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Loss of competitiveness a seriouss matter
Published on: Wednesday, June 28, 2017

By Datuk John Lo
it was sad to read that Malaysia has tumbled in competitiveness ranking in the recent Global Competitiveness Report released by the World Economic Forum International Competitiveness Survey – from 19 [2015-16] to 25 [2016-2017] recently.

More so to see most Federal political leaders, including those in opposition, have either ignored or tried to justify this drop. Blaming it on global uncertainties, including China’s economic slowdown is inexcusable for the simple reason that all nations have been faced with the same world economic conditions.

The simple question to ask is why other nations have been able to keep or improve their ranking.

More worrying is that there has been a distinctive gradual long-term decline in competitiveness over some years which our political leaders, for political expediency, have ignored and failed to initiate policies to arrest the decline.

They have just let it slide. Quite clearly, there has been a political leadership vacuum to lead Malaysia into higher level of competitiveness. Had there been more political will to implement the transformation programme, Malaysia’s competitiveness would not be in this sorry state.

In spite of this slide in competitiveness, Malaysia still managed to have a decent economic growth last year and 1st quarter 2017. Had our competitiveness been better, we would have scored higher.

When there is decent economic growth and decline in competitiveness at the same time, we should look out for the quality of this economic growth and the long term economic implications. With declining competitiveness, is this growth rate sustainable?

Leading and coaxing a country to face up with the reality and critical necessity of competitiveness is the hardest political job. A lot easier to dish out handouts, privileges and monopolistic concessions to the favoured few.

Not much thinking is needed here. It is an easy way out but this will be at the expense of long term economic growth and prosperity. There are plenty of examples like Communist China before Deng Xiao Ping embarked on the capitalist road and Cuba, Greece up to now. Or those countries in Eastern Europe that used to practise excessive socialism and poor governance. Malaysia, up to day, has been indulging in paternal, feudal economic policies.

Weaning away from generations of pampering subsidies, rights, privileges will be a tough call.

Malaysia needs a Deng Xiao Ping or Lee Kuan Yew who had the wherewithal leadership to convince and inspire their citizens that they must work hard and smart to take the country forward.

Any effort to define competitiveness is an exercise in futility. Simpler and for the purpose of this article to look at China and Singapore. Before Deng, China was a pariah country, mired in dire poverty and most people went to bed on empty stomachs. Mode of transport were zillions of bicycles. USA did not even bother to cast a condescending eye on China. Then Deng unleashed the inherent Chinese competitiveness. Within one generation China has become the 2nd most powerful country after USA, soon to overtake it. It is the biggest car market in the world.

China has caught up and over-taken USA in many fields like fastest computers, high speed rail, highways and even space technology. Most outstanding fact is China has become USA’s biggest creditor! There is a real possibility that the RMB will rival USD as the world currency.

Singapore may be a little “red dot” on the map. The 4 million Singaporeans are super competitive and are enjoying high income, thanks to Kuan Yew’s leadership. Malaysia is still trying to achieve it.

Two facts on China and Singapore – First, greater competition has brought prosperity, unity and a sense of national pride in China and Singapore. Second, good quality political leadership has been the most critical factor.

Patently clear that current political system has not worked well for a long time. Khairy is right – he said that the young generation wants a united Malaysia, not divided by race or religion, focused on achieving better lives.

In colonial time, the British used “divide and conquer” tactic to legitimise their rule over us.

Their intention, as colonial masters, is understandable. Now that we have been a nation for 50 years and more, why would our own leaders in Peninsula want to use the same method to divide and segregate the races?

Unity is strength. Divided we fall. Bad leaders have bad intentions – to exaggerate our differences, want us to fight with each other and hide their failures/corruptions by creating racial differences. Good leaders promote a vision of togetherness. United, we can be as good as South Korea, Taiwan, China or Singapore.

We need new political leadership who can give us a new political system, away from race and religion.

Then we can become a great nation again.

Peninsular Malaysia should adopt Sabah’s political model. Not one Sabah leader would use race or religion.

With Datuk Musa leading the way as the leader for all Sabahans, other leaders including those in opposition, are good examples for Malaysian leaders to emulate the “politics for all Sabahans”. Sabah is inclusive politics whereas W Malaysia is exclusive politics or “This is our country – others don’t belong here” politics.

W Malaysian politics have become toxic and contaminated to nation building and national unity.

