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Showing posts with label GDP. Show all posts
Showing posts with label GDP. Show all posts

Saturday, August 26, 2023

Reversing declining R&D investments

 


SIX decades ago, Malaysia was richer than South Korea and Taiwan.

But today, the country is behind these two technology superpowers and is still trying to break out of the middle-income trap.

Taiwan overtook Malaysia’s gross domestic product (GDP) per capita in the mid-70s, and not long after that, South Korea overtook Malaysia in the mid-80s.

A major reason for Malaysia lagging behind Taiwan and South Korea is the failure to invest adequately in research and development (R&D) that ultimately resulted in low local technology creation.

This is reflected in the number of patents granted, as mentioned in the World Intellectual Property Indicators report.

In 2022, a total of 6,876 patents were granted in Malaysia, out of which almost 85% were granted to non-residents.

In contrast, South Korea granted 145,882 patents in 2022. Three out of four patents in that year were granted to residents.

Official figures show that Malaysia’s gross expenditure on R&D (GERD) has been declining in the past several years, even before the Covid-19 pandemic.

In fact, the country’s GERD per GDP dropped to just 0.95% in 2020, which was the lowest since 2010.For comparison, countries like South Korea, the United States and Japan spent 4.81%, 3.45% and 3.26% of their GDP in 2020 for R&D, respectively.

Notably, China’s GERD per GDP stood at 2.4% in 2020, significantly higher than Malaysia despite having an almost similar GDP per capita.

It is noteworthy that Malaysia is well behind its GERD per GDP target of 3.5% by 2030. The intermediate target is 2.5% by 2025, which is just two years’ away.


Science, Technology and Innovation (Mosti) Minister Chang Lih Kang

In a reply to StarBizWeek, Science, Technology and Innovation (Mosti) Minister Chang Lih Kang acknowledges that the gap to achieve the 2030 target is “stark and significant”.

He also adds that there is a funding shortfall of RM40bil to achieve the 2025 target.

“The slump in GERD before 2020 primarily stems from a dwindling contribution from the business sector, which started around 2016.

“While the government has consistently provided substantial R&D funding, it’s imperative for the business and industry sectors to substantially participate.

“After all, these sectors stand to gain the most from R&D innovations, utilising outcomes to enhance products, refine business processes, and overall drive competitive advantage,” says Chang.

Malaysia’s long-delayed ambition to become a high-income nation relies on the country’s ability to effectively spend on R&D efforts in high-potential areas.

Increased R&D efforts that would lead to greater technology adoption in the country are highly necessary, considering that Malaysia is set to become a super-aged country by 2056.

Amid declining fertility rates, more of the country’s workforce must be automated and mechanised to avert any crisis in the future.

Mosti Minister Chang also says that a higher expenditure on R&D serves as a foundational indicator in many global indices like the Global Innovation Index (GII) and the Global Competitiveness Index (GCI).

In the Madani Economy framework unveiled by Prime Minister Datuk Seri Anwar Ibrahim last month, these two indices were mentioned as some of the key performance indicators (KPIs), moving forward.

Anwar envisages Malaysia to be among the top 20 countries in GII by 2025. As for GCI, Malaysia aims to rank in the top 12 within the next 10 years.

It is understandable why Anwar hopes to improve Malaysia’s ranking in such indices.

“These indices are meticulously scrutinised by foreign investors when determining potential investment destinations,” according to Chang.

Spending it right

A similarity between South Korea and Malaysia is the fact that both governments have in the past invested significantly in building local industries, including for R&D efforts.

“Chaebols” or South Korean mega-conglomerates were once small businesses that received generous support from the government since the early 1960s. This has helped to nurture internationally recognised brands such as Samsung and Hyundai.

Similarly, Malaysia has also channelled billions of ringgit into profit-driven entities such as car manufacturer Proton and semiconductor wafer foundry Silterra.

However, unlike in South Korea, these heavy industrialisation projects that were introduced during the administration of Tun Dr Mahathir Mohamad failed to sustain commercially and continued to depend on government handouts.

These two projects have since been privatised. Proton Holdings Bhd made a rebound after China’s Zhejiang Geely Holding emerged in the carmaker with a 49.1% stake.

Meanwhile, Silterra was sold to Dagang NeXchange Bhd (Dnex) and Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Centre (Limited Partnership) – also known as CGP Fund.

Dnex holds a 60% stake in Silterra, while CGP Fund owns the remaining 40%.

An analyst explains that the failure of Proton and Silterra was the result of continued government funding in the past, even if the management did not achieve tangible results.

“South Korea was different. You have a set of KPIs outlined along the timeline. If you don’t perform, you won’t get the money,” the analyst says.

Like it or not, the government has a big role to play in stimulating R&D efforts in the market.

The US government, for instance, is a major funder of R&D and is also a major user of the new innovations that may have yet to receive demand from the public.

It is noteworthy that the Internet and the global positioning system (GPS) began as projects under the US Department of Defence.

It is typical of the private sector to innovate and to create new products only when they foresee market opportunities.

With shareholders’ ultimate focus being on profit, the private sector may have its limitations when it comes to risk-taking.

In the case of Malaysia, businesses do not reinvest an adequate amount of their profits into R&D, despite the fact that Malaysian companies retain high operating profits.

In 2022, the gross operating surplus of businesses constituted 67% of GDP, which increased from 62.6% in 2021.

The easy supply of cheap foreign workers, particularly before the pandemic, has further allowed Malaysian companies to avoid R&D and automating a large part of their operations.

Distinguished professor of economics Datuk Rajah Rasiah agrees that the domestic private sector does not invest adequately in R&D.

“As firms move up the technology trajectory towards frontier innovations, they expect strong support from the embedding ecosystem, especially the science, technology, and innovation (STI) infrastructure.

“Although Malaysia did attempt to create the STI infrastructure after 1991, almost all of them (such as Mimos, Science and Technology Parks and the incubators in them as well as the Malaysian Technology Development Corp) were not effectively governed, and hence, they have become white elephants.

“Given the lack of such support and ineffective governance of incentives and grants in the selection, monitoring and appraisal of their output, private firms are unconvinced that attempts to upgrade to participate in R&D will materialise,” he says.

Techpreneur Tan Aik Keong also points out that Malaysian companies face fundraising difficulties for R&D purposes, especially small and medium enterprises and unlisted companies.

Tan was recently appointed as a member of the National Digital Economy and Fourth Industrial Revolution Council. He is also the CEO of ACE Market-listed Agmo Holdings Bhd.

“Investors and lenders may hesitate to support R&D initiatives due to the inherent risks and uncertainties associated with these endeavours.

“The lack of a guaranteed correlation between R&D investment and immediate revenue generation can lead to doubts about the return on investment (ROI),” he says.Tan opines that the lack of “proven success stories” whereby R&D investments in Malaysia resulted in significant ROIs contributed to the scepticism.

In addition, he says that companies with no prior experience in R&D investments would find it challenging to start investing heavily in R&D.

