Media Statement by Dr Chen Man Hin, DAP life adviser in Seremban on 15th November 2009
WILL MALAYSIA PLAY A ROLE IN WHAT THE PUNDITS CALL ‘ASIA WILL LEAD THE RECOVERY OF THE WORLD ECONOMY’
It is becoming evident that while the economies in the West are trying very hard to revive their economies, and while America is still bogged down by failures of its banks – both big and small – China and India are having record GDP growths, followed by Indonesia and Vietnam.
This has prompted many economists to propose the trend that it is Asia that will show the way for recovery of not just the Asian economy but also the WORLD economy.
This conclusion was further emphasised only two days ago, at the GLOBAL LEADERS SERIES talk organised by the American Chambers of Commerce in Singapore, it was postulated that Asia will lead the recovery of the world, from recession.
This is happening because China is now the second richest nation in the world, with its economy galloping at a rate of 9% GDP growth, supported by positive GDP growth rates in Indonesia, and Vietnem.
CAN MALAYSIA HELP ASIA LEAD THE RECOVERY OF THE WORLD ECONOMY AS A RESPONSIBLE MEMBER OF APEC?
Unfortunately, the economy in Malaysia has not been as encouraging as countries in ASEAN like Indonesia and Vietnam which has positive growth rates of 6%. Malaysia’s economy slowed down in 2008 and is slated to slow down to minus 6% in 2009.
PM Najib has predicted that the recession has bottomed and the economy is projected to have 6% growth in 2010. Not many people share his optimism. The income from manufacture exports would still have a problem as its major markets in Japan, America and Europe have yet to recover.
The country is feverishing looking for new markets for its export, as substitutes for the slow takes from Europe and America.
PM Najib has courted China by establishing stronger ties and increasing bilateral trade relations. He has given China big contracts like building a double rail track, between Gemas and Johore Bahru, a dam in Penang and three other projects, in the hope of reciprocal contracts in China.
But these are not enough. What is required are solid FDIs from China and foreign countries.
Foreign investments bring in money and technology. The figures are not encouraging. Statistics show that FDIs into Malaysia have decreased in the first half of 2009 compared with FDIs in the first half of 2008.
This means that the investment incentives offered by the government are not attractive enough. Najib’s reforms of the NEP did not impress the investors despite the cut of the quota from 30% to 12½%. it would appear that the NEP policy is still very much in force. The NEP culture and structure are still there. There is no liberalisation.
If there is no real liberalisation, if there are still distortions in the economic system like quotas, APs and any regulation or rules that hinder free trade, the economy will continue to stagnate.
40 years of NEP has slowed the economy considerably and Malaysia is far, far behind Hong Kong, Singapore, Taiwan and South Korea. If there is no true liberalisation there will never be a 1Malaysia.
We, in the PR strongly recommend Prime Minister Najib to follow the course taken by China to fully liberalise the economy. China changed a communist economy to a socialist market economy,and is now the second richest country in the world.
If Malaysia does not liberalise, it will be overtaken by the other ASEAN countries who are more liberal and democratic. Malaysia may not join the other countries who helped Asia lead the recovery of the world economy.
MALAYSIA CAN ALSO HELP ASIA LEAD THE RECOVERY OF THE WORLD ECONOMY IF IT HAS A FULLY LIBERALISED ECONOMY LIKE CHINA
Dr Chen Man Hin
DAP life adviser