• What Is Political Economy?

    Aristotle believes that government, Society and Economy are one entity of the nation. Politic and economy cannot be separated.

  • Social Democracy

    The reform does not have to be coercive revolution and allow the democracy assimilate with Marxism and lead the form of Social Democratic parties...

  • What Is Marxism?

    Capitalist is a class that is according to Marx exploiting the proletariat which is the workers and continues until today.

  • Should We Support GST?

    Some said GST should be implemented to cater the welfare needs and to support the aspiration to become a first world country.

  • What Is Keynesian Economics?

    t emphasizes on the role of government in helping people make a rational choice. The Keynes believes that people is not always rational in certain condition.

Showing posts with label Political Economy Issues. Show all posts
Showing posts with label Political Economy Issues. Show all posts

Malaysia Process On Policy Formulation

12 June 2014 0 comments

Policy Formulation Process

Policy formulation varies from countries to countries. It will depend on the type of political structure and philosophy of one State. The world trends also may have influenced on the overall practice of a nation. Sometimes, such trend may result acceptable or radical outcome.

Policy Models

Public Policy varies from one another and some based on several models such as :
a) Institution model – policy may result from an instituitional ouput.
b) process model –policy as a political activity
(c) group – policy as group equilibirium which means that the interaction among groups will result indicative demands(formal and informal)
(d) Elite model – policy as elite preference rather than the mass opinion. The normal people are apathetic and ill-informed about public policy.
(e) rational model –policy as efficient goal achievement. It maximizes net value achievement after taking into consideration all aspect of denominators such as the values of the society, available alternatives, consequences, measures, and priorities of the most efficient policy.
(f) incremental model – policy as variations on the past. It is a continuation on the past government activities.
(g) game –theory model- policy as rational choice in competitive situation. It involve study of the rational decision in which two or more entities have choice to make decision and
(h) System Model – as system output .It is a response of political system where the force initiated from the environment itself (inputs-outputs relationship).

Public Policy In Malaysia

Scantility public policy in Malaysia is designed generally upon the requirement of the political and social structure and the future demand of the nations as whole. In Malaysia the social and political system are very closely related to the creation and formulation of public policy.
First is through political channel that means the policy is initiated through Cabinet orders or through the recommendation of several political reigning parties. Second is through administrative processes at the ministerial level. Since a policy has implication on the administrative machinery, the drafted policy is discussed at several high – level of government meetings. Third is through the combination of both processes via integrated approaches/interaction.

Policy making process

In general, policy making process in Malaysia has to go through several stages such as identifying the arising problem,  planning, and recommending/formulating suitable alternatives, legitimizing policies, implementing the suitable action policy, coordinating various events to suit the established policy and finally evaluating the effectiveness of such policy. Upon all processes, policy revision is vital nowadays due to the development of complex society in the modern era. Moreover, the roles played by certain groups are also essential to provide a better input in the content of the policy. In general, three players are identified: the politicians and government public administrators; the public’s and the related interest group.  The first group is the major players to be responsible in ensuring the success of the policy implementation. This group can be refined as the cabinet minister, members of parliament and high-level of government officials. The policy is implemented under the jurisdiction of the constitution and government regulations. Under the constitution, the federal, state and local governments are given constitutional rights to implement public policy. As for the publics, they can act individually or form interest groups to put forth their ideas and needs for government consideration. However, these individuals and interest groups do not automatically have exact power to formulate a public policy or playing as a major actor. Still, their movement can sometimes get a kind of strong public support through their campaign and activities and they also can make the policymaker to understand a ground problem in a clear vision to resolve the arising problems. Some even use the mass media as their tool to convey their intention toward the government and to this extent, recently this mode seems to be quite effective to trigger the government machinery.

Coordinating agencies

To understand the means of implementation for diversified types of policies among ministries; therefore we need to explore the coordinating machinery that involve in such as process. The essential component of coordination within the government machinery lies initially at the federal level where one of which is trough the cabinet and the cabinet committees. Three most important councils known as the national development council (NDC),  the national economic council (NEC) and the national security council (NSC) assist the cabinet to deal with related fields such as coordinating implementation of development programs and projects under NDC; planning on  economic aspects under NEC and security aspect under NSC.  These councils chaired by the prime minister himself. Since major component of policy deals with the development aspect, the  national development planning committee (NDPC) has been set up to evaluate and restructure all plans of the development programs drawn by various government ministries and agencies. The chairman is the secretary to the government and the secretariat is the economic planning unit, Prime Minister Department.


