Wednesday, April 7, 2010

NEM, NKRAs, SRIs: Putting Them All Together

I have a strange feeling that we are doing everything but nothing may get done.

Why? There is a lot of visioning and missioning going on. But somebody has to stoop down to scoop up the dirt for the path to be clean.

Let me explain myself. (I am still trying to make sense of the NEM: Part 1.)

1. The new administration starts with a Big Bang - on slogan.

1Malaysia: People First, Performance Now.

What this is presumed to mean is that we should all put aside our petty differences and get on with doing some real work. 1Malaysia could be a rallying call to the rakyat to get out of own individual sectarianism and start thinking of ourselves and each other as Malaysians. In other words, let's move to a higher level of distinction for ourselves.

It is also a rallying call to all the races to live in harmony by respecting each other to right to a means of livelihood and economic opportunities so that by each of us putting in our efforts and working hard, we all together contribute to the improvement of our economy. Hence, performance now so that each of us will benefit from our own efforts and the efforts of each other as a result of synergy, momentum and economies of scale for example.

People First, Performance Now can also be a rallying for the civil service so that each and every public servant will work hard and smart in the interest of the people by helping them to solve their day to day problems in earning a living because of the many laws they have to comply, and through new and improved systems to create create efficiency and new opportunities.

1Malaysia is an ideal we all Malaysians should strive for so that we can always think of all Malaysian citizens as one people.

1Malaysia is an ideal now because it is a wish we have but a reality which we do not have.

In other words, there should be an attempt by us to change the way we have been thinking about ourselves and our fellow Malaysian citizens - because the way we have been thinking is not good enough, below our high new ideal.

There is a group who are happy with the old way of thinking, and there is a group who will be happy with the new way of thinking.

Each camp will argue its case in order to persuade more people from the other side to join them. It all boils down to economics and politics: who has the power to ensure that they are the main beneficiary of the position they are fighting for. The thinking is likely to be on the way the economy should be managed.

The slogan therefore operates like an overall label for the regime.

2. The next thing for the government to day is to do something big and significant that will redefine the key parameters for the Malaysian society and economy. What are the major parameters?

They are called the 6 National Key Result Areas (NKRAs): Reduce crime rate, Fight corruption, Improve education, Help the Poor, Improve infra in rural areas, and Improve public transport.

These 6 NKRAs are indeed big and significant because if we are think back to what our comments are on the NEM, we find that we keep falling back to the NKRAs.

So, the NKRAs contain most of the major solutions to the problems that are inflicting society as well as the economy - crime, corruption and education.

The NKRAs deal with issues that affect our national social and moral fabric, as well as our national social and economic infrastructure.

In fact, the NKRAs should be sufficient for the NEM and be dubbed the Great National Transformation Programme. Instead, it is being diminished as the GTP - The Government Transformation Plan.

But, seriously, if we can do the 6 NKRAs well, we should not have to worry too much about the NEM. But no, the NEM has to come into being.

3. The New Economic Model is supposed to be an economic model like no other economic model because it is supposed to be entirely new - if I know my English.

So the NEM is supposed to be this great Economic Transformation Plan (ETP) which is equal in stature to the NKRAs' GTP.

How is the NEM supposed to transform the Malaysian economy? There are 8 Strategic Reform Initiatives (SRIs):

(1) Re-energising the private sector
(2) Developing quality workforce and reducing dependency on foreign labour (NKRA3)
(3) Creating a competitive local economy (SRI1)
(4) Strengthening the public sector (NKRA2)
(5) Transparent and market-friendly affirmative action (NKRA2 & NKRA4 & NKRA5)
(6) Building the knowledge-based infrastructure (NKRA3)
(7) Enhancing the sources of growth (SRI1)
(8) Ensuring sustainability of growth (SRI1).

which can, as shown above, be reduce to just one simple objective: To re-energise, fire-up the private sector by creating a competitive environment for it, by encouraging the exploration of new ways of doing business (innovation) and by sustaining growth by paying more attention to the natural environment.

SRI5 is dicey, as the argument is that affirmation policy is good but there should be no rent which can presumably be created through corruption and collusion. Some may even want to add crime.

4. The "fourth pillar of the national transformation" according to the NEM: Part 1 is the 10MP which should contain details of economic programme for 2011-2015.

