Sunday, February 18, 2007

Ali Baba Economy

Malaysia's New Economic Policy (NEP) fails the Malays and bumiputeras it sought to assist. And it fails all Malaysians who have a rightful stake in the wealth of the country.

Finally, the Government has come up with statistics which we have known for the past 2 decades or so. An overwhelming bulk of contracts granted under the NEP scheme to bumiputera contractors are subcontracted to other parties, particularly non-bumiputeras, “Ali Baba” style.

The Prime Minister, Datuk Seri Abdullah Ahmad Badawi himself admitted that an astounding average of 85.37 per cent of projects secured by Bumiputera contractors goes to the other communities.
...the prime minister said this not only foiled the government's desire to empower Bumiputera contractors but also, in a wider context, undermined the more important Bumiputera agenda to ensure the country achieved progress and stability in the long term.
What does the above statistics mean?

It means that the NEP has failed to improve the plight of the bumiputeras, particularly the poor bumiputeras in picking up competitive skills to improve their well-being in the longer term.

It means that the NEP only provides short term lucrative financial benefits to politically-connected bumiputeras, particularly UMNOputras and does nothing towards enhancing the skills and performance of bumiputeras in general.

It means that the country's precious government resources are not allocated efficiently due to non-competitive tenders and biddings. It allows the politically-connected to acquire contracts from the Government at much higher prices than the Government would have had to pay under competitive conditions.

It is clear that is the case, as otherwise, other contractors would not have willingly taken on the subcontracts at substantially lower prices, leaving the main contractors with lucrative “commissions” for doing very little. At the end of the day, the tax payers funds from every community – the Malays, the Chinese and the Indians are wastefully expended on the 'Ali Babas'.

It is high time to scrap the NEP which has clearly failed so many, and benefited so few of the population it was designed to assist, both bumiputeras and Malaysians.

We need ironically, a new economic policy which will focus on helping poor bumiputeras and poor Malaysians and helping them build wealth generating capabilities. The new plan should also serve as a foundation for national unity, not one of national segregation and disintegration which the current policy personifies.
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