“For listed entities, there is relatively more flexibility in terms of fundraising for R&D purposes.

“Capital market instruments such as private placements and rights issues can be leveraged to raise larger sums of funds to support R&D initiatives.

“Fortunately, the availability of matching grants from agencies like Mosti, MDEC, Miti, and MTDC can provide much-needed financial support and incentive for companies to invest in R&D activities,” he says.

Acknowledging the challenges, Mosti Minister Chang says that alternative financing mechanisms are being considered

A notable example is the Malaysia Science Endowment (MSE), which has set an ambitious goal of raising RM2bil.

“MSE is more than an alternative R&D funding for the nation.

“The working model is to utilise its interest, which will be generated from the investment.

“The fund would be optimised further through a matching fund mechanism – bringing quadruple helix stakeholders together to focus on solution-driven R&D and prioritising based on the nation’s needs,” he says.

Mosti, with Akademi Sains Malaysia, is currently actively developing a fund-raising mechanism to establish the MSE.

In addition, Chang says the government will continue to deploy a myriad of fiscal incentives that include tax exemptions and double deductions on R&D expenditures.“The overarching goal is to promote a symbiotic relationship where both the private sector and the government collaborate seamlessly to advance Malaysia’s R&D aspirations,” he says.

Lack of quality researchers?

R&D efforts are not just about investing a large sum of money. They will only yield best results if they are supported by qualified, world-class researchers.

Unfortunately, in the case of Malaysia, brain drain has become a major challenge in pushing for greater R&D.

The ongoing decline in interest among schoolchildren in science, technology, engineering and mathematics (STEM) studies will only worsen the situation in the future.

Agmo’s Tan notes that the declining interest in science subjects among students threatens the availability of skilled researchers, scientists, and engineers needed for a thriving R&D ecosystem.

“The potential for brain drain is a legitimate concern if Malaysia does not foster an environment conducive to R&D growth,” he says.

In 2020, Malaysia saw a decline in the number of researchers per 10,000 labour force at only 31.4 persons, as compared to 74 persons in 2016.

At 31.4 persons, this was the lowest level since 2010.

Rajah says that Malaysia lacks quality R&D researchers, as well as engineers and technicians to support serious R&D participation.

“Malaysia’s researchers and R&D personnel in the labour force fall way below that of Japan, South Korea, Taiwan, Singapore, and China.

“In fact, this is one of the major reasons why national and foreign firms participate little in R&D activities in Malaysia,” he adds.

When asked about the commercialisation of research done by Malaysian universities, Rajah says the commercialisation ratio against grants received in Malaysia is very low.

This is compared to the Silicon Valley and Route 128 in the US, the science parks in Taiwan, and the Vinnova targeted areas in Sweden.

However, Rajah says the blame for the low rate is mistakenly placed on the scientists.

“Most universities in Malaysia focus on scientific publications, which is a major KPI for them. Malaysia does well on scientific publications.

“Mosti and the Higher Education Ministry should make intellectual property (IP) and commercialisation equally important.

“In doing so, the government must tie grants and incentives to link researchers and firms by offering matching grants so that the research undertaken by the scientists are targeted to the pursuit of IPs and monetary returns.

“Firms in this case will ensure that the 1:1 sharing of funds with the government brings returns for them – widely undertaken successfully in Japan, the Netherlands and Taiwan,” he says.

At the same time, Rajah suggests a critical appraisal of previous grants approved to ensure that mistakes are not repeated.

 CLICK TO ENLARGECLICK TO ENLARGE

In further strengthening the country R&D expertise, there are calls to improve universities’ curriculum more holistically.

Technology consultant Mohammad Shahir Shikh said there is a gap and misalignment between industries’ requirements versus theoretical research in new knowledge discovery by the universities.

He calls for greater partnership between universities and the industry, including for improving business operations via the integration of new technologies.

Mohammad Shahir has previously served as an engineer with chipmaker AMD for 11 years.

He raises concerns about the severe shortage of STEM graduates in Malaysia to serve the needs of the industries.

“The country’s target was to have 500,000 STEM graduates by 2020, but we now have only 68,000 such graduates.

“Even then, the highest number of unemployed graduates here is from the STEM stream.

“My proposal to the government is to start assisting potential schools and STEM students become familiar with scientific terms in English and improve their communication skills,” he adds.

Mohammad Shahir points out that about 30% of Finland’s workforce consists graduates from the STEM stream.

“This is a priority that needs to be addressed if we want to achieve our national innovation goals,” he says.

National STEM Association president and founder Prof Datuk Dr Noraini Idris laments that only about 15% of form four students take pure science subjects, namely physics, chemistry, biology and additional mathematics.

The percentage has fallen from abogaut 19% back in 2019.

“This is alarming. We need more students to take pure sciences if we want to create more scientists, data analysts and researchers for the future.

Noraini calls for a complete revamp in the national education system, whereby “STEM culture” is fostered among children from a very young age.

“My team and I have proposed the “cradle-to-career” model which instils the interest for STEM from nurseries and preschool to tertiary education.

“It also needs formal and informal support, whereby informal refers to family, peers and community to foster the interest in STEM.

“For this to happen, we need the effort of various ministries and not just the Education Ministry,” she says.

It is high time, according to Noraini, to set up a department for STEM directly under the Prime Minister’s Department to coordinate the joint-efforts across ministries.As the country works towards improving STEM’s acceptance, Agmo’s Tan says Malaysia must put more emphasis on R&D efforts in emerging technologies such as artificial intelligence, blockchain, extended reality and cloud computing, among others.

“We must encourage the establishment of R&D centres by high-tech companies through attractive incentives,” he adds.

Looking ahead, the government has a lot of issues on its plate to address.

To reboot the economy, it is not only about spending more money on R&D.

More importantly, every ringgit invested must be spent efficiently in high-growth research areas that will yield strong ROIs.

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Friday, August 4, 2023

Higher growth projected for 2023

Lee said interest rates may stay elevated for some time and expects Bank Negara to hold the OPR at the current level in 2023 and into 2024.

The commendable first-quarter showing augurs well, says the Socio-economic Research Centre

'STRUCTURAL REFORMS ARE KEY TO SUPPORTING THE ECONOMY AND RINGGIT' - Lee Heng Lee 

KUALA LUMPUR: The combination of declining exports, persistently high core inflation and cautious consumer spending will likely see the economy experiencing a moderation in growth in the second half of the year (2H23).

Despite anticipating a deceleration in economic growth in the upcoming quarters, Socio-economic Research Centre (SERC) has raised its 2023 gross domestic product (GDP) growth projection to 4.5% year-on-year (y-o-y) from 4.1% previously, to reflect the strength in the first-quarter (1Q23) economic growth.

The GDP expanded by 5.6% in 1Q23, exceeding the 4.8% growth achieved in 1Q22, thanks to sustained domestic demand underpinned by strong private expenditure and improvement in labour market conditions.

