Posted on by Kit

How real is the Economic Transformation Programme?

The Economic Transformation Programme (ETP), the latest pronouncement by Minister in the Prime Minister’s Department Datuk Seri Idris Jala, follows upon a number of other pronouncements that have become the hallmark of Dato Seri Najib’s administration.

Like the previous pronouncements of 1Malaysia People First Performance Now, the Government Transformation Programme, the 10th Malaysia Five Year Plan, the ETP is rich in rhetoric.

The sloganeering and spin that is common to all of these exercises provides a clear indication that the Government led by Najib is wholly at sea in tackling the enormous challenges that the country faces.

These challenges have accumulated over the wasted three decades characterized by mismanagement, corruption and abuse of power that has benefited a small coterie.

A common feature of the series of announcements is that they contain unrealistic assumptions about economic growth prospects; they use clichés that are taken from business school texts that have been spun in order to create a false impression of a rethinking of policies.

The various announcements of “policies” and “strategies” are littered with a slew of abbreviations such as KPIs, NKRAs, MKRAs, NKEAs, EPPs and BIZ Ops are freely bandied about.

Of late the Government has developed a passion for peppering every announcement with an alphabetic jumble.

It would appear that the Government has substituted sound policies with what appear to be tools from the corporate world.

These may be appropriate tools in the business world. The Government is not a corporate entity; it is accountable to the public and cannot be driven by notions of “profit”.

The concepts embodied in the ETP are beyond the comprehension of the public at large. We are subjected to lofty speeches peppered with colorful Power Point presentations loaded graphics that confuse rather than enlighten.

Each event at which these so-called policies are unveiled lays bare the inability of and impotence of the Government to boldly deal with the core and fundamental policy distortions that are responsible for the country becoming trapped in the middle income group.

The glimmer of hope offered earlier this year that the Government would embark on a path of reforms under the rubric of the New Economic Model has been rapidly extinguished by the ferocious attacks launched by PERKASA and its patron against any policy reforms that attempt to remove the distortions brought about by failed policies linked to the NEP.

The ETP acknowledges and reaffirms that the private sector will need to play a central and decisive role in enabling Malaysia to achieve a doubling of per capita incomes by 2020 through sustained economic growth of 6 percent per annum.

To attain these targets, private firms, according to Idris Jala, will invest US$ 266 billion (60 percent), GLCs US $144 billion (32 percent) and the public sector US$ 34 billion (8 percent), making a total investment of US$ 444 billion.

These assumptions – these it must be stressed are assumptions rather than forecasts – are wholly unrealistic in view of the historic growth rates attained over the past decade and a half and the current flows of FDI which are NEGATIVE in view of capital flight.

The underlying assumption appears to be that the private sector will make a remarkable shift without the Government doing its part. This assumption lacks all credibility as such a turnaround cannot be anticipated so long as the Government remains entrapped by the policy framework espoused by PERKASA and others of its ilk.

The ETP has set a target of US$ 444 billion for investment over the next decade. No overall macroeconomic framework has been presented, a practice common to previous Perspective Plans. There is hardly an indication of how this amount of investment will come about.

The reality is that FDI has declined in recent years with no sign of a revival; at the same time domestic savings are not being fully invested with capital flight becoming sizable.

There are few indications that FDI will revive and take off without a radical change in the investment climate e.g. implementation of reforms of the type talked of in the context of the NEM.

It is becoming abundantly clear that the NEM is going nowhere. A weak and divided Government is now being held hostage by PERKASA and the die-hearts in UMNO.

Domestic investors are fighting shy and if anything voting with their feet by engaging in the capital flight. Idris will have to do better if he is to be believed – more details of specific projects will be needed before he is taken seriously.

Be it as it may, there are other curious and contradictory features of the ETP. On the one hand the formulation is built upon the notion that the private sector will be unleashed; and yet the ETP is a top-down creation.

PEMANDU is seemingly picking “winners” and it would imply that Malaysia is about to embark upon a new form of central planning to get to highly untenable targets.

The approach contradicts the very notion that the private sector will be freed to make investment decisions without interference from the Government.

A grave omission in the ETP is the singular lack of an articulation of changes in the policy regime to arrest corruption, increase competitiveness and transparency in procurements, introduce meaningful safety net programs, rationalize labor market policies including the adoption of a minimum wage policy and the abolition of anti-competitive measures e.g. APs.

The failure to deal with the issue of tax reform within the context of the ETP is yet another indication of the lack of an integrated and wel-designed programme of reforms that are imperative if the private sector is to be permitted to function effectively.

It is hard to believe that the Government anticipates that the private sector can be induced to perform as if by Royal Command.

The mind-boggling and totally unrealistic pie in the sky nature of the ETP and the linked announcements may well become Malaysia’s version of Mao’s GREAT LEAP FORWARD fiasco that was built on unrealistic targets and dubious performance indicators. Micro management and planning of the kind— to planning for Bird Nests and Bird spit production as part of the effort to double incomes! – cannot be taken seriously.

