The Peril of Mahathirism

Khoo Kay Peng

NEAC chairman Amirsham Aziz does not have to look so far e.g. Taiwan, South Korea and Eastern Europe to find out what is wrong with the Malaysian economy.

It might be more productive and effective for Amirsham and his team to study the peril and consequences of Mahathirism.

The Malaysian economy over the last few decades has been dictated and influenced by Mahathirism, a mix of socio-political economic model introduced by the nation’s longest serving PM Dr Mahathir Mohamad.

Mahathirism is a unique blend of social and political interests which were used to define the major economic policies.

The New Economic Policy was subtlely transformed into a main policy which was used as a symbol of the Malay/UMNO political and social dominance. The nexus has made it very difficult for any administration after Mahathir to try to change or repeal the economic policy without facing a major repercussion or protest from the community.

Hence, the economic liberalisation step undertaken by Prime Minister Najib Razak was limited in scope and impact. Only sectors and sub-sectors which do not have a high participation of bumiputeras were liberalised.

Ironically, a renowned US ivy league has found his economic liberalisation effort so significant and interesting until it merits a comprehensive study. It was reported that the Harvard Business School in Boston will undertake a case study on Najib’s “courageous and bold initiatives to tackle the financial crisis.”

There is another irony. This announcement did not come from the university spokesman but from the Harvard Business School Alumni Club of Malaysia president G. Gnanalingam.

By now, it should be clear that Najib’s economic liberalisation programme is neither ‘courageous’ nor ‘innovative’. There was no follow up on any further liberalisation. If any, Malaysia is only playing catching up compared to more liberal economies in the region such as Hong Kong, Vietnam, Singapore, Thailand and even Indonesia.

There are still restrictions to foreign ownership, land transaction, equity ownership, public procurement, licensing and others. There is little change in the bureaucracy which hampers any reform effort.

Najib’s stimulus package of RM60 billion created limited ripples. Until today, only a fraction or 20 percent of the amount has been used. Since the extra budget is spread over 3 years, it will not generate a significant growth for the local economy.