By : Mohamed Rais bin Saniman
Introduction :
As Malaysia celebrates its 50th
Merdeka anniversary this year with joy and thanks giving, across the
land from Perlis to Sabah, including sending its first Cosmonaut into
space, it is also a time for all of us responsible Malaysians, who wish
the country and its people well into the future, to take stock of our
history, namely to assess what went right and what went wrong in the
past decades. We must learn from our history, so that we could map out
our future development, utilizing the strengths of our successes and
also avoiding the weakness of our past mistakes. This article attempts
to asses the socioeconomic contribution of the New Economic Policy (NEP
or DEB in Bahasa) towards building a united Malaysian nation in
diversity since its introduction in 1970 and its evolution over the
decades. It also attempts to assess its relevance in the future
socioeconomic development of this country. This is the Unfinished
Business of Malaysia which it sets out to accomplish since Merdeka.
Indeed it forms the basis of its national drive particularly the spirit
of the Angkatan Bangsa Melayu.
The article is divided into the following sections, which we will elaborate in turn :
- The Origin of Malaysia’s New Economic Policy (NEP)
- The NEP in Summary
- Some Instruments of the NEP
- NEP Debate and Decision
- The Outcome : Economic Growth and Ethnic Disparity
- The NEP Today
- The Relevance of the NEP type of policy in the future
- Conclusion
*
The writer wishes to thank his mentor, teacher and friend Tan Sri Just
Faaland, of the Chr. Michelsen Institute, Bergen, Norway, for allowing
him to use part of his paper on the NEP, which he presented to the
international symposium on the NEP organized by the Central Bank of
Namibia in September 2007. The African countries, most of which are
facing problems similar to those faced by Malaysia, are keen to learn
from the Malaysian experience of implementing the NEP, to achieve
maximum economic growth with ethnic economic balance simultaneously. Tan
Sri Faaland, who was the Economic Adviser to Tun Abdul Razak, at the
time of the 1969 racial riot, devised the NEP which became the basic
underpinning of the Malaysian economic system since 1970. He is
currently one of the Economic Adviser to YAB Dato Abdullah.
A. The Origin of Malaysia’s New Economic Policy (NEP)
What
came to be called the New Economic Policy (NEP) in Malaysia was
initiated and developed in response to massive economic disparities
along ethnic lines. Fifty years ago, in 1957 when Malaya achieved its
independence from British colonial rule, it had a population of 7
million; nearly every other resident was a resent Chinese or Indian
immigrant stock. Today, in the large Malaysia-which since 1963 includes
also the two North Borneo States of Sabah and Sarawak-there are some 25
million citizens; one in three being Chinese and Indian Malaysians and
two of three are Malays or members of other indigenous groups of
peoples, collectively referred to as Bumiputera (sons of the soil).
The
economy of Malaya at Independence was deeply segregated as between
ethnic groups: in geographic location, in types of economic activity and
in levels of livelihood. As compared with the non-Bumiputera :
- Malays form a much higher proportion of population in rural areas than in towns;
- Malays populate the relatively poorer States and occupations to a higher degree;
- Malays form a higher proportion of the workforce in low productivity traditional agriculture and a lower proportion of the workforce in high productivity modern industry and commerce;
- Within given industries and enterprises Malays typically hold lower-echelon position;
- Malays have property rights over only about one-third of land under agricultural cultivation;
- Malays have a significantly lower share of ownership, control and management of industrial and commercial enterprise and, as a result, less control of their own economic destiny;
- The average Malay has a much lower standard of living.
These disparities persist today and remain major issues for policy debate and formulation.
In
May 1969, following general elections that year, the tenuous social
balance between ethnic groups broke down into vicious rioting. This was
quickly and effectively met by the declaration of a state of emergency,
vesting all power in a National Operations Council (NOC), headed by the
then Deputy Prime Minister Tun Abdul Razak. Civil order was quickly
restored and the NOC spent the next year and a half laying the political
and institutional basis for what they saw as a viable and prosperous
multi ethnic Malaysia of the future. The NEP was borne and presented in
the Second Malaysia Plan (SMP), issued in early 1971, when the country
returned to Parliamentary rule. The NEP was further elaborated in the
Mid Term Review of SMP in 1973.