SERC executive director Lee Heng Guie said the robust consumer spending witnessed last year may not be replicated this year due to the high interest rate environment and more cautious consumer spending.

“The cash stimulus has already been spent and the spending boom, such as the ‘revenge spending’ that we saw post-pandemic, has already faded,” he said during SERC’S media briefing on the quarterly economic tracker for 2Q23.

Lee pointed out that the country’s exports had also started to ease as global demand weakens under the strain of high inflation and interest rates.

For 1H23, exports contracted by 4.5% y-o-y and Lee projects exports to decline by between 5% and 7% for the full year on the back of lower demand.

With these factors at play, SERC expects GDP to grow in a range of between 4% and 5% in 2H23, with consumer demand continuing to be the key growth driver in the remaining months of the year.

He added the elevated base effect in 2H22 will present another challenge to the 2H23 GDP performance.

On the overnight policy rate (OPR), Lee believes the current rate of 3% is at an “accommodative and supportive” level for sustainable economic activity.

He said interest rates may stay elevated for some time and expects Bank Negara to hold the OPR at the current level in 2023 and into 2024.

“Any change to the OPR is dependent on how resilient the economy is and how consumer inflation behaves.

“I think the current level is just right, (as) it will not significantly hurt the people.

“Structural reforms are key to supporting the economy and the ringgit.” Lee Heng Guie

“It is still supporting the economy, but does not overburden businesses and the people. Even though central banks are likely to end their rate hike cycles, it does not necessarily imply that they will reduce rates either,” he explained.

Lee expects most central banks to likely keep interest rates at current levels till inflation, both headline and core, subsides to a “comfortable range”.

In the majority of advanced economies, a comfortable range of inflation is around 2%, Lee observed. Although headline inflation has eased in Malaysia, Lee stressed the battle against inflation has not been won.

“This is because subsidy rationalisation is still on the table of the government. The government needs to address that following the state elections to control the budget deficit,” Lee noted.

Given the volatility in crude oil prices, Lee said the current oil subsidy scheme was fiscally unsustainable and would further contribute to deficits.

He added the ringgit had strengthened against the currencies of Japan, China, Australia, Taiwan and India since the US Federal Reserve’s (Fed) first federal fund rate hike in March last year.

However, against the greenback, the local unit is among a basket of currencies that have experienced a significant weakening after having declined by about 7.4% since the start of the rate hike cycle.

“Structural reforms are key to supporting the economy and the ringgit,” Lee stressed.

He said the proposed progressive wage model (PWM) plan, which is currently under consideration by the government, is a right step towards a productivity-linked wage system which will foster competitiveness by forging a stronger correlation between wages and productivity.

Lee, however, contends that a more comprehensive and practical analysis should be undertaken on the plan by a tripartite body, which includes representatives from the government, employers and employees.

This is due to the presence of valid concerns and areas of uncertainty within the proposal, such as whether the PWM would be extended to foreign workers and specific sectors.

In keeping the economy resilient, Lee emphasised on the importance of private investment.

He reiterated that private investment not only helped stimulate economic growth, but also generated jobs and thus benefiting both the community and the nation as a whole.

Speaking on the US economy, Lee believes that it is still resilient, citing the strength of its labour market and wage growth as indications. However, he said consumer spending remained robust and asserts inflationary pressure.

“In the United States, headline inflation has not reached the targeted 2% level, while core inflation remains sticky.

“This is something the Fed would be observing. If there is risk of inflation resurgence, it may still continue to increase rates,” Lee said.

Globally, Lee pointed out that the purchasing managers’ index for the manufacturing sector has continued its downtrend, sustaining below the 50-point threshold. The services sector, meanwhile, recorded a slight slowdown in its latest figures.

“We are worried the slowdown in the manufacturing sector has broadened and impacted the services sector,” Lee added.

On world trade volume and industrial production, Lee pointed out that both have been moderating, owing to slower demand. “This is why we saw a decline in exports for regional countries, including Malaysia, recently.”

The Star - StarBiz By KIRENNESH NAIR kirennesh@thestar.com.my 3 Aug 2023

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Wednesday, February 1, 2023

China's Rise to Economic Superpower, economy stands out in global arena

China's Rise to Economic Superpower 

World Economy

As the world still grapples with supply-chain backlogs (partially) caused by China’s strict Covid-19 policies, it has become painfully obvious how vulnerable the global economy is to national or even regional disruptions, especially if they happen in China, the world’s number one supplier of goods.

Over the past few decades, China has grown to become the world’s manufacturing hub and largest goods exporter by a significant margin, turning it from emerging market into economic superpower. According to estimates from the IMF’s latest World Economic Outlook, the country will account for 18.8 percent of the world’s GDP based on purchasing power parity (PPP). That’s up from just 8.1 percent two decade ago, when both the United States and the EU were miles ahead of China’s economic output.

Over the past 20 years, both the U.S. and the European Union have seen their economic superiority challenged, as new powers, such as China, India and others have emerged. While the U.S. saw its share of global GDP decline from 19.8 to 15.8 percent between 2002 and 2022, the EU’s share dropped from 19.9 to 14.8 percent of the same period.

The gap between China, the U.S. and the EU will likely widen over the next few years, as the economic outlook for the latter two is cloudy with a chance of recession, while China is expected to continue growing at mid-single-digit growth rates.

By Felix Richter 

Felix Richter
Data Journalist
felix.richter@statista.com +49 (40) 284 841 557

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China’s economy stands out in global arena 

 

Steady trade: Workers use computer terminals to monitor remote operations at a container port in Tianjin. China has now become a major trading partner for more than 140 countries and regions, with its total trade of goods up 7.7% y-o-y in 2022, topping the world for six consecutive years. — AP 

 Annual average growth of 4.5% between 2020 and 2022, outpacing the world average of around 2%

BEIJING: In its three-year-long fight against Covid-19, China posted outstanding results in economic development and epidemic control, reinforcing its status as a leading engine for the global economy.

From 2020 to 2022, China’s economy posted an annual average growth of 4.5%, outpacing the world average of around 2%, according to Yuan Da, director of the Department of National Economy of the National Development and Reform Commission.

In 2022, the economy grew 3% year-on-year (y-o-y) to a record high of 121 trillion yuan (US$18 trillion or RM76.3 trillion), with the increment standing at 6.1 trillion yuan (RM3.8 trillion), equivalent to the economic aggregate of a medium-sized country.

It also marks a new and higher level in terms of economic aggregate after the Chinese economy topped the thresholds of 100 trillion yuan (RM62.5 trillion) and 110 trillion yuan (RM68.8 trillion) in 2020 and 2021, respectively – maintaining its position well as the world’s second-largest economy.

Analysts attributed the hard-won results to the country’s effective coordination in fighting Covid-19 and its economic fallouts simultaneously.

Thanks to effective virus control and timely pro-growth policies, China’s economy has quickly emerged from the epidemic-induced slump and consolidated its recovery momentum for a brighter outlook.

