Malaysia Today - Your Source of Independent News
Malaysia Today - Your Source of Independent News |
- The NEP: The Good and the Bad - Revisited
- Is Malaysia’s electoral system ready for GE13
- Will other communities also start making similar demands?
| The NEP: The Good and the Bad - Revisited Posted: 22 Mar 2013 10:29 PM PDT Note: This article is from chapter 6 of the book - The Middle Path: An Alternative To The Partisan Madness  What is the NEP? In a simple definition, the New Economic Policy is Malaysia's socioeconomic affirmative action plan. It wasimplemented in 1971 in the aftermath of the 1969 racial riots, and the period set for the implementation of NEP was 1971-1990. The overriding objective of the NEP was stated as national Unity. The goal of the NEP was two pronged – one, eradicate poverty; and two, restructure society to eliminate the identification of race with economic function through rapid expansion of the economy over time. However, it was clearly stated that this restructuring of the racial composition of employment and ownership of wealth was to be done withoutdenying opportunities to others. The strategy was to accelerate economic growth, but at the same time, redirect the benefits more to the disadvantaged. What is the background of the NEP? The NEP has historical basis. Even from the colonial days before Merdeka, the Malays had been given certain privileges by the British, especially quotas for public scholarship and civil service employment. The period of British rule left behind some remnant effects on our society and economy. The economic system and the geographical location of where we lived and worked were divided along racial lines. The Malays were largely concentrated in the traditional agricultural sector where per capita income was the lowest and poverty was the highest. The Chinese were concentrated in mining, manufacturing and construction where per capita income was recorded as much higher. The Indians were largely labourers in estates and mining. The NEP was announced in June 1970 in the aftermath of the racial riots in 1969. Whatever is said about the immediate causes of the riots, the root cause for the unrest was socioeconomical imbalance. It was clear that the problem of poverty and the economic differences along racial lines were detrimental to social stability and national Unity and had to be addressed immediately. The NEP was formulated as aconcerted effort to reduce poverty and restructure the economy. What was the poverty level and distribution of economic wealth at that point? At that point of time in 1970, the recorded number of households living in poverty was 49.3%. The top 5% richest households were obtaining 30% of the total income. Of those living below the poverty line, 64.8% were from the Bumiputera population, 39.2% of the Indians and 26.0% of the Chinese. In terms of wealth distribution, it is recorded that the Bumiputera had 2.4% of equity capital, Indians held 1.1%, the Chinese accounted for 27.2%, those categorised as Others had 6.0% and foreigners held 63.3%. What was the target of the NEP? The target of the NEP was to reduce overall poverty to 16.7% by 1990. In terms of restructuring the economy, the target was to increase Bumiputera share of corporate capital from 2.4% to 30%, the share of the Chinese, Indians and others to increase from 34.3% to 40%, while that of foreigners would be reduced from 63.3% to 30% -- a 30-40-30 ratio of distribution among Bumiputera, other Malaysians and foreigners. Why was the NEP so important? Affirmative action plans like the NEP are important because the disadvantaged in society must be helped. When one segment of the society is disadvantaged, to have an equal playing field in our economic system will not be fair. To use a simple analogy, it is like playing golf – a beginner must be given a handicap or he/she will stand no chance - it will be an unfair game skewed towards the experienced player. Socio-economically, nobody should be left behind. This is imperative because history has shown that once there is a segment of society left behind economically, there are greater chances of social unrest. It is important for every society to have affirmative action plans, but it must be planned very carefully. Ours was called the New Economic Policy (1971-1990). The NEP was successful in many ways. What were the good things that came from the NEP? There have been many. I will outline seven here: 1) The NEP managed to reduce poverty. According to official data, percentage of households living below poverty line across all ethnic groups has been reduced from 49.3% in 1970 to 15% in 1990, and in 2009 overall poverty had been reduced to 3.8%. 2) The NEP managed to restructure the economy. Post-NEP, the wealth ownership of the Bumiputera had increased from 2.4% to 19.3%, the share of the Chinese, Indians and other Malaysians was 46.8%, surpassing the target; while the share of foreign ownership was reduced to 33.9%. By 2008, Bumiputera share had increased slightly to 21.9%, non-Bumiputera share was reduced to 36.7% and the share of foreigners, 41.4%. While recorded numbers vary from one report to another, it generally shows that the NEP has achieved a much more equitable and sustainable distribution compared to the 2.4 - 34.3 - 63.3% ratio pre-NEP. At the same time, after the NEP in 1990, the number of Bumiputera employed in the industrial sector like mining, manufacturing, construction and utilities also had arose significantly. Bumiputera representation also increased in professional and technical categories and at the administrative and managerial levels.
