Archive for category NEP
Applying Prospect Theory To Ending Affirmative Action
Posted by Kit in Bakri Musa, Economics, NEP, UMNO on Thursday, 21 July 2011
By M. Bakri Musa
An insight of cognitive psychology (that sub-discipline dealing with mental processes like thinking and decision making) is that humans are far removed from the ideal of a rational self-interested Homo economicus (Economic man) when making decisions, contrary to the core assumption of traditional economics.
Two factors weigh heavily when we make decisions, given a set of alternatives. One, we are loss averse; that is, we magnify the value of a potential loss and minimize the potential gain even if the two are quantitatively the same. The other is that how those alternatives are framed very much influences our decision.
Although these insights refer to individual decision-making processes, nonetheless they can be extrapolated to the societal level, on how we collectively make decisions. This has relevance to the central wrenching issue dividing our Malay community today, on whether to continue or do away with affirmative action.
Read the rest of this entry »
Bersih rally may point to unequal wealth distribution, says Financial Times
By Clara Chooi
July 14, 2011 | The Malaysian Insider
KUALA LUMPUR, July 14 — Datuk Seri Najib Razak should take heed of last Saturday’s mass protest as a possible show of public distaste on income disparity in Malaysia, aside from a push for electoral reform, the Financial Times has said.
The daily reported in a commentary on its popular Lex column that the prime minister may have to lift the issue of unequal wealth distribution as a priority for his administration, noting that since the Umno president took office, he had chosen instead to focus on boosting Malaysia’s gross national income per capita (GNI). Read the rest of this entry »
Now Putrajaya hands LRT deal to UK firm ahead of Najib visit
Posted by Kit in Good Governance, NEM, NEP on Monday, 20 June 2011
By Shannon Teoh
June 20, 2011 | The Malaysian Insider
KUALA LUMPUR, June 20 — A Finance Ministry committee has changed its mind by awarding the contract for the Kelana Jaya light rail transit (LRT) extension to a consortium led by British firm Colas, after controversially ordering a deal last week with another joint-venture.
But the committee’s latest decision continues to ignore the recommendation of LRT operator Syarikat Prasarana Negara Berhad for the contract to be awarded to a third company in the frame.
The Singapore Straits Times reported today that the joint-venture between Colas and CMC Engineering Sdn Bhd would be awarded the project, citing senior industry executives and government officials close to the tender as its source. Read the rest of this entry »
Key resignation, resentment hits new national innovation initiative
Posted by Kit in Economics, Najib Razak, NEM, NEP on Friday, 10 June 2011
By Lee Wei Lian
June 10, 2011
The Malaysian Insider
KUALA LUMPUR, June 10 — Unik, the prime minister’s initiative tasked with restructuring the country’s public innovation ecosystem has hit a setback with the resignation of its technical advisor N Danaraj who was in charge of putting together the National Innovation Policy (NIP).
His resignation earlier this week could come as a blow to Unik due to the loss of experience as Danaraj has a masters degree in public administration from Harvard, a doctorate from Oxford and was also technical advisor to the National Economic Advisory Council (NEAC), a senior fellow at Khazanah Nasional and a research fellow at the Malaysian Institute of Economic Research.
His departure, which sources say was due to various disagreements with Unik CEO Dr Kamaljit Singh over the NIP, comes as several innovation agencies have been privately expressing concern over the Unik chief’s leadership style.
Read the rest of this entry »
Why needs-based affirmative action makes no sense
By Lee Hwok Aun
June 01, 2011 | The Malaysian Insider
JUNE 1 — We commonly hear these days that Malaysia should shift from a race-based affirmative action (AA) to needs-based affirmative action. Pakatan Rakyat started advocating this; Barisan Nasional followed.
The idea seems too nice, constructive, and harmonious to criticise. Both political alliances believe they have found a formula that can gain popular support and shift us away from the testy and rancorous debates over race-based AA and the New Economic Policy.
Unfortunately, needs-based affirmative action makes no sense, much as even I want to believe in it. The notion is, at best, imprecise and partial; at worst, incoherent and delusional. Read the rest of this entry »
NEP or meritocracy?
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.
Read the rest of this entry »
Why I stay, but why my children should not
Posted by Kit in 1Malaysia, Brain drain, nation building, NEP on Saturday, 28 May 2011
Ekompute
The Malaysian Insider
May 27, 2011
MAY 27 — When the New Economic Policy was first launched in 1971, I really thought that it would only be for 20 years, just as what the government had said. But anyway, who can argue against the NEP when its two-prong objectives are to:
1. eradicate poverty, irrespective of race;
2. restructure society so as to eliminate the identification of ethnicity with economic function.
However, as Yogi Berra says, “In theory, there is no difference between theory and practice. But in practice, there is.”
If the two objectives had been pursued honestly and diligently, I think no one will object to the NEP, even if it runs perpetually.
