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Saturday, September 12, 2009

Vision 2020…not bloody likely!

By Hussein Hamid

Mahathir unveiled the Vision of 2020 plan for Malaysia in 1991. Malaysia was to become an industrialized nation and be considered a high-income economy. Najib refined (that is double speak to mean ‘no can do lah’) that vision: “It is clear that our Vision 2020 objective has to be refined to remain viable,” Najib said.. “Being richer alone does not define a developed nation. There are important social and quality-of-life measurements that must be factored in when considering our objectives and successes.” Malaysia needs to “redefine and recalibrate” how and when it will achieve Vision 2020, Najib told reporters after the speech. That doesn’t necessarily mean a change in the timeline, he said.

I would have agreed with him in principal had he not put in the “that does not necessarily mean a change in the timeline” proviso. I am no economist but let us just use common sense to look at realities.

Let us look at the differences between salaries earned, the cost of a vehicle and a house between 1973 and 2009.

YEAR increase
1973 2 009
1.3 liter Japanese Car 7,000 60,000 8.5
Double Story House 45,000 300,000 6.6
Engineer Salary 1,000 2,000 2

It is the same story when you compare salaries of shop assistants, office staff, factory workers and a whole range of other workers and professional. I have used these 3 items a house, a car and salary earned as a measurement of the country’s performance for the past 35 years to gauge our standard of living. There is little difference in salary between 1973 and 2009 – and yet our purchasing power is vastly different. While the starting income for a newly graduated Engineer between 1973 to 2009 has only doubled – the cost of a car has increase 8.6 times and that of a house 6.6 times.

Fast forward to today.

Ask the kids working at McDonald how much they were being paid per hour? RM3.00 per hour x 8 hours = RM24 per day. Working 25 days a month means they get RM600 per month.

In Australia my daughter works part-time during her University days at Gloria Jeans Coffee. She is paid Aud$14.00 per hour x 8 hours a day =Aud$112 a day x 25 days = Aud$2,800 per month.
(@ RM2.92 per = One Aud Dollar x Aud$2800 = RM8176 per month).

My daughter earns 13.6 times more that the girl at McDonalds in Malaysia.

Our Government lays claim to the fact that Malaysia will be a developed country 2020? A high income country? Let us look further.

2005 Financial Times Figures

GNP per Capita in US Dollars.

USA US35,400
United Kingdom US$25,510
Singapore US$20,690
Australia US$19,530
Malaysia US$3,540

The above figures are the 2005 Financial Times figures for GNP per Capita in US Dollars – a measurement of developed country by income measurements.

Malaysia’s GNP per Capita US$3540. Malaysia a developed country by 2020? Not likely. This is a really sad story and a worrying trend is it not?

The Ringgit is sliding further and further under Barisan Nasional. To compound the effect of inflation, the Ringgit has depreciated greatly against ALL major currencies. The real income of most Malaysians has moved backwards. This is why many Malaysians suffer under the petrol hike. The root of the problem is that our real incomes have shrunk in the face of inflation and a depreciated currency. Malaysians have not been spoiled by subsidy but are unable to move out of the time lock of stagnated and depreciated incomes. If you compare the per capita incomes of Singapore, Hong Kong, Taiwan and South Korea they are a few multiples of ours although at independence all these countries were on the same economic level as Malaysia .

What has gone wrong? Were we not once the rising star of East Asia? A country rich in natural resources with the most promising potential?

What happened?

Massive Corruption for one! Plundering of our precious resources, wastage of funds for huge non-economic projects, anti-public interest deals with politically-linked companies and passing-of-the-buck to the man in the street. I repeat – passing of the buck to the man on the streets!

Four decades of a mismanaged NEP where education, economic and employment policies defined by race without the necessary checks and balances ensured that meritocracy took a back seat.

Our university standard has declined and today our best and brightest youths emigrate to escape the racial inequality and instead now contribute to the economies of foreign lands.

The reputation of our judiciary which was once held in high esteem worldwide has sunk so low that foreign investors now insist on arbitration in Singapore in case of any dispute.

We also have a slew of oppressive laws such as the ISA, OSA, University and University Colleges Act and Printing Presses and Publications Act (PPPA) which all stifle free speech and are designed to keep the ruling parties in power.

We have become less attractive to foreign investors and now lag behind our neighbors in Asean for foreign direct investment. Even some corporations who have established themselves here are moving out. All the economic and social malaise cannot help but affect the value of our currency. The strength of a country’s currency is after all, a reflection of its fundamentals. Furthermore, Bank Negara has a policy of a weak Ringgit to help exporters – never mind the burden on the common folk. The government is pro-corporation, not pro-Rakyat.

While the poor and middle-class are squeezed, an elite group gets breathtakingly rich. We have the distinction of having the worse income disparity in Asean. A re-distribution of wealth is under way from the poor and middle-class to a select group of politically-connected elite. The end result of this re-distribution will be a small group of super-rich while the majority are pushed into poverty and the middle-class shrinks. This is what happens when the rich gets richer and the poor get poorer.

There is much that is wrong with Malaysia. The responsibility for pulling the country backwards can be laid squarely at the door of the ruling regime – Barisan Nasional. It is BN’s mis-governance, racial
politics and culture of patronage and greed which has seen the country regress economically and socially. We seem to be sliding down a slippery slope, further down with each passing year of BN’s rule. Another five years of BN rule and we’ll be at Indonesia ’s standard under Suharto. Another 10 years and we’ll be touching the African standard.. What a way to greet 2020. Is there any hope for Malaysia?

Faced with the reality that BN will never change, many Malaysians desperate for change turn their eyes to Pakatan Rakyat.

Pakatan Rakyat has promised to treat all races fairly, to plug wastage, fight corruption, reform the judiciary and make Malaysia more competitive. But some have questioned whether we can trust Anwar Ibrahim and his loose coalition of disparate parties. The question is not whether we can trust the opposition but whether we can afford not to in view of our state of affairs.

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