Razaleigh – NEP has expired. Time for New Deal

Speech by Tengku Razaleigh at HELP University College, KL; July 10, 2009

1. Thank you for inviting me to address you. It’s a pleasure to be here, and to learn from you. You have asked me to talk about Najib’s First 100 Days, and this lecture is in a series called Straight Talk. I shall indeed speak plainly and directly.

2. Let me begin by disappointing you. I am not going to talk about Najib’s First 100 Days because it makes little sense to do so.

3. Our governments are brought to power for five year terms through general elections. The present government was constituted after March 8, 2008 and Datuk Seri Najib Tun Razak’s tenure as Prime Minister resulted from a so-called “smooth transfer of power” between the previous Prime Minister and himself that took a somewhat unsmooth twelve months to carry out. During those months, Najib took on the de facto leadership role domestically while Abdullah warmed our international ties. The first 100 days of this government went by unremarked sometime in June last year.

4. Not only is it somewhat meaningless to talk about Najib’s First 100 days, such talk buys into a kind of political silliness that we are already too prone to. It has us imagine that the present government started work on April 2 and forget that it commenced work on March 8 last year and must be accountable for all that has been done or not done since then. It has us forget that in our system of parliamentary, constitutional democracy, governments are brought to power at general elections and must be held accountable for promises made at these elections. It leads us to forget that these promises, set out in election manifestos, are undertaken by political parties, not individuals, and are not trifles to be forgotten when there is a change of individual.

5. It is important that we remember these things, cultivate a more critical recollection of them, and learn to hold our leaders accountable to them, so that we are not perpetually chasing the slogan of the day, whether this be Vision 2020, Islam Hadhari or 1Malaysia. As PR Professionals, you would see my point immediately. Slogans without substance undermine trust. That substance is made up of policies that have been thought through and are followed through. That substance is concrete and provided by results we can measure.

6. Whether or not some of our leaders are ready for it, we are maturing as a democracy. We are beginning to evaluate our governments more by the results they deliver over time than by their rhetoric. As our increasingly well-educated and well-travelled citizens apply this standard, they force our politicians to think before they speak, and deliver before they speak again. As thinking Malaysians we should look for the policies, if any, behind the slogans. What policies are still in place and which have we abandoned? What counts as policy and who is consulted when it is made? How is a proposal formulated and specified and approved before it becomes policy, and by whom? What are the roles of party, cabinet, King and Parliament in this process? Must we know what it means before it is instituted or do we have to piece it together with guesswork? Do we even have a policy process?

7. The mandate Najib has taken up is the one given to Barisan Nasional under Abdullah Badawi’s leadership. BN was returned to power in the 12th General Elections on a manifesto promising Security, Peace and Prosperity. It is this manifesto against which the present administration undertook to be judged. The present government inherits projects and policies such as Islam Hadhari and Vision 2020. If these are still in place, how do they relate to each other and to 1 Malaysia? How do we evaluate the latest slogan against the fact of constitutional failure in Perak, the stench of corruption in the PKFZ project and reports of declining media freedom? What do we make of cynical political plays on racial unity against assurances that national unity is the priority?

8. It is not amiss to ask about continuity. We were told that the reason why we had to have a yearlong ‘transfer of power’ to replace the previous Prime Minster was so that we could have such policy continuity. The issues before the present BN government are not transformed overnight with a change of the man at the top.

9. Let me touch on one issue every Malaysian is concerned with: security. The present government made the right move in supporting the establishment of the Royal Commission to Enhance the Operations and Management of the Police in 2004. Responding to the recommendations of the Royal Commission, the government allocated the PDRM RM8 billion to upgrade itself under the 9th Malaysia Plan, a tripling of their allocation under the 8th Malaysia Plan.

10. Despite the huge extra amounts we are spending on policing, there has been no dent on our crime problem, especially in the Johor Bahru area, where it continues to make a mockery of our attempts to develop Iskandar as a destination for talent and investment. Despite spending all this money, we have just been identified as a major destination for human trafficking by the US State Department’s 2008 Human Rights Watch. We are now in the peer group of Sudan, Saudi Arabia and North Korea for human trafficking. All over the world the organized cross-border activity of human trafficking feeds on the collusion of crime syndicates and corrupt law enforcement and border security officials. Security is about more than just catching the criminals out there. It is also about the integrity of our own people and processes.  It is above all about uprooting corruption and malpractice in government agencies, especially in law enforcement agencies. I wish the government were as eager to face the painful challenge of reform as to spend money. The key recommendation of the Royal Commission was the formation of an Independent Police Complaints and Misconduct Commission. That has been shelved.

11. Royal Commissions and their findings are not to be trifled with and applied selectively. Their findings and recommendations are conveyed in a report submitted to the King, who then transmits them to the Government. Their recommendations have the status of instructions from the King. The recommendations of the Royal Commission on the Police have not been properly implemented. The Royal Commission of Inquiry into the Lingam Video clip might as well not have been conducted, because its findings have been completely ignored. Both Commissions investigated matters fundamental to law and order in this country: the capability and integrity of the police and of the judiciary. No amount of money thrown at the PDRM or on installing CCTV’s can make up for what happens to our security when our law enforcers and our judges are compromised.

