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Tuesday August 20, 2013 MYT 8:14:00 AM
Tuesday August 20, 2013 MYT 8:22:40 AM
by yuen meikeng
(From left) Dr Muhammed, Syed Akbar, Yeoh and Dr Gomez sharing ideas with Shaila at Menara Star in Petaling Jaya.
Affirmative action has been in the country for over 40 years and while some say it has managed to bridge the economic gap between the Bumiputras and non-Bumiputras, there is debate on whether it should continue.
United Nations Development Programme Malaysia Human Development Report national consultant Dr Muhammed Abdul Khalid, blogger Syed Akbar Ali, Asian Strategy & Leadership Institute (Asli) CEO Tan Sri Michael Yeoh and Universiti Malaya’s Prof Dr Edmund Terence Gomez discuss this during The Star’s Cafe Latte Chat titled “Should Affirmative Action Continue for the Majority?”. The Star’s assistant news editor Shaila Koshy was the moderator of the session.
Shaila: Has affirmative action managed to reduce communal tensions? In reducing poverty, has it instead created intra-ethnic poverty?
Yeoh: If we look at the original intent of the New Economic Policy (NEP), we must remember that it has two limbs. Firstly, to eradicate poverty irrespective of race. Secondly, to restructure society to avoid identification of race with economic function. I think the country has done quite well by reducing the poverty level. For the second limb, we see a creation of a Malay middle class. This was non-existent pre-NEP and so there are some successes. Deviation in implementing the policy has created some ethnic tension. It could perhaps worsen race relations in the country and also lead to an increase in intra-ethnic inequalities. So while the NEP has achieved some success, it has also some negative effects as well.
Shaila: Do you think the deviations came from the civil service or were they taking a cue from politicians?
Dr Muhammed: The NEP was not race-based. The poverty rate was 17% and in 2012, it was less than 2%. Bumi ownership is a problem. It was 19% in 1990 and now it is about 22%. But if you look at Asli’s studies, it has broken the 30% mark. So if you use this as an indicator, then it has met its target. But the overriding objective is national unity. Has it created tension and instability? I say no. Since 1969, there has been no racial riots. The Kampung Medan incident was due to socio-economic imbalance. It was not a conflict between the Chinese and Malays. It was between the Indians and Indonesians. Has it met its target? Yes. Has it widened inequality? I say no, based on numbers. In 2012, inequality was most reduced among the Malays. The current highest inequality rate is among the Indians, followed closely by the Bumis and Chinese. However, the policy has to be revamped a bit. If you want to help the poor, don’t give same privileges to rich Bumis. Its implementation needs to be improved. As for creating tension, I disagree.
Syed Akbar: The value of (the) affirmative action started in 1970 has been proven. Malaysia has been a stable country in this region. Affirmative action kept the country in one piece. Those wealthy were identified as one race. So now, we have bridged this gap. We achieved a lot in the past 40 years. We need to tweak it as time passes. We were a rural-based country and we were agrarian. Now things have changed and we are (a) manufacturing economy. We find millions of Malays living in urban centres where they share the same issues as non-Bumis. So as for the policy in the 1970s, does it still hold true for Bumis? This is where we have to make changes. Now, do we need to give 7% discount for a RM2mil to RM3mil penthouse for Bumis? This is something we must consider. It is not time to write it off (the) books. People will know when the times arrives but we need to tweak it along the way. We need to open up discussions intelligently.
Shaila: No one in Malaysia has objected to the NEP. We do not want to see any segment in society poorer than the rest. But has it been abused?
Dr Gomez: When the NEP was introduced, there was no denying we needed it. It was imperative. It has done enormous good for Malaysia. But the NEP is a paradox. It was a race-based policy trying to bring about national unity. It was also very clear that there was a duration - 20 years. If we do not have that duration, it can lead to massive problems with those who have not been privy to it. The debate now is whether it should be a race-based policy or class-based affirmative action. For all the good the NEP did, there are new inequalities. We cannot deny that we have a massive brain drain problem and massive declines in the public service delivery system. This needs to be addressed. We still have race-based parties. We have not moved away from race-based to class-based.
Shaila: Hasn’t this been raised to the Government before?
Yeoh: People did set up a National Economic Consultative Council in 1989. It was rightly done because 1990 was supposed to be the end of the NEP. They brainstormed and debated on issues and challenges.