Malaysia as Practitioner Neoliberals Keynesian

9 June 2014 0 comments



               Nowadays, in Malaysia, people ask for government intervention to the poor and poverty and fight for the affirmative action for certain races and the son of the soils especially through UMNO to maintain the right of the Bumiputeras. Without the intervention of the government in affirmative action to help the low income Malay, the society will not achieve what liberal interprets as economic equilibriums and social justice. The States justify the intervention of government in economic through this reason. In example, in order to ask the government to reduce the crime rate or the abuse of drugs, the people cannot just tell them not to take drugs or just gave advised to those wrongdoers. People in the states need the government to become “responsible” and the demand for the roles of government. 

We can see that the Neoliberalism nowadays are turning to become a norm and not a threat to the people. The latest action was the stimulus package that provided by the government to boost up the economy.According to a Bernama report mention that the government has introduced two stimulus packages totaling RM67 Billion to help economies in facing the economic crisis. However the Prime Minister, Dato Seri Mohd Najib Tun Abdul Razak mention that strengthening the economy is much better that given the stimulus. (Bernama,20 August 2010). 

Malaysia had been educated to hope for the government intervention in their own life. States are willing to increase the help from the people in order to ensure politic and social stability. Sometimes the Non Government Sectors demand for the government helps and speed up the process. Like the request from  Master Builders Association of Malaysia (MBAM) request for the quick introduction of stimulus that had been announced in the 10th Malaysia budget. (Bernama, 19 August,2010). When the incentive from the government become routine, we can expect that people will demand more and more helps from the states. When capitalist are state dependent, it will affect the market competitiveness and also the market equilibrium itself. 

Malaysia as a Welfare State

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From my understanding, to apply to Malaysia fiscal policy, Malaysia is indeed practicing is welfare capitalism state. Malaysia have been subsidizing the need of the people on the basis of welfare example, in sugar, petrol, rice and other. The motions were strengthened by the Prime Minister , by mentioning that “Barisan Nasional have long applied the concept of the welfare state. Why Pas just think about it now?”[i]. The issues arose in the time where PAS are shifting their mission of forming an Islamic state to form a welfare state. However the statement was denied by Najib itself that Malaysia is going to implement welfare state policy because according to him, Malaysia will be into economic disaster. However, by ignoring the political flip flopping, I strongly believe that Malaysia is already in the phase of transition of welfare reform.
Currently, the government was subsidizing and controlling 20 crucial items on market in ensuring the price is affordable to the people such as sugar, flour, petrol Ron 97, cooking gas, cooking oil and other. Government also subsidise 97 percent of operating health care service in the country.

Welfare of Malaysia Education
According to UNDP 92.5 % of Malaysian are educated citizen.  With only 29 million of people Malaysia share 0.56% of total GDP  of the world by comparison that Indonesia with 244.2 million people only share 1.43% of world total GDP.   By ratio human capital in Malaysia are 3.17 times more productive than Indonesia. It indicates that our human capitals are efficient and outstanding. All of these facts signify that Malaysia has a strong economic foundation and ready for free trade gradually for the years to come. Currently, the education from primary school to secondary is free. In fact, the current allocation of government towards education is 21% of the GDP. The amount was approximately RM 38. 7 billion, which is among the highest in national budget 2012. Furthermore  RM 12. 7 billion of that were allocated for Minister of higher education. The allocations were planning to transform Malaysia education. Furthermore, one of the National Key Result Area (NKRA) of Malaysia is education improvement.   However, in university level, half of the fees are supported by government, the other half were paid by the student or through education loan PTPTN with 1% interest. However, for those who get a first class degree, they were exempted from paying the fees. Some of the welfare benefit enjoyed by Malaysian people in term of education is:

