Malaysia’s recently presented New Economic Model is, on paper, a hugely ambitious strategy for changing the country’s economic and social direction and, hopefully, its economic and political fortunes.
The government of Prime Minister Najib seems inclined to embrace its principles and try to forge a new direction in Malaysian economic and social policy. In the 1980s Malaysia was among the brightest stars in the Southeast Asian economy, with growth around 8 per cent a year and a huge transformation away from its comfortable plantation and minerals past towards a new industrial future, driven by foreign investment and rapidly growing exports of consumer electronics to regional and global markets. Mahathir reigned supreme, dispensing patronage and securing UMNO’s political base under the camouflage of the long-established New Economic Policy, put in place after the racial disturbances of the late 1960s to lift up the bumiputera Malay population and in the process embedding race-based politics into the fabric of political culture.
After the Asian Financial Crisis Malaysia has faced a far less certain future, not only because of the political dark-side that it exposed under Mahathir, but also because of the way that cosy politics had come to sap the vibrancy out of the economy and good economic policy. Economic performance has gradually stagnated, Global Financial Crisis aside. A race-base political culture has become less and less tenable: it’s not only Anwar Ibrahim that challenges with an alternative political model; the government itself is grappling within itself and against the ghosts of its past for a new way, ditching the old New Economic Policy. Malaysia is on the cusp of a profound turning point in its national development.
As Shankaran Nambiar explains in this week’s lead the New Economic Model, were it implemented, would seek to sweep aside many of the shackles that have held Malaysia back, economically and politically. It would tackle the failure of economic policy to provide a foundation for lifting Malaysia out of its lower middle-income malaise. It would also, necessarily, tackle the related problem of Malaysia’s suppression of civil and political freedoms. The most important problem, he argues, centres on ‘the institutional framework in Malaysia. The way people interact, their expectations, and the norms and conventions that govern these interactions must change. The norms, habits and conventions in society must support efficiency and competitiveness, and not give way to lassitude and indifference…There is evidence that civil liberties and a more liberal political and social fabric helps promote economic development. Institutional reform of this nature involves guaranteeing: freedom of speech; freedom of assembly and demonstration: equal opportunity; freedom from excessive governmental intervention; respect for minorities; and a fair, independent judiciary.’
It’s a brave call but if heeded there is promise of realising the Malaysian dreams of once again being the strong country of Southeast Asia and a future among the industrial democracies of the OECD.
The government of Prime Minister Najib seems inclined to embrace its principles and try to forge a new direction in Malaysian economic and social policy. In the 1980s Malaysia was among the brightest stars in the Southeast Asian economy, with growth around 8 per cent a year and a huge transformation away from its comfortable plantation and minerals past towards a new industrial future, driven by foreign investment and rapidly growing exports of consumer electronics to regional and global markets. Mahathir reigned supreme, dispensing patronage and securing UMNO’s political base under the camouflage of the long-established New Economic Policy, put in place after the racial disturbances of the late 1960s to lift up the bumiputera Malay population and in the process embedding race-based politics into the fabric of political culture.
After the Asian Financial Crisis Malaysia has faced a far less certain future, not only because of the political dark-side that it exposed under Mahathir, but also because of the way that cosy politics had come to sap the vibrancy out of the economy and good economic policy. Economic performance has gradually stagnated, Global Financial Crisis aside. A race-base political culture has become less and less tenable: it’s not only Anwar Ibrahim that challenges with an alternative political model; the government itself is grappling within itself and against the ghosts of its past for a new way, ditching the old New Economic Policy. Malaysia is on the cusp of a profound turning point in its national development.
As Shankaran Nambiar explains in this week’s lead the New Economic Model, were it implemented, would seek to sweep aside many of the shackles that have held Malaysia back, economically and politically. It would tackle the failure of economic policy to provide a foundation for lifting Malaysia out of its lower middle-income malaise. It would also, necessarily, tackle the related problem of Malaysia’s suppression of civil and political freedoms. The most important problem, he argues, centres on ‘the institutional framework in Malaysia. The way people interact, their expectations, and the norms and conventions that govern these interactions must change. The norms, habits and conventions in society must support efficiency and competitiveness, and not give way to lassitude and indifference…There is evidence that civil liberties and a more liberal political and social fabric helps promote economic development. Institutional reform of this nature involves guaranteeing: freedom of speech; freedom of assembly and demonstration: equal opportunity; freedom from excessive governmental intervention; respect for minorities; and a fair, independent judiciary.’
It’s a brave call but if heeded there is promise of realising the Malaysian dreams of once again being the strong country of Southeast Asia and a future among the industrial democracies of the OECD.
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