Nov 21, 2006

Malaysia plans to continue affirmative action policy to uplift bumiputras

Part I

(Channel News Asia) MALAYSIA: In 1970, Malaysia put in place an affirmative action-based policy with the aim of uplifting the economically disadvantaged bumiputra or ethnic and indigenous community.

Called the New Economic Policy (NEP), it has recently attracted heated debate in the country.

While many Malays want to keep it going, others, especially non-Malays are saying enough is enough.

In the first of this five-part series from Inside Malaysia, Channel NewsAsia examines the NEP's achievements so far, and how the policies have affected the lives of the country's multi-ethnic community.

The NEP was introduced in Malaysia following racial riots in 1969.

Nearly 200 people lost their lives, although the unofficial figure was said to be a lot higher.

The tragic events shook a nation that had gained independence just 12 years earlier.

Ramon Navaratnam, President of Transparency International Malaysia, said: "The damage done to the Malaysian psyche was very serious and people feared that we had not been sufficiently appreciative of the underlying currents."

As the former Secretary General, Mr Navaratnam was among those who helped to draft the NEP in 1970.

He says the Malays, who form a majority of the country's population, felt that they were being marginalised.

"At that time, the ownership of the economy and the income distribution were very severely skewed. Malays were the poorest. The question raised was - what's the use of political power when you don't have economic power?"

In contrast, the Chinese community was concentrated in urban areas and were primarily involved business.

The other minority group, the Indians, were largely in the rubber estates.

The affirmative action policies of the NEP were therefore aimed at correcting the socio-economic imbalances - to remove the correlation between race identity and economic functions.

Besides eradicating poverty, another objective was to raise the bumiputra corporate equity ownership to at least 30 percent by 1990.

But more than three decades on, the NEP targets have not been fully met.

The UMNO-led government says the 1997 financial crisis is to be blamed for severe losses to bumiputra investors. They also say there have been leakages and abuses in the system.

"A lot of these people did not keep what they have for investment and many sold it as soon as they got it. So it became 'easy come easy go'," Mr Navaratnam said.

The NEP was to have ended in 1990. But because of its limited success, the government decided to extend it.

However, it gave the assurance that it would not pursue the target at the expense of the non-Malays.

Najib Razak, Deputy Prime Minister of Malaysia, said: "We will endeavour to make the necessary correction over time but in the process of correcting, we will not be unfair to the other races or the other communities."

Still, Mr Navaratnam feels that such an affirmative action policy cannot continue indefinitely. "We must have a plan of phasing out the NEP; phasing out the subsidy mentality."

However, at the recently concluded UMNO general assembly, Prime Minister Abdullah promised that as long as there is economic disparity, the affirmative actions policy will continue.

He said the original 20-year timeframe was just too short for the bumiputras to play catch up with the other races. - CNA/so

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