ETP Part 3 (ii) — The hothouse labs probably killed innovation

(Also published on The Malaysian Insider)

The ETP resulted from 12 “labs”. Each lab comprised 30-50 experts who had eight weeks to research best practices and innovations, distil them in intense brainstorming sessions and support them with detailed analysis. The result was 131 Entry-Point Projects (EPPs) across 12 National Key Economic Areas (NKEAs) that would maximise gross national income with minimal public-funding support. Such is the PEMANDU narration.

Truly transformative ideas may have had no chance. Much was made of the private sector participation. But large companies would naturally dominate. Start-up companies, even if invited, cannot afford to release staff for eight weeks. Consider this example: 10 years ago, Microsoft, IBM and HP would have dominated any lab to transform the IT industry. Google was a cash-strapped start-up, Apple was in disarray and Facebook did not even exist. The incumbents would have been free to promote pet projects and stifle their competition.

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ETP: Part 3 (i) — PEMANDU strengthens the ‘know-who’ cancer

(Also published on The Malaysian Insider)

ETP: Part 3 (i) — PEMANDU strengthens the ‘know-who’ cancer
Dr. Ong Kian Ming & Teh Chi-Chang

Very swift progress, but is it due to PEMANDU? In its eight ETP updates so far, PEMANDU has announced multiple new EPPs (Entry-Point Projects) worth billions of ringgit of investment and creating thousands of jobs. One EPP — Johor Premium Outlets (JP Outlets) — is already open. But how much of this rapid execution is due to PEMANDU instead of normal private sector efficiency?

Opportunistic naming of existing projects as EPPs. For example, the JP Outlets and St Regis Hotel projects pre-dated the ETP. Their completion dates were unchanged by their subsequent EPP status, suggesting minimal input by PEMANDU. Naming them as EPPs gives the illusion of quick wins and overstates PEMANDU’s success.

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ETP: Part 2 — We won’t really be twice as rich in 2020

(Also published on The Malaysian Insider)

ETP: Part 2 — We won’t really be twice as rich in 2020
Dr. Ong Kian Ming & Teh Chi-Chang

RM48,000 in 2020 is not real income. The ETP promises to double gross national income (GNI) per capita to RM48,000 by 2020 from RM23,700 in 2009. However, RM48,000 in 2020 will be worth a lot less than RM48,000 today, just like RM100 today buys a lot less than RM100 eight years ago, thanks to ever-rising prices. If Malaysians are really to be twice better off, nominal income must be RM64,000 by then, to compensate for the 2.8 per cent per year inflation that PEMANDU expects.

Nothing transformational in the RM48,000 target.

This target is for nominal income, which includes inflation, and not real income, which strips out inflation. Because of inflation, nominal GNI per capita growth averaged 8.2per cent from 2001-2010, whereas real GNI grew only 3.2%. At the historical average 8.2 per cent per year growth rate, nominal incomes will exceed RM48,000 by 2018 anyway, with or without the ETP or PEMANDU.

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