by Dr. Chen Man Hin
The Barisan Nasional government frequently makes pronouncements that the economy is sound, with GDP growth rates of 5% and above.
However the following statistics of per capita income do not give a flattering picture of Malaysia:
PER CAPITA INCOME OF SELECTED ASIAN COUNTRIES
1967/ 2005
Malaysia US290/ 5,042
Singapore 600/ 26,836
Hong Kong 620/ 25,493
Taiwan 250/ 15,203
S. Korea 160/ 16,308
In 1957, Malaysia had the second biggest per capita income after Japan, but now we are at the tail end among the front-rank developed nations in Asia.
In 2005, Malaysia’s per capita income increased by only 17 times from 1967, as compared to South Korea which increased 100 times. Taiwan 60 times, Singapore 45 times and Hongkong 40 times.
Malaysia is far richer in natural resources than the other countries. Singapore for example has no rubber, oil, forests, palm oil, etc.
The difference is in the development and utilisation of human resources. Malaysia has failed to make full use of the human resources in the country.
The statistics indicate that Malaysia was competitive with the other countries up to 1967. Thereafter, the Asian tigers like HK, Singapore, South Korea and Taiwan leapt forward to lofty heights.
In 1966, the bumiputra policy was formally announced as a policy and in 1971, the National Economic Policy was launched. The various regulations and measures from these two policies slowed down economic growth considerably. Entrepreneurs, businessmen, traders and small and medium industries were put off by these policies.
The reaction of international countries was negative, and many investors shied away from Malaysia. Foreign direct investments declined considerably to US$3.9 billion in 2006, whereas Asean countries had FDIs of US$10 billion for Vietnam, US$7.9 billion for Thailand, US$30 billion for Singapore. China had US$70 billion FDIs in that year.
The NEP which compels reservation of 30% for bumiputras in all economic activities has dampened investment interests of both local and foreign investors.
In china, development was depressed in the days of communist policies. The commune system where production was collected by the central government leaving nothing or a small percentage for the farmers and workers destroyed the enthusiasm of the people to work.
With the launching of liberalisation policies in 1978, China leapt forward and she is on the way to become a world economic power by 2030.
Malaysia too must implement global policies like liberalisation of all economic functions. Bumiputraism and the New Economic Policy are outdated measures, and must be replaced by more pragmatic and enlightened measures.
If Barisan stubbornly clings to old baggage policies, then it can be predicted that Malaysia’s per capita income will continue to lag behind the Asian tigers.
The answer is to go global and liberalise. Liberalise! Liberalise! Liberalise!