The socio-political conviction on which the NEP was based was clear :
“National
Unity is unattainable without greater equity and balance among
Malaysia’s social and ethnic groups in their participation in the
development of the country and in the sharing of the benefits from
modernization and economic growth. National Unity cannot be fostered if
vast sections of the population remain poor and if sufficient productive
employment opportunities are not created for the expanding labour
force” (SMP, pp.3-4).
The
basic formula for an effective NEP was set out in no uncertain terms
and the political commitment to its implementation were emphatic :
“(The
NEP) incorporates the two pronged objective of eradicating poverty,
irrespective of race and restructuring Malaysia society to reduce and
eventually eliminate the identification of race with economic
functions…(The Government) will spare no efforts to promote national
unity and develop a just and progressive Malaysian society in a rapidly
expanding economy so that no one will experience any loose or fell any
sense of deprivation of his rights, privileges, income, job and
opportunity… To achieve our overall objective of national unity,
Malaysia needs more than merely a high rate of economic growth. While
devoting our efforts to the task of achieving rapid economic
development, we need to ensure at the same time that there is social
justice, equitable sharing of income growth and increasing opportunities
for employment… The Plan must succeed as it is vital to our survival as
a happy and united nation” (SMP, p.v).
B. The NEP in Summary
The
NEP was designed to enable the Bumiputra community to enjoy the fruits
of development on par with the other ethnic groups, who were then and
still remain economically far more advanced. This was to be achieved
through a process of growth and modernization so directed as to bring
about gradual restructuring of employment and production patterns in all
sectors and at all levels, so as to be in rough accord with ethnic
population ratios.
The NEP is not a
policy purposely to discriminate against non-Bumiputra ethnic
communities or withdraw from them the levels of income and wealth they
have already gained; on the contrary, it seeks to ensure that increments
in the nation’s wealth and income redound more fully to the Bumiputra
and not disproportionately to the minority. To achieve this, the
Bumiputra must eventually participate on an equal footing in the modern
high productivity sectors. The NEP therefore places emphasis on
advancing economic productivity of the Bumiputra, on education and
training, on the adoption and spread of modern technology, on market
efficiency and competition in a largely private sector regime, and on a
business friendly government. The NEP, therefore, is firmly a policy for
sustained growth with emphasis on a gradual change in distribution as
between ethnic groups, and at the same time a transformation of social
institutions and attitudinal change. In other words, economic
development is indeed important. Yet, growth alone, no matter how rapid
it may be, is not enough. Distribution must be a parallel or twin
objective of equal importance.
The
twin objectives of NEP are the eradication of poverty for all
Malaysians irrespective of race and the correction of the racial
economic imbalances in terms of income, employment and wealth. This
required action on many fronts:
First,
it was accepted that the federal and State governments and their
various agencies and institutions would have to play more active and
interventionist role, so as to ensure that the Malays obtained a fair
opportunity to gain more ready entrance into, and equality within, the
modern sectors. New institutions would therefore be set up and old ones
sharpened to assist the Malays.
Second,
the policy framework had to be consistent with and conducive to a high
rate of economic growth. This would alleviate general poverty in the
country by raising the general income level, provided growth was fairly
evenly spread. It would enable the non-Malays to grow without hindrance
while allowing for accelerating Malay entry into the modern sectors.
Growth was also necessary to create those additional resources, required
to undertake the economic and social reforms envisaged, without serious
pain and dislocation to the system. To achieve such a high performance,
the private sector was to be given incentives to spearhead the growth
of the economy, especially in its rapid industrialization efforts and
export drive. The challenge was to ensure both rapid growth and an
improving racial economic balance. It was recognized, however, that
beyond a point, the pursuit of these objectives could become competitive
rather than complementary. The Government would therefore have to
exercise flexibility in case of severe conflict.
