Posts in category: Insights

How do you say, ‘True North’ in a different language? As one of the main elements which anchors the work of PEMANDU Associates, translating the term True North, and so much more, lay at the heart of projects the organisation recently undertook in non-native English-speaking countries.

“It was definitely challenging – the work bandwidth tripled!” says Mohd Fauzi Puniran, a Vice President who was assigned to the Federal Road Agency Transformation Lab in Russia in late 2017. The Federal Road Agency (Rosavtodor) is responsible for overseeing the road transport industry and transport engineering in Russia, and had sought PEMANDU Associates’ Big Fast Results (BFR) Methodology to identify its True North to guide its management of federal roads. The Agency also requested our assistance to determine related initiatives to support regional economic growth.

“Some English words just do not make sense in Russian due to contextual issues, and may even appear offensive once translated. Hence, we worked closely with interpreters and our Russian counterparts to ensure the correct meaning was conveyed upon translation,” Fauzi, who was the engagement manager for the project, explains.

This process was painstaking, with the involvement of interpreters who would translate simultaneously while the Lab was underway. Each workstream was also co-facilitated by a Russian co-facilitator in addition to a PEMANDU Associates facilitator. This allowed the project team to gather the required input during the Lab towards preparing the final Lab report.

Hence, for the two months of the Lab, the team’s typical day consisted of 16-hour days spent facilitating the Lab, summarising the Lab findings in English then translating it to Russian. This was done not only to develop content for the final Lab report, but also to prepare for subsequent days’ proceedings throughout the duration of the Lab.

The team also put in effort behind the scenes to ensure the language barrier did not disrupt the work flow or working relationships between the Russian client and our associates, who are based in Malaysia, where English is the accepted language for business in addition to the national language, Bahasa Malaysia.

“We undertook frequent engagement with our client even outside of working hours. It also helped to build relationships among key stakeholders. Another strategy we adopted was to keep things simple. This did not only apply to our choice of words, but also in the way we conducted the Lab. It was important to explain each task undertaken during the Lab, so the Lab members not only understood the words we used, but also the meaning behind each action,” says Fauzi.

Zehan Teoh, a Senior Vice President at PEMANDU Associates who was stationed in Russia for a separate project, agrees on the importance of keeping it simple, adding that the fluency of language sometimes emerged secondary in communicating with clients and stakeholders.

Speaking on his experience in the country, he observes, “Very often we noticed that between non-native English speakers, although the vocabulary used was stripped down, it did not mean that information was being left out.

“Verbal cues are only part of the entire spectrum of communications, you also have non-verbal cues and body language.”

He adds that while translating on-the-go, be it from English to Russian or vice versa, did pose a challenge in the working environment, another important element it impacted was the ability to build trust amongst the project team and their Russian stakeholders; a crucial determinant in the success of any project.

Like Fauzi, Zehan saw that finding local advocates to help explain the context of discussions went a long way in ironing out communications breakdowns. Again, non-verbal cues, as well as staying engaged in discussions, even if they are being a conducted in a language you are unfamiliar, with also play a crucial role in building trust.

“Although the vocabulary used was stripped down, it did not mean that information was being left out.”

“Be sincere through your body language and show interest in trying to understand what they are saying. Even exhibiting that first step of being willing to reach out and being present will give your stakeholders the encouragement that you are sincere. Hence, even without a common language of communication, there are other ways to build trust,” he says.

The challenges posed by language barriers are also present in PEMANDU Associates’ currently on-going Senegal Agropole Lab project, which aims to identify projects to add value to priority crops and establish shared infrastructure and services for increased efficiencies by 2020 in South Senegal. This was despite half of the project team being fluent in French, the country’s official administrative language.

“The biggest challenge with the assignment is the subtle nuances between languages requiring Lab output to be monitored closely. Working with our client to ensure the meaning and context for the Lab output was captured and translated correctly was essential for future implementation. From a project management point of view, this required more time than usual, which means it put further pressure on a highly intense assignment like a Lab, says Yoong Huey Yee, a Vice President who is engagement manager for the project.

She points out however, that the difference in language allowed the project team to bond with the client due to the extra effort demonstrated. “Our fluency in French added to the client’s appreciation in our effort to make the assignment a success, despite our mother tongue being English. Working closer also facilitated trust-building,” she says.

She also agrees with Zehan’s advice that certain factors transcend language barriers, such as humility, attentiveness, respect and empathy, all of which helped the project team bridge the communication gap.

