Msia's Policy Makers Wake Up To Economic Realities

The IMF projects Malaysia's GDP to contract by 3.5% this year compared to the Malaysian government's forecast of -1% and +1%. Meanwhile, IMF's forecast for Sinagpore is -10%, which is in line with Senior Minister Lee Kuan Yew's comments a month ago.

Thus, PM Najb's move to remove the 30% bumiputra equity requirement in 27 sub-services sector (Computer & Related, Health & Social, Tourism, Transport, Sport & Recreational and Business Services) is commendable and marks a first step towards real economic reform for the country.

Removing the NEP policy and the political agenda behind it is essential. But what is more essential for bloggers/the media and the public to understand is that distribution of human and financial resources based on race is economically most wasteful and greatest disincentive for economic wealth-building (as opposed to wealth hoarding by the privileged few).

Allocating economic resources based on race/class(Marxism)/religion/or any other superficial feature is a guarantee for economic inefficiency and waste. There are huge opportunity costs (RM140 billions or 20% of annual GDP?) that Malaysia's affirmative action policies (as distinct from but not unrelated to cronysm) have incurred.

So Najib's move should spark a fresh wave of analysis why Malaysian policymakers need to recognise the absurdity and stupidity of economic disincentives and to allocate its resources in the market efficient way. Everyone benefits from a bigger pie.

A Mighty Nation In The Making: Part II

There have been some post-election analyses commenting about the risky strategy of Msian Chinese voters in Bukit Selambau and Bukit Gantang in supporting PAS and attending PAS ceramahs.

Chinese Malaysians are not naïve with regards to PAS's Islamic state aspirations. We have all along known their long term objectives. But if PAS changes its pro-multiracial colours after helping PR to be the next government, then it would destabilise the government because Malaysian voters can always vote them out.

The common glue that holds the Pakatan together is the anti-corruption, anti-injustice agenda. And what is most tragic about BN/UMNO is their blatant lack of shame in the face of corruption and money politics (albeit Msia is ranked 7th in terms of corruption).

This lack of honour and fair play is totally unacceptable in Asian cultures. The advent of the Internet media and bloggers has opened the eyes of Msians, esp the younger generation regardless of race and religion.

So I conclude that the PR victories in the two states are not a victory for Islamic interests but a victory for all Malaysians.

A Beautiful & Mighty Nation In The Making

God works in unknown ways. Deep in my heart, I wish that PR will win the three seats (Bukit Selambau, Bukit Gantang and Batang Ai) in the by-elections tomorrow.

What is God’s plan for Malaysia under the new PM Najib? Will he be under pressure to reform or maintain a tight grip on the status quo?

Tonight, I’ll pray that the the best party with the best leaders will win in line with God’s future plan for this beautiful and mighty nation.

Malaysia is beautiful because it is the nation beloved by God for its racial harmony despite government-sponsored racism. It is mighty because the dramatic political upheavals and elections in the past year have been broadly peaceful with no bloodshed.

7th April, Tuesday: Whichever way the by-elections go today, I think PM Najib will surprise on the positive as far as incremental reforms are concerned.

If BN wins two out of the three seats (Bukit Gantang most likely will be won by PAS/PR), it would increase the people's anger more if BN sees the victories as an endorsement to be as corrupt and oppressive as before. So the PM will likely make some reforms to placate the middle ground, the most important challenge being the revamp/removal of the NEP stigma on the nation.

On the other hand, if PR wins all three of the seats, the PM will be under more pressure to reform BN internally, which is also good.

Either way, the stock market is riding a global bear market rally and should retrace later when the focus is back to a contracting economy.

Painting by Iranian artist Kamrooz Aram.