I REFER to the accusations against Pemandu by Osman Jailani in his articles on May 3 and April 24 published in The Malaysian Insight.

I must say I am disappointed at the lack of professionalism and journalism etiquette in his reports to discredit the work Pemandu had done together with the civil service under the National Transformation Programme.

His earlier article even went to the extent of misleading readers with discriminatory data selection, biased reporting and outright name calling – to quote the writer – “Syed Hussein Alatas has warned us decades ago about these kind of people whom he coined as jadong – jahat (evil), bodoh (dumb) and sombong (arrogant). Individuals like these lack morals and integrity. A traitor!” (Gosh, he must really hate Pemandu).

It is ironic that the very individuals who whine and complain about the lack of talented professionals in the civil service are the very people who smear and tarnish the reputation of well-established institutions, demoralising and pushing away qualified young professionals from accepting the call of national service for the fear of the bad rapport associated with the job.

The writer who goes by the name of Osman Jailani (a fictional character in the late P. Ramlee’s movie – Ibu Mertuaku) maliciously painted Pemandu as the harbinger of economic disaster for Malaysia with biased reporting of:

• GNI methodology and context
• Inconsistent time periods to justify short-term downward cycles
• Blatant lies on the lack of government emphasis on sustainable and inclusive growth under the NTP

In responding to the accusations, we shall refrain from petty name-calling and focus on the more relevant aspects of the article. Let’s address them blow by blow (since that was what he wanted).

Accusation No. 1: GNI is declining, growth is declining.

Back in 2010, the World Bank estimates for high-income threshold of GNI per capita was US$12,276. The calculation used is known as the World Bank’s Atlas method which takes into account a 3-year global average exchange rate.

By factoring in historical global inflation rate, we were able to extrapolate the forecast figure for 2020 which was US$15,000.

Based on this method, Malaysia’s GNI per capita increased from US$8,230 in 2010 to US$10,570 in 2015, as compared with the World Bank’s high-income threshold at US$12,276 in 2010 and US$12,475 in 2015.

This means our gap to high income has reduced from 33% to 15%. Why 2015 not 2016? Well, figures for 2016 have not been released by World Bank (it usually takes them five to seven months to compute figures for the previous year).

Instead of using one method/formula (Atlas) to compare Malaysia’s GNI per capita with World Bank’s high-income threshold, the writer chose to use the figures from EPU which takes into account the exchange rate only for 2016 and compare it with World Bank’s high income threshold (which was calculated using a different method – Atlas).

You may ask why did World Bank’s threshold for high income only increased by US$200 from 2010 to 2015. Well, the global economy has experienced slower growth from 2014-2016 (periods in which the writer has selectively chosen to highlight the drop in other selected economic indicators for Malaysia further in the article) with GDP at 2.7% in 2015 compared to 4.3% in 2010. The World Bank’s GNI calculation takes all this into account.

To provide a more holistic context, there are more than 50 countries that have experienced a drop in GNI per capita in 2015 as a result of the slowdown in the global economy and drop in oil price. These include Singapore, Netherlands, Japan, France, Russia, Switzerland, Iran, Iraq, Sweden, Canada and Australia among others.

Clearly, the writer has failed to understand that Malaysia is a highly globalised economy with total trade exceeding national GDP. As such, a change in global demand, in particular the drop in commodity price (oil and palm oil) would have a significant impact on the economy.

Exhibit 1: GNI per capita (World Bank Atlas)

On the contrary, Malaysia’s economy is performing well against the backdrop of an uncertain global economy. In fact, Moody expects Malaysia’s economy to grow higher than other A-rated countries from 2017 to 2020. How did we do better than other more developed countries?

In 2009, Malaysia’s fiscal deficit stood at 6.6% of GDP and our debt per GDP ratio was growing at a CAGR of 12%. If there was no transformation, Malaysia would have been highly indebted and potentially at the brink of bankruptcy.

Recognising this, we made a conscious decision to reduce our debt/deficit and introduce a mildly expansionary economic policy.

What does that mean? It means that we will not force double-digit growth by borrowing and spending more money – this is where the Economic Transformation Programme (ETP) played a critical role.

Through the ETP, we were able to transform the economy by catalyzing the private sector as the engine for growth. As such, we were able to grow our economy without ballooning our debt. Exhibit 2 and Exhibit 3 below illustrate:

1. Growth in private investment before and after ETP.

2. Private-vs-public investment ratio before and after ETP.

Exhibit 2: Growth in private investment

Exhibit 3: Private-vs-public investment ratio

The writer went on to say that “assuming the ringgit remains at the same level, we are still off target because our economy grew at a lower rate”.

Wait, what?