 1.         A free text book for all school students which involve 5.7 million students
2.         Allocation air on student uniform school for curricular activities for family income below RM 1,000 per month.
3.         Each year they will be allocated for scholarship, namely Biasiswa Kecil Persekutuan, Biasiswa Kelas Persedian Universiti & Skim Biasiswa sukan.
4.         Abolition of fees for primary and secondary school.
5.         No fees for taking the examination of PMR, SPM, SPM and STPM.
6.         The amount of scholarship for JPA were increased in 2008 from 5,000 a year to 10,000 a year.
7.         Addition food Program were enlarged. (Program Rancangan Makanan Tambahan)[ii]
PTPTN issues as a Class Struggle.
Before 1997, the tertiary education was supported by the government in term of scholarship. PTPTN had been introduced for the first time in 1998/1998 by Dato Najib Tun Razak Minister of Education during that moment, were intent to reduce the burden of the government to support in term of scholarship for the student admitted to university. At the beginning of the introduction, almost 13,000 students benefited from the PTPN with interest of 4% and were required to pay back within 10 to 15 years. Since the PTPTN were introduce, dozens of private higher institution were established and open up opportunity for those who were not fortunate enough or prefer not to study in the public university.
Only recently those students were protesting on the issues of PTPTN loan. In 14 April 2012  hundred of student began to march from Masjid Jamek , LRT to Dataran Merdeka. According to their anti-PTPTN protest, the abolishes of PTPTN will and everyone would have the right to access free education. The group was supported by opposition party, particularly PKR because during the protest , vice President Nurul Izzah and Tian Chua also gave a short speech. While the opposition leaders claim that the country need RM 25 billion to wipe out the PTPTN debt. However, the government denies that the real cost of eliminating the debt was RM 43.6 billion. In my opinion, the reason why the protest was not largely supported by the student is because the reason is not strong enough. The government never “took back” the gift so the spinning plate is stable. Furthermore, the interest was at 4 % were reduced by 1 %. It is not impossible in the future that the interest will be abolished.


The figure also suggests that the demand for PTPTN is increasing each year. It exemplifies the need of the people on the government aid in education. The increase of demand of the PTPN can also show that the scholarship is limited and not widely available.




[i] Najib Hairan Pas Hendak Wujud Negara Kebajikan, Date: 10-06-2011 Author: / Ere Mai, Bernama. [accessed on 22 November 2012]

Pakatan Rakyat Strongest point: Endemic Corruption of Barisan Nasional Ruling government.

