Economy

Malaysia and economic gloom (Pt 2)

Few statements coming from groups and individuals published by the mainstream media and very little news analysis of the New Economic Policy (NEP) have shown a deep knowledge of the complex history of the policy.

This includes too the many layers of meaning NEP connotes to different groups of Malaysians.

For the non-Malays and increasingly for many Malays, generally the NEP is regarded as the socio-economic enabler of Malay ‘special’ political rights, extracted at a serious social cost to the other races. It especially discriminates against Indians and other smaller minorities such as the Orang Asli and East Malaysian natives.

If we could have provided an unbiased and unclouded analysis to the public as to the role of the NEP-type policies, this would have led to a spirit of willing sacrifice and mutual accommodation between the races.

It is still possible if only all stakeholders are fully aware of what the the NEP has achieved; what its shortfalls are; who have benefitted and who have been left behind; what programmes have worked and which have failed and where inefficiencies, leakages and wastage have taken place.

An open, rigorous and transparent stock taking of the NEP policies with regard to poverty alleviation, restructuring of public and private sectors, corporate equity ownership, government procurement, education, urban development and other contested sectors can serve as a starting point for building a new national solidarity and consensus.

Two salient points

There are two essential points that must be emphasised when deliberating on or debating the NEP.

The first is that the NEP should not be – as is often done – equated with the special position of the Malays and other indigenous communities as defined in the constitution. This special position – not rights or privileges – is entrenched and is not disputed. It is not the subject of contention when critics of the NEP question or voice their concerns about NEP-related issues.

To treat these two subjects as though they are similar or closely related diminishes the level of subsequent discussion and analysis.

Unfortunately, it seems to be the preferred strategy of various interest groups and biased commentators to invoke the spectre of a challenge to the special position of the Malays whenever the issue of the NEP is aired in the open. This reeks of an attempt to obstruct or silence legitimate public discourse on a public policy that has shaped and dominated many aspects of life in the country.

The second important point is that the NEP ended in 1990 and was replaced with the National Development Policy (NDP) and later the National Vision Policy (NVP). At the same time, the two- prongs of the NEP – eradicating poverty and restructuring society – continue to be pursued in subsequent national policies. In particular, the restructuring of society (or race-based approaches, objectives and targets) underpinned the present NDP and the Ninth Malaysia Plan.

It is the race-based operational philosophy and thrust of national development which is contentious – not the NEP itself per se, not poverty eradication and certainly not the Malay special position as defined in the constitution.

The truth of the matter is also that the NEP has been successful and the social and economic positions of the Malays have been considerably uplifted. If this vital information were made publicly available, there would be less talk about Malay under-achievement and less insecurity within the Malay community that they are losing out to the other races. In fact the Malays – though not the non-Malay bumiputeras – should be proud that they are the majority ethnic community in many highly paid and prestigious occupations.

That this information is not disseminated is due to the lack of transparency and dependability of the official statistics provided to the public. Malaysia is badly lagging behind many countries in ensuring that its statistical system is accessible, objective and transparent.

Malaysians are restive, disenchanted and demoralised. Ethnic tensions are rising, deliberately stoked by those who want to keep their grip on power at all cost. To heal the divisions in the nation, the NEP, one of the main causes of widespread disaffection among the minorities as well as majority bumiputeras who voted in droves against the Barisan Nasional, has to be opened up to public scrutiny and analysis and a new national development policy put in place.

Nazir Razak’s call on NEP

This is by no means a new, radical or communally divisive proposal that I am making. On Feb 3, Nazir Abdul Razak, the incoming prime minister’s Najib Tun Razak’s brother, called on the government to show true economic leadership. In his statement which was largely ignored by the country’s mainstream media, he noted that the global economic crisis is having a brutal impact on the world’s real economy. It is not just another economic slow-down; this crisis is shaking the core of the established world economic order.

For Malaysia to overcome this crisis, Nazir (right) suggested that the government move beyond just orthodox fiscal stimulus and monetary measures. Unfortunately, this is exactly what has taken place in the past few days as can be seen from details of the second stimulus package.

In Nazir’s view, five key strategies are needed to reposition Malaysia in the new world economic order. These are:

Re-examining the NEP

Review how the New Economic Policy retards national unity, investments and economic efficiency and develop a new, more relevant framework for economic policy-making.

Leveraging on “MCI”

There will be an accelerated shift in economic power to the Middle East, China and India as a result of this crisis. Malaysia should further exploit its unique comparative advantage in terms of social and geographical connectivity with these economies.

Encouraging cooperative spirit among “ABC”

The government should improve collaboration between academia, business and the civil service to develop and execute national development plans.

Stimulating acquisition of brands and distribution

The government should develop a clear framework of incentives and co-investment opportunities to take advantage of acquisition opportunities abroad that can fill traditional gaps in branding and distribution for Malaysian products and services.

Attracting talent

The weak labour markets in developed countries are a ready source for talent to work in Malaysia with a particular emphasis on filling the gap in the education sector in improving teaching of key subjects especially English and Mandarin.

While fiscal and monetary stimulus would provide temporary boost to the economy, Nazir emphasised the need for strategic and proactive leadership to advance Malaysia’s economic position in the new world order that will emerge from this crisis.

To me and fellow patriotic Malaysians like Nazir, only a new road map based on more equitable, enlightened and inclusive principles can bring out the best amongst all communities.

Only a new socio-economic order based on national unity, equity, justice and growth – one in which Malay and non-Malay marginalised and vulnerable are provided equitable assistance combined with a system of meritocracy that rewards the best, irrespective of race – can guarantee the future of Malaysia.

Let me end by borrowing some words from Julia Caesar’s classic speech on patriotism and rework it in the Malaysian context

Beware of the leaders who beat the drums of patriotism in order to implement the NEP unscrupulously and fill their own pockets, for patriotism is a double edged sword. It emboldens the blood and narrows the mind. When the drums of corruption have reached fever pitch it emboldens the blood and narrows the mind. When the mind closes, the eyes cannot see and the hand will sign anything. How do you know? For this is what I have done. I am Caesar, the signatory of the concession agreements.

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