Y.B. DATO' SERI AHMAD HUSNI BIN MOHAMAD HANADZLAH
POLICIES THAT DELIVER: Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah speaks at the inaugural Treasury Economic Forum 2013 at the Ministry of Finance, Putrajaya, on a new framework for Malaysia’s economic development.
I WAS at the annual World Bank Meeting in Tokyo last October. My fellow Ministers of Finance, a number of whom were from countries I would consider great and mighty, related to me how hard life has been for their people in the last two years.
In a number of European countries, civil service salaries were cut between five per cent and 27 per cent at a time when the inflation rate ranged up to seven per cent to eight per cent, national budgets slashed by double-digit percentages and income and other taxes increased by almost the same quantum. In countries like Greece and Spain more than 26 per cent of its working population is unemployed. In the US, unemployment rate was at 7.9 per cent.
It is shocking and sad to know that in these developed countries, millions of families are finding it hard to put food on the table. Many have either lost their homes to foreclosure or are in default. Businesses closed down due to the lack of access to funding. Ordinary people suffered due to the lethargic economic growth. I was told that due to budget cutbacks in the public healthcare system, there were even cases of cri-tical medical treatment postponed or cancelled. Generally, a lower standard of living was forced onto millions of the European and American populations.
Before 2008, these people, the ones who suffered most, were just leading their ordinary lives as they have always been - like you and me, going to work everyday, going to school and raising their families. Suddenly, by end of 2009, their standard of living just dropped.
Looking at the third quarter of 2012, the US economy grew 2.6 per cent, the eurozone area contracted 0.6 per cent and the UK stagnated at 0.0 per cent. Even our close neighbour Singapore was not spared, as revised official figures showed a flat growth of 0.0 per cent in the third quarter. However, Malaysia's economy expanded 5.2 per cent in third quarter of 2012.
Our economy has proven to be resilient and robust, especially when we take into account our economy's integration with the outside world. In the first three quarters of last year, our economy expanded 5.3 per cent. For the entire year we can expect our gross domesic product (GDP) to surpass our initial target of 4.5 per cent to five per cent.
Prime Minister Datuk Seri Mohd Najib Razak's vision for the future requires us to reset the very foundation of our economy and restructure the government. We need to keep up with changing times. This is why we introduced and implemented the government, economic and political transformation programmes. These transformation programmes are consolidated under the National Transformation Policy.
The next and final step for us to introduce is the social transformation programme, which the Prime Minister himself described as the biggest challenge in our transformation journey. This comprehensive change of our society will take a longer time to be achieved.
Researchers and thinkers will formulate ideas and strategies to map out this continuing and inevitable change. A developed Malaysia in 2020 will be a richer ci-vil society, governed by good governance, civic consciousness and respect for the rule of law.
A number of eco-nomists, analysts and members of the media have since coined the term Najibnomics to collectively define the particular set of policies I described above. As for me, if you were to ask me how I would define Najibnomics - my answer is short and simple - Najibnomics is a set of economic policies that deliver.
The longer, more academic response is - Najibnomics is a series of mutually-supporting fiscal, administrative and infrastructural policies and measures, including the various transformation programmes that can deliver tangible and effective impact on the economy and thus, the well-being of the rakyat, not only the financial and business communities but the general population as a whole. It is all about the delivery. This is the essence of Najibnomics.
We, in Malaysia, have never been tied to any particular economic school of thought. We are pragmatists. In formulating the country's economic policies, foremost on our minds is the well-being of our fellow-Malaysians. We believe our common prosperity is too important to be tied to dogmatic theories. We are open to practical ideas that can be translated into practical implementation.
As a nation, we cannot serve as an economic laboratory. We cannot experiment with the lives of 28 million people.
What counts is the impact on the daily lives of the average Malaysian, to our small- and medium-sized industries, to the poor and the underprivileged. We are not hardliners. We look at the situation straight in the eye, assess the several lines of recommended action that are based on data-based facts and realistic projections and then we move. We are even open to unorthodox measures, if that is what it takes to get us the results we want.
