Minister in the prime minister's department Tan Sri Amirsham Abdul Aziz said recently that the Malaysian economy must be liberalised and specific industries should no longer come under government protection, as the government wants to see more competition in the market which will benefit the nation and all the people.
"The government is currently studying which sectors that should still come under protection. These are the strategic sectors that entail national interests."
Some say without any rival or comparison, risk or competition, anything will tend to go lax and sloppy and thus head towards decline and even demise.
Many companies under the government's protective shield have shown signs of poor management, and the government has to divert taxpayers' money to bail them out.
Consequently, it is a good thing to liberalise the national economy, especially for specific industries which are facing developmental bottlenecks.
But the point is, are we ready for it?
Take the automobile industry for instance. Thanks to the government's protective shield, the national cars have been able to ply on all our roads and highways. But the national cars' price advantage will be negated if the government decides one day to loosen its grip by allowing technologically advanced imported vehicles with low production costs to swarm into the local market. The national automakers may have to suffer the same fate as the three largest US carmakers.
On top of that, many foreign economists agree that the latest round of global financial tsunami has stemmed from property and financial market liberalisation all in the name of capitalism.
From here we can see that excessive freedom still has its share of risks.
As such, the government must strike an equilibrium during the economic liberalisation process and must not rush to it.
Perhaps we can take cue from the successful examples in countries like Taiwan and Singapore, first giving priority to forex and trade reforms before implementing liberalisation in trade, forex and interest rates, and finally full implementation of economic liberalisation. This is to achieve the simultaneous effects of protecting corporate companies while maintaining free and stable economic expansion.
(By HONG JIANWEN, Business Desk/Translated by DOMINIC LOH/Sin Chew Daily)
MySinchew
2008.11.14
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