Transcript Key Socio-Economic Issues Impacting National Economic

ASLI - SEDAR Roundtable Discussion
“Key Socio-Economic Issues
Impacting National Economic
Resilience & Competitiveness”
by
Datuk Nicholas S. Zefferys P.J.N.
Governor & Past President American Malaysian Chamber of Commerce
President & CEO Applied Consulting & Engineering Sdn. Bhd.
Director – Southern Bank Berhad
14 January 2006
1
Requires 7% Avg. Annual Growth
(some years higher-others lower)
2020
The march towards
9th Malaysia Plan (pending) Comparative Advantage
And
2006
Anticipate steady
but unspectacular growth
(as reflected in Budget 2006)
Jobs
2
3rd Qtr 2005 Economic Results
• GDP growth @ 5.3% (v. 4.4% 2nd
Qtr); led by Svcs. & Mining
• Exports up 7.5% (v.28% in ‘04) led
by E&E (6.8% growth; 84% of all
exports)
• Deficit=0.6% of GDP (est. 3.8% for
year)
• Inflation tending higher: price
increases in chicken, petrol, other
• Monetary policy tracking with
expansion); lending rate increased to
curb inflation
• Ringgit appreciating slightly; curbs
imported inflation
Building a solid
economic foundation
3
The Malaysian Model
Socio-Economic Dualities
55%
Muslim
45% NonMuslim
State-owned
Enterprises/Jobs/
Education
Private
Enterprises/Jobs/
Education
Separate yet integrated economies complimenting each other
Two interactive societies living/working side-by-side
4
The Dual Tracks of Malaysia
Bumi Track
Syriah Law
Priority School seats
30% Entitlements
Non-bumi track
Civil Law
Vernacular Schools
Global Mobility
Social
Bumi Track
Economic
Non-bumi Track
NEP/NDP/Affirm. Actn.
Party Dominance
Gov’t/Bus Alliance
Social-contract
Economic survival 5
Niche strategies
Where the tracks lead?
This?
or
. . . This?
Bumi
Malaysians
Non-Bumi
Separate, protected -but lesser development.
Joint but balanced, and
stronger development
6
SOCIO-ECO SPHERE
Above Surface
Goals
- To Be Regionally Competitive
- Drive Mission Critical Development
- Grow the Economy
- Meet Regulatory &
Social Obligations
Driving Forces
Below The
Water Line
Both address structural reforms
Leadership
& Collaboration
CEO: PM
MOF II
Khazanah Nasional
PNB
EPF
LTAT
LUTH
7
GLC Transformation Manual
1. Enhance Board
2.
3.
4.
5.
Effectiveness
Strengthen Directors
Capabilities
Enhance GLIC
Monitoring &
Management
Improve Regulatory
Environment
Clarify Social
Obligations
6. Review & Revamp
Procurement
7. Optimise Capital
Management Practices
8. Manage & Develop
Leaders & Other Human
Capital
9. Intensify Management
Practices
10.Enhance Operational
8
Improvement
Khazanah Transformation Plan
• Phase 1: Launched 29 July 2005 by PM
Develop Goals & Initiatives
• Phase 2 (Aug. ‘05 - Dec. ‘06):
Execution of initiatives
• Phase 3 (2-5 years from now):
Materialisation of sustained benefits
• Phase 4 (5-10 years onwards):
GLCs transform into regional champions
9
Moving from . . .
To . . .
. . . not just in trade, but also investment
10
NEP/NDP AFFIRMATIVE ACTION POLICIES
Borne of poverty reduction & wealth redistribution goals
As well as preparation for
Globalism.
Perceptions?
Realities?
British Legacy:
- Downgraded Malays
- Intellectual caldron of “isms”):
Malaysian Legacy: Strong Government Central Control
Government decides market winners & losers?
11
PM Abdullah’s Presidential Speech
On The Malay Struggle
WE want to become an advanced nation.
(The rest of the world) will not formulate
policies to help Bumiputras.
The global economy does not recognise
quotas; it will not allocate special
projects for Bumiputras.
The global economic lexicon only
acknowledges terms such as
competition, competitiveness,
productivity, innovation, creativity,
originality, excellence and efficiency.
12
Paradigm Pliancy (A Model for Change)
The ability to stretch the mind
and break out of the box!
Existing
Paradigm
Breaking
out
of the
Box
Stepping
into a
New Domain
(A)
(B)
(C)
Entitlements &
Affirmative
Action
A+B=C
Equal Opportunity
& Meritocracy
13
New Course
Old Course
Changing course or “tacking” yields a short
period of turbulence as the sail is reset to
a new course and the wind fills the sail
propelling it on its new direction.
14
2006
A turning point?
Malaysia has a demonstrated pragmatism
for doing the right things.
15
Keadilan Supreme Council
The Edge: Nurihsan Majid
 Unanimously approved an economic
motion to “replace race based NEP” with a
New Economic Agenda
 Seeking an ideal of universality
 A racial approach is inadequate to deal
with complex socio-economic inequality
in Malaysia
16
Keadilan’s New Economic Agenda
The Edge: Nurihsan Majid
1. Emphasis on justice for all Malaysians;
eradicating poverty regardless of race;
2. Narrowing the gap in rural & urban
development;
3. Provide training & education to all
Malaysians to face a K-based economy;
4. Promote entrepreneurship for a stronger
small & medium sized enterprise backbone
of the economy;
17
Keadilan’s New Economic Agenda
The Edge: Nurihsan Majid
5. Promote a delivery system which is worker &
business friendly, that inculcates accountability
& openness for more sustainable development;
6. Ensure government intervention is limited &
strategic by forging positive partnership with the
private sector that empowers economic actors
for a growth-based economy; and
7. Forge a positive economic strategy to compete
in a globalised economy.
18
A Paradigm Forward?
SOCIAL
ECONOMIC
Moving From
Moving From
Entitlements
Gov’t. Run Business
To
To
Equal Opportunity
Private Enterprise
19
Terima Kasih
Xie Xie
Nandree
Shukriya
20