A winning formula marred by rogue practitioners

FEB 17, 2009 – Despite our official make-don't-know strategy, the global financial blackhole is pulling the country inexorably into the doldrums of a recession.
Exports are shrinking as our customers go broke, what little gets sold fetches less as commodity prices plummet, and rising retrenchment are all hitting the domestic economy hard.
With the market taking its sweet time to correct itself, proponents of big government are making their voice heard.
The financial crisis is feeding these anti-market elements' push to circle the wagons of protectionism and blame the market for all the ailments – from failing industries to loss of jobs to rising suicide rates, etc.
To these control freaks, the market is not able to regulate itself and direct Big Brother intervention is required to ensure the working population's welfare is safeguarded.
They would have us believe that efforts to re-nationalise industries must take priority and are essential for economic recovery.
Former prime minister and best friend of privatisation, Tun Dr Mahathir Mohamad, has now called for a more direct and active role by the government and also for more money to be pumped into the local economy.
During his two decades of rule, he has been the ultimate champion of trade and initiated the massive privatisation policy of national assets, taking the cue from his then British counterpart, Margaret Thatcher.
However, the privatisation of national assets, government contracts and procurement during his era did not pass the basic minimum standards of accountability and transparency.
This resulted in a lot of wastage, lopsided contracts and the ever-present spectre of cronyism. Among these lopsided agreements are the Independent Power Producers' (IPP) agreement with TNB, highway concession, and many others.
It is ironic that Dr Mahathir himself is now calling for an end to the IPP agreements that is draining away billions of taxpayers' monies.
The problem is not so much the privatisation of national assets per se but it is about putting in place standards that pass the acid test of accountability and transparency, as well as focusing on delivering the best services to consumers.
The privatising of national assets should be aimed at achieving higher efficiency, reducing government liability and generating more revenues. In short, creating wealth.
However, the opposite is the case for Malaysia where concessions were awarded to companies that neither add value nor provide a more efficient service.
What is even more exasperating is that the government ends up bailing out these failed projects. All borne by the long-suffering taxpayer, of course.
In a globalised world economy, it is a definite step backwards if the country takes a more protectionist view on trade.
Free trade is essential. But it is also important to ensure fair trade.
Re-nationalising industries is not the answer to protect the rights of consumer or the public.
Establishing a big government presence in business will not allow for promotion of innovation and creativity. It will, indeed, diminish any competitive edge we have.
The evolution of the telecommunication industry has seen the benefits go to the hands of the end consumers. With choices aplenty and intense competition focusing upon satisfying the need and wants of the consumer, this process has hugely benefitted the public.
The success story of the telecommunications industry can and should be replicated in other industries.
Malaysia is a trading nation and hence should rigorously push for reduction on trade barriers as well as promoting free and fair trade initiatives.
With the impending second stimulus package of about RM10 billion stimulus package about to be announced, it is hoped that any stimulus package is done not to over protect or over regulate the market but to catalyse the market with virtues of competition, value added benefits and infuse the market with high standards of efficiency.
Only in a globalised economy and with free trade will more lives be lifted out of poverty. Despite appearances, markets can regulate themselves if high standards of accountability and transparency are upheld.
Free trade does not only ensure the survival of the fittest but, more importantly, it promotes the best ideas as well as delivering the best service for the consumers.

- published in The Malaysian Insider : Feb 17, 2009