Great debate between Idris Jala, William Pesek
Datuk Seri Idris Jala must be lauded for taking on William Pesek of Bloomberg for what Idris describes as his recent “disgracefully biased and ill-informed article “on Malaysia.
Idris is one of the few ministers who boldly defends and also promotes government policies.
He thus enables us to be better understand and appreciate or otherwise, the thinking behind government policies and practices.
So let’s have more open, frank and healthy public discussions please, despite the Sedition Act and the Official Secrets Act.
What are these acrimonious issues between Idris and Pesek?
First, Pesek mentioned Malaysia’s “underlying economic distress” and “prolonged slow growth” caused by “race-based policies that strangle innovation, feed cronyism and repel multinational companies”.
Idris denies these allegations. He stated that economic growth expanded by 6% last year and will grow at an internationally projected 5.6% for the next four years. Therefore, it is not “slow growth”.
Indeed, Idris is right. But that does not mean that Pesek is wrong.
Actually if not for some race-based policies, expenditure wastage, extremism, cronyism and corruption, economic growth could have been greater, given Malaysia’s rich natural and multiracial human resources.
Then much more could have been done all these years after Merdeka, to better distribute income and to spread the economic benefits wider across the 40% lower-income groups.
Second, the fiscal deficit and debt have been restrained as correctly pointed out by Idris. But the question lingers on that it would be difficult to sustain this fiscal management, given the continuing corruption, and the wastage of public funds and the 1Malaysia Development Bhd debt overhang.
It is also misleading to compare our high deficits and debts with the even larger deficits and debt of the US, Japan and Singapore. Don’t forget they are rich developed countries that have wider margins of economic resilience to rely upon.
Our economy, in fact, is and can be perceived as less robust and sustainable in the longer term. This is because of the serious doubts, and uncertainties resulting from the growing racial, religious and political polarisation and excessive politicking going on now.
Third, poverty and especially absolute poverty have actually been considerably reduced, as highlighted by Idris. But we have now realised more than ever before, that with rising prices, especially after the declining ringgit and the GST and other charges, the urban poor find it extremely difficult to make ends meet.
At the World Bank Global Economic Prospects Report 2014 seminar, which I chaired at Bank Negara, it was stressed that transport costs are taking a high toll on the incomes of the 40% low-income urbanites.
Then you add the high house rentals, tuition fees, rising food prices etc, there is an almost hand-to-mouth existence.
This is perilous and the mere “facts” will not reveal the depressed poverty and human conditions of the absolute and even the relative poor.
Fourth, it is true that inclusive policies and developments have been impressive and Idris has shown that Pesek is pitifully wrong in his criticism here.
Public services like water, electricity, roads, schools, hospitals and clinics are found and spread all over the country.
And Idris and all of us can be happy that even remote areas in Sabah and Sarawak, that were neglected before, have now greater access to government facilities and amenities. But nevertheless much more needs to be achieved, not only in quantity but also quality.
However, despite all this high and consistent investment in education that is meant to raise literacy and employment, productivity and incomes, our education standards from the primary schools to universities have been weak by international standards and ranking.
In this regard Pesek has a strong point. This is what causes “economic distress” and keeps us caught in the middle-income trap.
The poor standards of English, Maths, Science, are doing us irreparable harm.
I believe Idris himself will agree with these views that are shared by a large number of Malaysians.
But most political leaders will not move faster to overcome these problems because of their populist and race-based concerns.
So how does Idris answer Pesek?
Fifth, Idris criticised Pesek for his “alleged failure to dismantle race based that strangles innovation” Idris countered that “Malaysia eased rules governing overseas investors”. But this does not adequately cover Malaysian non-Bumiputera investors.
Malaysians are moving their private capital and potential investment here by the billions. The Bumiputera, non-Bumiputera dichotomy is depleting our capacity to compete. How does Idris address this critical issue?
The brain drain continues as many Malaysians, including Malay colleagues, feel more insecure about rising extremism, Islamisation and perceived discrimination in so many fields.
So Pesek is not wrong here and we cannot afford to be indifferent to the reality on the ground, regardless of more liberal treatment given to foreigners, at the expense to our own Malaysians? How do we debunk Pesek here again?
Sixth, the ringgit is indeed weakening and sadly this apparent downward trend need not be a temporary phenomenon.
Pesek argued that “the ringgit’s fluctuations are a decent summery of the country’s wayward course in recent years”.
I agree with his views, as I have publicly written earlier.
The decline of the ringgit reflects the confidence in the national economy and and its prospects.
Idris suggests that Pesek perhaps “would like to discuss this matter with Tan Sri Zeti Akhtar Aziz, one of the most admired central bankers in the world”.
But knowing the good governor, I think she would be the first to acknowledge that economics is not an exact science and that there is no place for economic analysis or judgments that can be cast in stone.
Hence the ringgit decline need not be transitional nor even good for the economy in the longer term. It’s weakening could worsen, if the economic structure and our policies are not transformed more substantively.
This is where Idris could help from an economic point of view, with help from the Treasury and Economic Planning Unit.
Seven, Pesek I believe is facetious when he suggests “a return to old leadership is urgent”. I would not presume, like Idris, that Pesek has criticised the country “to please a former prime minister”.
But nevertheless Pesek’s logic is somewhat skewed here. In fact, many would argue that our present predicament is largely due to past failed policies and practices.
So what is Pesek really up to now?
Eight, Idris is reasonable to say that we will attain “a high-income status nation by 2020”.
But the rakyat would rightly respond: what is in it for me, Datuk Seri? We know that the income disparities are serious, as indicated by the poor Gini ratio.
If the socioeconomic welfare of the rakyat continues to deteriorate, they will feel more frustrated.
Hopefully, they will not show their unhappiness too openly. Then we would all be in real trouble and no amount of claims of high achievement will appease the rakyat. So we have to ensure the economic benefits seep down to the bottom 40%.
Ninth, Idris is not wrong in stating that “many countries and institutions can see the progress we are making”. Indeed we have and are doing well, so far but will we be able to sustain this progress?
Of course, compared with most of the developing world we are streets ahead.
Many countries admire our several successes and want to know how we made it despite our many divisive forces.
Tenth, as Idris asserts himself, there are differing opinions on our performance and future path as a developed country after 2020.
The overriding question, however, is whether our present strong economic fundamentals are strong enough to be sustainable in the long term.
This is where Idris and Pesek genuinely differ. Idris emphasises our generally successful economic past and our present achievements. But he is quite quiet about our many weaknesses.
On the other hand, Pesek examines the structural weaknesses and light transformation of our economy, in the interests of sustainability in the longer term.
In conclusion: I believe the truth is to be found somewhere between the two respected professionals in the great debate.
We thus have in Idris, an optimistically defensive and self-righteous stance.
On the contrary, we see in Pesek, a somewhat overcritical pessimistic prognosis of our future sustainability as a developed nation.
This is why we should have more open debate. This is why both the views in the great debate of Idris Jala versus William Pesek are exciting, pertinent and should continue to be analysed and the necessary hard structural transformation and changes made soon in the national interests for a better Malaysia.
During Ramadan, let’s us all pray together for a more peace, progress and most of all, for a more united and blessed Malaysia!
Article published in The Star and The Malaysian Insider.