• Economic Reform

    Dear fellow Malaysians, voters, and residents of P102 Serdang,

    I believe that the future of our country’s economy should be focused on value-added services and manufacturing.  Getting us there requires a holistic package of reforms – to restructure monopolies, encourage SME development, reduce the cost of doing business, and upgrade our labour force.

    I believe that one of the biggest impediments faced by the business sector is the scourge of corruption. Not only does corruption increase the cost of doing business, it also redirects economic activity into areas that can be exploited via corruption (e.g. logging, land grabs and government contracts) rather than to more productive and innovative areas of the economy. Corruption encourages rentseeking which discourages innovation, investment and the productive use of economic inputs. Only with a transparent and responsive government, together with an independent and effective anti-corruption agency, can we have any hope of stamping out this scourge.

    Our Malaysian economy is currently distorted by unfair structures and contracts which favor monopolies and oligopolies, many of which are controlled by politically-connected individuals and entities. These arrangements need to be restructured in order to reduce the cost of doing business, as well as to create room for entrepreneurs to flourish through competition and innovation.

    Small and Medium Enterprises (SMEs) are the engine of the nation’s economy in terms of providing jobs, investments and innovation. Their potential can be unleashed by removing unfair monopolies, and reducing the cost of doing business by cutting red-tape and offering targeted incentives.

    I believe that a vibrant business sector that produces high-quality, high-value goods and services is the way forward for Malaysia. This will require skilled, intelligent workers – the exact opposite of our situation today. Our heavy dependence on foreign labor is not sustainable nor is it beneficial to the economy in the long run. At present, wages and skills at the bottom of the economic ladder are artificially depressed by policies which encourage and foster dependence on cheap, unskilled foreign labour. In this respect, I support the Pakatan policy of a RM1,100 minimum wage, as part of a holistic package to move our economy up the value chain.

    In most developed economies, it is possible to find work in the service sector or in a specialized trade – for example, being a waiter or a mechanic – that provides a decent living standard.  That is the Malaysia I look forward to. To achieve this, workers too need to play their part to improve productivity. To accomplish this, our education system must be improved at all levels. My views on education are covered in two separate statements. Broadly, I believe vocational and technical education and training must be encouraged. Vocational and technical education streams must be linked closely with industries via well-structured and rewarding apprenticeship programs. R&D within and between our industries and universities must also be improved in order to increase productivity.

    I believe that government should facilitate rather than being directly involved in economic activity. I believe that the business of government is good governance rather than being in business. The government should step in only where there are market gaps or failures: that is, to create a more level playing field in order to benefit the man-on-the-street and taxpayers, or to supply public goods where needed. For example, in cases of market failure such as where consumers are shortchanged because of lack of information, the government must provide regulation and enforcement. In areas where public goods are under-provided – such as roads and public infrastructure, education, health services, and public housing – the government should conduct dialogues with key stakeholders to determine what and how much it should do, and then deliver its obligations transparently and cost-effectively.

    When we manage the economy well, and make progress towards a more open, democratic, transparent and fair Malaysia, I believe we will enjoy a tidal wave of expertise and capital from Malaysians currently working and living overseas, setting us off on a virtuous cycle of growth and economic and social development.

    Dr. Ong Kian Ming
    Election Strategist, Democratic Action Party
    Parliamentary Candidate for P102 Serdang
    Thursday, 18 April 2013

Leave a reply.