10MP fails to impress economists

By Stephanie Sta Maria | FMT

KUALA LUMPUR: The 10th Malaysia Plan (10MP) yesterday came under scrutiny of three economists who lauded its acknowledgment of the country’s stumbling blocks but lamented its initiatives to tackle them.

At a dialogue jointly organised by the Malaysian Economic Association and the Faculty of Economics and Administration, Universiti Malaya, the trio cited a few initiatives that have set off alarm bells in their heads.

DAP chief economist, Tony Pua, called the plan “tired” and noted that it contains many similarities to past plans. His main concern, however, lay with the “shadow” of the New Economic Policy (NEP) which he said is cast over the 10MP.

“The NEP characteristic in the 10MP is the 30% Bumiputera quota, which, in fact, was left out of the New Economic Model (NEM),” he said. “The problem is not the quota itself but the danger that such a quota would prevent this community from moving ahead because it doesn’t distinguish between the rich and poor Bumiputera.”

“If a needs-basis is used instead, then all poor Bumiputera are assured of assistance. But when you dilute it with a specific quota for one race, the better-off of the race (Bumiputeras) are able to get a larger chunk of government benefits.”

The PJ Utara MP noted that this contradiction also extends to the NEM in terms of the government’s move to increase competitiveness, meritocracy, transparency and getting value for money from government projects.

He questioned whether a project will now be awarded based on the above-mentioned criteria or on fulfilling the 30% Bumiputera quota.

“This is a major dilemma that will play out throughout the next five years and affect out economic performance,” he said. “I see the 10MP mirroring the model of the late 1980s where many mega projects were launched which ultimately had to be bailed out by the government.”

“If we repeat the same cycle without implementing measures to ensure we get the best value for money from these projects, then we may face another crisis and this time the government may not have enough funds for a bailout. I’ve seen many mega projects and subsidies being awarded to big corporations this year and I don’t see the change that the NEM is calling for. ”

“Our problem now is two-pronged. The first is implementing everything in the 10MP and the second is having the political will to enforce those changes. At this point, I’m worried that the latter is missing and I hope to be proven wrong for Malaysia’s sake.”

Extremely tall order

Former executive director for the Malaysian Institute of Economic Research, Professor Mohammad Ariff, zeroed in on Malaysia’s ambition of becoming a high-income nation. According to him, the 6% growth per annum outlined in the 10MP is an extremely tall order.

“The 10MP takes us on the path of achieving Vision 2020,” he said. “Vision 2020 envisaged that Malaysia would have a per capita income of US$20,000 by 2020 but the financial crisis hit and and the economy slowed. Today, we need at least a 7% growth rate to even reach the US$17,000 per capita income by 2020.”

“The 6% targeted growth means that investments must grow at 12.5% per annum. But during the Ninth Malaysia Plan, investment growth only stood at 2% so this is a huge leap and I’m not sure if it’s possible.”

“Foreign direct investment (FDI) has only been growing at 1% per annum, which pales in comparison to China’s 10% and Singapore’s 9%,” he added. “Our FDI is practically crawling! It’s a far cry from when we were recording 9.1% growth before the Asian financial crisis. Something is seriously wrong here and the 10MP should be addressing this.”

Prof Ariff also hit out at the government’s fondness for throwing huge chunks of funds at the education sector in the hope of boosting it further. He bluntly stated that the main problem with the country’s education system is the severe lack of quality teachers.

“In Malaysia, being a teacher is a ‘last resort profession’, which means there is no passion or interest,” he explained. “We have to start attracting the best brains into this profession the way China does. And it does that by offering very good monetary rewards. In China, being a teacher is first choice because it is the only profession that provides 100% of salary as pension. This motivates people. In Malaysia, we pay peanuts and so we get monkeys.”

Formidable challenge

For Professor Rajah Rasiah, Dean of the Faculty of Economics and Administration, the allocation of subsidies presents a formidable challenge. He noted that the utility of money will be very high for the poor and very low or nil for the middle-income and the wealthy.

“The 10MP refers to providing equal opportunity, but does it really take that stand in its recommendation of mechanisms?” he asked. “Unfortunately, it doesn’t”

He said that while the poor will be able to survive and enjoy basic needs, they will not be able to cross the poverty line and contribute to the country’s economic growth.

