Friday, April 17, 2009

The Role of Government

What is the role of the government?

In the most idealistic situation, there should be no need for government - the people simply go about their daily routines and live their lives, worrying only about death and the hereafter for those who choose to do so.

The first real need for government is defence - when marauding tribes roam the earth attacking others in search of economic security (land, crops, animals) and luxury (slaves to do work for them).

The people wish to defend their way of life and they vote a strong and clever leader to fight off intruders.

This is the first element of a social contract where the people agree to listen to the leader when the time comes for defence for the sake of effectiveness - along with it comes the concept of statehood and loyalty to the state.

The initial arrangement is for the leader to work on a volunteer basis. He works his farm but spends his leisure exercising his muscles and strategising to fight off external aggression to the state.

The leader is reluctant to work as chief defender on a long-term basis. He will hold the position for a term, and then willingly resigns from the leadership and handles it to the next most capable person as deemed by the community.

When the stake increases, the leader is requested to focus on the job of defence while the people agree to pay him a stipend to sustain himself and his family. When the stipend is institutionalised, it is called tax. There is no other moral justification for tax except to provide public goods.

When the person creates a dynasty out of his initial appointment as the leader, the concept of royalty is formed.

Like any other family fortune or business, if the inheritance cannot last three generations, then the dynasty will likewise deteriorate and the throne challenged by a new pretender, as can be seen from Chinese history.

In modern politics, the dynasty is not the father-son baton, but the party.

It is very interesting to see how the role of government very quickly turns into politics.

Today, the people of course want defence from external aggression and external intrusion. The issues are security and immigration.

There is the other normal concern over law and order at home - mostly crimes and quarrels. In some countries, this sphere has expanded to punishing people for voicing out their disatisfaction with the leadership.

In the economic climate of today, the leadership should worry about unemployment.

Keynes' idea is that, if the private investment has failed, then the government should invest. This is for short-term stabilisation.

If the problem persists, i.e., if the private has lost its will to invest, then the government should improve the environment for private investment.

The key to private investment is confidence - confidence of the people in the control of their own destiny within the context of the statehood.

This is when the government places itself below the people - and not the people below the government.

The government should know best - and the only sign that it knows best is when the system it has created is running so well that the government can keep to its core functions - rather than crowding out the private sector.

Where the government should not know best is doing business - because that is the purview of the private sector.

Thursday, April 16, 2009

Implementation & Efficiency

A lack of vision is not a bad thing if the system is good.

A vision, no matter how good, is worthless if it cannot be implemented properly because of bad formulation or a bad system.

Visions, if too many, may be conflicting which may then render them worthless because of their ineffectiveness, not matter how efficient the implementation.

In Malaysia, we suffer from too many visions and one bad system.

1. Bad System

A system is bad when it cannot cope with the issues of the normal situation, either in terms of the volume of work, or in terms of the quality or appropriateness of its response.

A bad system may be the result of poor design, poor hardware, poor software.

In a third world country, the first problem is often poor design - because of the inability to see beyond the immediate. The system gets stuck in its rudiments. Incompetence or lack of hardware then hampers its evolution to a higher order. The system becomes anachronistic and under-resourced - under-resourced because of the anachronism.

Throwing more resources at a bad system without overhauling the system merely continues a bad system.

Old workers who know best "the system" are usually the culprits at arresting system change. Fresh and keen minds are needed, but only after they have studied and understood the nature of the job.

The only way the Old and the Young can be made to focus on the system change is to focus on the efficiency of the system.

2. Too Many Visions

This may be quite a unique situation in Malaysia - because there are just too many cooks.

A bad system, by itself, throws out many problems. The many problems are the signs of a bad system.

Trying to solve the many problems one by one will be an endless task - as well as a thankless task.

The many visions of Malaysia is a sign that we are trying to remove the symptoms and not trying to identify the root cause.

The many visions or directions given to government agencies are, in themselves, a sign of a bad system as well as an additional problem to a bad system. This traffic jam of directions could be a major reason for the stalemate in the delivery of the public sector.

The only way out of this traffic jam of directions is for the Department Head to deliver to the Big Chief personally by diverting existing resources from other functions (which usually affect those without a voice).

