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2006 Budget weak, feeble and
aimless - neither resilient nor meeting the challenges of ICT and
globalisation _______________________________ This is what Dr. Chen said in his email about the 2006 Budget presented to Parliament last Friday: “budget claims to be 'strengthening resilience and meeting challenges'. on the contrary it is weak and feeble, and aimless. “1. unaware of problems of people faced with rising inflation and increased cost of living without pay rise or tax reduction. there should be reduction of tax on personal income as well as a tax rebate of rm100 per family per month. employers to be encouraged to give cost of living allowances to pay for increase cost of food and travelling expenses. “2. to deal with loss of competitiveness with drop of world ranking from 16th to 28th position, company tax should be lowered from present 28% to the level of hong kong (18%) or level of singapore “other steps must be taken now to increase competitive power of our industries to meet challenges of rising giants china and india. the pm cum finance minister seem to be oblivious of the possibility that malaysia might become a factory slave instead of being a player and challenger for the asian market. “a high powered commission should investigate the causes for the drastic drop in malaysia's competitiveness, and take remedial measures straightaway. “3. FDI (foreign direct investments) are slow and low, only US$2 billion for first half of this year compared with US$ 1 billion last year. Blame should not be purely laid at china's door. what is wrong here? corruption? nep? “4. multimedia super corridor is supposed to be malaysia's silicon valley which would attract world class IT and software corporations. this is not happening, why? it was supposed to launch the country into the information era. if we have insufficient IT and software workers and engineers, how can the msc succeed. “5. is malaysia IT resilient? is there a broadband infrastructure in the country? NO! if broadband is not available in most parts of the country, where is the resilience and the power to meet challenges? A special vote should be made to introduce broadband to all parts of the country to help all malaysians to be IT literate. “6. With a wired country, the whole country can have more than one msc or silicon valley. S Korea is a classic example of a completely wired country and has become a technology and industrial giant. Malaysia can be one too. “the prime minister, should take steps to wire the whole country, and the people can then be resilient and prepared to meet challenges”. Dr. Chen’s email reflects in a nutshell the increasingly widespread sense of unease at the national malaise reflected not only in the 2006 Budget, but also the general lack of direction and national leadership nearly two years after Datuk Seri Abdullah Ahmad Badawi has taken over the premiership with his pledge of a clean, incorruptible, efficient, trustworthy and people-oriented administration to create a just, prosperous and progressive Malaysia and won an unprecedented landslide 92% parliamentary majority with such a pledge. Five months ago, the Prime Minister felt it necessary to defend 18-month premiership in his address to the Harvard Club dinner. He conceded that while “not everything had gone according to plan, with malaise and inertia still a problem in certain sectors”, he reiterated that he is committed in realizing the “solemn promises” made in the Barisan Nasional general election manifesto last year – “not made in the heat of electioneering, but rather after careful thought about what needed to be done for Malaysia”. Abdullah’s defence of his 18-month premiership was hailed by the New Straits Times as “arguably one of his most important speeches since becoming Prime Minister in November 2003” while The Star headlined “Pak Lah comes out fighting” in its editorial comment. Such unthinking adulation for Abdullah’s speech and 18-month premiership, however, was contrasted by unqualified disdain in the Malaysian blogosphere with many bloggers seeing no hope in the rhetoric becoming reality. It must be said that the views of the bloggers were not isolated opinions unrepresentative of general public opinion. I took a middle position, no unthinking adulation and yet not wanting to yield to unqualified disdain, hoping that despite my disappointments at the failures in his first 18 months of premiership to deliver his pledges, the Prime Minister could still work up a “second wind” for a renewed commitment to fulfill these pledges. I had hoped that this “second wind” could at last be found in the 2006 Budget, the Prime Minister’s second budget, but this is not the case, as it has not been able to address the growing feelings felt by increasing numbers of Malaysians that something is very wrong with our country and governance. More and more things are happening in a country which is supposed to break away from the malaise of “First World Infrastructure, Third World Mentality”, indicating that in many areas of national life, instead of going forwards we are actually going backwards. How then explain the following mishaps, tragedies and scandals:
When Malaysia’s world competitiveness ranking last year improved by five places and ranked 16th as compared to 21st position in 2003 in the Swiss-based International Institute of Management Development (IMD) World Competitiveness Yearbook (WCY) 2004, the Prime Minister immediately quoted it as authority in his keynote address at the Malaysia-China Business Dialogue in Beijing on 28th May 2004 during his first official visit to China as premier as testimonial why Malaysia was a good place to do business. But when Malaysia’s world competitiveness ranking plunged 12 places from 16th to 28th position in the IMD World Competitiveness Yearbook 2005 in May this year , it was met with a conspiracy of silence and denial syndrome which was only broken by the Deputy Prime Minister, Datuk Seri Najib Razak in early September - four long months later.
