The recent headline in one of the national papers ‘Gloom till end of next year’ together with a photo of our Second Finance Minister crying, has encouraged me to write this commentary article. It touches on various sensitive issues that may seem to be disconnected but in fact are clearly part of a larger national problem.
Current political scenario
Few can deny that we live in unprecedented turbulent times. The recent controversies over a range of issues covering so many areas of life – economic, education, administration of law and justice, religious, socio-cultural – all point to heightened public frustration and widely held perceptions of a nation that is losing, if it has not already lost, its sense of direction. There is a grave danger that should we fail to act quickly and decisively, we will not only endanger what we cherish, that is, our unique Malaysian way of life but also that the country can tip over the brink, and descend into disharmony and disaster.
The current Perak constitutional crisis is a classic example of our political situation in which in the quest for political (and economic) power, the public has been totally ignored and sidelined. More ominously, the instruments of the state – civil service, police, judiciary, official mass media - are being used in an arbitrary fashion so as to make a mockery of our system of democracy and the basic constitutional principles of the separation of power.
Current economic scenario
Various international and national socio-economic indicators have shown in the last few years that Malaysia's economic future is getting more difficult and stormy. These indicators include recent global competitiveness, inward FDI performance, stock market capitalization, government inefficiency, business inefficiency, government intervention in the economy, corruption level, environmental pollution, wages and prices and income inequality. Other subjective indicators such as the sense of material well-being and security, socio-political stability, civic freedom, etc. are closely correlated to the economic indicators and reveal a worrying downward trend. The Government itself has admitted to many of these concerns though in oblique fashion.
What is holding the economy back is the poor quality of leadership, structural inefficiencies, political patronage, wastage and blunting of economic edge arising from economic policies such as the Privatization Programme, Industrial Master Plan, the National Automotive Policy, etc. that contain serious design and implementation flaws, as well as the massive costs of bailouts which will increase further with the economic stimulus package..
At the same time, the failure to reform state-owned companies and restrictions and controls in vital sectors such as the distributive and other trades and service sectors that were formulated on the basis of narrow racially based objectives threaten to become major constraints to growth and competitiveness.
If the leadership does not rise above narrow parochial interests and jettison past policies that had only enriched vested interest groups, the economic future of young Malaysians is likely to worsen from its present state. Many Malaysians not engaged in politics - including Deputy Prime Minister’s brother, Nazir Razak - have called on the Government to show true economic leadership and immediately implement deep reform policies but there has been no response on the Government’s side. Clearly, vested economic and political interests are still setting the economic agenda for the country.
Where has the NEP money gone?
As you know the NEP issue is a very sensitive issue. Perhaps if I give a few tranquilizers for a start, you may not feel so pained to read on.
Tranquilizer No. 1: Euro Commissions
As reported by a French newspaper recently, in October 2007, Deputy Defense Minister Zainal Abidin Zin acknowledged in Parliament that the vendor of the Submarines, Armaris had paid 114 million Euros in commission to Perimeker, a company controlled by Abdul Razak Baginda. As soon as the money was transferred, Atlantuya, a Mongolian lady came to Kuala Lumpur to claim her USD 500,000 commission from Razak Baginda. Subsequently she was murdered in the most gruesome manner. Razak Baginda was arrested and charged in court. After a trial considered dubious by many observers, Razak Baginda was acquitted with the accusation of having ordered the murder and released in November 2008. Accused of having perpetrated the murder, Azilah and Sirul are now having their case heard. The verdict is scheduled for the 9th of April but it is likely the impact of the case will continue long after in Malaysia, Mongolia and France.
Tranquilizer No. 2: Tenders Not Required
Just a few days ago, our Deputy Prime Minister Najib Razak announced that contracts valued at less than Rm 500,000 each ( Rm 200,000 before) are not required to go through the normal tender process. He also announced at the recent Kuala Trengannu by election that the Government had allocated Rm 900 million (Rm 600,000 last year) for small Bumipuerta contractors. If this allocation was not enough, the Government was prepared to increase the amount.
