Talk of becoming a high income nation....

What does it take to become a high income nation? I am not an economist - so these are merely random thoughts from a brain that can't seem to stop thinking about how to make this country a better place for all of us (Malaysians first, naturally!)

1) Boost government income and reduce the budget deficit by improving the quality of our human capital.

How can one do this? Boosting the earning power of the rakyat hence deriving a larger proportion of government income through income tax contributions. (Singapore, Hong Kong are richer countries based on the quality of their human capital - yet these countries have lower tax rates than Malaysia currently..... it is not higher taxation that helps - it is the earning capacity of the people and this is not achieved by allowing our best brains to leave the country and leaving the bulk of the population in low earning, low productivity jobs - these low income wage earners do not contribute to the taxes that are needed to fund our economic progress.

2) There is talk of removing subsidies so that employers will be forced to raise salaries of workers. Having said that, what makes Malaysia competitive amongst our counterparts in the emerging world? Lower costs and our middle sized population. However, removing subsidies alone is certainly not going to be the driving force that will make foreign companies invest more in our country - what's the attraction for foreign companies when they know that costs are going to rise? What value is in it for employers especially if the quality of the human capital or productivity does not improve?

It is a question that we all try very hard to answer but did certain policies of the government in the past contribute to the state of the poor quality of the human capital currently? The fact is that the one thing that can improve human capital is open competition. What drives each of us to achieve success and what makes a winner a winner? Without that, we will only be subject to more mediocrity.

3) Government expenditure - so far I have talked about increasing government income. (Let's not talk about Petronas, yet, ok). How transparent is the government with regard to spending of taxpayers money? Failed mega projects? Mismanagement of funds (BTW, why is there no longer any news on PKFZ....?).

The key thing is this : How can the government request the public to tighten their belts with the removal of subsidies when they can't even be open and accountable with how they spend our money? The onus is on the government to prove that they are worthy in the management of taxpayers money.

What are the issues that are close to the taxpayers hearts?

1) Quality Education where the best brains are given the most opportunities - true meritocricy (how else do you improve human capital?), access to libraries and information technology .

2) Good public infrastructure (we pay tolls everywhere and yet we pay higher taxes than in Singapore - go figure) in the form of public roads, public transportation

3) Foreign investments and job opportunities - however this area lacks transparency and regulation (the key thing is that there should be some sort of conflict of interest clauses - politicians too often want a piece of the pie and that is not good governance) - if this is addressed, and policies do not get switched over and flip flopped all the time, perhaps the investors would have a better appetite to invest in Malaysia.

4) Rewards for innovation

5) Affordable Healthcare

We certainly do not need high spending on defense......

What value do I get for every dollar of taxes that I pay?

What will it take to make the government realize that the quality of the human capital in Malaysia desperately needs to be improved?

If we continue as a nation to fight amongst ourselves, we will eventually lose out to the competition globally. So should you listen to the fundamentalists (IA - PKS) with their protectionist measures and lose out to the rest of the world or should you listen to some common sense and move the nation forward? Because that will eventually improve the lot of everyone in Malaysia (including IA-PKS though they may be too small minded to see this now)

Where is Malaysia headed? In response to Romerz post

I agree with Masterwordsmith that it is indeed worrying to see where Malaysia is headed.
After the March 2008 GE, we watched and waited to see of there would be any improvement in the likes of our current administration.
We watched as scandals (Lingam-ism, PKFZ, Jet engines, Toyolism, stadium collapses... amongst others) are reported but no tangible outcome of investigations is achieved. We watch in sadness when we see lives lost (TBH being one of them)for no apparent reason. We watch as the government makes flip flop decisions that affect the public and the future of our generations to come like our education system.
We watch as religious extremism is allowed to be fueled in the form of cowheads and now the burning of churches
We watch as the democratic process is tainted with the Perak incident.(We have not forgotten)
We watch as all these issues continue to remain unresolved and politicians continue to bicker and fight for control.
Where is Malaysia headed? I think it is very clear.
It is good to see though that common sense does prevail with calls to remain calm and avoid retaliation or demonstrations that can further stoke dissent in a sensitive situation.

Let's hope that 1Malaysia will deliver...or will it be more of the same?

As commented in response to Tony Pua's blog article (highlighted in my previous post)
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I think that the public will give recognition if it is due. Somehow though, I cannot help but agree with you ... the whole concept that is currently being pushed forward sounds really nice like a rather expensive advertorial but fear that the actual product does not match the description. The whole concept is good but the manner in which Perak was handled and peaceful dissent clamped sends out opposing messages. PKFZ -what's the latest dig on this? - UMNO seems to bulldoze through many other policy matters without considering the views of the component parties but does not offer any assistance to OTK? Our "favourite" Umno politician, KT of Selangor getting away with all his excesses also leaves the public feeling short changed and angry at his blatant disregard for public opinion and accountability. The MACC and police force is more a convenient and selective tool used by the government to serve its needs rather than an institution that the public can believe acts with integrity and independence. The whole point is that when the actions do not match the rhetoric, Malaysians will end up with a product which doesn't deliver but costed alot to advertise. I would rather they focused more on action and less on the packaging. Just got my first dose of propaganda on TV ..... looks nice but......Still, I would rather not continue to rant but will give the benefit of the doubt (yet again), watch and wait. Can someone explain more about Equinas to me?

