Malaysia's Middle Income Trap (or is it "Trapped")

A timely, but another "here we go again" charade, my comments at the end.

http://www.chinalawblog.com/2010/08/china_malaysia_korea_and_the_middle_income_trap.html

... a post by Michael Schuman on Time Magazine's Curious Capitalist blog, entitled, "Escaping the middle-income trap." The post focuses on how Malaysia's economic growth has been so consistently strong since World War II, yet has been slowing over the last few years and of how Malaysia just cannot seem to break into the league of developed nations. Schuman defines this "trap," as follows:

I returned a few days ago from Kuala Lumpur, the capital of Malaysia, where the talk of the town – well, at least among economists -- is the “middle-income trap.” What's that, you ask? A developing nation gets “trapped” when it reaches a certain, relatively comfortable level of income but can't seem to take that next big jump into the true big leagues of the world economy, with per capita wealth to match. Every go-go economy in Asia has confronted this “trap,” or is dealing with it now. Breaking out of it, however, is extremely difficult. The reason is that escaping the “trap” requires an entire overhaul of the economic growth model most often used by emerging economies.

The concept behind the “middle-income trap” is quite simple: It's easier to rise from a low-income to a middle-income economy than it is to jump from a middle-income to a high-income economy. That's because when you're really poor, you can use your poverty to your advantage. Cheap wages makes a low-income economy competitive in labor-intensive manufacturing (apparel, shoes and toys, for example). Factories sprout up, creating jobs and increasing incomes. Every rapid-growth economy in Asia jumpstarted its famed gains in human welfare in this way, including Malaysia.

However, that growth model eventually runs out of steam. As incomes increase, so do costs, undermining the competitiveness of the old, low-tech manufacturing industries. Countries (like Malaysia) then move “up the value chain,” into exports of more technologically advanced products, like electronics. But even that's not enough to avoid the “trap.”

To get to that next level – that high-income level – an economy needs to do more than just make stuff by throwing people and money into factories. The economy has to innovate and use labor and capital more productively. That requires an entirely different way of doing business. Instead of just assembling products designed by others, with imported technology, companies must invest more heavily in R&D on their own and employ highly educated and skilled workers to turn those investments into new products and profits. It is a very, very hard shift to achieve. Thus the “trap.”

Schuman sees South Korea as "probably the best current example of a developing economy making the leap into the realm of the most advanced." Schuman sees Malaysia as a long way from making that same leap:

Malaysia, though, is quite far from where it wants to be. That's a bit surprising based on its remarkable recent history. Malaysia has been among the best performing economies in the world since World War II, one of only 13 to record an average growth rate of 7% over at least a 25-year period. The country has an amazing record of improving human welfare. In 1970, some 50% of Malaysians lived in absolute poverty; now less than 4% do. Yet Malaysians also feel that they've become somewhat stuck where they are. GDP growth has slowed up, from an annual average of 9.1% between 1990 and 1997 to 5.5% from 2000 and 2008. Meanwhile, other Asian economies have zipped by Malaysia.

According to the World Bank, the per capita gross national income (GNI) of South Korea in 1970 was below that of Malaysia ($260 versus $380), but by 2009, South Korea's was almost three times larger than Malaysia's ($21,530 versus $6,760). Malaysia is getting “trapped” as a relatively prosperous but still middle-income nation.

Schuman does not see Malaysia making the leap. Its companies are not innovating. Its private investment is declining and it spends almost nothing on R&D. "If Malaysia is going to break the “trap,” it has to reverse all of these trends."

So what has made Korea so different from Malaysia?

Why has Korea jumped so far ahead? I think the reason is embedded in the different methods the two countries used to spur rapid growth.

Both countries relied exports to create rapid gains in income, but they did so differently. South Korea, from its earliest days of export-led development in the mid-1960s, had been determined to create homegrown, internationally competitive industries. Though Korean firms supplied big multinationals with components or even entire products, that was never enough – Korea wanted to manufacture its own products under its own brands. The effort was often a painful one – remember Hyundai's first disastrous foray into the U.S. car market in the late 1980s and early 1990s – but Korea is where it is today because its private companies have been working on getting there for a very long time, backed in full by the financial sector and the government.

