Malaysia’s PM Najib Razak claimed that people coined his economic vision as Najibnomics, and he proudly said last month that it is indeed a successful economic plan.
But little did he know that Najibnomics would have a nefarious effect on his ruling coalition’s chances in the next General Elections to be held next year.
And that is because Najibnomics is the simplest but not the smartest form of economic intelligence. It is so simple that it is based on three major principles: minus, pluses and long division – in short, it is purely an arithmetic exercise and it does not even involve pure maths.
It does not take a genius to achieve the so-called successes of Najibnomics on paper while the rest of the country is squeezed like a fresh orange, and the remains of the struggling populace – as you know it – is dried and made into cattle fodder waiting for the polls to choose their leaders again.
Najibnomics is driven by a few global and local hallmarks. They are as follows: For the global ones, there is firstly the fear of the rating agencies and the race to become a developed, high-income nation. No matter what happens in between, the country must show it has achieved the goals.
Under the highly publicised plan, the program will lift Malaysia’s gross national income (GNI) to US$523 billion by 2020, and raise per capita income from US$6,700 to at least US$15,000, meeting the World Bank’s threshold for a high-income nation.
It is projected that Malaysia will be able to achieve the targets set if GNI grows by 6% per annum and Najibnomics will do even better because there are talks of pushing the GDP to 9% growth.
On the local scene, Najibnomics is trying to achieve everything through OPM.
That is other people’s money. And by that, it clearly means the use of OPM to achieve the local economic success.
This too is driven by the fear of losing to the opponents and if necessary, everything that has to be done through the minus, plus or divide, will be carried out in simple terms in order to show a success Najibnomics.
That is to say, the government uses money that is not in its pocket to make promises and then ropes in the necessary actors and players by dishing out projects to them so that they can benefit by profiting in the long run.
Nothing wrong with that, but the exception is this system is not necessarily the best in a country where debts, in every nook and corner, are high through the BN claims Malaysia does not have the highest debt ratio in the region.
But since the local companies do not have that amount of cash, Najibnomics roped in the rich Chinese conglomerates to operate freely in the country, with devastating results at times.
And it is another form of OPM. Thus, the simple arithmetic. No need to argue about that.
And these loopholes are fast catching up with the PM and the BN.
Take for example the high inflationary pressures. Though the inflation level is kept at bay with some tweaking and the refusal by the BNM and Statistics Dept to admit they are missing out on the disruptive economy, the inflationary pressures are high and the toll on the public is higher while the impact on Najibnomics is faint.
Another glaring example of the failures of such simplistic calculations to achieve moderate successes that are dependent mostly on external factors and on high domestic demand is the Goods and Services Tax or GST.
The tax has served the government well. But it is of great disservice to the people. Go and figure it out!
However the most glaring (sorry repeat usage of the word) of all examples or let me put it this way: The mother of all examples of the failures of Najibnomics is pump fuel price.
The government is now struggling to get the people to agree with it on the removal of subsidies – yet another form of OPM used under Najibnomics to achieve limited and quick successes.
These will haunt Najibnomics and will boomerang on the BN – if the opponents were to capitalise on them – and if the voters (particularly of Malay origin) gets their maths right.
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