By Idris Jala
There are occasions where one needs humour, not just patience to deal with critics. The publication of the Economic Transformation Programme (ETP) 2014 Annual Report has unearthed its own set of denigrators.
Emerging out of the woodwork and safe behind their keyboards, they fire away on social media, hell bent on condemning every traction the government has achieved.
The irony is that when we first embarked on the National Transformation Programme in 2009, these same critics were vociferous in their accusations that we had neither the political will nor the capability to deploy reforms.
When we very quickly got down to implement three-foot activities to spearhead transformation, they claimed we did not have the results to show for our work.
Since 2011, we have annually published detailed reports on economic and government transformation. For further assurance, figures are externally validated by PricewaterhouseCoopers and international panels are invited to scrutinise and provide feedback.
Few other governments in the world have embarked on such an extensive way to share the nation’s scorecard. But somehow our critics have deemed these intentionally transparent steps to be insufficient.
Shifting gears, they went on to discredit and dampen goodwill by saying statistics from the Statistics Department, Finance Ministry, and Bank Negara Malaysia were lies, and damn lies.
When we went a step further to reference complementary data from the World Bank’s Malaysia Economic Monitor, June 2014, and Asian Development Bank’s conference in May 2013, naysayers, true to form, countered with calls of lies, and damn lies.
The moral to this story is that there are folks who refuse to acknowledge, yet alone appreciate any improvement the country has made. Their vision is tunnelled and motivations, highly suspect.
I will highlight three main allegations and our responses. You can find our clarification at http://bit.do/pemandu01
Allegation one: The ETP has no impact to the economy and was not a factor in delivering the results
The 12 National Key Economic Areas (NKEAs) command about 70% of total gross national income (GNI) whereas the non-NKEAs take up only 30%.
Critics say the NKEAs are growing at a slower pace than non-NKEAs, and that to them is a problem, which I find puzzling. From an absolute standpoint, growth of NKEAs since 2010 at RM163 billion is significantly better than non-NKEAs at only RM98.6 billion (see table below).
As an example: Ali earns RM1,000. He is offered a new job which pays RM2,000 or 100% increase to his salary.
Ahmad earns RM10,000. His new position gives him a salary of RM15,000 or 50% increase. Who would you prefer to be? Ali or Ahmad? Obviously, the latter. It will be daft to say Ali.
In this context, materiality is key. At the level of a national-level programme, a government must focus attention on areas of significant volume with potential for growth.
Another example: Let us say we discover that florists earn high profit rates, higher than that of the petroleum industry. Should Petronas stop investing in oil wells and refineries, and instead invest in florist shops? That would be absurd. Rather, Petronas, by providing good jobs, will provide customers for florist shops, and they in turn will have own industry associations.
Similarly, non-NKEA sectors will naturally benefit from activities and dynamism triggered by the catalytic effect brought forth by the NKEAs.
In a nutshell, NKEAs are key drivers of the economy due to their scale and potential. As a consequence, they deserve the government’s focus. To discount the contributions of the ETP is a failure to appreciate the full picture of the country’s economic growth in the last five years.
Allegation two: Low poverty figure is misleading and not a true representation of the state of poverty in Malaysia
Getting a grip on the issue of poverty is complex. If you ask different people in different settings, you will get different answers. So when the government announced the significant reduction of poor households from 49.3% in 1970 to 0.6% in 2014, critics were annoyed and claimed we had fudged our numbers.
How does Malaysia measure poverty? Is there a better way to do it so we are more reflective of the state of poverty?
We evaluate and assess poverty in two key areas. One, absolute or extreme poverty where, if the government or society does not step in to provide the necessities, people will die from starvation. They need shelter, food and amenities. Over the years, institutionalised safety nets have cushioned the very poor.
As a country progressing towards high income, we must also address relative poverty or low-income and lower-middle-class households, which we label as the bottom 40%. They are not in abject poverty because they can afford a decent standard of living. Government steps in to provide access to education, healthcare, and provisions for old age – efforts in levelling the playing field so all citizens have opportunity, no matter what social class they are born into.
Initiatives such as minimum wage and BR1M, as well as income-generating programmes like 1AZAM help raise income levels and create additional opportunities. I believe we can certainly do more and we will, as specified under the recently tabled 11th Malaysia Plan.
Many have called the government to raise the poverty line index (PLI) using relative measurement for poverty. Let me illustrate why this alone cannot work.
Country A chooses to do nothing for their absolute poor and they die from malnourishment. Obviously there will be a drop in the number of absolute poor. Country B feeds their poor, provides shelter and by that, lengthens lifespan. As a result, they will continue to show a large number of poor people.
If you use this relative method of measurement, Country B ends up being “penalised” with a larger number of poor, while Country A is “rewarded” with the impression their poverty rate has reduced.
What is more important are the actions we take to mitigate poverty. Our critics may disagree with our measure of poverty, but we have been consistent. By being consistent we are better able to target programmes and measure results.
While, as a responsible country, we must deal with poverty both in absolute and relative terms, the trend of the drop in poverty is more important than whether we use inches or centimetres to measure something.
The issue of poverty touches the hearts of Malaysians and that to me bespeaks of a caring culture.
Untying the knots that trap people in poverty goes beyond mere intellectual discourse. It calls for collaborative action from people of goodwill. The government must do their part, and so must everyone else of capacity.
Allegation three: Transformation has failed in Malaysia
When facing such an accusation, I know critics fail to understand the meaning and context of our national transformation. For them, transformation must be seen and felt immediately and by everyone. They expect a brand new world where economic struggles and social injustices are things of the past.
This is not transformation but a miracle, and we are not miracle workers. Together with government agencies and the private sector, we are tasked to take the country towards high income in a sustainable and inclusive manner. It calls for the discipline of implementation, facilitation, monitoring, and reporting in what can only be a gruelling period of 10 years.
ETP and Government Transformation Programme are focused efforts that aim directly at targeted beneficiaries and indirectly on the whole country.
Since the ETP, private investment grew 2.5 times between 2011 and 2014 compared to 2007 and 2010.
Today, private investment captures the chunk of total investment at 64%. We are able to weather global volatilities, attract foreign investment, reduce national debt and deficit, create new jobs, keep inflation in check, and ensure social safety nets for the poor.
While I welcome genuine ideas and contributions to move our country ahead, we should not be discouraged by virulent armchair critics fixated on condemning and damaging erstwhile efforts. There is a lot to be done and little time to waste.
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Idris Jala is CEO of Pemandu and Minister in the Prime Minister’s Department. Fair and reasonable comments are welcome at idrisjala@pemandu.gov.my
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