Malaysia, on the other hand, relied much, much more on foreign investment to drive industrialization. That's not a bad thing – multinational companies provide an instant shot of capital, jobs, expertise and technology into a poor country. MNCs, however, aren't going to develop Malaysian products; that has to take place in the labs and offices of Malaysia's private businesses. But those businessmen have been content to squeeze profits from serving MNCs and maintaining their original, assembly-based business models.

Korea was at one time the second poorest country in the world, second only to Niger. Now, Seoul is more dynamic than Tokyo and Korea just continues to grow both economically and in terms of its political freedoms. Why is that? And why are countries like Malaysia and Thailand stuck in the middle ground? And what about China and Vietnam, will they be able to make "the leap?

Japan and Korea are important because they have spending power. Vietnam and Cambodia are important because they have very low wages. China is the most interesting because just three or four years ago, companies were going to China because of its low wages, but now, companies are going there to make money (mostly on the Coast) and going there to make things (more and more inland).

Where do Malaysia or Thailand fit into all this?

Malaysia and Thailand remind me a bit of the mid-size law firm. I can understand hiring the big firm for the big deal or the big case requiring a massive number of associates or legions of highly specialized partners. And I can understand hiring a highly efficient and focused small firm. But I rarely understand hiring the mid-sized firm, which usually tries to price itself along the same lines as the big firms, but without the corresponding depth or expertise. Why bother? And nothing against either Malaysia or Thailand, but I think many businesses have asked themselves this very question.

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My Views: The way I see it, we always tend to blame corruption as the main bane to why Malaysia is trapped in the middle income trap. While that has some merit, it is not the pervading critical factor - Korea and Taiwan also have to deal with corruption, and at various times corruption was more ingrained and pervasive in Korea and Taiwan, maybe not to Malaysia's extent, but there are quite a lot of similarity, even today. Indonesia, whose corruption problem is much bigger than Malaysia, has surpassed Malaysia's per capita income measure as of last year - what gives?

Malaysia's strategy relied very heavily on import substitution while South Korea's revolved around creating export industries. Import substitution does nothing to bring in foreign exchange; it only stops outflows. To be fair, Malaysia does not have critical mass while South Korea and even Taiwan to a lesser extent can claim that. Having critical mass means a product will reach profitability much swifter, and will attract more capital to grow it for export markets later. Having ASEAN is supposed to help all countries get to critical mass faster, but all duties and related taxes have to be abolished to achieve that ~ no mollycoddling of any industries ~ if we are not effective competitor in producing cars, cement or steel bars, let someone else do it.

I see the main reason being our big picture strategy does not correspond to our actions or policies enacted or actions taken. We have wonderful big picture plans, we want to move away from mid-income to high income per capita ... but we still religiously allow millions of foreign workers in?????????????????????????????? Not to mention the additional millions of illegals unaccounted for - having a shadow workforce of 4m-5m when your actual local workforce is around 10m-12m will have immense repercussions. We know the solutions but we lacked the political to implement them.

The low paying jobs will all go to foreign workers who are happier to work in those jobs. But that reinforces the "low cost, labour intensive" mindset, causing businesses to continue to invest in those areas. Imagine if we have ZERO foreign workers = plantations cost will rise, well almost everything will rise as well ~ businesses will have to shut sunset industries and capital will have to find ways to get into higher value add businesses to stay afloat. There are plenty of ramifications on just that one issue which may explain a lot of things, but you can figure them out.

Another example of when big picture strategy or 1Malaysia does not gel with the actions taken: over subsidised local industries ~ we just never know when to stop with the breast feeding, do we??!! Take Proton, why are we Malaysians, and barely making the top 10 in Asia alone,... happens to be THE SECOND MOST EXPENSIVE PLACE ON EARTH to buy cars??????????????????????????????????? Talk about middle income, well a good chunk of it was taken to subsidise Proton.




Maknanya harga Persona kat Saudi = RM33,934 aje
Maknanya harga Proton Gen2 kat Saudi = RM32,256 aje
Maknanya harga Waja kat Saudi = RM35,673 aje

Is our per capita income higher than Saudi??? Why are Malaysians paying double the price ... after 30 years??? I mean if you cannot compete after we Malaysians have been dumping profits onto Proton for 10 years, 20 years, doesn't that tell you something?

