Day: October 22, 2010

Malaysia’s Development Strategy Revisited (5)
by Dr. Mohamed Ariff*

A New Pro-Poor Economic Policy and Reform

There is certainly a need for a clear focus on the needs of the poor and marginalized regardless of race, colour or religion. In other words, Malaysia needs a ‘new’ New Economic Policy that is explicitly pro-poor. The main beneficiary of such a policy would still be Malay households, as they account for roughly three-quarters of the bottom 40 per cent of households in terms of income distribution. Continue reading “Malays competitive and competent – need for New Pro-Poor Economic Policy/Reform”

Malaysia’s Development Strategy Revisited (4)
by Dr. Mohamed Ariff*

New Economic Model Up Against Formidable Challenges

The structural change agenda presents formidable challenges. The kinds of skills that the new paradigm demands cannot be provided by Malaysia’s archaic education system, which needs a complete overhaul. At the same time, the country is suffering from a serious brain drain caused by both push and pull factors. The importance of a truly independent judiciary cannot be exaggerated: anecdotal evidence suggests that Malaysia’s tarnished judiciary and gutter politics are among the push factors. Seen in these terms, the brain drain is largely a manifestation of frustration that has led some people to vote with their feet.

All this calls for bold structural changes, including institutional reforms encompassing everything from education to the judiciary, backed by governance reforms to strengthen fiscal discipline, transparency and accountability. Nothing short of a holistic approach will set the Malaysian economy far enough or fast enough on a true development path. The politics of policy making, however, may hobble the reform process. Continue reading “NEM stillborn?”

Malaysia’s Development Strategy Revisited (3)
by Dr. Mohamed Ariff*

The New Economic Policy: Pervasive Poverty in the Malay Community

Multi-racial Malaysia’s major structural problems are largely attributable to the New Economic Policy initiated in 1970 in the aftermath of the May 1969 racial riots. With its emphasis on ‘positive’ discrimination in favour of the then backward Bumiputeras (literally ‘sons of the soil’), the objectives of the policy were laudable, serious misgivings about its implementation notwithstanding. The New Economic Policy continued to exist after reincarnating itself in various forms beyond the original 1990 deadline. While it has undeniably helped narrow interethnic income differences, all is not well judging by the outcomes. While interethnic income disparity has narrowed considerably, intraethnic income disparity, especially within the Bumiputera community, has widened. Continue reading “NEP “outlived its usefulness” – does not make sense to keep an obsolete policy ticking along on life support”

Malaysia’s Development Strategy Revisited (2)
by Dr. Mohamed Ariff*

Input-Driven Growth unsustainable

It goes without saying that Malaysia must grow at a faster pace if it is serious about joining the club of developed countries by 2020 – hence the need to reinvent itself through reforms that can help restore the lost growth potential. Malaysia has learned the hard way that input-driven growth is unsustainable. It is instructive to note that the economy was growing at a rate of over 8.0 per cent in the early 1990s despite declining total factor productivity. To stay competitive, the growth strategy then was to keep wages low with the aid of a large migrant workforce. Obviously there was a dismal failure to understand that there were limits to economic expansion through input increases.

Migrant Workers depress wages

It was a major policy blunder to let migrant workers depress wages in the country, thereby throttling productivity improvements. Malaysia locked itself into low value-added manufacturing by allowing foreign workers to work in the sector for low wages, thus removing the incentive for manufacturers to automate. The size of the problem is huge: the country reportedly has 1.9 million registered migrant workers and another 600,000 unregistered ones (probably an underestimate), accounting for nearly one-fifth of the working population. These workers are not confined to the so-called 3D jobs – the difficult, dirty and dangerous jobs that the locals shun – but compete with Malaysians in the wider labour market. Continue reading “Middle income-trap – Malaysia has shot itself in the foot!”

Malaysia’s Development Strategy Revisited (1)
by Dr. Mohamed Ariff*

Malaysia has turned 180 degrees since Independence in 1957, transforming itself into a thriving modern economy and leapfrogging from a low-income to a middle-income trajectory. The country owes its prosperity to its economic openness, with trade as the lifeblood and foreign direct investment (FDI) as the backbone of the economy.

Economic Openness and Vulnerability to External Shocks

The price Malaysia has had to pay for this success is greater vulnerability to external shocks, but it has learned to cope with cyclical ups and downs with remarkable dexterity. This does not mean, however, that all of the crises in the Malaysian economy were caused entirely by external forces, as if domestic policy missteps had nothing to do with them. The Malaysian experience shows that crises tend to be blessings in disguise, as they force the authorities to step back, take a hard look at their policies, learn lessons and move on. Continue reading “Solution to the problems of economic openness is not less openness but more openness”

By Dina Zaman

I like giving our politicians a break. Doesn’t matter which side they swing. Like many Malaysians, I too laugh at some of the pearls that dance out of their mouths. When this happens, it makes for a sunnier day, and then we all get on with our lives.

However, today’s gem which came out from Johor delegate Azura Mohd Afandi, who wanted the Information Ministry to curb television shows and commercials that could lead people astray from the right religious paths, really made me think that time around, (1) nothing can ever beat this statement and (2) that’s it. The people who are involved in politics have four screws loose.

“For example, commercials on sanitary pads are openly shown on TV and this could influence the young to get involved in social ills,” said Johor Bahru Puteri Umno member, urging the ministry to increase shows that teach good values and religious practices.

As a still menstruating woman, I have yet to witness how sanitary pads and their ads could lead one to sin. I have always thought that sanitary pads are a bane to women and frighten the hell out of men, especially bloody and wet ones.
Continue reading “Sanitary Pads and their relevance to intelligence”

PAS picks Dr Zulkefli for Galas
The Malaysian Insider
October 22, 2010

GUA MUSANG, Oct 22 — PAS picked Gua Musang acting chief Dr Zulkefli Mohamad as Pakatan Rakyat candidate for the November 4 Galas vote.

Dr Zulkefli was the Gua Musang parliamentary seat candidate in Election 2008, losing to Tengku Razaleigh, who has been appointed as the election director for this highly anticipated by-election, the 13th since the general election.

The announcement was made by Kelantan mentri besar Datuk Nik Aziz Nik Mat last night. Opposition Leader Datuk Seri Anwar Ibrahim was also present. Continue reading “PAS picks Dr Zulkefli for Galas”