“When these people are out of poverty, they are able to think productively and participate in the process of achieving Vision 2020,” he opined. “But what we currently have is a misallocation of subsidies. Subsidies that are meant for the poor are being enjoyed by everyone, both foreigners and locals. The treatment of social welfare here seems to be one that takes a penny-wise, pound-foolish approach rather than one that is dynamic.”

While he praised the 10MP for recognising the urgent need to quicken GDP growth, he also said that the plan needs greater depth and dynamism in terms of turning its 10 initiatives into reality.

  1. #1 by yhsiew on Saturday, 12 June 2010 - 5:52 pm

    Retaining the NEP will greatly increase PR’s chance of taking over the federal government in the 13th GE. It was partly because of the NEP that BN performed badly in the 12th GE. With the NEP continues into the 10MP, more non-Malay will give their support to PR in the 13th GE.

    BN is expected to pay a price in the 13th GE for being unable to reform after Tsunami 2008. In fact, a Chinese newspaper reported yesterday that behind the glamor of the 10MP, businessmen are worried that Najib does not have the ability to deal with corruption, cronyism and issues relating to the NEP as he made no mention of how he is going to deal with these problems in the 10MP.

  2. #2 by sheriff singh on Saturday, 12 June 2010 - 5:58 pm

    Why no money for accountability, transparency and integrity?

  3. #3 by Jeffrey on Saturday, 12 June 2010 - 6:32 pm

    The crux of the issue is the NEP/30% bumi quota.

    Criticisms are centered on how its implementation has spawned a patronage-ridden economy and how that in turn is a disincentive for development of the country’s competitiveness and growth and an incentive for wastage and leakages.

    That is where NEM next comes in. It is supposedly an inclusive blueprint to dismantle and eventually replace the NEP.

    However late last month an assembly of Malay NGOs led by Ibrahim Ali’s Perkasa rejected the NEM.

    The 10 MP that follows is the next 5-year economic masterplan of the country’s revised growth and budget deficit forecasts. It is supposed to incorporate the implementation side of the NEM.

    It is logical to presume that the 10 MP and NEM should be in sync and consistent in fundamental principles like hand and glove, horses and carriage.

    But no, as Tony Pua commented “The NEP characteristic in the 10MP is the 30% Bumiputera quota, which, in fact, was left out of the New Economic Model (NEM)”!

    So here there is a disjunct and disconnect between the NEM (economic) blue print (that is supposedly dismantling the NEP) on one hand and that of the 10 MP (economic masterplan) that retains the NEP)!

    Malay Right Wing groups opposed to reforms are clear that they reject the NEM but support the 10MP. (So do many other business and corporate elites and beneficiaries of the NEP now immediately getting excited by the big figures the 10MP and getting ready to lobby for a slice of the action)!

    Apart from rhetoric amid conflicting signals – no to NEP in NEM and yes to NEP in 10MP – what we have are the horses going one way and the carriage, another, and a glove that does not fit the hand!

    How can one expect economists and foreign investors to be impressed by the NEM when the 10MP as its implementation engine to drive competitiveness and growth go the opposite way?

    We can’t have economists and foreign investors decrying the wastages of NEP to praise the 10 MP when conservative right wing groups supportive and defensive of NEP being equally impressed with it (10 MP)?

    Should we spend time discussing the 5 year master economic plan (10 MP) when it is fundamentally divergent from and irreconcilable in spirit and principle from that of its blue print (NEM)??

    When the horses are already set to run North is it productive for us to evaluate how far the carriage drawn by these horses will travel South, so to speak???

  4. #4 by drngsc on Saturday, 12 June 2010 - 8:09 pm

    Looks like Najib/BN wants the cake and eat it. On the one hand, the NEM. And on the other hand, the NEP / 10MP. Basically, all talk, no change. What do you expect from the BN? Sloganising is great, but no meat. All talk only.