Tranquilizer No. 3: Toll Rate Hike
The practice of awarding large projects without calling for tenders has cost our Malaysian taxpayers and the average citizen much financial pain. Everyone is aware that as a result of giving out water, highway and other concessions without calling for tenders, all the project costs have been inflated to cover the ‘commission’ and other dubious costs. The argument has been made that since the concession agreements are bankable instruments and banks have already given out large amount of loans to finance the projects, the concessionaires can insist that the Government needs to follow the words of the agreements closely. This is the justification used to explain why the Government has been compensating the highway concessionaires hundreds of millions of ringgit of public money just to delay the toll rate hike.
Tranquilizer No. 4: Water Rate Hike
Another case of the financial pain arising from the NEP-influenced concession and tender system prevalent in our economy is the ongoing tussle between the Selangor State Government and privatized water companies. Presently, the State Government is negotiating with the Selangor water concessionaires to delay the water rate hike of 37% with effect from 31st March 09. If the State Government is not successful, the next tariff hike of 25% will be in 2012 and consumers will be even more shocked in 2015 when they have to pay more than Rm 2 per cubic meter of water they use. At that point, all Selangor residents will realize how much corruption and badly conceived national economic policies can directly harm them.
Do we have the political will to plug up these leakages?
An ethnic approach to wealth accumulation and distribution in Malaysia has underpinned national policymaking and implementation for over 38 years now. In no other country in the world is there to be found a similar preoccupation as seen in the longevity and wide array of NEP policies.
Many experts and laymen are of the opinion that the NEP – which currently affects virtually all aspects of the economy and human resource development – represents Malaysia’s biggest obstacle to competitiveness, social cohesion and meeting the goal of becoming a developed country.
But if the NEP is such an impediment to progress, why has it not been dismantled? The most often touted reason it is in the interests of the dominant elites that this policy be continued perpetually in its present form. The ruling party has enormous resources and tremendous capacity to co-opt or coerce dissenting elements that question the NEP. Critics are offered the carrot or the stick into staying passive or compliant within the fold of the system.
Furthermore, the public is prohibited from questioning the implementation of the NEP or else they could find themselves charged under the Sedition Act or ISA for challenging ‘Malay rights’.
The NEP is shrouded in statistical spin and official data mystification. In all the official mass media but especially over the Malay vernacular media, the official view has been widely propagated and reinforced by the opinions of supporters of the status quo that have benefitted from their NEP privileges. Some of the views may have been well-intentioned but they have now taken on the colouration of sound-bites that have little substance. Other views have consisted of comments that smack of political grandstanding.
Few of the statements provided by groups and individuals that are permitted over the official mass media - as well as very little of the news analysis on the NEP – have demonstrated a deep knowledge of the complex history of the policy and the many layers of meaning it connotes to different groups of Malaysians.
For the non-Malays and increasingly for many Malays, generally, NEP is understood to be the socio-economic enabler of Malay ‘special’ political rights, extracted at a serious social cost to the other races. It especially discriminates against Indians and other smaller minorities such as the Orang Asli and East Malaysian natives.
If we could have provided unbiased and unclouded analysis to the public on the role of NEP-type policies, this would have led to a spirit of willing sacrifice and mutual accommodation between the races. It is still possible if all stakeholders are fully aware of what the NEP has achieved; what its shortfalls are; who have benefited and who have been left behind; what programmes have worked and which have failed; and where inefficiencies, leakages and wastage have taken place.
An open, rigorous and transparent stocktaking of NEP policies with regard to poverty alleviation, restructuring of public and private sectors, corporate equity ownership, government procurement, education, urban development, and other contested sectors can provide the starting point for building a new national solidarity and consensus.
There are two essential points that need to be emphasized when deliberating on or debating the NEP.
The first is that the NEP should not be – as is often done – equated with the special position of the Malays and other indigenous communities as defined in the Constitution. This special position – not rights or privileges – is entrenched and is not disputed. It is not the subject of contention when critics of the NEP question or voice their concerns about NEP-related issues.
To treat these two subjects as though they are similar or even closely related diminishes the level of subsequent discussion and analysis. Unfortunately, it seems to be the preferred strategy of various interest groups and biased commentators to invoke the spectre of a challenge to the special position of the Malays whenever the issue of the NEP is aired in the open. This reeks of an attempt to obstruct or silence legitimate public discourse on a public policy that has shaped and dominated many aspects of life in the country.