All our political leaders are not stupid. They know well that only competitive countries have succeeded to give a good life to their citizens.

How can Malaysia improve competitiveness? The hardest to overcome is the mindset of political leaders, not ordinary Malaysians. The current mindset of telling Malaysians we are the best, we are the “ketuanan”, we are special, privileges and handouts can continue ad nauseam. This pulling wool over eyes must stop.

They are giving false hope, unrealistic expectations. It was OK when government revenue from oil and gas was gushing out from the ground. No hard work is required – just spend and spend. Well, the good times are now over and unlikely to return anytime soon. The sword of harsh reality has arrived to extract its pound of flesh.

That’s why there is GST, high cost of living and hundreds of thousands of unemployed and unemployable graduates. The time of easy money has evaporated. The Hobson’s choice is upon us now. Compete or perish.

To enhance competitiveness, it must start with the political leaders. They must have political will and courage to lead Malaysians to greater competitiveness, greater productivity and most importantly, tell them what the real world is like. They must also lead by example, with dedication, honesty, creditability and hard work.

Except for UTS, majority part of Government system, which is the engine of the country, needs to be transformed for Malaysians to be competitive. We can never be competitive if this is a drag and hindrance. Also, the Government should dispense with imported cheap labour which is preventing us from adopting to more labour efficient regime´.

After the political leaders can show they can transform, the next step is for them to use their brains to produce appropriate laws, policies and directions towards greater competitiveness so that the best and brightest can be given the opportunity to administer the country, the universities so that they can produce world class graduates and businessmen who can conquer the world and not dependent on “cari jalan” or “cari makan”.

I mentioned universities earlier. In fact, the whole education system from kindergarten to university needs a major revamp. Good solid education is prerequisite for greater competitiveness. Not allowing the best brains to flourish in universities has led to mediocre graduates, little innovation and original research. We must allow our best brains to drive and propel the future economy of Malaysia.

Greater competitiveness will bring out the best in all Malaysians, resulting in a higher degree of productivity.

This in turn will give us more effective Ringgit in our pockets. This is a fundamental economic lesson that all Malaysia political leaders must learn. They have to face the fact that, racial and religious politics, widespread handouts, subsidies and all form of assistance can never build a strong Malaysia. They can only weaken our country.

Greater competitiveness and productivity are the most effective answers to narrow the widening gap between middle/low stagnant income and spiralling cost of living/more government taxes.

Without the windfall of oil money, political leaders must face the harsh reality that there just isn’t enough for all these handouts, subsidies and economic abuses. For a start, we need a “spring cleaning” to throw out the garbage of corruption, leakages and sheer wastages. Many ordinary Malaysians including some taxi drivers in KL that I have met recently can see a new vicious cycle – on one hand the government is dishing handouts, on the other, taking them back with more taxes like GST. Ordinary Malaysians are wise enough to see there is no net Ringgit increase in their pockets. All these “good intentions of the Federal Government don’t impress them anymore, no longer can generate mileage with the middle and lower income group in the urban areas.

The Federal Government should introduce competition into Malaysian society soonest, especially for those who can take off the “tongkat” already. If the political leaders can only open their eyes, most Malaysians, irrespective of race, can embrace competition already. Judging from experience of China, people can adopt competition much faster than what the political leaders think. Most can take on the challenges of competition like ducks to water.

Who would imagine that within one generation, China can uplift 600 million people out of poverty and become the 2nd largest economy in the world? Just think about it. Those Malaysian political leaders who persist in thinking Malaysians cannot compete are either underestimating their ability or worse, are harbouring some evil agenda to keep the people poor. Like the dark ages in Europe, the ruling class kept the people poor for the same reason.

Poor people were easy to control and rule. They can be contained with morsel-handouts.

Educated, independent minded people are more demanding to the ruling class.

With more competition, people will become better off, Government will be able to raise taxes and more able to render assistance to those who are in genuine need. Last and most important is that Malaysian political leaders must face up to these basic facts – competition makes us stronger, not weaker. Competition can unite the nation, not divide us. Competition is about Malaysia vs other countries, not Malaysians vs Malaysians.

Competition can equip us to keep pace with other nations. Competition can bring greater prosperity and above all, political leaders with quality leadership can see competition as a positive unifying force for a united Malaysia.

The RM64 question is – where can we find such political leaders with the necessary political courage to move Malaysia forward in the path of competition in the prevailing highly personalised, racialised political environment?

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