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by Lee Heng Guie

A nation's 50th anniversary is perhaps a useful benchmark to take stock of the country’s 50 years of developments, in order to assess its future growth path.

Malaysia is a young and forward-looking nation, which has the essential qualities of ingenuity and enterprise to push the nation forward.

For the past 50 years, the checks and balances of a diversified economy have paid handsome dividends as well as provided the needed cushion to weather the swings and vagaries of external cycles. The facts and figures are compelling by international standards.

At the time of independence in 1957, per capita income was US$200. Fifty years later today, it is expected to hit US$5,806. Bank Negara Malaysia’s international reserves, a measurement of the country’s overall wealth accumulation, ballooned to US$98.4 billion as at end-May 2007, a multiple of 289 times of 1959’s US$340 million.

There were, of course, challenges, obstacles and problems that had to be overcome during the last 50 years. And the journey ahead will be even more challenging and demanding.

The Malaysian economy is still growing and undergoing structural changes. Globalisation has intensified interdependence and competition between economies. It is thus clear that a globalising economy, while formulating and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world.

Hence, it is crucial for policymakers to plan and formulate economic, fiscal, monetary or social policies with more certainty and confidence.

The writing is already on the wall. Our economy has to move into fast-growth gear and economic and financial transformation needs to be accelerated. Malaysians must be bold and brave enough to adapt radical policy changes and reforms in order to become a truly competitive global player. The key for the future is whether the economy is flexible enough to adjust and adapt. There is no easy way out.

From today’s vantage point, I would like to see the following transformations take place over the next 50 years. The next 10 to 15 years are important milestones for Malaysia to make a quantum leap in its quest to attain developed nation status by 2020.

First, a nation blessed with well-being, equitable wealth and income distribution, and balanced development between growth and the environment.

The yardstick of a developed country is not only benchmarked against real GDP growth and income per capita, but most importantly, against the attainment of good quality of life, strong human capital development, a caring society, the sharing of economic prosperity, credible public institutions and solid corporate governance.
Second, high quality economic development to be spearheaded by a dynamic, competitive, innovative and risk-taking private sector.

Malaysian indigenous companies continue to make a strong presence as competitive contenders in the global sphere, covering plantation, Islamic finance, construction as well as other services providers.

Central to the government’s strategy to promote private sector investment is the liberalisation of restrictive laws and practices, as well as the deregulation of cumbersome rules and regulations.

Third, an accelerated pace of transformation within sectors of the economy. Malaysia was already sufficiently diversified in the manufacturing and agriculture sectors. We need to accelerate the pace towards building a modern, dynamic, as well as competitively priced service-oriented economy. Having the world class hardware and software infrastructure is not good enough.

What is lacking is getting the right person to do the job. The challenges ahead are related more to our efforts at deepening and value adding to the broad-based services sector, backed by a knowledge-based, information savvy and versatile workforce.

Fourth, a world class education system that produces knowledge workers with the right attitude, mindset and character for our nation building. We must be open-minded, practical and creative.

Lee Heng Guie is chief of economic research at CIMB.

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