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It is of great importance to review
the policy on income distribution, the philosophy and the targets of
the New Economic Policy (NEP) that was promulgated in 1970, consistent
with the current development
Speech
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debate on Mid-Term Review (MTR) of the Eighth
Malaysia Plan (8MP)
by Dr Tan Seng Giaw
(Dewan Rakyat, Thursday):
I rise to speak on the MTR with the fear of the unknown. (What will happen
to this country after the departure of Dato' Seri (now Tun) Dr Mahathir
Mohamad as Prime Minister next month?)
There is an urgent need for the improvement of coordination between
government departments, so that messages are communicated effectively such
as the avoidance of delay in the distribution of the Report of the Mid-Term
Review of the Eighth Malaysia Plan (MTR of 8MP).
The Prime Minister Dato' Seri Dr Mahathir Mohamad has presented the MTR.
This is his last speech in the House as Prime Minister.
The Third Outline Perspective Plan (OPP) outlines the broad views of
development in Malaysia from 2001 to 2010. This includes the period of the
eighth and ninth MPs.
It has taken the Economic Planning Unit (EPU) with the cooperation of other
ministries about two and a half years to complete the MTR. But, it was only
at 5.00 PM on 28 October, 2003, that copies of MTR were distributed to
members. Why? Members need more than two days to read the report.
After our previous complaints about late distribution of OPP, EPU has taken
note. It has got MTR ready a few days earlier. Copies of the report were
sent to Parliament on 21 October, 2003. On each copy is pasted the label
'Embargo: it cannot be announced until Thursday, 30 October, 2003.'
EPU has sent Parliament copies of MTR in the hope that members obtain them
a few days before the debate in the House. Alas, some staff members in
Parliament have treated them as though they are annual federal budget, that
is only announced on budget day.
MTR is not a budget. Copies can be given to members a few days before
presentation in the House. They are then made public after the presentation.
Obviously, there has been a breakdown in communication. This must be
corrected. The Balance
In our country with 25 million people, MTR assumes that domestic and
foreign investment will go up in the next two years. If investment doe not
improve as anticipated, will the targets of the 8MP be achieved? However,
the investment climate is very important. One of the factors that affect
this climate is the fear of investors towards Islamic State that is based on
the Koran and the Sunnah.
When Dr Mahathir announced on 29 September, 2001, that Malaysia was an
Islamic State, it sent jitters to many. Some say that there is not a country
in the world including Malaysia that has its administration based on the
Koran one hundred percent. Bapa Malaysia the Tunku has left a legacy,
reminding Malaysians not to turn the country into an Islamic State. The
Federal Constitution does not allow such as state. The National
Vice-President of PAS Dato' Mustapha Ali was pressed by the interviewer of
Hardtalk BBC TV Tim Sebastian on this issue last month. He dithered.
If we can make sure that there will not be an Islamic State in Malaysia,
the jitters will disappear. (The Prime Minister has to look into this
issue.)
The Prime Minister must create an atmosphere for the balance between
spiritualism and materialism. Materialism by itself as seen in Communism
will not work. On the other hand, spiritualism on its own will not lead to
progress.
Besides the economic growth as contained in the MTR, we have to review
various aspects including independence of the judiciary, the executive and
the legislature, freedom of the media, environment and human rights. We do
not want to ape other countries such as the United States. The Enron and
Worldcom scandal in the US estimated at US$ 3 trillion is the biggest in the
world. We don't need this. But, we would like a surrounding that encourages
domestic and foreign investment with endogenous-led growth. Foreign Direct
Investment (FDI) in the world has decreased. We are not likely to see the
amount of FDI and domestic investment in this country as witnessed in the
90s last century.
Judiciary
The problem of the Government attempting to influence the appointment and
promotion of judges occurs in other countries such as UK and USA. Both the
Republican Party and the Democratic Party, USA, insist on their candidates.
We don't want to emulate UK and USA. But, we need an independent judiciary.
The Government should not interfere. All judges should handle their cases
professionally whatever their political leaning. For example, people suspect
that the former Chief Justice (Lord President) Tun Hamid had strong
political preference in carrying out his duties. Hitherto, the Government
has not investigated this.
Lately, many companies like multinationals or transnationals prefer
arbitration to appearing in courts to settle their cases. Although the cost
of arbitration is higher than going to court, they can choose the arbitrator
and the time taken is shorter. The Government should find out why there is
lack of confidence in some of our judges.
