Archive for category NEP
10 May 2013
On Sunday, after a hotly contested general election, a record electoral turnout and over half a century of essentially one-party rule, the Malaysian people edged toward change _ but chose not to make the leap.
The campaign saw the ruling Barisan National (BN or National Front) emphasise stability, continuity and economic growth, and the opposition Pakatan Rakyat (PR or People’s Alliance) urge the end of corruption, the institution of minority rights and dealing with issues over the cost of living. In a contest that always seemed too close to call, Prime Minister Najib Tun Razak has held on to power, taking the prize from the indefatigable Anwar Ibrahim and his PR.
The election confronted Malaysia with big choices. While the Najib government led a tactical retreat on some elements of the old order, Mr Anwar called for its sweeping rejection.
Malaysia struggles with breaking through the “middle-income trap”. Wages have climbed to the point where the country can no longer compete internationally in labour-intensive manufacturing yet skills and systems haven’t improved so that Malaysia can compete effectively in the same product lines as more advanced countries.
Without further reforms, it is difficult to see how Malaysia can escape from this middle-income trap. Much of the struggle to find a way through has to do with escaping the legacy from the old order _ a “New Economic Policy” framed over 40 years ago that entrenched discrimination against minorities (including the significant entrepreneurial classes) and affirmative action through government-linked corporations (and systemic entrenchment of political patronage and corruption). Read the rest of this entry »
by Jayant Menon, ADB and ANU, and Thiam Hee Ng, ADB
East Asia Forum
April 25th, 2013
Private investment in Malaysia never fully recovered from the impact of the Asian financial crisis.
Foreigners have continued to shun Malaysia, but it now seems that even domestic investors are fleeing, with Malaysia becoming a net exporter of capital since 2005. One explanation for the sluggish performance of domestic private investment relates to the crowding-out effect of the growing dominance of government-linked corporations (GLCs) in many sectors. The influence of GLCs, however measured, is both widespread and pervasive.
The GLC share of operating revenue is approximately one-third in the aggregate, and they control more than half the industry share in utilities, transportation, warehousing, agriculture, banking, information communications and retail trade. GLCs employ around 5 per cent of the national workforce and account for approximately 36 per cent and 54 per cent, respectively, of the market capitalisation of Bursa Malaysia and the benchmark Kuala Lumpur Composite Index. Read the rest of this entry »
By Koon Yew Yin | 13th April 2013
My object in writing this is to support Professor Dato Dr. Woo Wing Thye’s lecture on 12th April in Syuen Hotel, Ipoh. In his lecture he listed 5 root causes for our poor performance in comparison with South Korea and Taiwan.
Prof. Woo, possibly because of the election fever, tried to be politically correct and made little mention of the New Economic Policy role in our failure to keep up with our neighbours. In fact it is not only Prof. Woo who is silent on the NEP – most analysts appear to have sidelined this policy in the election debate to date.
This is a mistake as the real policy culprit explaining our failure to devlop as quickly as our neighbours (see table attached) is the New Economic Policy (NEP) and the abuse of power in the B.N. Government’s implimentation. As a result, our neighbours are doing much better than us in spite of the fact that they all did not have the natural resources such as oil and gas.
Mar 14, 2013
QUESTION TIME When former prime minister Dr Mahathir Mohamad said in typical acerbic but unsubstantiated fashion that Malay rights, privileges and its position would be affected if the opposition were returned in Selangor, it begged two other questions.
What did he do for the ordinary Malay during the long 22 years he was in power from 1981 to 2003, and how much was he responsible for the lack of their progress? And to broaden the question further, how much has Umno done for the Malay on the street and in the kampung?
A good starting point to answer the question is to look back at the New Economic Policy (NEP) of the seventies which provided the framework and target for economic redress between the races. The noble twin aims of the policy which few argued with were the eradication of poverty irrespective of race and the elimination of race identification with economic function.
This restructuring was supposed to have come from an increasing economic cake so that no community would feel deprived from the process which would be made over 20 years.
But the reality was different. While there was much effort in equalisation of opportunities initially through the education of Malays and giving them chances for jobs in the government service and the private sector, the policy morphed into one that focused on the equalisation of outcomes instead.
This resulted in drops in educational standards and minimum qualifications to accommodate weaker students instead of helping weaker students to cross existing bars by increased and better tuition. Read the rest of this entry »
by Mariam Mokhtar
Mar 11, 2013
Malays could be the masters of their own destiny, but decades of spoon-feeding, reinforced by an unhealthy belief that they are morally and spiritually superior, has robbed many Malays of the power of critical thought and analysis. It is as if the strain of thinking for oneself, is too great a challenge.