  5. #5 by dagen on Saturday, 12 June 2010 - 9:33 pm

    “Foreign direct investment (FDI) has only been growing at 1% per annum, which pales in comparison to China’s 10% and Singapore’s 9%,” he added. “Our FDI is practically crawling! It’s a far cry from when we were recording 9.1% growth before the Asian financial crisis. Something is seriously wrong here and the 10MP should be addressing this.” … Prof Ariff as quoted by author in article above.

    There, prof ariff basically gnawed jib’s 10MP down to its bones. Awwww. It must be hurting pretty bad huh, jibb.

  6. #6 by voice2009 on Saturday, 12 June 2010 - 10:51 pm

    There is no end to achieve the 30% by bumiputra.


    Do you know that the bumiputra grown millions each year?

    The article 153 supposed written as temporary and must be review times to times by agong with cabinet.

    Over 50 years not even one simple review.

    This country another 10 years behind indonesia and vietnam.

    This country another 10 years highly declared bankrupt.

    All because of artice 153 divided the MALAYSIANS.

  7. #7 by voice2009 on Saturday, 12 June 2010 - 10:57 pm

    Each year bumiputra population grow add another million.

    How can you achieve the 30% when each year the population grow another million years after years.

    No end.

  8. #8 by boh-liao on Saturday, 12 June 2010 - 11:02 pm

    Just like what d Chinese say: Change soup, but no change d medicine
    A useless action

  9. #9 by waterfrontcoolie on Saturday, 12 June 2010 - 11:34 pm

    I totally agree with the Professor, the fundamental educational system requires total revamp. This business of creating A’s for shiok sendiri is self-decieving. You have students or even graduates who can’t COUNT properly and seem totally oblivious to simple calculation. This simply not acceptable because basic maths is the basis for most logically reasoning. of course, it sad to note that only a small % of Bumis seem bothered by the current environment. being the majority of the population, if they refuse to acknowledge that the nation needs changes, there isn’t much progress the nation can achieve. But please don’t think by doing so, others in the nation will suffer; having no choice, they will plunge into non-Malaysian market for their survival. It is my hope that more middle class Malays take a serious look into such issues. [ The term Bumis would cover too many non-Malays in this country]

  10. #10 by tak tahan on Saturday, 12 June 2010 - 11:37 pm

    Those who have money,better migrate before too late.Change is like long time to go or forever.I can say 60% of ignorant malaysian won’t change as long as NEM similar NEP is still exsist.What a celaka malaysia!Beh tahan

  11. #11 by raven77 on Sunday, 13 June 2010 - 12:05 am

    The only way these guys are going to wake up is when we go Iceland/Greece way…BANKRUPT….until then we will see this sandiwara.

    It is not that if we get bankrupt, it is more a question of when. With the current deficit and hopelessly bloated civil service and govt expenditure and all the massive leakages thru corruption it will be much earlier then 2019. Idris Jala knows it. So do we.

  12. #12 by Jeffrey on Sunday, 13 June 2010 - 1:06 am

    ///It is not that if we get bankrupt, it is more a question of when./// – Raven77

    This may well be a realistic assessment. The subsidy-rentier mentality has seeped so pervasively that it has embedded deeply in the psyche of all our elites, whether political or corporate holding the levers of power as well as substantial sefgment of populace. It is pervasive in every institution and sector of our patronage-ridden economy.

    No leader who evinces political will to attack it will be allowed to survive in his position for long. (It is moot whether even if PR takes over the government it could substantially mitigate this feudal mind set reinforced by race/religious considerations and its habits).

    It implies – I hope I am wrong- that the country has to go down to the abyss and suffer all the pains first before anything could go upwards for the better. And even then it is not sure it will go upwards for the better for a long long time.

  13. #13 by ekompute on Sunday, 13 June 2010 - 3:22 am

    Najib is trying to pull wool over everyone’s eyes by trying to eat the cake and keeping it at the same time. He doesn’t walk his talk, so let us walk him out of his talk in the next general election.

