Policy flips due to flops

JULY 26 — Call it a disguised flip-flop. Or extortion. Or another example of poor decision-making by the government.

But the government’s clumsy decision-making over the independent power producers (IPPs) issue underlines a deep and more troubling problem for Malaysia — the paucity of talent in the Cabinet and the top level of the civil service to either chart economic strategy for the country or come up with solutions in these challenging times. Or spot a bad policy.

It is not by accident that many decisions by the administration are being challenged, reversed, reviewed or ridiculed.

The decades of sacrificing meritocracy and having a political system which views smart individuals as a threat is hurting the country like never before.

Just run through the list of Cabinet ministers from Prime Minister Datuk Seri Abdullah Ahmad Badawi downwards. Only a clutch of them have a strong grasp of economics and understand how the market works. Tan Sri Nor Mohamed Yakcop. Datuk Amirsham Aziz, Datuk Mustapa Mohamed. Perhaps a handful of others. Perhaps.

The rest are, well, politicians. They rose up the ranks in Umno, MIC, MCA because they are astute politicians; they are adept at working the ground, are good orators; are powerful warlords in their respective states and are the best that their component party can offer.

They are products of a system which rewards political smarts and loyalty but one which does not encourage the rise of technocrats or the co-opting of talent from outside the political structure.

That is why when Abdullah was selecting his team of ministers after the March 8 general election he could only bring in former Maybank chief Amirsham into the Cabinet. He was warned by party leaders that his plan of appointing a clutch of corporate captains as senators and them making them ministers would invite a revolt in Umno.

So he played safe and chose one corporate captain. There were at least three others on his shortlist.

Today his Cabinet is loaded with politicians, who sadly would not have made their mark in any other field but politics. The talent drought is not much better in the civil service.

The country’s best and brightest have long given the public sector a miss. The reasons are many — poor salaries, racial discrimination, an overly religious environment.

Chinese and Indians who return from Cambridge, Oxford, Imperial College and other top universities — if and when they return — have no inclination to join the civil service. In their view this is a dead-end job with little prospects of career advancement.

The top Malay scholars are gobbled up by multinationals and government-linked companies like Petronas, Sime Darby, Tenaga Nasional Berhad.

The result: the Malaysian Civil Service is staffed by the good, above average, average and mediocre.

The brilliant and very good are few and far between. That is why when the government unearths a jewel like the Chief Secretary Tan Sri Sidek Hassan, it is loath to allow him to retire.

But having only a sprinkling of talent here and there in the upper reaches of government and the civil service is disastrous for a country like Malaysia which has to move up the value chain, lower its dependence on foreign labour, compete with the likes of Singapore, Vietnam, India, and China, and prepare for the day when the country becomes an importer of oil.

Above average talent cannot help craft policies and plans to help Malaysia navigate through this tricky period of global economic turmoil, rising oil prices and historically high prices of goods and services. Above average talent cannot spot the craters in policies or ideas put forward by the Cabinet.

There was crater in the government’s decision to impose a 30 per cent windfall tax on IPPs. Nobody seemed to have tested the idea with the financial services sector, or thought about its impact on the bond market here.

IPPs finance the construction of their power plants through the issuance of bonds, and this windfall tax would have affected their cash flow.

-TMI