To resort to what is obviously a system of central planning — with unrealistic targets, dubious statistics to show “performance”, picking “winners”, maintaining constraints to growth via quotas and a system of approvals together with subsidies to corporate entities (both GLCs and selected private corporate tycoons) — is totally in contradiction to the announced intent to let the private sector act freely.

Indeed, the system the country appears to be slipping into has many of the features that brought about the collapse of the Soviet economy in the late 1980s. It is also salient to note that the remarkable success of China and its modernization program which can be attributed to the dismantling of central planning is being largely ignored.

The real danger is that the country is going nowhere until there is a determined effort to implement real reforms.

Each day it becomes clearer that Najib does not have the strength to get out of the quicksand he is caught in.

He cannot go on much longer singing the APCO written songs. These are no longer being reported in the Utusan, an organ that in the scheme of things is supposed to sing songs desired by Najib. Now that it is openly becoming a mouthpiece for Mahathir and PERKASA, the end may not be far away.

22 Replies to “How real is the Economic Transformation Programme?”

  1. Who cares abt d goals of ETP
    UmnoB/BNputras only care abt d US$444 billion 2 be made available soon
    Hee, hee, hee, rich n happy days r here again
    Jiat, jiat, jiat, jiat ka liao b4 GE13, worry later what happens after GE13
    UmnoB/BNputra declares: I’m a billion/millionaire tuan first, who cares WTF I’m second

  4. Economic Transformation ? For a country that has no money ? Most of the projects can’t stand on their own, and require public money upfront or require some form of ongoing government subsidy. A case in point is the KL MRT project. It can only happen if the government gives land plus an annual ridership guarantee. Who gets the contract ? UMNO cronies like Gamuda and MMC.

    My question to Idris Jala is this: Will the projects be subject to open tender and evaluation, or will they be allocated to UMNO cronies ? Will subsidies and grants be made public, or will they be stamped “rahsia” ?

  8. Wot 60% of the money for the projects to come from private sector? Who has that kind of money? And if they do have that kind of money would they jump in to join the band wagon?

    Dont forget umno’s specialty. I mean how can we forget. Launch with a bang and and years later, wot happens? Where is our hicom? and our multi-media supercorridor, and our perwaja, and our bakun? and BBMB? and oh there are so many more.

    Look at sarawak. Practically all mega projects there are owned and operated by one family. And rewards from those projects were used to buy properties in N America and UK. So who benefits? American, Canadian and UK economies.

  9. 53 yrs on… Malay-sia a rich natural resouce nation still struggling with identity, Mathadirism Constitution Reform,NEP,latest NajibETP ,Racial Equality,Bias Judicial Practices,Religious freedom…etc .
    Rakyat Malaysia >>13 th GE coming soon Remember and BeWARE of many more of these UMNO POLITICAL GIMMICKS Corruption Obsession Votes – Fishing Propaganda by all dirty means Fooling the rural poors inorder to stay put at Putra jaya.
    This Time round ,Lets Vote for PR Aliance into Putrjaya and VOTE OUT BN govt (includes SarawakTaib empire -SUPP and Sabah BN )Out of the Parliament absolutely.
    Do Not hesitate or think twice>>JUST GO FOR PT TOGETHER for the sake of Realisazation of Real Democracy, Equality and National Harmony-Unity and your daily survival,careers prospects regardless of creed religion and race.
    Pray for you all …

  10. How real is the Economic Transformation Programme?
    This will be just another BN/UMNOB scam
    Having intellectual pretensions but will be mainly sham
    We really must go for a change of government
    Come GE13, vote in PR for better management

  11. Of course umno has a secret yet simple formula to make the whole thing work. Actually, we were given a hint of that formula not too long ago by the grandson of kutty. Didnt he say that our poor FDI was due to the opposition? Due to people like LKS, to people like you. And me. So if we could only shut up then FDI would come in. And then wallah, a big fat rabbit would emerge from the hat! If you people think that all these sound too david copperfield and untrue, think again. Remember. Umno has the benefit for experts like cintanegara to advise them on PRINSIP PRINSIP EKONOMI POKOK RAMBUTAN.

    WTF.

  12. How about just stepping into the real world and getting out of sloganeering and just getting down to plain hard work….

    Silver spoon Najib will never understand and the immensely voracious appetite of Rosmah is now all very clear to see…..suddenly mega projects emanating from Singapore….must be the courtesy visit by Lee KuanYew to Malaysia’s real PM , Rosmak. Wonder what happened to the “harga diri” of Malays especially…How can they tolerate this????

    People down the line are tired, dry in their pockets and worried for their future and children….the spark is about to be lit….and Idris Jala will be the first on line for the roasting for cutting subsidies and then trying to spend our way to another bubble economy…

    Wonder if the French slaughtered all their leaders during the revolution as a result of a similar situation…but as of now….I just can’t wait for the next election to throw all these fellows out…

  13. BN has been given a long time to prove it can govern well, and evidently we have gotten our answer. In the past we have seen much of these fanfares to create the impressions that thew country is well on track to the future but in real life it is not so. We have been told the numbers are good but to us it is always too good to be true. It is the same people doing the same thing, what are the chances of success?

