By Fazly M. Fauzy | June 01, 2011
The Malaysian Insider

JUNE 1 — The New Economic Policy has often been described as biased to Bumiputeras in terms of education and economic rights given to them under the policy. Critics of the NEP believe that it is crippling Malaysia by rewarding those who they feel to be “undeserving” of these rights because it is not based on merit but instead on their preferential status as Bumiputeras.

I would contend, however, that while meritocracy is a noble ideal in that it rewards those who have truly earned their due but at the same time, it also unfairly undermines those who they have deemed unworthy due to their perceived lack of merit.

This hypothesis that I’m presenting is not something that is radical or new but in fact has been discussed quite extensively in many articles, books and journals. My goal here then is to highlight to those who would suggest that we abolish the NEP in favour of a meritocracy; that in a meritocracy only those who are in position to succeed will always win while those unfortunate will always be left behind and this I feel is an injustice.

The NEP which is essentially an affirmative action policy was initiated in 1970 in order to bridge the wealth gap between the then predominantly rural Malay population and the urban Chinese population. The NEP did succeed in uplifting the economic position of the Malays as evident in the increase in the number of registered Malay professionals and the emergence of the Malay middle-class between 1970 and 1990. While the NEP did succeed in alleviating the status of the Malays by reducing poverty and increasing their earning power, the wealth gap amongst the Malays themselves began to widen.

This paradox was raised by A.H. Roslan, an Associate Professor of Economics at the Universiti Utara Malaysia. In his paper, “Income Inequality, Poverty and Development Policy in Malaysia” (http://mimbarselangor.com/wp-content/uploads/2010/10/Income-Inequality-Poverty-and-Development-Policy.pdf), Roslan mentions that, “the success of the NEP has resulted in the Malays to become no longer economically homogeneous as before.

There has now emerged for example, a Malay urban working class, a Malay middle (professional) class and also a Malay business (capitalist) class.” Roslan further adds that, “the ethnicity-oriented policy in essence becomes incoherent” because, “for the policy to be coherent there must be a coherence of interests among its members. This implies that the Malays must not be deeply divided — be it socially economically or politically.”

So, if the NEP is no longer coherent because the Malays are no longer homogenous economically, does this mean that it is also irrelevant? To answer this question we now need to address this issue of meritocracy.

The definition of meritocracy in the Merriam-Webster dictionary is: “a system in which the talented are chosen and moved ahead on the basis of their achievement.” It is interesting to note, however, that the term meritocracy which was coined by British sociologist, social activist and politician, Michael Young in his 1958 essay, “The Rise of the Meritocracy: 1870-2033: An Essay on Education and Equality” was not meant to have such a positive connotation.

Young’s intention in this satirical commentary that portrayed a 21st century Britain that put extreme emphasis on one’s intelligence as the marker of success, was to warn that a society that aggressively promotes achievement will result social inequity.

In an article published in the Guardian on 29 Jun 2001 entitled, “Down with Meritocracy” (http://www.guardian.co.uk/politics/2001/jun/29/comment) Young had said that, “It is good sense to appoint individual people to jobs on their merit. It is the opposite when those who are judged to have merit of a particular kind harden into a new social class without room in it for others.” With this statement in mind we can now explore if Young’s assertions can be applied to Malaysian society.

Even after 40 years since the inception of the NEP economic disparities still exists amongst the Malays, Indians, Chinese and other ethnic minorities. According to the “The Report: Malaysia 2010” by the Oxford Business Group, between 2004 to 2009, the mean monthly gross household income for Bumiputeras increased by 5.6 per cent from RM2711 to RM3624.

For the Chinese the increase was at 2.5 per cent from RM4437 to RM5011 and for the Indians it was 3 per cent from RM3456 to RM3999. It is also stated in the paper, “Ethnic Heterogeneity in the Malaysian Economy: A Special Reference to the Ethnic Group Participation in Financial Planning Activities” published in the Journal of International Social Research. (http://www.sosyalarastirmalar.com/cilt2/sayi8pdf/shafii_norhasni_ahmad.pdf)

In 2005, the Chinese own nearly 70 per cent of the business complex in Malaysia reflecting the Chinese control over the business establishments around the country. This is regardless of the percentage of Chinese population of around 30 per cent, according to the latest statistics on population described earlier in the article.

The trends persist for other types of commercial buildings and premises. The Chinese, on average own 71.9 per cent of commercial buildings and premises. In comparison, only nearly 12 per cent of them owned by the Bumiputeras regardless of about 60 per cent of the population consist of the Bumiputeras.

The same phenomenon can also be observed to the trends of commercial buildings and premises by the Indians. On average, only 1.5 per cent of them are owned by the Indians although the Indians form eight per cent from the total population.

This implies that in terms of capital owned and wages earned the Chinese are still outpacing not just the Malays but also the Indians and other ethnic minorities. This higher comparative wealth also means that the Chinese can afford a better quality of living in terms of education and housing.

We can attribute the economic success of the Chinese to their business acumen and emphasis on education and hard work but at the same time is it okay to dismiss the Malays as lazy and stupid for not being able to compete?

Since we Malaysians are football fanatics let me try to use the EPL as an example to demonstrate that the bottom team’s failure to rise up the ranks is not due to their lack of endeavour but due to the unfavourable odds that have been stacked against them from the beginning.

