By T.K. Chua
As I read through Ramon Navaratnam’s comment on Malaysia’s “skewed economy model”, his take on five-year development plans and the role of annual national budgets, I can’t help but provide my own view.
Malaysia’s high household indebtedness is not just due to high cost of living. There are a series of other factors that account for this.
First, wages are way too low. Entrepreneurs, businessmen and real estate owners get way too much. Government policies allowing unfettered entry of foreign workers further depress the already low wages. Development plans and annual budgets have talked about equitable distribution of income since I was young. However, it has stayed the same, or has become worse, even as I grow old.
Housing and cars are relatively expensive in this country. With wages hardly growing in real terms, many have resorted to loans, which were easily available not so much to help those in need, but to keep the economy “buoyant”.
That has been the economic model in practice: we want those who can least afford to spend more to keep our GDP growth robust. It sounds paradoxical, but it is true.
The moment an economic slowdown is detected, we reduce contribution to EPF, lower interest rates to spend more and relax the loan conditions to allow for more lending and borrowing. The thinking has been for the business community to continue to prosper, not for the plight of the working class who now need to incur more debts.
Over time, it has become a habit. Many Malaysians today have lost their skills at money management. Spend first, and think of the consequences later. Sometimes it is excessive borrowing and spending that lead to high inflation and high cost of living.
There are good and prudent ideas in our five-year development plans and annual budgets to provide us with holistic and balanced development. But the problem lies with implementation and evaluation.
When a new five year plan is launched or when an annual budget is tabled, there will be pomp and pageantry. Mainstream economists heap praises and pleasantries. New policies, programmes and projects, eloquently formulated and written, are presented for all to get excited.
But have we ever evaluated, assessed and measured the outcomes of our development plans and annual budgets?
If we have taken into account all rural water and electricity supply projects, by now the whole rural countryside will be covered with water pipes and electric cables.
If we had implemented all the health and education programmes as promised, by now we would be able to find schools and clinics with properly-trained staff at every nook and corner.
By the same token, if we had faithfully carried out all the “restructuring” and “Bumi” programmes, most Malays and Bumiputeras would have attained wealth and ownership status at par with people of other communities.
If we had carried out all the R&D programmes from nano technology, research grants to ICT, by now we would have attained a scientific standard of excellence. There would be no need to wait for 2020.
If we had carried out reforms and public sector transformation as promised through Pemandu and other agencies, there would be no need for the director-general of Occupational Health and Safety to say the department has only 12 site supervisors to oversee hundreds of construction sites in Kuala Lumpur.
There is now a total dissonance between development plans, budgets, implementation and outcome. Plans and budgets are just pomp. The government seems to act on impulse or on its whims and fancies.
Did 1MDB feature in any development plan or in our annual budget? Where did 1MDB come from, to take so much government land, and raising so much debt with government guarantee?
When our MPs debated past annual budgets in Parliament, did they know what they missed?
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