Wednesday, March 24, 2010

Will NEM Fail Like NEP?

Judging by the targets set by the Government itself, that is to achieve 30% bumiputera equity, the New Economic Policy (NEP) has been proven to be a complete failure over the past 20 years as according to government data, bumiputera equity ownership has remained at 19.4% in 2006 compared to 19.2% 20 years ago in 1990, after hitting a peak of 20.6% in 1995.

The recent Government Transformation Programme (GTP) document has quoted and concurred with Tun Musa Hitam where he asked whether “our redistributive economic policies are indeed holding us back competitively... Race-based economic policies do not sit well with the realities of globalisation and free trade.”

In addition, the GTP Roadmap specifically highlighted the fact that

  • “another outcome of the NEP was a sense of deprivation, discrimination and even resentment felt by the non-Bumiputeras...”
  • “there has also been a widening of the income gap within the Bumiputera community, leading to rising discontent...”
  • “these factors have pushed many Malaysians, especially professionals, to work and reside overseas, in economically more advanced countries with attractive pull factors... there are signs that this brain drain has become increasingly serious.”

The above are clear admissions by the Government that despite the initial success of the policy during the 1970s and 1980s, the NEP has failed over the past 20 years, and hence there is an absolute need for a “New Economic Model” (NEM) as proposed by Datuk Seri Najib Abdul Razak.

Pakatan Rakyat and DAP has been consistent is seeking a new economic agenda which is founded on merit and competition, supported by affirmative action based on needs and not race, and we are pleased that at least on paper, the Government is finally coming around to these principles.

However, the perpetual delays in the proposed NEM since the end of last year has raised serious concerns that the policy will really become a transformative economic policy which will raise Malaysia out of the doldrums.

Over the past few months we are seeing increasing pressures from race-based vested interest parties such as Perkasa and Malay NGO Consultative council which has caused the Government to waver in its original goals of the NEM. In fact, Deputy Minister of International Trade & Industry, Datuk Mukhriz Mahathir specifically pointed out that the NEM “would have the spirit of the New Economic Policy” earlier this month while many other Ministers have issued vague and conflicting statements on NEM causing further confusion.

We would like to reemphasize the fact that with an economic policy founded on merit and competition, supported by affirmative action based on needs and not race, is the best policy not only to revive Malaysia's economic fortunes, but also to uplift the plight of the poor of whom the majority are bumiputeras. We believe that any affirmative action policies based on race, such as the NEP will only result in the wealthy and more influential of that particular community benefiting from such policies, while the vast majority of the community would not benefit proportionally as proven by NEP's failure over the past 20 years.

Hence, we would like to call upon the Prime Minister to not allow his landmark NEM to become derailed into meaningless oblivion by becoming in essence the extension of the NEP, an fate suffered by the 2 previous policy replacements to the NEP, the National Development Plan (NDP) in 1991 and the National Vision Policy (NVP) in 2001.
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