DEBATING ON THE BUDGET SPEECH BY THE HONOURABLE WONG MUN HOE, STATE ASSEMBLYMAN FOR PANTAI JEREJAK DURING THE OCTOBER 2004 STATE LEGISLATIVE ASSEMBLY

 First of all, allow me to congratulate the State Government for putting up a State Budget that has been carefully planned. It is a budget that has taken into consideration, the state of the economy and the people. Indeed, the Budget once again reflects the serious intention of the State to maintain our competitive edge in this increasingly borderless, globalised and challenging world.

I am greatly attracted and concur with YAB Ketua Menteri speech that the Supply Bill for 2005 is based on the Penang Strategic Development Plan for the period 2001-2010 where five (5) main strategies have been outlined to be implemented so that we can achieve a competitive k-economy with a high quality of life based on sustainable and equitable development. This is why in my Debate this time, I have chosen to touch on two of the five strategies mentioned which is to increase our economic competitiveness and good governance.

In fact during the State sitting in May, I have already reminded the Government to be vigilant over our competitive edge. It has and will be sorely challenged as we seek to progress up the ladder of economic opportunity and growth. This is because we are meshed in between two economic juggernauts – India and China. Indeed, there are many proclamations that South East Asia including Malaysia and Penang will be squeezed as China and India flex their economic muscles and suck in more investment.

India with its population of 1 billion people marks it out as the world’s second most populous nation after China but its higher fertility rate will make it the most populous nation by the middle of the century. Adjusting for differences in the purchasing power of the US dollar, India is now the world’s 4^th largest economy after the USA, China and Japan. Chugging along at about 6% annual growth rate, India’s income per person is now about US$2,700 a year, and is rightly touted as the new emerging economic super power.

The Chinese market has dominated global headlines. Its size promises pots of gold and investors line up to enter China. China’s integration into the global economy has contributed to a new pattern of international trade and capital flows. With an economy averaging around 9% per year over the last 20 years, it has been attracting massive amounts of foreign investment. China accounted for well over 46% of Asia’s total inward FDI in 2001. It is today, the largest recipient of FDI and is tipped by various multi-lateral agencies including the World Bank and the World Trade Organisations to be the world’s largest economy before the middle of the century. With an income of US$4,600 per person, China will also have the largest middle class in the world by 2020 – some 400 million!

The question therefore facing us today is "Should we be alarmed?" I would suggest no; rather, we should be alert. Notwithstanding what I have said earlier, both India and China have their own set of problems ranging from political stability to bureaucratic and regulatory red-tape to transport and logistic costs. In order for us to maintain our competitive edge, there is a need for us to recalibrate our strategies accordingly. This requires us to reform our entire business and bureaucratic cultures and maintain a watching brief on our competitors.

Support and Encourage Science and Technology and Research and Development Programmes

Dato’ Speaker. Trade between Malaysia and the two economic juggernauts have increased steadily over the years. According to the ASEAN Secretariat, exports to India in 2002 exceeded US$3.67 billion whilst we exported well over US$4.76 billion of goods and services to China, mostly in terms of primary products. There is a clear need for us to move up the value-added chain and to higher levels of technology in order to improve our competitiveness. Compared with both India and China, we are still far behind in terms of the necessary human resources to make us competitive – for instance we have less research scientists and engineers. Clearly here, Government policy is required to develop our base and resources, either in conjunction with private sources or through a massive investment in public education to support Science and Technology (S & T) and Research and Development (R & D) programmes. We already have a levy on human resources and the funds raised should be targeted at further recalibrating our skills base. Other fiscal incentives should also be promoted, both at the State and Federal level, to encourage S & T and R & D developments. At the same time, the State Government should be pro-active to encourage and speed up access to these S & T and R & D programmes through additional training or collaborative ventures.

Exlore New Markets

Besides stepping up these value added supply chain mechanism and promoting our technological capacity, diversification strategy in export market can also be paid attention to. Every country needs to explore some other markets such as Latin America, Eastern Europe and Africa. This is something the Federal Government has pursued intermittently with some degree of success but at the State level, we appeared not to have a coherent strategy along these lines. This may be because such ties should only be explored strategically and at the Federal level. Therefore, constitutional reforms enabling some autonomy for State Governments, particularly in effecting pro-growth and resilient economic outcomes could be another consideration for Federal and State politicians, for at the end of the day, we are all desirous of enabling our citizens to enjoy a better quality of life. Indeed, in the 21^st century, as Kenichi Ohmae has reminded us in his numerous books such as The End of the Nation State, Beyond National Borders and The Borderless World, that a fleet-footed, flexible, nimble and active and regional response is more appropriate to a customer-focused and globalised economy. SMEs, clustering and regional growth areas are integral to these new economic policies. This can be combined with the sister cities concept where underlying complementarities and comparative advantages are mobilized to increase trade and encourage closer cooperation and development.