When a Malay criticises the ruling party, he is seen as ‘ungrateful’. He is told that he should be appreciative for all that Umno has done for him – all the opportunities for education and work. It is conveniently forgotten that not all Malays benefit from the New Economic Policy (NEP).
Many middle-class Malay families complain that scholarships or study loans go to the children of well-connected parents. In businesses, and especially in government tenders, the same applies – connections count more than skills or expertise. Many senior politicians and their wives are more commonly known as Mr or Mrs “Ten percent”.
Conversely, Malays have not realised that receiving an education or business opportunity via the affirmative action policies, should not deprive them of a voice. Malays must learn that keeping the government on its toes does not mean that they are unappreciative or disloyal.
Some Malays have a child-like version of the world. In a discussion with a non-Malay, the Malay who cannot present his facts in a logical manner may invariably blurt out, “Go back to where you came from”. It is like the frustrated child who does not get his way and threatens his sibling with, “I’ll tell father what you did”. He does not care about the consequences. He just wants to hurt and get retribution.
When our leaders act in the same manner, this presents a very poor example for the Malays. As an example, former prime minister Dr Mahathir Mohamad had encouraged the stripping of Ambiga Sreenevasan’s citizenship because she wanted true democracy. Read the rest of this entry »
Hopes for Malaysia to be a high-income economy are not bright because Najib’s NEM does not dump the NEP policy
by Dr. Chen Man Hin
DAP life advisor
2nd March 2013
Look at the FDIs inflow to Malaysia compared to other Asean countries for 2012.
According to UNCTAD Malaysia FDI for first half of 2012 was US4 billion, and for the full year would be around US 8 billion.
Whereas it was Singapore US 27.4 billion, Indonesia 8.2 billion, Thailand 5.6 billion.
World bank figures for PER CAPITA INCOME for 2011 are:
Malaysia US$ 9500 ( US$ 7440 in 2008)
HONG KONG 36012
South Korea 22424
But Malaysia’s PCI of US9500 is far way from the required high income level of US$ 16,000 Read the rest of this entry »
— Koon Yew Yin
The Malaysian Insider
Feb 24, 2013
FEB 24 — After reading the article “Room for Competitive Bumiputera Companies’ in The Edge this morning, I am encouraged to write this piece to support Petronas Chairman Tan Sri Shamsul Azhar Abbas.
He said that in 2010 and 2011 alone Petronas awarded about Rm 74 billion worth of contracts to Bumiputera controlled companies, a sum cannot be described as anything but huge.
Despite this Petronas has become a punching bag for Malay right wing and business groups in recent months. The Malay Economic Action Council (MTEM)- an umbrella of more than 60 business group blamed Petronas for sidelineling Bumiputera companies and favouring more competitive foreign companies.
The MTEM has called for Tan Sri Shamsul and the Menbers of the Board of Petronas to resign. This is outrageous. The Malays cannot continue to expect hand outs and juicy contracts.
It is time they must realise that they have to become more efficient and competitive to face the real business world. Read the rest of this entry »
By Dr Chen Man Hin, DAP Life advisor
23 Feb 2013
Events have shown that the NEP is still enforced in the economic development of the economy – two faced NEP and NEM economic policy.
Soon after being Prime Minister, Najib launched his New Economic Model to stimulate development with the aim of achieving a high economy like that of the Asian Tigers of Singapore, S Korea, Hong Kong and Taiwan
To do this he had to get rid of the economic handicaps wrought by the New Economic Policy. It is on record that Najib announced on May 2nd 2009 that he would replace NEP with his New Economic Model (NEM).
It is now 2013, and the signs of a high economy are not encouraging. For Foreign Direct Investments (FDIs) of 2012 Malaysia scored 9 billion US dollars compared to Indonesia’s US$19 billion and Singapore US$130 billion. (World Bank figures)
Per capita income for Malaysia in 2012 was US$9500 million, compared to Hong Kong US$30 million, Singapore US$50 million and South Korea US$25 million. Can Malaysia reach a high income status of US$20million by 2020.
Read the rest of this entry »
by KJ John
Jan 15, 2013
In 2007, I wrote a column entitled, ‘Why I will not vote for BN’. No one then really took me seriously, although I was told that MCA circulated that column during the MCA central committee meeting. Even later, a representative of the then chief secretary told me, but after the fact, that the man was not too happy with my column either.