However, the NEP has been turned into a political tool and interpreted to serve only those in power, such that even after double the time frame since its inception, the ordinary Malays are said to be still poor.
How can any wakil rakyat reconcile himself to this fact, that the people he claims to be fighting for are still living in poverty, while he himself, as a people’s representative, lives in a multi-million ringgit mansion? Read the rest of this entry »
Chua SoiLek should not have too inflated an ego about himself or MCA
It should be the front-page headline news of the MCA newspaper The Star today, but it was tucked away in page 4, regarded as less newsworthy than Prince William and Kate Middleton’s wedding (entire front page with pic and headline‘You look beautiful’), “PM – Innovate to compete: Relying on foreign labour a threat to economy, SMEs told” (p 2), “A sea tunnel, after two bridges – Penang’s proposed third link in the pipeline” and “Hostile witnesses an obstacle, says MACC panel” (p 3).
It finally appears in p 4 of Star “Party will give up posts – MCA presidential council backs Chua’s stand” beneath another Chua SoiLek story “Stop fanning racial flame, SoiLek warns opposition”.
This is what even journalists in MCA’s own newspaper, the Star, think of the newsworthiness and importance of Chua’s “shock announcement”.
Many Malaysians thought that MCA leaders are finally taking a political stand because they are moved by the latest World Bank report entitled “Malaysia Economic Monitor: Brain Drain” and adverse news headlines like “Malaysia’s brain drain getting worse, says World Bank” and “NEP, brain drain holding back Malaysia, says World Bank” which said among other things: Read the rest of this entry »
Kit Siang: Soi Lek killing the people’s hope for change
Posted by Kit in Brain drain, Corruption, MCA, NEP on Friday, 29 April 2011
By Clara Chooi
The Malaysian Insider
Apr 29, 2011
KUALA LUMPUR, April 29 — Lim Kit Siang accused Datuk Seri Dr Chua Soi Lek today of destroying the people’s hopes by dictating that they had no choice but to accept the status quo in the present administration under Barisan Nasional (BN).
This, said the DAP adviser, was reflected in Dr Chua’s recent reminder to the Chinese community that their hopes should be based on the political realities in Malaysia.
Lim insisted that the MCA president had missed the point when he challenged PKR to abolish Malay privileges, pointing out that the opposition had never argued over the special position of the Malays as enshrined under Article 153 of the Federal Constitution.
The point of contention, said Lim, was the BN government’s “blatant abuse” of the New Economic Policy (NEP) and refusal to implement needs-based affirmative action policies.
“His (Dr Chua’s) theatrics interest no one. Article 153 is not an article of controversy… it does not arise. The point of controversy is that the NEP must go.
“Dr Chua is just trying to create something out of nothing so that the people are distracted from the focal issues.
“Now that the people have some hope that for the first time, they have a proper alternative, he is trying to quash that hope,” Lim told The Malaysian Insider today. Read the rest of this entry »
NEP overwhelming Najib’s reforms, say reports
Posted by Kit in Najib Razak, NEP on Friday, 4 March 2011
By Shannon Teoh
The Malaysian Insider
March 04, 2011
KUALA LUMPUR, March 4 — New York-based business newspapers took aim at the Najib administration’s reform policies today, claiming that a “phony war on affirmative action” has failed to overcome pessimism in the local market.
The Wall Street Journal said in an opinion article that the government’s failure to speed up economic reforms while racial tensions increase have slowed productivity as the country labours under the legacy of the New Economic Policy (NEP).
“The risk now is that political parties representing the three races will be steered by extremist groups that exacerbate conflict for their own gain,” the Wall Street Journal said today. Read the rest of this entry »
Najib has tough fight against NEP ‘cancer’, says report
Posted by Kit in Najib Razak, NEP on Friday, 25 February 2011
By Shannon Teoh
KUALA LUMPUR, Feb 24 — Datuk Seri Najib Razak is taking “an unprecedented gamble” by pledging to dilute the system of Malay patronage that has kept Umno in power, said a foreign report yesterday.
The Centre for Independent Studies (CIS) — an Australia-based think tank — said that the large support for the status quo and Umno’s current vulnerability meant that “Najib will have a difficult task convincing his colleagues to ‘risk all’ for the sake of Malaysia’s long-term future.”
Its foreign policy research fellow Dr John Lee also questioned the prime minister’s capacity to introduce economic reforms as the introduction of the New Economic Policy (NEP) in 1970 has cultivated a “vast and deep network of rent-seeking and patronage.” While acknowledging that the New Economic Model (NEM) introduced by Najib last year was “enormously significant,” Lee said that the decades of pro-Bumiputera affirmative action was now a “millstone around the neck of the struggling Malaysian economy and the cancer behind the country’s growing structural problems.” Read the rest of this entry »
Perkasa hijacked NEM, says NEAC man
Aidila Razak | Feb 8, 11
Malaysiakini
Malay rights NGO Perkasa’s fierce objections to aspects of the first part of the New Economic Model (NEM) forced its second part to be watered down.