It is no wonder that people in senior positions heap awards on each other.

While those who do all the work in the middle and bottom of the service are generally forgotten - tied to those posts, as it were, by the invisible leash of the pension.

3. Speed & Quality

When there are too many ideas and there is an addiction to speed of implementation, in a bad system, the only adjustment factors are the cost and quality of the implementation. High cost, bad job.

Performance then becomes an arbitrary term to describe the job that is required.

Performance - quantity or quality.

Mediocrity is the general path because it may be the most cost-efficient way out. But as the quality requirements increase, costs will rise accordingly.

High costs, good job can only be accomplished by trained and experienced workers, with proper tools and resources.

4. Last Word

But building a good system requires a vision.

Leadership & Effectiveness

A leader deals with effectiveness - doing the "right" thing.

What is the right thing to do for the country?

1. 1Malaysia. This is a very tricky one.

(a) That Malaysia is one nation of one people? If this is the case, then we should just take it to be as such and proceed with policies and action plans that implicitly that 1Malaysia as the underlying factor.

(b) That Malaysia is one nation of many different races? If this is the viewpoint, then the implied policies and actions are to define the racial differences and find ways and means to build the bridge towards racial unity.

This is one aspect of the tricky part - because you are going to be spend a lot of time trying to do something that could easily have been assumed and taken for granted, as explained in 1(a) above.

The other aspect of the tricky bit is this - that racial unity, though important for national harmony, is, by itself, something that the people cannot eat. Racial unity is a necessary but not a sufficient condition for nation prosperity. Prosperity is something that policy can dictate.

2. Prosperity. This is another tricky one. What is prosperity?

(a) Prosperity, to those who have been awakened to the negative feeling of jealousy, is about the "signs" of prosperity - big concrete houses, big metal cars, expensively tailored clothes, and all the things that you find on TV about the rich and famous. With this misconception, jealousy is transformed into greed. Greed becomes important because, in the modern economy, money is needed to pay for these things. So, the focus of policy is on how to make money - quick and easy. The policies of the last two or three decadees demonstrate the danger of such a misconception of the idea of prosperity - and how it can damage an entire generation.

(b) Prosperity is about satisfaction, contentment, and happiness. Malaysia was a prosperous nation in this sense, a state of equilibrium, of peace and harmony in the truest sense of the words. Then, we became jealous of foreign direct investors - we chased them off and we poured money to buy back what they had invested in our country - only to discover that we did not know how to handle those businesses profitably, because we forgot about business risks. We ventured outside our area of competence. Politicians tried to become businessmen. We went into a deep recession. We called in foreign direct investors to pull us out of the pit. Then, we tried to be clever again. We thought of schemes of spending without spending, thinking that the private sector and the foreigners could pay for the schemes. Reality showed up. We ended up having to dig deep into the treasury and the public paid dearly for misguided schemes. Now the coffers are empty. But we still dream of spending as the path to prosperity.

(c) Prosperity is the feeling we get when we, as individuals, are in full control of each of our own situation and, we would all like to think, destiny. Why? Because the reality is harsh and, whether we like it or not, we will have to put in effort, and even suffer, as we live our lives. Mistakes and errors will be made - old tricks, new circumstances; new tricks, old circumstances. By trying to take control of our own situation, or even having the impression that we are taking control of our own situation, we know what has happened, what is happening and, perhaps, what is going to happen to us. We know where we are and we know what we are going to do. There is purpose and direction. There is motivation. There will be effort. We rather suffer our own mistakes, and not the stupid ideas of others.

(d) Prosperity is NOT about an individual or a bunch of individuals, trying to take full control of the situation for everyone else. This will presume great power. This will be conspiratorial - things will go badly and the culprits will not own up and people will think they have a hidden agenda - and they may have not an agenda but lack of competence. Instead, the individual, or the bunch, should focus on building systems - clear systems that everybody can follow and play the game well. The economy is nothing but a system, and the economy is made up simply of rules of the game. The people play the economic game, and they will accept their own successes and failures - and put in extra effort to do better next time.