We like to see the judiciary more transparent and accountable, especially
in the appointments and promotions of judges. The Minister in the Prime
Minister's Department Datuk Rais Yatim appeared to look malignantly when the
Bar Council failed to have a quorum for its extraordinary emergency meeting
on 4 October, 2003. The meeting was to discuss transparency and
accountability of the judiciary.
In his book 'Freedom under Executive Power in Malaysia', Dr Rais says: "The
judiciary has lost its tussle with the executive in controlling arbitrary
executive power. The executive that directly alters the affairs and status
quo of the judiciary in a manner that the Malaysian executive has done is
indeed a rarity and its mode of attack on the Malaysian judiciary in 1988 is
not known to be practised in the liberal democratic world. But again one
must understand, Malaysia is not a liberal democratic country."
Because of various factors, the Bar Council did not succeed in holding the
above-stated meeting. Then, the Government should discuss with the council
and consider its suggestion to set up a Judicial Commission to handle
appointments, promotions and transfers of judges.
Corruption
Once again, I would like to propose that the Government set up a Royal
Commission of Enquiry to investigate corruption in this country before it
becomes an epidemic comparable to SARS.
Those who give and receive bribes are equally wrong; they all go to hell. I
often bring up the seriousness of corruption in this country. I assume that
all government officers present in the gallery of this House are clean,
efficient and trustworthy. Some young officers are corrupt. If they continue
to be in the service, they will be braver, becoming bad examples for the
others. I don't want Malaysia to follow the foot steps of other countries
such as Argentina. I have always suggested that the Anti-Corruption Agency
is only responsible to Parliament, (not to the Prime Minister's Department
as it is).
Today, I am asking the Government to step up the efforts to deal with
corruption, especially among some young officers. In the midst of dedicated
officers, there are black sheep just as there are black sheep among
professionals such as doctors.
Just imagine the competitive business world. Those companies such as from
Australia have the advantage in their exchange rate. A$1 is equivalent to
more than RM2. If a company brings in A$3 million that is already over RM6
million (compared to a Malaysian company that has RM3million to spend), it
can bribe young officers, who are rotten, more effectively, to issue
licenses and other things and beat the local company hollow.
Productivity and innovation
The following is a poem by Robert Frost (1874 - 1963), an American poet:
Design
I found a dimple spider, fat and white.
On a white heal-all, holding up a moth
Like a white piece of rigid satin cloth -
Assorted characters of death and blight
Mixed ready to begin the morning right,
Like the ingredients of a witches' broth -
A snow-drop spider, a flower like a froth,
And dead wings carried like a paper kite.
What had that flower to do with being white,
The wayside blue and innocent heal-all?
What brought the kindred spider to that height,
Then steered the white moth thither in the night?
What but design of darkness to appall?-
If design govern in a thing so small.
The first two chapters of MTR insist on restoring economic dynamism
and macroeconomic perspective, listing the steps and policies such as
developing the capability of local enterprises to market internationally and
participate in the global supply chain and increasing supply of quality
human resources to meet the demands of an economy that is moving to higher
value added activities.
On theory, the steps and policies are encouraging. In practice, we need to
introduce meritocracy and liberal agencies that train human resources of
great demand in the market. MTR stresses the emergence of China, India, and
the new economy in Latin America and Europe. As stated, globalization has
generated a high volume of trade and capital flows across countries,
intensifying competition for markets and investment funds. Can Malaysia
seize the opportunities from multitudinous initiatives like the World Trade
Organisation (WTO), ASEAN Free Trade Area (AFTA), ASEAN investment area and
other free trade arrangements?
China is involved in many fields, not just labour-intensive industry. India
is racing ahead. China is a giant that is growing. What is the niche for
Malaysia? We require marketable skills. We must have meaningful research and
development. What is allocated in the MTR is scarcely enough. (A total
amount of RM3.4 billion was expended for science and technology (S&T) in the
last 2 ½ years. More than 50% of it was for S&T infrastructure. The rest was
spent on R&D like Intensification of Research in Priority Areas (IRPA).) We
have to improve productivity, that is, to equip the economy and raise
competitiveness.
