Archive for category NEP

Is the 11th Malaysia Plan irrelevant?

Rama Ramanathan
The Malaysian Insider
7 May 2015

John F. Kennedy’s 1961 vision of putting a man on the moon energised the United States to “catch up to and overtake” the Soviet Union in technological prowess. The Soviets humiliated the US by being the first to put a human in space. Kennedy’s vision spurred the US into action to achieve technological domination.

Tun Abdul Razak’s 1971 vision, in the New Economic Policy similarly energised Malaysia. Razak wanted to eliminate poverty and to eliminate the association of occupation (and income) with race. Razak’s vision spurred the nation to recognise and reverse the effects of race-based choices with inequality-reducing choices.

The NEP reduced the income inequality between the Malay and Chinese communities. It succeeded so well that at the end of the NEP in 1991, the government decided to stop reporting figures for the Malay community. The data was hidden because the government lacked political will to end handouts which increased income inequality.

To avoid making the hard political choice of ending benevolence to rich Malays the government combined “other Bumiputera” with Malays and reported only figures for Bumiputera, Chinese, Indians and Others in national reports. Energising vision gave way to superficial vision. Read the rest of this entry »

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Razak’s NEP was for all races, says ex-civil servant who helped draft it

by Elizabeth Zachariah
The Malaysian Insider
17 January 2015

The man who helped Malaysia’s second prime minister Tun Abdul Razak Hussein craft the New Economic Policy (NEP) to eradicate poverty and end identification of occupation with race laments that it has now become distorted by race and religion.

Tan Sri Ramon Navaratnam, who was the deputy head of the Economic Division in the Treasury under Razak’s administration, said the NEP was “a wonderful, noble policy”.

“He (Razak) was serious about eradication of poverty regardless of race. Every poor chap, regardless of his ethnicity, was given help.

“Not today, I am afraid. Along the way, it got distorted as race and religion got in the way,” Ramon told The Malaysian Insider in an interview to conclude a series commemorating Razak’s 39th death anniversary. Read the rest of this entry »

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Razak’s NEP both a success and a failure, says ex-aide Abdullah Ahmad

BY V. ANBALAGAN, ASSISTANT NEWS EDITOR
Published: 15 January 2015 6:59 AM
The Malaysian Insider

A close confidante of Malaysia’s second prime minister, Tun Abdul Razak Hussein, has rated the country’s controversial affirmative action-based economic policy created by his boss as both a “great success and great failure”, 45 years after it was first implemented.

Tan Sri Abdullah Ahmad, who was Razak’s political secretary, said the New Economic Policy (NEP) had done well to lift the Malays out of poverty and increase the number of Malay professionals in all sectors.

But it has failed in its other objective of eradicating poverty regardless of race, Abdullah, better known as Dollah Kok Lanas, told The Malaysian Insider in an interview as part of a series to commemorate the 39th death anniversary of Razak who died on January 14, 1976.

Abdullah also noted what economists have been telling Putrajaya in recent times, that wealth inequality is no longer between races, but within each race, and in the case of the Malays, concentrated within an elite class.

“Some might argue that the enlarged national economy is indeed being shared across the three main races of the Malaysian society, but (this is) among the 1% or less. I have sympathy with this view.
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Razak’s young Turk talks about his mentor

by Md Izwan
The Malaysian Insider
14 January 2015

To commemorate the 39th death anniversary of Malaysia’s second prime minister and “Father of Development” Tun Abdul Razak, The Malaysian Insider is running a series of interviews with his colleagues and close associates who, with Razak, steered Malaysia through the early days of rebuilding following the race riots of May 13, 1969.

Earlier today, we heard from four of Razak’s sons on his legacy and their personal memories of their father.

In this article, former deputy prime minister Tun Musa Hitam speaks about Razak’s leadership style and of his experience working with the man who brought him back to Umno after his expulsion. Musa had been expelled from Umno after the race riots over a fall-out with the then prime minister and Umno president, Tunku Abdul Rahman.

Readmitted to the party by Razak, Musa went on to rise in Umno and also held the post of Minister of Primary Industries in Razak’s cabinet.

