Archive for category NEM
10 May 2013
On Sunday, after a hotly contested general election, a record electoral turnout and over half a century of essentially one-party rule, the Malaysian people edged toward change _ but chose not to make the leap.
The campaign saw the ruling Barisan National (BN or National Front) emphasise stability, continuity and economic growth, and the opposition Pakatan Rakyat (PR or People’s Alliance) urge the end of corruption, the institution of minority rights and dealing with issues over the cost of living. In a contest that always seemed too close to call, Prime Minister Najib Tun Razak has held on to power, taking the prize from the indefatigable Anwar Ibrahim and his PR.
The election confronted Malaysia with big choices. While the Najib government led a tactical retreat on some elements of the old order, Mr Anwar called for its sweeping rejection.
Malaysia struggles with breaking through the “middle-income trap”. Wages have climbed to the point where the country can no longer compete internationally in labour-intensive manufacturing yet skills and systems haven’t improved so that Malaysia can compete effectively in the same product lines as more advanced countries.
Without further reforms, it is difficult to see how Malaysia can escape from this middle-income trap. Much of the struggle to find a way through has to do with escaping the legacy from the old order _ a “New Economic Policy” framed over 40 years ago that entrenched discrimination against minorities (including the significant entrepreneurial classes) and affirmative action through government-linked corporations (and systemic entrenchment of political patronage and corruption). Read the rest of this entry »
by Jayant Menon, ADB and ANU, and Thiam Hee Ng, ADB
East Asia Forum
April 25th, 2013
Private investment in Malaysia never fully recovered from the impact of the Asian financial crisis.
Foreigners have continued to shun Malaysia, but it now seems that even domestic investors are fleeing, with Malaysia becoming a net exporter of capital since 2005. One explanation for the sluggish performance of domestic private investment relates to the crowding-out effect of the growing dominance of government-linked corporations (GLCs) in many sectors. The influence of GLCs, however measured, is both widespread and pervasive.
The GLC share of operating revenue is approximately one-third in the aggregate, and they control more than half the industry share in utilities, transportation, warehousing, agriculture, banking, information communications and retail trade. GLCs employ around 5 per cent of the national workforce and account for approximately 36 per cent and 54 per cent, respectively, of the market capitalisation of Bursa Malaysia and the benchmark Kuala Lumpur Composite Index. Read the rest of this entry »
The Sun Daily
Posted on 21 April 2013
JOHOR BARU (April 21, 2013): The state of Johor is without a doubt, the state where all eyes are drawn – whether from the Barisan Nasional side, or from the Pakatan Rakyat.
Big names from the opposition have been parachuted to this southern state of Malaysia, where they hope that the 1.5 million voters here will cast ballots in their favour.
For the Barisan Nasional, the pressure is on to retain power in this birthplace of Umno, and they are more determined than ever to keep Johor in their grasp.
Even with so much at stake, the battle for Johor has taken off in a gentlemanly fashion, with fierce rivals going so far as to praise each other. Read the rest of this entry »
Hopes for Malaysia to be a high-income economy are not bright because Najib’s NEM does not dump the NEP policy
by Dr. Chen Man Hin
DAP life advisor
2nd March 2013
Look at the FDIs inflow to Malaysia compared to other Asean countries for 2012.
According to UNCTAD Malaysia FDI for first half of 2012 was US4 billion, and for the full year would be around US 8 billion.
Whereas it was Singapore US 27.4 billion, Indonesia 8.2 billion, Thailand 5.6 billion.
World bank figures for PER CAPITA INCOME for 2011 are:
Malaysia US$ 9500 ( US$ 7440 in 2008)
HONG KONG 36012
South Korea 22424
But Malaysia’s PCI of US9500 is far way from the required high income level of US$ 16,000 Read the rest of this entry »
By Dr Chen Man Hin, DAP Life advisor
23 Feb 2013
Events have shown that the NEP is still enforced in the economic development of the economy – two faced NEP and NEM economic policy.
Soon after being Prime Minister, Najib launched his New Economic Model to stimulate development with the aim of achieving a high economy like that of the Asian Tigers of Singapore, S Korea, Hong Kong and Taiwan
To do this he had to get rid of the economic handicaps wrought by the New Economic Policy. It is on record that Najib announced on May 2nd 2009 that he would replace NEP with his New Economic Model (NEM).
