As often repeated in the mainstream media, Malaysia has huge, almost boundless, economic potential. Blessed with abundant natural resources, a diversified workforce and strategic geographic location, Malaysia has been able to grow rapidly in the last couple of decades with relative ease.
The challenge, now is to sustain growth in a more competitive world. Although not officially endorsed, this represents Pakatan Rakyat's core thinking around economic management.
Let me begin by stating our core guiding principles that will be our compass in developing a potential PR administrative plan.
Our core beliefs, our basic economic philosophy are the following: A market economy, economic equity; and means-tested redistribution and comprehensive political reform. I will now deal with them individually.
Implementing a humane economy
We believe in a market economy. It menas that as a rule, the government will not interfere in the fundamental operations of the free market mechanism. Businesses will be given full facility to operate and flourish, hard work will be rewarded and the forces of supply and demand will, ceteris paribus, determine the equilibrium pricing of goods and services.
But it will not be a laissez-faire or "leave it alone" economy because while transactions between private parties may be sacrosanct, history has shown that unbridled free enterprise has led to much abuse and exploitation of the weak. We have all seen how the financial crisis of 2008 brought the global markets to their knees, with a toxic mixture of greed and banking deregulation.
The reality is that “ceteris paribus” is a fiction because many things are not equal. So, in pricing, there are situations where the government must act.
True, decisions on investments and resource allocation should, as a rule, be determined through markets. But where you have monopolies, cartels and mismanaged state corporations ganging up to skewer the pricing mechanism, that is no longer free market. In such situations, government intervention is no longer a question of choice but a moral imperative.
The philosopher Michael J. Sander argues that the world is in danger of becoming a “market society” where everything is for sale and where the markets have become detached from morals. A market society based on price tags cannot differentiate worthy or unworthy causes.
Therefore, he argued, rightfully, that a free market should only be used as a tool and not as an all encompassing way of life. What we want is a market economy, not a market society.
The Pakatan market economy will be a regulated market with an interventionist slant. It will still be very much a free market economy but a market with a human face. In other words, it will be a humane market economy.
Protecting the poor, benefiting the middle and rich
Our second core belief is our commitment to economic equity. We will do our level best to improve the livelihood of the bottom 40% households, who earn less than RM1,500 a month.
For the businessmen in the crowd, I am sure none of you fall under this category. So you may ask, what has economic equity got to do with me? Why should my income tax be used to help the bottom 40%?
If the poor can earn better income, they will become better consumers of the goods and services that you produce. If they have better income, their children will be better educated, and grow to be your future productive workers, innovators and directors. It’s a simple circle of life: improve the livelihood of the poor and they in turn power economic growth.
Our target is to ensure the bottom 40% achieve a household income of RM4,000 a month.
Our economic equity is essentially based on social justice, which is to introduce an equitable redistribution policy based, not on race, but on economic means testing.
The NEP has been grossly abused, and while it served its purpose at the formative stages, it is no longer in tune with the times.
Our new policy will be based on needs. That means the poor, the needy and the marginalised will never be neglected.
The Malays and the Bumiputras still comprise the largest group in this category. So, any suggestion that they will lose out is totally unfounded. But it is a more equitable policy because we know that poverty cuts across all races and the best measure for affirmative action is means testing. No ethnic group will be left out.
This policy is not directed just towards poverty eradication but economic upliftment as well. With means testing, we will work towards a more equitable distribution of the nation’s economic pie.
Implementing structural changes, without fear or favour
One important dependency of real economic impact is the implementation of comprehensive political reforms in Malaysia. Without these reforms, impediments to higher growth will remain.
Crony capitalism prevents many of the budding and genuine entrepreneurs from climbing up the economic ladder, while crony subsidies and crony monopolies ensure that the rich continues to be rich or becomes even richer.
The government must have the resolve to remove these structural economic advantages to certain parties. In most cases, implementing such changes involves self-interest.
Is the ruling government able to remove monopolies and/or oligopolies in telecommunications and trade imports that continue to support partisan causes?
Umno-BN has no uniting cause; unless you consider plundering the rakyat, to be a valid common goal. BN operates with Umno as the big brother, all other component parties just follow in their footsteps.
As the propaganda goes, this is a recipe for a stable government; in reality though, there is a terminology for this kind of government; authoritarianism. Authoritarianism restricts freedom and breeds corruption.
The government has been going into overdrive to paint a negative picture about PR’s ability to rule, much less implement economic policies. The government says that PR is too fragmented; DAP is too Chinese, PAS is too Islamist, and PKR is too multi-racial. It is true that we are different, but what PR has in common makes it herculean. PR is united in a common belief of social justice and a real desire to see a better future for all Malaysians. - October 19, 2013.
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