Insight - The necessity of reform

Some pupils with their face masks and face shields while attending classes during school reopening at SK Perempuan Methodist, Penang. Starpic by LIM BENG TATT/The Star/22 July 2020.

STRENGTHENING greater socio-economic resilience, reforming strong and credible institutions as well as maintaining stable political system should be central to “Building Back Better” Malaysia.

It is important that various institutions and public policies reorientate, reset and refocus growth-inclusiveness-sustainable according to the changing circumstances and times.

Institutional reforms

Weak institutions and governance can impose significant economic and social costs.

Corruption and misappropriation of public funds lead to more wastage and misallocation of resources towards unproductive activities.

A weak legal and rule of law regime undermines both domestic and foreign investors’ confidence, discourages investments and innovation, resulting in a decline in long-term economic growth.

Among the institutional reforms are Parliamentary select committees on major public service appointments to determine the key appointments of four commissions, namely, the Election Commission, the Judicial Appointments Commission and the Human Rights Commission or Suhakam, as well as the chief commissioner of the Malaysian Anti-Corruption Commission; and separating the Attorney General’s Office, which is the legal adviser for the executive body, from the Public Prosecution Office.

Lee Heng GuieLee Heng Guie

These are crucial steps to shield the prosecutorial decision-making process from the political influence and the conflict of interest. Electoral system reforms to improve the procedures of elections ought to be conducted on a fair manner without having biasness in favour of certain politicians and political parties.

Racial unity and harmony

Racial harmony, tolerance and understanding in a multi-racial society of great diversity, which is the recipe for our country’s success, should be upheld at all cost to maintain the common space that we now are sharing and living harmoniously and peacefully.

What is most worrying is that with polarisation increasingly permeating society, it endangers inter-ethnic harmony and puts our very fabric society in danger, as the frictions erode social cohesiveness.

It’s the government’s priority to manage the balance of social cohesion.

With every new generation, our racial harmony needs to be refreshed, reaffirmed and reinforced.

The government has to enact the Bill on the National Harmony and Reconciliation Commission to affirm its seriousness in mitigating racial and religious sentiments in the country, and to move the nation away from race and religious-based discrimination.

We have to undertake a review of all the federal and state legislation and policies in order to assess their compatibility with the right to equality, and amend and abolish (when necessary) existing laws, regulations, and policies that are in conflict or are incompatible with the right to equality.

The government and political leaders must take a clear and unequivocal stand that Malaysia must remain a moderate and tolerant nation and all the powers of the law must be brought to bear on those who promote hatred and intolerance based on race and religion.

Economic reforms

The reform priorities to boost both growth and equal opportunities require radical and granular implementation for the well-being of all Malaysians and to achieve strong, sustainable, balanced and inclusive growth.

Discard affirmative action policies (except for the targeted needs and income-based policies, regardless of race and geography).

Where to focus reform efforts

Better public sector delivery and efficiency, rule of law and adequate, accessible infrastructure provisions are equally important to save public resources, access markets and create a conducive ecosystem for businesses to invest in innovation.

Enhance better investment climate through regulatory reforms.

The government’s role should be limited to setting and facilitating businesses and investors as well as enforcing fair rules of the game.

The government should focus on removing barriers to the growth of domestic business and enterprises, to be complemented by foreign direct investment.

Freer and healthy competition, deepened trade and services (through multilateral and bilateral trade agreements), and high-quality investment are essential for innovation, the diffusion of digital technologies and ultimately productivity growth and social inclusion.

The authorities and agencies at all levels (federal, state and local authority) need to demonstrate leadership to actively facilitate investment through ease of doing business.

These include building better government-business relationship to ease business pain points; building capacity to address information gaps that are prevalent in facilitating domestic investment; developing public-private partnerships as well as maintaining public-private sector engagement so as to have proper business impact analysis before introducing new policies or regulations.

It is equally important that the government ensures transparency and has in place consistent and clear rules/regulations that limit administrative discretion to minimise unproductive rent-seeking and corruption.

We must persistently push zero tolerance for corruption, which adds to hidden costs.

Education is crucial

Education is the most crucial reform priority to make sure the current and future generations have the skill sets to secure employment.

This will both boost productivity and give everyone the best chance of a fulfilling life.

The upgrading of software and hardware infrastructure, the quality of educationists and best practice teaching techniques and strategies to produce quality and adaptive graduates is vital.Environmentally sustainable growth

Responding to the urgency of climate change and mounting environmental pressures, growth priorities must focus on green investment; environmental, social and governance or ESG standards; tackling air pollution; climate change and other key environmental problems, which all have to be a part of a sustainable growth strategy.

Health reform

Health reform is critically needed to ensure a sustainable and affordable national healthcare system, given that the ageing community and growing costly chronic care needs are exerting considerable demand on the health system.

Lee Heng Guie is Socio-Economic Research Centre director. The views expressed here are the writer’s own.

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