I am all in agreement with subsidising large industries for a country to get traction, but OMG 30 years ... South Korea did the same thing but these industries were weaned off government subsidy much much earlier, and today they are the Samsungs, Hyundais, LGs etc... Mark my words, if we just talk cock all the time, 10 years from now Malaysia will still be the second most expensive place to buy cars, and its because we are still subsiding Proton, and Cambodia and Vietnam's per capita income would have probably surpassed us as well.

These sort of things, you don't need a brilliant person to tell you why we are stuck in middle-income ... we all know the answers, most Malaysians are smart as we do supply very smart graduates to work in Singapore, Taiwan, HK, US, UK, Australia and Indonesia anyway. Big picture - easy, strategy and war cries - easy, actual action ~~~~ ooohhh, susah la... vested interests, not now la, maybe another 3 years, this one cannot la... belongs to so-and-so, that one cannot give open tender la, that project already given .... lower price also kenot... actual contract $35m, final price after adjustment $95m ... how la.

Then add cultural and business factors. Koreans believe very strongly in education. That's partly because it really is a path to success there. Degrees really do get you promoted, unlike most of the rest of the world. Koreans make being educated into a really big deal. Here in Malaysia, yes, getting a good education is important ... but its not the end of the road if you don't ... you can still get plenty rich by knowing the right people. Do we even dare to eradicate that "cultural issue"??!!

Comments from a foreign observer: "Malaysia isn't really a mid-sized firm at all. More like a lethargic government operation with mediocre status quo as the prevailing mantra. There's no efficiency or any notable skill, there's also no scale or depth. There's zero marketing acumen.

It seems more concerned with internal cultural problems than growing commerce (divisions between locals/chinese, islamic issues and so on). There's also a culture of IP theft which is pretty prevalent You open a software co there, they'll be selling burned copies of your stuff for $5 a cd at the local mall before the end of the week. They largely strike me as free riders, not leaders. It very much feels like a small town / strip mall kind of economy, with bootlegging thrown in.

Even if you imported capital, equipment, innovation and good leadership, I don't think they are culturally interested in commerce enough to suffer hardships to prevail. They don't strike me as goal-oriented team players in the way Koreans do."

The last para was hard to take for me, as a Malaysian ... how about you? Its not just in finance but the entire misalignment is evident in our justice system, or regard with respect to human dignity and personal rights ~ the government is supposed to do what is good for the country, if there is sufficient anger, the people will act, sooner or later.

Anthems, war cries, sloganeering .... all emblematic of our problems, and yet thats where we excel in??!! Maybe we can supply those as exports to other emerging countries??? I cringe whenever I hear Malaysia Boleh ... boleh what??? ...

(Whistling and singing): ... When will they ever learn, when will we ever learn ....

In The News

Sometimes its OK to just cut and paste, no additional commentary needed. Read along the lines and between the lines.

Malaysia Needs Fiscal Reforms: Fitch

KUALA LUMPUR, March 23 (Bernama) -- Malaysia needs to implement structural fiscal reforms like a goods and services tax in order to improve its credit rating, said Fitch Ratings.

Its Asia sovereign ratings director, Andrew Colquhoun, said structural reforms to raise government revenue as a percentage of gross domestic product (GDP) in a sustainable way and a broader structural economic reforms to increase the investment rate to give longer term growth prospects were needed.

The rating agency last June cut Malaysia's local currency ratings to "A" from "A+" due to concerns over the country's growing budget deficit which hit 7.4 per cent of GDP in 2008. He said the government planned to narrow the fiscal deficit to 5.6 per cent of GDP this year but has shied away from measures to reduce fuel subsidies and introduce new taxes.

"Disappointingly, fundamental reforms to budget revenues with the introduction of goods and services tax have been postponed.

"That kind of reform and structural improvements in the budget revenue are what we are looking for to restore positive pressure in the credit ratings," he told reporters after Fitch Ratings's 2010 credit briefing here on Tuesday. He said reforms had the potential to significantly improve the public finances on the structural side.

Meanwhile, Fitch Ratings' senior director of Financial Institutions Asia, Ambreesh Srivastava, said outlook for Asian banking systems was expected to be better this year.

"In 2009, sector return on asset (ROA) rose in Indonesia, the Philippines and Vietnam, and was stable in Singapore and Thailand.