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| Is Malaysia’s electoral system ready for GE13 Posted: 22 Mar 2013 08:25 PM PDT With a possible, some say probable, watershed and regime change for Malaysia's increasingly competitive political system in the pipeline, it is useful to look into the election system and its mechanisms. The media, fascinated with personality clashes, campaign highlights and the outcome of elections, don't look too often into details of the electoral law. And most voters don't care much whether the ruling governments tweak the rules in their own favour, most often by changing the boundaries of precincts more or less unnoticed – the old, widespread, and popular gerrymandering. Malaysia is not alone here, but the discrepancies in the electoral size of constituencies in favour of Malay and against Chinese areas have been "adjusted" frequently and helped the United Malays National Organisation (UMNO) to safeguard its dominance over the last decades. One of the special features in Malaysia's multi-ethnic society is the still predominantly race-based party system. UMNO, the long term dominant ruling party was founded in 1946 as a reaction against the granting of citizenship to Chinese and Indian immigrants upon independence. The defensive attitude of the Malay (then shaky) majority, understandably insisting on political dominance in their own homeland, led to the formation of other ethnic-based political parties. UMNO, in a successful move to broaden its support base since 1974, managed to co-opt the Malaysian Chinese Association (MCA), the Malaysian Indian Congress (MIC), the Malaysian People's Movement Party (GERAKAN) and a number of parties in Sabah and Sarawak into the National Front (Barisan Nasional / BN) coalition (now altogether 13 parties), which enjoyed a huge majority in Parliament until 2008. Irregularities in most general elections until now have been reported quite regularly. The long list reaches from vote buying, stuffing of ballot boxes, bussing of voters to other constituencies and multiple voting, "phantom voters", "imported voters", "missing voters", manipulated voters lists, to granting citizenship to illegal immigrants (mainly from Indonesia and the Philippines). The latter is now one of the major arguments to attack UMNO and Prime Minister Najib Razak for this citizenship for votes trick. Najib, who has promised his followers to win back the coalition's two-thirds majority, seems to struggle for political survival now, if rumours and polls are a reliable indicator. The Barisan Nasional has been only nominally multi-racial but cemented in reality the Malay dominance and privileges (with quite a number of affirmative action measures), which nearly guaranteed so called "safe deposit" constituencies especially in rural areas. Pretending that the Malay political dominance was under threat has always rallied Malay voters behind the ruling coalition. And to make things even more difficult, the competition of the Islamic Party PAS often forced UMNO to demonstrate its religious credentials. With the resentment against this concept among non-Malay minorities (at least about 30%) growing with the frustration about strings of prominent corruption-scandals, it was a logical strategic move for opposition leader Anwar Ibrahim to form a multi-racial party, the Peoples' Justice Party or Parti Keadilan Rakyat in 2003. Anwar, after being sacked from UMNO and his post as Deputy Prime Minister in 1998, accused under dubious circumstances of corruption and sodomy and imprisoned, is back on the political scene since 2008 and the probable Prime Minister if his opposition "Peoples' Pact" (Pakatan Rakyat / PR) wins the upcoming election. The Pakatan Rakyat is not without internal problems given the diversity of its members, namely the Malay Islamic rival of UMNO, Parti Islam Se-Malaysia (PAS) and the Chinese Democratic Action Party (DAP). However, given the erosion of the Barisan Nasional component parties Gerakan (officially multi-racial but predominantly Chinese and the Malaysian Chinese Association (MCA), Pakatan Rakyat seems to be a very strong challenger to the ruling coalition. Inherited from the British colonial master, Malaysia has adopted a clear-cut first-past-the-post majoritarian election system which has helped to keep UMNO and its BN component parties in power so far. The Barisan-coalition contesting the elections practically as one single party gave few choices to the voters and made it more than difficult for opposition parties to make inroads… until 2008 when more voters were fed up with arrogance of power and all too visible corruption. The majority of the BN in 2008 was clear, with 140 seats against 82 for the opposition, which is four times their previous share. But in relative vote shares it was as narrow as 50.27% against 46.75%. And nota bene: in the first-past-the-post electoral system relatively small changes in voter preferences can change the outcome dramatically.