I think the NEM should just focus on narrow economic issues regarding investments - how to stimulate local investments. While the business institutional framework may be improved by streamlining rules and regulations, there should be greater cooperationa nd coordination by the NEAC with Pemandu to fine-tune the NKRAs to improve on the overall national social and economic framework that defines the general character of the nation.

The greatest piece of announcement in the PM's Keynote Address may be the corporatisation of MIDA which actually tries to address the issue of investments. If MIDA is going to be worthy of its new name of Investment Development (and not just Industrial Development), then there may be a case for NEAC with the NEM to be nested under MITI in order to work closely with MIDA to get investments going.

The real action of the government for transformation should then be given to Pemandu to drive government policies and spending in the right directions along the lines of the NKRAs.

The purpose of the 10MP then may just be for the government to announce the extent to which it is broke, so that there should be greater need for the general public to take care of itself. Hence, efficiency and private investments.


de minimis said...

Yes, the MIDA changeover was the most substantive matter.

walla said...

Those in the know will say much of what the NEM is proposing was already annotated in special papers submitted as far back as the 4MP and if those recommendations had been applied, we would not need to be in the present position of trying to make up for lost time, furthermore against the rapids of resistance.

Granted there is always the slick way to extend the ten-year deadline and so relieve pressure but that would be procrastinating what must be done anyway in the global context.

Having said that, one acknowledges that the 1Malaysia slogan creates a new mood to replace an uglier one, although recent outbursts and subterranean rumbles reflect certain fixations which remain entrenched regardless of their recorded consequences on the economy.

But having created a new mood, the next step of blueprinting frameworks may turn out to be retro if the action steps are not gingerly walked.

For something heavy and complicated to filter from apex down to pyramid base where the actions are to be taken, targets must be clearly spelt out in advance without dilution by distance traveled. In the behemoth that is today's government structure where politics also play a part, that may not be so easily achieved.

A simpler framework followed by a clap-bang tectonic shift would probably work better.

The gist of the present proposed framework seems to hover between urgency and complacency. The former, by admitting that the present economic anatomy needs surgery, the latter by its almost languorous way of trying to achieve creative destruction by destructive creation.

The bottom-line is this:

where are we exactly as a nation that has the capability to regenerate growth not from trading, mining and planting but from actualizing ideas which can command higher premium because buyers have already acknowledged that we can make great things and deliver outstanding service?

walla said...

One can have a gazillion steps to a new economic model but if they don't dovetail to increase our capability to make great things and deliver outstanding service to an increasingly discriminating global market spoiled for choices, then we will not achieve a self-sustaining high-income economy.

With that in place, my stab at answering the bottom-line question, looking at how the other high-income economies operate:

on our own, in the timeline we have, no.

In that light, the only clap-bang tectonic shift i can think of, for which i solicit your alternative ideas, is to liberalize our economy until we become a completely duty-free nation. In other words, the whole country becomes a FTZ. That to include services and ringgit flotation.

There are many ramifications of doing so. Certainly there will be costs, sunk and sinking. But that, to my mind, is the only stroke we must make in order to jolt all to wake up to the perils inasmuch realize the promise. Because as we stand, we have neither the saleable standards nor the critical mass of brains and experience in innovating a high-income economy. We have pockets of institutional structures, lapels of performance excellence, collars of nation-building. But we don't have the full savile row suit, and from the 4MP to this 10MP, we had also auctioned the pair of leather bally's. To do the things we must do in order to hit the economic cycle of high-income growth, we need real external inputs.

There's another way to think around it. If we say that the Mida changeover is the most substantive matter of all, then the Mida investment promotion function will be the most substantive role to support the NEM objectives in which case Malaysia as your most porous investment destination will be the fastest most powerful punch towards the direction of realizing those objectives. In other words, to think about the NEM, everyone must assume he or she is the corporatized Mida's director in charge of national marketing of Malaysia as the preferred investment hub.

That's the last fine line of the bottomline. But as it is drawn with a fine 2B pencil, some will choose not to see it and in proportion to their resistance, so too the failure of what is to come next but this time we don't have the luxury of starting as if we were at the inception of the 4MP with investors bursting to come play in this magical shangri-la with its runaway outperforming bourse nor look east policy and other soups of the day.

For those who know what the other bigger, hungrier and smarts-focused emerging countries are quietly doing, we are indeed, out.of.time.