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Losing steam

Publication Date : 12-10-2012


The events attended by Malaysia’s Prime Minister Najib Tun Razak over the past few days have been largely related to the policies implemented during Mahathir's time. On Tuesday, Najib officiated the MSC international advisory panel meeting and yesterday, he was at the Look East Policy Conference.

When the Multimedia Super Corridor (MSC) was launched in 1996, the international advisory panel had a star-studded line-up comprising the founder of Microsoft Corporation Bill Gates, Acer Inc founder Stan Shih and 42 other "who's who" in the multimedia world. Today, MSC is reduced to nothing more than a set of numbers,

The "Look East" policy, meanwhile, had an even earlier start than the MSC, but what have we picked up after all these 30 years?

If we had successfully implemented the Look East policy and the MSC project, we should have no problem transforming our economy. We wouldn't even need another ETP (Economic Transformation Programme). We missed the boat and now it will take us double as much effort to do the catching up.

Mahathir launched the Look East policy with the objective of getting Malaysians to learn from the diligence and impeccable work ethics of the Japanese people, while the MSC was meant to explore new economic realms outside of the manufacturing industry and to put Malaysia on the ICT bandwagon.

Unfortunately, these two programmes have now drifted into oblivion save for the rudimentary memories reawakened by the occasional conferences held in their honours.

In 1991, Mahathir mooted the national aspiration of turning Malaysia into a fully developed country by the year 2020. His argument was straightforward: So long as we attain at least 7 per cent economic growth every year, we will be able to achieve our goal.

Najib said in the Dewan Negara on July 19, 2010 that if the national economy were to grow at least 6 per cent every year, we would become a fully developed nation by 2020.

Under the shadow of the euro crisis, it is yet to know whether the national economy would be able to meet the 5 per cent target for next year, and with only seven more years to go and the global crisis still in force, the number game has now lost its meaning.

IMF Chief Economist Olivier Blanchard said it would take the world economy at least ten years to be delivered from the current crisis which started in 2008. If global world economy needs ten years to go back to the normal level of growth, that will pass our deadline to become a developed country.

As a matter of fact, we have already felt the brunt of a decelerating global economy. Our August exports were down 4.5 per cent y-o-y, the biggest fall since 2009, with the final quarter of this year set to be even more challenging.

As if that is not enough, commodity prices have been on a free fall as well. The CPO prices peaked at 3,930 ringgit (US$1,284) per tonne in 2008, down to 2,456 ringgit for December 2012 contracts.

Rubber prices are also on a down swing, from 10.45 ringgit per kg in April 2011 to the January 2012 average of 6.71 ringgit and October average of 6.30 ringgit.

Given the bleak external outlook, we need to look to domestic demands to buttress our economy. But with exports and commodity prices declining and the 2013 Budget lacking in real solutions and limited effects from the generous aid handouts, the prospects of our economy are anything but promising.

It appears that the leaders of the ruling Barisan Nasional are more concerned about their chances of winning the next general election.

Translated by Dominic Loh.

*US$1= 3.06 ringgit


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