New Economic Model (NEM) unveiled after a opportunity ample fanfare. It has been accompanied by the normal unaccurate write-ups and celebtrounce from economic analysts from the mainstream heap resources. Mayhap they see in it gone-by than what can be recognize or mayhap can be an incorrigible unbeliever after a opportunity short belief in flushtful visions, in-particular those put out by a collection of consultants.
The National Economic Hortatory Conference (NEAC) as its designate suggests is purely an hortatory mass after a opportunity very inconsidereffectual – if any – antecedent or clout in implementation.The theories astern New Economic Model (NEM), firstly though, let’s arise by noting that after a opportunity the loudness of crisis struck by the conference in the muniment. This is a ample deficiencyed concealment from economic muniments of the synod which possess been redressly optimistic on the empire’s economic coming. The prelude to the NEM notes that “the spell for substitute is now – Malaysia deserves no short”. Nomass get dissent after a opportunity this. In truth, in some ways, the Synod and NEM may be too fresh in seeking solutions on multifarious key challenges.The spell for substitute should possess been at last 20 years antecedent.
By think for pattern Strategic Reconstitute Initiative 2 on the developing a power resultforce and reducing dependency on strange labour. According to the NEM, “policies get convergence on generating a conducive resultforce to engage the deficiencys of a high-value conversance rule opportunity wage-restraining labour traffic distortions, such as exorbitant and undiscriminating use of strange labour, get be removed. Although redress-dependence on strange labour has been authorized as a superior engagement to the rule for multifarious years, yet the sum of strange resulters in the empire – in-particular if the sum of illegals is intermediate – has confirmed in-effect entire year during the gone-by 30 years. How to put a bung to this is easier said than produced. Another superior lack is that multifarious of the so-called self-confident new strategic device directions are not new. A sharp critique of synod economic muniments shows that these new device directions possess been regurgitated or recycled from antecedent Malaysia Plans.Thus the prospect strategic Reconstitute Initiatives (SRIs) that get anchor the NEAC’s recommendations is appears to be old wine in new bottle.
If one examines the five superior dresss of the 9th Malaysia Cunning they appear no contrariant from the prospect SRIs of the NEP. If we go flush antecedent to the Eighth Malaysia Plan, we see the corresponding recommendations beneath disuniteially contrariant labeling. Instead of the prospect SRI for the NEM and five key dresss for the 9th Malaysia Plan, we possess the nine strategic goals of the 8th Malaysia Plan.More careful concerns environing the NEM refresh to the following: • It claims that the empire’s GDP get accrue at last redress 6 percent total-year for the contiguous 10 years. This accrueth trounce claims that the global rule after a opportunity which we are tied up get remain to accrue entire year after a opportunityout lose. As the fresh global financial downturn has demonstrated, there is no answer-for that the global rule on which our exports are relying get remain on a undeviating sequence accrueth method. Should there be a slowdown in the global rule, the NEAC’s scenario for the empire’s per capita GNP to get-at the mysterious sum of USD17, 000 in 2020 get be surpassing.
It appears to claim that petroleum and to a shorter distance gas allowances get remain to be the coin cow driving the Malaysian rule. Are these allowances sustaineffectual redress the contiguous 10 years? Synod rumors possess been dormant on this key scrutiny and the NEM rumor similarly has no basis relative-to to this accurate truthor. Currently, oil and gas allowance accounts for gone-by than 40 percent of synod allowance. As oil evolution slows down and activity call-for remains on an upward implication, how ample oil is there in the tank to fuel offer and coming accrueth?There is honest one sequence in the NEM rumor on the contact of diminishing oil evolution. Perhaps the contiguous disunite of the NEM get possess gone-by to say environing this end. • Although one of the prospect SRIs describes to generally-known sector reconstitute and “a exsanguineous, consultative and bestowal convergenceed synod”, a flaunting exclusion is any argument and dissection on how to get at this exsanguineous well-behaved-bred use. We already possess 1.
2 pet well-behaved-bred maids in a population of 26 pet or almost one well-behaved-bred maid for entire 20 Malaysians. This is not affordeffectual or sustainable.Japan, for pattern, has a aspect of one well-behaved-bred maid for entire 155 of its population. If the Japanese aspect was to be applied to Malaysia, we get deficiency to impair our well-behaved-bred use by one pet employees! Clearly this extent of cutback is not politically contrivable. However, what is insertion settle in Greece now – a meltdown of the empire’s financial be – in liberal disunite due to perversion, mismanagement of the empire’s generally-known score, and a coarse well-behaved-bred use that has been the playground of assistance politics could very well-behaved-behaved supervene in Malaysia where the corresponding truthors lawful for Greece’s financial meltdown are at result.Let’s see if the contiguous NEM rumor get be effectual to prepare a open exercise cunning on the cuts to the well-behaved-bred use and other structural substitutes deficiencyed for a exsanguineous and redress well-behaved-bred use anteriorly we utter it a realistic and achieveffectual economic frameresult for the empire. Finally, there is a superior unresolved confliction in the basic dress aimed at resistance of subsidies and the dress convergenceing on lifting the profound 40% of households and reducing allowance disparity.
The NEM unconditionally states that “the pricing of indispensable issue and uses in Malaysia does not ruminate traffic prices …. [and] the liberal synod charge on subsidies – is not sustainable”. Hence we can rely-on pricing reconstitutes shortly important basic issue and uses. But what get be the contact on the stay standards of the specieless and inferior intermediate arrange when subsidies are removed? There is remark of a “Transformation Fund” to comfort the aversion during the reconstitute date and of a navigate prophylactic net for the profound 40% households anterior to subsidy resistance.Even if these are put in settle after a opportunityout distortions and leakages, the contact of traffic pricing of indispensable issue and uses get be to swell allowance imparity. And where is specie for this generous prophylactic net to end from when the target is to impair the fiscal arrears in the federal synod (7. 4% of GDP in 2009) to a nigh redress after a opportunityin the contiguous 10 years? This is probably the Achilles heel of the NEM.
As customary, the NEM is 20 years too fresh so that we are now surely caught between a buffet and a unyielding settle.