Speaking at the 10th Civil Service Conference on “Development with a Human
Touch: Maximising Human Capital” in Kuala Lumpur, Najib said the IMD ranking
on the 12-point plunge in the nation’s world competitiveness has “got the
government worried”.
IMD World Competiveness Ranking
In the past five months, has the government found out the reasons as to why Malaysia is losing out in international competitiveness to the extent of a 12-point plunge in the IMD World Competitiveness Ranking when the Prime Minister had repeatedly said that his top priority is excellence and the enhancement of the nation’s competitiveness to rebrand Malaysia in the global marketplace?
When
Parliament met in June, I submitted a question asking for “the reasons why
Malaysia has fallen 12 places from 16th to 28th ranking in the IMD World
Competitiveness Yearbook 2005, losing for the first time in international
competitiveness to Thailand and the government’s response to this latest
development”. Now, the government will have the excuse to ignore the World Competiveness Report (WCR) because of a better ranking of the World Economic Forum Global Competitiveness Report (GCR) 2005, with Malaysia moving up seven rungs to rank 24th from 31st out of 117 nations worldwide. Last year, the government chose to use the World Competitiveness Yearbook 2004 because of 16th ranking as compared to GCR’s 31st placing. This year, the government prefers the GCR because of an improved 24th placing as compared to a worse WCY ranking of No. 28th. The government should not pick and choose the report with the better ranking, but must explain the reasons for the drop in competitiveness whether WCY or GCR. In fact, Malaysia’s GCR 2005 ranking of No. 24 is nothing to be proud of, considering that Malaysia was ranked No. 16 in 1999, falling to No. 25 in 2000, No. 30 in 2001, 27 in 2002, No. 29 in 2003, No. 31 in 2004 and No. 24 in 2005. MPs are not hounding Rafidah for any personal vendetta as the issues at stake are bigger than one Minister – concerning the fundamental principle of executive accountability, transparency, integrity and responsibility to Parliament The Minister for International Trade and Industry, Datuk Paduka Rafidah Aziz through his Deputy Minister has promised to come to the House tomorrow to answer questions relating to the long-running saga of AP scandal. Her former boss and former Prime Minister, Tun Dr. Mahathir Mohamad has advised Rafidah to “tackle approved permit (AP) issue in Parliament and leave less important ministerial matters to subordinates”. It is most regrettable that Rafidah had not taken the first opportunity to appear in Parliament to give a full and satisfactory accounting of the AP scandal. She should have come to Parliament last Monday before she left the next day for the ASEAN Economic Ministers’ Meeting in Vientiane on 27-28 Srember 2005, and she should have been here today to make amends for her prolonged absence from Parliament – attending only 20 days in the past six years when Parliament had sat for 390 days. I had issued an invitation to Rafidah for a full and no-holds barred accountability session on the APs scandal in Parliament today, and it is most regrettable that she has not come down to earth from her aristocratic stratosphere to account to Parliament. There is no question on the AP controversy in the Order Paper today but there is one tomorrow by the UMNO MP for Gerik, Dr. Wan Hashim Wan Teh asking on the efforts of the government to protect the national automotive industry from decline and losses as a result of the poorly-controlled import of foreign cars. With the mountain of questions which have snowballed in the four-month AP scandal, it is clearly impossible for justice to be done to the AP issue with one parliamentary question - even if the unusual practice of allowing four supplementary questions is resorted to. What is needed is a full and no-holds-barred accountability session in Parliament on the AP scandal, with the Minister fielding all the queries. This is why I offered Rafidah such an opportunity in Parliament today, promising to allow Rafidah to have the floor as many times as she wants to give a full accounting through the parliamentary device of seeking clarifications. It is most regrettable that she has not availed herself of this unusual offer and opportunity, which does not reflect well on Rafidah’s role in the APs scandal. I am surprised by Brendan Pereira’s Friday column “In the name of transparency” in the New Straits Times, suggesting that there a campaign for the “public lynching” of Rafidah – which is news to me. Although UMNO MPs have shared with me their disgust and outrage at Rafidah’s handling or mishandling of the AP scandal, I have not detected any move or proposal for the “public lynching” of Rafidah. I fully agree, however, with Brendan that “Rafidah does not owe anyone an apology for letting the public know which MPs got APs”. But Rafidah does owe an apology for the MPs AP List – for the List’s mischief and malice because of its selectivity, omitting the data from 1997 to 2000, which was part of my original question, as well as the full list of individual, Open and Franchise APs going back to 1987. But Rafidah, her Deputy Minister Ahmad Husni Hanadzlah and Parliamentary Secretary Dr. Tan Yee Kew, all seemed to have agreed that the release of the MPs AP List was wrong, finding a government officer to be the scapegoat for the MPs AP List. Rafidah should come to Parliament tomorrow to name the government officer who prepared the MPs AP List, repudiate all decisions to penalize the officer concerned and give an assurance that the officer would be commended .instead of being victimized. Just to remind Rafidah of the multitude of APs questions and contradictions she has to confront and address satisfactorily, here are some:
