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Malaysia's economic reforms on sound basics [02-03-2011]  
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Malaysia recorded 7.2 per cent GDP (gross domestic product) growth for 2010 against the backdrop of a crisis-prone world economy.

 

 



The country is not insulated from any adverse world trend. It is still largely an export-driven, foreign investment dependent economy.

While these two factors have contributed to this rebound, domestic consumption, mainly spurred by the government's two stimulus packages, has helped a great deal for this impressive achievement.

The 1997 Asian financial crisis and the more recent global economic turmoil are indications of the growing complexities of the world economy.

When we look at the US or Europe, the so called developed nations, the upheaval is frightening. When global giants, nations or corporates faulter or fall, the shock waves and tremors are pervasive.



The cyclical theory or for that matter the prevalent econometric modelling are of no help to predict the future or a trend. The reality is one of constantly changing parameters. Changes are the rule now, not exceptions, as considered decades ago.

Malaysia has realised this notion much better than any other country in the developing world. Wanting to move up a few notches on the development scale to achieve a developed nation status, the efforts are convincing.

The transformation agenda being implemented one by one is determined to change the track for a fast forward. Starting with the GLC (government-linked companies) transformation, the gear shifted to the Government Transformation Programme.

Now it has gone into an overdrive mode in the Economic Transformation Programme. The pace is indeed, fast. To a layman and the public-at-large, these may appear as overdoses.

On a sector-by-sector basis, the programmes are specific strategic thrusts to increase the opportunities. The responses to these initiatives are positive and timely. The efforts can avert the Malaysian economy from falling into the trap of complacency and underperformance.

This anticipatory attitude and approach well crafted and strongly articulated, is welcome by the private sector, both domestic and foreign. If the economy is set to grow, and it is poised to grow by about 6 per cent annually, there is plenty to share by all parties in this new growth paradigm.

A performance higher than the benchmark of 6 per cent growth, is indeed a good beginning.

The New Economic Model, no doubt, addresses the challenges of the future leading to 2020 from a macro-economic point of view. It also provides the thought processes for micro-economic management.

Corporate entities can dove-tail their business models and business processes within the broad framework of NEM.

Even before the advent of the NEM, a good number of Malaysian corporations were already taking the cue from global trends.

In the aftermath of the Asian crisis, and at on-set stage of a world-wide slump, pro-active chief executive officers (CEOs) of corporations started to re-think about their businesses. More are forced to re-think now.

The business strategies, the business culture, the customer focus, the revenue generation and the bottom line profit, are being re-examined, not once, but from time-to-time.

In short, the whole attitude towards changes, an anticipatory approach and strategies to confront the ensuing changes becomes the key challenge.

"The run-of-the-mill" and "business as usual" passive paradigms if continued are a sure receipt for disaster. Those who are imperceptive to the "writing on-the-wall" will lead their firms to rust and may be to dust.

The NEM may not contain the specifics a company is looking for. It provides a window for new business perspective for an entity of a group or sector.

A discerning characteristic for a CEO is an ability to handle change, and more importantly, to understand the complexities of impending changes.

The necessity for restructuring and focus on what are now considered core competencies and compatible business within a group or cluster, become an operational imperative.

A simplified business processes and speedy communication flows, and a commitment to discipline in execution and implementation are the rules of the present business game.

The success of the government initiatives and the consequential strategies of the private sector, depend very much on the government delivery system.

The implementation framework, with a referral mechanism even to the Prime Minister and a team of ministers, structurally is a good idea.

However, when every matter, every nitty-gritty has to go to the top, it is a sign that bureaucracy is in control.

If there continues to exist large pools of government personnel bucking the trend and the momentum of the leadership, then serious short falls will ensure. We cannot afford to let this happen.

Prime Minister Datuk Seri Najib Razak's enthusiasm needs to be imbued into every level of administration - be it public or private as a necessary input for the national cause.

A principle that is based on sound basics will succeed. Malaysia's economic reforms are on sound basics.

Datuk Mohamed Iqbal Rawther is the secretary-general of the Malaysia-Japan Economic Association.

Source:BUSINESS TIMES
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