"Malaysian banking sector's ROA was down due to one-off goodwill impairment at Maybank, excluding which ROA would have been relatively unchanged," he said.

On local banks, Ambreesh said, the rating outlook was mostly stable, but positive rating actions were possible for a few banks whose financial profiles had improved despite the recent downturn. He said under Basel 3 framework, banks were required to increase their tier-1 core capital ratio and this would result in moderation in return on equity (ROE).

"But capital position may need to be strengthened if the bar is raised significantly," he said.

The Basel 3 framework is scheduled for implementation by end-2012.

"If the bar is raised, I won't be surprised if there are some negative implications on ROE for the local banks," he said, adding that most local banks were at eight per cent and above.

Ambreesh said the banks, however, were likely to have adequate time to do so should this happen over the medium term.

-- BERNAMA

Najib Leaves For Hong Kong To Attend Asian Investment Conference

SEPANG, March 22 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak left to Hong Kong this afternoon to attend the Credit Suisse 13th Asian Investment Conference 2010 which starts Tuesday. Accompanied by his wife, Datin Seri Rosmah Mansor, Najib left on the government plane at 5.30 pm from Kompleks Bunga Raya at the KL International Airport. International Trade and Industry Minister Datuk Seri Mustapa Mohamed is also accompanying the prime minister on the trip. Najib is expected to deliver a speech at the four-day conference organised by global financial services group, Credit Suisse.

Najib, who is also Finance Minister, is expected to touch on Malaysia's liberalisation measures, provide hints on the make-up of the soon-to-be unveiled New Economic Model, increased efficiency via the Government Transformation Plan (GTP) and moves to make Malaysia a high-income economy.

The Prime Minister will also discuss with Sir John Major, former British Prime Minister and special adviser to Credit Suisse, steps taken to make Malaysia one of the favourite destinations for investors in Asia and outline the nation's plan for economic development. Najib's packed itinerary also includes meetings with Brady Dougan, Chief Executive Officer of Credit Suisse and Kai Nargolwala, Chairman of Credit Suisse Asia.

The Prime Minister will also be interviewed separately by Wall Street Journal's Peter Stein, Bloomberg TV's Susan Li, Business Week, Denise Tsang from the South China Morning Post and Duncan King, Credit Suisse AIC TV.

He will meet a group of Malaysian chief executive officers and hold one-on-one meetings with Credit Suisse fund managers. Najib and wife will return home on Wednesday.

-- BERNAMA

The leap we need to make — Tengku Razaleigh Hamzah

MARCH 23 — James Puthucheary lived what is by any measure an extraordinary and eventful life. He was, among other things, a scholar, anti-colonial activist, poet, political economist and lawyer.

The thread running through these roles was his struggle for progressive politics in a multiracial society. His actions were informed by an acute sense of history and by a commitment to a more equitable and just Malaysia.

James was concerned about economic development in a way that was Malaysian in the best sense. His thinking was motivated by a concerned for socioeconomic equity and for the banishment of communalism and ethnic chauvinism from our politics.

The launch of the Second Edition of this collection of James Puthucheary’s writings, “No Cowardly Past”, invites us to think and speak about our country with intellectual honesty and courage.

Let me put down some propositions, as plainly as I can, about where I think we stand.

1. Our political system has broken down in a way that cannot be salvaged by piecemeal reform.

2. Our public institutions are compromised by politics (most disturbingly by racial politics) and by money. This is to say they have become biased, inefficient and corrupt.

3. Our economy has stagnated. Our growth is based on the export of natural resources. Productivity remains low. We now lag our regional competitors in the quality of our people, when we were once leaders in the developing world.

4. Points 1) -3), regardless of official denials and mainstream media spin, is common knowledge. As a result, confidence is at an all time low. We are suffering debilitating levels of brain and capital drain.

Today I wanted to share some suggestions on how we might move the economy forward, but our economic stagnation is clearly not something we can tackle or even discuss in isolation from the problem of a broken political system and a compromised set of public institutions.

This country is enormously blessed with talent and natural resources. We are shielded from natural calamities and enjoy warm weather all year round. We are blessed to be located at the crossroads of India and China and the Indonesian archipelago.

We are blessed to have cultural kinship with China, India, the Middle East and Indonesia. We attained independence with an enviable institutional framework.