12. Two Royal Commissions undertaken under the present government unearthed deep issues in the police and the judiciary and made recommendations with the King’s authority behind them, and they have been ignored. The public may wonder if the government is committed to peace and security if it cannot or will not address institutional rot in law enforcement and the rule of law.

13. The reform of the police and the judiciary has been on the present government’s To Do list for more than five years.

14. I want to reflect now upon where we stand today and how we might move forward. We are truly at a turning point in our history. Our political landscape is marked with unprecedented uncertainty. Nobody knows what the immediate future holds for us politically. This is something very new for Malaysians. The inevitability of a strong BN government figured into all political and economic calculations and provided a kind of stability to our expectations. Now that this is gone, and perhaps gone for good, we need a new basis for long-term confidence. No matter who wins the next General Election, it is likely to be with a slim majority. Whatever uncertainty we now face is likely to persist unless some sort of tiebreaker is found which gathers the overwhelming support of the people.

15. We need to trust less in personalities and more in policies, look less to politics and more to principle, less to rhetoric and more to tangible outcomes, less to the government of the day and more to enduring institutions, first among which must be the Federal Constitution.

16. We need an unprecedented degree of openness and honesty about what our issues are and what can be done; about who we are, and where we want to go. We need straight talk rather than slogans. We need to be looking the long horizon rather than occupying ourselves with media-generated milestones.

17. Those of us who think about the future of Malaysia have never been so restless. The mould of our past is broken, and there is no putting it back together again, but a new mould into which to pour our efforts is not yet cast. This is a time to think new thoughts, and to be courageous in articulating them.

18. Such is the case not just in politics but also in how the government manages the economy. In a previous speech I argued that for our economy to escape the “middle income trap” we need to make a developmental leap involving transformative improvements in governance and a successful reform of our political system. I said the world recession is a critical opportunity for us to re-gear and re-tool the Malaysian economy because it is a challenge to take bold, imaginative measures. We must make that leap or remain stuck as low achievers who were once promising.

19. We are in a foundational crisis both of our politics and of our economy. In both dimensions, the set plays of the past have taken us as far as they can, and can take us no further. Politically and economically, we have arrived at the end of the road for an old way of managing things. The next step facing us is not a step but a leap, not an addition to what we have but a shift that changes the very ground we play on.

20. This is not the first time in our brief history as an independent nation that we have found ourselves at an impasse and come up with a ground-setting policy, a new framework, a leap into the future. The race riots of 1969 ended the political accommodation and style of the first era of our independence. Parliament was suspended and a National Operations Council put in place under the leadership of the late Tun Razak. He formed a National Consultative Council to study what needed to be done. The NCC was a non-partisan body which included everyone. It was the NCC that drafted and recommended the New Economic Policy. This was approved and implemented by the Government.

21. The NEP was a twenty year programme. It had a national, and not a racial agenda to eradicate poverty and address structural inequality in the form of the identification of race with occupation. It aimed to remove a colonial era distribution of economic roles in our economy. Nowhere in its terms is any race specified, nor does it privilege one race over another. Its aim was unity.

22. The NEP’s redistributive measures drew on principles of social justice, not claims of racial privilege. This is an important point. The NEP was acceptable to all Malaysians because its justification was universal rather than sectarian, ethical rather than opportunistic. It appealed to Malaysians’ sense of social justice and not to any notion of racial privilege.

23. We were devising a time-limited policy for the day, in pursuit of a set of measurable outcomes. We were not devising a doctrine for an eternal socio-economic arrangement. Like all policies, it was formulated to solve a finite set of problems, but through an enduring concern with principles such as equity and justice. I happen to think it was the right thing for the time, and it worked in large measure.

24. Curiously, although the policy was formulated within the broad consensus of the NCC for a finite period, in our political consciousness it has grown into an all-encompassing and permanent framework that defines who we are. We continue to act and talk as if it is still in place. The NEP ended in 1991 when it was terminated and replaced by the New Development Policy, but eighteen years on, we are still in its hangover and speak confusingly about liberalizing it. The NEP was necessary and even visionary in 1971, but it is a crushing indictment of our lack of imagination, of the mediocrity of our leadership, that two decades after its expiry, we talk as if it is the sacrosanct centre of our socio-political arrangement, and that departures from it are big strides. The NEP is over, and we have not had the courage to tell people this. The real issue is not whether the NEP is to be continued or not, but whether we have the imagination to come up with something which better serves our values and objectives, for our own time.

25. Policies are limited mechanisms for solving problems. They become vehicles for abuse when they stay on past their useful life. Like political or corporate leaders who have stayed too long, policies that overrun their scope or time become entrenched in abuse, and confuse the means that they are with the ends that they were meant to serve. The NEP was formulated to serve the objective of unity. That objective is enduring, but its instrument can come up for renewal or replacement. Any organisation, let alone a country, that fails to renew a key policy over forty years in a fast-moving world is out of touch and in trouble.

