Towards A Competitive Malaysia #108
Chapter 16: Critique of Current Strategies
The Umpteenth Malaysia Plan
Malaysia had just ended its Eighth Malaysia Plan covering the years 2000–05. Abdullah presented the Ninth covering 2006–10 to Parliament on March 31, 2006. The 9MP bears his imprint.
I am biased against Five-Year Plans; they have a bad Soviet smell to them. The whole process smacks of central planning. If we have learned anything from the failure of the Soviet system, it is that tight central planning rarely works. Even the Russians have abandoned it.
There is nothing magical or rational about a five-year time frame. In ICT, five years would be an eternity. The computer I bought five years ago is now hopelessly slow and inadequate. On the other hand, trade, business, and investment policies need to be stable; we cannot change the rules every few years and expect to attract investors and encourage trade; likewise with tax laws. With education, the planning should span decades, not five years. Education policies instituted today would not see fruition until decades later. When Malaysia introduced an all-Malay instruction in its schools in the 1970s, the destructive effects are apparent only now, three decades later.
When Tun Razak introduced the First Malaysia Five-Year Plan in 1965 as part of his massive rural development scheme, he had in place the mechanisms and processes to execute and monitor the various projects. That First Malaysia Plan was actually the third for the nation, the first being developed under colonial rule covering the period 1950–55; the second and third were developed by Tun Razak before Malaya became Malaysia.
The Tun modeled his plan after the earlier successful National Operations Council under General Templer, the man who broke the back of the communist insurgency. Tun Razak had his own famed National Operations Room at his ministry, and at the various state and district levels. He made frequent visits in a Land Rover, often unannounced and without great fanfare, to check on developments at the ground level. Those line officers could not simply give him glossy reports for he would inspect the projects himself and assess their progress, or lack there of. Often on the way to visit a project, Tun would stop and inspect one that was on the way. Such unexpected visits were crucial; they gave a more realistic picture of the reality. It also kept those civil servants on their toes.
Tun’s visits also served another useful function; they afforded him opportunities to check first hand on the quality of personnel in the field. It was his way of spotting talent. On seeing a spark in the district, he would bring him or her back to headquarters on a fast track career development. This important leadership responsibility is largely ignored by his successors.
Contrast that with how Abdullah does his inspections. He would arrive on the government’s corporate jet (which he now treats as his private toy), and then be transferred to an air-conditioned Perdana limousine. Thousands would greet him and there would be the obligatory speech making and all round handshaking. All the while he would be immaculately dressed in his dark double-breasted woolen suit. This while visiting a village project in hot, humid, tropical Malaysia!
Tun Razak’s successors relied exclusively on their coterie of advisers. Mahathir expected talented Malaysians to come knocking on his door or lobby through his many hangers-on. Abdullah restricts himself to the buddies of his son-in-law. Unfortunately, bright young Malaysians are too busy being wooed by the private sector or engrossed in the excitement of starting their own enterprises. They have little time for hanging around at UMNO Youth’s meetings. Those who do, obviously their time and talent are not much in demand elsewhere.
These elaborate and all consuming Five-Year-Plans are also disruptive to the normal workings of the government. Months if not years before the beginning of a plan period, time and resources would be consumed with endless meetings to “coordinate and review” the master plan. These meetings typically take place during the last year of the previous Plan, when there were still many projects yet to be completed or even started. With resources and personnel consumed in formulating the next Plan, projects of the existing Plan are ignored. At the end of every Plan period, billions are unspent and numerous projects abandoned, incomplete, or not even started.
If the end of the Plan period were consumed with planning for the next, halfway through the five-year period there would be an exhaustive “Mid Term Review,” again another series of meetings and briefings. One wonders where the time would be for actually working on those projects that are so beautifully and ambitiously laid out in the blueprints.