  14. All these ETP, KPIs, NKRAs, MKRAs, KERAs, PURA-PURAs and whatever the f**k is too complicating for Taxidriver to comprehend. All I understand is that the whole thing is to confuse to divert from real issues so that I concentrate on my taxi-driving job. Fat hope!

    Nothing good will come out from their BIG, BIG PLANS. Small brains cannot accomplish big things. Po..po…po. Po get some pointers from Lau Lee or LSL

    But it’s too late, UMNO…It’s too late. Sabah and Sarawak ” TAK NAK” you after 47 years. Malaya also ”TAK NAK” you after 53 years. We have had enough of your nonsense!

    Bangkitlah Rakyat Malaysia. Tumbangkan UMNO/BN Demi Masa Depan Kita.

  15. How “real” – ETP or for that matter ‘1 Malaysia’ or “NEM”??? Yeah how REAL?
    The situation is so grave that the Government has to rely on crisp, pithy, feel good slogans to gloss over the problems and challenges.
    This is evinced by what Idris Jala said that we should not spend time unproductively in arguing about race and rights – that what is important is to have “positive energy” and believe in the country in order to give confidence to investors… “If there is no hope for the future there is no power in the present. “ (Reference : TheMalaysiaInsider Report, September 21, 2010).
    This look like a psy-war to boost up collective confidence thinking that that alone is a panacea to our problems. However best intentions as compressed in pithy catchy slogans do not policy or progress make.
    Whilst public confidence (the “X” factor) is important, is there sustainability of that confidence if there were repeated mismatch between promise and performance, talk and walk???? Confidence is sustainable only if there’s:-
    (1) intellectual honesty about the gathering and use of realistic facts and data language for formulation of a policy;
    (2) the political will to enforce/implement the policy (once formulated) and
    (3) a capable and committed team of bureaucrats to back up its implementation;
    On issue of (1) when Idis says ETP’s a “programme’ not a plan like 10th Malaysia Plan with figures disclosed, whats the facts and figures to say such a programe will succeed? He’s talking of spending US$444 billion for next 10 years (until 2020) with private sector leading 92% of the way! On the average we’re talking of spending US$44.4 billion which is close to 25% of last year GDP of US$188 billion! How does private sector raise this kind of money (when big boys are taking their money & investment out)? How much money is there is our entire banking system from which private sector can raise this amount of money? Don’t just say borrow from foreign lenders who may not lend you looking at our political risks and our government sovereign ratings! To show you’re not plucking figures from thin air, substantiate with facts and figures on how private sector could raise this money! One can’t win confidence by just referring to vaguely to some big figures and burying vital facts under some “programme”
    in lieu of plans…

    On issue of (2) political will, could there be confidence when, for examples, Perkasa opposes openly NEM or the DPM, contrary to ‘1 Malaysia’ precept put race first and being Malaysian second, and the principal advocate of these concepts responds by not only not contradicting but also giving apology, excuses or defences for their positions?

    On issue (3) of competent team of bureaucrats (recruited on basis of NEP) to implement when the last we recall a prosecutor tried to prove suicide arguing self- strangulation???

    So how REAL?

  16. ETP – Everything Ta Pao by UmnoB/BN
    Fr now till GE13, no time 2 waste, $$$$ must b spent n jiat jiat jiat
    Which r d lucky $-sucking companies? Who r d lucky vacuum-suckers?
    If PR were 2 win in GE13, PR will inherit a bankrupt nation, jiat ka kang kang
    Dis is how self-strangulation occurs

  20. //mana mau dapat duit 444 billion US$ itu? 444 Billion RM pun bukan senang! Cakap saja senang//- on cheng

    444 billion US$ sap sap water la. Mahathir, Dolah, Jib, Hishammoodin, Moo Hee Din, ‘Mike Tyson’ Md. Taib the balak king from sarawak, KJ, Toyol, Baginda Razak………. they can come up with the amount. Like that rakyat no need to worry lo. because if they started stealing, it will be their own money. Sure they will fight and kill each other!!

  21. ///This is evinced by what Idris Jala said that we should not spend time unproductively in arguing about race and rights – that what is important is to have “positive energy” and believe in the country in order to give confidence to investors… “If there is no hope for the future there is no power in the present. “ (Reference : TheMalaysiaInsider Report, September 21, 2010).///–Jeffrey

    IDris Jala is certainly wrong in that remark. The country is in this shit state because the powers-that-be utilized the issue of race and right to advance their own personal benefit at the expense of the nation. In making the issue of race and right sensitive, the government could work in black box and behave like secret society. Those who saw through the sinister moves of the government chose to become tax payers outside the country and we are now rendered the low-income trap because of that.

    The one concept that ruins this country is Ketuanan Melayu, with Melayu expanding to include all kinds of persons. Luckily that concept kills the nation, like the cancer cells killing the host.

    Don’t waste time creating all kinds of alphabet soups hoping to ameliorate the suffering without removing the only killer disease NEP.

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