By Stephanie Sta Maria - Free Malaysia Today
An academic has expressed shock and disbelief over the 'lack of original ideas' in the initial framework of the New Economic Model unveiled by Prime Minister Najib Tun Razak yesterday.
University Malaya's Prof Edmund Terence Gomez found it unsettling that the prime minister gave a fresh coat of gloss to old ideas instead of crafting new ones, particularly in the three main areas of focus - affirmative action policy, private sector-led growth and public-private cooperation.
“Najib says that the affirmative action policy will now be need-based instead of race-based. But the aspects of its transparency and market-friendliness are clearly targetted at bumiputeras. And this is no different from the NEP,” he told FMT.
The chairman of UM's Social and Behavioral Science Research Cluster also questioned the rationale of putting forth the affirmative action policy when such policies have previously failed.
Gomez also highlighted Najib's failure to mention institutional reforms, which the academic said is crucial to ensure accountability and transparency of policy implementation.
On the issue of privatisation, he pointed out that former prime minister Dr Mahathir Mohamad spoke on this 20 years ago.
“This idea has been implemented and it has failed. So why are we repeating it? And in discussing privatisation, Najib also has to talk about regulations but there has been no mention of this so far.
“The corporatisation of the Malaysian Investment Development Authority (formerly known as Malaysian Industrial Development Authority) will not play a major role in attracting foreign investments,” he said.
“What is needed is a truly transparent policy that will protect investors' rights. Najib has not issued this assurance,” he added.
Promises – easy to make, difficult to keep
Meanwhile, Centre of Policy Initiatives' Prof Lim Teck Ghee described the framework as 'nice rhetoric'.
He called on the government to explain when and how discriminatory policies and programmes in education, housing, corporate equity, land alienation and other areas of the economy will be phased out.
Lim also stressed on the need for exact details pertaining to the new merit-based policies that will replace it.
Promises, he said, are easy to make but difficult to keep.
“We have already heard of much backtracking on the NEM. During the (Malay pressure group) Perkasa meeting, we saw pressure from (Perkasa chief) Ibrahim Ali and Mahathir to reintroduce the NEP which many Malaysians regard as the key obstacle to the country’s advancement.
“The pronouncement of a doubled per capita goal in 10 years is unacceptable because the present government will not be around to take responsibility for failure to reach the target,” he said.
“The long-term time frame of the NEM is an excuse for inaction or delaying tactics. NEM has no short-term targets and I think it will suffer the same fate as the other ambitious policies before it,” he added.
Brace yourselves for the repercussions
CIMB Investment Bank chief economist Lee Heng Guie applauded the NEM's critical review of Malaysia's shortcomings, but refrained from commending it outright.
“This is a fundamental reform that is long overdue. The framework is a very strong statement of intent and is very much in line with the government's bold and radical approach in pushing for change,” he said.
Lee stressed that from this point onwards, strong political leadership is of supreme importance.
“Tough decisions have to be made in the areas of reducing subsidies, restoring market prices and creating fair and equal opportunities,” he said.
Lee warned that these policies can lead to political repercussions and the government must brace itself.
“Policymakers have to stand their ground and stick to the reform agenda. Any flip-flop will be detrimental,” he said.
Lee noted that the biggest hurdle will be the targetted GDP growth, due to the unpredictable economic environment and more intense global competition.
He added that this will be especially challenging with the government's plan to uplift the private sector as the prime growth driver.
“But the NEM is no longer an option,” he asserted. “It's a necessity. Decisive action needs to be taken to speed up transformation and I hope it would do exactly that.”
Monash University's political scientist James Chin said the current framework will excite foreigners because the prime minister aims to do away with rent-seeking and patronage.
“It would also excite (right-wing Malay pressure group) Perkasa because he has promised continuity of certain aspects under the affirmative action programme that will benefit the bumiputeras. But it's too early for any assumptions,” he added.
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