Monday, March 22, 2010

High Income or High Competitiveness?

Battle is the most magnificent competition in which a human being can indulge. It brings out all that is best; it removes all that is base.

All men are afraid in battle. The coward is the one who lets his fear overcome his sense of duty.

Duty is the essence of manhood

General George S. Patton

When I went to 'roll my sleeves and get my hands dirty' in The Little Red Dot a couple of years ago, too often I heard that they never thought a Malay could be as competitive because they have seen many come and go and they lack the urge to compete healthily on the same level with the rest of the team, instead of using their charms to gain support to stay afloat. At first, I felt good but after a while, shish, are we Malays that bad that me, the not-so-smart malay gal could be seen as such?

With this hoo haa on making this country a High Income Economy, joining another 67 countries recognised as ones by the World Bank, I am totally skeptical that this country, with Malays being the majority, could be one because I always see that most Malays are 'malaise' and they think highly of them it's extremely difficult to make them think, what more to think outside the box and make this country a great one? Most think the job they have are rightly theirs, not because they earned it, but because they deserve them even when they only lift a finger or two! This explains why our public servants balloon up in recent years - just like when we first gained our Independence. However, this time around, we hire more not to empower them but to control them in times of elections. Like Sabah and Sarawak, they are also our Gomen's FDs.

Even if we become one, I hate this GNI and that GDP because we could have high income per capita yet not everyone benefited from it. So, what good does it make? It goes back to where we are today.

I shall leave economic theories to those people who know best like Mr. Etheorist (wow, I love his blog!) and today, I wanted to rant about Global Competitiveness Index ("GCI").

"The essence of competitiveness is liberated when we make people believe that what they think and do is important - and then get out of their way while they do it" ~ Jack Welch

GCI is a new, more comprehensive tool to assess competitiveness of nations as "a competitive country is one that increases the prosperity of its own people". Developed for the World Economic Forum ("WEF") by Professor Xavier Sala-i-Martin of Columbia University, the new index extends and deepens the concepts and ideas underpinning the Growth Competitiveness Index formerly used by the Forum. Officially launched in September 2006 as part of The Global Competitiveness Report 2006-2007, the GCI has now become WEF's main index of reference. For 2009 - 2010, Switzerland knocks USA off the first spot to be the most competitive country.

What I love about GCI is that it encompasses on 12 Pillars of Competitiveness, taken from the very plain words of Dr. Gerald Bracey here in the context of ever-familiar USA: -

1. Institutions must operate through laws that are fair, not through personal whim or through the kind of cheating we saw at WorldCom, Enron, etc.

2. Infrastructure. We have long taken infrastructure for granted, but since Katrina and the collapse of that bridge in Minneapolis, we can no longer afford to be complacent. You need effective was of transporting goods and people via roads, railroads, ports, and air. You need reliable electricity and a good telecommunications system.

3. Macroeconomy. Our weakest link. Governments that have to pay lots of interest on debt can't be efficient because that money can't go to increase productivity. The U. S. debt, both to other nations and to its own people is huge. The trade deficit has been falling somewhat because of the falling dollar, but that kind of gain entails its own risks--if China and Japan bail out of buying bonds and such in dollars, the economy will collapse (but so will theirs)(75).

4. Health and Primary Education. As I showed in "The Worst Place to Be a Kid," the U. S. is not a particularly healthy place to grow up. And the health problems suffered by children carry over into the workplace as adults, especially for low-income workers. Primary education establishes the base for later education.

5. Higher Education and Training. For the WEF, this includes secondary school as well as institutions of higher education. And, as the half-life of jobs shortens, the availability of and ability to take advantage of high quality on-the-job training becomes increasingly important to both employer and employee.

6. Goods Market Efficiency. In a competitive nation, the most efficient firms produce goods that consumers really want.

7. Labor Market Efficiency. In a competitive nation, workers are allocated to their most efficient use and given incentives for high performance.

8. Financial Market Sophistication. A competitive market channels resources to the best entrepreneurs, not to the politically connected. It also provides risk capital and loans.

9. Technological Readiness. The WEF holds that differences in technology use explains much of the differences in productivity among nations. Information and communication technologies are especially important in this regard.

10. Business Sophistication. This reflects how well various related companies work together in networks.

11. Innovation. "Firms in innovative countries must design and develop cutting-edge products and processes to maintain a competitive edge. This requires an environment that is conducive to innovative activity support by both the public and private sectors".

12. I left out market size because a) I'm running out of room and b) the WEF admits that it is not as well established as the other 11.

For more bytes on these pillars, I enjoy reading Prof.M.Guruprasad's as it shows the vital aspects of each pillar.

Once upon a time, Malaysia and Taiwan were standing on the same level in terms of competitiveness and 52 years on, Taiwan is on the 12th place - jumped 5 places - while Malaysia falls 3 places to be on the 24th place (See WEF's full ranking here).

Why do I need to compare us with Taiwan anyway? Not only it is amongst the highly competitive countries, it is also a High Income Economy! Maybe we need to get our EPU to learn a thing or two from this nation!

If you watched NatGeo, Disc and Travel & Living channels, you would see many faces, facets and assets of Taiwan. This tiny nation houses the most expensive and the finest Chinese treasures - thanks to their advent in technology and their responsible to guard these precious priceless gems from the past that make Chinese people the best amongst the finest. Nonetheless, its advent in technology is well balanced with their love for harmonious existence with nature, self-sufficient to feed its people. Amongst the cleanest and the best social community services, this tiny nation with a big heart and brilliant plans is a must-see travel destination.

It's Council for Economic Planning and Development in May last year came up with development strategies for six key emerging industries over the next three months: - (i) tourism, (ii) medicine and health care, (iii) biotechnology, (iv) green energy, (v) culture and creation, and (vi) high-end agriculture, in order to cope with the drastic changes that are taking place in the global economy and enhance Taiwan’s industrial development, aiming to upgrade industrial competitiveness and break through the difficulties facing exports at a time when the international environment is faring so poorly.

And we went Ga Ga over 5-year RM1.0 B investment in bottling Coke when F&N decided to quit, planning to build Nuclear Power Plant when we have enough green energies to leverage on, destroying our billion years, irreplaceable flora and fauna that not only supply livelihood to many of its citizens and a wondrous Mother Nature that we could offer to tourists.

I once watched on NatGeo on 'belangkas' or horseshoe crabs. We Malaysians only know them as delicacies when their blue blood is liquid gold to biomedical industries.

We won't get anyway if the largest race in this country continue to take a backseat. It's high time to change that and be the change we want to see (Gandhi).


zewt said...

so you're plying your trade down south? i would be joining you very soon. and i am sure u know why me, together with so many people decided to make the move.

with food served right on a platter (metaphorically speaking), the major race will continue to take a backseat. with ppl screaming for food should be served on a platter, that backseat will just get more and more comfortable.

thanks for the info on liquid gold... very englightening indeed.

zewt said...

and... dont let how others see you affect the way you see yourself.