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NEWS UPDATES 31 March 2010

Economists say Malaysia’s new economic model lacks critical details

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While the New Economic Model (NEM) acknowledges the need for Malaysia to reform to be more dynamic and competitive, it lacks critical details for smooth implementation that hopefully the 10th Malaysia Plan will address, reported the StarBiz, quoting economists.

Even if half the initiatives were implemented in the shortest time possible, the benefits would be enormous for the nation and its people, they noted.

An economist said that although some of the initiatives announced under the NEM came as no surprise as they had been bandied around, the difference this time was the holistic approach that put into perspective the entire transformation for a dynamic Malaysia.

“Fundamentally, the reforms were long overdue but decisive actions are needed to speed up the transformation as the country runs a risk of a downward spiral and possibly a painful stagnation if the nation does not re-invent itself,” said CIMB economist Lee Heng Guie.

He hoped the policy makers would take a clear stand and stick to the reform agenda and act decisively to see the real benefit of the transformation.

“If it means making tough decisions which may lead to some political repercussion (so be it), as there cannot be room for flip-flops, but only readiness and adjustments with proper timing and sequencing so that we eventually get there,” he said.

The economists also agreed that the onus was not on the civil servants alone to implement the initiatives in the NEM but all the stakeholders, be it the business sector, politicians, non-governmental organisations and even the rakyat who had to be committed to the transformation agenda.

Intel Malaysia country manager Ryaz Patel welcomed the Government’s initiative to build a high-income nation under the proposed NEM.

It believed that Malaysia had a unique opportunity to leverage today’s inflection point and break away from the middle-income trap, and make the shift to a high-income economy.

Meanwhile, Interpacific Research economist Anthony Dass said: “Don’t expect results in one or two years; it would be a tall order.’’

“Look for results in five to seven years as it structurally kicks in,’’ he said.

An analyst felt that the consultative approach with the public was a great step as it showed the Prime Minister’s seriousness in wanting to hear the public views and allow them to be part of the decision-making process before implementing the plan.

Lee added that the NEM was adopting an approach that was market driven and private sector led and eventually the private sector would be energised to become the prime growth driver while the role of the government would be redefined as facilitator.


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