Third,
an active full employment policy would be pursued so as to absorb the
already underemployed and unemployed labour force, while at the same
time catering for new entrants to the market, stemming from population
growth and making room for those wishing to move to new jobs in the
modern sector of the economy. Economic growth had to be encouraged and
guided along an employment intensive path. The full employment policy,
like the rapid economic growth policy, was therefore an indispensable
and a strategic element of the NEP.
Fourth,
to develop the capability of the Malays: Vigorous programmes of
education and training the Malays would be undertaken so as to enable
them to participate actively in the development process. For all
Malaysians, education was assigned the important role of laying the
foundation for the creation of a new common value system among the
younger generations for the attainment of national unity and racial
integration.
At
its core, therefore, the NEP was designed to achieve no less than a
complete social and economic transformation. It sought to achieve the
emergence of a new Malaysian society which would transcend existing
ethic, cultural, religious and economic differences and provide for
opportunities for advancement for all Malaysians. After 1969, it seemed
there was no other option, otherwise the country would return to anarchy
and chaos.
C. Some Instruments of the NEP
Consistent
with-and indeed as part and parcel of-the pursuit of this strategy,
Malaysia introduced a set of policies which are characteristic of the
NEP:
1. Foreign Investment Committee (FIC) and the industrial Coordination Act (ICA)
For
the effective pursuit of the NEP objective to correct ethic economic
imbalances, specifically in the patterns of employment and in ownership
and control of enterprises, the Government established what was called
the foreign Investment Committee (FIC) and introduced the Industrial
Coordination Act (ICA). This became the powerful agent of change in the
private corporate sector, focusing on the balance of equity ownership as
between foreign and domestic investors. However, only sporadically and
only in the early years was the FIC active in the pursuit of employment
restructuring, even though this had been the intention when NEP was
first formulated. Also, the name notwithstanding, the FIC has concerned
itself not only with the role of foreign investment; all
acquisitions of assets above stipulated magnitudes, mergers and
take-over of companies-whether they involved foreign or just domestic
investors-have to be approved by FIC.
The
NEP at its inception in 1970 envisaged that by 1990 the ownership of
capital would be such that 30 per cent was owned by Bumiputera as
against no more than 2 per cent in 1970, 40 per cent by non-Bumiputera
nationals as against some 35 per cent in 1970 and 30 per cent by foreign
investors as against well over 60 per cent in 1970. The FIC was
mandated to formulate policy guidelines on foreign private investment,
to monitor progress and make recommendation for investment policy
changes, to supervise ministries and agencies concerned, to regulate the
acquisition of assets, mergers and take-over of companies.
Over
time and as Malaysia has developed and its economy has been even more
integrated in the global economy, the FIC has changed rules and
practices so as to allow the more unencumbered flow of market forces in
respect of corporate equity structures. However, the FIC is still in
place and retains its functions as an important regulatory and
monitoring agency.
2. Privatisation
In
the early 1980 the Government initiated what became an active and
deep-going privatisation process. A proactive Malaysian Privatisation
Plan was prepared by a consortium of local and foreign consultants,
approved and published. Privatisation included turning Government
departments and agencies into corporations as well as management buy out
of Government companies. The record for the past 25 years shows that in
all 500 projects were privatised and well over 100 000 public sector
employees were transferred to the private sector. Privatisation remains
today a major aspect of national development policy. Where possible, it
is so directed as to enhanced the participation of Bumiputera ownership,
employment and business opportunities in line with NEP objectives.