Despite the political tension surrounding Tunku’s departure and Razak’s ascension as prime minister, Musa remembers his mentor for his gentleness, patience and consultative approach, coupled with his firmness to see a decision through once it was made. These were values, Musa says, that Razak knew were needed to manage a multireligious and multiracial country like Malaysia.

TMI: What kind of person was Tun Razak to you? As a leader, a friend or a colleague?

Musa: Tun Razak was a national leader in the true sense of the word. He had vision and perception. He understood the priorities of our country on attaining independence. The long term interest of the nation, to him, was a united Malaysian nation based on the principle of unity within diversity. Read the rest of this entry »

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When affirmative action doesn’t work, it’s time for a new solution

Ahmad Mustapha Hassan
The Ant Daily
05/12/2014

OUTSPOKEN: The above was taken from part two of an article by Tanner Colby which discussed the affirmative action in the US to uplift the minority communities that had been marginalised, especially the African-Americans.

He did a study on this and wrote a book about the history of the colour line and the effort to erase it. He came to this final conclusion, “Affirmative action offered the illusion of reparative justice wrapped up in the rhetoric of empowerment, but its net result was to absorb and neutralise black demands for equality, not fulfill them.”

Quotas were imposed on college admissions and also on employment. This brought about corruption in the system.

Another American researcher and author, Thomas Sowell, an African-American, came to this conclusion:

• Encourage non- preferred groups to re-designate themselves as members of preferred groups to take advantage of group preference policies

• Tends to benefit primarily the most fortunate (eg Black millionaires), often to the detriment of the least fortunate among the non-preferred groups (eg poor whites)

• Reduced the incentives of both the preferred and the non-preferred to perform at their best – the former because doing so is unnecessary and the latter because it can prove futile – resulting in net losses for society.

He concludes: “Despite sweeping claims made for affirmative action programmes, an examination of their actual consequences makes it hard to support those claims, or even to say that these programmes have been beneficial on net balance.” Read the rest of this entry »

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Major flaw in computing bumi equity target

By Lucky Star
Malaysiakini

Part 1: Has 30pct bumi equity target been achieved?

COMMENT At the initial stage of the New Economic Policy, privatised entity and government-linked companies (GLCs) were almost non-existent.

Khazanah Nasional Berhad, the main institution through which the federal government controls GLCs, only came into existence in 1993. Therefore, before 1990, the exclusion of government shareholding owned by Khazanah was a non-issue.

But, when the privatisation policy was vigorously implemented after the publication of the ‘Privatisation Master Plan’ in 1991, the exclusion of government shareholding in privatised entities and GLCs had a significant distorting effect on equity ownership by ethnic group.

Musa Hitam, in an exclusive interview in August 2014 with the Malaysian Insider said, “But the government does not take GLCs into account when they point out that the present bumiputera equity ownership is 24 percent. We are deluding ourselves by continuously pointing a finger at the Chinese.” As a former deputy prime minister and chairperson of a GLC, Musa definitely knew what he was talking about.

For the purpose of showing bumiputera equity ownership, government data are divided into three categories of bumiputera, namely:

1) Bumiputera individuals
2) Bumiputera institutions
3) Bumiputera trust agencies
Read the rest of this entry »

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Has 30pct bumi equity target been achieved?

By Little Stars
Malaysiakini

COMMENT At the outset, we wish to make it abundantly clear that we fully support the New Economic Policy (NEP) objective of eradicating poverty irrespective of race and we completely agree with the 30 percent bumiputera equity ownership target.

In a multiracial country, social engineering using affirmative action to uplift the economic status of a lagging community is necessary. We do not doubt the noble intention of the founding fathers of NEP and we believe the objectives can be achieved if right policies are formulated and implemented.

Government in any part of the world is usually quick to claim credit for any success. However, in the case of Malaysia, with regard to the achievement of 30 percent bumiputera equity ownership target, the government seemed to be more inclined to declare “failure”.
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Zero household savings is staggering, and true

– Kamal Salih, Muhammed Abdul Khalid and Lee Hwok Aun
The Malaysian Insider
29 November 2014

We refer to statements by the Governor of Bank Negara (BNM), Tan Sri Dr Zeti Akhtar Aziz, reported on various print media on November 28, 2014, on portions of the Malaysia Human Development Report (MHDR).

