Social justice is key to economic revival

Written by R B Bhattacharjee
Sunday, 31 May 2009 23:46
Source: http://www.theedgemalaysia.com/first/15350-social-justice-is-key-to-economic-revival.html

THE countdown has begun towards the re-invention of Malaysia’s economy from a middle-income nation to a high-income one.

Last week, Tan Sri Amirsham Abdul Aziz was appointed as head of the National Economic Advisory Council, in which he is tasked with advising the government on creating a new economic model based on innovation, creativity and a high value-add.

That will take some doing, particularly in the light of the backward slide of the economy in the last several years.

The reasons for this decline include rising production costs due to a tightening labour market, cheaper exports from lower-cost markets such as Vietnam and China, and the failure of the manufacturing sector to move on to higher-value activities, as the Malaysian Institute of Economic Research, among others, has pointed out in its analyses.

Nevertheless, the determination to transcend one’s limitations is an important prerequisite for success. So, we must not be in the least daunted by the challenge that is before us.

However, it is equally essential that we harbour no illusions about our shortcomings as an economy, and are prepared to learn from the mis-steps that have been taken along the way to fulfilling our aspiration to become a developed nation.

Indeed, much energy and resources can be saved if we begin by taking stock of stumbling blocks that have prevented the nation from achieving the lofty goals of the Vision 2020 blueprint. Resource constraints that have kept groundbreaking projects like the Multimedia Super Corridor (MSC) from generating the much-heralded momentum to push the nation towards a knowledge-economy need to be addressed. It is good, as industry analysts have noted, that the MSC has provided the real estate for a K-economy to thrive, but it still remains to be populated with a critical mass of IT-based knowledge workers.

A further issue to be addressed is the culture of political patronage that has become an intrinsic element of the nation’s economic development, encompassing infrastructure projects to national industries to allocations for human capital development.

At this critical juncture in the nation’s economic rejuvenation, there needs to be an honest acknowledgement of those policies and practices that have turned out into handicaps for our competitiveness and that prevent a quick reworking of our economic model.

In this regard, the liberalisation of 27 service sub-sectors that was announced by Prime Minister Datuk Seri Najib Razak soon after he assumed office signals the government’s seriousness in addressing the systemic weaknesses that are keeping investors on the sidelines.

Among other encouraging initiatives is the revival of a decades-old practice to expose the civil service to entrepreneurial approaches to problem-solving. Seen in a positive light, this synergy can bring the dynamism of business solutions to bear on the more regimented approaches that public administrators are prone to adopt.

Yet, even more crucial is a sense of community among everyone who has an economic stake in the country’s success, based on a fair reward system.

In that sense, it will be just as important for the new economic framework to address social cohesion as it needs to stimulate innovation and engender excellence.