The Malaysian Insight

ON paper, the former Najib Razak administration promised to create about three million new jobs but in reality, 60% of those jobs created were filled up by foreigners who did not mind the low wages.

On paper, the nation was to become a high-income one by 2020 but 60% of its households still needed government cash aid to make ends meet.  

These are among the economic failures of the Najib administration that the current government’s Shared Prosperity Vision 2030 does not want to repeat, said Institute Masa, a think-tank that co-authored the SPV2030 document.

M. Nizam Mahshar, the CEO of the think-tank, said one problem with the Najib administration’s National Transformation Plan (NTP) was its obsession with eye-catching statistics.

What the former government failed to do was measure accurately the outcome of its policies on ordinary citizens.

This was one reason the NTP came up short on its targets despite billions of ringgit spent on programmes to boost entrepreneur incomes, provide affordable housing and generate high-paying jobs, said Nizam.  

“They were output-focused instead of outcome-focused. They used key performance indicators (KPI) while we want to use key result indicators (KRI),” Nizam told The Malaysian Insight.

The NTP was Najib’s signature economic plan to turn Malaysia into a high-income country. It had two prongs – the Government Transformation Plan (GTP) and Economic Transformation Plan (ETP).

In another example, Nizam illustrated how the administration massaged the “output data” of the policies when those programmes did not show favourable results.  

Senior urban housing planners told the think-tank that units for PPR housing units meant for low-income households in the Klang Valley only had a take-up rate of about 14% to 20% – meaning only that many B40 buyers bought those units.  

“So instead of changing the programme to get the outcome needed. They changed the KPI from take-up rate to the offer rate,” said Nizam, referring to the rate at which these units are offered to low-income earners.  

“And immediately the figure shot up to 140%, but they did not in reality solve the problem, which is that B40 households struggled to own houses,” said Nizam.  

Valuing results

The SPV2030 was launched on October 5 by Prime Minister Dr Mahathir Mohamad and is Pakatan Harapan’s 10-year economic plan.

Its three aims are to restructure the economy; address wealth and income inequality across ethnic communities, regions and classes; and to build a united, prosperous nation that is a regional powerhouse.  

In 10 years, SPV2030 aims to, among others, raise the incomes of the B40 group to not less than RM5,800 per month.

It also wants to make small and medium enterprises (SMEs) and microbusinesses a major driver of the economy by raising their contributions to gross domestic product from 20% to 50%.

SPV2030’s guiding principles state that it will achieve these targets through seven strategic thrusts, including restructuring the business and industry ecosystem, boosting key economic growth activities and developing human capital.

The NTP’s own three pillars are inclusivity, prosperity and sustainability but Nizam said the similarities end there as there is a stronger focus on integrity and institutional reform.

These reforms are critical to the SPV’s success as they ensure that civil servants and policy planners properly implement programmes and accurately measure whether these initiatives work.

For instance, instead of just monitoring how many entrepreneur development programmes and how many participants show up, it must also measure whether those who took part grew their businesses and made more profit, Nizam said.

“It is a more of a challenge and in our consultations with some civil servants they said it was more challenging. But it’s necessary,” said Nizam.

“Like the prime minister said, we have to set targets and move from KPI to KRI. We need to value results indicators instead of just looking at performance.” – October 22, 2019.