Are We Ready to Embark on TN50 Economically?

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This (TN50) is now the Najib (Dato' Seri) administration's philosophy which has rendered its predecesor's (Tun Mahathir) Wawasan 2020 as a mere precursor to a bigger agenda, the TN50

TN50 or Transformasi Nasional 2050 (National Transformation 2050), is the new buzz word under the current Malaysian administration. TN50 is sought to replace the almost completed Wawasan 2020 (2020 Vision). From polical perspective, it is a mark of territory. A mark of political era. A change of skin. This (TN50) is now the Najib (Dato' Seri) administration's philosophy which has rendered its predecesor's (Tun Mahathir) Wawasan 2020 as a mere precursor to a bigger agenda, the TN50.

Before we can start TN50, we must first take stock of the state of affairs of our beloved country, Malaysia. Since we are no longer trying to measure whether Wawasan 2020 has been achieved, given its obsolescence, we should ensure that we are on the right footing to embark on TN50. However, let us put that aside first and reset our minds phychologically. We should not cramp our minds with the idea of Wawasan 2020 anymore because there is no point in doing so. It would be a myopia indeed. Why? Because the Government of the day has abandoned it and is putting all, all!, its efforts into TN50. Regardless of which politicians we support, and whether we like it or not, we can only embrace what will be laid out for the future of our country. As they say, "If You Cannot Fight Them, You Join Them"

So what is the state of our country? Recently, the Prime Minister (PM), Y.A.B. Dato' Seri Najib Razak, gave a speech on TN50 at Universiti Teknologi Mara (UiTM) sharing statistics on the country's economic status. Like many economists, the PM started of with the Gross Domestic Product (GDP) growth. Whilst GDP is not always the best measurement for the success of an economy, it is, by far, the best indicator. GDP is the yardstick to indicate how much economic activities have been transacted. This is a representation of both business transactions as well as consumption expenditure by the citizens. Both act as the primary movers for the economy. For the first quarter of 2017, the Malaysian economy closed at a GDP growth of 5.6%. This is a favourable unexpected result considering the average for 2010 to 2016 hovering at 5.1%. So, for a start, with such rates that are double the World GDP growth rate, we are indeed on the right track.

How did we achieve this? Thanks to the Government policies over the past few Federal Budgets, we have managed to reduce the impact of key World economic variables such as oil prices and foreign currency translation rates. With the low oil prices as well as the weak Ringgit, our revenues have plunged significantly in the region of RM40 billion or so. Learning from this mistake, we have now reduced our dependency on oil revenues from 41% in 2009 to 14.7% in 2016. Luckily, the shortfall was fortunately addressed by new revenue streams. For s start, in 2013/2014, the Government introduced the Goods and Services Tax (GST) at 6%. This had also helped reduce the Federal Budget deficits from 6.7% in 2009 to 3.1% in 2016.

Then there was the subsidy rationalisation. Tax payers' monies are no longer used to subsidise oil prices, sugar prices and many more subsidies as well as grants. The most efficient subsidy rationalisation would be for the oil price. Previously, significant portion of the subsidy (oil) was benefited by industrial users such as the Independent Power Producers (IPP) instead of the citizens. Now, that benefit has been redistributed by other means that can reach the citizen more effectively such as the BR1M, a financial support scheme for low income earners. It is also worthy of acknowledgement that the Government's burden to bear capital expenditure has been reduced due to the recovery in Foreign Investments (FI). Forbes had reported that Malaysia is the best country in Asia for raising FI. Thanks to the capital inflow from China and the Middle East, we do not need to rely heavily on the United States of America. A bet well taken by Malaysia (in respect of America vs China trade negotiations).

Very much like his father's (Tun Razak) efforts, PM Najib has managed to work these numbers to reduce poverty. The improved GDP as well as targeted Government expenditure in the Federal Budgets have reduced Malaysian poverty level from 3.8% in 2009 to 0.6% in 2014. We are expecting to see a Nil for 2016 as promised by Dato' Seri Najib. In any case, the Extreme Poverty rate has already been confirmed at Nil. In addition, Malaysians will also be introduced to 3.3 million new jobs by 2020 and to date, we have achieved 69% of that (2.26 million). The job opportunities as well as income per capita that has increased from USD8,232 in 2010 to USD10,010 in 2016 has reduced the Middle Income Trap from 33% to 18%. We are indeed hopeful to reach the World income per capita of USD12,275 soon.

So, if we ask ourselves, are we ready to embark on TN50 economically? I think, Yes. Indeed what we have taken stock earlier shows an excellent start to an odyssey towards 2050. Our hope is that the Government (whoever the leader may be in the next 33 years) will continue the efforts in enriching the country's economic well being. They can label it with whatever name they want as long as they have the Rakyat (citizens) at heart. For this, it is only logical to have continuity and stability politically, for a change in regime would only throw all efforts out of momentum and worsen the economy back to square one. We would not want to move backwards, do we?

* kopihangtuah

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