More liberalisation needed

I have written many posts on the importance of liberalising the economy and doing away with the restrictions under the NEP. One of the article, “Time for a moratorium on the NEP , perhaps? “ was published in MalaysianInsider on December 1st. I will qoute part of that article here:

There are still many cash-rich Malaysian companies and individuals. If these people can invest and be the engine of growth, we can create more jobs as well as stimulate growth to counter the global economic recession.

For the private sector to invest, there must be a few pre-requisites:

1) Cheaper access to funds. Bank interests and interest spread must be lowered.

2) There must be less regulatory interference in order for the companies to invest and grow. In this respect, we may have to do away with the NEP. If that is not immediately acceptable, then perhaps we should have a moratorium to suspend the NEP for a few years to see how our economy can benefit.

If this trial can prove that NEP is in fact a hindrance to the growth of the people, including our Malay brothers, then we can, at the end of the moratorium period, do away with the NEP completely and replace it with a needs-based economy.

3) Tax cut and incentives for investments in certain priority sectors, such as education, healthcare as well as transportation, biotechnology, nanotechnology and so on.

I ask our Malay brothers to accept my suggestion for a moratorium rationally. It is better for everyone to have an expanding cake than to have a cake that is rapidly shrinking. In the latter case, having a fixed proportion of the cake may be meaningless if the cake shrinks to half its former size.

On the part of the non-Malays, they should try to have a real economic partnership with the Malays, genuinely imparting skills and business know-how, and not just form an Ali Baba relationship to beat the loopholes in the NEP.

We need to think out of the box and adopt fast action to counter this economic tsunami. Already we have felt the first wave; subsequent waves will be more devastating and if nothing is done now, we are going to face a really bleak future.

Malaysia after 51 years of independence needs to have a economic policy that is based on competition and market forces, and whatever affirmative action needed should be based on needs. If the affirmative action is based on needs, then any ethnic group with a large proportion of the poor, will be benefited,and no ethnic group would be marginalised.

ANother advantage of having a competitive economy is that the economic cake can expand much faster. If the cake can be much bigger in a shorter time, everyone in the country would benefit ultimately since evryone’s share of the cake will be bigger.. The government would benefit by having a bigger tax base and more revenue from taxation, and more projects can be carried out which can help the people. The private sector would be more efficient and competitive, and by being competitive, it can expand world markets for Malaysian products as well as services. It will aso help move us up hte technological ladder, which we are now quite far behind those countries that were once behind us..

It is in this context that I welcome  the announcement today of the liberalisation of the service sector in 27 sub-sectors in areas of Health, Tourism, Transportation, Legal services as well as computer industry. By doing away with this restriction, it would spur private investments in these fields. 

I doubt that there would be “waves of foreign investments” as reported in some of the main stream media. To expect much foreign investments at this time when almost all foreign countries are in economic troubles is not really realistic, but it would definitely benefit us when the global economy starts to pick up. In the meantime, we can expect more private investments from private sector in Malaysia in these fields.

I hope there will be more liberalisation in other areas, in corporate sectors ,licensing , as well as in the placements of students in tertiary institutions.

Let us revert back to the original aims of eradication poverty irrespective of ethnic origins and let us become an egalitarian society based on merits and morals, with help being extended to the non-competitive groups and socially disabled.


13 Comments (+add yours?)

  1. kittykat46
    Apr 23, 2009 @ 17:10:43

    Isn’t it the official Barisan Nasional line that NEP no longer exists ?….how come there is a need to “liberalise” so many sectors ?….sorry, just being a bit sarcastic…..

    Notice that no Federal or State Laws have been amended or repealed. Its just an administrative fiat to temporarily set aside mandatory NEP requirements, probably just for the duration of the economic crisis.

    Anyway, I’m glad they have set aside these requirements, if only temporarily and only in limited sectors.

    The stupidest regulation I personally dealt with was the restriction on applying for a “C” lorry licence.
    It was just a licence for a 3-ton lorry to carry your own company goods, for heaven’s sake……but if you don’t meet the 30% bumiputra ownership quota, you will be denied the application.


  2. klm
    Apr 23, 2009 @ 21:23:00

    I dont trust these buggers. It is wise to watch and see. Dont commit any money based on this “liberalisation”. Too many u turns in this country.

    I think foreigners will be do the same.


  3. Disgusted
    Apr 23, 2009 @ 23:28:13

    The only liberalisation I can see it is to “liberalise” this country from UMNOputras and its gang of warlords.

    That will be the only “real and concrete” liberalisation taking place.

    Once that’s is done, this country will be liberalise from all unjust laws, bad governance, institutional patronage and separation of powers.

    Isn’t that better than “ad hoc” liberalisation by the current regime?

    After all, let’s NOT forget which regime put all these restrictions into place in the first place.

    It is the UMNOputra leadership beginning from the Razak days.



  4. cilipadi
    Apr 24, 2009 @ 07:36:09

    Wow, a pack of tainted dirty cards can bring liberalisation? I am not so sure. Better than nothing but still, change the whole set of cards to new cards is the way to go in the long run.

    Lets complete the cycle, since it started with Razak, then end with N Razak.