3. Clear System. What is a system? What is clarity?

(a) A clear system is one that everybody in the country can understand and follow and play well - or at least, the chance to play well. A clear system necessarily means that it is simple - that there are rules but not too many rules. We should do things, not wading through rules. We should not put in rules "just in case." We should think very hard before we create new rules, or exceptions to rules.

(b) Clear Economic System. We need to be clear about what an economy is all about. The economic system is basically an urban-based societal game where the chips used are called money. The tricky bit is to realise this: Economics is a game played by able-bodied educated individuals who constitute the economic mainstream. The internal game is how to join the mainstream. The external game is how to build a mainstream that can compete with the rest of the world; then, we will have a fighting chance to stand tall in the world. In the process, either the internal or external game, there will be people who are outside the mainstream. The role of the Social Safety Net is to provide assistance to people outside the mainstream. Sub-streams can be created - the economy can multi-layered. It is a mistake to destroy the mainstream and take the sub-streams to be the mainstream with no social safety net for the underpriviliged or undercapacitated.

4. Social Safety Net. Every modern society should have a good social safety net. What is the social safety net?

(a) The social safety net is the net that is placed under the high-flying mainstream of the economy in order to capture those who didn't make it to the tight rope or those who fall down from the tight rope. We want all our able-bodied and well-trained young people to climb to the top. This is important because with their advancement they will make the society a better place to live. The more productive the mainstream is, the more there is to spare to create the social safety net. By developing properly both the mainstream economy and the social safety net, the nation will have a system that can be conducive for peace and harmony and happiness.

(b) Without the social safety net, individuals will be petrified of the unknown future and their instinctive response will be to make lots of money and accumulate lots of assets in the hope of securing their future but in the process destroying the present for everyone.

(c) One of the arguments against the social safety net is that it will make people work less hard. I think it is about time that this is encouraged. I think Malaysians worry too much and work too hard for nothing. We should work less, create more by doing the things each of us really want to do. There is already too much economic progress through industrialisation and there should be greater emphasis placed on services.

(d) There could be less crime as a result.

Wednesday, April 15, 2009

Effectiveness vs Efficiency

The distinction between effectiveness and efficiency is patently obvious to those who have understood it. But for those who have not, it may be worth a recap.

Many people are confused between effectiveness and efficiency. A sign of the confusion is that they tend to use the two terms together - as in: "for greater effectiveness and efficiency."

But which is which.

Leaders should be concerned with effectiveness - doing the "right" thing.

Subordinates should be concerned with efficiency - doing the thing "right."

The leader's concern is direction. He points a finger and says: "Go there."

The subordinate's job is not to worry about the "correctness" of the direction - but simply to "go there" as quickly as possible - as efficiently as possible. For if subordinates start arguing about the correctness of the direction, then the team will get nowhere.

What if the whole project fails?

If the failure is the result of inefficiency of the execution, then the subordinates should be punished.

If the failure is the result of wrong direction, then the leader should be punished and not the subordinates.

There is much confusion in the apportioning of blame of policy in Malaysia.

The civil servants seem to be getting the short end - for most of the blame is on the efficiency of the "delivery system."

But the national chaos that we get now is not the result of the slowness of execution - but the speediness by which bad policies get executed so that the whole economic system of incentives and rewards and effort is all upside down.

The civil servants seem to be causing the mess when in fact they may not be the culprits.

The politicians may be calling all the wrong shots.

If the people cry out because of the error in policy, it is tempting to shut them up in order that the culprits do not be made to appear stupid.

But the people have a voice in a democracy - not matter how faint.

Tuesday, April 14, 2009

The Essence of Leadership

The essence of leadership is the ability to inspire.

By inspiration means that the very name or the very image or the very concept or the very idea energises in one a desire to act or a desire to do good or an heigthened state of being or even a happy state of well-being.

The inspiration may have come from observation or perception of their past words or past actions, or the words or actions of their parents or ancestors. It is entirely evidenced based, although some may argue that some of the evidence may be judgmental.

This is where many everyday images or symbols or icons help to inspire ordinary men and women to live happily in their quiet humble little ways.

When we think of leadership, we are thinking of something that is good - something on the side of light and not of darkness.

Why?

Because ordinary people are good and therefore the world in general is good.

