Talk about reform plans

I REFER to the glowing reports about the achievements of the National Transformation Programme (NTP). Although these achievements are indeed substantial, the evaluation results of a near-perfect score would have carried a bigger impact on public opinion if it had come from an independent body outside the Government and the ruling party.

Election time in vibrant democracies is often described as the silly season. It’s the time when opposition parties make big promises on what they would do for the people if they win the election. The incumbent political party in power, on its part, would claim that all good things that happened during its tenure are due to the wisdom and competence of its leadership in bringing growth, prosperity and happiness to the people.

In the United States of America, the mother of all democracies, President Donald Trump claimed credit when the stock market climbed up impressively hardly a month after he took office. Economists and market commentators, on the other hand, said the rise was the result of the momentum built up during the previous administration under Barack Obama through a combination of domestic policies as well as favourable external developments. TV comedy shows quickly seized on Trump’s brash statements to make fun of the new president as he complained about the “fake news” media downplaying his claims to greatness.

As mentioned in the latest Bank Negara Malaysia Annual Report, economic conditions in the country are strong and stable, giving confidence that 2018 would also see good gross domestic product (GDP) growth on the back of the close to 6% growth in 2017. All this is commendable and acknowledged. But as the boxed articles in the Bank Negara report and other research publications also point out, there are fault lines in the economy, giving rise to concerns about wage levels for the bottom 40% (B40) and middle 40% (M40) households and their difficulties in coping with the rising costs of urban life. As such problems can stoke social instability, they should be openly recognised as major challenges that the Government has yet to come to grips with.

The Government faces a major challenge to control the excessive reliance on cheap foreign labour because of the vested interests benefiting from this human trade. However, the challenge must be met because the lax policy on employment of cheap foreign labour, and worse, the entry of undocumented foreign workers, have a depressing effect on wage levels across all sectors.

While export manufacturers become rich with paying them low wages, and political cronies make easy money importing foreign labour, the working class remains poor and does not feel any benefit from the strong economic fundamentals.

At the same time, there are not enough high skills jobs that pay better wages because the economy is not restructuring fast enough to wean itself off the old methods of production to automate and produce jobs of the modern technological age.

There are signs that youth and graduate unemployment is much higher than the national average. This is worrying because these frustrated young boys and girls can easily fall prey to the political and religious extremists in their militant calls for an Islamic state.

The country therefore requires major structural reforms in economic policies to generate competition, entrepreneurship as well as innovation and creativity and become like the East Asian Tigers. These Asian countries in our region were at one time poorer than Malaysia but have now become fully developed with high levels of transparency and accountability in their government.

They have modernised with a much lower ratio of foreign labour in their workforce by using labour-saving technologies to raise productivity levels which enabled them to pay good wages to their employees.

We should be like them to develop an ecosystem that is conducive for long-term investments. Nowadays, apart from the macro economic fundamentals, investors also place high expectations on the governance structure of public institutions, the rule of law and clean government when making their business decisions.

There is also an urgent need to modernise the education and training system with more emphasis on the teaching of English, Science and Mathematics in national schools as corporations look at education standards to assess the availability of high-quality human resources to operate the technologies in their plants and offices.

All these are the deciding factors for the economy to generate the jobs and incomes that make GDP growth meaningful to the working population.

Let us hope that debates during the GE14 campaign will indicate what the political parties will do to introduce the reforms needed for Malaysia’s future as a successful country.

TAN SRI MOHD SHERIFF MOHD KASSIM Kuala Lumpur