Thursday, 6 July 2017

MOTOR INSURANCE LIBERALISATION - Major step towards developed nation status


A former world leader was once quoted as saying that "success will go to those companies and countries which are swift to adapt, slow to complain, open and willing to change. The task of modern governments is to ensure that our country can rise to this challenge".
Malaysia has since independence been on its path towards developing a nation and society that can compete and thrive at the global level. It is evident that in a global capitalistic economy, liberalisation is a philosophy that we too, as a nation, must follow suit to reach the economic levels we desire.
At the time of our independent, it was common policy for the administration to develop policies suited for an economy that was still in its infancy. The policies of the day favoured restriction of global companies from overpowering  budding businesses.
While protectionism allowed growth and opportunities for new entrepreneurs, it also created long-term effects of complacency due to lack of competition.
Most importantly, overarching government control also allowed very little room for creativity and innovation, as regulations often kept business operations revolving around the same procedures and bureaucratic practise for long periods of time. Furthermore, customers also suffered from a lack of quality choices, while our participation in the global economy was also stifled due to our own restrictions, providing local businesses with less room for firther expansion.
The liberalisation of such economic activities would then balance out the needs of all stakeholder, through competition that benefits more efficient businesses and allowa the best choices for the consumers.
After more than three decades of protectionism, the government has taken a bold step in outlining a clear plan to bring Malaysia through the next important step - the liberalisation of not just our commodity markets but also in areas of technology.
The National Automotive Policy 2014 (NAP2014) is one of the major testaments to sucha paradigm shift - developing localvalue and talent with high income activities, with gradual liberalisation in mind.
While the Proton-Geely deal, which received massive media coverage during the festive season, is one product of such shift in conducting business, we have witnessed another major milestone through the liberalisation of motor insurance in Malaysia, beginning July 1.
While details of the liberalisation model have been widely covered in the news, for me the most importantaspect is that consumers tend to benefit, in particular those who have better driving behaviour and safety records. The policy would lead to saferdriver habits and also driving conditions for motorists and those around them, which is inline with the NAP 2014 in principle and spirit.
However, Iwould also like to emphasise that any shift in policy will need time for adjustment. New things are not sapred from imperfection, and will naturally require tweaks and changes over time to acommodqate the reqalities on the ground. Letus allow such due process, because the most important step has taken place.
Remember, the liberalised model above all places power in the handsof consumers - so let your feedback beheard, so business can thrive and serve the nation in the best form and will continue to improve as time goes by.
The writer is the chief executive officer of Malaysia Automotive Institute.

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