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Each of the side, BN and PR have their strongest facts and principle. In my observation, one of the strongest points that PR have against the government today is the endemic corruption and its effect to our nation.
According to transparency international report 2011, two sectors are most corrupt which is the grand corruption and its police. Grand corruption means the corruption that involves elite and the one that have position. It shows that the majority of Malaysians rejects corruption, but it we still in the position of 60 out of  182 under transparency international Corruption Perception Index  in 2011.[i] The best rank that we achieved in Transparency International is at 2006 which is ranked 43 out of 163 in 2003. Ironically, there is a statement made by the Pahang MB mention that Rent Seeking OK as long as everyone benefits. (The Malaysian Insider, 28 May 2011). [ii]
According to Datuk Seri Nazir Razak Chief of CIMB group, on July 2 reported by Malaysia Insider Corruption blocking Malaysia leap into the higher income status.  [iii]Corruption has a negative impact on productivity in the long term because it raises the cost of doing business. High levels of corruption reduce economic growth.  It can distort the allocation of resources and the performance of government in many ways. (UNDP, 2000).One of the most popular issues involve corruption is National Feedlot Company (NFC) where it involves its  Datuk Seri Dr Mohamad Salleh Ismail the husband of former Ministry of Women Development affairs  with the amount of misuse RM250 million Ringgit.[iv]
The funny thing is that all of the board of directors was her family members with a very high salary. This project actually initiates by the government to back up national supply of short of beef. Because Malaysia had been a huge amount of beef reported by the Veterinary Services Department last year it Malaysia had imported 25.3 tonnes of beef worth RM 3.7 million and the demand are expected to increase in the long term because the rise of income.(News Straits Times ,8 May 2012).
If the project successful it will reduce the price of beef in the country and cause Malaysia not too dependent of imported beef. In contrast, RM250 Million of taxpayer money is lost.
They are plenty of cases have not been investigated down there. It includes some of the gigantic projects are overpriced Dayabumi projects in mid 1980s and the Kuala Lumpur City Centre (KLCC) as the tallest twin tower in the world.Beside projects, PETRONAS also been used to finance rescue Bank Bumiputra twice in the 1980s and 1990s. (Jomo K.S & E.T Gomez.2000.p.280)[v]
Among South East Asia, Malaysia is not the worst, if compare with Thailand and Indonesia. We are just behind Singapore and Brunei. However, in order to realize the aspiration of achieving developed nation in 2020, we must get rid of this disgusting culture. Corruption can affect the county in term of politics. The grant corruption enshrined the culture of “crony capitalism” and rent seeking. According to Bribe Pay Index 2011 report, in Malaysia one of the highest percentage of the bribe is in Public works contracts and construction Industry.There are few huge companies that are related to UMNO as the ruling party and the party will do everything to save them. These activities were called as political patronage.
Some of it was Renong Group led by Halim Saad UMNO members that has cornered highway construction and related activities.( See Gomez 1994).
The link between business and political will open up bias towards the contract tender and others. In 1990s, there are many new rich have been born under the New Economic Policies which and benefits from this link between business and political parties and create unfair competition. Some of it were  Tajuddin Ramli, Wan Azmi Wan Hamzah, Ahmad Sebi Abu Bakar, Vincent Tan Chee Yioun, T.Ananda Krishnan, T.K.Lim and Ting Pek khiing. ( E.T.Gomez 1999 p,121). Because of this link, they will have access to business opportunities and expected them to support their political patrons. This has led to wasteful deployment of economic resources. In short, this what causes some funny project involve the building of bridge worth RM 20.3 million heading nowhere towards the bush in Pantu Sarawak. (MalaysiaKini 19 October 2012)
One of the most serious body involves in corruption is policed. However, we know that not all police are corrupt. They are term call “petty corruption”. According to Minister of Home Affairs survey, 70% of the citizens are pressured to bribe the police officers.  [vi] The Merdeka Research Center also find out that the majority of the citizens feels that corruption is getting serious in the country.[vii]
 To make thing worse, the ex IGP admits that during his position, it is very hard to catch “ah long” or the money lender because they are ties between those people and politician. Tan Sri Musa Hassan mentions that every time he captured the person involve, some of politician and minister will come to the office and ask him “what do u arrest this man, he is my friend “.[viii](MalaysiaKini 30 May 2012). Therefore, we can see that, the one that we expect to protect us are actually also trap in the corruption than are interlinkages.
Therefore, the corruption is the strongest point for Pakatan Rakyat has two critics the current government in the debate on the welfare state.




[i]   Corruption index 2011 from Transparency International: find out how countries compare, http://www.guardian.co.uk/news/datablog/2011/dec/01/corruption-index-2011-transparency-international [accessed on 22 November 2012]

[ii] Shazwan Mustafa Kamal http://www.themalaysianinsider.com/malaysia/article/pahang-mb-rent-seeking-ok-if-everyone-benefits [accessed on 22 November 2012]


[iii] Corruption blocking Malaysia’s leap into higher-income status, says Nazir Razak http://www.themalaysianinsider.com/litee/malaysia/article/corruption-blocking-malaysias-leap-into-higher-income-status-says-nazir-razak/[accessed on 22 November 2012]

[iv] The RM250 million National Feedlot Centre (NFC) scandal – “shouldn’t someone go to jail”? http://blog.limkitsiang.com/2011/11/12/the-rm250-million-national-feedlot-centre-nfc-scandal-%E2%80%93-%E2%80%9Cshouldn%E2%80%99t-someone-go-to-jail%E2%80%9D/[accessed on 22 November 2012]

[v] Jomo K.S & E.T Gomez (2000) ,The Malaysian Development Dilemma.Rent,Rent-Seeking and Economic Development,Theory and Evidence in Asia.Chapter 7.pp.274 -303.Cambridge University Press,New York.

[vii]  Malaysians see country as seriously corrupt
26-Nov-2009, Angus Reid
http://merdeka.org/media/189-261109.html [accessed on 22 November 2012]

[viii] Bekas IGP: Ada orang politik marah 'rezeki' disekat , Ahmad Fadli KC http://www.malaysiakini.com/news/199345 [accessed on 22 November 2012]

Barisan Nasional Strongest Point: Government Transformation program (GTP) and Economic Transformation Programe (ETP) with “Government Knows Best is over.”

