Does the Economic Transformation Programme address the fundamental problems that Malaysia faces or is it just an instrument for the current administration to consolidate power by entrenching its control of the state-market relationship?
Nurhisham Hussein, an economist, and who I believe has the most popular economics blog about Malaysia, concluded his analysis like this over on East Asia Forum:
The answer must be that the GTP, ETP and NEM are not needed so much for economic growth alone but to transform the Malaysian economy and society into one that can reasonably sustain high income status. A more productive, value-adding private sector, coupled with a more efficient public sector, will be far better able to support and nourish a high income, more equitable society. The 9 July demonstrations in Kuala Lumpur demonstrate the increasing political and social activism and awareness of Malaysian society. The alphabet soup of economic programs currently under way will help Malaysia achieve a matching economic maturity.
Reuters has a special report on Malaysia’s ability to reform. This is a must-read report. Note also that Mahathir Mohamed, who is interviewed extensively, has an uncanny ability to blame everyone else for what is wrong with Malaysia. I provided earlier commentary on the political economy context of Najib’s economic reforms here.