Frankly Speaking: June 7-13, 2010

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The tobacco flip, flop, flip Barely a week since news broke that the government was delaying its ban on 14-stick packs of cigarettes, Health Minister Datuk Seri Liow Tiong Lai has come out to say that the Cabinet has decided that the ban is on, with immediate effect.
This was in contrast to the Health Ministry’s earlier statement on May 27 that said the original deadline of June 1 had been pushed to January 2011 pending further study. It was a move that had sparked an uproar among the tobacco players who had already sunk significant costs into preparing for the ban.
However, while the tobacco players have expressed their approval for the move to enforce the ban, ultimately it gives the impression that the government seems to be running hot and cold on the matter. If there is one thing that the business community does not need, it is the uncertainty that such flip-flops bring.
There has always been an undercurrent of dissatisfaction in the industry for the almost ad hoc way that the government enforces regulation in the tobacco sector, with the latest move just adding fuel to the fire. The main argument that has always been trotted out is that a lack of clarity in the industry deters foreign investment. In the end, it is not the regulation that gets the players so up in arms, it is the uncertainty, the fear that the rug will be pulled out from under their feet with no warning.
Even so, the tobacco companies are still not out of the woods yet.
Apart from what Liow has said, sources say tobacco companies have not been given anything in black and white that the ban is back on. If this is the case, then it leaves the companies neither here nor there, open targets for another sudden change in regulation.
It does make one wonder what exactly is running through the government’s mind when it comes to this matter. But at this point, what all the players want is for the government to make up its mind once and for all.

Will the 10MP be different?On June 10, the prime minister is scheduled to table the 10th Malaysia Plan (10MP) in Parliament. Expectations have been building up in recent months that this time around, the 10MP will not just be another development blueprint that looks great on paper, but falls short when it comes to implementation.
The 10MP will map Malaysia’s development path from 2010 to 2015. Implementation is critical if we want to extricate ourselves from the middle-income trap and be a high-income economy by 2020.
What is different with the 10MP is that it will be undertaken in tandem with the Government Transformation Programme (GTP) and guided by the New Economic Model (NEM) framework. The GTP will ensure that implementation of both the 10MP and NEM is given priority, and with efficiency, transparency and minimal leakage.
There is, however, a danger that the vested interests of a small group of people, who are willing to sacrifice the economic welfare of future generations for short-term gratification, will prevail.
Already, the proposed plan to reduce the government’s subsidy budget has been vilified by some politicians, even though it is obvious that the government cannot continue to finance the hefty subsidy bill without impairing its fiscal position, and undermining the efficiency and competitiveness of the domestic economy.
Put simply, we can be our own biggest enemy in our efforts to reach developed status.
The government must not allow itself to be held to ransom by a small group of people who talk of the larger good but in actual fact, are protecting their own interest. Only then, can the GTP, the 10MP and the NEM really take off and bring about the transformation that this country urgently needs.

Cabinet reshuffle, part 2Talk of a cabinet shake-up involving key ministries has been circulating for a while, but when the announcement finally came last Tuesday, it turned out to be a bit of a damp squib. Two new ministers were named and a host of deputies made the list released by Prime Minister Datuk Seri Najib Razak.
Perhaps the most interesting appointment was that of first-time MP Chua Tee Yong as deputy minister of agriculture and agro-based industry. Tee Yong, 33, is a son of new MCA president Datuk Seri Dr Chua Soi Lek, who defeated Datuk Seri Ong Tee Keat for the post in March. As expected, Dr Chua, who has to live down a sex scandal, did not seek a cabinet post, while Ong, who was transport minister, was dropped.
The fact that the minor reshuffle involved Barisan Nasional component parties but not Umno, the lynchpin of the ruling coalition, indicates that Najib has some unfinished business to sort out before putting together the team that he will need to take to the next general election.
When that takes place, the headway Najib has made in pulling his party leaders behind his reform agenda will become much clearer. For now, the prime minister’s attention will be focused on setting out the 10th Malaysia Plan and the National Key Economic Areas, which form the pillars of the New Economic Model that is due to be launched in the coming months. Unlike preceding Malaysia Plans, the new road map promises fundamental structural changes to the economy. For sure, Najib can expect opposition from those who have been benefitting from patronage politics.
It may well be said that the Government Transformation Plan that Najib wants to roll out with his 1Malaysia, People First, Performance Now agenda could be hamstrung until he can assemble his A-team.

This article appeared in Corporate page of The Edge Malaysia, Issue 809, June 7-13, 2010