Najib must now go beyond ‘quick wins’: analyst

(Business Times Singapore) KUALA LUMPUR, July 14 – Prime Minister Datuk Seri Najib Razak has taken initial steps to improve the economy, but now he needs to tackle tougher problems for the reforms to be truly effective, an analyst said.

“In our opinion, what has been done so far are essentially ‘quick wins’ typical of a new leader in any organisation,’ Maybank-ib analyst Suhaimi Illias said of Najib’s first 100 days in office.

Najib has surprised many by the speed with which he has tackled a number of prickly issues.

The more sensitive ones have been the emasculation of the powerful Foreign Investment Committee — a panel that vets proposed investments — and the paring of the bumiputra quota in initial public offerings by half to 12.5 per cent of shares for public sale.

More populist ones include merit-based government scholarships regardless of race, highway toll discounts, and the sale of budget housing to low income earners.

Najib’s policy changes have been described as ‘brave and bold’ as they could cost him support within the Malay community, which has benefited from the New Economic Policy (NEP) — the near 40-year old affirmative action policy that favours it.

In a report, Suhaimi lists the remaining ‘tough fixes’ as fundamental reforms and restructuring to transform the country into a high income economy; fiscal reform to narrow the ballooning budget deficit; educational reform to improve long-term competitiveness; social reform for racial harmony; and civil service reform to improve the lagging bureaucracy.

In a speech on the topic of “Najib’s 100 days” at a gathering of public relations consultants last Friday, former finance minister Tengku Razaleigh Hamzah articulated the need for a holistic approach to the country’s political and economic problems.

Malaysia has relaxed some quotas, he observed, but had left intact many other rent-seeking aspects such as the approved permit and taxi licensing system. “We have left the apparatus of the NEP, and a divisive mindset that has grown up around it in place. Wary of follow-up actions, the business community has greeted these reforms cautiously.”

“The real issue is not whether the NEP is to be continued or not, but whether we have the imagination to come up with something which better serves our values and objectives, for our own time,’ said Tengku Razaleigh, who had offered to contest the Umno presidency last year but did not receive sufficient nominations. Najib won the post uncontested and went on to become prime minister.

Tengku Razaleigh suggested that the leadership should be brave enough to explain that the NEP was outdated and rally people towards a pragmatic approach.

“We want the full participation of all stakeholders in our economy. A fair and equitable political and economic order, founded on equal citizenship as guaranteed in our Constitution, is the only possible basis for a united Malaysia and a pre-requisite of the competitive, talent-driven economy we must create if we are to make our economic leap,” he added.