Dr Gomez: For the New Economic Model (NEM), there was a debate on whether affirmative action was needed. Has affirmative action succeeded when introduced in business? While we have seen failures in business, we see successes of affirmative action being implemented in education. That was where we enriched the new middle class.
Dr Muhammed: I have to stress that the NEP is not entirely race-based. The first prong is not race-based but the second is race-based. We are confused with affirmative action and the NEP. Affirmative action doesn’t have a target but the NEP does. If you look at numbers, the NEP has met its objective but there are problems. We like to say that the NEP is the cause of brain drain but there was a study on why people leave and it is all monetary reasons. It is not because of the NEP. Singapore, Hong Kong and Israel have a higher rate of brain drain. Lee Kuan Yew was wrong in his book to say brain drain in Malaysia is due to race based policies. Our wages in Malaysia are very low. It is monetary incentives that drive people.
Shaila: Would you agree it is not just money? Because some people in positions decide to interpret goals in a particular way. Things were mismanaged and that’s why people were leaving.
Dr Muhammed: I agree with you but the NEP doesn’t go into the labour market in the private sector. Eighty-five percent of brain drain comes from the private sector. Who controls the private sector?
Yeoh: The NEM is a good way to move forward. It is a question of implementing it. We haven’t implemented it in full.
Syed Akbar: I think my view is that while affirmative action helps one community, it should not obstruct others from doing what they want to do.
Dr Muhammed: Affirmative action has to be fluid. Non-Malay Bumis are worse off now. The focus should be on the people of Sabah and Sarawak, orang asli and the disabled community. We do nothing about them. There are a few dimensions of inequality that we should focus on. Moving forward, this should be given focus.
Shaila: Do we have any opportunities to put inclusiveness in the NEM?
Yeoh: There is a proposal to set up an Equal Opportunities Commission. This is worth to push for implementation. This is one of most interesting proposals from NEM. Create opportunities for not only one race but from gender perspectives and for disabled groups. This is one specific recommendation that needs to be looked at. Another proposal in the NEM is to have an independent review every two years on how weaknesses need to be addressed. Now, it has been two years after the NEM, so we should see how the government can this independent review.
Dr Gomez: New inequalities from the NEP is spatial divide. Poor states are Bumi-dominated like Sabah, Sarawak, Perlis and Terengganu. Interestingly enough, these states are with oil. So it raises questions that something is fundamentally wrong with inequities. It is time to transcend race and move beyond from race-based but what is really required to bring inclusiveness in the country.
Syed Akbar: We must understand that affirmative action is because of race. There is a need to help people based on socio-economic status and also based on ethnicity.
Shaila: How do we move forward?
Dr Gomez: One of the most important things is that history clearly indicated when affirmative action was introduced for education, it worked. In Malaysia, the stress was for early education. It put kids through a good school system and they became the new Malay middle class. That was the success of the NEP. But when it came to business, affirmative action has not worked. Affirmative action in education is the way forward. We should focus on getting education right and solve institutional decline. If we can have a proper education system, we equip people with skills so that they do not need affirmative action. This should be focused on in the NEM and Malaysia’s Education Blueprint.
Yeoh: What we need to do is to maintain national unity. We need to realise we are at the globalisation age and our competitiveness needs to be improved. I think we also need to ensure that there is social justice. Policies must be fair and just to everyone, not just a particular community.
Syed Akbar: I want to suggest something about government procurement. Government procurement contracts and spending has been seen as a way to build up the Bumi economy. There are abuses in system. Only the Finance Ministry contracts division is in charge of dishing out contracts. Only one department. My suggestion is the government should set up ministerial level administration to administer government procurement for bringing up the Bumis. We have abuses where contractors form a cartel to cheat the government. Right now there is only one division handling contracts. We need to be more scientific about it.
Dr Muhammed: Affirmative action and NEP works, to me, because it gives us national unity and stability. The country prospers. Everybody prospers. Because of market imperfections and historical issues, you still need affirmative action but it has to be monitored. We cannot have economic policy in isolation as you need supplementary policies. Social issues must be taken into account. What we need is for us to address apathy. Social justice is important. The NEP has shown that nobody is being penalised. But to do away with it is a grave mistake.
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