We were colonised for 446 years before we became independent in 1957, and Tan Sri recollects that we have done pretty well despite many people thought we would fare badly.
Why have we done well? Tan Sri posits that it is because as we Malaysian make the right decisions
- We have chosen democracy, capitalism and an open economy as our model when the world was inclined towards socialism
- The test of our democracy: seamless and smooth transition of regimes on 9 May 2019
- The model chosen was pragmatic and not ideological
- The capitalism chosen was laissez faire, focus on growth and not on distribution, and depending on the thr trickling effect flood will lift up all the boats - but it did not work
- Hence NEP was born, but we do not rob Peter and give to Paul - we focussed to expand the cake instead and hard core poverty was reduced drastically
- One major challenge was in 1986: Where the country's diversification from 2 products rubber and tin we diversified to other agri commodities suffered when prices of global commodities crashed. NEP features were diluted, but in 1989 the country was back in prosperity, where it even prepaid loans taken to help with the crisis.
- 1997 was another crisis when the country was under attack by currency speculators, but there was a contagion effect from Thailand, Indonesia & south korea. Despite the currency being stable but it went up compared to the dollar and profits wiped out to forex losses. Malaysia was the only country that suffered from the crises but did not borrow from IMF or the World Bank because their solution was perceived to "cause blood in the streets".
- Next watershed was creation of islamic banking. Pragmatic step by step approach over 10 years. Malaysia is the only country in the world with a dual banking system
Outcomes of pragmatism: Householg income in 1957 was RM200 and today it is RM7,000, poverty is reduced, upward mobility is quite good. There were hardly any professionals even in the 1970s, it was 7 professionals to 1000 people but today it is 46 out of 1000, middle class is there and growing.
There are many challenges of course and many things we need to do differently, but with the track record of overcoming past crises, Tan Sri believes that this should give us hope that we will overcome any challenges.