  14. #14 by HJ Angus on Sunday, 13 June 2010 - 4:54 am

    The monster of corruption has grown too large and pervasive for the Bankrupsi Negara government to control with major organs of the nation’s institutions now badly affected.
    This is why BN leaders become Jekyl and Hyde characters.
    Looks like they need a split personality to survive – or is it a disconnect from the brain and the rest of the body?
    Let us end their suffering by voting them out in the next elections so most of them can be rehabitulated.
    Of course the change will be tough and traumatic but just take a look at Indonesia – they took the bitter pill and now have emerged stronger and more vibrant as a democracy.
    Unless we change, I predict Indonesia will become a better country than Malaysia in 10 years.

  15. #15 by HJ Angus on Sunday, 13 June 2010 - 5:00 am

    sorry typo or rather wrong word

    the word “habitulated” should be replaced with “habilitated

  16. #16 by boh-liao on Sunday, 13 June 2010 - 10:35 am

    We must not forget d important element in d ‘per capita income’ calculation: population
    With low priority in family planning, with high teenage pregnancies n rampant illegal becoming legal immigrants, our population is balloning very fast, by 2020 our population may reach 33 million or more
    Can our national gross income catch up with our population growth?
    Fecundity yes, productivity no, sure way 2 pok kai liao

  17. #17 by HJ Angus on Sunday, 13 June 2010 - 10:51 am

    Such has been the masterplan of TDM to enslave Malaysians:
    Remember the 70mil population target?
    Unfortunately many Malays bought into the concept that a “caring” government would take care of their needs.
    I won’t be surprised is the EPU operated on this basis:
    1.Secure the NSHighway for UMNO cronies
    2.Encourage a large population so more tolls can be collected.
    3.Create lousy sub-standard public transport systems so people have to buy made-in-Malaysia cars.
    4.Create some apparent competition via the APs system.
    5.Ensure BN cronies operated business that enabled them to reap excessive profits like those for IPPs, tolls and APs.
    Maybe such a masterplan did not exist but we can see that after 30 years of such policies, we have created a sub-species of Malaysians who have become totally dependent on hand-outs.
    Plus BN politicians who cannot begin to wean these 50-year old babies!

  18. #18 by son of perpaduan on Sunday, 13 June 2010 - 11:01 am

    This clearly proven Umno mentality is the main cause of rakyat moving backward. The past MP ( Malaysia Plan ) fails to lift us up and causing billions of ringgit wasted for all Umno bail-out. If this country lead by someone like DSAI, I have no doubts, thousand times much more better than any Umno fellas.
    Look, who’s control the economy? transportation like air, sea, land, banks, tolls concession, bernas, gambling, numbers forecast agency, awards of contract, automobile, education, petrol and gas, telecomunication, so on and so forth.
    Let all race as long they are malaysian run the business, if this mentality not change, 100 Malaysia Plan also no use, just like you work for even 100 years if you don’t change the mentality of what bumi or non bumi lah.
    Federal Constituition clearly recognize raja raja melayu and what you afraid of?? rakyat is your children, treat them equally and encourage them to participate national programme, distribute equally too. Let the religious department handle religion matter so that it is not rojak with our economy development.
    Corruption is cause by cronyism , therefore, get rid of the 30% of bumi quota, protect them in terms of qualified them not give them. Qualify and give make a lot of difference

  19. #19 by frankyapp on Sunday, 13 June 2010 - 1:49 pm

    I think easily 30 % of the RM320 billion will be siphoned off by cronies’s agencies in the form of commission and “kopi O ” money through the Ali Baba’s system. Another 20 % will be wiped out due to delays and abandoned projects in implementation and the devaluation of the ringgit. Hence what’s left is the balance 50% ie RM160 billion. RM160 billion for 5 years,I think is pretty too small to implement according to the 10MP and hence would need pretty lots of supplementary funds.Can Malaysia affort all these extra funds locally without bankrupting the nation through borrowing from outside ?

  20. #20 by boh-liao on Sunday, 13 June 2010 - 2:31 pm

    RM160 billion mayb just enuf 2 build a useless parliament in Put-putrajaya
    UmnoB/BNputras n cronies very happy – no wonder d number of millionaires in Malaysia grew fast n furious ahttp://www.businessweek.com/news/2010-06-10/singapore-malaysia-lead-recovery-in-global-millionaires-ranks.html

  21. #21 by boh-liao on Sunday, 13 June 2010 - 2:33 pm

    RM160 billion mayb just enuf 2 build a useless parliament in Put-putrajaya
    UmnoB/BNputras n cronies very happy – no wonder d number of millionaires in Malaysia grew fast n furious

  22. #22 by Jeffrey on Sunday, 13 June 2010 - 2:45 pm

    Under 10 MP “a world-class civil service college will be established to raise the competency of civil servants”.

