Malaysia needs five (2+2+1) stratagems to elevate itself to a higher growth orbit, achieve its true potential and maintain its position as one of the Asean Economic Community’s economic, social and political powerhouses. The suggested policy thrusts consist of 2 resets that entail transformation changes, 2 retunes or accelerated policies, and 1 reboot where an old policy is resurrected.
The 2 resets: The first reset covers the political system-social contract-new generation nexus where a paradigm shift from race-based policies to needs-based, more female gender-positive and inclusive growth policies is needed. The economic order has matured faster than current political arrangements. Without a reset of the race-centric political system, its maturity will lag far behind and become a drag on the deepening of the economic system. The second reset required is to change the unskilled foreign workers’ policy to a skilled foreign workers’ policy. This will reduce the country’s dependence on unskilled foreign workers and concomitantly quicken the pace of industrial upgrading and automation as well as the shift to a high-wage, high-value economy.
The 2 retunes: The 2 “retune” policies concern the government-GLCs-state’s role nexus and the education-skills training-workplace transformation nexus. The first retuning to get the long-term economic policy on track is to reduce the role of the government in the economy and pursue private sector-led growth as enunciated in the five-year development plans and economic transformation programmes. The latter involves fostering greater market competition and liberalisation to unlock the dynamism and creativity of free markets, free enterprises and entrepreneurs. The second retuning is to focus on education outcomes and industry needs, including boosting labour force participation and female employment while transforming organisational leadership and skills-upgrading that leads to globally competitive firms and institutions.
The 1 reboot: The good government-rule of law-citizens’ trust nexus needs a reboot to address the trust deficit and endemic corruption. In this regard, the clean-efficient-trustworthy slogan promoted before can be resurrected and inculcated as core values for future generations looking to improve the administration and governance systems.
Yeah Kim Leng is Professor of Economics at Sunway University Business School, an external member of Bank Negara Malaysia’s Monetary Policy Committee and former chief economist and managing director of RAM Holdings Bhd
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