Day: June 30, 2016

Relationship Between the Government and the Private Sector

Why is there a need for government intervention in the market? Basically, there are two reasons: social efficiency and equity. Social efficiency occurs at an output where social marginal benefits are equal to the social marginal costs of production or consumption. Governments are pressured to provide a fair distribution of resources among their people but it is quite subjective for the issues of equity. Taxes and subsidies are used to regulate market efficiency. Taxes can reduce a monopolist’s profits without affecting price or output and subsidies can help the monopolist to produce a competitive level. Laws can also be established to prevent monopolies and oligopolies and offer consumer protection.

The government intervention in the market can create positive or negative results. Countries with business-friendly governments have generally performed better than countries where this relationship between government and business has suffered. These business-friendly countries have responded more positively to pro-growth policy reforms. In Malaysia, former Prime Minister Mahathir had set target for the business and government cooperation and developed the concept of “Malaysia Incorporated” which aim to attain higher productivity and accelerate the modernization of Malaysia economy. In order to bridge a closer public-private sector relationship, major groups in business like Federation of Malaysian Manufacturers (FMM) regularly organises meeting with the government on business issues. Malaysia is a relatively open society and is influenced by other developed countries. With more than 50,000 students overseas, majority of them would return and offer Malaysia with new ideas from the wine that they drink to industrialisation policy.

Malaysia has taken a couple of measures to be an open economy and has set up Consultative Panels to identify areas of cooperation for improving the delivery of services from the public to private sectors and improving the public administration. Malaysia has become one of the most liberal import regulations in South East Asia as their import taxes on foreign goods (incl. luxuries) were very low with little restrictions. These helped the foreign business people but hindered the growth of local industries. Thus local manufacturers called upon the government to protect the local industries and provide them with opportunities to grow. Efforts are also made for deregulation such as the reduction of composite application forms, the issue of composite licenses, the extension of the validity period of licenses from one to five years, the abolition of licenses or license fees and the improvement to the systems and procedures for licensing. Further administrative improvements have been implemented (e.g the reduction of procedures for processing export licenses for GSP, ASEAN-PTA and textiles, computerisation of work processes to expedite delivery of services and installation of modern telecommunication systems at most agencies to upgrade communications with government agencies).

With the declaration of Vision 2020 in 1991 by the Prime Minister, Malaysia is determined to become a fully developed, competitive, dynamic, robust and resilient country. Currently, the Malaysian PM Razak Najib is liberalizing the economy to try to increase foreign investment by easing certain restrictions. A requirement for Malays to own a …

To What Political Party Did Abraham Lincoln Belong?

Barack Obama is a Democrat. Most people know this. What many people may not know is that the man Mr. Obama looks to for the most political (and now presidential) inspiration and guidance was a…. Republican!

That’s right. Barack Obama’s hero, Abraham Lincoln, was a Republican. Lincoln wasn’t just any ole Republican either. He was among the founders of the Republican Party and was the first Republican to be elected President.

The Republican Party was founded in 1854 in Ripon, Wisconsin. Its principal goal was to stop the expansion of slavery into the western territories. Lincoln had been involved with the Whig Party, which was disintegrating due, in large part, to sectional rivalries. Since Lincoln was personally opposed to slavery, he found the Republican Party platform much to his liking.

The first Republican to run for President was John C. Fremont, and that was in 1856. But Fremont’s appeal was largely regional, and he was defeated by James Buchanan. By 1860, however, things would be different.

Before Lincoln ran for President in 1860, he campaigned in his home state of Illinois for the US Senate. Back then, senators were chosen by their state legislatures. Lincoln was the Republican nominee for Senate, but since the Republican Party was so new, he lost. Nevertheless, the series of debates Lincoln had with Democratic Party opponent Stephen Douglas aroused great interest in the country.

Lincoln followed by his Senate campaign with a series of pamphlets and speeches that captured the nation’s attention. He became one of the leading voices against the expansion of slavery, and, in 1860, emerged as the Republican nominee for President.

While the appeal of the Republican Party was still regional (at the time, the Northeast), the entire nation was split regionally at this point. There were, in fact, four candidates for President that year, including Lincoln’s former Senate campaign rival, Stephen Douglas. None of the candidates received a majority of the popular vote, but the population advantage in the Northeast gave Lincoln an Electoral College majority – making him the 16th President of the United States and the first President to be a Republican.…