    In part due to lack of English proficiency required in private sector the govt becomes the employer of last resort treated as if part of NEP’s extension.

    We have over 1.2 million civil servants against approximately 28 million population. Thats about nearly 5% of population, regionally highest compared to (from what I hear) Thailand’s 2.06%, Korea 1.86, Philippine 1.81, Indonesia 1.79, Laos 1.24 & Cambodia 1.18 in the region. Imagine the cost of maintaining such a bloated group – salaries, bonuses, mileage claims pensions etc – if efficiency/productivity is not there, not to mention if many also expect subsidisation from the public (Duit Kopi) for service.

  23. #23 by steven chan on Sunday, 13 June 2010 - 2:47 pm

    Indonesia which used to trail behind us has now overtaken us n ranked higher than Malaysia. They have even abolished their NEP n do away with 30% privileges n now all citizens are equal.
    This is a good eg. of a progressive nation. No point to talk all good until the cows come home but in reality nothing is achieved.

  24. #24 by sotong on Sunday, 13 June 2010 - 3:18 pm

    Unless there is a crisis, nothing significant is going to change.

  25. #25 by waterfrontcoolie on Sunday, 13 June 2010 - 4:27 pm

    There is a flyer in the mail when mentioned the name of an ex-deputy Minister incharge of Felda. Is there any truth in the accusation? If not, why isn’t the Gomen taling action against him for claiming that the PM is responsible for the poverty of FELDA? It was indicated that Billions, much higher than the $4.76 B of PKFZ had literally disappeared from the coffer! Though having seen so many magic shows happening in this Bolehland, I can’t say I am surprised. No wonder, we are indeed going BANKRUPT; just like our parther Zimbabwe!

  26. #26 by johnnypok on Sunday, 13 June 2010 - 5:05 pm

    1. All the Chinese and Indians migrate from Malaya

    2. Sabah and Sarawak pull out of Malaysia

    3. Malaya become part of Indonesia

  27. #27 by Cinapek on Sunday, 13 June 2010 - 5:35 pm

    “……His main concern, however, lay with the “shadow” of the New Economic Policy (NEP) which he said is cast over the 10MP…”
    so said Tony Pua.

    I absolutely agree with this statement. The NEM can spout any “feel good” rhetoric but when it comes to implementation, you can bet your last dollar the Little Napoleons will base their decision making on the ideals of the NEP if there is no definitive actions and declarations from the BN Govt that they are moving towards a need based policy rather than a racially based policy.

  28. #28 by ekompute on Sunday, 13 June 2010 - 6:22 pm

    QUOTE: “10MP fails to impress economists”

    Same song, different title… and the consultants are laughing to the bank merely by rearranging some words. I wonder whether any of those implementing the 5-year plans actually bother to read those reports.

  29. #29 by boh-liao on Sunday, 13 June 2010 - 7:05 pm

    First there is “Melayu Bangkit”, next maybe “India Bangkit”, “Cina Bangkit”, “xxx Erect”, etc

  30. #30 by ringthetill on Sunday, 13 June 2010 - 7:16 pm

    This seems too good to be true. It is imagination and creativity stretched to very highest degree. If all the the past Malaysia Plans had been fulfilled, the nation would have been in a better shape than what we experience today. All the wastage and corruption must be curtailed before we can hope to see better days ahead.

  31. #31 by victimofcorruption on Monday, 14 June 2010 - 5:54 pm

    “10MP fails to impress economists”.

    Which MP had impressed by being fair to the minorities so far?

    It is sickening to hear our PM chanting “Satu Malaysia, Satu Malaysia, Satu Malaysia” in the advertisements.

    It is even more sickening when our ex-PM came out and said that all our PM done is for the rakyat. It is rakyats’ fault if they still can progress. Wow!!! Blaming us back.

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