Singapore economy was reportedly to have expanded by a whopping 14.7% against Ministry of Trade and Industry’s (MTI) growth forecast of 15%, making the country the fastest-growing economy in the world after Qatar, according to IMF (International Monetary Fund). While Singapore is enjoying vibrant economic growth, its nearest neighbour Malaysia is struggling to keep the economy above 6%, a figure PM Najib Razak keep telling the voters that will transform the country into a developed nation by 2020 – provided the 6% growth continues until 2020.
Malaysia’s 2010 Budget was indeed a colourful event as if the Holy Grail of “High Income Economy” through Najib’s New Economic Model has been found. But there’s a huge hole between the majority low-income group and the aspiration to achieve high income nation which needs to be bridged. As usual, Malaysia’s loss is Singapore’s gain and so Malaysia’s brain drain is Singapore’s brain gain. Although the sinkhole is obvious, Najib’s party namely UMNO was not particularly concern about plugging the hole.
Interestingly UMNO and PAS seem to be embarking on a reverse engineering as far as Islamic is concerned. While PAS is moving towards more liberal and pragmatic approach, UMNO is seen as moving into extreme (Islamic) and racist direction. It was like as if UMNO and PAS has switched places. UMNO may feel insecure especially after the Mar 2008 general election and hence its’ extremist and racist approach hoping to win back the Malay-ethnic votes but such policy also scares not only it’s own citizen but also the foreign investors away.
At the initial stage, short-sighted UMNO may though that it doesn’t need “brains” regardless whether they are Chinese, Malay or Indian simply because it needs only obedient (or rather stupid?) voters to vote them in again and again as if they are in the manufacturing production lines. Suddenly the low-end supply chain of manufacturing has been taken over by China, Vietnam and whatnot. The country was caught in surprise because the brains required to run the high-value chain of economic have all migrated.
Couple with excessive corruption, the nation’s coffer is fast running dry and if not for the oil and gas money in cushioning the expenses, the country would have bankrupt years ago. Nevertheless the country’s coffer is still draining and the only option was to stop all types of subsidies and raise money via taxes such as the soon-to-be implemented GST. How can the country become a high-income nation when the majority of the citizens are still in the low-income bracket made poorer by escalating high cost of living and the top brains are still migrating?
Even if the government of the day goes crazy and suddenly announce everyone’s salary would double, that would not transform the country into a high income nation. If it’s that easy then all the countries in the world would be a fully high income developed countries today, no? The local stock market is heading north and don’t be surprise if it reaches 2,000 points soon, making the 1993-1994 super bull run like a child play. Strangely not many people feel “very rich” as compared to the “abalone and shark’s fin soup for lunch” in 1993-1994.
Nevertheless Najib Razak is easily a better prime minister than Abdullah Badawi in cooking the feel good atmosphere before the next general election speculated to be held this year. With the right amount of money spent (on vote buying and opposition’s candidates), right timing to call the snap election, effective media propaganda and assistance from smart friends from APCO, Najib’s administration may just be able to steal the two-third majority to amend whatever they wish to change after the next general election.
With the monarchy, police, election commission, army, anti-corruption commission, illiterate voters (pardon me) and whatnot behind the current ruling government, something has to be terribly wrong for Najib administration to lose power to the opposition. So yes, the present government will most likely maintain their grip after the next general election, at least at the federal level. When the local companies are busy transferring their funds elsewhere in the pretence of business expansion, don’t think for once foreign investors are naïve enough to flock into the country in a big wave.
Talk to any businessmen particularly the Chinese and they will tell you they can’t do much even if the present government wants 90% of their fortune overnight. When the government sense their days are over, it won’t be corruption anymore but rather day-light robberies. And temporary hot money coming in to enjoy higher interest rate is not equals to foreign investment, mind you.
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