Beyond proving the importance of a common language in undertaking projects, our work in Russia and Senegal testifies to the universal transferability of PEMANDU Associates’ BFR Methodology – one that transcends differences in language in the pursuit of driving transformation.

By Nyoomi Rasiklal Kamani

“We feel that only when we are challenged with our backs against the wall, innovation and ideation takes root…”

Having joined PEMANDU a little over a year ago, I have been witnessing evident outcomes achieved by our Big Fast Results (BFR) methodology. Some of the governments that have actually deployed this methodology, customised to deliver their economic transformation, included Malaysia, Tanzania, South Africa (whose ‘Phakisa!’ transformation programme translates to ‘Faster!’), Oman, Maharashtra, Andhra Pradesh. More recently, PEMANDU has been tasked to work on similar projects in Russia, Botswana, Nigeria and Senegal, of which I have personally been involved in.

Anchoring BFR is a 6-8 week lab process, where our consultants, analysts and project stakeholders engage in intense discussions to achieve consensus on a project’s high-level True North and its granular action plan which outlines step-by-step actions, persons responsible, timelines, budget requirements and measurable targets.

Our labs are also divided into four phases: pre-labs (determining the work scope), labs (where our stakeholders are required to be present), post-labs (where the detailed implementation plans agreed upon in the labs are scrutinised) and syndication sessions (ensuring that our client and all their stakeholders provide feedback on the lab and agree on its final outcome).

Business Unusual

As a newcomer to BFR, I admit that there were nuances which caused me to pause momentarily as the 6-8 week period is both rigorous and can be overwhelming, especially to a newbie. However, I was able to see the importance and significance of this timeframe as it involved analytics, solutioning and detailing of intended plans to mobilise transformation.

This time is used to not only gather, process and syndicate data but also build rapport between our consultants and lab members. Every problem or case for change is often overarching. Hence, to ensure that the interest of all parties is acknowledged, we invite representatives from each party.

This usually involves individuals from private and public sectors, smallholders, entrepreneurs and ministry representatives. Engaging the participants in the labs was also a first for me. I witnessed that most participants would come with a pre-set idea of the direction they would want to pursue. Hence, there was a need to break these silos down, so that all possible ideas, solutions and determinants were robustly discussed and agreed upon. In theory, the lab may seem to be a workshop but in reality, it is a platform that requires able facilitation to derive the right mix of solutions that will deliver the True North.

Emotions usually ran high as each lab member would defend the interests of their stakeholders. The management of these polarities represented a large chunk of our work. Often debates may come from disenchanted stakeholders who had participated in previous studies and research papers by other institutions, contrary to present environment. Managing discussions based on these pre-set ideas is a common feature in labs. Participating in a lab also requires different individuals to work together and this dynamic may also be a challenge that requires facilitation.

Witnessing the more seasoned PEMANDU consultants in action allowed me to gain a new perspective in facilitation. The polarities were managed through constant open communication to encourage our lab members in uncovering a common goal.

Economics can make sense

Theoretically, we could write down the True North at the front of the lab room, emblazoning the Gross National Income, private and public investments we are pursuing. However, this doesn’t translate as a common language. We have to strip these numbers down to the bare essentials – identifying how these numbers are arrived at, how the lives of their stakeholders stand to benefit from the transformation, what are the common social impact and how the targets will even be achieved.

These rounds of communications represented how we had to facilitate conversations between stakeholders by redirecting them to parties who will be affected by the changes proposed and encourage clear communication between them all.

Another reason why these labs are business unusual is because when we get all of our stakeholders under one roof, this removes the typical delays impacted by locale differences, as well as those with fragmented interests but have chosen not to participate. In our labs, we get them to plan, agree and detail their vision so that their results are Big and Fast – as promised. The labs are also where we pursue the most important component of transformation – gaining stakeholder buy-in. Without stakeholder buy-in, it is difficult to push the plan into immediate action.

Being Accountable

At the end of every lab, we publish syndication and budget reports. This means lab members cannot just agree on something at a superficial level. We question, challenge and encourage until each lab member understands the rationale behind a particular transformation initiative and are able to commit themselves and volunteer to lead the initiative. It is also here where they are required to confirm the anticipated resource and budget, as well as committing to a feasible timeline for the project.

