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| Workers at a Malaysian factory collecting newly-produced latex gloves to be packed for export. Attaining improvements in competitiveness, while laudable, is just the beginning. We also have to strengthen the foundations of our economic, political and social institutions, and values which are fundamental to long-term survival. |
AIM TO DO BETTER
ECONOMIC
COMPETITIVENESS:
Productivity,
human capital and social values are some areas that can still be improved
THE annual IMD ranking of 60 nations according to their
competitiveness for 2014, was just released. The International Institute for
Management Development (IMD), a top-ranked business school in Switzerland,
ranked Malaysia 12th this year from its 15th position last year.
This fact should be read together with other information on
rating, such as the ease of doing business and the ease in getting credit in
which Malaysia is ranked 6th and 1st places, respectively. Our competitiveness
did improve.
The Malaysian government must be congratulated for working hard to
improve its ranking. To a certain extent, the exercise initiated many years ago
by Tan Sri Sidek Hassan, then the Chief Secretary, has now materialised.
However, climbing to better positions will not be easy now, as we
have to compete with other nations known for their liberal economic policies,
such as Norway, Sweden and Singapore. This is not to say that we remain
contented; on the contrary, we should always aim to do better.
Pursuing more liberal economic policies may not be that easy. If
the progress of the Trans-Pacific Partnership Agreement (TPPA) is any guide,
nations are more guarded and protective of their economic interests now.
The modest economic achievements that we attain now, amid an uncertain
global economy, have planted more seeds of caution on the part of our citizens
in opening up more market access and allowing more liberal commercial presence
of foreign players.
This is often true. When economic prospects are not bright enough,
people have a guarded confidence and are more cautious. Their memories of the
1997/98 financial crisis and the effects of the financial turmoil in 2009, are
still fresh in their minds. Hence the calling and pressure for not conceding in
our offer in the TPPA negotiations appear quite understandable.
If this is the case, how can we become more competitive and rise
to higher positions in the years to come, when those nations at the top of the
tally are already more liberal and technologically far superior?
Looking at the statistics, there are still a few avenues where we
can enhance our competitiveness.
FIRST is in the area of productivity and efficiency. We should be
able to raise output for the same amount of input or same output for lesser
amount of input. We must also reduce wastages and inefficiencies around us.
SECONDLY, our human capital is another area which can help
contribute to raising our nation's competitiveness. This can be achieved by the
readiness of our workforce to absorb higher skills and new technologies
allowing us to deepen our technological capability and push forward our
production capability frontier. Our reliance on low-skilled foreign workers
could have delayed our march to high-technology production.
Equally pertinent, our human capital and entrepreneurship should
attach greater importance to research and development (R&D), and creativity
and innovation, so as to generate large amount of intellectual property and
assets which in turn create value on shore.
THIRDLY, still on human capital, we should not be only concerned
with just absorbing new skills, but more importantly, we need to have the right
frame of mind that will facilitate our long-term economic and social
transformation.
Our social values must change to help that transformation process.
Thus we must strive hard to weed out all negative things in society, such as
drug addiction, the loafing culture (merempet), and too much politicking.
Instead we have to work for greater creativity and innovation
which demand greater endurance, patience, and perseverance as well as having a
good system of rewards and punishment, which incentivise us to observe and
emulate such qualities.
There is no more important and critical factor than the role of
effective leadership among and within us, who can initiate an all-round change
in social values and mental make-up by the society. We may need another mental
revolution, so to speak, as the challenges are many. Hence having right
economic incentives alone may not be enough.
Moving forward, these are demanded by our Rukun Negara and our New
Economic Model which call for substantive, rather than cosmetic, changes in all
aspects of our life.
The enhancement of the role of human capital, strengthening of our
social and moral fabric and values, greater commitment towards national unity,
as well as to democratic institutions, are some of the social changes we need
to bring about and sustain if we are to be strong and economically competitive.
These are the foundations for long-term economic growth and social stability.
Thus attaining improvements in the position of competitiveness,
while quite laudable, is just the beginning. We have to strengthen the
foundations of our economic, political and social institutions, and values
which are fundamental to long-term survival.
This is the expectation demanded of our leaders who have been
elected to manage the affairs of the country. I think this is what
transformational leadership is all about.
