THE unity government’s roadmap “Madani Economy: Empowering the People” is to elevate the dignity and status of Malaysia as a leader in Southeast Asia. The planning includes enhancing economic growth, promoting investments and strengthening local industries to be more innovative and globally competitive.

The short-term targets include accelerating the implementation of projects for schools and dilapidated clinics and eradicating hardcore poor.

There are seven medium-term targets to be achieved within 10 years and I include my views on each:

1. Malaysia among the top 30 largest economies in the world

Currently, Malaysia is ranked 37. For Global Innovation Index 2022 and Global Startup Ecosystem 2023, we are ranked 36th and 20th respectively.

It seems achievable.

2. Top 12 in the Global Competitiveness Index

Malaysia ranks 27th in 2023. We fared well in economic recovery, investment growth and employment market but areas of concern are business legislation, talent development, education, societal framework and sustainable development. We have been talking about high-added value or economic sophistication for a long time but need to see the results.

A tall order.

3. The percentage of labour income to reach 45% of the total income 

The 12th Malaysia Plan target is 40% by 2025 and currently it is around 32% (Singapore: 43%). 

Common talk is to reduce dependency on low-skilled foreign labour. A comprehensive study/survey to be carried out and deliberated in parliament so that concrete actions can be implemented. We need “jobs-skills integrators” to identify the manpower and skills gap. Another study to be done is on companies with high-profit margins as against its wages bill, of course considering productivity factors, and comparing it with remunerations of its senior managers and if need be, come up with guidelines.

4. Increase women workforce participation rate to 60%

The Labour Force Survey Report 2018 showed 60.2% of women aren’t in the labour force because of unpaid care duties (childcare, eldercare, and housework). We need effective ways to improve work-family balance since women have higher educational attainment than men. Almost 40% of employed females have tertiary education against about 23% for men.

5. Top 25 in the Human Development Index

In the 2021/22 Human Development Report, Malaysia ranked 62. On education, the government should not only provide a comfortable environment, the best facilities or internet access but also review the curriculum and teachers’ quality. There is a long road ahead.

6. Top 25 in the Corruption Perceptions Index

Malaysia ranked 61 among the 180 countries. There are plenty to be reformed and top of the list should be political funding and the parties in the unity government should lead the way. Instead of giving to political parties, donors should channel to an endowment to help hardcore poor. The discontent of the masses sterilises the contentment of the privileged few.

Bumpy roads ahead.

7. Targeting a deficit of 3%, or lower

For last year it was 5.6% of GDP. Our finances remain vulnerable to economic shocks and spending pressures. Giving RM100 through e-wallet is a step in the wrong direction. We have low revenue base relative to operating expenditure. Even the 2023 budget gave few details of planned subsidy reductions. Our government debt/GDP ratio of 73.3% in 2023 is a cause for concern.

The average monthly income in Malaysia is US$982 (RM4,471.54) per capita. In the United States, it is US$6,364. If we compare income and price levels, life is more expensive in Malaysia than in the US. 

The following are few actions that can be considered at little or no extra cost:

• Commit to a part-time re-employment policy for senior workers especially skilled ones.
• Provide Employees Provident Fund transition support to lower-income workers thereby relieving the employers rather than giving out the RM100 even to those earning RM100,000/year. 
• The Economist’s Crony-Capitalism Index showed we are no. 3. Malaysia’s billionaires still totalled more than a tenth of the 2023 GDP. A billionaire was requested to share some of his profits. Let’s try on the others.
• Revisit some government-linked companies (GLCs) since opinions surrounding them are mixed. When GLCs dominate an industry, private investments are negatively impacted and a barrier to competition. Further, in 2020, Prime Minister Anwar Ibrahim deemed it criminal for government backbenchers to be assured positions in GLCs when many people were struggling financially.
• Eradicate cartels.
• Reduce the development gap between regions and states, do look at cottage industries or setting up cultural villages as tourist attractions.
• Monitor enforcements at every level.
• For equal opportunities and social justice, do look at barriers in redevelopment of Malay reserve land as it will also greatly increase the income capacities and opportunities of the Malays. 
• To prevent political instability, implement the Fixed Parliament Term Act to prevent the negative effects on investor confidence and economic stability.
• Ministers to tone down the tempo against vociferous opposition members and avoid legal suits. Anwar’s team needs to focus on achieving the above and not wasting time in court. In short, work smart and we not only need smart but also wise leaders. Nurul Izzah Anwar once asked the prime minister to focus on uniting people, scrutinising the economic problems, attracting foreign investments and addressing other issues.
• Last but not least, do away with multiple pensions for elected representatives and the need to give high gratuities. We talk about helping the poor but at the same time protecting the interest of the MPs. 

In the meantime, a few clarifications are needed:

Can achieving 5.5% growth lift us to the top 30 economies and a leader in Southeast Asia in 10 years?  

In his speech, Anwar said two decades before and after 1998 witnessed a significant decline in average economic growth and investments dropped against the percentage of GDP. 

The speech writer may want to recheck the statement and the real numbers. The World Bank data showed uptrend for the latter since 1976, peaking in 1995 and sliding from 1998 onwards due to the financial crisis. Between 1988 and 1996 there were phenomenal economic growth of 9-10%.

How much input were there from the special advisory body advising the finance minister?

Comparing the objectives and issues raised in the Shared Prosperity Vision 2030 and the Madani economy, there are not many differences.

We can have aspirations and lofty promises but there must be political will. The proof of the pudding is in the eating.

What say you… – July 30, 2023.

* Saleh Mohammed reads The Malaysian Insight.

* 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.