Embracing the Big and Fast in BFR

It is this comprehensive process which necessitates the 6-8 week lab we highly recommend to our clients. But having participated in several labs since joining PEMANDU, I’ve come to realise, there are often different horses for different courses. I recalled reading one of PEMANDU’s first lab projects when I was still a student. It was on the development of Malaysia’s Economic Transformation Programme. I remember wondering what were these labs and what constituted the work in conducting 12 labs over two months in 2010, involving 6,000 stakeholders. Now I know!

PEMANDU has always encouraged the Lab participants to play the game of the impossible. We feel that only when we are challenged with our backs against the wall, innovation and ideation takes root. A need for commitment manifests itself and from there, being accountable and driven to deliver comes second nature.

It is a mindset PEMANDU nurtures from an employee’s first day, up until the impossible is merely another item on our checklist and always bearing in mind that if you do business as usual, you cannot go big or fast; and to get Big Fast Results, you cannot do business as usual!

By Marc Fong

“In such a system, no one – not even the Government – can act as a single point of control”

Systems in countries, from the third world to highly developed nations, are complex. Whether it is addressing economic value chains, education, health, or other kinds of systems, governments must work with a fragmented, diverse set of stakeholders with various capabilities and often conflicting goals. They typically must contend with issues such as a disparate “consumer” base (the public), supply-chain infrastructure, corruption and political intervention.

Compounding this, the various institutions and agencies of the government typically work within their own corner of the system, unable to see or optimise that whole. In such a system, no one—not even the government—can act as a single point of control. This complexity can be seen even in corporations and organisations – albeit on a smaller scale. Leadership is often focused on long-term goals whilst members of the leadership team have different priorities depending on their portfolio and stakeholders.

In an age of social media and real-time information, priorities can also change in the blink of an eye. Politicians worry about pacifying an electorate while business leaders are answerable to their shareholders. While stakeholder engagement and management are critical aspects of leadership, having a set of constantly shifting priorities is guaranteed to stifle delivery.

Developing the True North

The most successful examples of delivery share a common starting point – one where the leadership of a country or organisation have agreed that urgent intervention is needed to ensure delivery of a common purpose that they will commit to above other interests. Leaders need to acknowledge the burning platform, the raison d’être for transformation that they commit to regardless of their individual agendas.

In short, clarity and alignment from the leadership form the foundation for which to kickstart transformation.

Transformation must begin at the very top – the Prime Minister or CEO must make a clear statement that he or she acknowledges the problem and is willing to commit the resources (time, manpower and financial) to transform and ensure compliance from the rest of the leadership.  In addition to this, the leader must have a clear vision of his end-goal or ‘True North’, a single overarching goal that becomes the mission for the nation or organisation.

The leader must then communicate this to his or her leadership. In some cases, the True North can be amended or further refined based on input from the leadership but the end-result is universal acknowledgement from the leadership on the scale of the problem, the urgency of it and the True North that they will prioritise ahead of their own political or individual agendas.

Malaysia’s example

When Dato’ Sri Najib Tun Razak assumed the role of Prime Minister of Malaysia in 2009, he was faced with an economy that had stagnated as a result of the 1997 Asian Financial Crisis and further suffered from the 2008 Global Economic Crisis, jeopardising the nation’s aspirations to become a fully developed nation by 2020.

Over a series of 5 retreats, the Prime Minister and his Cabinet agreed upon and set the direction for the National Transformation Programme (NTP), for which PEMANDU was mandated to performance manage and facilitate. This is where we introduced our 8 Steps of Transformation methodology, a radical and structured approach incorporating clear diagnosis, planning, implementation, execution and feedback; in a sequence which ensures transparency and accountability during transformation.

The 8 Steps begin with setting the True North, or strategic direction, for transformation, which is what we facilitated during the Cabinet Retreats in 2009.  Workshops or retreats are often ideal platforms to obtain clarity and alignment as they provide a dedicated location and time for the leadership to have a discussion. Preparation is extensive to ensure the best-informed decisions — at a national level, key institutions such as ministries and their agencies are engaged with the objective of obtaining data as well as developing models and scenarios. Participants are engaged ahead of time and briefed so they can come prepared with data-driven points of view.

Our facilitation of the process allowed for frank discussions, reducing the risk of hidden considerations and internal agendas. The role of the facilitators is to ensure conversations are healthy (i.e. not dominated by a single party or point of view) as well as to ensure that the discussions are data-driven.

Driving Transformation

The result of the Cabinet Retreats was agreement on a ‘True North’ for Malaysia – the achievement of high-income nation status (as defined by the World Bank) by 2020 – as well the principles of the NTP: growth that was sustainable (by reducing dependence on public investment and diversifying the sources of economic growth) and inclusive (ensuring Malaysians at all levels benefited from the transformation).

