Wednesday, November 22, 2006

Deteriorating Income Disparity

Malaysia’s New Economic Policy (NEP) was first announced in 1970 as the principal policy response to the post-election race riots of May 1969. The NEP had two prongs, namely “poverty eradication regardless of race” and “restructuring society to eliminate the identification of race with economic function”. However, we all know that in essence and in reality, the NEP policies are pro-bumiputera, or more specifically, pro-Malay. Over time, the NEP became less about poverty eradication and more about “restructuring society”.

However, even in the context as a policy which aims to serve the interests of the Malays, has it achieved its objectives? The answer is obvious, and it is contained specifically in government documents.

No. The NEP, or its modern equivalent incarnates, the National Development Policy (NDP) or the National Vision Policy (NVP) have failed miserably in alleviating the plight of the middle-class and poor Malays.

For the past fifteen years since 1990, the income disparity between the rich and the poor has increased significantly and consistently over the years. The top 20% income earners in the country have increased their wealth distribution from 50.0% in 1990 to 50.5% in 1999 and 51.2% in 2004. On the other hand, the poorest 40% of the country, of which the Malays and other bumiputeras form a substantial majority, have seen their wealth distribution in the country decline at an accelerating pace from 14.5% in 1990 to 14.0% in 1999 to 13.5% in 2004.

The failure in the persistence of the NEP is obvious and clear for all to see. And the statistics is readily available in the Governments 8th and 9th Malaysia Plan. The perpetuation of NEP serves only in making the rich UMNOputras even richer, and the poor Malays, bumiputeras and other races poorer.

Datuk Zakaria Mat Deros' shennigans which aren't unique to Klang, the ruthless destruction of homes of the poor and the marginalised education system for the bumiputeras in Sabah serves as clear indications that the NEP has gotten it absolutely wrong for Malays and for Malaysia.

We need to promote a policy which is specifically targetted at the poor Malaysians, of whom the majority are Malays and bumiputeras such that they receive the necessary assistance from the government, society and community. We do not need a policy which serves only to protect the economic and political interest of the UMNOputra race.
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