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.
Malaysia reported a 7.2 per cent economic growth last year, after a 1.7 per cent dip the year before.
However, its tiny southern neighbour Singapore registered a 14.5 per cent jump, equalling it as Southeast Asia’s third largest economy.
The Wall Street Journal added in its opinion article that the events in the past month, referring to demonstrations by Indian rights group Hindraf, suggest that the decades of pro-Bumiputera policies under the NEP designed to “paper over ethnic divisions have only perpetuated the strife instead.”
Groups like Hindraf accuse the ruling coalition of yielding too readily to nativist Malay voices that agitate against meritocratic reforms, the newspaper said.
Bloomberg’s BusinessWeek also ran a column by Australian researcher John Lee which said that pro-Bumiputera group Perkasa’s influence among Umno’s Malay constituents made it difficult for Prime Minister Datuk Seri Najib Razak to push through reforms.
“So far, little has been done to roll back pro-Bumiputera restructuring and redistribution policies or initiatives that would reduce the role of the state in the economy,” the weekly newspaper said, calling the government’s efforts “a phony war on affirmative action.”
“Significantly, Najib has backed away from abandoning the four-decade-old sacred tenet that Malays own at least 30 per cent of all corporate assets in the country,” wrote Lee, who was born in Ipoh, Malaysia.
“The obsession, however, with improving the lives of Bumiputera-Malaysians rather than all Malaysians has come at a heavy price. Many NEP affirmative action policies are still in place today (and some have even been extended). This living legacy is behind much of the pessimism surrounding the country today,” he said.
The article added that economic protection in the name of affirmative action has led to unproductive and wasteful habits.
“Foreign perception that Malaysia’s affirmative action economic environment makes the country an uncompetitive place to invest is damage enough,” Lee wrote.
He added that Malaysia’s net foreign direct investment (FDI) fell from US$2.56 billion (RM7.76 billion) in 2004 to negative US$7.67 billion in 2008 and recovered to only US$1.95 billion in 2009 — the worse decline among its developing and developed neighbours.