The second important point to note is that the NEP ended in 1990. Subsequently it has been replaced by the National Development Policy (NDP) and the National Vision Policy (NVP). At the same time, the two prongs of the NEP – eradicating poverty and restructuring society – continue to be pursued in subsequent national policies. In particular, the restructuring of society prong (or race-based approaches, objectives and targets) underpin the present NDP and the Ninth Malaysia Plan.
It is the race-based operational philosophy and thrust of national development which is contentious – not the NEP itself per se, not poverty eradication, and certainly not the Malay special position as defined in the Constitution.
The truth of the matter is also that the NEP has been successful and the social and economic position of the Malays has been considerably uplifted. If this vital information were made publicly available, there will be less talk about Malay under-achievement and less insecurity within the Malay community that they are losing out to the other races. In fact the Malays – though not the non-Malay Bumiputras - should be justly proud that they are the majority ethnic community in many highly paid and prestigious occupations.
That this information is not disseminated is due to the lack of transparency and dependability of the official statistics provided to the public. Malaysia is badly lagging behind many countries in ensuring that its statistical system is accessible, objective and transparent.
Need for a New Road Map for the Country
Malaysians are restive, disenchanted and demoralized. Ethnic tensions are rising, deliberately stoked by those who want to keep their grip on power at all cost. To heal the divisions in the nation, the NEP, one of the mains causes of widespread disaffection among the minorities and as well as majority Bumiputras who voted in droves against the Barisan Nasional, has to be opened up to public scrutiny and analysis, and a new national development policy put in place for the country.
Najib Razak’s Call on NEP
This is by no means a new, radical or communally divisive proposal that I am making. On 3 February, Datuk Najib Razak, the incoming Prime Minister’s brother called on the Government to show true economic leadership. In his statement which was largely ignored by the country’s mainstream media, he noted that the global economic crisis is having a brutal impact o the world’s real economy. It is not just another economic slow-down; this crisis is shaking the core of the established world economic order.
For Malaysia to overcome this crisis, he suggested that the Government should move beyond just orthodox fiscal stimulus and monetary measures. Unfortunately this is exactly what has taken place in the past few days as can be seen from details of the second stimulus package.
In Nazir Razak’s view, five key strategies are needed to reposition Malaysia in the new world economic order. These were:
1. Re-examining NEP – Review how the New Economic Policy retards national unity, investments and economic efficiency and develop a new, more relevant framework for economic policy-making.
2. Leveraging on “MCI” – There will be an accelerated shift inn economic power to Middle East, China ad India as a result of this crisis. Malaysia should further exploit its unique comparative advantage in terms of social and geographical connectivity with these economies.
3. Encouraging cooperative spirit among “ABC” – the Government should improve collaboration between Academia, Business and the Civil Service to develop and execute national development plans.
4. Stimulating acquisition of brands and distribution – The Government should develop a clear framework of incentives and co-investment opportunities to take advantages of acquisition opportunities abroad that can fill traditional gaps in branding and distribution for Malaysian products and services.
5. Attracting talent – The weak labour markets in developed countries is a source for talent to work in Malaysia with particular emphasis on filling gaps in the education sector to improve teaching of key subjects especially English and Mandarin.
While fiscal and monetary stimulus would provide a temporary boost to the economy, he emphasized that we also need strategic and proactive leadership to advance Malaysia’s economic position in the new world order that will emerge from this crisis.
To me and many other patriotic Malaysians such as Nazir Razak, only a new road map based on more equitable, enlightened and inclusive principles can bring out the best amongst all communities. Only a new socio-economic order based on national unity, equity, justice and growth – one in which Malay and non-Malay marginalized and vulnerable are provided equitable assistance combined with a system of meritocracy that rewards the best, irrespective of race – can guarantee the future for Malaysia.
Let me end by borrowing some words from Julia Caesar’s classic speech on patriotism and rework it in the Malaysian context
Beware of the leaders who beat the drums of patriotism in order to implement the NEP unscrupulously and fill their own pockets, for patriotism is a double edged sword. It emboldens the blood and narrows the mind. When the drums of corruption have reached fever pitch it emboldens the blood and narrows the mind. When the mind closes, the eyes cannot see and the hand will sign any thing. How do you know? For this is what I have done. I am Caesar, the signatory of the concession agreements.
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