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To arrest the class struggle , Najib administration had launched Government Transformation Program (GTP) and Economic Transformation Program (ETP) that emphasize more and more government affirmative on the market. Under the policy, various welfare aid was delivered to the people such as Klinik 1Malaysia, Kedai Rakyat 1Malaysia, Perumahan Rakyat 1Malaysia, Baucer Rakyat 1Malaysia and many other incentives. Since Najib took office, in 2009 until 2013, the budget never misses giving rewards and also a bonus to the people.

However, one of the key is participation of the rakyat. In my opinion, this is what delays the class struggle in Malaysia. At the moment of April 4th in 2009, Prime Minister, is announcing “The day and age where government knows all and knows best is so long over”. Many people cheers with applause and some of people view the statement pessimistically. For example comment made by Lim Kit Siang undermined the commitment, stated that the “principle has been forgotten by cabinet and bureaucracy”.[i] However, all of the critiques were foul where "government knows best is over” really took place in people hearts and minds and remarkably proved under the implementation of the Government Transformation Program (GTP), and Economic Transformation Program (ETP),that managed by Performance Management Delivery Units (PEMANDU). All of the roadmap under New Economic Model uses the new method which, were organized and plan with high involvement of citizens that came from various backgrounds. As stated by Y.B Dato Mukhriz Tun Mahathir in a speech during his visit to one of the public universities on October, “It is irrational that we hope for the different results while we are doing the same thing.”

Participant of Rakyat in National Policy
In my opinion, one of the biggest and most successful products is the GTP and ETP. It empowers people participation and contribution to join together to develop the nation. “People first, performance now “have witnessed high levels of cooperation between private sector and public sector with over thousand of people,194 MNCs, GLCs, SMEs, Ministry and government agency to plan the roadmap of ETP [ii]. All aim for one mission. Which is for Malaysia to be a high income nation, with USD 15,000 GDP per capita in 2020 (in 2011 it was USD 9,700). [iii] In fact, during the GTP and ETP was launched in 2009, it was USD 6,700 only .[iv] This effort was led by Dato Seri Idris Jala and some said that they held meeting until 5 am to plan the roadmap.[v]

This noble effort would only be successful under great leadership. As has been mention of Sir Charles Masefield , Commonwealth partnership technology management , who praise the Malaysia effort under GTP and ETP ” The key programmes, success is that it is being led personally by the Prime Minister, any programs like this, unless it is led by the top will not be successful[vi]. When PM Najib once mentions that the government knows best is over, he really “means it”. [vii] The roadmap of GTP ,that was as thick as 600 pages birth from wide involvement of expertise and figure include academician, public servant, private sectors and come out with the strategy “Big, Result, Fast”.[viii]  As a result of this effort,  according to department of statistic and Bank Negara, for 2011, the total private investment was RM94 billion is highest in five years and Growth National Income (GNI)  were RM830 billion, highest achieved since independence. [ix]

Roadmap of Education
Furthermore, the participation in government policy from the rakyat witness in the Blueprint of Education Strategy from 2013- 2025 was born. The strategies were being developed from various stakeholders and expert, highlight 11 measures to propel Malaysia education. The approach of the administration is groundbreaking, because it involves people in many ways. It also involves NGOs and international body such as UNESCO, World Bank, OECD and six local Universities. In the national blueprint also we can observed that over 50,000 Ministry official, teachers, principal, ordinary citizens were engaged via discussion, interview, surveys, and National dialogue town hall to gather the needs of the people and for the best solution. The ministry also appointed 12-members Malaysia of expert and 4 members of international expert to strengthen the findings.[x]


Knowledgeable rakyat will create a knowledgeable government.
“Government knows best policy is over” required people wisdom and demand a society with knowledge and highly educated background. Knowledge is power. On 1st April 2010, Prime Minister announces the establishment of the National Council of Professors that combines the intellect of 1,426 professors from all public higher learning institutions. The establishment of the council, encourages scholars to provide input in the government effort under the New Economic Model with the appointment of 14 head of cluster relate to the area of specializations.[xi] One of the Head of Cluster is Prof Datuk Dr.Mohamed Mustafa Ishak in Security and International Affairs.[xii]
Furthermore, MyBrain15 scheme is also one of the commitments of the government to create more scholars in our country. MyBrain15 is aiming to have 60,000 PhD holders by 2023[xiii] with a very interesting scholarship reward. This is a part of effort to achieve vision 2020 as in Najib’s speech “The three essential areas in the country needs to improve on if it is to achieve Vision 2020, are human, private and social capital.”[xiv]

