Wednesday, December 02, 2009

Is the 2nd Finance Minister for Real?

The Second Finance Minister gave a keynote speech at the National Economic Outlook Conference 2010-2011 organised by the Malaysian Institute of Economic Research on the 1st December, which must have shaken the audience to the core, not because the content of his speech had anything new or shocking, but because it was the first time a Finance Minister had stated the obvious which all Malaysians knew about, with regards to the country's economy.

According to the AFP report, Datuk Seri Ahmad Husni Hanadzlah said:
"Malaysia is trapped in a low-value-added, low-wage and low-productivity structure," Second Finance Minister Ahmad Husni Hanadzlah (left) told an economic outlook conference. Among its peers China, India, Vietnam, Indonesia, Philippines and Thailand, Malaysia's economic growth over the past three years was second-lowest, he said.

"Our economy has been stagnating in the last decade. We have lost our competitive edge to remain as the leader of the pack in many sectors of the economy. Our private investment has been steadily in decline... While Singapore and Korea's nominal per capita GDP grew within the last three decades by 9 and 12 times respectively, ours grew only by a factor of four."

In a withering assessment, Ahmad Husni said the services sector is underdeveloped, private investment is half the levels before the 1997-98 Asian crisis, and the manufacturing sector is suffering from lack of investment.

...He called for sweeping measures including an emphasis on meritocracy and ensuring all Malaysians are given "equal opportunity to participate in the economy".

"We must also consider the gradual dismantling of our open-ended protection of specific sectors and industries which have introduced a climate of complacency and artificial levels of supply... The long-term success of the nation's economy must take precedence over the short term interests of a few protected groups."
This is a speech which sounds as if it has been lifted word for word of the blogs of the Pakatan Rakyat leaders! In fact we have been saying the same over the past decade and we are ecstatic that a Finance Minister is finally listening for it is better late than never.

However, the “earth-shaking” speech will be a sheer waste of time and effort if it is not put into real concrete actions. We would like to call upon the Minister to move a ministerial statement on the country's real state of the economy and to allow for debate in the Parliament so that both sides of the house can unite for once on the urgent “wide-ranging reforms” needed to restart the country's engine of economic growth.

This is particularly urgent in the light of recent measures by the Government which runs completely counter to what the 2nd Finance Minister has raised such as the direct award of the mega-Matrade Exhibition and Convention Centre to Naza TTDI which serves the “short term interests of a few protected groups” and the complete lack of competition in the other projects awarded by the Government resulting in the continued decline in competitiveness.

Hence we hope that the Cabinet Ministers will no longer sing unbelievable and unrealistic praises of the Malaysia's economy in Parliament when responding to queries from its members. Instead they should all discard the knee-jerk denial syndrome mentality to ensure an honest assessment which is critical to adopting the right measures to heal the malaise in our economy.
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