Najib Razak, Prime Minister of Malaysia, was in the Parliament, on Thursday, the first time, to announce a major policy – the 10th Malaysia Plan (read here and here). The 10MP is to guide Malaysia’s development strategy for the next 10 years (2011 – 2020) to achieve Najib’s signature policies – 1Malaysia, GTP and NEM and ultimately Vision 2020 through (read here, here and here).

The Financial Times quoted that, “…The Oscars ceremony in Los Angeles has been described as “20 minutes of entertainment crammed into two hours of television”. Mr Najib’s 20 minutes of reform has so far failed to convince…” (Read here)

It is worthwhile to note that the World Bank has dedicated two reports to Malaysia on how to beat “The Middle Income Trap” (read Repositioning for Growth and Growth Through Innovation). The two reports essentially suggest that to beat the “Middle Income Trap”, Malaysia will need to do the following:

  • Promoting further specialization of the economy
  • Improving the skills base of the labour force
  • Making growth more inclusive
  • Bolstering public finances

With regards to innovation – often seen as a key requirement to sustain economic growth, the WB suggests that Malaysia’s innovation performance can be strengthened in three dimensions:

  • improving innovation capabilities by ensuring that firms have sufficient access to talent, technology and finance for innovation;
  • enhancing the driving force of innovation by promoting and protecting the process of competition;
  • amplifying the impact of innovation by focusing on promising product niches and concentrating activity in geographical clusters.

Najib’s NEM and the 10th Malaysia Plan are similar in essence to these two reports (but then again this recommendation can be made to any middle income developing economy intending to move up the development ladder).

What has been missing is “the political strategy”. How should Najib implement these reforms and survive?

The above recommendations cannot be implemented successfully without eventually dismantling BN’s patronage and Malaysia’s race-based political system. To date, all of Najib’s moves that has hints of reducing or dismantling BN’s patronage system as well as race-based politics have backfired (read here and here).

If anyone has any suggestions on viable strategies for Najib, (as in Najib can implement it without being kicked out of UMNO and assist BN winning the next election) please do let him know.

Because if Najib (the bluest of blood in UMNO and BN) can’t implement reforms, then no one in UMNO can – and Malaysia will certainly face the prospect of dying a slow and painful death as the distribution of wealth (as in redistributing towards UMNO Malays) becomes increasingly untenable.