Revealing this today, National Economic Advisory Council member Zainal Aznam Mohd Yusof said Perkasa and other right wing groups were up in arms particularly over the NEM’s rejection of 30 percent bumiputera equity and the proposal of an equal opportunities commission.
“(These suggestions) were lambasted and strangled by right wing groups led by Perkasa. They wanted to burn part one (of the NEM).
“…Perkasa said we did not have roh Melayu (the Malay spirit),” he lamented.
Speaking at a forum organised by think-tank Institue of Democracy and Economic Affairs (Ideas) in Kuala Lumpur, Zainal Aznam added that listening to the right wing groups meant that the cabinet had failed the test on reforms.
“This was the government’s litmus test and at this time, I have to say that there is no political will,” he said. Read the rest of this entry »
Can Malaysia graduate?
East Asia Forum
January 19th, 2011
Author: Hal Hill, ANU
Malaysia is one of the developing world’s great success stories. Few countries outside of East Asia can match its development record. Since its independence over 53 years ago per capita incomes have risen more than eight-fold, and absolute poverty has been all but eliminated.
But it currently faces three key, interrelated challenges, some generic to upper middle income developing countries, others specific to Malaysia itself.
The first, how to graduate to the rich-country club, has been clearly articulated by the country’s Prime Minister, Tun Najib: ‘We are now at a critical juncture, either to remain trapped in a middle-income group or advance to a high-income economy … We now have to shift to a new economic model based on innovation, creativity and high value added activities.’
The second, shared by some of its Southeast Asian neighbours, is the country’s slower development trajectory since the Asian financial crisis of the late 1990s. Even before the current global financial crisis, which it has navigated quite successfully, economic growth in the 2000’s was about two percentage points below that of the decade 1986-96.
Particularly worrisome is the slump in investment, which has been stuck at little more than 20 per cent of GDP since the late 1990s. This is 10-15 percentage points of GDP lower than the country’s historic ratio. With savings remaining buoyant, the country’s external position has been transformed dramatically. In 2002, the country had net liabilities equivalent to 35 per cent of GDP. By 2008, this had been transformed to net assets of 20 per cent of GDP. Put simply, Malaysians have been finding overseas investment increasingly attractive, while foreigners have been less attracted to Malaysia.
The third challenge relates to the development of high-quality institutions to underpin a modern market economy in a country that has experienced continuous one-party rule for over half a century. Malaysia’s ruling United Malays National Organisation (UMNO) is in fact the world’s longest-serving governing party currently in power among all ‘quasi democracies’. Not surprisingly, elements of UMNO exhibit the problems of complacence and arrogance that one expects from entrenched one-party dominance. Read the rest of this entry »
Pre-polls reforms unlikely, says Roubini’s RGE
By Yow Hong Chieh
The Malaysian Insider
January 13, 2011
KUALA LUMPUR, Jan 13 — Much-needed reforms to Malaysia’s pro-Bumiputera policies will likely be put on the back burner until Prime Minister Datuk Seri Najib Razak secures a new electoral mandate, a report by star economist Nouriel Roubini’s RGE global economic analysis firm has predicted.
RGE said in its “Wednesday Note — Malaysia’s Middle-Income Malaise” released yesterday that Umno was “unlikely” to revamp such policies “blocking” Malaysia’s rise to high-income nation status before the next general election for fear of antagonising Malay voters.
Najib’s market-friendly reforms under the New Economic Model (NEM) have received lukewarm to hostile response from the Malays, many of whom regard such proposals as a challenge to the special position of Bumiputeras outlined in the Constitution.
“[Given] the governing party’s reliance on Bumiputera support, major changes are unlikely until new elections are held and the government has the political confidence to confront popular resistance to reform,” RGE said. Read the rest of this entry »
Malay Rights v Special Position
Posted by Kit in Constitution, NEP, UMNO on Sunday, 9 January 2011
by Stanley Koh
Free Malaysia Today
January 9, 2011
COMMENT
“There are no Malay rights since our Constitution holds dear that all persons are equal before the law and entitled to equal protection of the law without discrimination on the basis of race and religion.”
That was what the late Ghazali Shafie said in a speech at the National Unity Convention in May 2001.
He continued: “What perhaps has come to be regarded as special rights is the special position of the Malays and natives of Sabah and Sarawak under Article 153 (of the Federal Constitution). The change from ‘position’ to ‘rights’ is frightening. Who did that, I wonder?
“In a plural society like ours, if the leadership was not bold and sincere enough to take corrective measures so that there would be a level playing field, then the situation would indeed be bleak and our society would be a playground for those who wish us ill.”
