Of economic freedom and 'Malaysia Boleh' spirit

 

It Seems like the season for heavy questions. Is the economy really recovering? Can we really change our economic model? Why did Manchester United (Man Utd) sign up Michael Owen?

Okay, so maybe the last one was not a heavy question but it's an intriguing one nonetheless. But let's go back to the economy. The local stock market is bouncing along nicely and the US economy is said to be showing signs of stability.

Cash calls or rights issues are getting bigger, a sign of confidence among companies. Budget airline AirAsia Bhd wants to raise RM500 million and plantation group IOI Corp Bhd says it's looking for more than double that amount from its shareholders.

What about smaller companies? I had lunch with a public relations outfit whose office is in the Mid Valley Megamall area recently and they said they wanted to hire more people and look for a bigger office.

Closer to the ground, traffic jams are still notorious in Kuala Lumpur that it is difficult to get parking in the malls over the weekend, and some 80,000 people paid as much as RM308 per ticket to watch English football champion Man Utd.

All of this leads me to conclude that we're not in such bad shape.

What's harder to figure out is if we can actually transform the economy from one that's dependent on a lot of factories making things that are sold abroad to a high income model.

Malaysia is now squeezed in between low-wage rivals like Vietnam and the leading innovators in rich countries like Japan. Busting out of this middle-income trap requires specialisation in selected areas and technological leadership, according to a World Bank report.

It also requires the ability to innovate and do things in a better way. This is why it's important for the government to foster healthy competition as it would spur companies to innovate to grow.

The government has been doing exactly that in recent months. It has relaxed foreign ownership rules in certain segments of the economy, for instance.

What about having the necessary talent to drive this economic transformation? I believe we have them, it's just a matter of finding and polishing them.

My belief is based on a story of a local airline engineer who has developed a software that has allowed his carrier to track every single plane it has in the world, among others. That has helped the airline save about RM80 million, which is the money it would have spent had it bought the programme from outside.

Now that's what I call "Malaysia Boleh".