Agenda Daily

Translating perception into reality

ykadirxWhile the news that Malaysia has climbed five steps in this year’s Global Competitiveness Report compiled by the Geneva-based World Economic Forum augurs well for the country, more needs to be done to counter bureaucratic ineptitude abuse of power and corruption to.further boost our image.

THE NEWS THAT MALAYSIA HAS CLIMBED FIVE STEPS IN this year’s Global Competitiveness Report (GCR) compiled by the Geneva-based World Economic Forum (WEF) could not have come at a more trying time.
Just days before that, Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz announced that Malaysia’s economic growth decelerated to its slowest pace of 4% since the 2009 recession.
The Central Bank chief said the country was hit by a slowdown in external demand and moderation in government spending, despite some soothsayers in the government saying otherwise.
This was the fifth consecutive decline in quarterly growth and down from the 4.9% registered in the first quarter of this year.
The WEF report might have not taken into account this latest development and also the deteriorating economic and financial situation in Europe and the United States, but it is, nevertheless, a healthy development for the country.
The WEF based its ranking 30% on statistical data and 70% on surveys. tt examined 12 pillars ranging from institutions to infrastructure, financial market development and innovation.
Malaysia achieved a score of 5.08, compared to 4.88 last year, out of a maximum of seven, and the GCR credited it to improvements across the board’.
Malaysia’s ranking rose to 21 from 26, ahead of such countries as Israel, South Korea and New Zealand. The WEF survey ranked 142 countries.
In the Asia-Pacific region, Malaysia is ranked 6th, up from 8th last year, while Singapore is ranked first, followed by Japan, Hong Kong, Taiwan and Australia. The global top spot is again occupied by Switzerland with Singapore coming second.
In WEF jargon, Malaysia’s progress is particularly noteworthy in the institutions and macroeconomic environment pillars, as well as in several measures of market efficiency.
In addition, the country’s macroeconomic situation has improved markedly over the past year to reach 29th place, even though Malaysia continues to run a budget deficit of about 5% of Gross Domestic Product (GDP).
It was also pointed out that Malaysia had an efficient and sound financial sector, which was placed among the world’s most developed, just behind Singapore and Hong Kong and a highly efficient goods market, ranked 15th.
Welcoming the news, International Trade and Industry Minister Datuk Sen Mustapa Mohamed told a media briefing  that Malaysia was ranked 3rd — rising from 7th - in financial market development, adding that the country’s improved ranking reflected the strong economic fundamentals, and the success of the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP).
He pointed out that foreign direct investment (FDI) had surged to RM21 .3 billion in the first half of this year from RM12.1 billion the same period a year ago.
Also, we have made improvements in the criteria of crime and violence, organised crime, and reliability of police services,’ he said.
Translating this positive perception into reality is the challenge that the government must face, given the rising domestic and global economic difficulties.
While FDI is on the rise, the earlier report by the Central Bank clearly stated that the Malaysian economy in the second quarter had been hit by a slowdown in external demand and moderation in government spending.
Although Prime Minister Datuk Sen Mohd Najib Abdul Razak, who is Finance Minister, has taken some steps to boost consumer spending and alleviate the hardship of the poor, the sustainability of these actions and their impact on the economy will take a longer time to measure.
With the gloom and doom surrounding the European and US economies, and with the Chinese showing signs of overheating, it would appear that Malaysia has to depend much more on the domestic sector to achieve the 5%-6% GDP growth that the government is aiming for this year.

THE impact of the recovery in the FDI flows on the economy is likely to be even more significant given the lower than expected domestic private sector investments.
The government has been expressing worries that the domestic private sector investments have not been keeping pace with FDI.
With MITI and the Malaysian Industrial Development Authority (MIDA) making credible strides in reviving the inflows of FDI, the question arises about a similar campaign to perk up domestic investments.
Is this not the responsibility of the Domestic Trade, Co- operatives and Consumerism Ministry? If it is, then the minister concerned should emulate MIII and MIDA.
But investme~t applications alone may not be the answer. The more important thing has always been their actual implementation.
If there have indeed been improvements in the government’s delivery system and economic planning via such initiatives as the GTP and ETP, then speedy implementation of projects should not be a problem.
Alas, this may not always be the case. Apart from the usual bureaucratic kinks, there’s now a new phenomena that the authorities have to contend with, and it is a tricky one.
The continuing debate on the ongoing construction of the RM700 million rare earth processing plant by Australia’s Lynas Corp in Pahang is a case in point.
Unless the authorities have the technological and intellectual capabilities to handle public opinion and ensure that future industrial projects are safe, approving and implementing them could prove to be difficult and time-consuming. This could drive away existing investors and divert new ones away from Malaysia.
The inability of the authorities to find speedy solutions to public concern over the Lynas project and blaming it on the Opposition parties and non-governmental organizations may not bode well for the country.
Public concern is not unreal. An earlier Japanese-owned rare earth processing plant had been shown to cause some environmental damage and health hazards.
Either the officials dealing with the approval of the Lynas plant were being reticent about public opinion, or were unaware of the incident involving the earlier rare earth processing project. The Lynas debate can harm our investment climate.
With the country back in favour with foreign investors, either because of improvements in the delivery system or due to uncertainties elsewhere, the thing we should not do is to allow bureaucratic ineptitude, abuse of power and outright corruption to spoil our image.

On the political front, the Barisan Nasional (BN), in particular Umno, should be thanking its lucky stars. The recent election of a non-ulama as the Deputy President of the Pan-Malaysian Islamic Party (PAS) has proven to be a blessing.
The election of Mohamad Sabu, a party lightweight, to the number two post was seen as a rebellion of sorts against the leadership of the u/ama and an indication of the rising power of the non-religious elements in the party.
Mohamad was elected over other stronger candidates because he is seen as harmless and his election would not offend the sensibility of the reigning u/ama leadership.
But that soon proved to be a folly. Famous for shooting his mouth off and being a crowd puller at party gatherings with his repertoire of jokes, he recently shot the party in the belly when he made a foray into history.
He caused widespread indignation among the Malays when, in not so many words, declared the communist attackers of the Bukit Kepong police station in Johor as heroes of independence.
In the Feb 24, 1950 incident, some 200 communist terrorists, jointly commanded by a Malay by the name of Mohamad Indera and a Chinese, Lek Tuan, killed 14 Malay policemen, four Home Guard members, three auxiliary policemen and the wife of Abu Bakar Daud, one of the surviving policemen, and three of their children. In all, 25 people died.
Without having to fire even a dud bullet, the BN, in particular Umno, can revel in a victory of sorts. The Malays have always been staunchly anti-communist and thousands died fighting them in the~ 12-year emergency period between 1948 and 1960.
For the Pas Deputy President to declare the communist attackers heroes was a mistake that only a fool could make. The funnyman Mohamad is not so funny after all. The Malay anger against him and Pas cuts across party lines and ideological affiliation.
Based on this incident, it should be plainly clear to  Mohamad’s supporters that electing him as Deputy President  and sitting him among the u/ama was a mistake. In one false stroke, he tarnished their esteem and opened the party to criticism.
Had a similar misjudgment been made by an ulama, say Datuk Seri Abdul Hadi Awang, the party President, or Datuk Nik Abdul Aziz Nik Mat, the spiritual leader - which is highly unlikely - the backlash would have been much more subdued and guarded.
But coming from Mohamad Sabu as it did, it became open season for taking potshots at the Islamic party.-26/9/2011

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