It's a once-in-a-lifetime economic challenge: Ku Li

Malaysia does not need another set of “ad hoc pork barrel expenditures” disguised as a stimulus package but strategic public investment projects guided by a vision and governed with “bullet-proof integrity”, said former finance minister Tengku Razaleigh Hamzah.

“What we need, and what the crisis gives us a chance to implement, is a set of bold projects with an economic story behind them to help Malaysia make the developmental leap we have been missing,” he said in a speech to a forum organised by the Asian Strategy and Leadership Institute.

Razaleigh, also a one-time international trade and industry minister during the administration of former premier Dr Mahathir Mohamed, was commenting on the RM7 billion stimulus package announced by Deputy Prime Minister Najib Abdul Razak late last year.

Najib’s stimulus package included an injection of RM4.8 billion into the economy through a reduction of contributions to the EPF retirement fund, RM1.2 billion to build low- and medium-cost houses and hundreds of millions of ringgit for the building, improvement and maintenance of basic infrastructure and public amenities.

According to Razaleigh, the current global crisis gives Malaysia a chance to put in place a set of bold projects “with an economic story behind them to help Malaysia make the developmental leap we have been missing”.

“We have a once-in-a-lifetime economic challenge. We must meet this challenge with a historic sense of purpose.

“That means, not with a "stimulus" consisting of ad hoc pork barrel expenditures but a set of public investment projects guided by a vision, designed around a strategy and governed with bullet-proof integrity,” said Razaleigh.

Make transformative leap

Razaleigh had, until a few months ago, harboured hopes of regaining his former glory and offered himself for the post of Umno president - who by tradition becomes prime minister - against Najib.

He was defeated even before the race started after receiving only one nomination - from his home base of Gua Musang - against incumbent deputy president Najib who bagged the rest of Umno’s total 192 divisions.

Razaleigh, a prince from the Kelantanese royal family, also took a jab at Prime Minister Abdullah Ahmad Badawi’s pet regional corridor development projects and drive to engineer Malaysia into a agriculture and biotechnology hub.

Malaysia, said Razaleigh, needs to make a developmental and transformative leap that is not about “doing more of what we have done”.

“We are not going to get there (by) putting up more highways, declaring more Growth Corridors or planting more oil palm,” said Razaleigh, who spoke of the need to affect “transformative improvements in governance” and a “reform of our political system”.

Razaleigh offered two sets of programmes and ‘an enabling set of reforms’ to “re-gear and re-tool the Malaysian economy” and light “the fire under our feet to make transformative improvements in governance and politics.”

Citing Malaysia’s advantageous position on the Straits of Melaka through which the bulk of the world’s annual merchant fleet tonnage and oil flows and shipping pass, Petronas’s position as one of the world’s leading oil companies, and the country’s strong trade links with Middle Eastern oil producers, Razaleigh said Malaysia’s oil and gas has served it well.

However, the country could do much better, said Razaleigh, who suggested the government develop Malaysia into an ‘Oil and Gas Center’ and tap into its strategic strength.

This can be done by developing offshore storage facilities for other oil-producing nations with high country risk, develop research and development capability in exploration, extraction and production, and specialize in energy - including alternative energy - technology.

Partnerships should be formed through a network of agreements with Gulf producers and major consumers to improve oil security, government-to-government partnerships in Asean, tax incentives should be provided, and innovative ‘production-sharing contracts created, said Razaleigh.

“Given our very special geographic and strategic advantages, we should build the first Spot and Futures Exchange for Oil and Gas in an OIC nation,” he said.

Razaleigh’s second idea was for the government to embark on a national home ownership programme - financing for which can come from modifications to the EPF as well as contributions from the government.

Upgrade public service

This, he said, can create multiplier effects in more than a hundred industries other than the housing sector.

“Of all the national projects we could undertake, few could have such a large social as well as an economic multiplier effect to the whole country that would allow the government to design communities and townships with their own transportation, communications, educational and recreational infrastructure with a strong set of standards and social objectives.

“Let us plan the housing stock to cater to the life-cycle of home ownership, with a good mix of options for different localities and life-cycle requirements. It is a way to grow racial harmony, build integrated schools, and help the poor without creating a crutch.”

In order to ensure these two programmes do not fail due to corruption and the failure of the public sector to fulfill the tasks, Razaleigh said the public service needs to be upgraded to implement such large public programmes successfully.

He concluded by talking of how the country can ill-afford “a political class out of touch with reality that trades on yesterday's political insecurities and a government that has forgotten its purpose.”

“We need a renewal of leadership as a first step to restoring true confidence. The economic statistics are mere indicators of the activities and expectations of the unique national community we are trying to build, so that building an economy and building a nation, providing good governance and being truthful, are not things that can be achieved apart from one another.

“To re-ignite our confidence would be to revitalise the project of building Malaysia,” Razaleigh added.

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