Najib Must Deal with Corruption

Odette's commentary :

Visionary and well summarized. My worry is that corruption is already too entrenched in the current system that good intentions alone will not be enough to make any difference. Too many warlords defending their turf and holding each other at ransom. Arrogance and pursuit of self interests will eventually lead to the the decline of this country unless the problem is arrested. I'm not sure if anyone has the political clout to achieve this realistically........



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Article By Tunku Abdul Aziz MySinchew
PRIME MINISTER Najib Abdul Razak has done it again. His high income vision for Malaysia, following so closely on the heels of his yet to be fully charted 1Malaysia has caught the nation off guard.
Najib, while remaining largely uninspiring as a leader, is at least aspirational. Nothing wrong with indulging in a little fantasy from time to time, but Najib has to learn to control his propensity for grandstanding. I don’t suppose it is too rude to ask Najib to spell out in the clearest possible terms what precisely he has in mind when he talks about 1Malaysia. Is it fair to ask us to support a concept that he has difficulty in articulating to our satisfaction?
Najib cannot be so naïve that he cannot see what the inherent problems are in the way of turning Malaysia into a high income nation. For starters, a country such as ours which has been so mismanaged these last thirty years in all the important areas of governance is a most unlikely candidate for the High Income Country Stake.
That does not mean that we have not the potential; indeed we have but, I am afraid we have squandered it beyond belief by putting in place investment, trade and industrialisation policies that have tended towards excessive, crippling control rather than encouragement to compete globally.As long as the spirit of the New Economic Policy is kept alive, competitiveness, the key to growing the economic cake, will remain on the back burner.
Najib and his UMNO colleagues may be dismissive of the debilitating effects of corruption on economic growth that will turn a middle income country such as Malaysia into a high income one. Let us look at countries at the top of the economic league table – countries that enjoy high income status. Finland, Denmark, Sweden, Holland, and closer to home Singapore, Hong Kong. Japan, Taiwan, New Zealand, and Australia are among the least corrupt countries in the world.
The message is clear. Corrupt countries like Malaysia may continue to dream: the reality is that if they are happy to bed down with corruption, there is no hope in hell or heaven, take your pick, that they will ever achieve high income status. Corruption is the antithesis of best practices, and as we have seen time and time again, all over the world, they are mutually exclusive.
Najib needs to fully understand the prerequisites for economic sustainability. The government under his stewardship must adopt rules, and values, based policies underpinned by systems of checks and balances as a minimum citizens’ charter. Key institutions such as the judiciary, the office of the attorney-general, the police and the Malaysian Anti-Corruption Commission have to be revamped to ensure that they perform their duties and functions in accordance with the law.
An incorruptible independent judiciary goes a long way in generating confidence within the business community. It says a lot about the reputation of the judges in our country when disputing parties prefer to seek arbitration elsewhere if they can help it. We need to clean up our act quickly as this is the only way we can show the world that we mean business, and that we have the best justice system that money cannot buy.
While it is necessary to rebuild our institutions at the earliest possible opportunity, more to the point is the need to put men and women of integrity in charge. Integrity is not restricted to any one race in our multi-racial Malaysia. A point often ignored is that if we put crooks and scoundrels in charge, we are putting the future of our country at very considerable risk, and yet the record of government management remains one of unbridled corrupt excesses because the government apparently is more at home with the crooks. The records speak for themselves.
A few years ago, at an anti-corruption conference in Cambodia, I had the honour of sharing the rostrum with Jim Wolfensohn, the President of the World Bank. It was his last overseas appearance before stepping down after a long and distinguished career at the WB. He was asked by a reporter what three bits of advice he had for Cambodia in its search for sustainable economic development. He said advice number one, fight corruption; advice number two, fight corruption, and advice number three, fight corruption!
So, Najib, the solution is staring you in the face, and all that is required of you is unadulterated political will. When as a result of systemic corruption government projects are conservatively estimated to cost 30% more than in a non-corrupt country, then is it any wonder foreign contractors concerned about ethical business bypass our country? We need a complete review of our systems of governance because there is much that has gone wrong with the way we manage our affairs. Of course, the tragedy is that there is none so blind as will not see.
In summary, therefore, a high income status is about competitiveness, open and accountable policies. It is also about sustainable economic and social development, equality of opportunity, respect for cultural diversity, human rights and public duty in the public interest. Is Najib up to it?