When the dust settles, what would we see?
An OECD paralysed, with a financial system staying barely afloat.
China may use the opportunity to refocus growth from foreign-owned export industries to local-owned domestic-oriented firms especially in major inland cities. There will be oppportunities for investors outside China to produce quality inputs for Chinese industries.
What will happen in the Malaysia economy? What must be done to repair the Malaysian economy?
The traditional Malaysian society and economy that we all have grown up in have been drastically changed - some would say destroyed.
We are no more Malays, Chinese, Indians and native Sarawakians and Sabahans.
Malaysia is now a mixture of billionaires, foreign workers, a whole bunch of speculators in shares and real estate, and consultants to government departments and GLCs.
We are all in for the quick gain. As opportunities for windfall gains evaporates as the oil money run out, we are all assassinating politicians for being empty handed.
First, beef up internal security to prepare for a spate of recession-induced crimes in the street.
Second, repartriate low-wage foreign workers. They are the ones that keep wages low and inhibit the use of technology in the economy - including construction.
Third, focus on investments - for exports to China. Malaysians should try to hire local professionals of all races. It is far better than attracting foreign investors to hire local professionals of all races.
Fourth, Malaysians should close ranks to work on putting together the fragmented economy (and the fragmented institutions). The divisive politics has destroyed the economy, and we do not need any 80-year olds to paddle us old-fashioned ideologies. For goodness' sake, we are in a globalised world - and what race are we talking about or are we really talking about power, monopoly, disgraceful wealth and opulence on the backs of those who toil.
Fifth, create a Third Force - the Liberals who care for the creation and spreading of economic opportunities throughout the whole society regardless of race or religion. We should take all key issues in Malaysia including the NEP-type and work out effective and transparent ways of balancing out wealth distribution, instead of the very crude old-fashioned quotas and licenses. There should be price-incentives to induce productivity gains and market-based wealth creation.
Sixth, sit down and do some proper political and economic analyses and publish them in peer-reviewed journals, even if of local origin. We have too much of foreign models using local data, and not enough original local thinking taking into account local conditions.
Seventh, we should take the Minister of Finance portfolio away from the PM and the DPM and give it back to the Minister of Finance. The PM should concentrate on national harmony and the DPM on internal security. The Minister of Finance on government spending and finance. The Central Bank on fighting inflation and financial speculation. Let the private sector a free hand to undertake investment. Remove politics from investment decisions.
Eighth, we have enough infrastructure to last another generation. We have expanded the aggregate supply curve. Let us work to use the infrastructure efficiently. Move the aggregate demand curve.
Ninth, reinstate the role of professionals in the economy. Remove politically-oreinted managers from public places.
Tenth, reinstate the role of markets in the economy with price movements doing the resource allocation. Let the people work, sweat, earn and keep.