Thursday, 24 November 2011

Malaysia loses the way following the West, politically or economically?


Clear vision in uncertain times

Diplomatically Speaking By Dennis Ignatius

In this period of global uncertainty, it is more important than ever for Malaysia to be united behind a common purpose lest we lose our way, be it politically or economically.

THERE is an old saying: “Without vision, the people perish.”

Applied broadly, it means that unless we are united behind a clear vision and are fully committed to doing what it takes to get there, we will invariably lose our way.

Do we have such a vision? Are we united behind a common purpose?

These questions are now more critical than ever before given that we have entered a period of global uncertainty, the likes of which we have not seen in quite a while.

Politically, we are seeing nations rise and fall and power shifting from West to East. Economies that were the drivers of world trade and engines of global growth are suddenly floundering.

The Eurozone, for example, is caught up in the worst crisis in its history. Many are wondering if it can even continue.

The United States, that other great economic powerhouse, is in crisis, rendered impo­­tent by massive foreign debt and deep internal divisiveness. Even China, despite its US$3.2 trillion (RM10.1 trillion) surplus, is not immune.

No wonder economists are worried that the world itself now hovers on the brink of another disastrous global recession.

Suddenly, it’s a whole new ball game out there. No one really knows how it will all play out but one thing is certain: resilient, innovative and competitive nations will do better than those which are not.

In this context, does Malaysia have what it takes to thrive in what management guru Peter Drucker calls a time of “accelerating change, overwhelming complexity and tremendous competition”?

Sadly, as anyone listening in on our national conversation quickly discovers, we are still fighting  yesterday’s battles, seemingly unable to make the critical choices that alone can guarantee our prosperity.



While so many other nations have moved on to bigger and better things, we are still mired in issues of race and religion, unwilling to make the compromises necessary to build unity and resilience, unable to de­­cide whether we are a democracy or a theocracy.

Everything is complicated and complex in Malaysia. Even simple issues take forever to be resolved. Indecisiveness can be crippling for a nation.

And for want of a clear vision, the national fabric weakens, our democratic space diminishes and our national institutions decay.

Unsurprisingly, the same dysfunction finds expression in our economy as well.

Malaysia is steadily losing ground, hobbled by the poor choices we make as well as the hard choices we avoid making.

Fifteen years of successive budget deficits have saddled our nation with a staggering RM433bil debt, amounting to 54% of GDP.

Of course, there are those who say that such debt levels are manageable given our growth rates. That is what they were saying in Europe before reality hit them in the face.

Whether we like it or not, international investors are taking stock of our situation and it is their judgement that will decide our fate as much as anything else.

Clearly, we are going to have to make some tough economic decisions sooner than later.

We can no longer remain indifferent, for example, to the waste and abuse that our Auditor-General chronicles year after year.

How long can we continue to spend money on submarines that cannot submerge or satellites that cannot track?

And how long can we afford those expensive subsidies, particularly the ones that go to well-connected corporations and big businesses, that distort the allocation of resources, weaken our competitiveness and foster yet more corruption?

Is it not time to end the reign of the robber barons?

And then there is our bloated and inefficient bureaucracy, now numbering more than 1.3 million, one of the highest civil servants-to-population ratios in the world.

Public service wages and pensions will cost the country more than RM64bil next year.

Significantly trimming the civil service is a must if we are to reduce the deficit.

Prime Minister Datuk Seri Najib Tun Razak has, of course, taken some important steps in the right direction and deserves credit for it.

Some say it is simply to win votes but that is what democracy is all about and must be welcomed.

In order to be effective and meaningful, however, the reform agenda needs to be much wider, much deeper and much bolder.

Undoubtedly, being a reformer in a country like Malaysia is no task for political pygmies.

It takes leadership, vision, courage and conviction, something that Thomas Friedman, the New York Times columnist, lamented recently is sorely lacking in much of the world today.

If there is one encouraging spot in an otherwise gloomy picture, it is that Malaysians are increasingly ready for change.

They are tired of the old template of division, distrust and blame and understand that compromise and accommodation is the only way forward.

Surely the near empty stadium in Shah Alam on Oct 25 was a resounding rebuke to those who want to play the old games of race and religion instead of building for the future.

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