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Saturday, May 9, 2015

Pemandu’s ETP report ‘grossly misleading’, says group

Prime Minister Datuk Seri Najib Razak presenting the Economic Transformation Programme results last month. A group of analysts say the report is not truthful nor complete as it only reports on 96 out of 151 entry point projects under the NKEA. – The Malaysian Insider pic, May 9, 2015.Prime Minister Datuk Seri Najib Razak presenting the Economic Transformation Programme results last month. A group of analysts say the report is not truthful nor complete as it only reports on 96 out of 151 entry point projects under the NKEA. – The Malaysian Insider pic, May 9, 2015.An analysis of the recently-unveiled Economic Transformation Programme (ETP) Report 2014 has found that Putrajaya’s Performance Management and Delivery Unit (Pemandu) achieved “no real results” and used questionable methods to show progress in its report.
Interest group Blindspot, which carried out the analysis, said the report was riddled with anomalies and showed Pemandu was of no use and should be disbanded.
In one example, the 12 National Key Economic Areas (NKEA), which Pemandu focuses on improving, recorded lower Gross National Income (GNI) growth than that of the non-NKEA sectors from 2011 to 2014.
The NKEA sector’s share of the total GNI also declined from 70.3% in 2011 to 68% in 2014, while the non-NKEA’s share had increased from 29.7% in 2011 to 32% in 2014.
“This is strange considering the NKEAs get special attention and promotion by Pemandu, enjoy problem escalations at the highest level – with each EPP having its own monthly steering committee chaired by a minister; notwithstanding receiving various forms of fiscal incentives, even regulatory flexibilities.
“Bearing in mind all the above and that the NKEAs are supposed to be the more dynamic sectors, has ETP and Pemandu actually stifled them instead?” said Blindspot in a statement.
The 12 NKEAs are: Greater Kuala Lumpur/Klang Valley; Oil, Gas and Energy; Palm and Rubber; Wholesale and Retail; Financial Services; Tourism; Electronics and Electrical; Business Services; Communications Content and Infrastructure; Education; Agriculture; and Healthcare.
On its website, Pemandu said “these NKEAs will receive prioritised government support including funding, top talent and prime ministerial attention”.
Pemandu’s 'insignificant' contribution
Based on its own calculations, Blindspot estimated that Pemandu’s numerous entry point projects (EPP) had actually contributed an average of just RM33 billion annually to the NKEA sectors, or some 3% of the overall economy.
It said the EPP’s contribution to the sectors was regressing each year, at a CAGR of -13%.
This flies in the face of Pemandu’s statement on its website that the EPP are “high impact projects, matched with specific ideas and actions, to spur the growth of the NKEAs” and “focussed on actions and not mere concepts”.
“The ETP claims to deliver some RM800 billion from the EPP-based NKEA. At an average annual rate of RM33 billion, it will take some 24 years to fulfil that claim,” said Blindspot.
Blindspot also noted that the NKEA’s productivity growth was declining by 3%, while the non-NKEA’s productivity grew by 8% from 2011 to 2014.
110% KPI for NKEA makes no sense
Meanwhile, the ETP Report 2014 chose only to record the progress of 96 out of the 151 EPPS set up, said Blindspot.
This was despite the fact that the remaining 55 projects may have already received special privileges like grants, subsidies, and tax incentives.
“Isn’t it proper performance management and delivery accounting procedure to report on the progress of all 151 projects?” asked Blindspot.
Datuk Seri Najib Razak’s declaration last Tuesday that Pemandu had achieved 110% of its Key Performance Index (KPI) for the NKEA also “did not make sense” since only 96 EPPs were reported, said Blindspot.
Questionable methods to measure progress
Blindspot also noted that the yearly ETP reports measure the EPP’s progress on an annual basis, rather than a cumulative basis, and this allowed it to hide how little it had achieved since each project’s inception.
For instance, Pemandu targeted 5,000 Tukar outlets to be implemented from 2010 to 2020, but as of 2014, only 1,395 outlets had been created – a cumulative progress of about 28%, said the group.
But the latest ETP Report said the Tukar programme had achieved 102% progress, said Blindspot.
“That (102% progress) refers to achievement in 2014 only. It does not show the overall progress from the start of Tukar programme (2011),” said Blindspot.
“So although what the reader sees as a ‘more than 100% achievement’, in reality the Tukar programme as a whole has only achieved 28% progress.”
Blindspot said the report also did not cover the GNI or job achievements of EPP, and that in Tukar’s case, the goal had been to create 51,544 jobs and have a GNI impact of RM5.6 billion.
However, it said that this was a “tall order” as GNI could not be boosted through Tukar shops, since customers would merely be switching from their preferred shops to the Tukar outlets.
“It’s just the same GNI transferred from Tesco, Giant, Mydin and other mom and pop shops to Tukar shops,” said Blindspot.
“Secondly, 51,544 jobs over 5,000 outlets imply about 10 new jobs created per outlet! With, for example, existing two workers already employed before Tukar, that will make 12 total workers per outlet.
“Will that not drive the shops to the ground if ETP’s prescription is to be followed?”
1.5 million jobs created over the past five years?
Blindspot also questioned the ETP Report 2014’s claim that 1.5 million employment opportunities were created within the “NKEA universe”, out of a total 1.8 million new jobs.
It said that if this were true, the 1.5 million jobs must be skill-based and high-income, and would at least be registered in the Employees Provident Fund (EPF).
However, there were only 620,400 new registrations with the EPF between 2011 and 2014, with the rate tapering at a CAGR of -15%, said Blindspot.
Meanwhile, the Department of Statistic’s Salaries and Wages Survey Report 2013 showed that only between 150,800 to 205,000 new wage recipients were recorded between 2011 and 2013.
“Wage recipients are workers with formal jobs working more than 120 hours a month. Our usual working hours are at least 160 hours a month.
“The only explanation that could be thought of is the millions of jobs created may have gone to illegal foreign workers,” said Blindspot.
Have salaries improved over the last five years?
The group said the ETP’s aim to ensure all Malaysians earned a high salary had yet to kick in, despite its five years in operation.
The Department of Statistics Wages Report 2013 showed that there was a growth rate of 4.2% in mean wages since 2010, while half the working population had salaries below RM1,500, said Blindspot.
And while the ETP promised over 60% new jobs will have middle or high salaries, Blindspot said its analysis showed that 44% of jobs created by the ETP were from the low-income category.
“As such, Blindspot calls for a serious audit on the ETP Annual Report 2014 and put a stop to this continuous obfuscations and untruths reporting,” said the group.
Blindspot comprises members Azlan Awang, Anas Alam Faizli, Khalid Karim, and Razin Murat.
- TMI

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