The government's National Mission, as reaffirmed in the Ninth Malaysia Plan (9MP), is to enhance the nation's capability to compete globally, strengthen unity, improve distribution of income and wealth and bring about a higher quality of life for the rakyat.

Ironically, its actions especially since 1983 have been contrary to what it espouses. The government admits its failures in the 9MP. Chapter 16 (pg 323) provides a clear verdict that the government has been unsuccessful in achieving the objectives of eradicating poverty and restructuring society.

After 35 years, only absolute poverty (RM415 for a household of approximately five people) has been reduced. Inequality and relative poverty are at worrying levels (UNDP 2006 and Aliran Vol 25/2005) and the restructuring of society has failed as there is a clear distinction between bumiputera and non-bumiputera (Asli/CPPS report).

Since independence, the economy has grown on average at 6.5 percent per annum (pg 3, 9MP). While this is indeed a phenomenal achievement, almost 60 percent of families wonder who has benefitted from the continued growth of the economy.

An astounding 43.3 percent of households earned less than RM1,500 a month in 1999 - an income that ensures that families struggle to meet their daily expenditures.

An elite group of 9.8 percent earned more than RM5,000 in 1999 (pg 61, 8MP). An investigation into the ownership of wealth will probably confirm the fact that a tiny percentage of Malaysians own this nation.

While corruption and mismanagement are clearly causes for maligned distribution of wealth, the greater threat to inequality has been selective economic liberalisation without proper institutional arrangements (primacy of Parliament, independent judiciary, civil service, academia, media, regulators, etc) to safeguard the welfare of the nation.

In the 1980s, under the regime of Dr Mahathir Mohamad, the nation saw wealth held in trust by the state gifted to selected individuals.

On the pretext of creating a bumiputera commercial and industrial community, economic liberalisation through privatisation was used to transfer state- owned enterprises and wealth to select individuals without parliamentary, administrative or public oversight.

The executive and the Economic Planning Unit together emasculated the civil service, the judiciary and Parliament, leaving no avenue for redress for the citizens over executive excesses.

Licensing and government procurement are the most self-evident practice of the transfer of state-owned wealth to select individuals.

Toll roads, privatisation of hospital support services, sewerage services, water services, government infrastructure projects such the light rail transit system, computer labs for schools, taxi and bus permits all demonstrate how state- owned wealth is transferred into private hands at an exorbitant cost to the government and directly to the citizens.

Taxpayers' money is squandered and at the same time, taxpayers are abused by being charged users fees for sub-optimal products and services.

Desperate measures

As Malaysia continues to lose its competitiveness due to weak institutions, the government is taking desperate measures to attract foreign investors and to remain competitive. Instead of remedying incompetence, mismanagement and corrupt practices at the national level through the restoration of independent institutions, the government chooses to continue with economic liberalisation.

Citizens must be prepared for further impoverishment, as the next wave of economic liberalisation will come soon through free trade agreements (FTAs), which are premised on the philosophy that the strongest, fittest and most powerful individual or firm will survive.

It reduces the role of government, and removes protection for labour and the environment. It essentially ensures that the sovereignty of capital over all other factors of production. Are we at the appropriate development stage to liberalise our economy completely? Furthermore, should Malaysians forfeit the welfare gains of development in order to be competitive?

Malaysia as a member of the World Trade Organisation (WTO) has no option but to liberalise although the WTO does provide for safeguard measures. The impact of Malaysia's WTO commitments on the country has not been studied and documented thoroughly.

Although the economy maybe growing, who is capturing the benefits of this growth? While corporations record profits through cost-cutting measures, business-friendly environment and government support a low wage policy (union busting policies, no minimum wage law, and continued reliance on foreign labour), privatisation of basic needs (water, electricity, health, education, transportation, oil), inflation and poor quality of public service are impoverishing the poor and the middle class.

Foreign corporations that come to Malaysia are primarily concerned about profits and not the welfare of Malaysians.

Malaysia as a member of the Asean Free Trade Area is also committed to regional liberalisation at a greater pace than at the WTO. Worker movements in Malaysia have already protested the accelerated liberalisation and lack of social safety nets as reflected in the Asean Charter.

Furthermore, Malaysia has signed a FTA with Japan. Through Asean, Malaysia is party to FTAs with China and South Korea. At the same time, Malaysia is negotiating FTAs with New Zealand, Australia, India, Pakistan, Chile, the European Free Trade Association and the US.

The current regime is undertaking economic liberalisation without ensuring that proper institutions are developed to safeguard the interest of the rakyat.

Inequality will further increase if the government does not include social safeguards (minimum wages matched to the level of development of the nation, the right to unionise at the national level, protection of vulnerable sectors, protection and sustainable use of natural resources).

No studies on the impact of the FTAs have been commissioned - those conducted on the cost and benefits are not available for public scrutiny.

Parliament has not been informed about the impact of the FTAs and, more importantly, the worker movements that will suffer the most have been totally disregarded by the government.

Clearly, its time for regime change in Malaysia.

MK GRACIAN is a Malaysian economist concerned with the future of the country.