The ‘True North’ for Malaysia was then refined into its final form, a target expressed in Gross National Income (GNI) which provided clarity for subsequent implementers – every initiative and project was assessed and prioritised on its ability to contribute to GNI. This resulted in a decision-making process that was both significantly accelerated and transparent. By publicly committing to these targets and principles in a series of strategic engagements, Dato’ Sri Najib and his Cabinet made themselves fully accountable for delivery.

It is important to note that the Cabinet did not make this decision in isolation – while the leadership remained accountable, throughout the process existing institutions were engaged to provide input and data ensuring a fully informed decision.

Since the Cabinet Workshops in 2009, Malaysia’s NTP has doubled growth in private investments and consistently ranked well in global indices. The gap between GNI per capita and the World Bank’s high-income threshold has narrowed significantly from 33% in 2010 to 20% in 2017 whilst both mean and median incomes for the bottom 40% of income levels has grown at an annual rate of over 12% from 2009 to 2014.

Our 8-Step methodology has also since been adopted by other countries around the world, such as Tanzania, India and Russia, while we continue to work with governments and the private sector in new markets. However, none of this could be achieved without completing our first step of transformation: developing clarity at the top and defining the True North.

By Idris Jala

“Malaysians must be able to rise above the distractions to look at our fundamentals and make an informed choice.” 

For those who develop resolutions, we always begin each new year with renewed vigour and optimism. More so, when we begin to look at how Malaysia is growing against the global landscape. As we move to complete the first quarter of 2018, stable growth is still being exhibited by leading economies, given that the global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage points to 3.9%. This translates to a positive outlook.

When we compare the Malaysian economy against the rest of the world, we’re moving at a very good pace. Malaysia’s GDP was recorded at 5.9% in 2017. This outpaced regional neighbours such as Singapore, South Korea and Taiwan.

The performance was recognised by the World Bank, which revised its forecast for the country’s economic growth for 2017 twice during the year, raising it from 4.3% in April to 4.9% in June to a higher forecast of 5.2% in October 2017. Fitch has also reaffirmed its A- rating for Malaysia with a stable outlook. The central bank, Bank Negara Malaysia, also continues to earn recognition for its handling of the country’s monetary policy.

In fact, the National Transformation Programme (NTP) has year-on-year catalysed Malaysia to move closer to its True North of becoming a high-income nation. In 2017, the gap between Malaysia’s GNI per capita and the World Bank’s high-income threshold has narrowed to 20% after the country spent more than a decade stuck in the middle-income trap.

We have always maintained that the journey to transform is a marathon, not a sprint. As Malaysia nears the completion of its transformation, the country must remain focused in implementing the initiatives to achieve its True North.

The outlook for this is positive. In 2018 Malaysia is expected to continue solidifying growth from its fiscal policies and economic diversification efforts from the NTP, which included growing private sector investment.

Decisive measures

Prior to the NTP, the economy was too reliant on the oil and gas industry, which is susceptible to price fluctuations. In 2009, oil and gas revenue contributed to 41% of government income.

Through the NTP, the government chose to focus growth on 12 economic priority sectors, enabling the government to reduce its dependency on income from oil and gas revenue, which has declined to around 14% in 2017. This has allowed for balanced and stable economic growth, bolstering the economy’s resilience against external shocks such as the reversal of commodities prices seen in recent years.

This is why, as demonstrated by the economy’s results in  2017, the country has continued to outperform global growth since the launch of the NTP in 2010.

Market observers and investors have shown that they value the strength and stability emanating from economic and business conditions in Malaysia. This is reflected by the country’s 23^rd ranking among 190 countries in the World Bank’s Doing Business Report 2017 and continued foreign investor confidence.

Notably, Saudi Arabian oil and gas giant Saudi Aramco committed a US$7 billion investment in the Refinery and Petrochemical Integrated Development (RAPID) project in the Pengerang Integrated Petroleum Complex (PIPC). PIPC is one of the flagship projects under the NTP and has the potential to become one of the largest downstream oil and gas hubs in Asia.

Staying inclusive

When the plans for NTP were laid out eight years ago, we knew that for the transformation to be complete, its outcomes needed to be inclusive and sustainable. To this end, the economic diversification contributed to the creation of 2.68 million additional jobs between 2010 and 2017. This has supported the narrowing of the country’s Gini Coefficient, which measures income disparity, to 0.399 in 2016 from 0.441 in 2009.

