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Malaysia’s losing battle for international competitiveness

What is the credibility of Najib talking about a total innovation of the Malaysian economy and nation when Malaysia is facing a losing battle in international competitiveness because of continuing loss of confidence in key national institutions whether judiciary, the civil service, the police, the MACC or the Election Commission?

This is the reason for the two recent adverse global rankings for Malaysia, falling three places from 21st to 24th ranking in the World Economic Forum (WEF)’s Global Competitiveness Report (GCR) 2009-2010 and a drop of two places in the World Bank’s Doing Business 2010: Reforming Through Difficult Times from 21st to 23rd placing.

The first seven months’ of Najib’s premiership have not seen any restoration of public confidence in the key national institutions but the reverse whether in the strategic areas to fight corruption and ensure integrity; keep crime low to protect the safety of citizens, tourists and investors; or to uphold the administration of justice.

This is why Najib’s budget presentation last Friday ended so disastrously, when he tried to capitalise on the Umno/BN by-election victory in Bagan Pinang as testimony of a national transformation to greater heights.

Najib’s last two sentences in his speech were virtually drowned in the shouts by Pakatan Rakyat MPs with their spontaneous chant of “Rasuah” – which was a dubious parliamentary record in the past five decades, not only for a maiden budget speech but also for any budget presentation by former Finance Ministers.

Najib had earlier failed to make any impression on MPs when he devoted two cursory paragraphs of his budget speech to “Combatting Corruption”, but which did not evince any political will on his part to break the back of the problem of rampant corruption in Malaysia.

What Najib has to show for the battle against corruption in his first seven months as Prime Minister is quite a dismal record, reinforced by the Umno/BN nomination of a tainted candidate for money politics and corruption as a candidate in the Bagan Pinang by-election – and the Umno/BN victory in Bagan Pinang is a major setback in the battle against corruption.

Is Malaysia heading for the worst Transparency International (TI) Corruption Perception Index (CPI) ranking and score in 15 years, when the TI CPI 2009 is released next month?

As pointed out by Transparency International Malaysia last month during the launch of the country report of the TI Global Corruption Report (GCR) 2009, the Malaysian Anti-Corruption Commission (MACC) and other “reforms” introduced by the government have so far been ineffective in fighting corruption.

These measures have not produced the desired results and so the public perception of corruption remains unchanged.

Malaysians are fed up with the status quo and the unbearable effects of corruption in the country. The Global Corruption Barometer 2009 surveyed released in May showed that 70 per cent of Malaysians believe that the government is ineffective in fighting corruption.

In contrast, although Indonesia has a far worse position in the corruption perception index than Malaysia, 76% of its people believe their government is effective in fighting corruption.

The public perception position for Malaysia is likely to be even worse than the Global Corruption Barometer 2009 survey in May after two further developments:

  • the mysterious death of DAP political aide Teoh Beng Hock on July 16, who went to the 14th floor MACC headquarters as a healthy, vigorous, idealistic young man to give his co-operation as a witness but ended up as a corpse on the 5th floor of the building; and

  • the MACC role as Umno catspaw to declare war on Pakatan Rakyat instead of declaring war on corruption, going all out to harass Pakatan Rakyat over alleged constituency allocation improprieties involving RM2,400 (even costing a human life) while being totally blind to corruption and abuses of power against Barisan Nasional leaders running into tens or hundreds of millions or even billions of ringgit!

For quite some time, there had been increasing complaints that the MACC had become a law unto itself, violating the basic constitutional and human rights of witnesses and suspects interrogated by MACC officers.

Even the police are afraid of the MACC because of the powers the MACC officers hold over the police in corruption investigations.

This is unacceptable and intolerable. I call on the Prime Minister to make public the number of reports which had been lodged against MACC (previously ACA) officers for abuse of power and use of physical force in interrogations in the past three years. Furthermore, what percentage of these reports against MACC (or ACA) officers for physical violence and torture during interrogation had been investigated.

The first step to restore public confidence in the MACC is to bring the MACC and all its officers within the ambit of the law as no democratic country can allow an institution to become a monster or a Frankenstein with no regard whatsoever to the rudiments of the rule of law and the most fundamental notion of human rights, as there should not be another Teoh Beng Hock murder.

In this connection, I call on the authorities concerned to fully co-operate with Teoh Beng Hock’s family who wants to get to the bottom of Teoh’s death and is asking for exhumation of Teoh’s remains for a second autopsy by renowned Thai pathologist Dr. Porntip Rojanasunand after her inquest testimony of Teoh’s death as 80% probability of homicide and 20% suicide.

Other instances why there has been a deepening crisis of confidence in the institutional independence, efficiency and professionalism in the past seven months greatly undermining Malaysia’s international competitiveness despite Najib’s “1Malaysia. People First. Performance Now” include:

  1. Renewal of Tan Sri Musa Hassan as IGP – the ridiculous parliamentary answer by the Deputy Home Minister, Abu Seman Yusup that Musa’s term was extended for a year because of his “excellent performance”.