In addition, as a continuation from previous commitments to education and training, governments allocate around 21% of national budget 2013 on this matter. The focus is on developing infrastructure and program from the early of preschool, until the higher education institutions. For example, RM 1.2 billion are provided to improve preschool education for KEMAS,PERMATA and to Ministry of Education[xv]. In addition, to ensure that the country does not left behind in term of nanotechnology, automotive, aerospace, and biotechnology, in budget 2013 also, allocate RM 600 million for the Research and Development (R& D) effort.[xvi]




[i] Muhyiddin – honour Najib’s pledge that “The era where the government knows best is over” and allow parents the choice to retain the policy of teaching Science and Mathematics in English for their children,blog lim kit Siang,  [internet] http://blog.limkitsiang.com/2009/08/09/muhyiddin-%E2%80%93-honour-najib%E2%80%99s-pledge-that-%E2%80%9Cthe-era-where-the-government-knows-best-is-over%E2%80%9D-and-allow-parents-the-choice-to-retain-the-policy-of-teaching-science-and-math/ [accessed on 20 November 2012]

[ii] ETP Overview,24 September 2010,Economic Transformation programme,Open Day,keynote Address, YB Senator Dato seri Idris Jala, CEO of PEMANDU in Prime Minister Department.[internet]

[iii] Ibid

[iv] A BETTER MALAYSIA, NST online, 2 April 2012,[internet]  http://www.nst.com.my/top-news/a-better-malaysia-1.69956#ixzz1qtqj9Wsp [accessed on 23 November 2012]

[v] Najib Tun Razak, Exploring Changes for greater achievement,2011, Jabatan Penerangan Malaysia.

[vi] Mazwin Nik Anis,2011, Najib’s GTP and ETP lauded, The star,22 June 2011.

[vii] PEMANDU annual Report 2011 , http://www.pemandu.gov.my/gtp/annualreport2011/pdf/pemandu_ar2011.pdf [accessed on 20 November 2012]

[viii]  Dato Seri Idris Jala, Economic Transformation Programme (ETP) ,YouTube, [video] http://www.youtube.com/watch?v=VzgP1qFvDpY [accessed on 20 November 2012 ]

[ix] Dato Seri Idris Jala ETP Turns one  Livestream Presentation by Dato' Sri Idris Jala [video] https://www.youtube.com/watch?v=2Qm38SXn2Gc [accessed on 20 November 2012]

[x] Preliminary Report , Malaysia Education Blueprint, 2013-2025, http://hornbillunleashed.files.wordpress.com/2012/09/preliminary-blueprint-english.pdf [accessed on 20 November 2012]

[xi] Najib Tun Razak (2010), Charting Malaysia’s Transformation,Jabatan Penerangan Malaysia, January 2011.page 81. Printed by Percetakan Zainon Kassim Sdn.Bhd.

[xii] Utusan Online, 26 July 2012, Keputusan berdasarkan hasil kajian ilmiah, [internet] http://www.utusan.com.my/utusan/Politik/20120726/po_07/Keputusan-berdasarkan-hasil-kajian-ilmiah   [22 November 2012]


[xiii] News Straits Times, 2012,MyBrain15 upgraded to woo more applicants, NST,http://www.nst.com.my/nation/general/mybrain15-upgraded-to-woo-more-applicants-1.146818 [accessed on 21 November 2012.]

[xiv] Najib Tun Razak, Charting Malaysia’s Transformation,Jabatan Penerangan Malaysia Januari 2011.page 116

[xv] Bernama, 2012, Budget 2013: RM1.2bil to provide quality pre-school education, The Star Online, 28 September 2012,[internet] http://thestar.com.my/news/story.asp?sec=budget&file=/2012/9/28/budget/20120928200658 [accessed on 22 November 2012]

[xvi]  Budget 2013: Tax breaks, affordable housing and cash for the needy, The Star, 28 September 2012, [internet] http://thestar.com.my/news/story.asp?file=/2012/9/28/nation/20120928161303&sec=nation [accessed on 23 November 2012]