Tuesday, August 03, 2010

Where's NEM's "Market-Friendly" Affirmative Action Programme?

The Prime Minister should drop all pretense of implementing a “market-friendly and merit-based affirmative action programme” under the 10th Malaysia Plan

Over the past week, I've been vilified by Utusan Malaysia and Umno leaders for having suggested that one of the steps to renew investor confidence in the country's economic policies is to remove the bumiputera discount applied to luxury property purchases. The most recent threat comes from the Deputy Minister from the Prime Minister's Department and UMNO Information Chief, Datuk Ahmad Maslan who warned me not to “play with fire”, using the defense of the Federal Constitution and the “social contract” as the basis for the race-based property discount policy.

The most disappointing of criticisms however, came directly from none other than the Prime Minister, Datuk Seri Najib Abdul Razak himself. Instead of commenting on the merits of the policy, he warned DAP leaders “against continuing to place pressure on the Malays and Bumiputeras on this matter because it could cause anger and dissatisfaction among them."

In coming up with the above suggestion, I had no intention of fanning racial sentiments or taking away the rights of bumiputeras as defined in the Constitution. I was looking at the policy strictly from the perspective of economic distributive justice. A person who purchases a RM2 million property under the current scheme of say, 7% discount will receive a benefit of RM140,000. However, a lower income person who purchases a property of RM100,000 will only receive a benefit of RM7,000, a fraction of the benefit enjoyed by the rich. The current policy is skewed towards greater benefit or “subsidy” for the wealthier community, which runs against the spirit of affirmative action policies.

The Prime Minister had in his inaugural speech on March 30 to local and foreign investors on the New Economic Model (NEM) said that the new “affirmative action approach based on “transparent and market-friendly affirmative action programmes” “will mean greater support for the Bumiputera, a greater support based on needs, not race”. It is as opposed to the previous New Economic Policy (NEP) of “imposing conditions to meet specific quotas or targets”.

Datuk Seri Najib has since backtracked from the above NEM proposal of not “imposing conditions to meet specific quotas or targets” in the 10th Malaysia Plan launched in June. However he had maintained that while the race-based 30% quota or target for bumiputeras will be retained, the race-based affirmative action policy will be “targetted primarily at improving the livelihoods of Bumiputera in the bottom 40% households” through “more transparent, market-friendly and merit-based instruments”.

However, his latest outright rejection of the proposal to remove race-based discounts for luxury properties flies direct in the face of not only the original NEM objectives, but also the watered-down affirmative action reforms outlined in the 10th Malaysia Plan. There is nothing that is “market-friendly” or “merit-based” in the race-based affirmative action policy of granting property discounts to wealthy individuals who could afford properties in the range of millions of ringgit.

UMNO, its mouth-piece Utusan Malaysia and Datuk Seri Najib has instead chosen to racialise and politicise the issue, inflaming racial sentiments to achieve short-term political mileage at the expense of the economy.

The above is the perfect example of what Datuk Seri Nazir Razak, the CEO of CIMB Bank had lamented recently where “wrangling over affirmative action in the proposed New Economic Model (NEM) is causing uncertainty among investors.” He had added that the time has come for the government to protect the interest of the majority of the Malays and not just selected few.

Both local and foreign investors are confused by not only the indecision and ambiguity over the proposed reforms over the decades old affirmative action programme, they are also turned off by the clear indications that the deeds and policies of the Government often do not match their words, as expressed in the NEM as well as the 10MP.

If the Government has no intention to reform its affirmative action policies as it stands today, then the Prime Minister and UMNO leaders should stop the hypocrisy and pretense that the Government is going to implement a “New Economic Model” which will be based on “market-friendly” or “merit-based programmes”. It'll only prove to investors that the Government is “all talk, no action” and that the Barisan Nasional is completely incapable of change, much less the transformation that is required to take us to a developed nation status by 2020.


Anonymous said...

What is amazing is that Najib got some 15 months of honeymoon over his policy. Seriously, did we need that long to figure out it was never going to work?