    In the past seven months, the Police and MACC were neck to neck as to which key national institution has lower public confidence and esteem.
    Last month, when the MACC Deputy Chief Commissioner Datuk Abu Kassim Mohammad was the special guest of the Star online live chat, there was an online opinion poll which produced the following result at the end of the hour-long programme:

    1. How would rate the MACC’s performance so far in fighting corruption?

      Good 3%
      Fair 0%
      Poor 98%

    2. Should MACC only ‘interview’ suspects during office hours?

      Yes 79%
      No 6%
      Depends on the situation 15%

    3. How would rate the MACC’s handling of Teoh Beng Hock’s case?

      Good 0%
      Fair 4%
      Poor 96%

    4. Should it be made compulsory for lawyers to be present, …

      Yes 83%
      No 6%
      Depends on the situation 11%

    For the police, in the last week of July, the Home Ministry website carried an opinion poll whether the people felt safe, with the following results:

    • 97% or 9,729 out of 10,060 respondents felt unsafe because of the high crime rate, with only 1% or 89 respondents felt safe and 2% or 242 respondents in the “uncertain” category.

    • 95% or 8,883 out of 9,319 respondents felt that the safety of the people was not guaranteed as compared to 3% or 248 respondents who felt it was still guaranteed, with 2% or 188 respondents in the “uncertain” category.

    • 94% or 8,743 out of 9,261 respondents felt that government had not done its best to ensure that the safety of the people was at the best level with 2% or 185 respondents felt that the government had done its best, and 4% or 333 persons “uncertain”?

      Never before had the re-appointment of an IGP attracted greater opposition from all sectors of society, whether MPs in the form of a Parliamentary Roundtable or civil societies, especially on two grounds:

    • Failure of Musa in Key Performance Indicators (KPI) as IGP in the past three years, in all the three core police functions to keep crime low, eradicate corruption and protect human rights. In fact, it is no exaggeration to say that under Musa, Malaysians are even more unsafe from street crimes now than when he became IGP in September 5, 2006.

    • The re-appointment of Musa for another term of IGP cast an adverse aspersion on all the senior police officers, as if there is not a single one out of the eight top police officers occupying key police positions below the post of IGP who are qualified or competent enough to become the new IGP to provide a new police leadership and culture to roll back the tide of crime in the past five years.

[Speech5 in Parliament on 2010 Budget on 29.10.2009]

14 Replies to “Malaysia’s losing battle for international competitiveness”

  1. … and the tragic tofu-bridge incident and that few fire breakouts in the defense ministry…they are not simply accidents or the acts of god. it reveled many weaknesses that warrant policy considerations. what have we done (is it enough?) to safeguard the public assets? what have we done enough to provide safety to the public attending organized functions (whether private or pubic)? and of course the safety measures of public infrastructures (whether it is free or built out of the tax payers’ pockets) …

    why these issues are not discussed at the parliament? are there not important enough? it definitely deserves airtime and newspaper space. to silent these issues is not the solution.

  2. These are the positions that UMNO will NEVER relinquish control:

    1. Appointment of IGP
    2. Appointment of Chief Justice
    3. Appointment of Attorney General
    4. Appointment of MACC Chief
    5. Appointment of military chiefs
    6. Appointment of key ministers such as Finance and Defence

    These appointments represent the various insurance policies for UMNO. No KPI needed for such positions. Only a sworn loyalty to UMNO.

  3. and the joke of the perak assembly affair. it just makes me think that any tom dick and harry can be elected to govern. 0confidence, 1lousy-reckless-state-assmbly.

    end the joke, fresh state election, please. how many more months can this show goes on? …at the expense of the people.

  4. And “UMNO” is a racial party aren’t they?

    Someone said that these positions and many others are “their” institutions and they must not lose any of them.

    But given the very low percentage of non-Malays up there (e.g. only about 11% in the civil service) what choices are available?

  5. What competitiveness and innovation? What the government does each budget is to squeeze the people more so that it can give more protection to the cronies and vested interest groups. Just a few examples:

    1. National Automobile Policy. This bl**dy stupid policy that is nothing more than aiming at helping some asses to be billionaires. After such a long wait, the AP system is further extended to 2015. Tell you what; come 2015, they will extend it to 2020 to coincide with that cok vision 2020. Anybody wants to wager with me (i.e. provided BN is still in power then). PR, relentlessly apply pressure on this; I think the people will support you. Can’t you see they are treating us like kids, thinking we can be hoodwinked year after year while they grow rich beyond belief.

    2. Then what about the annual inspection for all cars that are more than 15 year old. Look, I will not exchange my 15 years old marque for a locally manufactured new car and yet they want to inspect my car yearly and later scrap it. How good can the inspection be? It is another layer of bureaucracy, another opportunity to solicit bribe. The durability and the quality of a car is not dependent on the number of years one owns it, you stupid government. Beh tahan already.