The budgets for these Plans are impressive, billions for this and that. What is not clear is how much is for operations and how much for capital expenditures (new schools, buildings, bridges, etc.). On scrutinizing the figures, most of the funds are for salaries of civil servants and other operating expenses. The allocation for actual capital expansion is much less impressive.
In late 1970s I was involved in a Five-Year Plan for a major hospital, in particular its radiology service. Most of the funds were used for expanding the square footage of the unit, the bigger the better, as that would impress the minister. When I suggested that the major part of the allocation should be for acquiring better X-ray machines like a CAT scan, everyone was surprised. They were more interested in the building. In my hospital here in California, the MRI machine is located in a trailer! The machine is more important than the building!
Nor were there allocations for such essentials as staff training, landscaping, and the inevitable minor renovations that would be necessary even in a new building. Walk into any new government facility, and there would be no landscaping and the access road still unpaved. Inside, the needed tenant improvements are neglected; they are not even budgeted. Consequently, these expensive spaces end up being used as storage. Dewan Bahasa undertook a multimillion dollar expansion of its headquarters, but most of the expensive floor space was taken up simply to warehouse its unsold books!
Ungku Aziz, the distinguished former Vice-Chancellor of the University of Malaya, once related his experience in building a new library for his campus. Millions were spent for the building, but when he asked for additional allocations for books and journals, they were denied. The officials would not allow the purchase of new books and journals until all existing ones had been read! Presumably, the money for new books would have to wait for the next Malaysia Plan.
A more recent and glaring example of ineptness and lack of proper planning was this: with the teaching of science and mathematics to be conducted in English, there was a shortage of trained teachers. I would have thought they had anticipated the problem when they instituted the new policy. No! They discovered the problem only after the plan was introduced! Hishamuddin Hussein, the Minister of Education, was reduced to declaring blandly that the problems would be addressed in the next (Tenth) Malaysia Plan, a good six years away, at least.
The whole approach to the Malaysia Plan is flawed. Currently, a certain sum of money is allocated, usually based on a percentage increase over the previous Plan. How this increase is arrived at is never explained. The money is then divvied up. The first to get a bite is of course the Prime Minister’s pet projects. Rest assured that if the Prime Minister had been invited to Timbuktu, there would be an allocation for the setting up of an embassy there. Next would be the politically powerful agencies. Anything that MARA or the Ministry of Entrepreneur Development (two agencies concerned exclusively with Bumiputra affairs) asked for is routinely approved. These agencies could do no wrong and their requests never challenged. No one has yet analyzed how effective or efficient they are with the funds allocated. Similarly, billions are expended on GLCs, again with no critical examination of their mission or effectiveness.
The mindset seems to be the more money poured, the more important is the problem, and the more committed the government is to solving it. These rigid Five-Year Plans could be reduced to irrelevance very quickly by rapidly changing external events. The economic crisis of 1997 quickly reduced the Seventh MP (1995–1999) to shambles.
As there is no hiatus between one Plan period to the next, there is no time to pause and reflect, and to learn from the mistakes of the preceding plan. The Mid- Term Review is merely perfunctory, despite the endless meetings and extensive reports. There is no attempt to examine the underlying assumptions or to consider major course changes. The 1997 economic crisis occurred midway through the 7th MP, yet the second half of the plan proceeded as if nothing had happened.
It is time to jettison the whole idea of Five-Year Plans. A better approach would be to establish four or five priority areas. That would include improving education, eradicating poverty, improving our competitiveness, attracting foreign investments, and strengthening institutions. It is amazing that when the problems are clearly delineated, how much they are interrelated. If we have good schools and universities, that would go a long way to reducing poverty, improve our competitiveness, and make our workers attractive to foreign investors.
Once the major issues are identified, let the involved agencies work on them and set their own priorities. The problem of increasing access to higher education need not necessarily mean building new campuses or expanding existing ones, rather to encourage the entry of the private sector or foreign institutions. All these initiatives and course changes require a radical change in attitude and mindset. That is the difficult part.