The Cabinet meeting of August 10, which Rafidah attended after absenting four consecutive Cabinet meetings, created considerable confusion when it imposed a clamp on Rafidah from having to answer the media’s questions on the AP scandal. Was the clampdown inclusive of Parliament on all questions about accountability, transparency and integrity concerning the issuance of APs in the past 18 years. The impression after the Cabinet meeting was that Rafidah had been stripped of the APs responsibility. I had stressed at the time that the Prime Minister and the Cabinet have the powers to strip Rafidah of two strategic functions of the Ministry of International Trade and Industry, i.e. the drafting of the National Automotive Policy and the review of the issuance of APs, but they cannot impose a blanket ban on all public discussion and demand for accountability for her mishandling of the AP issue for the past 18 years – which would be unfair to both the Malaysian public as well as to Rafidah herself. Such a clampdown run in direct counter to the pledge by Abdullah to lead an administration which is people-oriented, clean, incorruptible, accountable and trustworthy as well as setting the most undesirable precedent of granting Rafidah immunity and impunity from any abuses and excesses of ministerial power. Many people asked whether this would be “the fourth time” Rafidah is to be “saved” by a serving Prime Minister? Will Rafidah come tomorrow and plead that she had been barred by Cabinet from giving answer to any question on AP? If the Cabinet had imposed such a clampdown, it should be removed as Rafidah should neither be denied the right to defend herself, including making public her 29-page explanation she had prepared for the Cabinet, nor provided with immunity and impunity from accountability and transparency for her 18-year AP responsibility. The confusion galore as to whether Rafidah had been stripped of AP powers and responsibilities could be gauged by the statement made by the Barisan Backbenchers Club Chairman Datuk Shahrir Abdul Samad shortly after the Cabinet meeting calling for Rafidah’s resignation as Minister for International Trade and Industry for commenting on the AP issue despite a cabinet “gag” on her. Shahrir said Rafidah should quit if she finds it hard to respect the cabinet’s decision not to comment on the issue of AP and that she “should stop making a fool of herself by talking about matters which are no longer under her ministry”. Everybody thought that Rafidah had been stripped of the APs responsibility, until she went to Singapore at the end of August to announce that the issuance of APs and the automotive industry are still under the jurisdiction of her Ministry – that there is “no change at all from before”. The difference now is that Prime Minister is chairing a meeting of four ministers - the International Trade and Industry, Transport, the minister in charge of the Economic Planning Unit and the Second Finance Minister - to take a comprehensive look at the automotive industry. So what did the Cabinet decide on the APs scandal on August 10? Just to protect Rafidah from public accountability by imposing a clamp-down on media questions to her? Rafidah did not explain why she had to go abroad to declare that her Ministry is still in charge of the APs portfolio or why she chose to make her first admission that there had been abuses in the issuance of APs when she was in Singapore. Why then did Rafidah break down at the National Day Celebrations where she cried while embracing Tun Dr. Mahathir? Is it related to the return of seven cars by Dr. Mahathir to Proton Bhd, which became national headline news on the eve of National Day, a strong signal that the APs issue was not going to go away as far as the former Prime Minister was concerned - which could only mean that Rafidah could not just pretend that the APs issue is no more or behind her? With Rafidah’s announcement that her Ministry is still in charge of APs, it was most remiss on her part to evade full accountability of the abuses and excesses of the issuance of APs in her 18 years as Minister for International Trade and Industry. Rafidah had prepared a 29-page explanation for the Cabinet to defend her stewardship of APs to import cars. She should table this explanation as a White Paper in Parliament including a full list of the APs issued each year, whether open, franchise or individual APs going back to 1987 and agree to a full parliamentary debate to demonstrate that she has nothing to hide on this subject. When she comes to Parliament tomorrow, Rafidah should account for her rare appearances in Parliament. Rafidah said she had to be away from the country several times this year, seven times on visits with the Prime Minister and 10 times on trade mission. Two observations are in order: Firstly, her official functions abroad should be matched with the parliamentary schedule to ascertain whether they justified her abysmally low parliamentary attendance record. I gave further particulars of her dismal attendance in Parliame Total Parliamentary sittings Rafidah’s attendance