This is why the world is abhor at the very thought of having to endure a leadership that is perceived to be not-good.

That abhorance may not be warranted, if the truth be known, but in a world of imperfect knowledge or understanding, we have to live with the informational handicap - which then is the reality that we have to be content with.

In other words, leadership is something that is intangible but visible from the effects it has on others. By the reaction of the surrounding, we know whether that leadership is inspiring or not inspiring - good or not-good.

Inspiration is something money cannot buy. Stimulation, yes!

Monday, April 13, 2009

2Malaysia: People Second, Performance Later

2Malaysia.

2Malaysia is a slogan that is much more original than the original one because the original one sounds more like 1Utama or 1Borneo - and both are commercial shopping complexes - are we up for sale?

2Malaysia is a slogan that is also much closer to the truth - that there are two Malaysias (2Malaysias?!) - (1) My Malaysia and (2) Your Malaysia.

My Malaysia is my Malaysia and it is mine.

As in - Your Malaysia is your Malaysia and it is not yours.

People Second

Me first.

This motto is that of a selfish person or society.

The big brother bullies the small brother. The big brother joining the big brother to bully the small brothers.

In a recession, the electee of the people and the servant of the people are kings. People are an irritation like mosquitoes around the ankles. We kick and kick, and kick ourselves.

What is there to be gained by being charitable - others first, me second? There is too much of this all around - the boss taking credit for every piece of rubbish you put out, and thinks he's clever. Maybe, he is!

Performance later.

But promises now. Yess, yess, yes, sir!

Talk big, walk and talk, do nothing.

What is the reason for a person to perform now and not tomorrow - because if he does not perform now, he would be dead. Ask the Loan Shark victim. Ask the unemployed. Ask the diabled. But ask a potential pensioner who can never be sacked!

"Performance now" is something you tell others now.

"Performance later" is something you do yourself.

1Malaysia vs Flatened World

"1Malaysia: People First, Performance Now" is a good slogan.

First, it says there is one Malaysia - which is a very good starting point.

Second, it says put the people first - which means that the government and that includes the politicians and the Civil Service must put all the people first - which is certainly a noble point.

But to put it into action means dispensing with case by case consideration (apart for exceptional cases) and go for a rule-based system - a rule that applies to all.

Third, it says act now - which is good - but only if the government, including politicians and the Civil Service, are competent, if not experts in their jobs.

If not, instant action without competence will bring the society and economy to ruin - and this is where we could be as a result of past policy actions.

So far, we are only dealing with self-correction - in other words, for the government to get back to doing its job properly.

But what are those proper jobs. (The KPI Minister may have something to say on this.)

The most important task of the government today is to position the economy properly in the new international economic order.

Do we continue to squabble over history and tear down our own house - or do try to expand and strengthen our economic boundaries and compete in the world arena - or do we simply allow some low-ranking civil servants to let in the enemies through the back door while the top dogs play office politics?

The priority for the government is as follows:

1. Build confidence among the citizenry on the basis that this country wants and treasures them all. National peace and harmony and goodwill.
2. Encourage all citizens to invest in the future of this country - children's education, businesses.
3. Encourage all citizens to re-invest in the future of this country - bring back top students, build more businesses.
4. Provide technical assistance to all economically-disadvantaged citizens to help them participate fruitfully in the economic mainstream. Avoid political corruption of the economic system. There will be jobs for people to teach methods and systems to others.
5. Bring the best of the human capital to the top - regardless of race - so that the nation can compete with the best in the global economic arena. Chop off the link between the political elite and the business elite.
6. Ensure that politicians do not amass wealth while in office - yes, they have sworn to serve and survive on their official salaries - and their families too.
7. Provide a good social safety net for all citizens (not just politicians and civil servants) when they grow old or are incapacitated. This is the real "People First." If we don't, the whole nation is poorer by it.
8. Develop world-class universities and technical colleges in the country. Measure performances with peer-review researches, linkages to industry and success of students in getting jobs or finding useful occupations in society.
9. Institute the highest moral standards for all politicians and civil servants and other leaders. Integrity, diligence, charity.
10. Make sure existing infrastructure and mechanisms work smoothly.