Agile regulatory reform: Should it first begin from the legislators and regulators?

The NPGRP aims to enhance Malaysia’s business environment and the well-being of the rakyat by creating new regulations and revisiting old ones that are not agile to the current economic environment. The end outcome is to raise national productivity growth and competitive advantage, as indicated by the agency in a statement.

The World Economic Forum (WEF) suggests that a competitive economy is a productive one. And productivity leads to growth. And at country level this leads to income levels and improved well-being. And it makes everyone happy. Look at countries in the top rank of Happiness Index: Finland, Denmark, Norway; these are countries with high per capita income and income gap is insignificant. Sounds familiar? Yes, as that is also hypothesized by Malaysia’s Shared Prosperity Vision 2030.

Back to agile regulatory reform. When regulations are adaptable to market demands without losing their compliant ethics and integrity, doing business will be easier and subsequently Malaysia’s competitiveness will be higher.

Malaysia has been hovering in the mid-20s ranking in WEF Global Competitiveness Index. This is a good achievement from an emerging market standpoint but in reflection, we have never surpassed our Asian neighbours, Singapore, Hong Kong, Japan, Taiwan and Korea.

These countries had their own fair of struggles, one was bombed, some were colonized and reached independence at about the same time with Malaysia but they became economic power in a short time.

As a citizen of Malaysia, I always wonder what had gone wrong. We have all the best policies in place. New Economic Policy. Vision 2020. Multimedia Super Corridor. Just to name a few. Some strategies have resulted in stellar implementation, some have effectively impacting the economy and some remain stagnant. In fact, I found out that the just launched NPGRP is a reform to the old one published in 2013. Why can’t we be in the top 10 of the competitive index? In my experience working in the government and dealing with them, I have met many brilliant civil servants with brain power who are sincerely competent in executing and forecasting ahead the prosperity of Malaysia. Kudos to them. Hands on their heart serving the nation.

The country will soon be going through the recovery phase from the impact of the pandemic, be it on the economy, health, and overall public well-being. Let’s make it easier for the country to bounce back by removing unnecessary regulatory hindrances that slow us down.

Nevertheless, what we saw last week was far from the aspiration of agile regulatory reform. The political circus at the parliament was classic popcorn moments for many Malaysians. Some took it to social media to express; some observed patiently. These are the people whom we elected (or not, ok that is for another discussion) who are responsible to table and legislate the regulations that were drafted by the brilliant civil servants. At the rate of their behaviour, I don’t think that agile regulatory reform is at their heart. Worst, even to understand the need of the reform. As a result, a negative reputation of political instability that affects the perception of investors.

On the topic of investors, closer to my experience in the tech industry, I am deeply concerned that the idea of licensing data centre and cloud service providers may have repercussions to the growth of the industry and subsequently stunt our national digital economy aspirations by amending the Communications and Multimedia (Licensing) Order 2000. Furthermore, this licensing does not reflect the aspirations of MyDIGITAL, a digital economy blueprint that will transform Malaysia digitally by 2030. Again, a beautifully outcome-driven policy paper drafted by brilliant civil servants. Without much meaningful bilateral industry consultation, the regulatory rushes into drafting the amendment; to much dismay and fear of the industry, to be regulated in an otherwise nascent but high-growth sector. This is also evidenced by the revocation of the cabotage exemption for foreign-flagged ships repairing undersea cables. If agile regulatory reform is to be in good practice, this would not have happened.

What Tan Sri Zuki said in his speech was right. He expects experts from both public and private sector to deliberate and strengthen the group regulatory practice compliance in introducing new regulations and amending the existing regulations to boost Malaysia’s productivity and competitiveness. Be agile, he further added.

Maybe the agile regulatory reform needs to first begin from the legislators and regulators themselves.

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* Norhizam Kadir was a Vice President in a government’s digital economy agency. He left and rejoined the private sector recently in an exciting innovative company.