The NTP also ensured to address the areas most pressing to Malaysians. This included their safety and security through the reducing crime focus area, where efforts to combat crime have resulted in a stunning 53% reduction in index crime between 2010 and 2017.

The government is also striving to transform the delivery of its services to the public. Thanks to efforts such as the establishment of Urban Transformation Centres (UTC) and Rural Transformation Centres (RTC) to serve as one-stop, integrated premises for the efficient utilisation of public resources, the public is seeing better service from the government. Initiatives to improve the public healthcare system has also enabled shorter waiting times for patients and reduced congestion at government hospitals.

As testament to these initiatives, the World Economic Forum’s Global Competitiveness Report 2017-2018 ranked Malaysia second out of nine ASEAN countries and 15^th globally for efficiency in public spending – this also put the country ahead of developed nations such as Finland, Norway, Sweden and Japan.

All these indicators suggest that Malaysia is in a good socioeconomic position and the country is on the right track. Different commentary and opinions will always exist and will get even louder considering the country’s impending 14^th General Elections.

Whatever our stance is, people must understand that when politics is exploited, it is nothing but a play on perspectives. Concerns pervade every election season. Malaysians must be able to rise above the distractions to look at our fundamentals and make an informed choice.

This boils down to the question of: how are we doing as an economy? Do our people have jobs? And are we getting closer to our target of becoming a high-income nation? Keep this in mind, while we walk towards the polls this year and carry out our duties as a democratic nation.

When PEMANDU started work on the National Transformation Programme (NTP) in 2009, we had two general sentiments beating down our front door – measured optimism and pure cynicism. The career cynics had zero faith that the NTP would deliver any impact, while the measured optimists were willing to give the Government a chance.

The NTP set out to address seven social issues that were of concern to Malaysians at the time. Subsequently, we identified 12 priority economic sectors with six policy enablers to grow Malaysia’s economy in a manner that is inclusive and sustainable, with the view of propelling the nation out of the middle-income trap into high-income status by 2020.

Today, as we enter the NTP’s eighth year, I wholeheartedly believe that all the Ministries, Departments, Agencies and private sector project owners involved have been steadfast in moving the country’s transformation forward, despite the naysayers. Steadily, the Government has delivered evident outcomes from its promises made under the NTP.

The results and challenges faced are evident in our six Annual Reports published since 2011. Let me highlight here, some of the key achievements to date. Chief among these was the launch of the much-anticipated Mass Rapid Transit (MRT) Line 1 on 17 July 2017. I believe the MRT has ushered in a new era of public transport in Malaysia, where close to a million people can be transported over 100km daily in a fast, convenient and environmentally-friendly way.

Steps to revamp our education system, although a mammoth task, have also borne fruit. Our students are now progressively doing better against global benchmarks. The Trends International Mathematics and Science (TIMSS) study showed that Malaysian schoolchildren’s ability in those subjects improved significantly in 2015 from the last study in 2011. For Science, Malaysia was among 16 countries recording the highest score of 471, up from 426 in 2011, while for Mathematics our students recorded 465 points from 440 in 2011.

These initiatives, like other activities under the NTP, enable us to be competitive as we pursue our aspirations of becoming a high-income and developed nation. And even as we journey towards a new phase for Malaysia, we have ensured social issues, such as public safety, are not neglected. Since 2010, we have almost halved Index Crime to record a total decline of 47% up until 2016.

Underpinning these achievements has been our steady march towards high-income status. According to the World Bank, Malaysia’s GNI per capita amounted to US$9,850 in 2016, putting us within sight of its high-income threshold of US$12,235.

Indeed, we have been closing the gap between middle and high-income by leaps and bounds – in 2009 our GNI per capita was “stuck” at US$7,620, separated by a gulf of 34% from the World Bank’s high-income threshold. As at 2015 we bridged the divide to 19%, marking our move out of the middle-income trap.

For Malaysians, this translated into growth in the median monthly household income to RM4,585 in 2014 from RM3,626 in 2012, representing an increase of 11% annually. Additionally, we have succeeded in systematically reducing the incidence of poverty in our country to 0.6% as at 2014 from 3.8% in 2009.

