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Newly formed Economic Action Council must act fast

Photographs: The Edge

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The farmers, the fishermen, the rising urban poor and those in isolated kampungs, estates and new villages should get priority attention, says Ramon Navaratnam.

The formation of the Economic Action Council (EAC) by the government will be welcomed by all Malaysians who want progress.

It is timely, given the world economic slowdown, and the growing restiveness amongst Malaysians about our socio-economic wellbeing and future.

The EAC members are outstanding and will have the full support of the rakyat to deliver fast.

Main EAC aims

The main aim of the EAC is to encourage and stimulate sustainable economic growth, equitable distribution of wealth and further enhance the wellbeing of the people. The EAC will also look into issues relating to the cost of living, employment, poverty and home ownership.

We congratulate the government for this ambitious EAC plan, which appears to be a major review of our socio-economic planning and is therefore most welcome.

The public will be encouraged and excited by the aims of the EAC. Hopefully the government will exert its full political will to deliver action fast on the aims of the EAC. Otherwise, public expectations would rise for now but then fall quickly, as disappointment will set in and the national mood of happiness will decline.

This would be unfortunate and counter-productive to the good efforts of the EAC Hence how can we ensure good outcomes for Malaysian society?

How the EAC should tackle socio-economic issues

Sustainable growth

To achieve the EAC aim “to stimulate sustainable growth”, new policies and incentives have to be introduced to encourage both domestic and foreign private investment.

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This will call for more encouragement of the private sector to invest, with reduced protection of local industries and a smaller role for government involvement in business. Government-linked companies, for example, have to play a smaller role in the economy.

Foreign investors have to also be fully consulted and allowed more liberal access to invest in our markets. But all these new investments must be subject to more stringent sustainable development environmental policies and guidelines. At least, we then can be able to attract better quality investment that will not damage the economy and cost us much more to clean up the environment in the future.

Equitable distribution of wealth

The equitable distribution of wealth is another laudable goal of the EAC. It is no point going all out for economic growth when the income gap or Gini coefficient worsens in our country. The rakyat will rightly ask – why have economic growth if it is mainly for the elite class to benefit? This question can raise a lot of social uneasiness and even social unrest.

To attain the goal of equitable wealth distribution, we can widen welfare grants and the safety net, for the poor, provide more for basic needs like housing, healthcare and transport for the poor.

To meet such additional public expenditure, we can raise more taxes from the top 20% of our income earners to provide more facilities for the poor. But how much can we do?

Given our budget deficits and the high national debt, can our five-year plans and constrained annual budgets finance this higher expenditure? How much more can we do to finance the equitable distribution of wealth and close the wealth gaps?

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Nationalise assets or better education?

One easy but questionable way to improve wealth distribution is to nationalise some of our assets and then redistribute wealth. But this is a risky philosophy and an unprecedented and dangerous action to take. We will then frighten investments away and Malaysia can become isolated.

So even just talking about an “equitable distribution of wealth” can be alarming and disconcerting. Hence if we want to pursue this topic, we will have to plan carefully.

Perhaps the most acceptable path to better wealth distribution would be through the provision of better education and training facilities for technical and vocational studies. This would enable our graduates from schools and universities (where international ratings are generally low) to get better-paid jobs and thus narrow the present wide income gaps in society.

“To enhance the wellbeing of the people”

We have to shift our emphasis on economic (GDP) growth and move towards a happiness index to measure our wellbeing. We need to find out what makes the rakyat happier. Here again it is the provision of more of their basic needs and stronger efforts to reduce the cost of living.

Then we go back to wiping out corruption, improving governance, cutting wastage of public funds, and developing moderate lifestyles. Efficiency and a culture of meritocracy and competition should be encouraged more by the EAC in all its new policies.

New hope for better future

The EAC gives us all new hope for a better future. But the EAC will have to deliver fast. At least go for the low-hanging fruit. Help the poorest of the poor first and do it fast.

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The farmers, the fishermen, the rising urban poor and those in isolated kampungs, estates and new villages should get priority attention from the EAC. Then the EAC will win more credibility and support for its noble aspirations.

We all wish the EAC, under the strong leadership of Prime Minister Dr Mahathir Mohamad, every success to deliver action fast so we can be a happier and more contented nation,

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