To cope with the constantly evolving epidemic situation, China has been dynamically optimising its control measures while enhancing the treatment and vaccination capacity, effectively safeguarding the lives and health of its 1.4 billion population at minimum costs.As of Jan 13, 92.9% of the Chinese population has been fully vaccinated, with more than 90% of people above 60 covered by vaccination.

With Omicron much less pathogenic and deadly, China, in December last year, announced ten new measures to lift numerous Covid-19 restrictions. On Jan 8, its management of Covid-19 was officially downgraded from Class A to Class B.

Less than one month after the optimisation of Covid-19 response measures in December 2022, China reported declining numbers of fever patients and critical Covid-19 cases as both had passed the peak. In the just-concluded Spring Festival holiday, China’s consumption made a strong comeback.

During the week-long holiday, sales revenue of China’s consumption-related sectors rose 12.2% from the same holiday period in 2022. Its cinemas sold 129 million tickets, generating a whopping revenue of 6.76 billion yuan (RM4.2bil), the second highest-grossing to date.

Wen Bin, the chief economist with China Minsheng Bank, said that warming demand at home would propel the turnaround in the Chinese economy this year and estimated the country’s full-year gross domestic product growth at around 5.5%.

Aside from the overall economic growth, China also made significant headway in maintaining consumer price stability, guaranteeing food and energy security, and improving people’s livelihoods.

In 2022, China’s consumer price index grew by 2%, a fraction of the increases reported in the United States, the eurozone and Britain. It is also lower than those of other emerging economies.

Amid a global food crisis, the country has secured a bumper harvest for the 19th year in a row, with its grain output at about 686.53 billion kg in 2022, up 0.5% from 2021.

A total of 11.86 million, 12.69 million, and 12.06 million new urban jobs were created in 2020, 2021, and 2022, respectively, all surpassing the targets set for each year.

Despite the gloomy global investment environment, China remains one of the most attractive investment destinations in the world.

Foreign direct investment in the Chinese mainland, in actual use, expanded 6.3% y-o-y to 1.23 trillion yuan (RM768.8bil) in 2022.

China has now become a major trading partner for more than 140 countries and regions, with its total trade of goods up 7.7% y-o-y in 2022, topping the world for six consecutive years.

Recently, multiple international investment banks and financial institutions, including Morgan Stanley, Goldman Sachs, HSBC, Barclays, and Natixis, have upwardly revised their forecast for China’s economic growth rate in 2023, betting on the country’s rosy prospects and strong resilience. — Xinhua

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Saturday, August 21, 2021

The economics of politics: Malaysia's leaders should put the people's interests before their own !

 


THE Sengoku period (also known as the “Warring States period”) of Japan from 1467 to 1615 is a period of great turbulence and unrest due to endless civil war and social upheaval.

` It came about as a result of a political vacuum when the Ashikaga Shogunate collapsed. Advancement of technology during this period also contributed to new warfare. Europeans arriving at the shores of Japan in 1543 introduced the “arquebus”, a type of long gun of its time. It was the same weaponry used by the Portuguese when they invaded the Sultanate of Malacca in 1511.

` I find this period of Japanese history especially fascinating, as this is where samurai warlords such as Oda Nobunaga, Toyotomi Hideyoshi and Tokugawa Ieyasu rose to prominence. Nobunaga was the leading figure and is recognised as one of the “Three Great Unifiers” of Japan. Coming from a relatively small, Oda clan, he became the most powerful Daimyo (feudal lord) of his time. Due to his adoption of “arquebus” and prowess in war, he was a potent force fighting towards a unification of all of Japan.

` He was succeeded by Hideyoshi, after being forced to commit seppuku in Kyoto when a retainer samurai general, Akechi Mitsushide, launched a coup. Hideyoshi was Nobunaga’s loyal general who rose through the ranks from a foot soldier. He completed Nobunaga’s unification agenda from the existing foundation laid and became the de facto leader of his time.

` Sadly, blinded by his political ambition to expand territories beyond Japan, he launched an ill-fated Korean invasion which damaged Japan’s own domestic economy due to prolonged military stalemate.

` After his death, his five-year-old son, Toyotami Hideyori, succeeded him under the guidance of a Council of Five Regents. It wasn’t until 17 years later before the conflict between Toyotami loyalist supporting Hideyori as a rightful ruler of Japan and Ieyasu, the regent and most influential Daimyo then, imploded leading to the Battle of Sekigahara. Ieyasu won and it ushered 250 years of peace and economic growth known as the Edo Period (Tokugawa Era).

` As our country is in the midst of a second major political impasse after only 18 months and looking to have its third government in three years, this raises the issue of the cost of politics towards our country’s economy and its overall wellbeing.

` Looking back, the Sengoku period was a time of political turmoil where espionage, betrayals and revenge were ordinary course of daily business. It is no different from modern politics today minus the bloodshed. The whole cloak-and-dagger operations beneath the glamorous guise of democracy today hinges on personal interests over the greater good of the people. Hence, almost always the people end up paying the greatest price in the economics of politics.

` The current geopolitical issue in Afghanistan is a clear testament of the cost of politics and poor foreign policy of the United States. After spending US$1 trillion (RM4.2 trillion) of taxpayers’ money, sacrificing 2,448 Americans lives with 20,722 more wounded over 20 years, the longest spanning foreign war in the US’ history is officially drawing to a close. However, at what cost?

` The withdrawal of troops has a left a vacuum in Afghanistan where the “elected” government was overran by armed Taliban. Even president Ashraf Ghani fled the country with cars and choppers filled with cash. The innocent citizens of Afghanistan are left to fend for themselves, while those deemed pro-American are fearing for their lives. Innocent people of both countries paid the ultimate price for US disastrous foreign policy which benefited nobody except weapons manufacturers, arms dealers, pro-war politicians and lobbyist. This is the real cost of politics on full display.

` Of course, there are economics positives that comes out from politics too. After all, politicians plays the role of lawmakers of a country and policies crafted will have direct consequences on the economics of a nation (refer to China’s GDP Growth chart below).

` Deng Xiaoping, the de facto paramount leader of China inherited a country when it was suffering from poverty and ill effects of policies such as the “Great Leap Forward” and “Cultural Revolution” implemented during Mao-era. He instituted a series of reforms including the most crucial “Opening Up of China” (Gai Ge Kai Fang) which pivoted China from a planned economy to a socialist market economy (also known as socialist capitalism).

` I remembered asking my economics professor in LSE years ago, “who is your favourite economist of all time?” Without hesitation, he said “Deng Xiaoping. This man may be small in size but he is enormous in stature. He is great because he had the vision to institute economic reforms steering from old ways for the world’s most populous nation. By doing so, he saved countless of lives.”

` Relating to the current political predicament in our country, I realised how Deng Xiaoping was not your ordinary politician. Unknown to many, he did not actually hold official leadership position in Government or the Chinese Communist Party when he was instituting reforms. Yet, his policies from 1978 onwards laid the foundation for what would make China the second largest economy and superpower of the world today. He is a statesman without honorifics, position and title.

