I am not an economic analyst nor a Minister in the PM’s Department. But I wish to rebut most of Idris Jala’s commentary and reply to Bloomberg ’s view that Malaysia has “underlying economic distress and ' prolonged slow growth”.
Idris Jala should rebut what William Pesek claimed as “underlying economic distress” and “prolonged slow growth” caused by “race-based policies that strangle innovation, feed cronyism and repel multinational companies”. By venturing to release subjective figures of Gross National Income (GNI) and economic growth, he does not fully exonerate the unmistakable reality of a failed economy of which Malaysia has become one.
In order to prove or disprove Pesek’s unflattering remarks, Idris should examine in detail the essence of Pesek’s claim.
In reality did race-based policies contribute to:
1. Strangulation of innovation?
When a hard-working innovator slogs to invent a product and this product has to be given free or sold for a nominal fee, the motivation to invent no longer exist. The result of such race-based policies led to a phenomenal migration of talent to other countries which reward creativity and invention. Malaysia’s loss is the other country’s gain. From 2006 to 2014, statistic revealed that 400,000 of Malaysia 's cream of the crop migrated to other countries.
And to fill the vacuum of this migration, nearly more than a million migrants from Indonesia, Bangladesh and Pakistan were given permanent residence (PR) or citizenship to replace the manpower loss.
Idris may choose to ignore or deny that race-based policies ever existed and therefore did not lead or contribute to any economic distress. So how does Idris explain the millions of contracts allegedly given exclusively to only one race? And why does the policy of giving discounts to one race irrespective of his rich or poor status given for the purchase of houses continue to be implemented?
Only recently, the state of Negri Sembilan implemented the policy of mandatory allocating 50 percent of houses built for sale to the bumiputra community. This will not only strangle the housing industry but it will be a disincentive for housing developers to even want to invest in building houses. And yet Idris Jala can still be in a denial mode.
2. Feed cronyism
The ruling Barisan National-led government’s power is premised on the farming of lucrative , often inflated contracts to all its 2,000 class A contractors who allegedly mostly comprise Umno division heads. Added to this are contracts allegedly given to the inner circle of the ruling party and this can include close family members and relatives.
The feeding of lucrative contracts to cronies has caused severe financial leakages in the government’s coffers. That alone in the long run would have caused severe financial imbalances in the country’s monetary policies.
3. Repel multinational companies
Foreign investors only come into the country to invest if the government is not corrupt and practices good governance. The fact that investors have lost confidence in the country is indicated by the severe outflow of foreign funds in the equity market. In fact some of the major multinational companies have ceased operations and transferred their companies to Vietnam and China.
When governance issues and corruption are played out daily in the media, foreign investors will evaluate their investment decisions. And most likely those issues will certainly repel multinationals from coming over here.
I sincerely hope Idris Jala will come to the realisation that criticism of substance, no matter how bad, should be accepted with the humility it was given. To adopt a denial mode will not cause the problem of bad policies to go away. Instead they should seek to find ways of changing and adopting good policies to improve the running of the government.
