Thursday 9 August 2012

PEMANDU will be defeated by complexities of modern economies, says REFSA

KUALA LUMPUR, Aug 9 — PEMANDU is “failing” because modern economies are too complex for central administration by a single agency, the Research for Social Advancement (REFSA) think-tank said today.

REFSA also accused the unit in charge of transforming government machinery and the economy of being too engrossed with putting out rosy reports and for valuing “perception and spin above genuine transformation”.
It added that PEMANDU was creating a delusion that the government could drive the economy and pointed out production in the country could not be cranked up by a per cent or two in order to meet designated KPIs given from “above”.

“PEMANDU is now failing for the same reason that command economies and central planning failed,” said REFSA. “Modern economies are far too complex for any single agency to administer.”

The two Cambridge-educated analysts who authored the REFSA report — Ong Kian Ming and Teh Chi Chang — and PEMANDU CEO Datuk Seri Idris Jala (picture) are a study in contrasting styles with the REFSA duo playing the role of watchdog and focused on flaws in PEMANDU’s data while Jala loves to end his presentations by quoting the famous blind author Hellen Keller as saying: ““Keep your face to the sun and you will never see the shadows.”

While Jala has appeared to try to rise above his agency’s critics by saying that the unit will remain focused on its “true north” of making Malaysia a high-income nation, REFSA has repeatedly stressed that PEMANDU should ensure its reporting is as near perfect as possible as it is a unit within the Prime Minister’s Department, which means it represents the prime minister himself.

“The integrity of the information emanating from this department must be beyond reproach,” said REFSA.
The think-tank had previously accused PEMANDU of fudging or making mistakes with its facts and numbers including GDP growth, Economic Transformation Programme (ETP) economic impact and the status of some projects.

It added that data and information integrity was of paramount importance for any government undertaking, and even more so for an ambitious programme such as the ETP.

“We must be wary of going down the old Soviet-style path of arbitrary target setting and professed achievements or, more recently, of Argentinean-style suppression of reported inflation to delude ourselves into thinking that our economy is in better shape than it actually is,” said REFSA.

REFSA also claimed that in PEMANDU’s rush to deliver “Big Fast Results”, it has been sweeping economic realities under the carpet.

“Ambitious targets underpinned by realistic plans, a ruthless focus on execution and good people take us to levels we would not have thought possible,” said REFSA. “But it is somewhat hubristic, not to mention delusional, to think that a government agency comprising 80 or so people can boost the economic growth rate by 20 to 50 per cent annually.”

PEMANDU was created by Prime Minister Datuk Seri Najib Razak to oversee his ambitions to take Malaysia to developed high-income status by 2020.

The ETP programme initiated by PEMANDU states that the bulk of the investment should come from the private sector although the government would make catalytic investments to help bolster private sector confidence.

“We are serious about reducing government involvement, especially in business, but are often disappointed that people out there don’t realise that we are serious about it,” Jala wrote recently in his column in The Star. “That gives us a case of the blues sometimes but we will continue to do what we have to.”

The crux of the issue however could be that Malaysia has practised state capitalism for so long that it is now grappling with sheer inertia that has made it difficult to affect structural change.

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