` China’s GDP Growth Chart in above

` Economics and politics always go hand in hand. Both cannot be looked at in isolation. While there are many negative economic indicators for our country at present such as Fitch Solution’s latest 2021 GDP growth forecast downgrade to zero or other rankings which point towards our country’s rapid decline in comparison to regional peers, one should not despair and be overly pessimistic.

` Our country was a beacon of democracy in South East Asia when there was a peaceful transfer of power in 2018 from a regime that ruled for 61 years since Merdeka. Of course, today’s political quandary exposes the flaws within the system but fail safes can be implemented if the leaders are willing to put the people’s interests before their own.

` Japan did not get to where they are today overnight. It was a civilization that went through the bloody Sengoku period. It also showed us that before an era of peace and prosperity comes along, there will be times of turbulence.

` Rest assure, history has shown as society progresses through education and learning from the mistakes of the past, it will mature. That is my hope for the country.

` Ng Zhu Hann, is the author of Once Upon A Time In Bursa. He is a lawyer & former Chief Strategist of a Fortune 500 Corporation. The views expressed here are his own.

Hann Ng - Managing Partner - Hann Partnership | LinkedIn

NG ZHU HANN

 

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Wednesday, August 11, 2021

Eight ‘No.1’ titles the US deserves

 

Illustration: Liu Rui/GTbr />

 The final day of the Tokyo Olympic Games saw the US secure three gold medals. With this, it passed China to come to the top of the medal table.

` I can sense how much the US media were waiting to see whether Team USA could top Final Medal Account. When China was leading the medal table with the most gold medals, US media outlets tended to count total medals to place America at "No.1."

` I just want to say, the fact that the US has won the most gold medals is acceptable to most Chinese. It is an anticipated result. For Chinese, it would have been very abnormal if America failed to top the gold medal tally.

` As a matter of fact, many Americans are more concerned with the "No.1 position" than their Chinese counterparts. This is also an important psychological reason why the US in recent years has continuously suppressed China's rise with the fear of being surpassed by China.

` The US now ranks first in the world in terms of GDP, military expenditure and financial strength. No powers can shake the US "No.1 position" in the near future. The loss of this top position is more likely to be caused by the US' own mistakes. For instance, the US has the highest percentage of GDP spent on healthcare, and it is supposed to have the best anti-pandemic performance of the world. Regrettably, the US is witnessing the highest levels of COVID-19 infections and death tolls -far ahead of other countries and regions. What's more ridiculous is this: Some US media outlets have racked their brains to make the US "No.1" in anti-pandemic ranking.

` Such obsession with "No.1" goes against facts and human ethics. If the US really cares about the "No.1" position, I suggest it mind more about the following eight "No.1" titles it deserves.

` The world's No.1 failed country in the COVID-19 fight. Over one and a half years, more than 35.8 million people have been infected and more than 617,000 have died from the virus in the US. As American physician and epidemiologist William Foege said in October 2020, "It is a slaughter." Indeed, the COVID-19 death toll in the US is higher than the sum of all soldiers died in the WWI, the WWII, the Korean War, the Vietnam War and the Iraq War.

` The world's No.1 country that passes the political buck to others. Former US president Donald Trump once passed the buck to the Democratic Party, while President Joe Biden has now blamed the Republican Party for the US' anti-epidemic failure. The US government has also passed the blame to the WHO, China, the COVID-19 vaccine, and even top US scientist Dr Anthony Fauci. Even with so many deaths, no US politician has ever stood up to apologize. no US politician has resigned. No one will hold themselves accountable.

` The world's No.1 country in spreading the COVID-19. Since April 2020 to March 2021, the US government did not take any effective exit control measures and a total of some 23 million people went abroad. The US has an inescapable responsibility for the global spread of the pandemic.

` The world's No.1 politically divided country. In fact, bipartisan disputes have been everywhere on almost all anti-epidemic issues among the US departments and media: nucleic acid testing, wearing facial masks, social distancing, home quarantine, vaccination, medical strategic reserve allocation, and emergency relief fund and so on.

` The world's No.1 country in terms of over-issuing currency. Since the COVID-19 outbreak, the US has chosen to save the stock market instead of people's lives. The US Federal Reserve has adopted unconventional monetary measures.

` The world's No.1 turbulent country during the COVID-19 pandemic. The epidemic has intensified racial tensions in the US, and George Floyd's death is just the tip of the iceberg: Discrimination and hate crimes against black, Asian, and Latin American people have significantly increased; Gun sales in the country jumped 64 percent in 2020; Mass shootings have taken place more often. In 2021, there was even a riot and violent attack against the Capitol. This is very rare in US history since the founding of the country.

` The world's No.1 country in spreading disinformation. What's really going on with the Fort Detrick closure? What are the real results of the vaping-related lung disease? Can the more than 200 US military biological laboratories located around the world be subject to international investigations? The US government has never faced up and responded to these questions. Instead, Donald Trump's tweets had become the biggest source of disinformation about the COVID-19.

` The world's No.1 country in practicing "origins-tracing terrorism." Biden has requested US intelligence agencies to take charge of the investigation of the novel coronavirus origins. Meanwhile, US Secretary of State Antony Blinken and National Security Advisor Jake Sullivan have made a series of irresponsible statements on the virus origins tracing. All of these have created international strife for no reason. They have worsened the already deteriorating China-US relations and fueled the strategic competition between the two countries. This has also harmed the global fight against the pandemic.

` "Crowning" the US with these "No.1" titles is in no way intended to start a war of words with the US media. It is rather a reminder to Washington of their responsibilities. If the US really wants to be a real "No.1" in the world and remain a respectable country, then self-reflection, national unity, and international cooperation are the true paths to the top championship spot.

` By Wang Wen - The author is professor and executive dean of Chongyang Institute for Financial Studies at Renmin University of China. opinion@globaltimes.com.cn

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Tuesday, November 10, 2020

Amid headwinds, China charts a technology-focused future

 

LAST Friday, the Finance Minister tabled what is now known as Malaysia’s largest-ever budget.

The excellently-crafted and well-written budget was presented in a couple of hours and after it was presented, the social media, mainstream media, economists, consulting firms and investment banking strategists gave their views on the measures, especially those related to taxes, incentives or grants.

Now that Budget 2021 has been tabled, lawmakers will debate on the merits and vote on it. Having covered budgets for more than two decades, the devil is in the details and this year is not an exception.

Let’s look at the gross domestic product (GDP) estimate first. The government expects GDP growth for 2020 to contract by 4.5% and for next year, it is estimated to grow by between 6.5% and 7.5% in real terms. For the economy to close the year with the projected contraction, the second half of 2020 has a very small room to contract by only 0.7% as the economy shrank 8.3% in the first half.

This is a tall order as economic data remains largely weak as seen in several indicators, which include the industrial production index as well as the poor reading in the retail sub-segment.

