NEP, a flawed policy?

MALAYSIA: It is noteworthy that PM Badawi has said that "Malaysians have the right to question the government or seek answers on issues". This come after the Gerakan leader asked the government to reveal how the Malay equity of 18.9% was arrived at.

The Malay equity controversy started when ASLI, a NGO, published a paper saying that the Malay equity may now stands as high as 45%. This report was later retracted after fierce rejections from the government. Although the NGO chief retracted and apologised for the report, the author stood by his report and resigned from the NGO.

Since then there had been calls for the government to show how it arrived at the equity of 18.9%, which was the same since 20 years ago. This is especially when the government claimed that the methodology used by the NGO was flawed. Till now the PM and DPM has said that the government has nothing to hide and they stood by the Economic Planning Unit (EPU) figures, but has fell short of revealing the methodology.

I feel that the only way to placate the general public and the politicians is to reveal the methodology used by EPU. Once this is reveal, let the people decide for themselves if the government is trying to hide anything. There is no use pressuring ASLI to retract their paper, criticising their methodology when EPU dare not reveal their own methods. This, unfortunately, suggests that there is something to hide. Once the 'true' equity is revealed, then the controversy will settle. If the methodology used is incorrect, for example using the par value as claimed by some politicians, then politicians - both from the government and the opposition - will have to sort out and agreed on a more amicable method. Until and unless the methodology is revealed, the controversy will lingers.

On the other hand, if everyone agreed that the Malay equity stands at 18.9%, the same as 20 years ago, then there is a cause for concern. Why is it that after 20 years, the bumiputra's equity had not increased?

Is it New Economic Policy (NEP) ineffective? Malaysia's economy had been hovering around 10% over the last 20 years. Malaysia has undergone much economic progress for the last 20 years. A lot of government's projects were awarded to bumiputra's companies. Why then the equity did not change in spite of all the support given by the authority to bumiputra's companies? The effectiveness of NEP has to be determined because it will be extended again in the 9th Malaysian Plan. If the policy had been ineffective, then extending an ineffective policy into the blueprint of Malaysia's development is certainly flawed. Not only will it not help achieve the wealth distribution among bumis, it will also created disquiet among the non-bumis. In the end, every Malaysian is disadvantaged, with the NEP helping neither the bumis nor the non-bumis and causing discontent instead.

However, if the NEP had been effective, why then poor equity stake of the bumis in the economic pie? Is it because those that where helped did not know how to help themselves? Maybe this was what the former PM, Tun Mahathir, said when he openly 'criticised' the Malays in one of the UMNO general assembly. He said then that the government had failed in helping the Malays not because of lack of policy but because of the Malays themselves. If this is so, then the NEP should be tweaked so that only those who has the potential, who is worthy of being helped should be helped. It should not just be given to anyone as long as he is a bumi. Studies had shown that handouts blunts the competitive spirit and self-reliance. Hence, this may be the reason why the equity had stayed stagnant over the last 20 years.

Or is the failure of the NEP attributed to poor distribution of wealth among the bumis themselves? This may explain why there are some bumis who are multimillionaires where as the majority of the bumis are generally poor. This is as important as the distribution of wealth among the races, because if the income gap between the rich and the poor becomes too big, this may compound the problem of wealth distribution. Already the road towards wealth distribution among the races is plaque with problems, the addition of a income gap within a racial group will pose a bigger problem. Marginalisation, today's catch word, will then take on a bigger dimension.

The equity of bumis, as I understand it, only takes into account the distribution of shareholdings of businesses in Malaysia. It did not take account into the salary drawn by the people. Hence, even if the equity of bumis stand at 18.9%, it does not mean that the bumis are generally poorer than the non-bumis. This is because the large majority of bumis who are working and drawing a salary are not considered. Hence the equity maybe 18.9% but the proportion of salaried bumis maybe much higher compared to the non-bumis. Hence, by just addressing the equity distribution may not be an ideal way in determining stakes each race has on the economy. What it meant is simply the proportion of shares held by each group and therefore the proportion of the super-rich among the racial groups.

Another pertinent point is how the equity is distributed among the bumis themselves. It is known fact that bumiputras does not equate to Malays, although generally accepted to be so. Bumiputras under the constitution includes the Bajaus, Kadasandusuns and other indigenous groups of Sabah and Sarawak. It will be interesting to see if the NEP has benefitted these bumis as well. It must be remembered that both Sabah and Sarawak were brought into the then Malaya by Tunku so as to maintain the bumis majority with the formation of Malaysia. Hence they are an integral and important component of the bumis population and it will sad that they are left out of the economic pie despite playing such an important role and their sacrifices towards the formation of Malaysia.

Whether the 'true' equity and its methodology will be revealed by the government remains to be seen. The government had been known to drag it feet on such matters. As a gauge, the proposed setting up of the police watchdog, IPCMC, had not materialised after nearly 10 months, despite the recommendations of a Royal Commission, approval of the PM and a change of the Police Chief. Therefore, do not be too surprise or upset when the bumis equity is still being debated in the years to come.

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