We were a federation with a Constitution that is the supreme law of the land, a parliamentary democracy, an independent judiciary, a common law system and an independent civil service. We had political parties with a strong base of support that produced talented political leadership.

We have no excuse for our present state of economic and social stagnation. It is because we have allowed that last set of features, our institutional and political framework, to be eroded, that all our advantages are not better realized.

So it makes little sense to talk glibly about selecting growth drivers, fine-tuning our industrial or trade policy, and so on, without acknowledging that our economy is in bad shape because our political system is in bad shape.

A case in point is the so called New Economic Model. The government promised the world it would be announced by the end of last year. It was put off to the end of this month. Now we are told we will be getting just the first part of it, and that we will be getting merely a proposal for the New Economic Model from the NEAC. Clearly, politics has intruded. The NEM has been opposed by groups that are concerned that the NEM might replace the NEP. The New Economic Model might not turn out to be so new after all.

The NEP

The irony in all this is that there is nothing to replace. The NEP is the opposite of New. It is defunct and is no longer an official government policy because it was replaced by the New Development Policy (another old New policy) in 1991. The “NEP” was brought back in its afterlife as a slogan by the leadership of UMNO Youth in 2004. It was and remains the most low-cost way to portray oneself as a Malay champion.

Thus, at a time when we are genuinely need of bold new economic measures, we are hamstrung by by the ghost of dead policies with the word New in them. What happens when good policy outlives its time and survives as a slogan?

The NEP was a twenty year programme. It has become, in the imaginations of some, the centre of a permanently racialized socio-economic framework.

Tun Ismail and Tun Razak, in the age of the fixed telephone (you even needed to go through an operator), thought twenty years would be enough. Its champions in the age of instant messaging talk about 100 or 450 years of Malay dependency.

It had a national agenda to eradicate poverty and address structural inequalities between the races for the sake of equity and unity. The Malays were unfairly concentrated in low income sectors such as agriculture. The aim was to remove colonial era silos of economic roles in our economy. It has been trivialized into a concern with obtaining equity and contracts by racial quotas. The NEP was to diversify the Malay economy beyond certain stereotyped occupations. It is now about feeding a class of party- linked people whose main economic function is to obtain and re-sell government contracts and concessions.

The NEP saw poverty as a national, Malaysian problem that engaged the interest and idealism of all Malaysians. People like James Puthucheary were at the forefront of articulating this concern. Its present-day proponents portray poverty as a communal problem.

The NEP was a unity policy. Nowhere in its terms was any race specified. It has been reinvented as an inalienable platform of a Malay Agenda that at one and the same time asserts Malay supremacy and perpetuates the myth of Malay dependency.

It was meant to unite our citizens by making economic arrangements fairer, and de-racializing our economy. In its implementation it became a project to enrich a selection of Malay capitalists. James Puthucheary had warned, back in 1959, that this was bound to fail. “The presence of Chinese capitalists has not noticeably helped solve the poverty of Chinese households.. Those who think that the economic position of the Malays can be improved by creating a few Malay capitalists, thus making a few Malays well-to-do, will have to think again. “

The NEP’s aim to restructure society and to ensure a more equitable distribution of economic growth was justified on principles of social justice, not claims of racial privilege. This is an important point. The NEP was acceptable to all Malaysians because its justification was universal rather than racial, ethical rather than opportunistic. It appealed to Malaysians’ sense of social justice and not to any notion of racial supremacy.

We were a policy with a 20 year horizon, in pursuit of a set of measurable outcomes. We were not devising a doctrine for a permanent socio-economic arrangement. We did not make the damaging assumption of the permanently dependent Malay.

Today we are in a foundational crisis both of our politics and of our economy. Politically and economically, we have come to the end of the road for an old way of managing things. It is said you can fool some of the people some of the time, but not all of the people all the time. Well these days the time you have in which to fool people is measured in minutes, not years.

The world is greatly changed. The next move we must make is not a step but a leap that changes the very ground we play on.

The NEP is over. I ask the government to have the courage to face up to this. The people already know. The real issue is not whether the NEP is to be continued or not, but whether we have the imagination and courage to come up with something which better addresses the real challenges of growth, equity and unity of our time.