Next: The Ninth Malaysia Plan (9MP)
The Umpteenth Malaysia Plan
Malaysia had just ended its Eighth Malaysia Plan covering the years 2000–05. Abdullah presented the Ninth covering 2006–10 to Parliament on March 31, 2006. The 9MP bears his imprint.
I am biased against Five-Year Plans; they have a bad Soviet smell to them. The whole process smacks of central planning. If we have learned anything from the failure of the Soviet system, it is that tight central planning rarely works. Even the Russians have abandoned it.
There is nothing magical or rational about a five-year time frame. In ICT, five years would be an eternity. The computer I bought five years ago is now hopelessly slow and inadequate. On the other hand, trade, business, and investment policies need to be stable; we cannot change the rules every few years and expect to attract investors and encourage trade; likewise with tax laws. With education, the planning should span decades, not five years. Education policies instituted today would not see fruition until decades later. When Malaysia introduced an all-Malay instruction in its schools in the 1970s, the destructive effects are apparent only now, three decades later.
When Tun Razak introduced the First Malaysia Five-Year Plan in 1965 as part of his massive rural development scheme, he had in place the mechanisms and processes to execute and monitor the various projects. That First Malaysia Plan was actually the third for the nation, the first being developed under colonial rule covering the period 1950–55; the second and third were developed by Tun Razak before Malaya became Malaysia.
The Tun modeled his plan after the earlier successful National Operations Council under General Templer, the man who broke the back of the communist insurgency. Tun Razak had his own famed National Operations Room at his ministry, and at the various state and district levels. He made frequent visits in a Land Rover, often unannounced and without great fanfare, to check on developments at the ground level. Those line officers could not simply give him glossy reports for he would inspect the projects himself and assess their progress, or lack there of. Often on the way to visit a project, Tun would stop and inspect one that was on the way. Such unexpected visits were crucial; they gave a more realistic picture of the reality. It also kept those civil servants on their toes.
Tun’s visits also served another useful function; they afforded him opportunities to check first hand on the quality of personnel in the field. It was his way of spotting talent. On seeing a spark in the district, he would bring him or her back to headquarters on a fast track career development. This important leadership responsibility is largely ignored by his successors.
Contrast that with how Abdullah does his inspections. He would arrive on the government’s corporate jet (which he now treats as his private toy), and then be transferred to an air-conditioned Perdana limousine. Thousands would greet him and there would be the obligatory speech making and all round handshaking. All the while he would be immaculately dressed in his dark double-breasted woolen suit. This while visiting a village project in hot, humid, tropical Malaysia!
Tun Razak’s successors relied exclusively on their coterie of advisers. Mahathir expected talented Malaysians to come knocking on his door or lobby through his many hangers-on. Abdullah restricts himself to the buddies of his son-in-law. Unfortunately, bright young Malaysians are too busy being wooed by the private sector or engrossed in the excitement of starting their own enterprises. They have little time for hanging around at UMNO Youth’s meetings. Those who do, obviously their time and talent are not much in demand elsewhere.
These elaborate and all consuming Five-Year-Plans are also disruptive to the normal workings of the government. Months if not years before the beginning of a plan period, time and resources would be consumed with endless meetings to “coordinate and review” the master plan. These meetings typically take place during the last year of the previous Plan, when there were still many projects yet to be completed or even started. With resources and personnel consumed in formulating the next Plan, projects of the existing Plan are ignored. At the end of every Plan period, billions are unspent and numerous projects abandoned, incomplete, or not even started.
If the end of the Plan period were consumed with planning for the next, halfway through the five-year period there would be an exhaustive “Mid Term Review,” again another series of meetings and briefings. One wonders where the time would be for actually working on those projects that are so beautifully and ambitiously laid out in the blueprints.
The budgets for these Plans are impressive, billions for this and that. What is not clear is how much is for operations and how much for capital expenditures (new schools, buildings, bridges, etc.). On scrutinizing the figures, most of the funds are for salaries of civil servants and other operating expenses. The allocation for actual capital expansion is much less impressive.