Even more heartening has been the income growth within income groups, with the bottom 40% of income earners (B40) charting the largest increase. Starting at a median and mean monthly income of RM1,440 in 2009, up until 2014 the group has recorded a compounded annual growth rate (CAGR) of 13% to RM2,629 in median monthly income, and a CAGR of 12% to RM2,537 in mean monthly income.

Furthermore, we surpassed our target of growing B40 mean monthly income to RM2,300 at 2015, as identified in the 10th Malaysia Plan, ahead of schedule in 2014 where we recorded RM2,313. The middle 40% of income earners (M40), have also seen their median and mean monthly incomes rising, at a CAGR of 9% each to RM5,465 and RM5,662, respectively.

Our target of growing the B40 mean monthly income from RM1,440(2009) to RM2,300(2015) was met in 2014, ahead of schedule.

NOTE: Data for 2014 Household income survey are based on interim report and inflation data for 2012 is based on CPI until August 2014
Source: 11th Malaysia Plan

Yet, the NTP’s high-income target is only one facet of the work that the Government has done to strengthen our domestic position – especially in the midst of a volatile global economy which has prevailed since 2008. Another design of the NTP, and I quote Datuk Seri Mustapa Mohamed, our International Trade and Industry Minister, “[The NTP] had turned the country from an input-driven, low-wage and low-skill economy into that which is innovative, technology-based and has value-added skills.”

For example, initiatives under the Oil, Gas and Energy NKEA are focused on growing the sector’s downstream segment, which can yield higher value as opposed to just relying on revenues from crude oil exports. One definitive project is the Pengerang Integrated Petroleum Complex (PIPC) in Johor, which houses PETRONAS’ Pengerang Integrated Complex (PIC) and Dialog Group Bhd’s Pengerang Deepwater Terminal (PDT). PIC is the single largest downstream/infrastructure investment project in Malaysia and continues to progress well towards its full completion by 2035. PIC reached 50% completion as at the end of 2016, while the construction of phase two of PDT is underway following the completion of its first phase.

The NTP is also anchored on raising Malaysia’s global competitiveness, as the size of our domestic market caps the growth potential of local companies. To this end, we introduced competition laws, are driving the adoption of global standards to enable our local products to compete in the international market, and liberalised selected industries and sectors to create an environment conducive for business.

Collectively, our efforts have garnered Malaysia global attention and recognition – The IMD World Competitiveness Yearbook ranked Malaysia 14th out of 61 countries in 2016 from 18th of 57 countries in 2009 and since mid-2015, Malaysia has received an ‘A-’ sovereign rating and stable outlook from Fitch Ratings, which was maintained in October 2016 despite the tough year for all.

As we pick up our stride in 2017, I ask for Malaysians to keep their belief and hope for our country strong. Dispense with the noise and focus our energy on the work to deliver our high-income nation target. We still have a lot of work ahead of us to achieve our targets but we are seeing evident outcomes from the roadmap we first published in 2010.

Every year, we publish a detailed document of what has been achieved under the NTP, the KPI scores and traffic lights on items where we met targets (green), missed targets (red) and partially met targets (amber). For readers interested in these details, please visit the Download Centre to view the annual reports.

The wake of the 1997 Asian financial crisis was the moment at which it became apparent, to all but the most cynical pundits, that the Four Asian Tigers did not merely survive because of luck or coincidence. It is, instead, its robust foundation that kept their economies relatively unscathed.

Between 1960s to 1990s, the Tigers — Hong Kong, Singapore, Taiwan and South Korea, created what economists called the “the Asian Miracle”, recording on average in excess of 7% GDP growth annually. At a time where most Asian countries were struggling to escape the poverty trap, The Tigers proved to the world that that it is possible for a low-income country to attain fast and strong growth, provided that the right policies are implemented.

And indeed, a miracle it is.

For decades, countries such as Brazil, South Africa, Indonesia, etc., have been diligently attempting to replicate the Tigers’ miracle without any success. These countries are currently stuck in what economists label as ‘the middle-income trap’. It describes where a middle-income nation’s economy has been stagnant for a long period of time and is struggling to transition to a high-income nation.

One of the biggest and fastest growing economies of the world, China, is also said to be stuck in the middle-income trap. Since recording an annual average GDP growth of 9.4% between 1978 – 2012, its economy recently begun to slow down, gradually slipping from 7.8% in 2012 to 6.7% in 2016, the weakest growth in 26 years.

Why the middle-income trap exists

Economists today have yet to find a prescribed path for avoiding or moving away from the middle-income trap. Hong Kong, South Korea and Taiwan, for instance, took as little as seven years to achieve it. In the case of countries like Argentina and Greece, it took more than three decades.