Further Develop Our Financial and Logistic Services

We have therefore to be pro-active. Financial and logistic services could also be further developed. Like Singapore, we can fight for and offer more appropriate and better tax incentives to entice companies to invest in our State. Indeed, there are already signs of China relocating some of its manufacturing operational functions and it is up to us to attract them. Whilst the major and significantly large corporations may prefer to invest in Singapore, it does not mean that we cannot provide Singapore with some competition, particularly in the SME sector, as we have relatively shown our ability to do so, with our foreign partners from Taiwan and Japan. Similarly, we can also consider making Penang as an off-shore banking center as this will help attract foreign banks to establish in Penang. This way, via their referrals, it will enable us to target foreign firms more effectively. These initiatives could also of course, further help to develop the KLSE as a major international forex market.

In addition, Penang can provide managerial talent, legal and human resources services to internationalizing China and Indian companies. We can effect professional exchanges and managerial development programmes for Chinese and Indian SMEs lacking such professional expertise. Again, here, Federal help is required and together, with other multilateral agencies such as the Asian Development Bank, we may be able to offer and develop such mutually beneficial programmes.

Dato’ Speaker. It is easy for us to be pessimistic or to adopt a Canute-like behaviour, but to do so would simply mean giving up. We should seek to be more dynamic, active and re-invent ourselves, our businesses, our government and our bureaucratic practices to take advantage of the new, open, globalised, trading and market environment. We should as, Alexander Bell once said, "When one door closes, another door opens but we so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us." We should therefore not merely see China and India as our competitors – it is for us to tap into them for they too would spawn global companies. How we utilize China and India is as described by Kenichi Ohmae "Use China as if it is part of our own body." This is a classic judo-style strategy and we should not resile from that. There are already 15 Chinese and 1 Indian companies in the Fortune Global 500 and as we have seen, readily invest in different countries around the world.

Engendered the Malaysia-Boleh and Penang Boleh approach

In this context, our bureaucratic culture needs to be refashioned. It needs greater flexibility, more professional and meritorious based and driven. It should be forward planning and prepared to take risks accordingly. Its ethos must seek to adopt and embrace global best practices, greater transparency, accountability and setting annual reviewable benchmarks to increase its productivity and efficacy. Initiatives should be fostered as in this globalised and competitive environment, autonomy and flexibility are endearing managerial values. The "Malaysia Boleh" and "Penang Boleh" approach must be engendered and we must dispense with the "Tidak Apa" attitude and "Near enough is good enough" approach. Excellence, service, quality, professionalism and merit should instead be our credo and drive our aspirations.

Which brings me to the second theme I am going to touch on; the subject on delivery system.

I would like to congratulate all those in the Government service who has benefited from the National Budget announcement recently. While certain sectors of the Government from the Police to the Imams will get an increment in salary, it is the one month bonus or the minimum pay-out of RM1,500 which will bring cheers and happiness to all civil servants. I would like to say that I shared the same view that our civil service deserves the bonus. Our civil servants have contributed significantly to nation-building and have served the people well, Syabas and Tahniah to all our civil servants.

Dato’ Speaker. I am also in full agreement with our YAB Ketua Menteri that whatever best systems we may have will not work and will fail to achieve our aim and objectives if the human factor is not improved by way of attitude, measures and the readiness to work as a team. All the best systems in the world cannot replace the human factor. This is because only humans will be able to decide if a system can perform successfully or not.

Improving our Delivery System

Therefore, in deserving our applause and commendation, nonetheless, just like in everything else, we have to bear in mind that there will always be some black sheep in the family. Unfortunately, there are still some who have not delivered and these are the stumbling block to a better delivery system, as promised by our PM. How for instance can we say that we are improving our delivery system when it still takes weeks for a simple matter of a small pothole being patched up? How for instance can we say that we are improving our delivery system when the tree branches trimmed by the Departments are left lying on the road for weeks before they are cleared up? How for instance can we say we have a good delivery system when there are sunken manholes which have been lying for years and no one wants to take responsibility? How can we say our delivery system is good when Departments spend months debating on whose responsibility is it to repair a street lamp? In the meantime, it is the rakyat who suffer. And we know that there is certainly a problem with our delivery system when early in the morning, the traffic congestion starts from Sekolah Kebangsaan Bayan Baru, Lorong Mahsuri 7 to Jalan Sultan Azlan Shah. This entire stretch which normally takes less than five minutes by car now takes 30 minutes, a new phenomena in my constituency. I am not a doctor and as such, I do not know what is wrong with our delivery system but in our EXCO line-up, there are so many doctors and I hope that at least one of them will be able to give us a proper diagnosis of what is really wrong.