It is now 2013, and the signs of a high economy are not encouraging. For Foreign Direct Investments (FDIs) of 2012 Malaysia scored 9 billion US dollars compared to Indonesia’s US$19 billion and Singapore US$130 billion. (World Bank figures)
Per capita income for Malaysia in 2012 was US$9500 million, compared to Hong Kong US$30 million, Singapore US$50 million and South Korea US$25 million. Can Malaysia reach a high income status of US$20million by 2020.
Read the rest of this entry »
Mohd Ariff Sabri Aziz | November 28, 2012
Free Malaysia Today
Malaysians think that by changing the present set of bad people with good ones everything will be all right, but nothing is farther from the truth.
People do not want to believe that if you have an intrinsically bad system, you are good at the beginning, but you are eventually going to degenerate.
But people don’t want to accept this.
Let’s assume Prime Minister Najib Tun Razak is a good person (he probably is) but the system which sustains him is bad. It will eventually cause him to turn bad.
So it isn’t enough to transform society by changing the people leading it, but the system that structures our society must be changed too.
That is our (Pakatan Rakyat’s ) agenda now. Not just changing of guards, but changing the system that structures our society. Read the rest of this entry »
Free Malaysia Today
September 17, 2012
The prime minister is holding back on the election date to shore up flagging support and give his reforms more time to work.
KUALA LUMPUR: Prime Minister Najib Tun Razak could call national elections anytime between now and April 2013, but he may wait to announce a generous budget on Sept 28 as he plays a risky waiting game.
The ruling Barisan Nasional coalition is widely expected to win the election but further gains by the opposition after its strong performance in 2008 could undermine Najib’s standing.
Holding back until after September would give Najib more time to shore up flagging support among ethnic Chinese voters, and to convince Malaysians that his reform efforts are working as he tries to reverse the ruling coalition’s worst election showing in 2008.
It would also make him vulnerable to any worsening of the global economy or the emergence of fresh corruption scandals that could push swing voters over to the three-party opposition. Read the rest of this entry »
— Jayant Menon
The Malaysian Insider
Sep 12, 2012
SEPT 12 — It was not long ago that the Malaysian development story was hailed as a model of FDI-driven, export-led industrialisation worthy of emulation by aspirants in the developing world.
Malaysia remains an outstanding model of how openness to trade and FDI can transform a poor, agrarian economy into a thriving, manufacturing-based, middle-income one in a generation. During this time, Malaysia also successfully preserved social harmony in its multiracial society, relying on economic openness to sustain growth under an expensive affirmative action programme that skewed incentives, the New Economic Policy (NEP). In this sense, the NEP performed an important signalling role and played its part in delivering the peace and stability that enabled Malaysia to sustain high growth. This growth, combined with revenues from large oil reserves, facilitated a massive tax-transfer scheme that favoured the majority, without significantly eroding macroeconomic stability.
But all that changed after the Asian financial crisis. FDI flows fell sharply and continued to remain low even after recovery. While foreigners continue to shun Malaysia, even domestic investors seem to have fled, with Malaysia becoming a net exporter of capital since 2005. Malaysia continues to grow, but without private investment it is unlikely to break out of the middle-income trap. Indeed, these days Malaysia is often discussed as a classic case of the middle-income trap. Growth without private investment is also unsustainable and Malaysia risks sliding back. Read the rest of this entry »
by Shankaran Nambiar
East Asia Forum
June 8th, 2012
Credibility is a prized asset for any government, and with general elections fast approaching in Malaysia, Prime Minister Najib Razak is no exception to this rule.
Najib has an onerous task ahead of him because the Barisan Nasional coalition, which he heads, won only 140 out of 222 lower house seats in the last election in 2008. This simple majority of 63.5 per cent was the coalition’s worst performance since Malaysian independence in 1957.
Najib’s leadership qualities will be severely tested this time around, but he is well aware of the daunting challenge ahead. In fact, his awareness of the problems on the ground might be his strongest suit. So far, it has enabled him to take the first steps toward repairing the damage the Barisan Nasional suffered over the years since the 2008 debacle.