3. Public Procurement
Government
departments and agencies, as part of both operation and development
activities, provide a major market not only for employment (up to 10 %
of the total workforce), but also for services and products supplied by
the private sector. In various ways Malaysia seeks to use this market
power to contribute to the NEP objectives. Preferential treatment of
Bumiputera suppliers is the order of the day for some categories of
products and services, contracts for standard building and construction
are awarded to Bumiputera entrepreneurs and corporations, business
opportunities are created as part of special Bumiputera vendor
programmes etc. Over time this has had positive effects and the
empowerment of Bumiputera through public procurement continues as a
major thrust today. Yet, the system-as practiced-has also led to a state
of over dependence by many Bumiputera entrepreneurs on preferential
public procurement. Moreover, the system has proved difficult to operate
with both effectiveness and perceived fairness.
D. NEP Debate and Decision
It
is in the nature of economic policies in this area that they raise
controversy. And so they should. While it may not be seriously contested
that-in the interest of a cohesive and viable Malaysian nation-the
successful attainment of the NEP objectives would be of lasting benefit
to each and all ethnic groups, the implementation of NEP policy
measures, each seen by itself, will be felt-and rightly so-to have costs
borne disproportionately by the non-Bumiputera and giving benefits to
the Bumiputera which are discriminatory for the non-Bumiputera. Also,
some benefits have to be accorded now in order for benefits to flow much
later. An illustration of this may be the terms of “the Social Bargain”
which created the basis for the immediate right of citizenship for a
million or more immigrant non-Malay residents against the long term
commitment to ensure that the Malays be brought up roughly at par with
the non-Malays in the future economic life of the nation. And moreover,
the very purpose and justification for specific NEP policy measures may
be defeated in actual implementation, resulting in misdirected
preferences, serious leakages and costly inefficiencies. Much of the
opposition to the NEP is based on the more blatant such misuse of NEP
instruments, giving the whole NEP effort a bad name in some circles.
Illustrations may be the reservation of a minimum of 30% of new equity
holding for Bumiputera; and the preference accorded in public
procurement.
Policy
decisions in Malaysia have often emerged in part through a special
process of consultation between leading personalities in political
parties and interest groups. While for the original NEP the imprint of
Tun Razak himself is very much in evidence, he successfully sought to
build a broad consensus in support of the new strategy and its specific
policies. One such step was to create what was called the National
Consultative Council which allowed influential representatives of a wide
range of political groupings and economic interests to deliberate
freely but in closed sessions the needs and options for handling the
challenges to national cohesion and development. Similarly, in 1989 when
the planning period of 20 years of NEP restructuring was coming to
conclusion, a National Consultative Council (with the Malay acronym
MAPEN) was convened, again with a membership representing a cross
section of Malaysian society. Then, in 2000 when the National
Development Plan (NDP) for the 1990s was coming to a close, a second
National Economic Consultative Council (referred to as MAPEN 2) was
convened. And earlier this year, as a follow-on to the National Missions
as formulated in the Ninth Malaysian Plan, a similarly constituted 50
member National Unity Board was established.
While
the Government paid considerable attention to the findings and
recommendations of these Councils, they were not always accepted in
policy formulation and implementation. Yet the deliberation in the
Councils provided both general orientation and specific input for
Government decision making. These Councils have allowed its broad and
influential membership to gain a more balanced insight into the nature
of the challenges to nation building and to find common ground.
Moreover, to an extent, the Council deliberations have helped create for
its membership a sense of ownership of the NEP.
Ever
since it origin, the NEP itself and-even more-its implementation have
been hotly contested. The central objectives of the NEP have had the
full acceptance of successive Governments to this day, but they have
been pursued with varying determination and consistency. Sometimes
pressures for changes have been accepted in the rules of application of
particular instruments of NEP policies, sometimes in complete retreat.
The initial formulation of the NEP and its subsequent elaboration in the
early years could draw on strong and focused political will. However,
the success of the strategy depended crucially on close monitoring of
implementation for impact, effectiveness and shortcomings. The
monitoring of the course of restructuring of the ethnic employment
pattern in the private sector, which is such a critical element in the
NEP, has been particularly weak. So has the build-up of statistics on
the ethnic distribution of different forms of capital. This has left the
Government without the information base needed for confident decision
making on how best to interact and dialogue with the private sector so
as to gradually come to grips with the ethnic disparity issues.