At its working best the NEP secured national unity and provided a stable foundation for economic growth. Taken out of its policy context (a context that James helped frame) and turned into a political programme for the extension of special privilege, it has been distorted into something that its formulators, people such as the late Tun Razak and Tun Ismail, would have absolutely abhorred: it is now the primary justification and cover for corruption, crony capitalism and money politics, and it is corruption, cronyism and money politics that rob us and destroy our future.

No one who really cares about our country can approve of the role the NEP now plays in distorting the way we think about the economy, of our people, of our future, and retarded our ability to formulate forward-looking economic strategy.

The need for a wholistic approach to development based on the restoration and building of confidence.

We need a wholistic approach to development that takes account of the full potential of our society and of our people as individuals. We need an approach to development that begins with the nurturing and empowerment of the human spirit. Both personally and as a society, this means we look for the restoration of confidence in ourselves, who we are, what we are capable of, and the future before us.

I return to the question of the Middle Income Trap that I alluded to some time ago. I am glad that notion has since been taken up by the Government.

The middle income trap is a condition determined by the quality of our people and of the institutions that bind them. It is not something overcome simply by growing more oil palm or extracting more oil and gas. Our economic challenge is to improve the quality of our people and institutions. Making the break from the middle-income trap is in the first place a social, cultural, educational and institutional challenge. Let me just list what needs to be done. Before we can pursue meaningful economic strategy we need to get our house in order. We need to:

1. undertake bold reforms to restore the independence of the police, the anti-corruption commission and the judiciary. Confidence in the rule of law is a basic condition of economic growth.

2. reform the civil service

3. wage all out war on corruption

4. thoroughly revamp our education system

5. repeal the Printing Presses Act, the Universities and Colleges Act, the ISA and the OSA. These repressive laws only serve to create a climate of timidity and fear which is the opposite of the flourishing of talent and ideas that we say we want.

6. Replace the NEP with an equity and unity policy (a kind of “New Deal”) to bring everyone, regardless of race, gender, or what state they live in and who they voted for, into the economic mainstream.

These reforms are the necessary foundation for any particular economic strategies. Many of these reforms will take time. Educational reform is the work of many years. But that is no excuse not to start, confidence will return immediately if that start is bold. As for particular economic strategies, there are many we can pursue:

* We need to tap our advantage in having a high savings rate. Thanks to a lot of forced savings, our savings rate is about 38%. We need more productive uses for the massive funds held in EPF. LTH, LTAT and PNB than investment in an already over-capitalized stock market. One suggestion is to make strategic investments internationally in broad growth sectors such as minerals. Another is that we should use these funds to enable every Malaysian to own their own home. This would stimulate the construction sector with its large multiplier of activities and bring about a stakeholder society. A fine example of how this is done is Singapore’s use of savings in CPF to fund property purchases.

* The Government could make sure that the the land office and local government, developers and house-buyers are coordinated through a one-stop agency under the Ministry of Housing and and Local Government. This would get everyone active, right down to the level of local authorities. The keys to unleashing this activity are financing and a radical streamlining of local government approvals.

* We have been living off a drip of oil and cheap foreign labour. Dependence on these easy sources of revenue has dulled our competitiveness and prevented the growth of high income jobs. We need a moratorium on the hiring of low skilled foreign labour that is paired with a very aggressive effort to increase the productivity and wages of Malaysian labour. Higher wages would mean we could retain more of our skilled labour and other talent.

* Five years ago I called for a project to make Malaysia an oil and gas services and trading hub for East Asia. Oil and gas activities will bring jobs to some of our poorest states. We should not discriminate against those states on the basis of their political affiliations. No one is better placed by natural advantage to develop this hub. Meanwhile Singapore, with not a drop of oil, has moved ahead on this front.

* We should ready ourselves to tap the wealth of the emerging middle class of China, India and Indonesia in providing services such as tourism, medical care and education. That readiness can come in the form of streamlined procedures, language preparation, and targeted infrastructure development.

These are just some ideas for some of the many things we could do to ensure our prosperity. Others may have better ideas.

Conclusion

We are in a foundational crisis of our political system. People can no longer see what lies ahead of us, and all around us they see signs of decaying institutions. Wealth and talent will continue to leave the country in droves.