No wonder its taken us 40 years to come to conclusion NEP is a pandora's box although it was warned from the Day 1. No wonder Mahathir stayed in office for twenty some years despite all the wreckage he left behind wherever he went. We knew we should have kicked him out in 1988 but even now we can't get rid of the guy.

What is it about us that still need to pretend the obvious?

UMNO is a dysfunctional party. There is no point pandering to dysfunctional group. If we are generous, its tough love. If we are ordinary, we kick-ass!

Anonymous said...

Why don't you let them be what they are today.Just let them have their house discount and whatever.
Just let Malaysia be or whatever good or bad in the future.

Chak said...

The phrase "market-friendly affirmative action programme" was probably coined by the same spinners as "1 Malaysia". If anyone were to ask for a concrete example, you would probably get the same runaround - which means no one really understands what all these soundbites actually mean.

Bunnies said...

I was just thinking...

if someone is rich enough to buy such luxury living quarters, would they be bothered about the discount? Yes, the amount is quite a bit but hey, when you are THERE, what is such discount? such amount would be lose change. Frankly, I dont think it matters to someone who is filthy rich.. of course, it is a different story if the person is not rich and want to squeeze himself to buy such luxury living quarters for whatever reason under the title of stupidity.

Anyway, yes, your suggestion is excellent. I think we should stop giving discount based on bumiputra. Discount should be given based on category.. as in poverty, poor etc. I think the poor deserves to be given discount to help them get out of that category. The very least, they would have a home.

Dont ask me what the hell is our PM or that ugly fat thing called DPM is thinking. If I have a say, I want them sacked! Useless, good for nothing pieces of lard.

Anonymous said...

Talk is CHEAP - after 15 months, I have given up on Najib -> he is just like Abdullah (too weak to do the RIGHT things for Malaysia).

Originally, I gave Najib the benefit of doubt (just I gave Abdullah in the beginning) but my colleagues were laughing at my gullibility. Now, I realize Najib is not capable of handling the pressure within UMNO to do the right thing for overall good of Malaysia (Muhyiddin & Dr M are breathing down his neck).

The foreign fund managers and investors whom I work with are beginning to believe that it's all TALK/FLUFF and no action again in Malaysia with Najib - the Govt. really needs to be changed - hopefully, it will be a peaceful change...pray hard.

Lee Wee Tak said...

NEP is about abolishing poverty and not about giving brownies base on race, regardless of need.

Go ask Tun Razak and Dr Ismail if this is the real reason for NEP. I am sure they would say "no"

If the rich can afford RM500,000, how come they still want "aid"? Tak malu ke?

Instead of coming out steamming out wildly like that, why don't they do a survey to find out if these rich people who probably getting gomen contracts or successful businessmen anyway, would need aid?

If a person can afford luxuries from government contracts, he already got aid once so why get another round of assistance?

Ahmad Maslan's opportunistic, irrational and deliberate "dun play with fire" smacks more like a politican than a person worthy of public office and policy setting

By taking the crab's walk way of debating (if you can call him debating) then the marginalised poor are indeed marginalised

so much about reducing subsidy and channeling to the poor

give me back the old RON price

Anonymous said...

Let's put it this way...we (all Malaysians including the Malays) have been short changed by the Government thru' its supposedly NEP which enriches the richer Malays. So, it's time to change!

Anonymous said...

It's amazing we're still debating NEM and NEP for so many months after Najib took over the helm of the country. I thought there's even a minister saying the time for NEP's over! In the meantime the FDI has plunged. What can the ordinary folks do instead of listening the experts of the two camps arguing the health of the nation's economy, scandals unfolding one after another?

Anonymous said...

Hey Tony,

Attacking Muhiyiddin on 1Malaysia? You sure or not? OK, the guy idea of 1Malaysia is nonsense but he may not debate you at all.. lah.. He will instead make the Malay don't like you and some PAS people find fault with you.