Focus, focus, focus: A reply to Ong Kian Ming — Marc Fong
MAY 25 — This is in response to the article titled, “The need to verify” published in The Edge Daily and The Malaysian Insider on May 24.
There is no denying that a dose of scepticism is needed. The danger is when detractors and pessimists choose to masquerade as realists or simple sceptics and, in so doing, attempt to derail the genuine efforts of others.
The following two points were highlighted in the aforementioned article, and featured below is our clarification.
Point 1: GNI calculation
The ETP’s true north has and will continue to be US$15,000 GNI per capita in 2020. The aggregate national GNI is the numerator but denominator is total population. In order to establish a yardstick by which we measure ourselves, we adopted a linear approach to calculating the GNI target that would indicate we were on the right path.
When we set the target, we were clear in our minds that it was sufficient to have an acceptable measurement of progress and then focus on the creation of conditions to encourage the private sector to participate actively. Economic forecasting is a highly specialised task, one we will leave to the experts. In determining targets, many variables are taken into account including:
1. Historical performance
2. Current performance
3. Future aspiration
4. Internal factors, e.g. domestic consumption
5. External factors, e.g. trade, global economic growth
6. Impact of projects known (EPPs) and unknown (Business Opportunities)
7. Existing commitments, e.g. 10th Malaysia Plan, etc.
8. Many other factors, e.g. inflation, our ability to compete, productivity, etc.
Policy/decision-makers take all the above into account and make a realistic decision of the target. It is not simply a matter of arithmetic calculation as suggested by the author no matter how badly one wishes it were the case.
Malaysia’s GNI in 2011 was RM830.1 billion, surpassing all targets, regardless of the method of calculation used. Similarly, GNI per capita grew rapidly from US$6,767 per capita in 2009 to US$8,126 in 2010 and US$9,508 in 2011.
Point 2: Private Investment calculation
The private investment target should have been RM86 billion, as per the MoF’s 2010/2011 report. Regardless of the number quoted, in 2011 private investment surpassed the target set, growing to RM94 billion, signifying a growth rate of 19.4 per cent.
The assertion that we projected a 5.5 per cent growth from 2010/2011 is somewhat disingenuous. The private investment targets were set in the 10th Malaysia Plan, which operates on a five-year cycle. Private investment grew sharply from 2009/2010 as the world economy recovered. To assume a similar rate of growth year-on-year over a five-year cycle is, at best, hopeful optimism.
We have on several different occasions explained how GNI and Private Investments are calculated — they can be found on the ETP Website under the Download Centre (etp.pemandu.gov.my/download_centre.aspx) or in the ETP Roadmap book. We have also continuously engaged with analysts, economists, and foreign investors.
Many a time, they start out challenging us, but eventually, through active discourse, come to understand what we are trying to achieve. Could this understanding then be the reason that informed analysts and economists are not rushing to take up arms?
I am sure they have, in the course of forming their professional opinions, undertaken adequate research and study into the ETP’s goals and processes. More importantly, like us, they understand that the ETP is not perfect and that it is an evolving programme that looks at the bigger picture: Ensuring Malaysia’s economic transformation by focusing on creating an environment that encourages investment.
Constructive engagement and discourse that stimulate ideas which will serve as launch-pads of actions for the betterment of the nation is important is critical. Having an open mind is a pre-requisite for any form of transformation.
Winston Churchill once said: A fanatic is one who can’t change his mind and won’t change the subject. Likewise, we have always and will endeavour to engage with all parties to the extent that the engagements are productive.
* Marc Fong is a senior analyst with the Performance Management & Delivery Unit (Pemandu)
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.