    3. Oh, one more thing, we can’t import used parts and components anymore. See the stupidity here. If my marque needs a windscreen or a tail-light, what is wrong with me importing the used parts and components from original manufacturer? In what way it is unsafe and environmentally unfriendly? The original used parts are at least better than the new fake. Remember, we can’t even manufacture an automatic car window system here!

    4. Imagine credit cards are taxed when the system is supposed to promote efficiency in the payment system. Imagine the cost saving because of credit cards. Now imagine what if most of us refuse to use the credit cards anymore – banks, merchants, hotel, and the government would all be jammed up. So why are we taxed when we have helped to attain cost saving and efficiency. Where is the “efficiency dividend” you stupid government?

    5. RPGT. Now the government want 5% of all property we own. We have taken years to own something. Now as we grow old and want to sell some of these assets, suddenly this do nothing government now wants 5% of whatever we have taken years to make. It is as if all these years we have not paid enough of other taxes for you asses to squander.

    6. I have not commented on all the wasteful and good for nothing expenditures incurred by the government yet. I think we have makan sh!t people advising government on economic policies and we have sh!t people running the government. I am really pissed.

  6. Is Malaysia losing competitiveness? The short answer is yes but its a slow process, its not like its falling off the cliff. We have some buiklt in strenght mainly our oil, higher savings and lead in trade that it will not show up quickly other countries competitiveness. The main problem is that global trade is harder and many countries who could have traded their way to gain against us find it hard to do so..That is actually what holding back a bit countries like Thailand, Vietnam, Cambodia even India and Philippines. Global trade is not going to grow like it used to be. Basically everyone grow slower and we on the other hand can spend more to stay ahead while they can’t afford to..

    But in reality, we are NOT building for the future while Those countries are. So if they ever solve the energy problem for example, we will fall behind drastically. Imagine if oil price were to fall by half? Our budget deficit would collapse our entire economy…That is right, our country whole economy is based on high oil prices…

  7. They are not making our economy into a high income economy because they think this is the way to a competitive first world environment. They are doing it because they can’t afford to continously subsidise the things that allow us to be a low cost and low income economy for decades – cheap oil and gas, other cheap commodities, subsidised essential goods like flour, cooking oil and sugar.

    Now that they know they can’t afford to continue the subsidies, the only way to take the subsidies away is to offset this with higher income – not higher productivity – but by simply forcing employers to jack up salaries because there would be severe pressure from the salaried workers. The government pays over 1 million civil servants, so this part they can control and they will increase their salaries too.

    By 2020, we will have a high cost economy, with relatively high salaries to offset this high cost base, but with no competitiveness in sight because the output remains the same. This is just to buy time so that the rich UMNOputras can continue to steal from the country by jacking up prices of everything that they control.

  8. Intrenational competitiveness takes into account many things, and not just about cheap labour. Government policies must be consistent, laws fairly applied as well as being promote a just and decent society. Otherwise, how can investors seek recourse when things go wrong?
    Malaysia’s standing internationally is losing ground, and I do have to spell out why, do I?
    Interestingly, while we are dozing, our neighbouring nations and leaders are doing quite alright.
    I have just read this in the Malaysian Mirror – “US President Barack Obama has lauded Singapore’s “legendary” founding father Lee Kuan Yew, as he sought advice ahead of his first trip to Asia since taking office.” Now, that counts for something, doesn’t it?

  10. When you have a product to sell and you have a reputation…cannot be trusted…customers will buy elsewhere.
    The end result posted here…is self explainatory.
    Investors do not trust UMNO government..unless they get clear benefits to invest here..not because of trusting UMNO….but because it makes good sense for their business…and some have moved away..because UMNO tried to be too smart and want a piece of the action…by insisting this or that…..making those world class manufacturers..sick of UMNO politics into their said business.
    Pharmacuetical manufactures is a classic example….all move out to other countries….because UMNO chose an UMNO owned company to be the muddle man…making the said products… much higher prices to Malaysians….UMNO do not care.
    All they can see…millions upon millions can be made….with buyers paying much more.
    Mind you…these are the sick and suffering from diseases.
    Ordinary Malaysians do not know why a welknown much needed medical manufacturer of medical products pulled out…to go elsewhere.

  14. The idea to raise taxes with the RM50 annual service fee is just too simplistic. Even the MSM had an article mentioning numbers like 5mil credit cards will bring in RM250mil taxes.
    I think the tax will prohably be less than RM100mil as multiple card holders will return most of the cards to the banks.
    I think a more effective way to generate tax income is to impose a GST of say 0.5% and also create ways to help the hardcore poor.
    However as little is being done to improve the broken education system, our BN planners can only come up with such simplistic schemes like the credit card tax and the 5% RPGT on profits after 5 years.
    http://malaysiawatch4.blogspot.com/2009/11/malaysiakini-and-bns-failed-education.html

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