With almost the entire nation under the conditional movement control order, economic growth, if any, will be challenging.

Meanwhile, in nominal terms, the government expects GDP growth to be -4.7% this year and to rise significantly by almost 9% in 2021, as inflation is expected to return with a reading of 2.5%, mainly due to the low base effect from 2020.

Perhaps when the Bank Negara releases the third quarter GDP data on Friday, we can then assess if the full year GDP assumption still holds water or otherwise.

For 2021, the government expects GDP growth to be driven by domestic demand, in particular growth from private consumption while the external sector may post some drag as imports are forecast to grow even faster than exports.

On the supply side, the government expects the services and manufacturing sectors, which account for 80% of the economy, to grow by 7% each while construction is expected to bounce back with a near 14% leap in 2021 after the forecast drop of 18.7% this year. From here, we can observe that one of the key drivers of the economy next year is public investment, as the government has bumped up development expenditure to the tune of RM69bil for 2021 from the adjusted figure of RM50bil this year (which was previously forecast to be at RM56bil).

The government’s total expenditure is now broken into three main buckets – other than operating expenditure and development expenditure, we now have a new line item called the Covid-19 Fund with an allocation of RM38bil this year and RM17bil next year.

In essence, since the pandemic outbreak, the government has introduced various economic stimulus packages under its Prihatin package series and the Penjana package, which in total amounted to RM305bil, while the actual direct fiscal injection totaled RM55bil.

However, under the Temporary Measures for Government Financing (Coronavirus Disease 2019) Act, the Parliament had only approved a ceiling of RM45bil for the fund and hence the Minister has proposed, taking into consideration the nation’s need up to 2022, an amendment that will be tabled to raise the fund to RM65bil, an increase of RM20bil.

This increase that was mentioned in the budget speech is meant for the RM10bil Kita Prihatin package, additional assistance for people’s well-being, as well as to secure the supply of the much-needed vaccine. The table above summarises the government’s revenue projection for this year and the next.

The expected revenue for the second half of the year and into 2021 will be challenging for the government, given the level it had achieved in the first half. As it is, the second half forecast is 23.3% higher than the first half.

In addition, for 2021, revenue and expenditure are expected to increase by 4.2% and 4.3% respectively, which will likely be tough given the tax breaks that the government is proposing, in particular, company income tax (CITA) and personal direct taxes.

Based on government’s estimate, taxes from the two sources are expected to fall by 6.8% and 7.2% this year but will bounce back strongly in 2021 with a growth of 8.8% and 18.2% respectively.Interestingly, the 2021 forecast for CITA and personal direct taxes at RM64.6bil and RM42.4bil is higher than 2019’s figure by 1.3% and 9.7% respectively.

As for expenditure, as total federal government debt stood at RM874.3bil mark or 60.7% of GDP as at end of September 2020, the government’s Debt Service Charges (DSC) too have deteriorated.

From an estimated level of 15.4% of GDP this year, DSC is expected to drop further to 16.5% in 2021, mainly driven by 11.6% increase in absolute DSC to RM39bil.

Although both the DSC ratio in 2020 and 2021 will be higher than the self-imposed fiscal limit ratio of 15%, it is hoped that by beyond 2021, this ratio will be brought under control when the economy is expected to expand further.

All in, Budget 2021 measures are holistic and inclusive for all levels of society and have been cleverly crafted to address the challenges faced by Malaysians, especially those severely impacted by Covid-19.The government has largely listened to the voices of hope in addressing the pandemic world.

Having said that, the expected government’s revenue and GDP projections are rather optimistic, resulting in a much lower budget deficit figure while the forecast government tax revenues too are on the high side. While the DSC has now surpassed the self-imposed ceiling, the government’s debt to GDP ratio is expected to remain elevated for at least this year and in 2021.It is important for the lawmakers to approve this budget as the government has taken steps in keeping the economy going.

While there are some shortcomings in the terms of budget allocations, it is hoped that this can be ironed out during the parliamentary debate stage and all lawmakers come to an consensus to approve the gigantic budget.

Pankaj C. Kumar is a long-time investment analyst. Views expressed here are his own. 

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The FM really got SHOCKED when LGE asked him whether the budget was approved by the cabinet. Watch the video.


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Sunday, January 5, 2020

Time for real change for Malaysian education as glory stuck in the past and the delusion of Vision 2020

New decade, new Malaysian education: For the sake of our children and our future, Mazlee’s replacement should be a qualified and capable Malaysian – irrespective of race or religion.

Dr Maszlee forced to resign for failing to heed Cabinet orders

We need a new Education Minister with the right qualifications, a scientific mindset and a technocratic iron will to implement the critical changes.


I HAVE been a big critic of and objector to Maszlee Malik as Education Minister from day one.

I took no pleasure in it then nor do I take pleasure in it now. It just is. The wrong person must go and the right person must come in.

Education is far too important for a nation to be entrusted to those not competent in moulding the minds of our most precious resource, our youth. Education is where we develop this resource for either the success or the failure of our nation.

We do not have to look far to see success. A country with no natural resources, with a tenth of our population, can be a developed nation by sheer power of its human resources.

In 1965, Malaysia and Singapore went separate ways in more ways than one. Look at where they are and look where we are now. The lessons to be learned are abundant. Have the humility to know when we are wrong and they have been right all along. There is no need to look East. Look South.

“A nation is great not by its size alone. It is the will, the cohesion, the stamina, the discipline of its people and the quality of its leaders which ensure it an honourable place in history, ” said its architect, Lee Kuan Yew in 1963.

The education ministership is the leader in ensuring that our children and our youths are able to take the nation to the next level. It is just not at the very top have we got it wrong, again and again. We must have the humility to admit when we are wrong and have been wrong for more than 30 years. We must have the decency, discipline and courage to want to change so our future can be assured.

What did Singapore do right in education? When one looks at massive differences in results, one need not look at many things. One need only look at the fundamental deviation at the root.

One: Singaporean education is in English.

Despite more than 76% of its population being ethnic Chinese, the medium of instruction for its public schools is English. Have you ever heard the Singaporean government or its leaders talk about “memartabatkan” (to give dignity to) the Mandarin language? They have no time for such foolish ethnic pride.

They may find ways to conserve Chinese heritage but they have no interest or inclination to play to racial sentiments that would sacrifice the very essence that will ensure their children have the easiest access to the widest and latest conservatory of human knowledge since the late 19th century.

As such, accessibility of critical knowledge for their children and subsequent generations are assured from young and is continuous throughout their lives. It is so easy to do for those who have the best interest at heart and yet so difficult to do for those with foolish pride and Machiavellian political ambitions.

No mandatory Chinese calligraphy is needed to ensure Chinese heritage continues. No shouting of slogans of Ketuanan Cina and its preservation. That is confidence in your own ability to shape destiny. To hell with all that. Learn in English.

Two: Their education is secular. Because that is the essence of education

One of the greatest physicists and teachers of the 20th century, the late Nobel Prize winner Richard Feynman, famously said, “I would rather have questions that can’t be answered than answers that can’t be questioned.”

