A dispassionate analysis of the forty years of implementation of the NEP-NDP provides many lessons. These include:
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There is no alternative to pro-growth policies if Malaysia is to attain the original goals of the NEP, namely eradication of poverty irrespective of race and economic restructuring; pro-growth policies are also essential if the Vision 2020 goals are to be achieved.
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Malaysia has achieved rapid growth and prospered when the policy framework has been pro-market and liberal.
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On the other hand, pro- distribution policies such as those favored and advocated by Faaland in the early 1970s and again revived now championed by PERKASA, have led to slow overall growth and more specifically low achievement of the restructuring targets.
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The private sector constitutes the main engine of growth. Over-regulation of the sector under the NEP framework creates impediments to investment, both domestic and foreign, thereby impacting on poverty eradication and opportunities for restructuring.
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There is a high cost of doing business when there is over-regulation or bureaucratic control. Distortions emerge that create opportunities for rent-seeking and corruption.
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Ethnic polarization surges when the economic cake grows slowly or not at all. National unity can only occur in circumstances when there are no perceived feelings of deprivation.
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Human capital investments have the highest rates of return and contribute to upward mobility for the disadvantaged. At the same time they are a prerequisite for attaining competitiveness. Present policies are skewed against real human capital development.
What the nation needs is not a return to failed and distorted policies, but a shift towards new instruments and approaches that will contribute to improved competitiveness, strengthened institutions that will deliver cost effective services in an efficient manner, eliminate corruption and rent seeking, and promote ethnic harmony via a Malaysian national agenda rather than promote divisiveness via ill- conceived and failed policies.
What the nation needs at this critical stage in its history is not rhetoric but vision. For one brief moment, hopes were raised that the adoption of the NEM would present an opportunity to move to a framework that would offer the means to escape the constraints of the NEP framework.
Alas, that opportunity has not been grasped. A mutating NEP lives on.
Malaysians need to be brought together and made to engage in a united war against divisive forces preaching race and separatism. A step in that direction would be the convening of a national congress to arrive at a consensus about national priorities foremost among which are the elimination of corruption, adoption of an educational system based on excellence, respect for good governance and the rule of law, and last but not least a return to the underlying principles of the Merdeka Constitution.
This critique of the 10th Plan has attempted to question some of the assumptions and assertions contained in the Plan. It has argued the case for a fresh set of policies and a different approach to confronting the many challenges the nation faces both domestically and internationally.
First and foremost, the majority of Malaysians desire a National Agenda that is not ethno-centric that contributes to national unity, prosperity and a future in which we are identified as Malaysians – not divided into Bumiputras and non- Bumiputras.
Second, there is a deep desire to live in an equitable society with absolute poverty eliminated, and income and wealth disparities reduced.
Third, Malaysians yearn for an open society that is just, in which human rights and the rule of law are respected.
Fourth, there is a deep desire for a society in which tolerance and respect for diverse views prevails.
Fifth, there is transparency and accountability in the process of governance.
Reaching these goals is as much part of the vision for Malaysia as a developed nation in income terms by the end of the coming decade. That status goes beyond some magical per capita income level. Sadly, the 10th Plan evades these issues and puts the nation on a path that entraps it further as a mediocre middle income country. Circumstances demand a new mix of policies that embrace:
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Rational Fiscal Policies: In the near term, bringing the fiscal imbalances under control; eliminate the distorting effects of both consumer and corporate subsidies in gradual stages and by increasing public sector productivity through elimination of waste, fraud, and corruption.
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Curb the scourge of inflation through a combination of fiscal, monetary and exchange rate policies that take account of market factors
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Improved delivery of public services by revamping the public service together with a restructuring of employment, including opportunities for non-Bumiputras to be hired and not constrained by a glass ceiling
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Deregulation to remove the dead hand of the bureaucracy to enable the private sector to operate effectively to achieve growth
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Address the issue of absolute poverty irrespective of race by a combination of measures that would include skill development, faster employment creation, and a coherent wage policy. Establish effective safety net programs that protect the weak and the poor.
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Introduce a minimum wage to ensure that those in the lowest rungs of the labor force receive a living wage. This would lift many out of poverty, reduce income disparities, and enhance competitiveness and modernizations of industry as private employers will be forced to become efficient and competitive.
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Equitable distribution of wealth; Support for competent Bumiputra entrepreneurs rather than cronies and the well connected; review the methodology for estimating equity share capital.
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Address the issue of quality at all levels of the educational system by enforcing standards and providing support to those in need to pursue educational opportunities; remove polarizing effects of various measures now in place
These proposals should be non- controversial and contribute to the development of a National Agenda that is unifying and not polarizing. It is the deepest wish of all Malaysians that there be a coming together, to confront the obstacles and challenges that lie ahead.