Based on case studies, the lack of foresight, is perhaps the biggest reason why the middle income trap exist.

For most low-income countries, after opening up and adopting a capitalist mindset, growth is attainable through the production of labour intensive and low cost products. However, as a country continues to grow, so does various aspects of its ‘supply chain’. This includes, but is not limited to, the demand of higher wages, sophistication of products and skilled human capital — all at the expense of its growing but still fragile economy.

As living standards rise, the current labour force driving the economy is also expected to shrink. Individuals with higher earnings potential will seek better-paid employment and comfortable jobs. Thus, the government will need to ensure the foundation of the economy (large, traditional industries the government rely to drive the economy forward) is not jeopardised and at the same time, actively seek for new sources of income to ensure the growth is not stagnant.

For an economy to prosper, it cannot be complacent; it has to continuously innovate and transform in order to become more competitive in high-income markets. Unfortunately, this is often costly, require skilled talents and significant investments in infrastructures.

No easy way out

The European Union (EU) was Greece’s golden ticket to high-income nation status.

Once a major centre for arts, philosophy and politics, Greece is one of the few countries which managed to escape the prison of the middle-income trap after close to three decades of stagnant growth.

To jump-start its economy post the collapse of a military dictatorship in the mid-1970, the Greek government embarked on a series of high deficit spending policies, done via heavy borrowings from various governments and international institutions.

The borrowings were made possible because of Greece’s EU membership. Despite realising that the country does not have the ability to return its borrowings, institutions and governments were still willing to make high risk loans to Greece, on the assumption that EU is the ultimate guarantor.

Greece eventually incurred an immensely high sovereign debt when its debt-to-GDP ratio ballooned to 176% in 2015, creating a major debt crisis in Europe. The unsustainable growth is also evident in other countries which were once stuck in the middle-income trap — Japan (debt-to-GDP ratio was at 248% in 2015), United States, and Singapore (both debt-to-GDP ratios at more than 100% in 2015).

In brief — there are no short cuts in breaking free of the middle-income trap, it requires long-term dedication and planning to ensure an economy’s growth is sustainable. A total of three key areas should be focused on by governments around the world.

Firstly, there needs to be policies stressing the creation of new growth engines, transforming the economy to an innovation-led, high value-added market. Instead of investing in easily imitable products and services with existing technologies, investments should be made on research and development to produce value-added products. Naturally, this has to be covered by adequate intellectual property protection. In short — one must build their own.

Secondly, countries require a robust education framework promoting knowledge and innovation. This investment needs to be substantial and implemented long-term, producing skilled workers who are able to bring the economy forward in the future and for generations to come.

Lastly, the need for advanced communication infrastructures (Information and Communication Technologies and high-speed communication networks) to promote the dissemination of information and knowledge. In the case of the Republic of Korea, the nation invested heavily in infrastructure and educational system post the Korean War in the 1950s. With a strong foundation in place, the country was able to focus on the goal of increasing international competitiveness through upscaling its technological industry (as seen in the meteoric rise of Samsung and LG in the world).

The goal here is to move up the “value chain” and growth by breaking into fast-growing markets.

Transformation principles

Once the pathway is clear, it is essential to institutionalise a transformation mindset. This is done through enforcing a set of transformational guidelines that all should adhere to.

In any transformation process, the first thing to tackle is the fear of failure. For countries which have been stuck in the middle-income trap for decades, a defeatist/fixed mindset has undoubtedly been developed. Thus, the adoption of a ‘growth mindset’ is crucial. According to Sir Richard Branson, Founder of Virgin Group, this means inculcating a mindset where one is “willing to learn, happy to make mistakes, and eager to experiment”.

This is also about ensuring one does not stay in a defeatist/fixed mindset as this will far too often, make ideas stagnate, businesses stop growing and people stop learning.

Secondly, transformation requires all to put their differences aside and work towards a single goal. For Jack Ma, the founder of Alibaba Group Holdings, one can never unify everyone’s thoughts in an organisation. However, one can definitely unify everyone through a common goal.

Finally, all actions need to be done with ruthless prioritisation and anchored on a number of key performance indicators (KPIs). This is what Dato’ Sri Idris Jala, CEO of PEMANDU Associates, calls the DMS model – Do it relentlessly, Monitor it constantly and Solve problems reclusively. We need to understand that there are no short cuts in any successful implementation and should always be ready for failure and expect to go back to the ‘drawing board’.