We can do this because we, meaning all of us, collectively have the experience of many, many years of managing the economy. We rely on the years of experience and knowledge that we have built up over the many years in administe-ring the economy, supporting the direction set by the Prime Minister. And central to the direction is - we must deliver.
The Treasury's distribution of BR1M 1.0 and 2.0 is a prime example of unorthodox measures that we undertook as part of our economic programme. Essentially, the key objectives of BR1M 1.0 and 2.0 are to help the rakyat cope with the rising cost of living and to expand domestic consumption.
While BR1M benefits the rakyat, it also acts as a stimulus response to the relatively weak-external demand, due to the lethargic growth in our traditional trading partners' economies.
The level of liquidity that we released into the economy was large enough to create an appreciable level of multiplier-effects but not too large to stoke unnecessary inflationary pressures and well within our financial capacity.
Because of the emphasis on delivery, every measure that we took, we monitored to the lowest granular-level possible. When we wanted to expand the economy with our stimulus packages, a special unit was set up to keep track of the progress of the hundreds of projects we were financing, we made sure funds were made available within a strict time frame.
You might say, stimulus packages? Well, would that not be Keynesian? Well, yes but you must also note that we are firm believers of the private sector's capacity as drivers of the economy. It is not sustainable for the public sector to prime growth.
Public expenditure should only serve as a temporary bridging function, until the private sector resumes its ability to undertake economic growth.
The private sector is profit-driven and as such, we recognise they can do things more efficiently, and at the same time, provide the necessary level of competition - competition that ultimately benefits the end-consumers.
Nevertheless, to even things out, for example, we have just established the Malaysia Competition Commission. We are firm believers in equity and fairness.
I have, thus far, spoken on the two main planks of Najibnomics - delivery and equity - which brings us to the third and final plank of Najibnomics - equitable delivery - a combination of the first and second principles of Najibnomics. For an economy to achieve sustainable growth, there has to be peace and harmony.
An economy can only prosper if it is made up of a population that is happy, healthy and wise. Najib made it clear to his economics team that equitable delivery is a critical component of his economic policy.
In this regard, we made sure that the benefits from the nation's Treasury is delivered across all communities on need basis. It is equally important that equity and fairness is applied to how we conduct the management of our economy - greater transparency, a more structured system in our procurement processes and an effective delivery system within the civil service.
I am very pleased that the initiatives that we have put through have been bearing early fruits. Our Urban Transformation Centres (UTC) and Rural Transformation Centres (RTC) have helped hundreds of thousands of people, making their lives easier and better. I am an Ipoh boy. In my hometown, in Ipoh, the UTC assisted 57,000 people in the first month of operation.
Both the UTC and RTC are one of many innovative solutions introduced by the Ministry of Finance to improve product delivery and processes to the community. Innovations, is the key to our future economic success. In terms of governance, we have introduced the value-for-money concept and we are moving towards the implementation of outcome-based budgeting system. Our technological innovation saw the use of e-procurement system.
Najibnomics is not like Reaga-nomics - the application of the trickle-down theory, pursued at high social cost. Najibnomics is the application of an inclusive and mutually-reinforcing set of policies, reform programmes and initiatives with the high objective of transforming the major components of the economy in a holistic manner with three major planks - delivery, equity and equitable delivery.
The definition of Najibnomics is not restricted to a defined set of economic, fiscal and monetary policies and measures but also in building a conducive environment for the national economy to grow. We have to have a holistic approach in our movement forward. We have to look at the entire eco-system. Delivery equals execution. You cannot deliver without having strong execution. Effective delivery means we have to measure our success in the outcomes of our actions - mere execution is not enough.
Yes, we can have a number of transformation programmes, many masterplans and tens of blueprints, but if our execution does not deliver the desired outcomes - we fail. And, as they say, failure is not an option.
Read more: Najibnomics and the way forward http://www.btimes.com.my/Current_News/BTIMES/articles/MOF11/Article/#ixzz2KeQMvmkI
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