What we need is tough love

There is a lot of interest on the new economic model (NEM), which would help Malaysia make that important leap to a high-income economy. It will be announced at the end of this month.

Everyone is curious because it may have an impact on their lives. For companies and foreign investors, it will be important for them to plan their future.

For Malaysians, it would be wrong for them to think that the NEM would be the Panadol that we so badly need. Rather, it would be the prescription. (I don't have inside information on what it entails so these are my personal views).

The two areas that I think it will address are subsidies and education.

Malaysians know subsidies very well. We pay for cheap electricity, cheap petrol and cheap basic food items. The NEM is likely to say that this will change.

This is not a new message but it needs to be repeated and explained because if all of us don't get it, our kids will be in trouble 20 or 50 years down the road.

Subsidies not only reduce the need for people to be more careful with precious resources, it also makes our companies weak. Worse, it creates a mindset that is difficult to change; the government will have the answer no matter what, so there's no need to think about it. The individual wants other people to do the thinking for him.

At the height of the financial crisis last year, Professor KS Jomo came to town to give a talk about the issue. Despite short notice, the hall was full and people were sitting on stairs. His talk was good but at the end of it, one person stood up and asked, "What should we, as ordinary Malaysians, do?"

Cheap energy also takes away the initiative for companies to invest in more efficient machines and equipment to save costs and grow in the long run. For example, hotels or shopping malls will be content to buy cheap, inefficient motors that help move elevators and escalators. Ever wonder why you always come across broken escalators and lifts? I believe that's one of the reasons.

The other side of the damage that subsidies wreak is the lost money in potential developments. Billions of ringgit are spent to keep prices fixed when they could be put to better use. We could pay our teachers better or hire more policemen with better pay, for example.

Education should also figure prominently in the NEM. Fortunately, the government has announced important measures like the 20 high-performance schools and hiring foreign teachers for English.

We have to reward our teachers better and continuously train them to help them do a better job. This doesn't mean that education is the sole responsibility of the government. Companies need to do more than just give out scholarships to top students.

The US has a scheme called Teach for America, which has been copied by other countries like the UK. Essentially, it is a non-profit body that hires graduates to be teachers in poor communities. It has proven to be wildly popular in the US as more than 10 per cent of those who finished Ivy League universities apply for teaching slots every year, according to recent US media reports.

It is a good idea to consider because studies have shown that the new generation Y are those who want to do something meaningful with their lives. Such a scheme, funded by top corporations, could provide an outlet for this and provide our top firms with potential valuable talent.

For sure, removing subsidies and improving the education system won't be easy. But it needs to happen if we are serious about a better future.

Those with children could probably relate to this better.

Some parents will not give their children too much pocket money or be overprotective at the playground. They do that for a reason. Children will learn how to budget and that bloody knee will do a much better job than another stern no.

What Malaysia needs is tough love.