Back to the wall, Najib exposes his political and economic treachery

In the past couple of days, Prime Minister Najib Razak has made a rash of contradictory statements that have further demotivated and even shocked many in the country. He not only gave the thumbs-up to continuing the grossly abused New Economic Policy, but even beefed it up, possibly widening the door to greater corruption in the name of 'market-friendly innovations'.

Then he admitted the professionals in the country were underpaid, but did not go beneath the surface of why this was happening and had been allowed to happen. Was he pandering to the urban workers, whose votes he badly needs in the next general election?

Then, taking the cake, he gave himself away when he said the controversial Goods and Services Tax or GST would only be implemented after GE-13! In other words, Malaysians should sheep-like vote for his BN coalition and then wait to be slapped by higher prices once the polls are over!

Why are we plunging downhill

An export-based economy, Malaysia is heading downhill partly due to the weakening of the US economy, the decreasing petrol prices worldwide, the sluggish world economy and so on, but Najib - who is also Finance minister - seems to be lost in a world of his own. Clueless, he is clearly passing off more rhetoric than concrete solutions to address the woes Malaysians now face as a nation.

Increasing prices have placed a millstone around the necks of everyday citizens and having a government that is disconnected from the issues of the day do not help. Not surprisingly that for the April to June quarter, the Malaysian GDP growth stood at 4% compared to a year ago. The government can rant that this is a sign the economy is getting better but economists know that GDP is not a measurement of the standard of living in a country.

Neither is the health of the stock market, which Najib’s predecessor, Abdullah Badawi, used to justify his diagnosis that the Malaysian economy was doing well under his tenure. The stock market is far better now than during Abdullah Badawi’s time, yet the standard and the cost of living is sliding down a slippery hill.

Money is spent on the incompetent and the unnecessary

Najib Razak has conceded that Malaysian professionals are underpaid compared with their counterparts in foreign countries. He said the state of affairs had somewhat deterred efforts to retain as well as attract good talents to work in this country.

"Although Malaysian professionals are competent, they are not being paid as well as those in other countries. I have been telling the private and public sectors to pay people salaries that commensurate with their skills and talents in accordance with international standards. So, it is my desire to see our wage rate move up steadily but with an eye on improving productivity as well," he said at the 11th Forbes Global CEO Conference here Tuesday night.

Telling the private and public sectors to pay more is not a solution. How can higher wages be paid out to people when the companies and the government itself is suffering a shortage of money? How can income be generated when the economy does not permit increased revenue?

Malaysian professionals are not being paid as much as their counterparts overseas because their employers cannot afford to pay them. Instead, money is spent paying incompetent people who are clearly not capable of managing these corporations. Malaysian Airlines is a case study of paying the most incompetent people the most amount of money. Small wonder the smart ones leave the country and are recognized elsewhere, where they are usually paid much better and appreciated for their capability and competence.

Creating a new monopoly

Najib also made it clear the government needs to hang on to the New Economic Policy, although affirmative action has not helped the economy while creating a super-rich class of elite Malay businessmen. To think that a revamped plan to strengthen the Bumiputera share of the economic pie would in turn help the Malaysian economy is wrong.

The PM's strategy of creating more opportunities for the Bumiputeras as opposed to imposing quotas on others is not really addressing the problem. Instead this would mean that more and more of the economic pie is blocked and locked-in for Bumiputeras. This is akin to the government creating a monopoly for itself, whereby it is up to them to determine who can do business and reap what profits.

Umno's greatest fear - COMPETITION

A growing and competitive economy needs the one thing the BN government is most afraid of - competition. The market place has to be a level playing field where the economically-adept and business-savvy can excel. Providing clutches to those who are ill prepared for this playing field will not help the economy but instead disrupt.

If Najib is serious about seeing the Malaysian economy grow, he should work to remove any form of favoritism within the government policies.

But this would never go down well with the ruling elite in Umno, since all this while the party is of the opinion that the Bumiputeras are not able to compete with others for their share of the Malaysian economic pie. But the Umno elite are wrong and this is their treachery towards their fellow citizens.

Back to the wall, a flailing Najib has dumped the core principles in his New Economic Model to please his colleagues in Umno. In doing so, he has made himself the most treacherous of the lot for giving false hope to the country and its investors, only to backtrack into disgrace and ignominy. And does he care, the greatest harm will be to the country, while he and his party mates increase their grip on the economy.

For Najib, it is clear any form of reform to the economy and any policy made has to benefit Umno and its hold on the populace. Even if this means keeping the people desperate and dependent on the government. It looks like the BN government is in the business of keeping Malaysians poor while they remain rich.

The imposing of the 6% service tax actually benefits the government directly, with the telcos passing on the cost to their customers. If they didn't transfer the cost, their own profits would be hit, but the money collected from the extra tax launched by Najib doesn't go into their pockets.

Oblivious to the wrongs of lying to the people

Another shocking statement made by Najib last week was that he would implement the much dreaded Goods and Services Tax or GST when the timing was "right". He admitted this to Steve Forbes, the editor-in-chief at Forbes Media who was in town to host a business summit. “I guess when the time is right, in the near future, probably after the next general election, we will introduce the GST," said Najib.

His comments created unease and grousing throughout the country. The GST has all the while been controversial as it will burden the people especially the man in the street as it is imposed on many consumer items. But Najib insisted it was "necessary" despite Malaysia having a 12 million workforce and only 1.2 million paid taxes.

Worst of all was his open deceit and apparent obliviousness that it is wrong for a PM to pull a fast one on his people.

"This is nonsense, it reeks of a lack of morals. The PM has so little respect for the people that he openly tells them that for now, he can delay GST because of the GE-13. But once it is over, once they have voted for the BN, he will implement and they suffer the pain of price hikes," Batu Member of Parliament Tian Chua told Malaysia Chronicle.

Perhaps, the best way forward for the Malaysian economy is to just stop all the double-speak and immediately remove all manner of favoritism and monopoly, allow everyone to compete on a level field for their share of the pie, and provide real assistance to the poorest groups.

Only then can Najib and BN talk about being attractive - not only to their own countrymen - but also to foreign investors.