Monday, 5 January 2015

Do away with Bumiputera agenda, prominent economist tells Putrajaya

Do away with Bumiputera agenda, prominent economist tells Putrajaya

Source / Author: The Malaysian Insider / Anisah Shukry

Economist Tan Sri Kamal Salih says ethnicity is no longer the basis of inequality. – The Malaysian Insider pic by Seth Akmal, January 2, 2015

The Bumiputera agenda has been the backbone of the Barisan Nasional (BN)-led government’s economic plans since 1969, its pro-Malay policies justified for decades by the economic backwardness of the Malays as a result of the British colonial policy of divide and rule.

“Putrajaya must go for the national agenda and create a national policy that is more inclusive. And if it does that properly, and avoid the pitfalls of the past, then I think it can achieve its economic goals, without having this red flag of being a ‘Bumiputera agenda’.

“If you are trying to reduce inequality and reduce the gap between the rich and the poor, the beneficiaries will be largely Bumiputeras anyway.

“So why go through the pain of being accused of being racist, when you can achieve the same goals without being racist?” Kamal, an adjunct professor of Economics and Development Studies at Universiti Malaya, told The Malaysian Insider in a recent interview in Kuala Lumpur.

Last November, the New Straits Times had reported that the government had spent RM46.5 billion to boost the Bumiputera economy through 23 programmes since September last year.

Bumiputera Agenda Steering Unit (Teraju) chief executive Husni Salleh, who is also Bumiputera Economic Council (MEB) secretary, said that all 23 ministers, secretaries-general and GLCs now have key performance indicators on Bumiputera economic programmes, monitored by Prime Minister Datuk Seri Najib Razak.

At last year’s Umno general assembly, the party’s deputy president, Tan Sri Muhyiddin Yassin, had proposed that a “new” National Economic Policy (NEP) be created to turn the Bumiputera economic agenda into a national agenda.

However, Kamal, who has dedicated his career to policy research, noted that inequality was more prominent within ethnic groups, rather than between them, and poverty could no longer be defined along racial lines.

“Ethnicity is no longer the basis for inequality. It has now become (defined) by income and the disparity between the rich and the poor, the gap between the CEO and the ordinary worker. So the whole thinking must change.”

This was evident in the recently launched Human Development Report 2013, which Kamal had authored with Dr Muhammad Abdul Khalid and Dr Lee Hwok Aun.

Among the report’s findings was that since 1970, inequality between ethnic groups has decreased and contributes only about 4% to Malaysia’s overall inequality in 2009.

In terms of relative poverty, it noted that the rate among the Malays was at 19.1%, followed closely by the Chinese at 17.9% in 2012.

However, race aside, the average Malaysian wage earner has to work 98 years to obtain the same earnings of an average CEO in 2011, according to the report, which was commissioned and published by the United Nations Development Programme.

Roughly one out of two Malays, non-Malay Bumiputera, Chinese and Indians also have no immediate liquid financial assets, making them vulnerable in the event of an employment or income shock.

In the meantime, the government’s pro-Bumiputera New Economic Policy (NEP) had stirred up resentment among the non-Malays against the Malays, and had not reached its 30% Bumiputera economic participation target, Kamal said.

“When the Malays keep getting these benefits in the NEP, or the policies are created in the name of the Malays, the non-Malays in the long run begin to resent it even though they had initially agreed to it. And the problem is not solved.

“The Malays, too, are envious that all the money only goes to a small group of people. Neither the Malays nor the non-Malays are happy,” he said.

Kamal said that affirmative action policies should stay, but they should be targeted based on the groups that needed it, rather than the entire Malay race as a whole.

“Some affirmative action policies should be state-oriented; some policies have to be more focused on rural areas than urban. The policies could be (targeted at) certain populations, social groups, or a territory.”

He cited as an example the Bumiputera poor of Sabah and Sarawak, or the entire state of Kelantan.

The Malaysia Human Development Report stated that households in the richest state, Kuala Lumpur, earn about 2.7 times more income than Kelantan, which is the poorest, with the gap between the two amounting to RM5,418.

Malaysians living in urban areas earned about 55% more than the average wealth per capita of the rural Malaysian, it said.

“The government of the day must not be discriminating against rural or opposition-led states,” he said.

“We need to review this allocation mechanism, otherwise the lesser developed states will never catch up.”

He added that the government must also balance affirmative action with merit-based action, otherwise it would discourage Malaysians from working hard and becoming independent.

“That kind of method of improving people’s lives through direct allocation sometimes creates not only a dependency but the opportunity for corrupt practices where those who are more connected and powerful get the advantage,” he said.

Kamal’s statement may not go down well with right-wing Malay groups, many of whom believe that the government should continue providing preferential treatment to the Bumiputeras, citing Article 153 the Federal Constitution.

In their calls for pro-Bumiputera policies to be enhanced, the right-wing groups have often maintained that Malays are under threat in their own country and must be protected by the government.

“‘Malays under threat’ is a negative statement,” said Kamal.

“You can’t feel threatened in a place where you are the largest community, and have all the institutions and even the constitution to protect your interest.” 

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