ECONOMIC changes are inextricably entwined with political ones – they need tectonic shifts in the way we have been thinking about social change. There in lies the difficulty for Prime Minister Datuk Seri Najib Tun Razak.
One year is just too little time to judge with any certainty how the new premier has done in terms of changing the very nature and structure of the economy – it’s no less than that which is required. But the right preliminary steps have been taken.
The question is whether Najib can effectively deal with the increasing political opposition to badly needed reforms. These are from groups, some of which are newly emergent and have the backing of past political leaders, which are strongly bent on preserving the status quo.
And deal he must with these very thorny issues; if he does not, the consequences for the country as well as Barisan Nasional’s chances at the next polls could take a serious beating from which neither can quickly recover.
But Najib seems intent. In a recent investment trip to Hong Kong, he told fund managers that he would keep rolling back policies that give preferential treatment to bumiputras as he sought to lure investments and boost stock market liquidity.
That won’t endear him to some local groups, one of which says it is intent on preserving Malay rights while another is composed of former prominent politicians, including ex-Cabinet ministers.
By Malay rights, one would infer the continued allocation of quotas for bumiputras as well as broad preferential treatment for them in the awarding of a range of contracts and privileges, and employment, especially in the government sector.
This is opposed to moves currently underway to make the country more competitive by gradually doing away with unneeded preferential arrangements across many areas.
It would not be far wrong to say that Najib started out on the right foot. First there was the 1Malaysia concept under which all were to feel that they belonged to and have a stake in 1Malaysia, reducing and eventually eliminating the gap that exists between them.
And then there was the move to roll back and eliminate the Foreign Investment Committee or FIC which oversaw and set conditions for investment, both foreign and domestic. There were also measures to liberalise investments in 27 sub-sectors of the economy.
The FIC had cast its shadow over the investment process before and its strong discretionary powers had been a constant and pervasive deterrent to those who wanted to plough money into Malaysia.
Since Najib stepped into the highest office, we’ve also had the Government Transformation Programme (GTP), an ambitious programme, probably never attempted anywhere before, to set specific quantitative targets for key government agencies to achieve within a certain time frame. Example: Cutting street crime by 20% a year.
For this, Najib roped in former Malaysia Airlines CEO Datuk Seri Idris Jala, a person who has an established track record of turnarounds in the private sector while at multi-national Shell and subsequently at the national airline.
The GTP identified a number of so-called key results areas to work on initially and devised a system of ministerial key performance indices or its now common acronym, KPIs, to measure and reward achievement.
The great thing about the GTP is that some things are already beginning to work. Early statistics indicate that street crime is reducing and that it will be possible to achieve the target within a year.
That is a major achievement considering that street crime has been rising these past few years. And it did not take a lot – or rocket science – to do this. The crime profile by area was analysed and patrols were bumped up in the worst areas. Simple!
That is an indication that things can be done and problems solved if there is a multi-disciplinary approach and political will to do it. Fortunately, bringing down crime is something no one will argue with as a goal.
Not so with the New Economic Model (NEM) now being formulated. It is quite a different proposition altogether because it deals with things such as incentives, competitiveness, meritocracy, removing patronage by nixing the link between politics and business, tightening government procurement, coming up with a more effective educational system, etc.
Each of these things is loaded with political baggage. Although deep changes are actually likely to benefit the rakyat, those who have had easy access to riches by being the fabled rent-seekers who obtain contracts and purvey them to others are likely to resist these measures with all their might.
But the interests of the nation and rakyat must take precedence. Change must come. A good start has been made. Steps have been identified. On some fronts, change is actually happening.
Now it is up to Najib to see it through for there is still much, so much, that needs to be changed.
3 APRIL 2010.