My retort: Well, he could have easily called me to understand my reasons and explanations, if he was interested to listen. If they could listen, then the government maybe could have addressed those reasons well before the general election. Finally, PM Najib Abdul Razak is trying, but is it too late?
This time around, allow me to state positively why I have no choice but to still vote for Pakatan Rakyat again. I will record three reasons in this column. Neither is this because I love BN any less, it is just that given our real choices and options, the unknown angel is better than that of the known devil.
My first reason is the ‘Allah’ issue and how it has been so badly handled by the BN government, and why they need to better understand the real issues about the true and real etymology of the ‘Allah’ word. My good friend and fellow writer to Malaysiakini, Bob Teoh, has documented the core issues quite well for all those interested to know the truths about this word. His book is entitled, Allah: More than just a Word.
I will not explain all the reasons involved here, which the High Court judgment by Lau Bee Lan has argued rather well. Citizens should read this judgment before talking about this issue. Read the rest of this entry »
By Clive Kessler | November 07, 2012
UPDATED @ 07:04:27 AM 08-11-2012
The Malaysian Insider
People are kind.
They have been writing to ask how I am.
I have not said or written anything serious for weeks.
And they are beginning to wonder.
The “Phoney War” Interlude
“What is the problem?” they ask.
The problem, I reply, is not me. It’s the situation.
Read the rest of this entry »
Syed Jaymal Zahiid | October 24, 2012 Free Malaysia Today
The former premier said this is because the Malays are no longer the kingmakers and are now reduced to being ‘beggars’ in their own land.
KUALA LUMPUR: Dr Mahathir Mohamad today called the Najib administration “weak” and said it will not entertain the concerns of the Malays, especially its business community, as they are no longer the country’s kingmakers.
The former premier said the division among the country’s majority electorate has made them fragile and forced the present government to depend on the support of “others” in an apparent reference to the non-Malays.
This is the second time Mahathir had openly called Prime Minister Najib Tun Razak’s government “frail”, saying it is forced to make key concessions to non-Malay demands in the hope of winning their support in the upcoming national polls.
“I do not believe this government will take your demands seriously,” he told the 2012 Malay Economic Congress held here.
“This is because we [the Malays] no longer hold anymore political power… we have become a beggar in our own country,” he added. Read the rest of this entry »
— Kim Quek
The Malaysian Insider
Sep 30, 2012
SEPT 30 — Barisan Nasional’s election-orientated budget 2013 is disappointing because it concentrates on raining one-off cash on the electorate to ease their pain, while forgetting to address the ills that necessitate such profuse dosage of pain-relievers in the first place.
If the people are affluent and contended, do they need to be showered with such pacifiers; or alternatively, would the feeding of such sweeteners sway their decision on whom they are going to vote for?
Obviously there are vast masses of disgruntled electorate who are not happy with the current living conditions. They are unhappy because they find it increasingly difficult to make ends meet; and they are also worried about the worsening safety of their environment.
The common people are simply overwhelmed by a cost of living that forever is speeding far ahead of their slow moving income increment. Needless to say, our economy is in trouble. What’s wrong with our economy? Read the rest of this entry »
— Jayant Menon
The Malaysian Insider
Sep 12, 2012
SEPT 12 — It was not long ago that the Malaysian development story was hailed as a model of FDI-driven, export-led industrialisation worthy of emulation by aspirants in the developing world.
Malaysia remains an outstanding model of how openness to trade and FDI can transform a poor, agrarian economy into a thriving, manufacturing-based, middle-income one in a generation. During this time, Malaysia also successfully preserved social harmony in its multiracial society, relying on economic openness to sustain growth under an expensive affirmative action programme that skewed incentives, the New Economic Policy (NEP). In this sense, the NEP performed an important signalling role and played its part in delivering the peace and stability that enabled Malaysia to sustain high growth. This growth, combined with revenues from large oil reserves, facilitated a massive tax-transfer scheme that favoured the majority, without significantly eroding macroeconomic stability.
But all that changed after the Asian financial crisis. FDI flows fell sharply and continued to remain low even after recovery. While foreigners continue to shun Malaysia, even domestic investors seem to have fled, with Malaysia becoming a net exporter of capital since 2005. Malaysia continues to grow, but without private investment it is unlikely to break out of the middle-income trap. Indeed, these days Malaysia is often discussed as a classic case of the middle-income trap. Growth without private investment is also unsustainable and Malaysia risks sliding back. Read the rest of this entry »
By Jeyaseelan Anthony | Saturday, 11 August 2012 01:55
Recently our Prime Minister had announced an allocation of RM180 million to uplift the economic standing of the Indian community. It was indeed a major announcement and a big step forward on the part of the government to help the Indian community. However in practice whether this allocation will help Indians in the long run is doubtful.
