From P Ramasamy
It is well and good for Prime Minister Anwar Ibrahim, who is also the finance minister, to speak of the urgency for Malaysia to break out of the middle-income country stranglehold.
The issue of middle-income entrapment has been debated for one or two decades. In other words, the cliche of breaking out of the middle-income trap is not something new.
The real question – how Malaysia is going to break free from the middle-income to become a high-income country – remains uncertain.
This is a far more difficult question to answer than merely invoking the rhetoric of middle-income entrapment.
Repeatedly emphasising technology-driven growth, digitalisation and innovation-led development hardly adds anything new to the long-standing debate.
While technology, digitalisation and skills-based employment are undeniably important elements in the pursuit of a high-income economy, these ideas have been articulated many times before.
The experiences of a handful of countries that achieved high-income status through natural resources alone cannot be entirely discounted.
But inevitably, Malaysia must rely on technology-led growth, digitalisation, skills development, artificial intelligence and related sectors.
Even if Anwar is correct in identifying the requirements of a high-income economy, he fails to address the most critical resource of all: the nature and function of human resources in the country.
Years of ethnic and religious policies, often disguised as affirmative action, have distorted the functioning of the economy.
While affirmative action can be accepted in principle to rectify historical imbalances, it cannot be used to justify ethnically divisive policies.
Discriminatory practices based on race and religion have undermined the rational utilisation of human resources and weakened economic efficiency.
The racially and religiously divisive policies of past governments – and to some extent, the present one – have impaired the economy’s ability to function on merit, productivity and innovation.
Without reorganising and re-strategising human resource development, efforts to accelerate technological and digital advancement will inevitably be constrained.
A nation that does not fully believe in the potential of its citizens to move the country forward is bound to falter in its journey towards becoming a high-income economy.
Anwar speaks fluently about the language and concepts of high-income development. However, he must provide clear answers on how to transform the trajectory of human resource development.
Skills, technological access and digitalisation are important, but without a level playing field in human resource policies, even the best intentions will fail in practice.
The aspiration of achieving a high-income economy will remain a pipe dream if leaders are unwilling to confront the elephant in the room.
P Ramasamy is the chairman of Urimai.
The views expressed are those of the writer and do not necessarily reflect those of FMT.
