The year that will be - We are sunk if we don't transform

The year that will be
A QUESTION OF BUSINESS
By P. GUNASEGARAM

WHILE a lot of us anticipate the New Year with hope, thinking in terms of new, fresh starts and such, there is often much trepidation too – the fear of what 2010 will have in store for us.

This week we have a special pullout with the theme “What lies ahead”. No, we have not quite turned forecasters as such, but we thought it would be useful for readers to have some idea as to what to expect this year and the key issues which are likely to crop up.

I hope you have some fun reading those pieces by our columnists and writers as well as the exclusive articles we have sourced from the world’s leading commentators. This should whet your appetite for information throughout the year, which no doubt you will process to find your way through the year.

Some things seem to be quite obvious at first look. Despite all that talk about a double-dip recession, growth is almost certainly likely to be better this year than last year’s dismal showing.

But that’s probably more than reflected in share prices, and if you think the share market will achieve new peaks, I don’t share your opinion. One of our writers (see the centre pages in the pullout) actually thinks we will reach new heights on the stock market but I prefer to be cautious.

The world will avoid a recession this year for sure, but it is what happens after that which is of greater concern. Further out, in 2011 and 2012, there are likely to be serious concerns about inflation and a readjustment process required to bring some semblance of order and regulation to markets.

With all that money pumped into the system, there is likely to be some inflationary threats sooner or later that will have to be tackled by restricting the supply of money into economies, especially the US economy. What that would do to nascent growth will be a matter of some conjecture. One can only make educated guesses.

For us in Malaysia, unless we can find quickly some sources of good growth, put the resources in to tap them quickly and make moves to sort out a myriad of long-term problems, including corruption and education, we will be pretty much stuck in the so-called middle-income trap.

If we stagnate there for too long while others make huge strides towards increasing their economic growth, which simultaneously increases incomes too, we may well slide downwards in our middle-income rankings.

Much depends on two things that we have embarked on and how successful they will be. They are the government transformation plan (GTP) to improve substantially the way we do things and a New Economic Model (NEM) to expand the economy more rapidly.

Key elements of the GTP have already been unveiled and later this month we should see the book which will reveal the plan in far greater detail. This plan will drive a change in the way we do things and bring results. If we achieve too little here, we are in deep trouble.

The NEM is expected to be released next month and a lot of us are waiting with bated breath to see what is on the cards that will provide a quantum leap for our economy and propel it into a high-income orbit.

Plans are one thing, execution is another. Which is why we need the GTP even if we have the NEM. The government needs to transform and quickly if it is to implement plans. Otherwise, we are all sunk.

In more ways than one, 2010 is a year of reckoning not just for the world but Malaysia as well.

Managing editor P Gunasegaram takes this opportunity to wish readers a very happy and prosperous New Year.