In late 1970s I was involved in a Five-Year Plan for a major hospital, in particular its radiology service. Most of the funds were used for expanding the square footage of the unit, the bigger the better, as that would impress the minister. When I suggested that the major part of the allocation should be for acquiring better X-ray machines like a CAT scan, everyone was surprised. They were more interested in the building. In my hospital here in California, the MRI machine is located in a trailer! The machine is more important than the building!
Nor were there allocations for such essentials as staff training, landscaping, and the inevitable minor renovations that would be necessary even in a new building. Walk into any new government facility, and there would be no landscaping and the access road still unpaved. Inside, the needed tenant improvements are neglected; they are not even budgeted. Consequently, these expensive spaces end up being used as storage. Dewan Bahasa undertook a multimillion dollar expansion of its headquarters, but most of the expensive floor space was taken up simply to warehouse its unsold books!
Ungku Aziz, the distinguished former Vice-Chancellor of the University of Malaya, once related his experience in building a new library for his campus. Millions were spent for the building, but when he asked for additional allocations for books and journals, they were denied. The officials would not allow the purchase of new books and journals until all existing ones had been read! Presumably, the money for new books would have to wait for the next Malaysia Plan.
A more recent and glaring example of ineptness and lack of proper planning was this: with the teaching of science and mathematics to be conducted in English, there was a shortage of trained teachers. I would have thought they had anticipated the problem when they instituted the new policy. No! They discovered the problem only after the plan was introduced! Hishamuddin Hussein, the Minister of Education, was reduced to declaring blandly that the problems would be addressed in the next (Tenth) Malaysia Plan, a good six years away, at least.
The whole approach to the Malaysia Plan is flawed. Currently, a certain sum of money is allocated, usually based on a percentage increase over the previous Plan. How this increase is arrived at is never explained. The money is then divvied up. The first to get a bite is of course the Prime Minister’s pet projects. Rest assured that if the Prime Minister had been invited to Timbuktu, there would be an allocation for the setting up of an embassy there. Next would be the politically powerful agencies. Anything that MARA or the Ministry of Entrepreneur Development (two agencies concerned exclusively with Bumiputra affairs) asked for is routinely approved. These agencies could do no wrong and their requests never challenged. No one has yet analyzed how effective or efficient they are with the funds allocated. Similarly, billions are expended on GLCs, again with no critical examination of their mission or effectiveness.
The mindset seems to be the more money poured, the more important is the problem, and the more committed the government is to solving it. These rigid Five-Year Plans could be reduced to irrelevance very quickly by rapidly changing external events. The economic crisis of 1997 quickly reduced the Seventh MP (1995–1999) to shambles.
As there is no hiatus between one Plan period to the next, there is no time to pause and reflect, and to learn from the mistakes of the preceding plan. The Mid- Term Review is merely perfunctory, despite the endless meetings and extensive reports. There is no attempt to examine the underlying assumptions or to consider major course changes. The 1997 economic crisis occurred midway through the 7th MP, yet the second half of the plan proceeded as if nothing had happened.
It is time to jettison the whole idea of Five-Year Plans. A better approach would be to establish four or five priority areas. That would include improving education, eradicating poverty, improving our competitiveness, attracting foreign investments, and strengthening institutions. It is amazing that when the problems are clearly delineated, how much they are interrelated. If we have good schools and universities, that would go a long way to reducing poverty, improve our competitiveness, and make our workers attractive to foreign investors.
Once the major issues are identified, let the involved agencies work on them and set their own priorities. The problem of increasing access to higher education need not necessarily mean building new campuses or expanding existing ones, rather to encourage the entry of the private sector or foreign institutions. All these initiatives and course changes require a radical change in attitude and mindset. That is the difficult part.
Next: The Ninth Malaysia Plan (9MP)
posted by M. Bakri Musa | 9:27 AM
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