The Eight Malaysia Plan (8MP) has been tabled, and I get the impression that Malaysians throughout the country are applauding the announcement of this document. There may be reason enough to rejoice with rounds of applause. But there also is cause for concern.

One such cause is the projected growth rate of an average of 7.5 percent per year during the 8MP. High growth rates are not, by themselves, reason to worry. But there are periods in an economy's history when high growth rates must, temporarily, be sacrificed in favour of consolidating the economy.

During such periods of consolidation, the government must concentrate on improving the quality of its workforce; on resolving social problems; on improving its infra-structural facilities; and on developing its technological capabilities.

The 8MP does not appear to be such a period of focused consolidation. Instead, it attempts to achieve a hodgepodge of targets, a primary objective being high growth.

The government's obsession with grand rates of growth prevails in the 8MP. Maybe the government wants to please its spectators, and so it relentlessly and noisily proclaims a target of 7.5 percent.

There must be a time when governments must be more detached and must choose to guide public opinion, rather than be guided by it. There is a flaw in thinking, if there is no time to pause, reassess and consolidate.

Doubtful strategy

All that aside, it is not clear how high rates of growth will be maintained annually. It is expected that the electrical and electronics industry will remain a major contributor to exports.

Presently, the electrical and electronics accounts for 72 percent of the total exports of manufactured goods. This amounts to about RM317 billion.

The American economy is not as sturdy as it used to be and the Japanese economy has not been vibrant in a while. With reduced demand emanating from these two countries for our manufactured products, one cannot possibly expect the electrical and electronics sector to provide much impetus for growth.

Probably, the government envisages that the information and communications technology (ICT) sector will be the next engine of growth. During the 8MP period, RM5.2 billion will be allocated to the ICT sector.

The wisdom of this strategy is doubtful. The Multimedia Super Corridor (MSC) project has not demonstrated strong signs of competitiveness, so far. On the global scale of things, one wonders whether Malaysia will ever be able to capitalise on the ICT industry.

Malaysia does need to invest in ICT if the country is not to lag behind. However, it is not realistic to expect the local ICT industry to fuel national growth.

Malaysia is in its infancy as far as IT education is concerned. Malaysia does not have anywhere near the kind of expertise that India has in software development.

In areas of hardware and chip technology, America invests huge amounts of money in research and development. We cannot expect to leap-frog ahead of America in these respects. India and China offer better technical expertise, and at much lower wage rates.

Certainly, the government does not intend to transform agriculture into a growth-generating industry. The official claim is that the government plans to transform the agriculture sector into a modern, dynamic and competitive sector.

The seriousness of this claim is questionable since the allocation made to the agriculture sector under the 8MP is lower than that made in the previous plan's period.

At any rate, the agriculture sector suffers from not being glamorous. Agriculture is definitely not as fashionable as information technology.

Sustained growth

Most important for our policy makers is the fact that agriculture does not promise high growth rates. Agricultural countries such as New Zealand have been able to experience only moderate growth rates.

If the electronics and electrical sector cannot be counted upon to deliver consistently high growth rates; if the ICT industry is not likely to propel economic growth in Malaysia; and if, agriculture, inherently does not have the potential to give high growth rates, then it means that we have to go back to the drawing board.

The urgent task that faces our policy makers is to realistically identify key areas that can propel sustained growth. It is pointless trying to compete with the giants. Proud as we may be of Proton, it cannot compete with Honda. Proud as we may be of Penang's Free Trade Zone, it cannot compete with the Silicon Valley.

Nothing will be gained by flitting from a mediocre performance in one industry to a mediocre performance in another industry.

We must hold back our applause until our policy makers can create niche areas in which we can develop our capabilities. Our policy makers must work at this task slowly, steadily and realistically, without succumbing to the temptations that short-term gains can offer.

SHANKARAN NAMBIAR is an economics lecturer at a private institution in Penang.