Idris Jala asks Malaysians to keep the faith
By Lee Wei Lian September 21, 2010
He said it was important to have “positive energy” and believe in the country in order to give confidence to investors.
“If there is no hope for the future, there is no power in the present,” said Idris.
The former Malaysia Airlines CEO acknowledged the fractious racially-tinged debates that appeared to dominate national discourse but called on Malaysians to move on.
“When we compete with many nations, if we get vortexed into discussions (on affirmative action) that are not constructive, we can’t get to implement the entry-point projects,” he said, referring to the perennial debates over whether there should be a level playing field for all races.
The issue of confidence comes as private investment is reported to be on the decline over the past four years even as the Economic Transformation Programme calls for the private sector to drive the economy.
Observers note that Prime Minister Datuk Seri Najib Razak has been pushing for economic reforms but resistance from conservative groups has appeared to prevent the radical restructuring needed to turn the nation into a high-income developed economy.
When pressed by the media on whether ethnic quotas will be lifted, the Pemandu CEO acknowledged that the “specific privileges” given to Bumiputeras under the constitution will continue but said any assistance would be based on merit.
“Affirmative action will continue but redefined to be much more transparent and fair,” he said. “It will focus on need and merit. We all agree — whether Malays, Chinese or Indians — that the poor need to be helped.”
He added that not all Bumiputeras required assistance and those who didn’t should compete on a level playing field.
“Those Bumiputeras who do not need to be helped, we would like them to compete on an even playing field with non-Bumiputeras,” he said. “That is how you become strong.”
Idris noted that in the labs conducted by Pemandu, there were no racial issues that came into play during discussions on how to transform the economy.
“Under the New Economic Model, all of us need to share in prosperity that goes on for a long time,” he said. “It is clear we need to start growing the economy.”
Idris said national unity was essential for the nation’s advancement and that the country needs to be mindful of global competition.
“No football team can be champions without being united,” he pointed out. “We are competing in a global race where there are a lot of good competitors.”
He also made an impassioned plea for Malaysians to avoid “destructive talk and wasteful academic and philosophical debates” on racial issues.
“The private sector is prepared to put in money but they want the government to put in support,” he said.
Bold RM1.4 trillion plan to transform economy
Royce Cheah Sep 21, 10 12:21pm
Malaysia on Tuesday unveiled ambitious plans to boost its economy by mobilising hundreds of billions of dollars of private investment, although questions remained over whether the money would materialise.
The plans ranged from a new mass transit system to relieve congestion in the capital, Kuala Lumpur, to building a huge oil storage facility next to neighbouring Singapore to form a regional oil products trading hub.
A government thinktank said it had identified investments worth RM1.376 trillion (US$444 billion) over 10 years, of which 60 percent would come from the private sector, 32 percent from government-linked companies and 8 percent from government.
The investment aims to double per capita income and push Malaysia into the ranks of "developed" nations by 2020, rebalancing Asia's third most export-driven economy towards domestic demand and the service sector.
These numbers 'pie in the sky'
"The plan does not provide a clear sense of where the money is coming from. A lot of these numbers are pie in the sky," said Bridget Welsh, a Malaysia specialist at Singapore Management University.
Malaysia is competing for investment with other fast-growing countries in Southeast Asia and neighbouring Indonesia recently unveiled plans to boost infrastructure too.
In the past 10 years, private companies invested just RM535 billion (US$172.4 billion), according to official data and Malaysia's private investment rate of around 10 percent of gross domestic product (GDP) is among the lowest in Asia and a third the level it was before the 1998 Asian financial crisis.
The government, which in 2009 ran its biggest budget deficit in 20 years as a percentage of GDP, contributes around half the investment in Malaysia and the minister in charge of presenting the investment plans said the new targets were credible.
"I don't think the government would publish a document that thick if there is no political will. It's a risky strategy to expose yourself so publicly when you have no plan to do it," Idris Jala told a public presentation on the plans.
The plan relies heavily on domestic capital as foreign direct investment in this country which in the early 1990s accounted for almost 40 percent of the Southeast Asian total accounted for just 3.8 percent in 2009, according to United Nations data.
Malaysian companies like leading bank CIMB and telco Axiata have started building a regional presence in large, fast growing countries, such as Indonesia.
Economists warned without a new policy framework to encourage investment the Malaysian plans would be hard to realise.
"It will be difficult to achieve the private investment growth target set by the government if there are no additional tax incentives given to the focus sectors," said Gundy Cahyadi, regional economist at investment bank OCBC.
New jobs would be 'middle-class'
The plans aim to create another 3.3 million jobs by 2020, many in the high-value service sectors such as Islamic finance. Idris said 46 percent of the new jobs would be "middle-class".
Despite churning out tens of thousands of graduates, Malaysia's education system has failed to deliver and is becoming increasingly polarised by arguments over language between the majority Malay population and minorities such as the large ethnic Chinese population.
The government thinktank that designed today's investment plan said that in 2003 Malaysia had just 21,000 finance and accounting professionals qualified to be employed by multi-national companies compared with 341,000 in India and 127,000 in the Philippines.
"How can you create middle-class jobs when you do not have an education system that works," said Singapore Management University's Welsh.
There is also policy risk in Malaysia. Recent plans for a radical overhaul of the country's costly subsidy regime proposed by the same thinktank that outlined the investment plans were shot down by government politicians who feared unpopularity.