MySay: The uncertain way forward

This article first appeared in Forum, The Edge Malaysia Weekly, on December 28, 2020 - January 10, 2021.
MySay: The uncertain way forward
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Dec 31, 2020, marks the end of the vision statement that has defined the direction of the country for many years. It is called Vision 2020 or Wawasan 2020 in Bahasa Malaysia.

The mission statement of the 30-year plan launched in 1991 includes: “By the year 2020, Malaysia can become a united nation, with a confident Malaysian society, infused by strong moral and ethical values, living in a society that is democratic, liberal and tolerant, caring, economically just and equitable, progressive and prosperous, and in full possession of an economy that is competitive, dynamic, robust and resilient. There can be no fully developed Malaysia until we have overcome the nine central strategic challenges that have confronted us from the moment of our birth as an independent nation.”

The nine challenges that Malaysia had to overcome were concisely stated:

Challenge 1: Establishing a united Malaysian nation made up of one Bangsa Malaysia (Malaysian race);

Challenge 2: Creating a psychologically liberated, secure and developed Malaysian society;

Challenge 3: Fostering and developing a mature democratic society;

Challenge 4: Establishing a fully moral and ethical society;

Challenge 5: Establishing a mature, liberal and tolerant society;

Challenge 6: Establishing a scientific and progressive society;

Challenge 7: Establishing a fully caring society;

Challenge 8: Ensuring an economically just society, in which there is a fair and equitable distribution of the wealth of the nation; and

Challenge 9: Establishing a prosperous society with an economy that is fully competitive, dynamic, robust and resilient.

It was a challenge issued to Malaysians from all walks of life, and the people responded. Vision 2020 became the buzzword of the people and permeated into planning processes. Everyone looked forward to Malaysia becoming a developed nation.

In 2004, some 14 years after it was launched, one of my first tasks when I joined the Institute of Strategic and International Studies (ISIS Malaysia) was to write a mid-term strategic review of Vision 2020. Then ISIS chairman and CEO the late Tan Sri Noordin Sopiee wanted to know whether there were strategic faults in the plan, as opposed to how the plan was being implemented.

He related to me the story of how it had started. On a Friday morning, he was asked to provide a speech for then prime minister Tun Dr Mahathir Mohamed for reading out on Monday. That was a prime assignment which he set out to complete with gusto. He booked himself into Awana Genting Hotel for the weekend, and went for it. By Sunday, he had a speech, and sent it to the PM’s Office. It was read out at the Kuala Lumpur Business Club gathering. The rest is history, as they say.

I found out later that Vision 2020 led to almost 1,000 briefings across Malaysia to ensure all levels of government — federal, state and municipality — as well as other stakeholders understood it and would buy in.

I submitted my thoughts to Noordin a few days later. He was quiet for days after that. Too quiet, I thought, and I started packing my bags. Surely I would be “outed” for an unfavourable report, I thought. Such was the culture in the country at the time. When he called me to his office, I thought the end was nigh. It was a short, but sweet, run, I kept telling myself. The footfall on the carpeted hallway sounded unreasonably loud, I felt. Instead, we spent several hours discussing the report and came to an inevitable conclusion.

Four strategic issues

Vision 2020 had four strategic issues. They were not the kind that would be characterised as “killer cracks” in the make-up of the vision, but rather things that needed management going forward and back filling.

There is a popular saying, “I am responsible for what I say, but I am not responsible for what you understand.” Such was what happened to Vision 2020. While the vision itself called for a “united nation”, people would rather believe it called for a “developed nation”. Nowhere did it say that Malaysia was targeted to be a developed nation. Hence, the first issue, instead of being a sociopolitical statement, it became an economic one. Talk about path divergence! How does a country move forward when forces conspire to move in two different directions at once? It would end up being a drunken crab walking, to say the least.

This then brought about economic issues, the second strategic issue, playing along the believed theme for Malaysia to be a developed nation. Within the economic issue there were three sub-issues. The first was that to be a developed nation, it wasn’t about reaching a quantitative target, for example having a per capita GDP of US$20,000 per year. Instead, one had to be regarded as an industrialised nation. Being held in such regard is not easy. Even fast-growing Asian economies were put into a category called “newly industrialised economies” (NIEs) despite their high per capita GDP.

The second sub-issue was that one had to be invited to join the Organisation for Economic Cooperation and Development (OECD) to be held in that regard. Formed in 1948, it is the de facto “rich countries’ club”. To be a member means you are an industrialised nation, hence, a developed country.

However, this opens another can of things in terms of economic measurements. OECD members had an average GDP per capita of US$43,351 in 2017, but there was a huge gulf between the US$14,507 of Colombia and US$103,745 of Luxembourg. Obviously, there is no minimum qualification in terms of GDP per capita.

The third sub-issue was one of simple maths. Should one target to reach the average of the OECD nations in 2017, Malaysia’s economy — with US$2,586 per capita GDP in 1990 — would have to grow almost 10.2% per annum for 18 straight years to reach Colombia’s level, 17% per annum to reach the average and almost 23% per annum to be at Luxembourg’s level.

From the table, it is clear that for Malaysia to reach the average of the G7’s GDP per capita would require a growth rate of almost 17% per annum for 30 straight years. Instead, what Malaysia did manage was a growth rate of 7.92% per annum during the period from 1990 to 2020. In short, to be a developed nation quantitatively would have been too hard a challenge.

And then, there are the qualitative targets, which I will not get into as they require judgement on the part of those judging, and that — as we know — is fraught with colour based on background, culture, beliefs and preferences.

That brings us to the third strategic issue. In Vision 2020, there were no quantitative targets. That makes measurement difficult, if not impossible. For example, when is a country “fully caring” (Challenge 7) as opposed to “somewhat caring”? What are the metrics? This is one of those strategic issues that needed debate and the targets backfilled. Alas, it never happened.

The fourth strategic issue stares at us in the face, yet it is not openly acknowledged. How can a multi-racial country be united when major political parties back then (and even now still) were race-based?

What happened in the interim

Perhaps realising how awry things have gone, the sixth prime minister launched the Transformasi Nasional 2050 (National Transformation or TN50) statement and the aim of Malaysia becoming a high-income nation by 2020 based on the World Bank’s quantitative target of a gross national income (GNI) per capita of US$12,536 in 2019. Malaysia’s GNI was US$11,200 that year.

After the 14th general election, a new government took over and promptly launched the Shared Prosperity Vision 2030.

2020 was supposed to be Malaysia’s finest year — a united nation, following the targets of the Vision 2020 statement, or even a developed nation, if one were to follow popular perception. Yet, here we are today, fighting the effects of the Covid-19 pandemic and lockdowns that have badly impacted the world and domestic economy.

In the meantime, five key master plans were supposed to be continued. But without a guiding vision, how could they? The five are:

1. Industrial Masterplan

2. SME Masterplan

3. Capital Markets Masterplan

4. Financial Sector Blueprint

5. The 12th Malaysia Plan

As it stands today, only the 12th Malaysia Plan and the new Financial Sector Blueprint are due to be announced. But what binds these plans to what common purpose? Needless to say, without a common direction, Malaysia will grow in many different directions, diluting the energy it has to propel the country to the top.

Huzaime Hamid is chairman and CEO of Ingenium Advisors, a financial macroeconomics advisory

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