She disputes our finding that over 90% of Malaysians have no savings, claiming that the analysis is “partial” and “misleading”.

We thank Tan Sri Dr Zeti Akhtar Aziz for engaging with the MHDR, and for providing this opening to reaffirm our findings. Allow us to clarify the points raised by Tan Sri Zeti. Read the rest of this entry »

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Putrajaya claims reduced poverty but UN report shows more poor Malaysians

by Anisah Shukry
The Malaysian Insider
1 December 2014

Whether poverty has declined in Malaysia depends on how it is measured. An example is Putrajaya’s reliance on absolute poverty figures, which according to a United Nations report, results in data that does not reflect reality.

The Malaysia Human Development Report 2013 commissioned by the United Nations Development Programme (UNDP) instead says poverty is better measured against what households earn in general, rather than by a fixed minimum level.

The report measures relative poverty, which sets the threshold at half the national median income, and finds the number of Malaysians in this category has been rising since 2007, with one in five households considered relatively poor.

Absolute poverty, on the other hand, is a measurement based on the declared poverty line. In Peninsular Malaysia, this is fixed at RM763, RM912 in Sarawak and RM1,048 in Sabah.

But the relative poverty line in 2012 was RM1,813, or half of the household median income of RM3,626.

The report, released last week and prepared by Malaysian researchers, notes that in 2007, 17.4% of Malaysians were in relative poverty, and this increased to 19.3% in 2009 and 20% in 2012.

The figures fly in the face of Putrajaya’s claim to have successfully reduced absolute poverty to 1.7% in 2012, from 49.3% in 1970. Read the rest of this entry »

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Malaysia reaping inequality, corruption and racial envy from race-based policies

by Anisah Shukry
The Malaysian Insider
25 November 2014

Malaysia’s affirmative action policies in the past 40 years have created a culture of dependency, corruption and racial envy, a prominent Malaysian economist said today.

‎Tan Sri Dr Kamal Salih, an adjunct professor of Economics and Development Studies at Universiti Malaya (UM) said that the‎ benefits of the development policies did not truly extend beyond the first 20 years of the New Economic Policy’s (NEP) implementation.

“The problem over the decades involved has not been with the intent nor the content of the NEP and its successors, but the manner of their implementation, which have produced new inequalities, poverty and vulnerabilities in the development process.

“While no further progress has been made in reducing inequality in income distribution over the last decade, the NEP had resulted instead in creating a culture of dependency, corruption and racial envy.” Read the rest of this entry »

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The politics and business of bank mergers

Terence Gomez
KiniBiz
22 July 2014

Malaysians were informed on July 10, 2014 that a major bank consolidation was in the pipeline, involving CIMB Group Holdings, RHB Capital and Malaysian Building Society. With this union, CIMB will emerge as Malaysia’s largest banking enterprise, in terms of assets, as RHB Capital owns RHB Bank, currently the country’s fourth largest bank.

According to media reports, the merger will enhance CIMB’s goal of becoming Southeast Asia’s leading Islamic finance institution with the capacity to expand its interests in this sector to other parts of the world. However, one core issue remains unmentioned in the press: this consolidation will tightly entwine the interests of political and business elites in the banking sector. Read the rest of this entry »

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Subsidies for the poor or Umno-Putras, part 2

– Koon Yew Yin
The Malaysian Insider
1 July 2014

In the first part of my article on subsidies for the poor or the rich such as Umno-Putras, I drew attention to the subsidy cut on gas that has come into effect and analysed its impact on poor- and middle-class households.

In this second part, I shall look at the area of subsidies for the cronies of the political elite which run the country – subsidies which are beneath the radar, unaccountable, undeserved and which have been partly responsible for the financial mess that the country is now facing.

What should be in front line of subsidy cuts

What should comprise the first, second or third rung of subsidy cuts to balance the national budget should be open to national debate. Read the rest of this entry »

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Do Malays need more crutches in business?

