The New Economic Model for 1Malaysia
a commentary by Eugene Yapp
Much have been said about Prime Minister Datuk Seri Najib Razak's New Economic Model (NEM). For a relatively technocratic solution to a problem confronting any modern nation state, the NEM has attracted the usual attention not only locally but internationally as well.
Practical wisdom suggests that this reaction is probably premised on undue expectation upon the NEM by both proponents and detractors alike.
As it turns out and after much fanfare, we discover the NEM was thought necessary by, among other things, the following compelling factors:
- A lower rate of Malaysia's economic growth rate in the decade since the Asian Financial Crisis of 1997-98. This is illustrated by the fact that by 2007, Malaysia seems far away from the World Bank's notion of a high income economy. In contrast, the Spence Commission on Growth and Development has identified Malaysia as one of only 13 countries that had for more than 25 years grown at rates exceeding 7% annually (Quah, 2010).
- Perceived decline in economic competitiveness as evidenced by smaller rates of overall private investments and in particular, foreign direct investments. This aspect is also contributed by the 2008 global financial crisis which in turn translated to a precipitous drop in exports. In fact, the announcement about the NEM was first made at the end of 2008 when things were looking very bleak and hope was badly needed.
- The rise of new global leaders such as China, India, Korea and Brazil has sharply increased their per capita incomes in the past decade, giving rise to Malaysia being described as being caught in the "middle income trap" and running the danger of being left behind.
The above factors highlight the critical need for the Najib administration to work towards boosting the sagging economy before it's too late.
Currently, Malaysia's real GDP per capita is around US$7,000 whereas the OECD average is around US$30,000. It thus reveals the urgency to raise the economy before Malaysia can hold herself out as a developed nation in line with the Vision 2020 aspirations.
But what does the NEM entail? Eight strategic reform initiatives (SRI) have been suggested:
- Re-energising the private sector so it could lead the process of economic growth;
- Developing a high quality workforce and reducing dependence on foreign labour;
- Creating a competitive domestic economy;
- Streamlining and strengthening the public sector as facilitators for private enterprises;
- Move to affirmative action that is transparent, market-friendly, merit based and conditioned on need;
- Building infra-structure for knowledge base;
- Enhancing the sources of growth; and
- Ensuring sustainability of growth.
Of all aspects of the NEM, it is these SRI that have drawn the most attention and criticism.
Some argue that the NEM has several distinctly positive characteristics, such as growth through enlargement in productivity, growth to private sector leading to local autonomy and decision making, and the use of local talent and skills contributing to transformation.
While many may agree that such characteristics may be different and distinctly packaged under the NEM, they are hardly new or innovative enough to yield desirable results.
Detractors say that the NEM is mere rhetoric and designed purely for public relations and/or political purposes; that the Government does not have the political will or wherewithal to pursue the SRI.
One compelling argument offered against the NEM is that for the targeted growth of US$15,000 per captia income to be reached, it will require economic growth that is faster than China! This is certainly unachievable at the rate our country is going.
A Christian response
How then should Christians respond to the NEM? While admitting that details of exact policies are still to come, one can't help but wonder if Christians as citizens of Malaysia can come out in support of the NEM?
The barrage of views and criticisms that have been offered for and against the NEM does not help either. Where do we go from here?
As a starting point, we note that the NEM is a creature and expression of political economy. By political economy, we have in mind the management of resources for the production of wealth to best meet the basic needs and requirement of life of the populace as determined by the political order.
That the NEM is imbued with this inherent characteristic is borne out by the fact that it is subordinate to and subsidiary to another greater and wider political good - that of 1Malaysia.
The connection between a social perspective of political economy and Christian theology is "stewardship".
The word "stewardship" is a translation of a biblical word which has come to encompass the meaning of "common decision about managing the resources of the common life and developing the techniques and structuring the institution to do so effectively" (Stackhouse, 1992: xiii)
It is therefore the task of the church and Christians to live out the calling to regard the political economy in the words of the pastoral letter, Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the US Economy, as "one of the chief areas where we live out our faith".
This entails identifying and participating through what God is doing in relation to building and managing the "public household" and to express God's life and words in visible and concrete expression in this area.
In practice, such an effort involves economic management.
Economic management is about ensuring the best possible livelihood for everyone. It is about liberating economic structures to ensure that no one is exploited or treated as 'strangers and aliens' incorporating everyone into the household of God (Eph.2:19-22). It has to do with the establishment of a household within which the goods necessary for survival and for functioning as free and equal citizens take priority over such goods that are not included in this basic core. (Vicencio, 1992: 219)
To this end, Christians must be prudent and avoid one of two of the contrasting extremes within the political spectrum in thinking through the NEM.
Firstly, Christians must avoid adopting the leftist position of the liberals who are calling for a total dismantling of any affirmative action policy often to the disadvantage of the poor and the marginalised.
That this is unacceptable is evident in the message of the Gospel which speaks decidedly in concerted concern for the poor and dispossessed. And it is here that the NEM provides a radically different affirmative action: eradication of poverty irrespective of race or ethnicity.
Given that economic disparity often leads to ethnic tensions and struggles, the NEM is expected to restore balance between the special position of the Bumiputeras and the legitimate interest of the minority.
Christians must therefore ensure that the NEM remains focused on its stated objectives and in particular, the bottom 40% of the income strata who will form the bulk of the beneficiaries because they constitute the largest component of the disadvantaged rather than on self-selected interest groups.
The other contrasting position is represented by the Malay rights groups such as Perkasa who has criticised the NEM for its lack of Malay agenda. They argued that if the NEM is implemented based on its present form, the Malays will eventually lose their competitive edge leading to a severe weakening of their position. Whether such a proposition holds true remain to be seen.
What is however disconcerting is that behind Perkasa is the call for a race-based affirmative action policy premised on a Malay-based agenda and politics (Pereira, 2010). This should not be the case as economic justice demands working out a form of "complex-equality" for all ethnic groups in meeting deferring and variegated needs.
Christians must therefore draw on common grounds with the other social communities irrespective of ethnicity and religion to press for a growing participation in loosening the feudal mentality and shackles of such a mindset and advocate for change to embrace a more inclusive mentality and fair-minded sentiments.
For better or for worse, it appears that Malaysians are better off with the NEM than without it. This is especially so given the prevailing trends in social disharmony and the rise of crime rates and corruption. Unless the economic growth engine can be revved up, chances are income will continue to worsen and create frictions that place even more stress on society.
The upshort of this is Malaysia's population will remain young for the next three to four decades and this will create more pressure on job creation.
For those of us who wish for a better Malaysia, it may do well to give the benefit of the doubt to the PM for a robust and genuine implementation of the NEM to turn around the current sorry state of the Malaysian political economy.
References
Max L. Stackhouse, Public Theology and Political Economy: Christian Stewardship in Modern Society. Grand Rapids, MI: Eerdmans, 1987, xiii
Charles Villa-Vicencio, A Theology of Reconstruction: Nation-building and human rights. Cambridge, UK: Cambridge Press, 1992, 219
Danny Quah, "Malaysia's New Economic Model: Making Choices", 14 April, 2010 at http://www.btimes.com.my/Current_News/BTIMES/articles/quah/article/
Derwin Pereira, "Najib Must Draw on Thirst for Change", 25 April, 2010 at The Star |
