QUESTION TIME | Some of Prime Minister Dr Mahathir Mohamad’s economic policy pronouncements are not just puzzling but downright alarming such as having another national car project a la Proton, steering Khazanah Nasional back to its so-called original objectives and reviving the concept of Malaysia Inc. Let’s look at each in turn and the problems that they can cause.
As I have explained in this article, another national car project would be a colossal mistake. It would distort the car market further because such a car cannot be economically produced and will result in even higher taxes on other cars.
Proton was one of Mahathir’s huge failures when he was prime minister from 1981 to 2003 costing taxpayers an additional RM360 billion at least in taxes since the first Proton rolled out in 1985.
As a matter of urgency, one of the new policies of the Pakatan Harapan government should be to forge ahead with a phased rationalisation of the car industry so that there will be no taxes on cars. This was done in Australia several years ago. This article explains it in more detail.
Despite a public outpouring of resistance against a third national car project, Mahathir is recalcitrant and still seems set on his pet project and reviving this failed, outdated policy of his yet again. He said he discussed with the Indonesian president the concept of an Asean car on his recent visit there.
Considering the abysmal state of cooperation within Asean and all the difficulties of the car industry, this will be a road to perdition if implemented. We are already suffering for 33 years already.
On to Malaysia Incorporated. Mahathir recently announced his intention to revive the Malaysia Inc concept to foster closer cooperation between the government and the private sector.
What exactly is this Malaysia Inc? Let’s quote from the Economic Planning Unit, the division within the Prime Minister’s Department:
“The Malaysia Incorporated concept was first announced by the Prime Minister in 1983 and it represents a new way of approaching the task of national development. Both the public and private sectors adopt the idea that the nation is a corporate or business entity, jointly owned by both sectors and working together in pursuit of a common mission of the nation.”
To operationalise this, some concepts were adopted, says the EPU, including deregulation, improving the delivery system, institutionalising consultation, establishing smart partnerships and pursuing privatisation.
If Malaysia Inc had been done properly and executed completely above board, things might have been alright. But Malaysia Inc and the attendant privatisation of core government assets to crony companies and individuals saw the largest exercise of government patronage and a prerogative to manufacture instant billionaires in some instances and...