Using the writer’s own source of information (EPU), the GNI per capita (in ringgit terms) has steadily increased from RM32,596 in 2013 to RM37,930 in 2016. Applying the same level of ringgit-US$ exchange rate (which was RM3.20 per US$1 in 2010) the GNI would be US$11,853! That is 5% away from the high-income threshold!

Accusation No. 2: GNI is not a good comprehensive measure of societal well-being.

According to the writer, “GNI is simply telling us the value of goods and services the economy produced, or whether the richest elite in Malaysia and their spoilt kids pocket it all. Cutting those forest trees in Kelantan and Kedah is good for GNI, extracting minerals while polluting our rivers in Tasik Chini is equally good for GNI”.

Yes, GNI is not the sole indicator for high-income standards, hence why it was not the only measure used to gauge Malaysia’s socio-economic well-being under the ETP (If it was, we would have pegged the ringgit at RM3.2 and achieved a new GNI record).

If the writer cared enough to read the annually published NTP reports, he would have known this.

The NTP was designed such that growth is inclusive and sustainable, aligned with the pillars of the New Economic Model. Many of the initiatives were focused on improving lives of the middle and lower-income people.

In his bigoted attempt to justify the blasphemous allegations against Pemandu, the writer chose to neglect the following achievements under the NTP: more than 5,000km of rural roads were built to connect rural villages, 334,593 rural houses given access to clean water, 144,025 houses were provided with electricity and 79,137 rural houses were built and restored. The minimum wage policy enacted in 2013 lifted 2.9 million out of poverty, while 7 million individuals benefited from BR1M cash transfer.

What makes the article more perversely impartial is that it fails to cite statistics for household income, a standard indicator used by economists to gauge socioeconomic growth.

According to the household income survey by the Department of Statistics, the median income for the bottom 40% (B40) grew at a rate of 12.8%, outpacing the total household income growth of 10.1%. Mean household income for the B40 also grew at 12.0% against that of the total household income 8.8%.

Exhibit 4: Compounded annual growth rate (CAGR) of household income groups

Accusation No. 3: rakyat’s income remain low and whatever jobs created are of low skilled labour.

To quote the writer “Not only are we not producing enough high-skill jobs, the slowdown in the economy is in fact eliminating the existing pool of high-skill workers”.

While there are still areas for improvement in shifting Malaysia’s workforce from labour intensive sectors to high value add sectors, the Writer’s claims that there are less high skill/income jobs at present time is false.

According to data from EPF, the income bracket that experienced the largest growth was the RM3,000-RM5,000 bracket followed by the RM5,000-RM10,000 bracket.

This means, in percentage terms, the Malaysian workforce is experiencing a value migration from lower income to higher income, which is largely contributed by the increasing number of jobs in the private sector. Companies that were not able to set up shop due to protectionist policies previously are now able to do so, in a manner that catalyse change in the regulations that govern the business environment.

Policies and restrictions will need to make way for innovation and technological advancement; such are the changes needed to push Malaysia forward.

Exhibit 5: Number of active EPF members by income bracket (%)

Accusation No. 4: KLCI already lost 13% between 2014 and 2016.

This is another clear example of the writer’s slick maneuvers in cherry-picking facts to mislead readers.

In justifying his comparison, the writer conveniently chose to compare the highest peak in 2014 to the lowest point in 2016. He then cleverly neglected to highlight the bounce in 2017. The overall growth which was absent in his analysis showed that the KLCI has increased by 40% from 1,259 (January 1, 2010) to 1,768 (April 28, 2017).

Exhibit 6: FTSE Bursa Malaysia KLCI Index (2010-2017)

Accusation No. 5: “Pemandu has failed miserably despite consuming a lot of taxpayers’ money”.

The writer pointed out that according to data from the Finance Ministry, Pemandu costs RM639 million. What he did not point out was that most of that sum was utilized for NTP projects and subsequently channeled to the relevant Ministries to deliver those projects.

Obviously, there is a cost to building 5,000km of rural roads! Perhaps the writer would prefer that amount was spent towards subsidising his daily commute to Starbucks.

While I commend many news outlets for being the check and balance that toe the line for government to be transparent and accountable, it is prudent that they, bound by ethical duties, report accurate and credible information to the public.

Spreading misinformation and lies in the name of politics is an insult to the institutions that often profess the mandate of enlightening the public.

It is discouraging to see that while other countries and global institutions are emulating and learning from Malaysia, critics back home are slinging mud and dirt to tarnish and smear the good deeds that are undertaken by the administration.

Pemandu is constantly improving ourselves, adapting to the dynamic change in the global economy and political environment, setting the pace to institutionalize government and economic reforms.

After all, transformation requires a fundamental change in the way we do things and for that we need commitment from all Malaysians to help contribute to the solution and not to add to the problem. – May 3, 2017.

* Shahrizan Syawal is a manager at Pemandu Associates.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.