E. The Outcome : Economic Growth and Ethnic Economic Disparity
The
NEP has shown itself, in spite of some shortcomings, to be an effective
policy for dealing with the economic and ethnic problems of Malaysia.
During the NEP era Malaysia achieved one of the highest rates of
economic growth in the world, reduced poverty and restructured the
production and income pattern to gradually contain rising ethnic
economic disparity when it was implemented firmly particularly from 1970
– 1987. The NEP had shown that the two twin objectives of maximum
economic growth and the reduction of ethnic economic imbalances were
mutually reinforcing. The experience of implementing the NEP gives a
valuable lesson to policy makers, namely in this country at least, it is
possible to achieve optimal growth and reduction of inequality at the
same time. Our experience shows that the upper ceiling is at about 7% of
growth. Beyond that rate there would be a trade off between growth and
equity as the implementation of the National Development Policy shows.
There should not be extremes of implementation either for growth or
distribution-a balance should be struck and managed, by careful
monitoring to adjust policies accordingly as required, to be on the
simultaneous optimal paths of growth and distributions.
The
NEP has been criticised as an anti-Chinese discriminatory policy and to
take away what they already owned. The evidence suggests that this
criticism is not valid. Under the NEP and the National Development
Policy regimes, Chinese capital have replaced foreign capital as the
most dominant force in the Malaysia economy replacing the latter.
What
the NEP did was to redistribute the INCREMENTS of the Gross National
Product newly created by joint cooperative efforts in proportions to
their contributions, and not the distribution of the whole economy. Nor
was there a threat of nationalization or coercion of foreign or Chinese
assets. The Federal Constitution protects the economic and social rights
of the Chinese and others. What they already owned in theirs, and the
NEP was designed not to touch those right and ownerships. The fact was,
‘The efforts to attain these objectives (of the NEP) will, in turn, be
undertaken in the context of rapid structural change and expansion of
the economy so as to ensure that no particular group experiences any
loss or feels any sense of deprivation in the process’. (Mid-Term Review
of the Second Malaysia Plan 1971-1975)
All
Malaysians gained from the NEP irrespective of the social and ethnic
groups. GDP per capita in real terms increased by about 4% a year on
average over the 50 years since Independence. Ethnic income disparity,
already very high in 1957, deteriorated further in the years up to the
early 1970s when NEP was introduced. In 1990, after two decades of NEP,
the income disparity in favour of the Chinese as against the Bumiputera
had been reduced to nearly 7 to 4 as against 9 to 4 in 1970. Since 1990,
in fact since the mid 1980s, there has been no further sustained
improvement in the ethnic income ratios. Now, however, the recently
announced National Mission as contained in the RMK-9 document is set to
not only maintain the rate of growth in per capita GDP at well over 4%,
but also to bring in an epoch of sustained gradual correction in the
ethnic income ratios, specifically to bring the ratio of Chinese to
Bumiputera income down to 6 to 4 in 2010 and to 5 to 4 in the course of
the 2020s.
F. The NEP Today
The
original NEP was developed in a long term perspective with targets to
be achieved within the first 20 years. In 1990 the framework was
reoriented into the National Development Policy (NDP) for the 1990s and presented in the perspective of Vision 2020, outlining
the aim of Malaysia attaining developed nation status by the year 2020.
While specifies of policy have changed over the decades, the core NEP
objectives of national unity, growth and social equity have
remained-although with shifting emphasis. In 2005, a new policy and
implementation framework-The National Mission-was drawn up, outlining the approach to be taken to achieve Vision 2020.
The National Mission is a framework aimed at obtaining greater impact and performance. It identifies five key thrusts:
First: To
move the economy up the value chain so as to sustain a growth rate of
at least 6%. For Malaysia to be successful within today’s increasingly
competitive market place, moving out from its “middle development” stage
towards a human capital driven economy, this will require
Increasing
the productivity, competitiveness and value added of establish
activities in agriculture, manufacturing and services sector;
Generating
new sources of wealth and upgrading employment opportunities in
technology and knowledge intensive sectors such as biotechnology and
skills based services;
Giving
a lead role to the private sector, enhancing small and medium
enterprise development, increasing public-private partnership and
attracting targeted high-quality foreign direct investment.
