Sunday, April 04, 2010
Making NEP agenda relevent for NEM
Prime Minister Dato Najib Tun Abdul Razak clearly stated at the Invest 2000 Seminar that the New Economic Model (NEM) is developed from the premises of the past policies of New Economic Policy (NEP) and New Development Policy (NDP).
This may diffuse a potential political bomb that the verbally incompetent and politically indifferent, Chairman of the NEAC, Tan Sri Amirsham Aziz had set fire to in closed door briefings to Bumiputera NGOs that there will be no more subsidy and quota for Bumiputera under the NEM.
But, to groups like Perkasa, Amirsham’s reckless remark deemed as devoid of Malay consciousness had left an indelible skepticism and put NEM under close scrutiny.
Perkasa is not a group one can simply ignore. Not even by UMNO’s attack dog Nazri Aziz or fringe Malay liberals like Zaid Ibrahim.
The recent survey by opposition inclined Merdeka Centre shows the Malays gave a 70% survey approval to Perkasa’s stand and struggle. Dr Mahathir have warned that they are not to be ignored. Surely Amirsham is sheer mince meat without PM's support.
NEP’s twin objectives to restructure of society and eradicate poverty or relative poverty for the present scenario remain relevant. The question is: Are these issues dealt with by Amirsham and his team of IMF/World Bank revered Board members in their NEM?
The recent speech by Dato Najib was merely the first part of the NEM which is basically a snap shot of where we are, where we should be, and a rough idea of how we will reach there. The picture is intentionally left incomplete without the usual unveiling of new specific policies and initiatives for public scrutiny.
This is a smart move on the part of Dato Najib. He is inviting suggestions and responses from the various segments of the public. That way there is a sense of ownership and that invites support to Barisan Nasional.
Anwar must be green with envy. He couldn’t pull such trick with his rhetorical and unclear Agenda Malaysia he claimed was copied by Najib. He maybe a former Finance Minister but Agenda Malaysia is not his. Malay Study graduate Anwar know nuts of economics but just reading prepared speeches.
Returning back to NEM, instead of criticising, groups like Perkasa must put forward proposals and suggestions that are in-sync with the presented scenarios.
In his speech, Dato Najib said that the main recipients of the high income economic model promoted by NEM are the 40% of the population in the lower rung of the income scale.
There are still skeptics questioning if the targeted income level is feasible. Would such a fast rate of income rise put inflationary pressure on the economy and counter the attempt to improve purchasing power of the population?
For argument sake, let’s assume the Government is able to put some policies in place to maintain inflation at its low which historically they have been able to. The idea of improving the lower 40% income level is in-sync with the second objective of NEP to address poverty irrespective of race.
By the logic that the majority within this income bracket are Bumiputeras, the Malays and Sabah/Sarawak Pribumi stand to benefit the most. At the same time, the poor within other races are not discriminated.
Now comes the more difficult issue of restructuring of society.
The opposition and liberals may have tried to paint this objective of the NEP black using a conspiracy theory concocted by Dr Kua Kia Soong’s book May 13 and Dr Lim Teck Ghee's intentionally miscalculated Bumiputera corporate equity. But it is only a perception game for partisan politics and propaganda. It is not material for policy development.
Walk through any town, city and commercial establishment, it is telling that Bumiputera are not dominating commerce and still remain small player dari Perlis sampai ke Sabah.
Back in 1969, after the racial riot happened, all parties, opposition and ruling parties, except perhaps for DAP, sat together and agreed that the disparity within the races was a real problem.
Malaysia cannot carry on with disparity in wealth, education, type of occupation, economic sector, living areas, etc as synonymous to any race. This socio-economic characteristic is remnants of colonialism and if allowed to persist, will only worsen race relation and create a social time bomb.
Subsequently, after negotiations amongst the various stakeholders, the NEP was created to address these issues.
The NEP had constitutional justification within Article 153 and is in line with the United Nation Charter, as said by Dr Saniman one of the architect of NEP, recently in a Perkasa organized one day Seminar.
NEP was successful in improving the educational achievement of Bumiputera. It helped create a middle class Bumiputera, But its plan to create the Bumiputera Industrial and Commercial Community had limited success.
The problems had been widely discussed be it from the perspective of internal factors within the Bumiputera community, external business environment factors, leakage in the process and the often cited reason of weakness in implementation.
The way NEP attempted to create the BICC was through subsidy, quota and negotiated contract. There are pros and cons to the approach.
Such practices breed market inefficiencies, lazy risk averse entrepreneurs, and merely developed experts in securing letter of support from Ministers.
Seeing this, PM outlined that affirmative programs will remain but it will be more market driven, transparent and competitive. What does that mean?
Or it is left to us and groups like Perkasa to help develop the idea further so that a fairer system that reward the truly deserving and allow the potentially capable Bumiputera to blossom and realised into successful entrepreneurs.
My fellow blogger, Syed Akbar Ali pointed out in his recent posting that highlighted the case of quotas in India to uplift the minority Indian Muslims. This proves quotas and subsidies are still relevant policy instrument in upgrading the economic status of targeted groups.
The problem in Malaysia to continue to allow such instrument lies with the fact that the economic minority is the Bumiputera majority and it would be perceived as discriminatory.
Where Bumiputera is majority by population, it is minority in terms of wealth, be it in absolute or relative term. Wealth translates to capital and without it ideas remain ideas and businesses gets clogged without it.
The Bumiputera is expected to raise arms over what is perceived as their diminishing rights under article 153.
The Article provides Bumiputera a minimal economic “guarantee” for scholarship, access to educational and training opportunity, jobs within the civil service, and business permits. All these within the practical administrative constraints.
The new administration of Najib has introduced merit based scholarship program for all Malaysian. Certain quarters within the Malay community are beginning to ask what is so special about Bumiputera Special Rights if similar program is allowed and beneficiary are children of affluent Chinese.
The same questions becomes more pronounced in Sabah and Sarawak where the conditions are worse to the point basic needs is still a challenge in the interiors.
According to Article 153, no funding or allocation for Bumiputera under Special Rights could be reduced by Government without the consent of the Royal Durbar. The power on Special Rights is vested with the Yang Dipertuan Agong and is not subject to the advise of the Prime Minister. Has that been adhered to?
If the Government has set out such criteria in their affirmative action, there must be a creative and original idea introduced in the policy innovation on the restructuring society which could be applied.
And, if Government is dead set against quotas and subsidies, then need it be reminded that quotas and subsidies for Bumiputeras are stated as part of Bumiputera Special Rights. Amirsham should have been aware of these issues and not look at economics strictly from the skewed self interest eyes of businessmen.
Perhaps, first generation Malaysian of Indonesian Minang parent, Amirsham never read his Constitution.
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