New Economic Model (NEM) unveiled delay greatly fanfare. It has been accompanied by the regular unaccurate write-ups and puff from economic analysts from the mainstream concretion media. Possibly they see in it further than what can be discriminate or possibly can be an incorrigible cynic delay less credulity in pompous visions, in-particular those put out by a assemblage of consultants.
The National Economic Advisory Cabinet (NEAC) as its call suggests is purely an advisory organization delay very paltry – if any – antecedent or patch in implementation.The theories aback New Economic Model (NEM), firstly though, let’s prepare by noting that delay the drift of urgency struck by the cabinet in the muniment. This is a greatly insufficiencyed unlikelihood from economic muniments of the synod which enjoy been poisely optimistic on the state’s economic coming. The proem to the NEM notes that “the opportunity for exexqualify is now – Malaysia deserves no less”. Noorganization succeed dissimidelayed delay this. In certainty, in some ways, the Synod and NEM may be too delayed in seeking solutions on sundry key challenges.The opportunity for exexqualify should enjoy been at last 20 years antecedent.
By deem for copy Strategic Correct Initiative 2 on the developing a description resultforce and reducing dependency on outlandish labour. According to the NEM, “policies succeed standpoint on generating a potent resultforce to as the insufficiencys of a high-value cognizance arrangement bound wage-restraining labour traffic distortions, such as exorbitant and undistinguishing use of outlandish labour, succeed be removed. Although poise-dependence on outlandish labour has been identified as a elder absorption to the arrangement for sundry years, yet the sum of outlandish resulters in the state – in-particular if the sum of illegals is included – has confirmed in-fact full year during the slow 30 years. How to put a bung to this is easier said than manufactured. Another elder lack is that sundry of the so-called self-confident new strategic device directions are not new. A clever retrospect of synod economic muniments shows that these new device directions enjoy been regurgitated or recycled from antecedent Malaysia Plans.Thus the prospect strategic Correct Initiatives (SRIs) that succeed anchor the NEAC’s recommendations is appears to be old wine in new bottle.
If one examines the five elder pushs of the 9th Malaysia Delineation they appear no irrelative from the prospect SRIs of the NEP. If we go equcogent antecedent to the Eighth Malaysia Plan, we see the similar recommendations subordinate subordinately irrelative labeling. Instead of the prospect SRI for the NEM and five key pushs for the 9th Malaysia Plan, we enjoy the nine strategic goals of the 8th Malaysia Plan.More solemn concerns encircling the NEM redelayed to the following: • It pretends that the state’s GDP succeed expand at last poise 6 percent per-annum for the contiguous 10 years. This expandth blame pretends that the global arrangement delay which we are tied up succeed remain to expand full year delayout lose. As the modern global financial downturn has demonstrated, there is no insure that the global arrangement on which our exports are trusting succeed remain on a direct verse expandth pathway. Should there be a slowdown in the global arrangement, the NEAC’s scenario for the state’s per capita GNP to attain the mysterious sum of USD17, 000 in 2020 succeed be consummate.
It appears to pretend that petroleum and to a lesser degree gas produces succeed remain to be the coin cow driving the Malaysian arrangement. Are these produces sustaincogent poise the contiguous 10 years? Synod announces enjoy been dormant on this key doubt and the NEM announce similarly has no grounds touching to this accurate certaintyor. Currently, oil and gas produce accounts for further than 40 percent of synod produce. As oil product slows down and principle claim remains on an upward spiral, how greatly oil is there in the tank to fuel give and coming expandth?There is sound one verse in the NEM announce on the collision of diminishing oil product. Perhaps the contiguous portio of the NEM succeed enjoy further to say encircling this effect. • Although one of the prospect SRIs announces to generally-known sector correct and “a emaciated, consultative and exhibition standpointed synod”, a glaring oversight is any discourse and decomposition on how to reach at this emaciated courteous-mannered employment. We already enjoy 1.
2 pet courteous-mannered ministers in a population of 26 pet or almost one courteous-mannered minister for full 20 Malaysians. This is not affordcogent or sustainable.Japan, for copy, has a aspect of one courteous-mannered minister for full 155 of its population. If the Japanese aspect was to be applied to Malaysia, we succeed insufficiency to subject our courteous-mannered employment by one pet employees! Clearly this swelless of cutback is not politically practicable. However, what is prelude fix in Greece now – a meltdown of the state’s financial established – in wide portio due to deterioration, mismanagement of the state’s generally-known liability, and a outrageous courteous-mannered employment that has been the playground of patronage politics could very courteous supervene in Malaysia where the similar certaintyors lawful for Greece’s financial meltdown are at result.Let’s see if the contiguous NEM announce succeed be cogent to agree a conspicuous action delineation on the cuts to the courteous-mannered employment and other structural exchanges insufficiencyed for a emaciated and poise courteous-mannered employment anteriorly we declare it a realistic and achievcogent economic frameresult for the state. Finally, there is a elder unresolved confliction in the basic push aimed at disunion of subsidies and the push standpointing on lifting the groundwork 40% of households and reducing proceeds disparity.
The NEM categorically states that “the pricing of imported result and employments in Malaysia does not contempslow traffic prices …. [and] the wide synod payment on subsidies – is not sustainable”. Hence we can anticipate pricing corrects shortly imposing basic chattels and employments. But what succeed be the collision on the maintenance standards of the thin and inferior average tabuslow when subsidies are removed? There is announcement of a “Transformation Fund” to enjoyment the asceticism during the correct bound and of a saunter security net for the groundwork 40% households antecedent to auxiliaries disunion.Even if these are put in fix delayout distortions and leakages, the collision of traffic pricing of imported result and employments succeed be to swell proceeds inadequacy. And where is coin for this tolerant security net to conclude from when the target is to subject the fiscal arrears in the federal synod (7. 4% of GDP in 2009) to a adjacent poise delayin the contiguous 10 years? This is probably the Achilles heel of the NEM.
As methodic, the NEM is 20 years too delayed so that we are now sincerely caught betwixt a rock and a constrained fix.