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| Will other communities also start making similar demands? Posted: 22 Mar 2013 05:27 PM PDT This is the 13th day of my Hunger Viratham. The visitors are streaming in and it is becoming more difficult to stay focused on my writing. It has somewhat slowed down my writing. Still, there is no let up in my resolve to achieve our goals of obtaining binding endorsement and commitment to implement Hindraf's proposals and I continue with my Hunger Viratham. More people are beginning to ask just where the BN and the PR political leaders are. Do they not care? Well, I will let them answer the people. For today I will discuss the question of the costs of implementation of Hindraf's five-year blueprint proposals. The politicians in power go to great length to propose, promote and implement mega project like the MRT, the High Speed Rail Link between Kuala Lumpur and Singapore and the Undersea Tunnel linking Penang to the mainland. These projects can cost when done, from RM10 billion to RM80 billion. The politicians will tell you that these are infrastructure projects that improve quality of life and which anyway has a multiplier effect on the economy. But what they will not tell you is how this also plentifully fills the pockets of the elites. In these projects, there is abundant opportunity for rentier commissions, for bribes, for project super profit, for operational super profits, for high interests on low risk loans. All these significant financial benefits just flow in the large part to the elite. They say it creates wealth for the country. That is great, watch the GDP numbers. On the other hand spending on making the lives of the people at the bottom end of society becomes only a passing priority for the political elite. The nation at large may benefit, but if the benefit is to be shared more equitably with the people, it becomes sacrilege – distribution of wealth cannot be a driver of policy. Creation of wealth can be the only driver of policy. This is conventional wisdom with the elite. If it cannot be justified on the basis of returns on investment or on what is considered a pressing need by the elite then the investment becomes a low priority project or a no priority project. 4.5 Billion Ringgits, the annual budgetary need for five years for Hindraf's blueprint proposals is spread out on several key socio-economic projects which we say addresses a pressing need of our society. We say there are significant returns in these investments for the nation as a whole. But it meets with significant resistance from the elite because it does not meet the resource allocation criteria of the elite. The real issue is that the benefits from the projects are spread over too many people and becomes too thin. That does not serve the interest of the elite – they do not stand to gain from such allocations. So it cannot be a good investment or allocation. Unfortunately for the nation, it is the elite who decide this. They have total control over national policy. So they try every argument in the book to put such projects on the backburner. And they succeed most of the time. Look at it another way. The annual budget of the government is about RM250 billion. RM4.5 billion is only 1.8 % of that. That still leaves RM245.5 billion for everything else, while a critical problem of our society gets resolved. In the last 47 years 1,155 billions have been spent on socio-economic development. If the Indian poor had gotten even 10 percent, that would be 115 billion ringgits. We surely would not be having the problem we have today had that expenditure been made. But it was not made. We have a problem today as a result and we need to solve it.
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