26. There is a broad consensus in our society that while the NEP has had important successes, it has now degenerated into a vehicle for abuse and inefficiency. Neither the Malays nor the non-Malays approve of the way it now works, although there would be multiracial support for the objectives of the NEP, as originally understood. The enthusiasm with which recent reforms have been greeted in the business and international communities suggests that the NEP is viewed as an obstacle to growth. This was not what it was meant to be.

27. It was designed to promote a more equitable and therefore a more harmonious society. Far from obstructing growth, the stability and harmony envisaged by the NEP would were to be the basis for long term prosperity.

28. Over the years, however, and alongside its successes, the NEP has been systematically appropriated by a small political and business class to enrich itself and perpetuate its power. This process has corrupted our society and our politics. It has corrupted our political parties. Rent-seeking practices have choked the NEP’s original intention of seeking a more just and equitable society, and have discredited the broad nation-building enterprise which this policy was meant to serve.

29. Thus, while the NEP itself has expired, we live under the hangover of a policy which has been skewed from its intent. Instead of coming up with better policy tools in pursuit of the aims behind the NEP, a set of vested interests rallies to defend the mere form of the NEP and to extend its bureaucratic sway through a huge apparatus of commissions, agencies, licenses and permits while its spirit has been evacuated. In doing so they have clouded the noble aims of the NEP and racialized its originally national and universal concerns.

30. We must break the stranglehold of communal politics and racial policy if we want to be a place where an economy driven by ideas and skills can flourish. This is where our daunting economic and political challenges can be addressed in one stroke. We can do much better than cling to the bright ideas of forty years ago as if they were dogma, and forget our duty to come up with the bright ideas for our own time. The NEP, together with the Barisan coalition, was a workable solution for Malaysia forty years ago. But forty years ago, our population was about a third of what it is today, our economy was a fraction the size and complexity that it is now, and structured around the export of tin and rubber rather than around manufacturing, services and oil and gas. Forty years ago we were in the midst of the Cold War, and the Vietnam War raged to the north. Need I say we live in a very different world today. We need to talk to the facebook generation of young Malaysians connected to global styles and currents of thought. We face global epidemics, economic downturns and planetary climate change.

31. We can do much better than to cling to the outer form of an old policy. Thinking in these terms only gives us the negative policy lever of “relaxing” certain rules, when what we need is a new policy framework, with 21st century policy instruments. We have relaxed some quotas. We have left Approved Permits and our taxi licensing system intact. We have left the apparatus of the NEP, and a divisive mindset that has grown up around it, in place. Wary of well-intentioned statements with no follow-through, the business community has greeted these reforms cautiously, noting that a mountain of other reforms are needed. One banker was quoted in a recent news article as saying: “All the reforms need to go hand in hand..Why is there an exodus of talent and wealth? It is because people do not feel confident with the investment climate, security conditions and the government in Malaysia. Right now, many have lost faith in the system.”

32. The issues are intertwined. Our problems are systemic and rooted in the capability of the government to deliver, and the integrity of our institutions. It is clear that piecemeal “liberalization” and measure by measure reform on a politicized timetable is not going to do the job.
    33.What we need is a whole new policy framework, based on a comprehensive vision that addresses root problems in security, institutional integrity, education and government capability. What we need to do is address our crisis with the bold statecraft from which the NEP itself originated, not cling to a problematic framework that does little justice to our high aspirations. The challenge of leadership is to tell the truth about our situation, no matter how unpalatable, to bring people together around that solution, and to move them to act together on that solution.

33. If the problem is really that we face a foundational crisis, then it is not liberalization of the NEP, or even liberalization per se that we need. From the depths of the global economic slowdown it is abundantly clear that the autonomous free market is neither equitable nor even sustainable. There is no substitute for putting our heads together and coming up with wise policy. We need a Malaysian New Deal based on the same universal concerns on which the NEP was originally formulated but designed for a new era: we must continue to eradicate poverty without regard for race or religion, and ensure that markets serve the people rather than the other way around.

34. Building on the desire for unity based social justice that motivated the NEP in 1971, let us assist 100% of Malaysians who need help in improving their livelihoods and educating their children. We want the full participation of all stakeholders in our economy. A fair and equitable political and economic order, founded on equal citizenship as guaranteed in our Constitution, is the only possible basis for a united Malaysia and a prerequisite of the competitive, talent-driven economy we must create if we are to make our economic leap.

35. If we could do this, we would restore national confidence, we would bring Malaysians together in common cause to build a country that all feel a deep sense of belonging to. We would unleash the kind of investment we need, not just of foreign capital but of the loyalty, effort and commitment  of all Malaysians.

36. I don’t know about you. I am embarrassed that after fifty years of independence we are still talking about bringing Malaysians together. I would have wished that by now, and here tonight, we could be talking about how we can conquer new challenges together.