COMMENT | The journey of 10,000 miles begins with a single step. In this vein, nothing can be done in haste.
Yet, as shown by the tsunami of the Malaysian rakyat on May 9, 2018, one can never say never too. Black swan events do occur, once emotions have reached a tipping point.
Thus, if the people, whose lives have become financially beleaguered and economically drained, are now searching in haste for solutions, it then becomes incumbent on the government of the day, which is Pakatan Harapan, to deliver the proverbial meat on the table.
Let's look at the economy objectively, especially with the goal of securing the future too. It has always been Prime Minister Dr Mahathir Mohamad's aspiration, indeed the dreams of all Malaysians, to be a high-income nation under the World Bank's definitions by 2020.
Harapan now has less than two years to achieve this. It would require an increase in annual gross national income per head to US$12,236 from the US$9,860 in 2016. An improvement of nearly 25 percent is a tall order.
Harapan must embrace this challenge head-on, and not be sidetracked by other issues that are equally critical.
Take the labour market, for example. Official data shows there were about 1.7 million documented foreign workers in mid-2017, down from 2.1 million in late 2014. This is approximately 15 percent of the labour force.
On the surface, this may seem credible, as it reflects the number of visas issued to documented foreign workers.
But there are unofficial estimates that argue that the actual estimates of the documented and undocumented foreign workers could range between 6 million to 7 million. There is a statistical anomaly. Therefore, if the low-skilled labour sector is too large, Malaysia cannot transition to a highly skilled economy by 2020 and beyond.
Fulfilling 10 promises in 100 days
Come what may, Harapan did not challenge the previous government merely out of sheer caprice, or of wanting to go one up on then-prime minister Najib Abdul Razak, let alone the entire Umno.
Our whole campaign was about "saving Malaysia." And, to save Malaysia, one needs a deep and broad strategy that can deal head-on with a global economy that is driven by 4As: Automation, apps, algorithm and artificial intelligence.
Harapan must also achieve a triple-A sovereign risk rating across the board, whether it is measured by Standards and Poor's, Fitch or Moody. Thus, there must be no let up on skilful financial and fiscal reforms, to broaden the revenue base.
Within its first 100 days, Harapan plans to fulfil ten of its promises - the first of which involves the elimination of the Goods and Services Tax (GST). The abolition of GST would be replaced by the sales and services tax.
Harapan is well aware of the demands at hand. If the GST is repealed, the state coffers would be functioning on RM42 billion less.
The sales and services tax alone can only produce up to an estimated RM16.5 billion. Thus, there is indeed a shortfall of RM25.5 billion. But the corruption of 1MDB alone was RM42 billion or more.
In Harapan’s alternative budget, we have clearly presented how we are to make up the RM25.5 billion.
Harapan will raise money from corporate income tax (RM2.81 billion), real property gains tax (RM0.3 billion), motor vehicle licenses (RM0.5 billion), motor vehicle import duties (RM0.13 billion), motor vehicle excise duties (RM1.3 billion), other import duties (RM0.4 billion), other excise duties (RM1.06 billion), stamp duties (RM1.2 billion), investment income (RM3.8 billion) and savings from wastage and corruption (RM20 billion), bringing in a total of RM31.5 billion. This gives an excess of RM6 billion, after making up for the shortfall of RM25.5 billion due to the elimination of GST.
On a more macro level, as explained earlier, the savings from addressing the leakages from annual government budget alone will be about 10 percent to 15 percent of the annual government budget. This is in addition to rising oil prices, which will provide the added cushioning required.
Eliminating systemic corruption
If the leakages of the entire country is taken into account, the full sum could well be five times the amount incurred by 1MDB alone. Thus Harapan plans to tackle corruption head-on too, as these are monies that belong to the people.
A concerted effort to eliminate systemic corruption means that the removal of GST will not pose a major problem. Harapan is mindful that corruption is a fact of life and will take all steps to eliminate it as under BN, corruption has become a way of life harming the people and the nation.
Some of the tolls on the roads have also exceeded their share of fair extraction. If the tolls are there indefinitely, it goes without saying that one must eliminate them too.
The above are just some of the measures that Harapan will take. Harapan will study all the concession agreements and come up with a comprehensive solution that will go a long way to reduce the people’s cost of living.
But it is also important to start with the basics when attempting to transform any economy. In this sense, Harapan will also focus on building one million homes, under a rent-and-own scheme, where the residents can benefit from the businesses.
However, in order not to create any crowding-out effects, such homes would have to be built in areas that can benefit other rural areas and constituencies in Malaysia, so as not to price out the private sector that is hunting high and low for premium land too.
In all, a majority of rakyat Malaysia has spoken. And the trust to change Malaysia for the better has to start now. There is no excuse for any delay, as the Malaysian economy has been retarded due to corruption.
Corruption, in a new Malaysia, will have no more leverage on public policy. The era of rent economy, where the country's policy instruments are vulnerable to internal and external state capture, is gone.
Long live Malaysia! Long live democracy!
RAIS HUSSIN is a supreme council member of Bersatu. He also heads its policy and strategy bureau.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.