Economic Policies of the Opposition
Very few people know that the opposition parties have actual economic plans and proposals. I would say that the economy and general prosperity have always been the strongest point going for the ruling party (at least the public's perception of these things — the reality being quite different). If the opposition can prove it has better ideas for managing the economy, I would say it is more than halfway to victory in the elections.
I have looked at the Democratic Action Party's proposed budget, and despite a handful of weaknesses, I think it holds up very well to economic-minded scrutiny. It takes several economic concepts and applies them well; unlike the present regime and its hamhanded policy of state encroachment on private enterprise, the DAP proposes largely sensible policies for structuring growth in the economy. Sadly, not many people are aware that the DAP has successfully put out an alternative budget, let alone that this budget is much better than those of many countries in the world today.
Equally depressing is that many are not aware of Parti Keadilan Rakyat's proposed Malaysian Economic Agenda, a policy meant to replace the New Economic Policy. Just as few people know that PKR has explicitly denounced the NEP as unjust, and proposes social welfare policies meant to discriminate on the basis of wealth and access to opportunity, not ethnicity. I urge you to read the MEA if you have not yet; it is only eight pages, and is much shorter than the DAP's alternative budget.
The MEA is disappointing in a few areas. One thing that struck me was its sparseness of detailed ideas. It pointedly criticises the status quo, and reels off a long list of economic blunders. Sadly, PKR does not seem to have picked up on the idea that price controls or ill-thought-out subsidies and taxes are a bad idea, its criticisms largely focused on graft and racism. In spite of this, few substantive proposals are made, beyond the most obvious — implementing a welfare policy based on need, not race. Platitudes insisting that "we need to return to the values of our founding fathers" are more common than serious proposals.
But having said that, the MEA is pointed in the right direction. It is not a bad document; indeed, it makes many excellent points about the state of the Malaysian economy. It does not get anything seriously wrong. My complaints are more about what it could be than what it actually is; PKR has missed an opportunity to prepare a more constructive criticism of our economic policies, and a more substantive proposal to replace them, but the MEA as it stands is a fine piece of work because it gets the broadest principles of economic management right.
Beyond the most apparent fact about racial discrimination, the MEA hits the nail on the head when it comes to protectionism, rejecting the idea that we can withstand global economic forces and remain unchanged. It emphasises the need for a more open and transparent economic regulatory structure, and greater freedom in establishing a business. It also points out our heavy reliance on the government, instead of individual entrepreneurs and enterprises, to keep the economy going — an unsustainable and unhealthy policy in the long run.
Indeed, what surprised me the most about the MEA was some of the figures it cited. According to the World Bank, government expenditures constitutes 52% of GDP. In other words, of every ringgit spent in Malaysia, over half came from the government. This shocked me, because previous figures I have seen estimated that government spending only makes up about a third of the GDP. The World Bank figures may be on the high side, but the MEA is right to emphasise them — we simply cannot and must not rely on government spending to prop up our supposedly market-based economy.
I cannot say that the MEA is the best action plan out there for our economy — at the moment, the DAP's alternative budget is the best alternative I have seen proposed. But the MEA is certainly one of the best proposals and critiques of our economic policy that I have seen yet, and having met several grassroots leaders in PKR, I have full confidence that they will be able to expand on the principles outlined in the MEA to create an even better policy proposal.