The New Economic Model (NEM); the Challenge is in Implementation.

1. Part One of The New Economic Model, launched this week by the Primeminister of Malaysia, Datuk Seri Mohd Najib Tun Razak, provides a framework for drastic transformation, not only of the approach to the economy, but to the culture of the nation.
2. The private sector is expected to be in the driving seat of the economy. With a focus on seeking opportunities and competition regionally and internationally, the emphasis must be on  "business friendly" policies and encouraging much more entrepreneurship. Liberalization will continue to promote greater productivity and efficiency. It is expected that the services sector will expand and lead the growth.
3. There is a skills shortage and what is needed are the right market-centric policies and incentives to get the country up to the higher income level. People with high level qualifications and skills have been leaving Malaysia. To help retain skilled personnel, the focus has to be on higher technology and value-added industries.
4. New business opportunities will be opened up in new technologies and automation. An example is telecommunications. Moving from basic call services through to Internet and data businesses. People in the telecommunications sector have had to develop and learn new skills to enable provision of these new services in an increasingly competitive market place.
5. Implementation of the new Model will demand a change in the "culture" for everyone, both in the public and private sectors. The business environment needs to be transformed. Corruption and inefficiencies in all sections of the economy will have to be tackled. This will require significant courage on behalf of the Government and people.
6. The benefits of the realization of a higher income economy to the "rakyat" (people) and "businesses" must be clearly communicated and understood.
7. For the "rakyat", the key messages would seem to be that with higher purchasing power comes a better quality of life, opportunities for upward mobility, better living and working conditions and an improved and sustainable environment and growth across the whole nation.
8. For the business community, the benefits should be greater efficiency, improved access to funds, (particularly for the SME), greater market transparency, fair market pricing and competition, a barrier free market place, and more opportunities for public-private partnerships.
9. The NEM is very bold and challenging. It demands the detailed attention of the business community, but in terms of implementation, it also requires a serious and determined approach on the part of the civil service.
10 In the words of the Senior Business Editor of The Star "A powerful issue to be addressed is skepticism on the ground, especially among the older generation that has long observed certain unsatisfactory developments or those who could have been subjected to a regime that favored certain ingrained practices of preferences. A proper model...is required in both private and public sectors, after taking into account all the stumbling blocks and impediments to change. ...the cultural and mindset of the past will require more time and possibly substantial effort to overcome age-old attitudes, mistrust and fear" 


Key References

Download the New Economic Model Part 1
A growing resource of articles on the NEM from The Star newspaper