Two notable efforts in this direction were the launching of the New Economic Model and the 1Malaysia concept, both in 2010. These campaigns show that Najib understands that addressing issues relating to inclusiveness and governance are key to winning the upcoming 13th general elections by a convincing margin. Read the rest of this entry »
Reuters/The Malaysian Insider
Jun 03, 2012
KUALA LUMPUR, June 3 — Ethnic Chinese voters, upset over policies that favour majority Malays, have become increasingly alienated from Malaysia’s ruling coalition, raising the risk of racial polarisation and a slowdown in the pace of reforms.
Support for Prime Minister Najib Razak among Chinese voters plunged to 37 per cent in May from 56 per cent in February, a survey by the independent Merdeka Center showed on Friday. It found 56 per cent of Chinese were dissatisfied with the government, compared to 30 per cent of Indians and 23 per cent of Malays.
Recent state and by-elections underline the trend. The main Chinese party allied with the ruling National Front coalition in eastern Sarawak state lost 13 of 19 seats it contested in local elections last year and the opposition won a by-election in the same state in 2010 largely thanks to Chinese backing.
The Southeast Asian nation’s 6.5 million ethnic Chinese turned heavily to the opposition in 2008 polls, handing the National Front, which has ruled uninterrupted since independence from Britain in 1957, its worst election showing.
Malaysia has seen ethnic Chinese voting with their feet, leaving the country for better prospects aboard including to neighbour and rival Singapore, in a troubling brain drain of talent and capital. “Malaysia needs talent to meet its goal of becoming a high-income country,” the World Bank noted in a report last year. “But the problem is that talent is leaving.”
With elections likely later this year, the government has failed to reverse the tide with voters such as Jack Gan, who complains he had to study much harder than his ethnic Malay peers to get into one of the country’s top universities. Read the rest of this entry »
– Greg Felker
May 26th, 2012
Credibility and the search for a new developmental model
In comparative politics the word “regime” refers to the formal and informal institutions by which political power is acquired and exercised. In political economy, a regime refers to an enduring combination of “socio-economic alliances, political-economic institutions, and a public-policy profile” (Pempel 1998: 20). In the case of Malaysia, the Barisan Nasional (BN) regime’s durability in the former, political sense has been closely associated with a particular sort political economy, or regime in the second sense. Despite significant changes over the years, Malaysia’s hegemonic-party political system, centered on United Malays National Organisaion’s (UMNO) dominance, has since the early 1970s practiced a form of developmentalism that has shaped Malaysian society in profound ways. As the Pakatan Rakyat (PR) understands, its challenge to the BN’s national political monopoly is inescapably a contest about Malaysia’s economic development model, as well. To what extent, and in what ways, does the prospect of change in Malaysia’s political regime imply a change in the country’s pattern of development?
Contemporary debates make clear the close connection between political contestation and economic policy choices. Indeed, one of the UMNO-led government’s vulnerabilities is a sense, growing in recent years, that the Malaysian development miracle has wavered and, for large segments of the population, inadequately fulfilled its promise of a steadily improving quality of life. The notion of the “middle-income trap”, first popularised in a global context by Geoffrey Garret in 2004, quickly became a frame for discussions of possible policy reform within Malaysia and among foreign observers. Two themes have been prominent in these discussions. One is the issue of the quality of governance as this affects broader economic efficiency and productivity. Second is the mooted necessity of a broad liberalisation of restrictions and regulations to enable greater flexibility and entrepreneurial dynamism. In both areas, the opposition and pro-reform civil society organisations have made telling critiques of the incumbent leadership. For its part, Najib Razak’s administration has launched a series of reform initiatives under the New Economic Model (NEM) that speak to the same concerns about governance and the structural challenges to Malaysia’s continued economic development. This dimension of the new competitiveness in Malaysia’s politics adds programmatic substance to a political tableau in which mass protest, scandal, and cultural controversies have comprised much of the drama. Read the rest of this entry »
Less than 3 years into his term as the 6th Prime Minister of Malaysia, Najib Tun Razak has already been showered with the accolade of “Bapa Transformasi” courtesy of his many transformation programs. The litany of acronyms associated with Najib is like a never-ending alphabet soup – GTP, ETP, PTP, NEM, NKEA, NKRA, NEAC, EPP, SRIs.
