Monocle’s foreign editor meets the man in charge of transforming Malaysia’s economy. Encouraging competitiveness, creating jobs, helping the poor and enabling democracy are his three main challenges.
Dato’ Sri Idris Jala is Malaysia’s Mr Fix-it. After a two-decade career at Shell he was brought in as ceo of Malaysian Airways at a time when the state-owned airline was struggling. After being credited with turning it around, Idris Jala was then given his next task: fixing government.
Prime Minister Najib Tun Razak created a new agency in government, the Economic Transformation Programme, and asked Idris Jala to head it. Reporting directly to the PM, Idris Jala is tasked with – as the name of the agency suggests – transforming Malaysia’s economy.
Despite his background though, it’s hard to paint Dato’ Sri as a stereotypical private sector boss trying to transform a failing public sector. Innovation, not cutting costs, is his lodestar. He has created what he calls “labs” of experts that meet for weeks at a time to come up with new ideas. And he has forced ministers to accept tough targets – the energy minister Peter Chin vowed to resign if he didn’t dramatically reduce the number of hours of electricity blackouts. With Idris Jala on his tail, Chin managed it.
Monocle: Malaysia is doing well, partly because you are investing as a government. You are spending quite a lot aren’t you?
Dato’ Sri Idris Jala: Yes. It is one of the things that we regard as propelling the economy to grow.
M: That’s quite a different tack to some of the European countries.
IJ: We’ve made a prognosis. There were two things that were very clear for us that we needed to do as a country: the first one was to make sure that we picked our areas of focus. To use an analogy, Usain Bolt wanted to be the 100m and 200m Olympic champion but if at the same time he wanted to be the weightlifting champion of the world and diving, etc, then he would have probably ended up being an average athlete. We simply said to ourselves: we need to pick the areas where Malaysia has got natural endowment and has capabilities, and we need to put our resources there. So we picked 12 of our sectors. The second thing we needed to do was to create the conditions for competitiveness to flourish. We put in a competition law – we never had it before. We stopped bid-price fixing, bid-rigging and all that stuff.
M: As a government you have been talking about raising per-capita income from $10,000 to around $15,000 [€11,400]. Does it matter how that money is distributed?
IJ: Yes. We have three objectives: the first one was the definition “high-income”, which was expressed in gross national income of $15,000 per capita. The second is about job creation because if you have very high gni and you don’t have jobs you cannot spread the wealth among the people. And this is the challenge in many countries; they don’t create enough jobs, particularly the high-paying jobs, so you have large inequalities. And the third one is about sustainability: that means that for everything you do today, you need to keep an eye out for the future.
M: Are you more on the left or the right?
IJ: In the centre.
M: Everyone always says that but everyone always leans more one way…
IJ: I can tell you why I’m in the centre. I am on the right when it gets down to allowing the private sector to ride the economy. Where I’m on the left is when you need to make sure you have enough money to help the poor. You can’t expect the private sector to build rural roads. I come from a tribe of 5,000 people in the jungle of Borneo. I can’t imagine the large multinationals saying we will willingly put our money [in] and build all those highways and roads leading up to your village – it’s just not going to happen, so when it gets down to inequities in societies that’s where government must play a role.
M: Out of 10, how would you mark Malaysia as a democracy?
IJ: Out of 10, Malaysia is doing pretty well as a democracy and the reason is this: we’ve had some draconian laws [such as] the Internal Security Act and that’s been repealed now, so we’ve made a lot of changes. If you look at the internet, the social media, there’s a lot of emancipation with regards to public dissent.
M: So you believe that there’s more freedom of expression than there was before?
IJ: We believe in dissent. For a functioning and modern democracy to exist you must allow for constructive dissent. That’s very important. But what you do not want to do is to create dissent that leads to anarchy in society because the rule of law must exist to prevent anarchy and chaos. It’s easier said than done, obviously, so we’ve got to find the right balance in how you do this.