[2184] Of initial reaction to the New Economic Model

With over 200 pages, it will take some time to digest the so-called New Economic Model fully. I began by reading the speech delivered by the Prime Minister earlier today and I am only beginning to read the document proper just now. Given time constraint, I doubt I will able to able to go through the points presented comprehensively. At first past though, the NEM seems to suggest something favorable to me.

It appears to suggest the retreat of the state from the marketplace. The stress on frictions in the market due to subsidies and trade restrictions, the need of liberalization and reduction of government holding in some government linked enterprises are proofs for this. The term market is prominently used throughout the document.

There is more nuance than a simple retreat however. The speech itself suggests that entities like Khazanah and EPF will be allowed to invest abroad as part of effort to not crowd out the private sector.

That is good but it does not erase the fact that these entities still exist.

Affirmative action itself is still in force although the PM suggests that it will be reformed from race-based to need-based. Somewhere in the speech, the term market-friendly affirmative action appeared. I am not quite bought by that term. I rather hear the abolition of affirmative action but I am willing to give ground that need-based is far better than race based affirmative action.

The existence of national key performance indicators itself suggests a huge bureaucracy. It has been taunted as part of government transformation but I am not at all impressed with the idea of enlarged bureaucracy. Nevertheless, I am willing to give the administration a benefit of a doubt on this front.

Never mind the administration seeks to strengthen the public sector. How that strengthening will affect the size of the bureaucracy is something I hope to find out while reading the report.

By Hafiz Noor Shams

For more about me, please read this.

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