That, ladies and gentlemen, is what makes an education.

Singapore does not impose belief on its citizens. And that starts in education. Question everything and everyone. Anything that cannot be questioned has no place in the classroom of public education. That is called indoctrination.

You want to indoctrinate your children that the sky is filled with butterflies and angels in the morning, go ahead, but not on our time or our dime.

It is abhorrent the amount of taxpayers money and children’s time that have been wasted on indoctrination of belief. Indoctrination stops you from thinking, it is the complete acceptance of belief.

As Einstein said, “Education is not the learning of facts, but the training of the mind to think”. Religion is not about thinking, its about accepting.

Religion – any religious indoctrination – has no place in public education. You do not find that in Singapore and you do not find that in any other developed nation. If you want to include religion in public education, do it as part of comparative religion in the social sciences context. Otherwise it is indoctrination. It is useless as education.

Belief, religion and its indoctrination must be the domain of parents, if they so choose, and not government. Otherwise the result is imposition, persecution and finally tyranny of belief upon the citizenry. And no nation will survive such tyranny.

There is a reason great men of history have warned us against such wanton imposition of religious beliefs and indoctrination of the masses. Thomas Jefferson once said, “In every country and every age, the priest had been hostile to liberty.”

We need to heed this warning.

Three: One word – Science.

I have said this again and again. Science is the salvation of a nation, especially today in the 21st century.

The triumph of human civilisation is the triumph of science. The ascendancy of humankind, each empire, each nation and people has been through their grasp of the “science” of their time and its application in their minds and lives.

Our education must be science-centric. No ifs or buts. There must be more basic science taught, learned, experimented with and exposed to our children from the day they start school until they leave it. In depth and breadth and in the number of hours spent on it. We must have truly competent and passionate teachers to carry out this duty.

Even as a lawyer, I have learned that the human mind and senses are limited. Nothing fools humans more than their minds and their own senses.

In just the last decade, more convictions of innocents due to so-called eye-witness testimonies, even multiple ones, have been overturned as a result of DNA evidence to the contrary. Why? Science has proven that human senses and minds can be easily fooled, especially by emotion and herd mentality. But science is objective, evidentiary knowledge.

We need to build a science-centric society and that starts with our primary and secondary education. From the beginning, Lee realised the importance of establishing Singapore as a leader in the field of science and technology in Asia. He did not care what your ethnicity or religion was, that was the priority. And look at the society he built. Modern in outlook and progressive in thought, to the point he could no longer really control the people.

Maybe that is what our leaders are afraid of. A questioning, educated, critical thinking masses.

We must halt this downward slide of epic proportions in Malaysian education.

A new education minister with the right qualifications, a scientific or science-centric mindset and a technocratic iron will to implement critical changes must be appointed. Nothing less can be acceptable to Malaysians. This must be our demand.

I believe the next appointment will be a critical test whether this Pakatan government is worthy of our consideration in the next elections or an alternative must be considered and pursued vigorously by the right-minded citizenry.

We need the new education minister to implement what is needed. Go back to the basics and have the will, courage and ingenuity to make tough changes against what I expect to be conservative political opposition, both racial and religious.

If the person is more interested in putting colleagues in religious brotherhoods ahead of qualified intellectual professionals in positions of authority in education, then we are all doomed.

If the person is more interested in telling and allowing teachers to carry on dakwah (Islamic preaching) instead of closing down separate canteens in schools, then our quagmire will continue.

Black shoes and hotel swimming pools. That is the legacy we have been left with.

We need to see the closing down of worthless tax-payer funded universities that carry the word science but are based on beliefs and scriptures. They make a mockery of our nation and society. They promote the dumbing down of our population and produce graduates that will have nothing to contribute but further destruction of the Malaysian civilisation. We need a shake down of epic proportions for Malaysian education to return it to its past glory and make future progress.

As such, unlike a certain racist and bigoted MP from PAS, who insists on a Malay Muslim candidate only for the post, we need a minister who is qualified, irrespective of race or religion. We just need a Malaysian who is capable, for the sake of our children and our future.

We need an education minister who understands what is essential education. It is not rocket science.

But like all things in Malaysian politics, I have stopped believing in the capabilities or integrity of most of our politicians and political leadership. How I hope that I am proven wrong.

I close with this quote from Carl Sagan, one of the foremost teachers of science: “We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.”

That could very well describe our Malaysian education system and administration.

But 2020 has arrived, so it’s time for real change to happen.

Activist lawyer Siti Kasim is the founder of the Malaysian Action for Justice and Unity Foundation (Maju). The views expressed here are solely her own.

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Comment: Tough times for Chinese education


A glimpse of glory 

 We once had a vision of a future, but now that it’s here, we still seem stuck in the past.

Cutting edge: Schools in China have begun to emphasise the teaching of coding, robotics and AI in the great push to produce the best engineers and digital experts. — AFP

WE are already into 2020 and it’s the dawn of a new decade. But if we buy into the endless narrative of race and religion, it’s as if we haven’t moved.

Six decades after Malaysia’s independence, and we are still trapped in this blinding obsession with ethnicity, which has done nothing but consume so much of our time and energy.

When rationale flies out the window, and reasoning fails, some politicians and self-declared communal champions resort to bigotry ways.

And of course, the most unscrupulous sometimes tell our citizens they should leave the country if they are unhappy, although incredulously, some of these characters conveniently overlook how their forefathers came to Malaya nearly the same time as the rest.

If Malaysia is caught in the middle income trap now, with our inability to reach a higher level of income, that’s down to not having changed in how we’ve functioned economically for the past 40-odd years.

The middle-income trap concept refers to the transition of low income to a middle income economy.

We have failed to achieve the Vision 2020 objective of becoming a developed nation, and the architect of that plan, Tun Dr Mahathir Mohamad, has blamed his successors for the failure.

Now, the Pakatan Harapan government – also led by Dr Mahathir – has unveiled the Shared Prosperity Plan for 2035. It remains to be seen if we will reach that goal, either.

But at the rate we are moving, it’s hard to ignore how the voice of hope has somehow hushed.

In fact, Vision 2020 set off bigger expectations and optimism, but now there seems to be a lack of purpose and leadership.

If Malaysia is facing a middle income trap, then we are also snagged in a political status snare because we are heading nowhere as a nation, as we recklessly hand racial and religious hardliners the wheel of the nation.

Unelected religious activists seem to be speaking more boldly than many elected representatives, who seem content to let these fringe personalities hog the headlines.

In the digital age, the decibel level has been cranked in social media, and comments posted by their fans to support these hawks have become more seditious and disturbing.

It’s hard to break free from that gnawing sense that they are allowed to continue because the government fears putting a leash on them.

Our Pakatan Harapan leaders, especially those from Bersatu, seem to lack the will to take on a centrist role, and worse, have attempted to compete with those playing the race and religion cards.