(MTR says: On the whole, Malaysia will need to be more alert and responsive
to both the opportunities and challenges from global competition. It is
essential to ensure that the country's policies and strategies are always
forward-looking so that it can adapt to the changing environment and exploit
the opportunities that arise. The country should also enhance its position
as a strategic and cost-effective location for foreign investment while
developing its domestic industries to be globally competitive. To maximize
the benefits of globalization, efforts will need to be intensified to
improve knowledge management, accumulate new skills and change mindsets.)
If the spider in the poem can design its web to trap insects, so can
Malaysians create designs that are marketable. The Multimedia Super Corridor
(MSC) has to be expanded to Penang and the whole country. (Malaysians can
design intelligent (I brand) chip, sigma 6, with 0.000.000 precision
component. With logistic, excellent design, good marketing and low cost of
transport, this type of chip is in great demand in the world. The idea and
design are from Malaysia, the factories can be in China.
The 2020 Vision means that Malaysia must have her own technology, not just
imitation and adaptation of technology from others. MTR contains only six
paragraphs on R & D development and innovation technology. During the review
period, 1,793 projects worth RM956.8 million were approved under various R &
D schemes. R & D fund has been allocated under the National Biotechnology
Directorate and the amount of RM70.5 million has been approved for
biotechnology research on agricultural plants, animals, food, molecules,
biopharmacy and natural produce.
At least, there are R&D schemes and a biotechnology directorate. We are
beginning. Biotechnology research costs multibillion ringgits, requiring
effective management, many good scientists and technologists.
Value for money
(MTR shows that the total allocation of 8MP of RM110 million has been used
up for projects. The amount of RM50 billion has been added for 2004 and
2005. On the surface, there is efficient implementation. But then, we have
to examine whether all the projects are value for money?
For example, every year over 20% of the federal budget is for education.
There are 18 public universities and thousands of schools. Are they value
for money? The total enrolment from pre-school to degree level is 5,954,181
students in 2003 with allocation of RM34.658 billion (2001 - 2003). There is
only RM5.507 billion for 2004 and 2005. Enrolment for secondary school is
930,000 students and the allocation is RM9.164 billion; over 430,000 for
higher education with an allocation of RM10.484 billion.
The standard of construction and the expenditure for each primary, secondary
and tertiary institution must be commensurate with the need. If RM1 million
is enough to build a reasonable primary school, why should it cost RM2
million? If RM500 million is adequate for erecting a university, why should
the Government spend RM1 billion? We need proper evaluation so that
resources can be used effectively.)
Income Distribution
We must always make an effort to reduce the gap in all aspects including the
digital divide. (In the human world, differences and gaps occur.) There
should be equal opportunities. But, we must make sure that nobody abuses the
effort to rectify the imbalances. Meanwhile the rights of all people should
not be eroded.
Since 1970, the New Economic Policy (NEP) fixes 30% equity or wealth for Bum
iputera. In 2000, the ownership of share capital for Bumiputera was RM62.97
billion or 18.9% compared with RM137.16 billion for Non Bumiputera or 41.3%.
In 2002, that for Bumiputera was RM73.16 billion or 18.7% and for Non
Bumiputera RM168.96 billion or 43.2%.
(According to the MTR, the growth of Bumiputera equity ownership was
impaired as a result of the slower economic growth, unfavourable stock
market conditions and the prolonged effect of the Asian financial crisis.)
In fact, in the past 33 years, Bumiputera have received more than 30% of the
share capital. But, when the market is good, some sell their shares for
quick profits. (Tun Dr Mahathir has repeatedly said that he has preached to
deaf ears, telling Bumiputera not to sell valuable shares.) If this
continues, in 10, 20 or more years, the House will still debate on the same
issue, 30% equity for Bumiputera will not be achieved. In the meantime, the
globalised world does not permit this way of distributing income.
MTR proposes that a minimum of 60% of government procurements, contract
works and other related projects be awarded to Bumiputera entrepreneurs. (It
adds that only competent and credible entrepreneurs will be awarded these
contracts.) Those who abuse this will be blacklisted. This statement has
been repeated very often. Has the Government the will to ensure that there
will not be abuses?
Hence, we would like the Government to review the policy, the targets and
the philosophy of NEP, to make the methods of income distribution (and
poverty eradication) consistent with the modern world. The Government should
do its utmost to achieve this.
Suka berjalan ke Melaka,
Berhembalang di dalam tongkang;
Sedepa jalan ke muka,
Setehempap jalan ke belakang.
(30/10/2003)
* Dr Tan Seng Giaw, DAP National Vice Chairman &
MP for Kepong
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