Malaysia is still plagued by discriminatory policies which favour the majority Bumiputra races. Announcing an allocation is rather easy but making the money usable for business or social purposes is another.
Take for example a real incident highlighted by Senator Dr. S. Ramakrishnan recently and I quote it here.
“One of my cousins wanted to import goats from Myanmar sometime in 2006. When he went to the Customs and Agriculture department for permits to import, he was told that he can only import under a Bumiputera name. My cousin then went looking for a trusted Bumiputra partner to import goat or at least lend his name for that purpose and he managed to find one. He imported goat and sold it in Malaysia. After the first import the Bumiputera partner went to Myanmar and started importing himself. My cousin lost a reliable source of supply and income.
Read the rest of this entry »
— Sakmongkol AK47
The Malaysian Insider
Jul 05, 2012
JULY 5 — In practical sense, the term rent-seeking or rent-seeker or rentier classs, refers to the activity by some people in capturing offices of state and using the power of the state to capture economic benefits.
So, the rentier class consists of the people making use of their official and political positions to capture economic benefits. They get these benefits not by actually providing or actually producing a service or product, but by virtue of holding a political or bureaucratic position.
So what? So the above arrangement leads to disparities in income not due to natural abilities or difference in character. Such arrangement becomes objectionable and unconscionable when the disparities in income do not arise because of abilities or character.
The lazybones and laggards get ahead of the industrious and those more clever because they have found a way to cut corners by earning state positions. And so because of the positions they hold, in the offices of state, political positions and being proximate to the corridors of power allow them to get ahead of others.
Generally speaking, that is why some people are very critical of the New Economic Policy because it allows and perpetrates such “economic arrangements”. Those who get ahead are those having political and bureaucratic powers and their cronies and fronts. Read the rest of this entry »
Reuters/The Malaysian Insider
Jun 03, 2012
KUALA LUMPUR, June 3 — Ethnic Chinese voters, upset over policies that favour majority Malays, have become increasingly alienated from Malaysia’s ruling coalition, raising the risk of racial polarisation and a slowdown in the pace of reforms.
Support for Prime Minister Najib Razak among Chinese voters plunged to 37 per cent in May from 56 per cent in February, a survey by the independent Merdeka Center showed on Friday. It found 56 per cent of Chinese were dissatisfied with the government, compared to 30 per cent of Indians and 23 per cent of Malays.
Recent state and by-elections underline the trend. The main Chinese party allied with the ruling National Front coalition in eastern Sarawak state lost 13 of 19 seats it contested in local elections last year and the opposition won a by-election in the same state in 2010 largely thanks to Chinese backing.
The Southeast Asian nation’s 6.5 million ethnic Chinese turned heavily to the opposition in 2008 polls, handing the National Front, which has ruled uninterrupted since independence from Britain in 1957, its worst election showing.
Malaysia has seen ethnic Chinese voting with their feet, leaving the country for better prospects aboard including to neighbour and rival Singapore, in a troubling brain drain of talent and capital. “Malaysia needs talent to meet its goal of becoming a high-income country,” the World Bank noted in a report last year. “But the problem is that talent is leaving.”
With elections likely later this year, the government has failed to reverse the tide with voters such as Jack Gan, who complains he had to study much harder than his ethnic Malay peers to get into one of the country’s top universities. Read the rest of this entry »
– Greg Felker
May 26th, 2012
Credibility and the search for a new developmental model
In comparative politics the word “regime” refers to the formal and informal institutions by which political power is acquired and exercised. In political economy, a regime refers to an enduring combination of “socio-economic alliances, political-economic institutions, and a public-policy profile” (Pempel 1998: 20). In the case of Malaysia, the Barisan Nasional (BN) regime’s durability in the former, political sense has been closely associated with a particular sort political economy, or regime in the second sense. Despite significant changes over the years, Malaysia’s hegemonic-party political system, centered on United Malays National Organisaion’s (UMNO) dominance, has since the early 1970s practiced a form of developmentalism that has shaped Malaysian society in profound ways. As the Pakatan Rakyat (PR) understands, its challenge to the BN’s national political monopoly is inescapably a contest about Malaysia’s economic development model, as well. To what extent, and in what ways, does the prospect of change in Malaysia’s political regime imply a change in the country’s pattern of development?