Second:
To raise the capacity for knowledge an innovation so as to reach
specific targets set for educational improvements for research and
development, for the penetration rate of personal computers etc.
Third:
To address persistent socio-economic inequality through focused efforts
on reaching the right target groups and by providing opportunities for
employment and advancement. Here time limited specific targets are set
for poverty eradication and for reduction of disparities within and
between ethnic groups, between rural and urban areas as well as between
regions of the country. The employment structure and hierarchy in the
economy is targeted to better reflect the full and fair participation of
all groups in the population. In addition, targets are set for ethnic
distribution of assets, both equity holdings and ownership in
residential and commercial property.
Fourth :
To improve the standard and sustainability of quality of life by action
on many fronts from better management of natural resources to ensuring
public safely and security and to promotion of the rich Malaysia
cultural heritage.
Fifth: To
strengthen the implementation capacity by improving public service
delivery, addressing actual and perceived corruption in both public and
private sectors, enhancing corporate governance by strengthening the
legal and regulatory frameworks and also strengthening the roles of
Parliament, media and civil society.
G. The Relevance of the NEP type of policy for future economic policies of this country.
The
Malaysian NEP story as depicted above of advance towards the
distribution objectives and then retreat or consolidation at half way
and now renewed efforts to advance again holds lessons for the future.
They are:
The importance of growth
Broad
based growth to ensure that disadvantaged groups can be more fully and
effectively included as participants in the production process through
employment, eventually at par with those already in places, and in
ownership, management and control of enterprises is less firmly
resisted-in conditions of growth and expansion.
Growth
is a matter of increasing productivity in given economic activities; it
is also a matter of shifting employment from lower to higher
productivity sectors and activities. In the evolution of the Malaysian
economy in recent decades, both these growth factors have been
operating. With education, training and opportunity large components of
the labour force have move to higher levels of productivity by both
avenues. The NEP strategy focusing on a more rapid and continuing shift
of Bumiputera into activities of high productivity has led to high
growth rates overall, even if the affirmative action to do so may have
meant foreclosing-at least in the short run-some opportunities for more
rapid advancement of the non-Bumiputera.
Employment creation and poverty alleviation
The
speed and pattern of growth in a largely traditional economy, as was
Malaysia in 1970, need to be such as to increasingly include the
underemployed and unemployed in the growth process, specifically
creating opening for those wishing to move into the modern sector. Thus,
economic growth has to be encouraged and guided along an employment
intensive path. Largely through these approaches, Malaysia reduced its
poverty rate from a high of one household in two in 1970 to less than
one in five in 1990 with further significant improvement in subsequent
years.
Education, training and opportunity
In
Malaysia a pre condition for success in the labour market has been the
raising of the levels of general literacy and basic skills and of
general and specialized education at secondary and tertiary levels. In
these respects the Bumiputera were at a great disadvantage at
Independence and when NEP was initiated in 1970. The lifting of the
educational standards of the Bumiputera to that of their compatriots of
other backgrounds has therefore been a constant Endeavour of the
Government, including scholarship and stipends, multiplication of
educational facilities, imposition of quotas for University entrance so
as to allow for an ethnic distribution of student body in closer accord
with the population structure. Some of these efforts by Government to
improve quality and quantity of supply of manpower from the disempowered
majority groups have been controversial and at times arguably
misapplied. Yet, they have been essential to the gradual improvement of
the position of the Bumiputera in the pattern of employment in the
private sector.
Role of the State and the private sector
In
Malaysia throughout the 50 years since its independence, the private
sector and market forces generally have been relied upon to be the major
agents of growth and modernizations. At the same time the Government at
national, state and local level has set and re-set the framework within
which the market operates. Malaysia has a strong tradition of planning,
setting time bound targets for overall and sectoral development and
carefully ensure that the need for more balances is respected.