Born in Kuala Lipis, Ghazali was 88 at the time of his death in January 2010. He had a distinguished career in politics and government.
Many bigots, opportunists and self-serving leaders of today will probably dismiss those remarks on the New Economic Policy as just one man’s opinion. If they are ignorant of history, they may even question his authority.
If Ghazali were alive and facing these critics, he would probably reply in these words, which were part of the speech at the 2001 convention: Read the rest of this entry »
Calling May 13, 1969 ‘sacred’ is sacrilegious
by John Baptist
The Malaysian Insider
November 11, 2010
I read with disgust Zaini Hassan describing in the Utusan Malaysia the tragic May 13, 1969 incident as “sacred”. The Oxford Dictionary defines sacred as either “connected with God or a god; considered to be holy” or “very important and treated with great respect.”
From general reading, the incident involved carnage, destruction of private and public property, ruining of families, instilling of fear, the destruction of years of trust between the races built by our forefathers and the maligning of our nation in the eyes of the world, setting us back years in the terms of our economic potential.
I need take only carnage to exemplify that it is prohibited by all religions and hence cannot sit comfortably within the first definition of “sacred” by the Oxford Dictionary. Read the rest of this entry »
ETP without the NEM cannot achieve a high income economy
Posted by Kit in Dr. Chen Man Hin, Economics, Najib Razak, NEM, NEP, UMNO on Friday, 29 October 2010
by Dr Chen Man Hin, DAP life adviser
The ETP (Economic Transformation Programme) without the New Economic Model (NEM) cannot achieve a high income economy for the people of Malaysia
Immediately after the UMNO assembly where the delegates unanimously rejected the NEM proposal to liberalise the economy beginning with the removal of the 30% bumiputra equity. There was alarm that this would mean the end of the NEM which was promoted Najib since he became Prime Minister.
To assuage the fears of investors and the economic and business world, PM Najib quickly assembled a coterie of 10 foreign investors before a gathering of a few thousand people, PM Najib presented them as multi-billion investors who are investing in the country. They were the pioneers of the ETP which is expected to harvest some US$444 billion of projects to propel the economy from a middle income to a high economy status by the year 2020.
This translates to bringing in investments averaging 1,300 billion ringgits a year. The government expects 99% of the money to come from the private sector.
Read the rest of this entry »
Malays competitive and competent – need for New Pro-Poor Economic Policy/Reform
Malaysia’s Development Strategy Revisited (5)
by Dr. Mohamed Ariff*
A New Pro-Poor Economic Policy and Reform
There is certainly a need for a clear focus on the needs of the poor and marginalized regardless of race, colour or religion. In other words, Malaysia needs a ‘new’ New Economic Policy that is explicitly pro-poor. The main beneficiary of such a policy would still be Malay households, as they account for roughly three-quarters of the bottom 40 per cent of households in terms of income distribution. Read the rest of this entry »
NEP “outlived its usefulness” – does not make sense to keep an obsolete policy ticking along on life support
Posted by Kit in Corruption, Economics, Finance, NEP on Friday, 22 October 2010
Malaysia’s Development Strategy Revisited (3)
by Dr. Mohamed Ariff*
The New Economic Policy: Pervasive Poverty in the Malay Community
Multi-racial Malaysia’s major structural problems are largely attributable to the New Economic Policy initiated in 1970 in the aftermath of the May 1969 racial riots. With its emphasis on ‘positive’ discrimination in favour of the then backward Bumiputeras (literally ‘sons of the soil’), the objectives of the policy were laudable, serious misgivings about its implementation notwithstanding. The New Economic Policy continued to exist after reincarnating itself in various forms beyond the original 1990 deadline. While it has undeniably helped narrow interethnic income differences, all is not well judging by the outcomes. While interethnic income disparity has narrowed considerably, intraethnic income disparity, especially within the Bumiputera community, has widened. Read the rest of this entry »
A nation of failed economic development plans
Malaysiakini
AB Sulaiman
Sep 20, 10
COMMENT
The world can be a nasty place especially in terms of planning, where your best and well intentioned plans can produce the worst unintended results. The country’s numerous development plans is a perfect example of this.
Since Independence we have always strived to be a country with strong social, economic and political credentials: a strong healthy and united people, public safety and security, great infrastructure, mature democracy, clean human rights record, good education system, governed under rule of law, and of course, a justice-minded judiciary.
To top them all off we are to enjoy a per capita income equal to the peoples in advanced economies. We wish to be an advanced country in our own right.
The current realities are anything but. The people are fragmented while some are migrating to friendlier lands, our infrastructure while adequate is wasteful, our democracy is an ugly disguise for authoritarianism, our education system produces non-thinking graduates, the rule of law has become the rule by law, and the judiciary is an international laughing stock. Read the rest of this entry »
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