It’s no secret that the top teams in the EPL are also the wealthiest in the league. Teams like Manchester United, Chelsea, Arsenal and Manchester City are able to draw in more revenue because they can collect more ticket sales from their larger capacity stadiums compared to the mid-table and lower rung teams. The popularity of these clubs also means that they can attract much more lucrative sponsorship deals and are able to leverage on their merchandising too.

These teams are then able to reinvest their earnings to buy better quality players, hire the best coaching staff and provide much more sophisticated training facilities to continue cementing their position at the top.

Now what about the teams that season after season continue to languish in the mid-table or are fighting for relegation like Everton, Wolves and Blackpool? Are they where they are in the table because they are not as competitive as the teams at the top?

From watching the games we can honestly say that whether you’re at the bottom or the top, the players are out there playing to win. The difference is the top teams are be able to attract the best players like Rooney, Torres and Tevez because they can meet their wage demands but the Evertons, Wolves and Blackpools of this world can’t afford such luxuries.

What this tells us is that teams like Manchester United are successful not just because they play the best football but also because they have the financial resources to keep them at the top. The inability of the mid-table teams to break into the top tier also cannot be blamed on their lack of trying. They train just as hard and play just as hard but at the end of the day the gulf in quality (that money can buy) will continue to assert the status quo.

This, in a nutshell, is the problem with meritocracy. A meritocracy will inevitably result in social stratification. The “haves” will continue to dominate the “have-nots” and regardless of how much the “have-nots” tries to catch-up the gap will just grow wider and wider. We don’t have to look very far to see consequences of a meritocratic society than our neighbour in the south, Singapore.

Singapore has often prided itself for being a wholly meritocratic state, but at what cost? In the book, “The Spirit Level: Why Greater Equality Makes Societies Stronger”, by Richard Wilkinson and Kate Picket, Singapore, in terms of income gap between the richest 20 per cent and poorest 20 per cent, was ranked first amongst the 23 rich nations surveyed. These rich nations included the US, UK, Australia, Germany and Japan to name a few.

This issue of income inequality was also raised by Kenneth Paul Tan, an Associate Professor at the National University of Singapore. Tan had written a paper in the International Political Science Review entitled, “Meritocracy and Elitism in a Global City: Ideological Shifts in Singapore “ (http://www.slideshare.net/motochan/meritocracy-and-elitism-in-a-global-city-ideological-shifts-in-singapore) and in it alluded to the fact that, “To ordinary Singaporeans, the widening income gap and the conspicuous lifestyles of wealthy and elite Singaporeans as well as the expatriate class of “foreign talent” are making equality of opportunity seem like a naive expectation that can no longer advance beyond mere platitude.”

The inherent problem with meritocracy is that ignores the fact that not everyone is on equal footing. As Tan also mentions in the same paper cited above,

Meritocracy, in trying to “isolate” merit by treating people with fundamentally unequal backgrounds as superficially the same, can be a practice that ignores and even conceals the real advantages and disadvantages that are unevenly distributed to different segments of an inherently unequal society, a practice that in fact perpetuates this fundamental inequality.

In this way, those who are picked by meritocracy as having merit may already have enjoyed unfair advantages from the very beginning, ignored according to the principle of non-discrimination.

This is the point that needs to be remembered by those who would advocate for a meritocratic Malaysia. We can’t ignore the fact that there still exist economic disparities across racial lines and a corrective mechanism is required to reduce this disparity. So to answer my earlier question, is the NEP still relevant despite the fact that the Malays are no longer homogeneous economically? My answer is yes, but with a few qualifications.

To start we need to go back to the original objective of the NEP that is to eradicate poverty amongst all races and remove the identification of race from economic functions. We must remove the association of the NEP with it being a Bumiputera policy. The most crucial part, however, is to ensure that only those who qualify, i.e. those who can’t afford to pay for the education of their children should be able to get scholarships and financial assistance.

With regards to the Bumiputera discount for properties, we can apply an income cap in order to qualify for the discount and open the discount to all Malaysians. The bottom line is we should maintain the NEP but with stricter requirements and enforcement so that those who can afford it shouldn’t benefit from it.

It should also be noted that some concessions have already been made with regards to Bumiputera equity quotas in IPOs.

Whereby a 30 per cent Bumiputera equity stake was required for listing before, today in the event that the 30 per cent allocation is not fully subscribed the company will still be eligible for listing. Also the My First Home scheme that was recently launched is also a step in the right direction to assist first time house-buyers in purchasing a home and this scheme is open to all not just Bumiputeras.

It will take time before we can reach the goals set in the NEP but steps have been taken to diminish the need for affirmative action but until then we must not let this issue divide us.

We need to instil empathy within our multiracial community so that we can help each other to become better rakyat. We should not prey on the weaknesses of others to bring them down but instead help to uplift them.

If the Malays for example lack in business or entrepreneurial skills, why can’t the Chinese businessmen help them to become better? Why not share with each other so that we can grow together? The same applies to the Malays professionals. Impart the knowledge and experience that you have learnt to train the next generation of Malay professionals.

I would like to conclude with a hadith from “The Book of Muslim Moral and Manners” by Imam Bukhari. The Prophet Muhammad (peace be upon him) had said that: “A believer will not eat his fill while his neighbour is hungry.” This is the message that we need to carry with us. We must be mindful of the predicaments of others around us and not be too engrossed with our own needs.