Contemporary debates make clear the close connection between political contestation and economic policy choices. Indeed, one of the UMNO-led government’s vulnerabilities is a sense, growing in recent years, that the Malaysian development miracle has wavered and, for large segments of the population, inadequately fulfilled its promise of a steadily improving quality of life. The notion of the “middle-income trap”, first popularised in a global context by Geoffrey Garret in 2004, quickly became a frame for discussions of possible policy reform within Malaysia and among foreign observers. Two themes have been prominent in these discussions. One is the issue of the quality of governance as this affects broader economic efficiency and productivity. Second is the mooted necessity of a broad liberalisation of restrictions and regulations to enable greater flexibility and entrepreneurial dynamism. In both areas, the opposition and pro-reform civil society organisations have made telling critiques of the incumbent leadership. For its part, Najib Razak’s administration has launched a series of reform initiatives under the New Economic Model (NEM) that speak to the same concerns about governance and the structural challenges to Malaysia’s continued economic development. This dimension of the new competitiveness in Malaysia’s politics adds programmatic substance to a political tableau in which mass protest, scandal, and cultural controversies have comprised much of the drama. Read the rest of this entry »
World Bank warns there will be no high income economy for Malaysia without implementing structural reforms
By Dr Chen Man Hin, DAP life advisor
The World Bank in its bi-annual report on East Asia and the the Pacific said that in view of the slow down in the economy in the years ahead, due to a massive world debit problem, the GDP of Malaysia would slow down to 4.6% this year and 5.1% in 2013.
He advised that Najib should stop fiddling with the economy with his multiple reforms which have not brought encouraging progress. He advised Najib strongly to implement structural reforms to bring about a strong recovery in the economy.
Structural reforms means that the New Economic Policy must be stopped and in its place, implement free market policies like those in Singapore, Hong Kong, S. Korea and Taiwan. A free market policy propelled the growth of the economies of these four ASIAN TIGERS, each of which have a per capita income of over US $20,000.
For Malaysia to have a high economy, the GDP must grow by at least 6% a year, which would make Malaysia a high economy nation by 2020.
Two months ago, Najib gave a glowing report and boasted that Malaysia had a per capita income of US$9,500, and would attain high economy status by year 2020. These predictions of Najib have been brushed aside by the World Bank.
Read the rest of this entry »
— Jaleel Hameed
The Malaysian Insider
May 13, 2012
MAY 13 — It is interesting that Tan Sri Nor Mohamed Yakcop is talking about Malaysian history, that the country would revert to the year 1511, when the Bumiputera agenda didn’t exist, if Barisan Nasional (BN) loses in the next general election.
Thank you, sir. Where did you learn your history? Because that’s pure bovine excrement.
What Bumiputera agenda was there before the May 13, 1969 race riots? In fact, BN came into being after the riots, when the then-Alliance government realised the majority Malays felt disenfranchised in their own country.
Let’s not even talk about Penang or the Malays in the state, of which you are one.
You mean to say the Malays entered the poor house only when Pakatan Rakyat (PR) took over in 2008?
You mean to say they were richer when BN was in power?
You mean to say that after 40 years of the New Economic Policy (NEP) by BN, all the Malays are richer? Read the rest of this entry »
By Shannon Teoh
The Malaysian Insider
Apr 01, 2012
KUALA LUMPUR, April 1 — Tengku Razaleigh Hamzah resumed his attack on the New Economic Policy (NEP) today, stating that “captive minds” continue to support it despite Malaysia moving further from its objective of redistributing wealth through pro-Bumiputera policies.
The Umno veteran said there has been “no intellectual inquiry” into why “despite many years of implementing the NEP, inequitable distribution of income continues to plague the people” as “we have become incapable of devising an analytical method independent of current stereotypes about Malays, Chinese, Indians and others.”
Ku Li today said, “…The NEP…has produced results that are diametrically opposed to the original intention of bridging the gap between the haves and the have-nots.” — file pic
“If the doctor keeps on prescribing the same medicine which produces opposite results, then something must be wrong with the doctor, and something more serious must be wrong with the patient who keeps on trusting the same doctor.
“Our thinking is based completely on a racial world view when it comes to matters of politics, education, economics, planning, and so forth. Needless to say, we promote a racial world view that thrives on the policy of divide and rule,” the Kelantan prince said at a book launch in Ipoh this morning.
Tengku Razaleigh, popularly known as Ku Li, had in February said “as a former finance minister, let me emphasise that it was never the intention of the NEP to create an incubated class of Malay capitalists.” Read the rest of this entry »