Thursday, March 22, 2007

Royal Address on Inequality

The Yang Di-Pertuan Agong, Sultan Mizan Zainal Abidin in his maiden address when opening the first meeting of the Fourth Session of the 11th Parliament, said the implementation of the distribution strategy must be continued so as to eliminate the income disparity among the races which is still wide. He said that “the Government must ensure the target to reduce the income rato between bumiputra and Chinese to 1:1.5 by 2010 is met. The ratio between bumiputra and Indians is to be reduced to 1:1.15 over the same period.”

I believe that income inequality, whether amongst Malaysians or between races must be reduced significantly or eliminated altogether. However, the mechanism to achieve such a result must be based on a needs-based affirmative action policy and not a race-based one, such as the New Economic Policy (NEP).

While there may be significant income inequality between bumiputras and the other ethnic groups, a race-based policy will inadvertently perpetuate inequality between the various races, and further accentuate the income inequality within the bumiputra ethnic group.

When a policy specifically targets a racial group instead of those who are specifcally in need, those who are best able to take advantage of the affirmative action policy will naturally be those with better education, better connections with the political elite as well as those with greater financial power. Hence, a policy such as the NEP will only serve to benefit parties like UMNOputras as epitomised by the Selangor state assemblyman, Datuk Zakaria Mohd Deros.

The continuation of the existing policy will also exacerbate the already widening ">income gap within the bumiputra community. As highlighted in the 9th Malaysia plan, the Bumiputra community not only have the highest income inequality in the country, the inequality has also grown by the fastest between 1999 to 2004.

If the government is serious about raising the plight of the bumiputras, the affirmative policy has to be needs-based. Only then will all the necessary benefits go to the poor bumiputeras, as well as the poor of other communities. This way, it will eliminate leakage to the already wealthy and powerful amongst bumiputras, and hence becoming more effective in raising the income levels of the poor, meeting the objectives set out by the King.

Therefore even though the King has called for redressing the ethnic income disparity between the various races in the country, it is critical for the Government to terminate its affirmative action policy based on race, such as the NEP, and focus purely on merit and needs. It is the most effective and practical way not only to raise the income of the poor bumiputras, but also the poor of other neglected communities like the Indians and Chinese.
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