    I found it vague with Dr. Hsu’s statement that:

    “I ask our Malay brothers to accept my suggestion for a moratorium rationally.”

    Why Malay? It should be Umno Malay brothers. The non-Umno Malays that I deal with all agree that they are better of without NEP.

    Umno Malay makan cili, non-Umno Malay rasa pedas?


  5. klm
    Apr 24, 2009 @ 09:24:48

    Several signs are no so good.

    1. Malays businessmen are pushing back. Guess they want an easy way out.

    Just last month, in the Cologne Medical exhibition, a pair of bumiputra went around telling the manufacturers that they can only sell their products through bumi companies in Malaysia. This was a half truth. But that was their selling line. That was their value add to the proposition.

    2. BN component parties also urged the government not to rescind the rollback later.

    Looks like Gerakan and MCA dont have strong faith in this announcement.

    The announcement so far opened up licensing terms, but it did not open up access to the public sector market.

    Hold on to your purse.


  6. klm
    Apr 24, 2009 @ 09:55:40

    Example of IT industry service structure

    Market : [ Govt & GLC companies]

    Main Contractors : 100% Bumi companies

    Service Sub con : 30% bumi (now “liberalise”)

    Other than a small change, there is no big impact. 30% bumi on sub con or whatever terms can still be be unofficially imposed at this level out of sight.

    As long as we have this structure, the IT industry will never develop as the sector with the real expertise i.e. the subcon do not make enough margin to support R&Ds. The middlemen take most of the fats.


  7. Dr Hsu
    Apr 24, 2009 @ 10:10:07

    This may be goodies to try to win the hearts of the people. And you all are right to be skeptical..Maybe we have to see its implementation before we should beleiev it.

    having said that, if it is for real, then as far as I am concerned , any cat that can catch the mice could be a ‘good’ cat ( of course, the cat must first clear the name for the death of a Mongolian mouse)……

    If these are for real, and if these can be further liberalised, then maybe it is a step forwar towards a fair and equal society.

    I think you are right again to hold on to your purse… Wait for any objections and any flip flop which is the trademark.

    But still, if these can be implemented, it is still a good fiorst step towrds a better, fairer society..

    And this cat, may be more decisive than the old sleepy cat which allows mice to climb all over his body and still sleeping and snoring..


  8. klm
    Apr 24, 2009 @ 11:02:18

    Dr. Hsu. I agree with you one the cat. (I respect Deng Xiao Peng a lot). We just watch and see if the cat catches the mice.

    I dont care if there is a Mongolian mouse dead or alive. That is the past. We have to look to the future.


  9. Disgusted
    Apr 24, 2009 @ 12:02:14


    You are right.

    It is just “talk” and not forgetting whether “Napzap’s” (in Cantonese, meaning rubbish) oral goodies can be realistically transform into a “reality.”

    There will be a whole lot of resistance from Little Napoleons, the M-Chamber of Commerce, little powerful pockets of racist groups crusading racist interests and race supremacy ideological groupings. You will be shocked to know over the decades, UMNOputra leadership has breed and nourished these people with favoritism to protect their race-based turf.

    Suddenly Napzap’s out-of-the-blue announcement to dismantle decade-old unjust policies….!!!!

    Unless, Napzap goes around telling these extremists quietly that it is only a temporary measure to win back votes and political support….!!!!

    Malaysians don’t merely want just policy reforms, they want “institutional” reforms.

    They want ROS to de-register racist and narrow race-based bodies bent on threatening national security. They want separation of powers. They want revoke of emergency laws. They want so many things, Napzap seems to have missed out.



  10. klm
    Apr 24, 2009 @ 13:42:44

    I learned a lesson in the corporate world. If you don’t change the KPI and reward system, there will be no change of behavior. One can talk till the cow come home, everyone one will be status quo. No amount re-structuring and re-organisation will deliver results.

    If the policies dont get translated in KPIs for ministers and civil servants, then this is all hot air.
    And even then, these napoleons will still try to sabotage the good intentions.

    So, the intention must also be backed by teeth. Send the saboteurs to jail. Though i prefer the Chinese system. Just shoot them.


  11. Dr Hsu
    Apr 24, 2009 @ 13:58:51

    they also have to pay for the bullets used to shoot them, so as not to waste the public funds.. 🙂


  12. Kaizen
    Apr 24, 2009 @ 15:14:30

    The Govermt must also liberalise the service sector such as Engineering Consultant. The existing process of registration with the treasury and award of jobs is a based on a cartel system.

    For example I am a specialised non-bumi marine civil consultant, my registration was denied becuase I do not have a TA (technical assistant) that was trained in the same field as me despite the fact that my existing TA has already acquired 15 years working experience with me.


  13. klm
    Apr 24, 2009 @ 17:44:30


    I think you have to be more precise in defining your problem. My understanding is that:

    1. You are certified and licensed to practice as a marine civil consultant

    2. You cannot get registration with treasury for govt contracts

    The issue is not liberalising consultant services but access to government market.

    That is what I have been saying, the govt can liberalise all it want, but either through policy or bad implementation, the large public sector and GLC market is not open to those qualified, then the whole exercise is just a PR game. Lots of noise but no explosion.


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