One almost needs a reference dictionary to keep track of them. But despite his many programs, he is still very, very far from being a transformative Prime Minister. And his many programs are still very, very far from being transformative.
On the eve of what will be the most tightly contested general election in our history, Najib has shown a greater willingness to make U-Turns when faced with tough decisions that would have made Malaysia into a more progressive, liberal and vibrant country.
His various transformation programs are nothing more than expensive tax funded PR exercises that masks the business and politics as usual way of doing things that is taking place behind the scenes within the corridors of Putrajaya and within UMNO’s headquarters at PWTC.
Before Najib can earn the title of ‘Bapa Transformasi’, he needs to show that he is not ‘Bapa U-Turn’ first. Read the rest of this entry »
— Spencer Gan
The Malaysian Insider
Feb 11, 2012
FEB 11 — Dear Mr Prime Minister,
I need clarification. Two days ago, you announced that PNB and Khazanah Nasional will be divesting some of its businesses to bumiputera firms.
There was also the usual talk of open tenders and how qualified bumi firms will be considered. I am not going to bother about this talk of open tenders because it will snow in Malaysia before there is a level playing field in business.
What concerns me is this drive to ask Khazanah Nasional to divest its stake in non-core businesses to bumi firms. I thought Khazanah was the sovereign wealth fund of the NATION. And I thought that meant that Khazanah is the custodian of wealth belonging to ALL Malaysians.
If that is the case, then Khazanah Nasional should be divesting its non-core businesses to qualified Malaysian businesses. Read the rest of this entry »
By Mohd Ariff Sabri Aziz | February 2, 2012
Free Malaysia Today
Sometime ago I met The Economist correspondent Dr Richard Cockett who asked me whether Prime Minister Najib Tun Razak will succeed in his transformation ideas.
I said, Najib will not suceed. And why not? Because Umno won’t let him succeed.
Take the case of his New Economic Model (NEM). Nowadays we hardly hear about it. In the 2011 Umno general assembly, Najib did not even mention it.
Instead he devoted much of his speech sounding very combative and full of vehemence. What he did at the time was to actually retrograde to Umno cavemen politics – stick and stones.
So how is he going to push his tranformation agenda? Knowing Najib, he will revert to the ‘old’ tested ways of ‘patronage’.
Read the rest of this entry »
— Sakmongkol AK47
The Malaysian Insider
Jan 27, 2012
JAN 27 — Datuk Seri Najib Razak was crowned the “Father of Moderation and Transformation” by the World Chinese Economic Forum (WCEF), which said the prime minister’s “fair and just leadership” had benefited the Chinese community “tremendously”. WCEF chairman Datuk Michael Yeoh said in his speech at the conferment ceremony today.
This was the major news item of the day. WCEF is a gathering of Chinese hongs and towkays eager to seek business favours from the PM. How does Michael Yeoh come by his assessment?
Among others, Yeoh praised Najib’s 1 Malaysia platform, his administration’s decision to increase allocation to Chinese schools and the introduction of tax exemptions for churches and temples, saying the initiatives were proof of the prime minister’s commitment to “fairness and justice”.
Fuyoh! I had to pinch myself. Never have I heard such outpouring of boot-licking averments which Michael sought to prove by stating the material I placed in italics above.
Let me steal the thunder from Michael’s shameless sycophantic offerings. Read the rest of this entry »
— Lucius Goon
The Malaysian Insider
Sep 30, 2011
SEPT 30 — One day soon, I hope a Malaysian leader will emerge who will say what he means and means what he says.
This leader will not tailor his message to his audience, be in love with symbolic acts and depend on image makeovers.
This leader will not be afraid of making unpopular but necessary decisions and policies for the country and will not allow family members or associates to plunder the country at will.
Prime Minister Najib Razak last night spoke at a gathering of Malay business and economic NGOs. He told them not to be too infatuated with protectionism. That was good but in the same speech he also reminded them that the government had reserved more than 40 per cent of the massive MRT project for Bumiputera companies.
