Growing with caution and care
Prime Minister and Finance Minister Datuk Seri Najib Tun Razak when speaking at the launch of Invest Malaysia 2016 last Tuesday was justifiably upbeat over the apparent turn around of the Malaysian economy.
On the basis of the facts he presented, our Captains of Industry would have been encouraged that business confidence is returning after considerable doubts earlier, over the declining oil and commodity prices, and fundamental concerns over the 1MDB issues and rising racial and religious polarisation.
The positive side
The economic picture now looks more rosy. The petroleum prices have picked up and has made the major difference in giving us a more positive outlook for now.
Actually, hardly any major policy and especially structural policy changes, can be said to have brought this fortuitous improvement in the confidence in the economy.
The economy has maintained a good growth rate of about 5%, the balance of payments are quite healthy despite the world economic slowdown and foreign investment is growing.
What has helped is that other countries are performing relatively worse than us for their own reasons.
That is why we look better too.That is one major reason why the strength of our ringgit has improved, and capital flows have increased while foreign investor confidence has grown.
As our Prime Minister has said: “Markets like strong leadership, political stability and a credible economic plan.”
He even mentioned that some believe that his cabinet reshuffle on July 28 last year added to market confidence as evidenced by the bull run at the Bursa Malaysia.
Does that mean that another cabinet reshuffle is imminent and necessary to get the bull to run again and at a faster pace?
By the same token, some would argue that with the brighter economic data showing up and with the generous wage increases given to the 1.6 million public servants, (which will also benefit millions more of their dependents), will the 14th General Election be held earlier, while the going is good?
The negative side
However, on the negative side of this rising economic confidence, is the negative feelings arising from public perception of unfair removals from high political office and also among officials, causing negative vibrations?
There are also other reasons for negativism such as:
1. Inflation is high while consumer prices in particular are rising. The rakyat is feeling the pinch of the rising prices of basic goods and services.
The personal and household debt levels are still high. One wonders how debtors can settle without being victimised by merciless loan sharks?
2. Graduate unemployment is also high and rising, given the prospects that the economic growth will be slowing down soon.
In any case, even if multinationals bring in more foreign investment, our graduates with their lack of knowledge and skills and poor proficiency in the English language, could find it very difficult to get suitable jobs to match their qualifications. There is therefore a serious mismatch between supply and demand of graduates. This can cause considerable dissatisfaction and social unrest.
3. Corruption is a strong negative factor that militates against our confidence and well being. The rakyat asks whether enough is being done to counter corruption.
It is sad that some Government officials can get away with corruption for so long, without being found out earlier.
People question whether this kind of corruption is being condoned by some powerful forces from within the system, if the corrupt officials can carry on with their nefarious activities for so many years, without suspicion or detection or discovery.
We wonder then how widespread is this problem and what is the negative impact corruption is having on inflation and efficiency and productivity in Government services?
4. Salary increases in the meantime have been given quite generous. This is welcome to the 1.6 million Government employees. But what assurance have the taxpayers and the rakyat that productivity and the quality of public service, will improve, at least correspondingly.
Surely the public can and should expect better quality and standards of service in the public services.
Hence together with the salary increase, the Chief Secretary to the Government, the head of the Public Service Department and the Secretary General of the Treasury – the so-called “Three Wise Men” – need to introduce new policies.
They must come out with New General Orders that will increase discipline and productivity in the public services.
I say, please learn from the private sector which is far less tolerant for indifference and inefficiency amongst its staff.
The economy cannot afford to pay more for relatively less output. We will erode our national competitiveness and our future economic growth will not be sustainable but stifled.
Conflict in our confidence
Thus there are emerging positive and negative aspects to our national confidence. Conflict in our national confidence is already present and should be curtailed before it consumes our society.
“State capture” can take place when we make the public service happy to do the bidding of the powers that be, without their adequately questioning bad policies and the bad ways, even good policies are implemented.
We need to guard against highlighting our growing confidence in some positive developments, but down playing the negative aspects of our socioeconomic growth and well being.
What we need is more Wasatiyah and balance in our analysis of our economy and its impact on our society, including both the good and the bad aspects. Only then can we remove the growing conflict in our national confidence in our country and our future progress and sustainability.
Article published in The Star.