Secondly, putting aside overseas functions which are outside her power to decide on the dates, why couldn’t Rafidah arrange her missions abroad to minimise or avoid altogether clashes with the parliamentary time-table which are circulated to Ministers more than a year in advance. New National Automotive Policy should incorporate timeline to phase out APs so that Malaysian consumers do not have to continue to pay more for cars in Malaysia than other countries after more than two decades of Proton protection The much-postponed new National Automative Policy, which has again been postponed to this month from last month, should should ensure the incorporation of at least two elements, transparency and protection of the interests of the Malaysian consumers. Former Prime Minister Tun Dr. Mahathir Mohamad has said that it would be “interesting” to study the APs list for imported cars for 2003 and 2002 because the numbers then were not as big as those given last year and this year. The question was raised as to the reason for the sudden three-fold jump of APs issued from 20,000 in 2002 and 2003 to over 60,000 in 2004 and 2005. Such a simple query should have been easily clarified by a government which believes in accountability and transparency. Unfortunately, no satisfactory answer has been forthcoming as the Ministry of International Trade and Industry seems to have lost the ability to communicate with the ordinary rakyat, let alone MPs. There must not only be transparency, the new National Automative Policy should also incorporate a timeline to phase out APs to abolish the AP system for car imports so that Malaysian consumers do not have to continue to pay more for cars in Malaysia as compared to other countries after more than two decades of Proton protection. Car prices in Malaysia are one of the highest in the world in money terms and even higher in relation to our modest per capita income, as a result of Proton protection. A Honda City for instance cost over RM80,000 in Malaysia but only about half the price at the RM40,000 price range in Thailand.The following examples have been given to illustrate how the Malaysian car purchaser is “thoroughly fleeced” as the result of APs protection for Proton: A Toyota Camry goes for
A$32,000 (RM92,000). In Malaysia it is RM170,000. In the 70s, the car-to-monthly wage multiple (for a recently qualified graduate) was low, at about 10 (10 months’ wages). This crept up to about 15 in the 80s, and is now almost 40 (i.e. 40 months’ wages for the graduate’s first car). I reiterate my call for a Parliamentary Select Committee on International Trade and Industry to give input as well as to monitor the National Automotive Policy, especially with regard to the two elements of transparency and the time-span for the abolition of APs for imported cars to allow Malaysian consumers to buy cars of comparative price and quality as in other countries. Two recent news in the automotive world should be food for thought for Cabinet Ministers mulling over the options for a new National Automotive Policy, viz: General Motors Corp plans to buy US$1 billion worth of automobile parts from India each year by 2008 as part of cost-cutting efforts at the world’s biggest automaker. GM is among several automakers – including Ford Motor Co., DaimlerChrysler AG, Volkswagen AG – that are sourcing auto parts from low-cost countries because of tough competition and rising cost of materials. It is reported that auto parts in India cost 25-30 per cent less than in North America or Europe, and are also around 15 per cent cheaper than South Korea and Mexico but the quality is on par. Malaysia does not appear in the radar of such international sourcing of auto-parts by the global automobile giants. In the first six months of 2005, about one-third of Thailand’s total vehicle production of 517,829, which includes over 350,000 trucks, were exported. In 2004, over 332,000 vehicles - one-third of Thailand’s total vehicle production for the year of 927,981 vehicles, which includes 597,914 trucks - were exported to destinations ranging from Argentina to South Africa. In contrast, Proton exported 17,243 units for the financial year ending March 2005 as compared to 7,338 units the previous year. These two snippets are fresh reminders as to how after two decades of protection, forcing one whole generation of Malaysians to buy cars which are more expensive and of lower quality than those available in other countries, Proton is still so uncompetitive that there are calls for another generation of 20-year protection for Proton. One important question that must be decided in the new National Automotive Policy is the future of Proton. If the Cabinet cannot take the decision on Proton’s relinquishing majority stake and control in a strategic partnership with a foreign partner, so that Proton can become truly competitive and face up to the challenges of globalization, then the Prime Minister should allow the decision to be taken by Parliament.
* Lim Kit Siang, |