Prime Minister Najib Razak said once the country’s economy expands from RM1.3 trillion now to RM2 trillion in seven or eight years’ time, he could close his eyes and approve any request by the public.

The government is now implementing a number of mega projects such as the KL-Singapore high speed rail project (HSR), RAPID (refinery and petrochemical integrated development) in Pengerang, MRT, East Coast Rail Line (ECRL) project, Pan-Borneo Expressway, etc.

These projects will help expand the treasury’s revenue from RM220 billion to RM340 billion. When the government has the money, it will be able to satisfy the people’s needs.

But is it that easy to develop the country’s economy?

Implement mega projects and job opportunities will be created and people’s income will increase. If this is a cure-all solution, then we should have made it to the league of high-income countries during former prime minister Dr Mahathir Mohamad’s time.

Mahathir also implemented a number of mega projects such as the LRT, North-South Highway, Sepang International Circuit, Putrajaya administrative centre, among others. But in the end, the country is still stuck in the middle-income trap.

So, the failure of the Economic Transformation Programme (ETP) introduced during Najib’s earlier days as the prime minister was not because the plan was not right but because we lack effective execution and political will.

The government should not revert to the old way of boosting economic figures by way of these mega projects because their effects are not long-lasting and could significantly raise our debt levels.

Mahathir’s mega projects had pushed the country’s debts higher and by comparison, the positive effects have been less. Owing to exorbitant costs, the country has decided to stop hosting the F1 motor racing event after 2018.

Economic development must never be taken for granted. When crude prices fall, we look to GST and when consumer sentiment is low, we look to investment funds from China and several impressive mega projects. This is not a long-term plan.

We need to have good governance and meritocratic policies in order to transform the country’s economy, enhancing the value of our products through R&D input and liberate our people’s creativity through education.

China’s economy has been growing by leaps and bounds not so much because of mega projects alone, but the people’s creativity and diligence as well as government efficiency.

If we carry on with our racial policy without good governance and implementation efficiency, we won’t be able to breakthrough the bottleneck, in politics or in economy.

There are issues we need to urgently look into, such as the livelihood of the people.

According to Bank Negara assistant governor Abu Hasan Alshari, only 6% of Malaysians have enough savings to last them for more than six months once they lose their sources of incomes, while 18% can last for three months.

This shows that some 76% of Malaysians do not have enough cash savings to see them through difficult times the moment they lose their jobs.

To low-income earners, they won’t be bothered about the vision of a developed nation or the TN50. They are more worried about the rising cost of living and ringgit depreciation.

There is a plethora of uncertainties affecting the country’s economy. Internal factors include political and policy instability. The collaboration between Umno and PAS has added the atmosphere of uncertainty to the country’s politics.

It remains to be seen whether BN’s moderate roadmap will last and whether BN will become a Muslim government.

In addition, the police investigation of foreign funds to NGOs and Najib’s presence at the Solidarity with Rohingya gathering resulting in Myanmar halting the export of labourers to Malaysia, will all affect foreign investors’ confidence in Malaysia.

It has been reported that foreigners are holding about 40% of the country’s public debts. During the first half of November, foreigners sold about RM5 to RM8 billion worth of Malaysian bonds, causing the ringgit to plunge as a result of weakened confidence.

As for external factors, US president-elect Donald Trump’s hardline stance against China could trigger a new wave of currency and trade wars, and this will have a direct bearing on the Malaysian economy.

Meanwhile, Malaysia’s October exports slipped by 8.6% while imports dropped 6.6%, showing that domestic demand remained weak.

Tay Tian Yan writes for Sin Chew Daily.

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