Malaysia has also sought to deal with real or perceived shortcomings and
failures of the market, be it in the area of labour supply, in the
availability of investment funds, in attention to under researched
potentials for growth and efficiency, in opportunities for social policy
actions etc.
This
country has succeeded in maintaining generally constructive interaction
between the State and the private sector by adopting a proactive
business policy and an open market regime. When it comes to the still
unmet need for empowerment of the Bumiputera in the economy, the problem
expresses itself most generally in the private sector. The Government
has at times made overtures to the private sector to overcome any built
in practice of discrimination against the Bumiputera; thus aiming to
ensure that the private sector can become part of the solution, not only
of the problem of ethnic imbalances in the market economy.
H. Conclusion
The
NEP was launched as part of an overall strategy of Tun Razak, to
reunite and rebuild the country after the traumatic experience of 1969.
Besides its objective of creating prosperity for all Malaysians, so that
no community would experience a sense of loss and deprivation, it
equally stressed the important objective of uplifting the economic
status of the Malays, in line with the spirit and intent of the ‘Social
Bargain’, the Federal Constitution and the RUKUNEGARA. In formulating
the policy, the lessons of past policies were valuable, namely that the
efforts of the previous years, in bits and pieces and not in a
comprehensive manner, were not sufficient to redress the economic
imbalances against the Malays vis-Ã -vis the non-Malays, even if
implementation and the delivery system could be improved.
Indeed past
policies had increased the gap between the Malays and other groups. It
was the basic underlying assumption of the NEP strategists, as proved by
the riot of 1969, that too much poverty and the much inequality,
stacked against the Malays, who form the majority of the population,
could only bring further discontent and trouble. The need and indeed the
policy was designed to shift and integrated the Malays into the main
stream of development of commerce and industry, and prevent them from
being permanently marginalized in the backwards sectors. The strategists
firmly believed that unless the Malays participate on a genuine basic
in the production process of the country, they would be permanently left
behind. Indeed as the evidence of implementing the NEP shows, it is the
only viable option to solve the ‘Malay problem’. It is the Unfinished
National Business today, as inequality has risen again to the levels of
the pre-1969 era, moderated somewhat in some years.
Malaysia
has on often positive, albeit chequered, experience with the NEP to
deal with gross ethnic disparities and to move towards a sustainable and
balanced nation in diversity. The lessons of this experience, as
applied to the now more developed Malaysia economy, are under scrutiny
today. Instruments of policy as designed and implemented in past years
are being left aside or redesigned and the search for other instruments
is ongoing.
The
NEP is a national objective, not a Malay objective per se, as being
interpreted and promoted by some quarters based more on prejudices
rather than on empirical evidence. The policy therefore can only be
successful with broad and informed public support. While group interest
will be affected differently, they must be brought to accept
accommodation and compromise in the wider interest of national cohesion
and political stability, which itself is a precondition for sustained
development. Perhaps the major lesson that can be learned from the NEP
experience is that deep seated structural disparities in employment,
income and assets along ethnic lines can only be corrected gradually and
over decades, even generations. And while realities on the ground and
ill winds from abroad call for flexibility and compromise, eventual
success depends on firmness of resolve and persistence of pressures for
change. Ethnic economic balance policy can be made to work, but it
requires clarity of objectives and wide acceptance of the need for a
national effort in which both the State and the private sector play
their part.
Malaysia
enjoyed political and socioeconomic stability since 1969, and to a
degree the NEP contributed to this success. There has not been any
racial riot since then. But we cannot rest on our laurels while the
pressure builds up beneath the ostensible happy, calm and smiling faces
of the Malaysian society. Wide and rising economic imbalances persist
today as they did before the NEP era, and the division coincides with
racial, cultural, linguistic, and religious divisions. Sooner or later
there will be eruptions. We pray to ALLAH that this country will be
spared the agony of recurrence of such a misfortune, but that is the
pattern in countries with extreme inequality where the majority or even
the minority are excluded from the full development process and deprived
of their full socioeconomic human rights.
