By Tunku ‘Abidin Muhriz

The Prime Minister must be very pleased with the response to his 88-paragraph keynote address on Tuesday.  In the age of Obama it’s difficult to portray oneself as a reformer without sounding slightly clichéd or platitudinal, but Dato’ Sri Najib’s combination of emphatic statements, lofty aspirations and some detailed proposals largely avoided this fate.  The speech was as instructive in what it did say as what it didn’t: the Prime Minister sidestepped the demands made by ethno-nationalists stuck in an obsolete era.  This is good news for the ordinary hardworking Malaysian and for the 1Malaysia concept, whose meaning firms up daily as opponents define themselves against it (perhaps that was the strategy all along).

There were some frank confessions: “we need a government that enables and empowers the private sector”, a semblance of ideological underpinnings: “competition should be promoted to allow dynamic and efficient markets”, and specific examples of action: “Khazanah has resolved to divest its controlling 32 percent stake in POS Malaysia through a two-stage strategic divestmest process”.

All this was backed up by the National Economic Advisory Council’s 193-page New Economic Model for Malaysia: Part 1.  This document is reminiscent of many I’ve read when I was working in Westminster or Washington DC: prescriptive yet logical, optimistic yet serious, and containing a pleasing array of diagrams.  I especially like Figure E on page 16, which outlines the actions that will enable execution of the eight Strategic Reform Initiatives (SRIs) that will lead to the main outcomes. Some boxes elicit skepticism e.g. “break logjam of vested interests through political will and leadership”, but the fact that it’s been printed on a document headed by the federal crest does count for something.  So do admissions of weakness, such as on page 60: “Malaysia suffers from an exodus of talent.  Not only is our education system failing to deliver the required talent, we have not been able to retain local talent of all races nor attract foreign ones due to poor prospects and a lack of high skilled jobs.”

And I am delighted that decentralisation made it into the report: “There should be ample opportunities for locally empowered economic ecosystems to operate through appropriate decentralisation of functions and processes… Greater decentralisation in decision making will achieve speedier implementation and effectiveness but may result in diluting federal government power”.  This point is inserted as if the authors were testing the waters before recommending detailed actions in Part 2: hopefully there will be an explicit recommendation in favour of fiscal decentralisation and the transfer of some revenue-generating powers from federal to state governments (GST perhaps!).  If the NEM is prepared to empower the private sector to foster greater competition, then it should be bold enough to empower state and local governments for the same reason in areas that can’t (for now) be privatised.

Much remains to be seen and will be deciphered after more consultation and analysis, but the politicians must bear in mind that getting us out of the middle income trap is an urgent objective and time is of the essence.  Much opposition is likely to come from vested interests and misguided ethno-nationalists.  In such a scenario, lack of originality is not a good enough reason to oppose something, however flawed, which may not be bettered for some time.

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Congratulations to Datuk Seri Dr Chua Soi Lek and Datuk Seri Liow Tiong Lai in winning the presidency and deputy presidency of the Malaysian Chinese Association in what was arguably the most democratic contest we have seen within a Malaysian political party for some time.

The MCA is one of Malaysia’s historically great political parties: a vital partner to UMNO in securing Merdeka and fighting communism. Tun Tan Cheng Lock and Tunku Abdul Rahman formed a real partnership of vision: a situation that has rarely repeated itself since.  It was also the party that supplied our first two Finance Ministers.  UMNO have supplied the other eight, five of whom also served as Prime Minister and two very nearly did – or indeed still might in future.

The extent to which the Prime Minister sticks to his guns to ensure economic reform might have a lot to say about that.

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Tunku ‘Abidin Muhriz is President of the Institute for Democracy and Economic Affairs (IDEAS).

An edited version of this article was first published in The Sun on 2 April 2010.

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