I was interviewed by The Malaysian Insider yesterday to give my views on the Pakatan Harapan budget compared to BN.
In brief, I pointed out that Pakatan Harapan’s base philosophy is the Social Market Economy model, which is predominantly used in Nordic and Germanic countries. However we are mindful of incorporating Asian and Islamic elements and influences within. For instance, while we believe in progressive taxation, we do not believe a tax rate above 30% will be acceptable to most because most Asians believe in personal responsibility.
Fundamentally, we will strive for economic equality irrespective of race or religion. We will also utilise elements of the free market as it is a superior means for efficient production of goods and services. The key is to regulate and not to allow an extreme brand of capitalism to take root and cause undue influence of money into politics.
The Nordic and Germanic countries are very good at balancing equality and economic growth. It is clearly a more sustainable and responsible model than the American.
The key to such an economy will require first, knowledegable ministers and lawmakers that have the political will to drive such a vision. The second element is the intelligentsia, the academics, economists, technocrats, statisticians, poets, writers and artists to merge and forge ideas and shape the soul of the nation. Third, we need an efficient, transparent and accountable civil service to implement our vision. Fourth, we need a free press and NGOs to be vigilant of the dealings of those in power.
The budget is a technical document of numbers and allocations. It must however derive from a philosophy. That philosophy originated from the ideas contained in Anwar Ibrahim’s Malaysian Economic Agenda. I was lucky to have been there with him when we considered many economic issues. He had a pragmatic approach to many of the ideas, reminding me time and time again how things are actually done in government. How to avoid pitfalls and how to create buy ins from the civil service. I remember clearly one budget session, where I said we needed to increase teacher’s salaries by 30% for 3 years to catch up with other developed countries, ultimately to produce productive graduates. He advised me to build in accountability into the budget and to keep the increase at 6% per annum so as not to create other unintended consequences, such as unhappiness with other civil service departments.
For the 2016 Pakatan Harapan budget, we miss his guidance and inputs. But I believe, we are still carrying out his guidance in spirit, that we as a nation must continue to forge economic equality to power economic growth.