The fact is that this country
remains as one of the most unequal countries in the world. It must
therefore continue to be addressed firmly as the NEP did, for the common
good of all Malaysians. Even in a homogenous society the issue has to
be confronted directly with decisiveness, as the situation is
unacceptable by any standard of a civilized society especially one that
aspires to be a developed country by 2020. It would be a historic policy
mistake not to take the dangerous problems of ethnic imbalances
seriously. Malaysia experienced it in 1969, so also most other countries
which failed to address the issue as a national priority policy. But
the history of implementing the NEP from 1970-1987 shows, the phase when
the policy was firmly implemented, that it is possible for this country
to reduce extreme inequality while simultaneously pursuing a policy of
maximum economic growth. Tun Razak took the risk without having a
precedent case policy to emulate. But we can now learn from the lesson
of our own history if we so desire.
Kuala Lumpur
12th October 2007/30 Ramadan 1428
Selected References
Anand, Sudhir, Inequality and Poverty in Malaysia-Measurement and Decomposition.
Oxford : Oxford University Press, 1983.
Chua Amy, World on Fire. Heinemann, 2003.
Economic Planning Unit, Prime Minister’s Department, Second Malaysia Plan 1971-1975.
Kuala Lumpur : Government Printer, 1970.
Economic Planning Unit, Prime Minister’s Department, Mid-Term Review of the Second Malaysia Plan 1970-1975. Kuala Lumpur : Government Printer, 1973.
Economic Planning Unit, Prime Minister’s Department, Privatization Masterplan. Kuala Lumpur : Government Printer, 1991.
Economic Planning Unit, Prime Minister’s Department, FIC Guidelines on Acquisition of Interest, Mergers and Take-overs by Local and Foreign Interest. Kuala Lumpur : Government Printer, 2003.
Economic Planning Unit, Prime Minister’s Department, FIC Guidelines on Acquisition of Properties by Local and Foreign Interest. Kuala Lumpur : Government Printer, 2003.
Economic Planning Unit, Prime Minister’s Department, Ninth Malaysia Plan 2006-2010. Kuala Lumpur : Government Printer, 2006.
Economic Planning Unit, Prime Minister’s Department, Fifty Years of Charting Malaysia’s Development. Kuala Lumpur : Government Printer, 2007.
Faaland, Just. Ninth Bank of Namibia Annual Symposium 2007, Broad based Economic Empowerment : The Experience of Malaysia : Chr. Michelsen Institute, Bergen, September 2007.
Faaland, Just, Jack Parkinson and Rais Saniman, Growth and Ethinic Inequality-Malaysia’s New Economic Policy.
Bergen : Chr. Michelsen Institute/Kuala Lumpur : Utusan Publications
and Distributors Sdn Bhd, 2003. (First published in 1990 by C.Hurst and
Co. UK).0+
Gomez, Edmond Terence and K.S. Jomo, Malaysia’s Political Economy-Politics, Patronage and Profits. Cambridge : Cambridge University Press, 1999.
Jomo, K.S., Beyond 1990 : Considerations for a New National Development Strategy. Kuala Lumpur : University of Malaysia, Institute of Advanced Studies, 1989.
Mahathir, Mohamed, Malaysia : The Malay Dilemma. Singapore : Federal Publications, 1977, 3rd edition.
Mahathir, Mohamed, Malaysia : The Way Forward (Vision 2020). Kuala Lumpur, 1991.
Ministry of International Trade and Industry, Third Industrial Master Plan 2006-2020. Kuala Lumpur, 2006.
perkongsian
dari
https://bigdogdotcom.wordpress.com/2008/08/10/the-role-of-the-new-economic-policy-nep-in-building-a-united-malaysian-nation-in-diversity/
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