Associate professor Dr Razeen Sally of the National University of Singapore said Malaysia was one of the fastest growing developing countries in the world but might not be able to progress further due to the present policies.
“It can no longer play the catch-up game where it just makes minor changes to succeed. It has to deal with some difficult issues. If it does not do that, it will remain trapped in the present situation and move into lower growth rate.
“It will translate into racial disputes,” he said at the second Liberalism Conference organised by the Institute for Democracy and Economic Affairs (Ideas) here, today.
He gave examples of incidences in Sri Lanka as seen during its ethnic conflict from 1983 to 2009.
“I am not saying Malaysia is anywhere close to that situation. I remember growing up in Sri Lanka in the 60s and 70s, no one would have thought a country that was doing well will ever see deadly clashes. But it happened.”
Razeen said every country that reaches a certain level of income, must implement deeper structural reforms in terms of public administration, law and the judiciary, accounting and other political systems.
“It becomes very important. Due to that, Malaysia needs a stronger version of its Economic Transformation Plan such as removing restrictions and slowly working towards the removal of the Bumiputera policy which is seen as profoundly discriminatory.
“Malaysia needs economical freedom to grow. It needs the extra twists to grow. It is now probably the most advanced developing country in the world with a GDP of USD15,000 per capita. Not very far off from achieving developed country status,” he said.
However, to grow further it needs to be rid of authoritarian policies and bad governance.
“To achieve that higher growth, there can no longer be small changes. It needs deeper structural reforms to promote competition among the people. It needs liberal rejuvenation on the economic front.”
He said for changes to take place, the country would require an open society with individuals who were genuinely free to speak up, failing which the country would continue to be stuck in a lower growth rate.
The New Economic Policy (NEP) introduced by the government gives bumiputeras preferential treatment with the view to uplift the economic status of Malays. However, there have been claims of the ruling party Umno using it to cement their political support.