Better quality of life

Countries in pursuit of high-income nation status should never be overly-focused on escaping the middle-income trap at all cost. Instead, they need to understand and be prepared for a set of new problems that comes with being a high-income nation.

Elevated risk of obesity, call for better quality of education, increased environmental pollution, are some of the many ‘first world problems’ that may arise.

As such, better quality of life is the end goal all countries should seek to attain. Becoming a high-income nation is far beyond fulfilling a set of ‘well-defined numbers’ set out by various international institutions. According to the Social Progress Imperative, this also includes taking into consideration the foundations of wellbeing (education, technology & life expectancy) and opportunity (personal rights, freedom of choice and tolerance).

These are the key principles that a nation must apply in creating a sustainable and impactful high-income nation.

The road to success was never easy and the journey is often paved with ambiguity and uncertainty. The Tigers’ miracle stories, albeit useful and helpful, should never be treated as an infallible guide for countries seeking to escape the shackles of middle-income trap.

At the end of the day, it is the quality of life that counts for an individual, never the wealth that one owns.

It’s experiential. It’s emotive. It’s provocative. The modern age has brought about a new way of communication. Information and newsfeeds are at our fingertips. The opportunity for anything and everything to go viral across ever expanding social media platforms is faster than the speed it takes to verify the authenticity of the source.

All it takes if for a disgruntled and disapproving social media user to have a bad experience with what you say or your service delivery and you’re finished – both online and off.

This is the real challenge faced by most public-sector organisations and governments of the day. Public expectations need to be met. The public demands for credible responses. They demand accountability, transparency and effective delivery. They want action, not promises.

There is an urgency to cut through the clutter and noise, forming a clear and trusted line of messaging, facilitate participation and buy-in.

The guiding principle is openness

Effective public-sector communication is about dialogue. It’s about engaging with individuals and communities at all levels and providing them a platform to voice their views and opinions. It’s about providing action and delivery to meet their needs.

Public sector communication has to be seen and regarded as a service to the general public. Constant engagement to foster participation is needed to build accountability and trust in the Government. Even more so when a Government is embarking on a national transformation agenda.

In any transformation agenda, communication is essential for effective consultation and engagement, informing policy-making and service design. The Government of Malaysia took on a bold new approach to communication in 2012 when they started their national transformation journey.

They were single-minded in promoting effective communication as a behavioural change from within – from the act of doing or implementation – closer integration of policy development, service delivery and communications functions. This ultimate led to better policies and services.

Getting the public to participate and to be informed was crucial in the communication process. Anchored by BFR Methodology’s 8 steps of Transformation, the Government of Malaysia was able to communicate effectively by being:

1. Inclusive in identifying the issues to resolve through a series of public labs.
2. Consultative with the public in finalising the solutions.
3. Accountable in reporting on the transformation delivery progress via monthly public updates and ultimately, the publication of annual reports every year end since 2010.

Political neutrality is a cornerstone of public sector communications.

While clarity and factual presentation of government policies, intended delivery and achievements are important, what helps complete efforts of building public confidence is trust in neutrality. Political neutrality is a cornerstone of public sector communications.

Real time communication

Effective communication has to thus take on a real-time approach. Public sector and government communications must engage with audiences. 24 hours a day. Clearly. Efficiently. It takes a deep dive into the transformation journey, walking the target audience through the transformation process by sharing measurable positive impacts of the beneficiaries periodically and when it happens.

Modern technology offers many tools for direct, unmediated communications with the public but these need to be used effectively. They should be credible, efficient and prompt disseminators of authoritative information. They should answer questions accurately, honestly and completely.

Be as good as the best in any sector. Be fast. Be accurate. Be concise.

All these are done in the hope that greater trust can be built amongst the public sector, government, general public and the media. Government communication needs to be as good as best in any sector. It needs to be fast. Accurate. Concise. And. To reach the audience wherever they are.

Communication is critical to transformation

At the heat of the policy process and public service development is the element of communication. The general public can and will judge the quality of decision and the delivery of services that affects their lives by means of their sight, feel and hearsay. Clarity and regular engagement is critical. Public sector and government organisations must be accountable for what they do, be prepared to explain and defend decisions, and also to admit mistakes.

Public sector and governmental organisations must develop effective communication strategies and engagements that link communications explicitly to the achievement and delivery of their national transformation outcomes. Only then can positive behavioural change exist and thrive.