Experts laud ‘Shared Prosperity’
New national economic model a welcome change but challenged by old mentalities
PETALING JAYA: The “Shared Prosperity” economic model will have to first overcome the special privileges accorded to certain races in past economic models if it is to work, says three of the nation’s notable economic experts.
Former Bank Negara Malaysia deputy governor Tan Sri Lin SeeYan said that one place, to begin with, was the education sector where places to further study should be given out based on merit and without quotas.
“Surely, there must be political commitment and will.
“After 60 years of independence, we must increasingly move to a system to help the poor and disadvantaged.
“The other economic models always had special privileges for the Malays,” he said commenting on Prime Minister Tun Dr Mahathir Mohamad’s “Shared Prosperity” economic model that he unveiled on Thursday.
The new economic model, according to Dr Mahathir, will enable Malaysia to continuously experience sustainable and equitable growth at every level of the value chain, regardless of class, race or geographical location.
Lin also said that with income and inequality margins still wide, there was a need to narrow the gap to transfer wealth to the poor and disadvantaged.
“It is difficult to have a capitalist economy and income inequality.
“In a capitalist-based economy, to remedy income inequality, it should be private-sector driven with the government as facilitator.
“The government transfers the benefits to the poor and disadvantaged,” he said.
Former Treasury secretary-general Tan Sri Sheriff Kassim cautioned the government that it would be politically challenging to undo the privileged mentality, which has been the order during the previous government’s rule for 60 years.
“If we want Malaysia to be an Asian Tiger, we have to change our attitude.
“Politics will be the biggest hurdle to a shared prosperity economic model in this country,” he said.
Sheriff said the concept of shared prosperity reflects the government’s desire to reduce income and wealth inequalities and create a more just society.
“It means that the interventionist policy will continue but unlike the New Economic Policy (NEP), which emphasised the bumiputra, the government will make it inclusive by emphasising on needs rather than race.
“At the same time, the government shows that it recognises that the economy must also be made to grow at a higher rate so that there will be more jobs and income opportunities to improve living standards for the poor.
“Without growth, there will be nothing to distribute to the poor,” he said, adding that local and foreign investments must also be encouraged as “fundamentally, the private sector was still the engine of growth in the economy”.
Asian Strategy and Leadership Institute Centre for Public Policy Studies chairman Tan Sri Ramon Navaratnam said the new model provided a radical breakthrough for fundamentally new socio-economic policies for the next 10 years.
“This is surely a breath of fresh air; after so many years of distortion in the interpretation and implementation of the NEP by many ‘little Napoleons’ from the highest to the lowest levels of the previous administration, the new economic model gives Malaysians new hope,” he said.
Navaratnam said to achieve the objectives of the new model, solutions should include raising new wealth taxes, increase spending to provide more welfare for the poor, enhancing training and technology levels to improve productivity, and provide better salaries and wages.
He said other solutions include focusing more on meritocracy and competition to better manage the excessive brain drain and treat all Malaysians equally regardless of race and religion.
He said public support was also crucial and the new economic model should be fully and widely discussed at all levels of the society.
“Our people must be briefed and consulted throughout the country and especially in the rural areas and small towns, to win their wholehearted support for the new economic model,” he said.