To reverse that exodus we need to restore confidence in the country. We do not get confidence back with piecemeal economic measures but with bold reforms to restore transparency, accountability and legitimacy to our institutions. Confidence will return if people see decisive leadership motivated by a sincere for the welfare of the country. The opposite occurs if they see decisions motivated by short term politics. Nevermind FDI, if Malaysians started investing in Malaysia, and stopped leaving, or started coming back, we would see a surge in growth.

In the same measure we also need to break the stranglehold of communal politics and racial policy if we want to be a place where an economy driven by ideas and skills can flourish. This must be done, and it must be done now. We have a small window of time left before we fall into a spiral of political, social and economic decline from which we will not emerge for decades.

This is the leap we need to make, but to make that leap we need a government capable of promoting radical reform. That is not going to happen without political change. We should not underestimate the ability of our citizens to transcend lies, distortions and myths and get behind the best interest of the country. In this they are far ahead of our present leadership, and our leadership should listen to them.

* Speech by Gua Musang MP Tengku Razaleigh Hamzah at the launch of the Second Edition of “No Cowardly Past: James Puthucheary, Writings, Poems, Commentaries” at the PJ Civic Centre on March 22, 2010.

* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.

No More Silly Records Breaking Please!

Diluting The Malaysia Boleh Mantra

If you live in Malaysia, you would have been inundated with inane records being broken of insignificant tasks. As a matter of fact, so many record breakers' applications from Malaysia were rejected by Guinness that the authorities decided to set up their own Malaysia Book Of Records. Let me just say a few things about what is wrong with all that:

1) Makes everyone else cringe (except the participants themselves) - Its not "shame" we are feeling, its more like seeing your parents doing something embarressing in public, its icky and the only response is eyes rolling to the top. Malaysians or associations who think it is fun to do certain record breaking events, must first have the sense of breaking a record of some merit. Things like largest ever ice-cream cake or largest tea bags, are very close to inane stuff.

2) Reflection - What we do in public, and what we claim to be able to do under the banner of Malaysia Boleh REFLECTS squarely back at us. We yell the mantra like kids who had too much sugar, and then proceed to attempt weak record breaking attempts of inane stuff. For those who can, go and break records that are "widely accepted" by the world as records worth mentioning. Do not go and start a new record book so that you can go on recording silly attempts at insignificant stuff. Its a reflection of shallow thinking, naive thinking, katak bawah tempurung, jaguh kampung mentality of the people and authorities responsible. Does it mean that, if we cannot score high enough to get into Mensa Society, that you go and set up a Maesa Society (with easier entry levels of course) - its that kind of second class mentality which will paralyse a large part of our society.

3) Fund raising - Some will question that I am too harsh on these silly events as most are fund raisers. There are 1,001 ways to raise funds. You don't have to go breaking silly records to do that. To use charity as an excuse to do exasperating events is juvenile, infantile, puerile, unsophisticated... and ... (I am running out of harsh words to say here...).

4) Pride or false pride - Many of us will cringe everytime pictures and articles are splashed (even across front pages) in papers. Is that real pride being show by the record breakers, or are we so limited to be able to only show the mediocre things we could do? Do we inadvertently cultivate the thinking that it is OK to be so-so? Why do we need to do a biggest teh tarik cup ever made, or tallest chapati,... cause you can never run out of local food items or local objects, can you?? That is why its inane. I can already think of 100 inane things to set records for: most roti bakar with kaya consumed in 1 minute; the highest kuih talam structure of Twin Towers constructed; biggest sarong; largest low sang; biggest kebaya; longest row of orchids; the biggest popiah constructed; etc...

5) Attempt records of significance - Just follow the Guinness rule book. If they deem it OK to be registered, it should be MORE acceptable since they have been doing it for decades. Some record breakers do have legitimate claims to real records such as Jayabarathy Letchumy's car drag with her hair. Some silly ideas actually turned out to be interesting records by Malaysians, such as the world's longest pencil.

I hope the "record breaking targets" is not part of the 9th Malaysia Plan. For everyone's sake, association leaders, government department heads, hotel marketing managers, junior journalists..... please, enough is enough, have a better screening process before supporting any record breaking attempt. Do not dilute the Malaysia Boleh mantra. As my hero Stephen Chow would say, "Only dim witted leaders can trip me up, ... you useless piece of log, don't walk back home, just roll on home, you useless piece of log!"

I do have one record event which I hope someone will try to break: "The most number of customers served by a government department in an hour".