Then, there is a specific case of the now infamous Jalan Sultan Azlan Shah flyover project which is now into its 4^th year of construction and still going on. In other developed countries, a project like this will probably take a year, certainly not more than a year and a half to complete but in this instance, we are still counting the days when the project is going to be completed. Promises after promises have been made but yet to be fulfilled. In the meantime, traffic in the vicinity is in a terrible mess and the temperature of both vehicles and the drivers increases simultaneously each time they used the road. Certainly, a lot of productivity and man-hours are lost and wasted as our rakyat is caught in the daily traffic congestion resulting from the on-going work. To make matters worse, there seems to be very poor planning for the project. The department involved does not seem to do have done any background study. They are not for instance, aware that there is a history of a tilting flat just next to the flyover project when they suggested that hammer piling be used. Neither do they seem to realize that Bayan Baru had a long history of flooding otherwise how could they not have taken this wonderful opportunity to reconstruct a wider and deeper drain so as to further reduce the flood problems. Where then, is the delivery system that we are talking about?

While the issues of potholes, sunken manholes the trimming and collection of tree branches and the repair of street lightings, may seem trivial to the Government departments concerned, but to the common rakyat, these are the day-to-day problems they face each time they go out and come back to their homes. It is these so-called trivial issues that get on their nerves and they are probably right to think that if the Government cannot even deliver on these types of so-called small issues, how can they be expected to deliver on bigger issues. The point I am making is our planning, monitoring and enforcement action has simply lots and lots of room for improvement. And if we are serious in supporting the call of our Prime Minister for a better delivery system, Government departments and civil servants must be serious and start implementing measures to reflect a better delivery system.

Set Up Special Monitoring Units Within Departments

Civil Servants Asked To Help Be Eyes and Ears

I would therefore like to suggest that in issues relating to potholes, manholes, the trimming of road-side trees and branches, the replacement of broken road signages and repair of road pavements, a special unit be set up within the respective Departments so that there is no need to wait for the public to make a complaint before action is taken. Members of the Unit can do their rounds either in the mornings or afternoons just to check on such cases. At the same time, all civil servants should be encouraged to help make an immediate report whenever they come across such cases. . After all, there are so many thousands of civil servants staying in every corner of our State and if they can be persuaded to play their part as our eyes and ears, merely to report such problems, they will be of invaluable help to us. As civil servants, they should not have the attitude that "This has got nothing to do with my Department and therefore none of my business." Perhaps they should start thinking that they too are the rakyat and as such, everyone in this country is equally responsible for the betterment of our country. All it requires from them is merely to make a phone call or to send a short note to the relevant Government departments. Upon receiving such complaints, immediate action should then be taken to rectify the matters in the soonest possible time.

Re-look at Client Charter

Perhaps it is time too that all Government Departments should re-look at their Client Charter and ask themselves if they are really carrying out what is in the Charter or is the Charter merely put up for decorative purposes. Perhaps all Government departments can also set up an Internal Audit department to look into what has been promised under their respective department’s Client Charter and to evaluate on a half-yearly or annual basis if the Client Charter is a success or not, and if not, why.

As I have said earlier, although I seem to be a little bit critical of what has not been done or the shortfall of some departments, I still feel that on the whole, our public service has not done too badly. What I am merely saying is that there is still a lot of room for improvement and a better delivery system starts with a more effective public service.

In both my themes, I have tried to argue that we need not fear changes but rather we should seek to actively embrace and generate changes. This involves turning potential threats into opportunities as the Chinese philosopher and strategist, Sun Tzu has reminded us in his famous book, The Art of War. This strategy involves generating an internal software – a transformation of our entire business and governmental values and architecture – government policies through which we can distill and implement our policies productively, judiciously and effectively. The rakyat play an important part. As long as our people remains united, as long as our people work hard and as long as our people support a modern and progressive Government under the Barisan Nasional, we have a chance. The next 3 years will tell and it is therefore of utmost importance that the people must continue to give strong support to the Government in all her development programmes. Only this way will we have a chance to survive.

With this, Dato’ Speaker, I wish to support the Budget. Thank you.