While these political shenanigans may gain domestic mileage, it doesn’t help Malaysia one bit because many see it as part of the inability to get our act together.

They see the vibrance and innovations of Thailand, Vietnam and Indonesia, and want a slice of that pie. But anyone who has been to the cities of these three Asean countries will understand why they are selling their stories much better to investors.

Let’s be blunt – they are telling investors to forget Malaysia as they highlight our continuing basket case political mentality and actions, with its cyclical scripts in tow.

Who can take us seriously if we believe a group of retired communists in wheelchairs can threaten national security over a reunion, which looked more like their farewell dinner?

Even the communists in China and Vietnam – countries which have good diplomatic ties with Malaysia – have embraced capitalism unlike those in other established free markets. The only thing communist is their political structure, that’s all.

And we still hear some small-minded chauvinists calling for the closure of vernacular schools, claiming they are the root to disunity.

The cause of our fragmentation isn’t these schools (which have produced many great talents), but the resident bigots and extremists.

Framed against this backdrop, it has become even more pertinent for those in significant positions of influence to speak up against these tyrants.

In November, Singapore launched its National AI Strategy, with three objectives to ensure it becomes a global hub for developing, test-bedding, deploying and scaling AI solutions, as well as learning how to govern and manage the impact of AI.

Schools in China have begun to emphasise the teaching of coding, robotics and AI in the great push to produce the best engineers and digital experts.

But our school system continues to be weighed down by politics, religion and language.

For just awhile, can we ask ourselves why we have been so preoccupied and emotional over so many superfluous issues that do nothing to propel Malaysia to become a developed nation?

It’s a small world after all, and in 2020, the world has become increasingly inclusive and is culturally more open and dynamic. But if we continue the way we are, we will remain in the lower tiers of national progress.

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Can the world order catch up with the world? 

When will the Western-led global order catch up with the world ...

Vision without execution is delusion

Few countries peer far into the future, but in 1991, Malaysia’s Prime Minister Tun Dr Mahathir Mohamad(filepic) declared Vision or Wawasan 2020. ... Looking back, was it possible to achieve this breathtaking vision? In my humble opinion, definitely. How much of it has Malaysia achieved? The answer depends on who you talk to.
 
The ideal eyesight is 20-20 vision when we can see everything clearly and know exactly where to go.

Given that 2018 and 2019 have been years of great populist upheaval, geopolitical tensions, massive climate change and technology transformations, it is not surprising that our first year of the third decade of the 21st century is masked by the fog of uncertainty.

Few countries peer far into the future, but in 1991, Malaysia’s Prime Minister Tun Dr Mahathir Mohamad declared Vision or Wawasan 2020, “the ultimate objective that we should aim for is a Malaysia that is, by the year 2020, a fully developed country in our own mould, according to the standards that we ourselves set”.

To set a five-year plan is common place; to lay out a vision 30 years to the future was breathtaking in audacity. Dr Mahathir himself laid out nine challenges to achieve by 2020: first, establishing a united Malaysian nation made up of one bangsa (race); second, creating a psychologically liberated, secure and developed Malaysian society; third, fostering and developing a mature democratic society; fourth, establishing a fully moral and ethical society; fifth, establishing a matured liberal and tolerant society; sixth, establishing a scientific and progressive society; seventh, establishing a fully caring society; eighth, ensuring an economically just society, in which there is a fair and equitable distribution of the wealth of the nation; and ninth, establishing a prosperous society with an economy that is fully competitive, dynamic, robust and resilient.

Looking back, was it possible to achieve this breathtaking vision? In my humble opinion, definitely. How much of it has Malaysia achieved? The answer depends on who you talk to. On the issue of advanced country status, Malaysia is one class below in the upper middle income bracket with a gross national income (GNI) range of US$3,996 to US$12,375 per year. High-income economies are defined by the World Bank as those with a GNI per capita of US$12,376 or more. The IMF estimates Malaysia’s 2019 GNI per capita at US$11,140, pretty near the top end of the upper middle-income range, so it is certainly within striking distance. Indeed, if the exchange rate goes back to roughly RM3.80 to US$1, Malaysia would attain high income status. On the issue of national competitiveness, Malaysia ranks 27th out of 141 nations surveyed by the WEF Global Competitiveness Index (2019). This is no mean achievement, as her financial markets are ranked 15th.

But with Malaysia’s Gini Coefficient about the same as the United States (41st), social equality is nothing to be proud of, but at least advanced countries have not also achieved fairness in income and wealth that they vaunt.

Malaysia is a country blessed with large natural resources relative to the population, located in the high growth zone of East Asia and an important contributor to the global supply chain. She faces the same difficulties and challenges of most emerging markets in how to position oneself in a global situation that is fraught with new and somewhat daunting problems of geopolitical tension, climate change and massive technology transformation.

As the example of high income, sophisticated Hong Kong economy has shown, no one can take economic freedoms and competitiveness for granted, because politics can change the game almost overnight. What most governments struggle with is how to prepare the population, both the working class and the young, to adapt to the emerging technologies through education and re-skilling.

So it is not surprising in this age of digital divide that the most contentious area of politics is often in education.

Actually, there is not so much a digital divide as a knowledge divide – we are divided by our ignorances of each other and our inability to appreciate that what is about to kill or marginalise us is global climate change, conflicts and disruptive technology.

But what separates us from working together is ideology, religion and ultimately identity, turbo-charged by fake news that says the other side is always the bad guy.

In other words, polarisation can be reduced from working together to deal with external threats, but internally recognizing that there are common, shared interests and objectives.

Personally, climate change is the existential threat, whilst there is little that small countries can do about Great Power politics.

But technology is what each country can adopt to deal with climate change and keeping up with competition. Small countries like Singapore, Sweden and Switzerland carry much more clout than their size because of their willingness to invest in technology. The real threat of artificial intelligence and Big Data is that only the few that have scale and willingness to invest in knowledge will be the big winners.

This explains why the US and China have the leading tech platforms, because they not only have scale, speed and scope, but also the focus to work on the AI breakthroughs.

But recognising the threats and opportunities is only half of the Vision thing.

Vision without execution is delusion.

Getting the execution right is then all about politics and the bureaucracy.

Boris Johnson’s election victory on Brexit showed that he had the correct vision that the British were tired of European bureaucracy that stifled their freedom of action.

But whether he can change the British business model means that he has to radically transform a British civil service that has followed EU laws and mindset. This is exactly what Carrie Lam has to do with the Hong Kong civil service that is operating behind the times.

MIT economist Cesar Hidalgo quotes the essence of the modern problem by citing top football coach Josef Guardiola as saying that “the main challenge of coaching a team is not figuring out a game plan but getting that game plan into the heads of the players.”

Any plan or vision must be internalised by the players, because only they can execute the plan in the game that is ever changing and uncertain. In short, no vision in 2020 can work until the political leadership understands that only by internalizing the diversity of the team can the team be a winner or at least not a loser.

Happy 2020.

The views expressed are the writer’s own.

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