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Being a developed nation

  • If we are a nation of happy and contented citizens, do we still need to become an economic power in the first place?

By LIM SUE GOAN
Sin Chew Daily

Quoting a PricewaterhouseCoopers report, PM Najib pointed out that Malaysia would become the world's 24th largest economy by 2050.

This forecast has triggered polarized reactions with the majority of people skeptical about the claim.

PwC has believably computed Malaysia's global ranking based on the country's economic performance at this moment, which is not wrong theoretically.

Theoretically a man can live up to a hundred years, but due to varying lifestyles from person to person -- some embracing health-compromising habits like smoking and alcoholism while others live under constant stress and hence more susceptible to illnesses -- most people do not live until 100.

Similarly, even if a country is performing quite well economically, this does not mean it is free from domestic and external risks which if evolve into a crisis will take the country off course.

Besides, people in other countries may work even harder, making it impossible for us to achieve the preset goal.

For example, in 1991, then PM Mahathir set the vision of becoming a developed country by 2020 based on the supposition that our economy would continue to expand by at least 7% annually in order to reach the per capita GDP of US$15,341. Judging from the rapid economic takeoff at that time, this vision was not out of reach at all.

But we never anticipated a regional financial crisis in 1998 and the arrest of Anwar Ibrahim that sent the market in jitters. Market confidence was suppressed and the government introduced the capital control policy to stabilize the local currency. Our economy was contracting for five consecutive quarters.

Later the national economy staged a powerful rebound with the GDP growing at a robust 11.6% for 4Q1999 and 1Q2000. Unfortunately the burst of the Internet bubble in the United States in 2001 shrank Malaysia's exports by a drastic 8-10%, causing the national economy to contract by 0.4%.

In 2007, the US subprime crisis saw a crunch in the Malaysian exports again, and by end-2008, unemployment rate climbed to a high of 3.7%.

Under the government's monetary and fiscal policies, the economy recovered quickly but the expansionary measures to stimulate the economy saw the deficits rising to 7.9% as government debts soared.

Owing to 1MDB and other factors, the ringgit plummeted during the past two years, and no one can tell whether we still can make it to the league of developed nations by 2020.

Therefore, our economic development is not to be taken for granted. Moreover, we are a major trading nation with rather small domestic demands, and any major global event could leave a heavy mark on our economy.

In addition, there are also downward risks internally, including the staggering government and household debts that are poised to bring down the country's financial system at the onset of the next crisis.

Government's operating expenses are too high and we have an abundance of civil servants on government payroll, as the burden is passed onto the rakyat.

Lack of transparency and corruption have aggravated social cost while eroding the country's economic competitiveness.

To become the world's 24th largest economy, we need to invest heavily in education and human resources training while investing also in new technology, artificial intelligence and R&D towards the Fourth Industrial Revolution, or be prepared to be overtaken by other countries.

To realize the TN50 aspiration and to become one of the top 20 countries in the world, we must implement institutional and educational reforms immediately.

Even if the people are ready, are our government and political leaders ready for it?

One of the biggest concerns of this country is that our politicians can do anything to keep themselves continuously in power, including sacrificing their principles or abandoning the ideals of democracy. No point talking about becoming an economic power if our economy backslides as a result of politics.

I have a feeling that our politicians are being opportunistic when they talk about being a developed country or economic power.

For instance, when we were drawing up the vision for a developed country back then, the vision encompassed nine major challenges, including the creation of a united, progressive, democratically matured, liberal and accommodating society. But today, no one is talking about these values any more. Numbers are all they are after.

As a matter of fact, the most pragmatic approach is not talking about some remote goals but to first address the day-to-day problems of the rakyat. The government must first reduce the people's cost of living and goods prices.

The economy can't be bad if Malaysians' basic needs are met and they are inspired to do their best.

If we are a nation of happy and satisfied citizens, do we still need to become an economic power in the first place?

 

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