Malaysia in dire need of intelligent, public-minded leaders

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For image info, go to https://www.aljazeera.com/news/2023/6/9/malaysia-will-not-survive-if-it-does-not-change-anwar-ibrahim (Malaysia will ‘not survive’ if it does not change: Anwar Ibrahim)

Malaysia in dire need of intelligent, public-minded leaders

KUALA LUMPUR, Jan 21, 2024: Structural reforms have largely been ignored by Malaysian governments.

It is opined that governments have become over-dependent on macroeconomic policies to support long-term growth.

Those are reasons why growth has become more volatile and fragile with a significant increase in economic distortions and inequality.

No News Is Bad News reproduces below a June 24, 2022 article by former Bank Negara Deputy Governor Sukudhew (Sukhdave) Singh titled “The Necessity of Structural Reforms”:

https://www.business-standard.com/article/pti-stories/india-needs-continued-structural-reforms-to-boost-growth-un-report-120011700789_1.html 

The Necessity of Structural Reforms

Sukudhew (Sukhdave) Singh

Sukudhew (Sukhdave) Singh

Former Deputy Governor, Central Bank of Malaysia | Former Independent Director, Khazanah Nasional Berhad

Published Jun 24, 2022

It is my view that governments have become over-dependent on macroeconomic policies to support long-term growth. Fiscal and monetary policies are no longer countercyclical policies and have instead been transformed into policies of first resort to promote growth. For this reason, growth has become more volatile and fragile with a significant increase in economic distortions and inequality. Structural reforms have largely been ignored even though these have the potential to create more sustainable and equitable longer-term growth. That must change. What is the nature of these reforms? It is not only economic reforms but also social and governance reforms that would make the economy better and create a more equitable distribution of opportunities. Let me illustrate with some of the structural reforms needed in my own country, Malaysia:

1. Rebalance power between capital and labor. Real wages have been largely stagnant for a significant portion of middle and lower-income households – incomes have failed to keep up with the cost of living especially in the urban areas.

2. Reforms to allow genuine private enterprise to flourish, for example, by reducing the concentration of market power in GLCs and other politically linked organizations. Without such reforms, it is impossible to substantially improve productivity and create a high-income economy.

3. Improve the sustainability of fiscal policy – too much debt and too little to show for it (improve revenue and expenditures; improve transparency and governance of expenditures; introduce policy rules to guide fiscal spending). Otherwise, fiscal policy will be a drag and risk to future growth.

4. Mitigate the impact of climate change on Malaysians by providing greater protection of the environment and green spaces in urban areas, promoting environment-conscious development, and making the economy more nature friendly.

5. Redesign the social contract to assist all needy Malaysians (instead of benefiting the already privileged of a single race and of a single religion). Make growth more equitable.

6. Introduce legislation to limit discrimination on the basis of race and religion, thereby strengthening the role of meritocracy and reducing the brain drain. Mediocrity cannot be accepted as the norm in our society.

7. Restructure the national education system to incentivize high-quality education that focuses on teaching knowledge that is economically relevant to a post-industrial economy. 

8. Strengthen the governance of our regulatory and enforcement agencies to increase accountability and transparency, reduce corruption, and minimize abuse and political interference.

9. Strengthen the independence and professionalism of the judiciary to better enforce rule of the law.

10. Incentivize politicians to work for the common good – stop treating politicians as VIPs and more as servants of the people; hold them accountable when they fail to deliver on their promises. Robust legislation on political financing and party-hopping would be a start.

11. Reforms to prevent the privileged from gaming the political system for their own advantage - we have had two governments that were not democratically elected and do not reflect the choice of Malaysian voters.

That is quite a list and it is only indicative. Can such reforms happen? They can if we make the right political choices. Malaysians must get rid of their apathy and choose leaders who are intelligent and public-minded enough to work for what is good for Malaysia as opposed to their own personal interest. We need political leaders who are willing to focus on the core issue confronting our society and economy rather than leaders who are only good for grandstanding and diverting our attention from those issues. If we are unable to do so, I hope the list makes it clear about the potential consequences that lie ahead. In an open economy, there are always limits to monetary policy. As for fiscal policy, if the fact that people have been asked to repeatedly withdraw their already meagre retirement savings is not an indication of fiscal stress and misaligned priorities, I don't know what is. The choice is ours. Can we wake up from our collective slumber to create a Malaysia that is economically more equitable and resilient?