– Koon Yew Yin
The Malaysian Insider
19 June 2014

Do Malays need more crutches or “tongkat” to succeed in business? During the past week we have had three different explanations provided by Malay leaders that have made the news.

Tun Daim Zainuddin’s explanation

The first is by Tun Daim Zainuddin, the former finance minister and close ally of Tun Dr Mahathir Mohamad, who argued that the lack of talented Malay entrepreneurs is due to the policies of Datuk Seri Anwar Ibrahim when the latter was the finance minister. Read the rest of this entry »

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Attacking DAP, Dyana not heroism, Zaid tells UiTM, ‘defenders of Malay race’

The Malay Mail Online
June 6, 2014

KUALA LUMPUR, June 6 — Universiti Teknologi MARA (UiTM) and those who fashion themselves “defenders of the Malay race” can be true heroes by working to end the country’s socio-economic ills and not in attacking the DAP or Dyana Sofya Mohd Daud, Datuk Zaid Ibrahim said.

The former de facto law minister took to his blog yesterday to defend the largely-Chinese party and its rising Malay star, observing the vitriol released by UiTM lecturers, administrators and other graduates during the 12-day campaigning for the May 31 May Teluk Intan polls that ended with the DAP’s loss to Barisan Nasional (BN).

“Perhaps they think this enhances their profiles and makes them suitable for promotion and contract extensions because they are ‘champions of the Malays’, but they are actually doing a disservice to academia generally,” wrote Zaid.

An alumnus of the university, the one-time de facto law minister noted the savagery of the attacks against Dyana, the DAP’s 26-year-old candidate in the Perak by-election and against her party, and said the display showed a marked departure from the original aim of UiTM’s promoters, which he said was to help the Bumiputera become world-class professionals.

The “racial indoctrination” at the Bumiputera-preferential university had gone overboard, he said, adding that the campaign of hate-painting the DAP as anti-Malay and Dyana as a “traitor” to her own race for aligning herself with a Chinese-majority party “made no sense” and was hurting UiTM’s reputation as an academic institution as well. Read the rest of this entry »

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Malaysia is ready for Dyana

Aerie Rahman
The Malay Mail Online
MAY 29, 2014

MAY 29 — It seems that nothing can stop Dyana Sofya’s meteoric rise. The cynic could cast aspersions that she is merely a DAP token. After all, the DAP is a predominantly Chinese party which has been trying to shake off this description.

The DAP needs to widen its support base in order to hold real power and not rely on the atavistic PAS or the fractious PKR. Dyana is Malay, young and from the affirmative action university, UiTM. It all fits the bill for the cosmetic change that DAP appears to desire.

But look deeper and one can see that Dyana’s story is something that most post-NEP Malaysians can relate to and identify with. And that makes her worth more tokens than one can spend at Genting. Read the rest of this entry »

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Zaid: ‘Gutter politics’ in Teluk Intan puts Malaysia in Indonesia’s shade

The Malay Mail Online
MAY 21, 2014

KUALA LUMPUR, May 21 — Umno’s personal attacks against DAP candidate Dyana Sofya Mohd Daud despite the party’s claims of upholding Islam exposes the violent political culture dominating Malaysia, said Datuk Zaid Ibrahim.

Comparing the tone in Teluk Intan with Indonesia’s recent presidential election, the former Cabinet minister noted that campaigning in the neighbouring country remained civil despite the much higher stakes.

In the minor Malaysian by-election, however, Zaid pointed out that Dyana Sofya has come in for all manner of personal attacks from rival Umno, who have labelled her a traitor to the party, a sell-out to her people, and a puppet of the DAP, among others.

“To put it simply, Indonesia has progressed in many ways in their quest to build a nation with values all Indonesians share as a people — but in Malaysia, the Malays seem to be going backwards.

“Perhaps the great success of the New Economic Policy (NEP) has somehow made Malays ‘different’,” Zaid wrote on his blog yesterday. Read the rest of this entry »

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GLC dominance disproves Dr M’s claim of non-Malay stranglehold, says DAP MP

by Joseph Sipalan
The Malay Mail Online
May 2, 2014

KUALA LUMPUR, May 2 ― The economic dominance of government-linked corporations (GLCs) negates Tun Dr Mahathir Mohamad’s assertion of a non-Malay monopoly over the country’s wealth, a DAP MP said yesterday.