That certainly sounds like protectionism to me, and molly-coddling a group of businessmen and creating unnatural business conditions for them. Read the rest of this entry »
By Clara Chooi
The Malaysian Insider
Sep 27, 2011
KUALA LUMPUR, Sept 27 — Datuk Seri Najib Razak expressed today the need to eventually do away with Bumiputera quotas but said the government must continue to support the community’s best talent to ensure a more competitive business environment.
The prime minister pointed out that the New Economic Model (NEM) promotes affirmative action based more on meritocracy, saying “we must promote the right Bumiputera”.
He said offering quotas would promote complacency, hamper economic growth and bury Bumiputera talent.
“What we have done in the past is we have not promoted the right kind of people.
“We want to do away from (with) quotas but we must support them (Bumiputera entrepreneurs) in a way that would allow them to grow,” he told the Khazanah Megatrends Forum 2011 here this evening.
“If we give them quotas, what will happen is that they will rest on their laurels and eventually, they will not gain expertise,” he added.
Najib said the 30 per cent Bumiputera equity target “does not mean anything”, particularly if entrepreneurs decide to sell off their shares when prices soar, leaving little in the hands of the Bumiputeras. Read the rest of this entry »
By Jahabar Sadiq
The Malaysian Insider
Sep 14, 2011
KUALA LUMPUR, Sept 14 — Rushed tender deadlines, slow decision-making and an abrupt change of project owners is blighting the Klang Valley Mass Rapid Transit (MRT) project that is already reeling from controversial land acquisitions along the Sungai Buloh-Kajang line, critics say.
The Malaysian Insider understands that the key independent check engineer (ICE) job has finally been issued — eight months after it was first put up for tender in the last week of December 2010 — just before the change of project owners.
It was one of many tenders that had short deadlines, much to the dismay of many engineering companies interested in taking part in the bidding.
“The ICE tender was on the last week of December 2010 when most people are on holiday. If that is not bad enough, it took them eight months to finally send out the official award letter,” an industry source told The Malaysian Insider.
“And what is strange is the award was given out so late by Syarikat Prasarana Negara Bhd (Prasarana) but just days before the project was transferred to MRT Co as the new owners,” he added, referring to the switch in project owners by Putrajaya. Read the rest of this entry »
by Greg Lopez
25 August 2011
There are strong institutional reasons for the lagging performance against its regional neighbors
In the 70 years since World War II ended, East Asian economies, including Malaysia, appear to have largely got performance right. Malaysia was also one of 13 countries identified by the Commission on Growth and Development in its 2008 Growth Report to have recorded average growth of more than 7 percent per year for 25 years or more. Malaysia achieved this spectacular performance from 1967 to 1997.
However, since the Asian Financial Crisis of 1997 and1998, Malaysia’s economic performance when compared to previous decades has been lackluster and most macroeconomic indicators are trending downwards. This was confirmed by Prime Minister Najib Tun Razak himself in the publication on March 30, 2010 of the New Economic Model – Part 1. This was a very brave move but a necessary one by the premier as he acknowledged publicly the failures of Malaysia’s current economic model in order to demonstrate urgency for reforms. Read the rest of this entry »
By Yow Hong Chieh
The Malaysian Insider
Aug 26, 2011
KUALA LUMPUR, Aug 26 — Putrajaya’s powerful efficiency unit has admitted that the Najib administration needs to acquire and develop land along the Klang Valley Mass Rapid Transit (MRT) route as it cannot afford the multi-billion ringgit project otherwise.
In a letter sighted by The Malaysian Insider, Performance Management and Delivery Unit (Pemandu) chief executive Datuk Seri Idris Jala told Associated Chinese Chambers of Commerce and Industry Malaysia (ACCCIM) president Tan Sri William Cheng that the government was pursuing a “rail-and-property” model as it would not be able to recover the cost of the first line between Sungai Buloh and Kajang through fares alone.
“For the government to manage the project efficiently and sustainably, fare box revenue will not be sufficient to finance the high capex and opex for the MRT network,” Idris said in the letter dated August 23, written in response to Cheng’s queries about the acquisition of Jalan Sultan land.
“Increasing the fares is not an option as the government wants to act responsibly by providing the rakyat with an affordable means of transport. Instead, the government is adopting a prudent approach towards a sustainable financial model for the MRT through a modified rail-plus-property model.” Read the rest of this entry »