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.


Shannon James said...

Targeting the income ratio in the name of the poor displays a serious misunderstanding of economics.

I suspect that the current ratio today talks more about the distribution of wealth amongst the richest 1% of Malaysians rather than the man on the street.

Consider the following example:
Suppose the top 5% of the Chinese just double their wealth, while the rest of the population remains the same. Then, the income ratio of the Chinese will boost up with respect to other races, and hence this ratio says nothing about middle-class Malaysians.

If we are truly interested to help the poor, we should instead ask whether the poor are given opportunities---not advantages---to succeed; opportunities like good schools, basic healthcare, etc.

Unknown said...

Hmmm.. Shien Jin raises a good point! ;)

By definition, to immediately reduce the alleged racial inequality, all the Malaysian government needs to do is to withdraw the citizenship from Lim Goh Tong and family, Quek Leng Chan, Francis Yeoh, Robert Kuok, Ananda Krishnan etc.

By removing the top ten richest non-Chinese, the disparity should narrow quite significantly. Problem solved ;)

Anonymous said...

The malays are suppose to be more competitive and successful.

Logically, the NEP benefits the malays but don't think it make them to be more successful. "Feel good" yes. But more successful, I highly doubt it would.

Proton is an example. Despite all protections it gets, how successful is she? Despite all the protection the malays get, how successful are they?

Will they succeed as the leading race in the long run?

Of course the government can always have protection policy forever. But we all know nothing in the materialistic world is forever, everything has a lifespan.

The world is changing, and so does our country. Too much of protection kills one's ability. Let your sons tumble and fall, and become more robust.

Anonymous said...

Guess who 'wrote' the script for the royal speech??

Anonymous said...

The point is not what the truth is. The point here is that the Royal address reflect what is the perception among bumiputeras - from the elite to the everyday man. So long as they believe it, so long as its a workable tool that UMNO can and will use.

One also has to remember, politicians are cowards i.e., opportunist by nature, not leaders of ideals and enlightenment. This is especially true in Malaysia and our current crop of politicians. They will always take the path of least resistance and greatest opportunity. So long its convenient and advantageous to perpetuate the myth, they will do so and the Royal Address reflect this

Anonymous said...

royal address written by razak baginda.....

Anonymous said...

I am surprised that the King's speech at the opening of parliament is regarded by you a if it is, in fact, his own speech.

The King's speech is, in reality, a statement of policy of the government of the day. The speech is handed over to the King by the PM.

Therefore, any stateament ib the King's speech is a statement by the geovernment of its intention. Any comment on the King's xspeech should be on the basis that it is a comment on government policy.

Anonymous said...

"By removing the top ten richest non-Chinese, the disparity should narrow quite significantly. Problem solved ;)"
Now I am curious to know: if we really stripe off their citizenship, what is the distribution of income among Malaysians in terms of number? Significant differently? Or else it is just another talk? ...