Towards economic success in 2020


  • Letters
  • Wednesday, 01 Jan 2020

Photo: Bernama

MALAYSIA is a blessed country in terms of the economy. Despite external uncertainties, our economic fundamentals remain strong enough to maintain a respectable growth rate of 4.5% to 5% this year.

This is not just the luck of a resource-rich country. Our central economic agencies, ie the Finance Ministry, the Economic Planning Unit and Bank Negara Malaysia, must be commended for steering the economy through challenging times, especially after the 1997/98 Asian financial crisis. The reforms that they initiated 20 years ago have proved useful in establishing the economy’s resilience to external shocks.

I believe that the greatest hope that the public and business leaders have is that the government will act on confidence-building reforms. Draconian laws that restrict the freedom of expression and assembly, that allow arbitrary arrests, affect not only human rights but also the country’s investment climate. Such laws can ring alarm bells around the globe, giving the impression of an insecure government, afraid of its own shadow.

We also hope legislation to regulate political financing will see progress in 2020. Political parties do need money to finance election campaigns – campaigns cost money, after all – so they must be allowed to receive donations. However, as money politics can compromise the integrity and independence of those elected into office, it is in the interest of good governance that a law be introduced without further delay to ensure that such donations are properly regulated to be transparent and accountable, and are fair to all political parties, big and small, old and new. The law will have a favourable impact on the economy as well, as it will demonstrate that an investor does not have to buy political influence in high places to do business here.

A level playing field means that the government should also review the role of GLCs (government-linked corporations) in the economy. Those that cannot compete fairly in the commercial sector and are not viable should be closed down. Also, all GLCs

running businesses in the commercial sector should be free from political links at the board and management levels and operate with their own financing like private enterprises so that they are not seen as getting special advantages – which would kill investment incentive in the country.

Statutory bodies and state sponsored foundations that own GLCs at federal and state levels must be placed under public scrutiny by requiring them to publish annual reports; these reports should be tabled in Parliament and state legislatures.

All reforms will only last if there is a strong Parliamentary and legal system of checks and balances on the powers of the elected government. Therefore, we hope that Parliament will create select and standing committees to provide oversight on the functions and performances of Cabinet ministers and the ministries and agencies under their purview. Where appropriate, these committees should hold open hearings on matters of wide national interest, in the manner by which Commonwealth Parliaments deal with controversial public policies.

Our Parliament should also engage with researchers, academics and civil society on issues such as the wage gap in employment, the high rates of graduate unemployment, the dependence on debt to cope with the high costs of urban living, and the extra burden of having to pay for private tuition or private schooling just to prepare children to get good jobs. These issues, which have been highlighted by the Khazanah Research Institute and university professors recently, call for high level soul searching about the efficacy of government policies. By familiarising themselves with these issues, members of Parliament will get a better grip on where they should focus their oversight functions.

The Parliamentary committees should also initiate civil service reforms that are essential in strengthening integrity and efficiency in the delivery of public services. Above all, Parliament, being the highest public institution in the country, should ensure the independence of the civil service and its various branches by protecting them from political interference. It should support strengthening the role of the Public Services Commission and other service commissions to become the highest authority on appointments, promotions and disciplinary actions. Although the prime minister and his ministers have the right to nominate their preferred candidates to hold the top positions, their nominations must be subject to confirmation by the relevant service commissions.

This is essential to create confidence in the public and the business and international communities that whatever the political changes, career civil servants will continue to administrate the country.

Further, as the cost of maintaining the civil service is growing faster than revenue, and with government salaries and pension payments accounting for the biggest share of the annual federal operating budget – causing the total budget to be stuck in deficit over the last several years – there is also a need to review the size of the public sector and produce comprehensive measures to ensure the country’s fiscal and financial stability.

Reforms are hard in any country, more so in a multiracial country like Malaysia. But as the government’s policy is to make Malaysia a high income country like the Asian Tigers, we have to be as modern, progressive and competitive as they are in our institutions and policies. Those countries have shown that reforms do matter to bring strength and vitality into society and the economy.

The Pakatan Harapan government must have the political courage to not let the conservatives stand in the way of national progress by using the politics of race and religion to block institutional, economic and social reforms. Let us hope this new year will see much anticipated reforms being put into place.

May God bless Malaysia with a successful future.

TAN SRI MOHD SHERIFF MOHD KASSIM

Kuala Lumpur

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