Swatting aside Tun Dr Mahathir Mohamed’s claims of Chinese dominion over the country’s wealth and Indian command of its professions to justify pro-Bumiputera affirmative action, Kluang MP Liew Chin Tong argued that GLCs masked the community’s true control on the economy.

“Look at most of the private hospitals, any of the big ones you can name. Take Subang Jaya Medical Centre, that is owned by Sime Darby,” he said, referring to the now renamed Sime Darby Medical Centre.

“Prince Court, which is the country’s most expensive hospital, is owned by Petronas. Pantai hospital and Gleneagles are owned by Kazanah through its subsidiaries.

Sime Darby and Petronas are both state-owned corporations while Khazanah Nasional is state asset manager; these and other GLC’s come under the control of the government headed by Malay nationalist party Umno.

A steadily growing force since the Mahathir administration, GLCs such as Khazanah Nasional, Sime Darby and DRB-Hicom have amassed overflowing war chests and built networks that far surpass that which smaller firms and start-ups can muster.

Putrajaya estimates that firms linked to it employ around 5 per cent of the national workforce, and hold 36 per cent market capitalisation of Bursa Malaysia and 54 per cent of the Kuala Lumpur Composite Index (KLCI) respectively. Read the rest of this entry »

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Chronic rent-seeking due to corrupted NEP, says Ku Li

by Joseph Sipalan
Malay Mail Online
4 April 2014

KUALA LUMPUR, April 4 — “Haywire” implementation of the New Economic Policy (NEP) was the cause of the rampant cronyism and rent-seeking now ailing Malaysia, said veteran lawmaker Tengku Razaleigh Hamzah.

The former finance minister said the practice of patronage in implementing the policy had undermined the “just and noble” philosophy that underpinned the social engineering programme that was mooted in the aftermath of the May 13, 1969 racial riots.

“The entrenchment of rent-seeking and patronage system into the fabric of Malaysian life begs the question: How did this come to pass?” he said in his keynote address at the launch of the book “Rich Malaysia, Poor Malaysians” last night.

“Much as this sounds like a blame game and much as this is distasteful to swallow, the answer lies in the New Economic Policy; or rather, the NEP that had gone wrong in its implementation,” he added.

Tengku Razaleigh, or Ku Li as he is popularly known, said the country has fallen victim to the machinations of politicians habitually lining their own pockets and colluding with businessmen who were uncompetitive without preferential treatment. Read the rest of this entry »

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Najib Wrong to Blame Malaysians

by Kee Thuan Chye
Yahoo! News
Jan 14, 2014

Prime Minister Najib Razak is wrong to blame Malaysians for the country’s standing in comparison to Japan and South Korea. He says Malaysia is not as developed and economically advanced as those two countries are because Malaysians lack strong will and fighting spirit.

This is bullshit.

He should instead blame his own party, Umno, and its partners in the ruling Barisan Nasional (BN) coalition. If it were not for the New Economic Policy (NEP) and its continued existence to this day, almost a quarter-century past its original termination date of 1990, we would not be in the state we’re in now.

The NEP made us economically less competitive. Investors were reluctant to put money into ventures for which they had to yield 30 per cent share to partners who brought hardly anything to the table.

The NEP triggered a massive brain drain that is now recognised as one of the factors weakening our hopes of becoming an advanced nation. Read the rest of this entry »

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Malaysia: High Income Nation, but Low Income Rakyat

By Anas Alam Faizli
Oct. 22, 2013

Malaysia’s current socio economic structure can be summed up in four words, “Rich Malaysia, Poor Malaysians.” Malaysia is blessed with abundant natural resources with petroleum being the most precious. Add the land, other commodity resources, large youthful population and the country has all the essential ingredients to flourish. How then did this small nation of 30 million manage to end up with the unsolicited title of among the region’s most unequal nation between the rich and poor. What happened? Read the rest of this entry »

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