Malaysia rocked to the economic core
Posted by Raja Petra
Thursday, 20 March 2008, MT
"A few years ago, all talk about 'Malays losing power' would have invoked street demonstrations but it doesn't seem to work now," says Rustam Sani.
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What now after NEP ?
Wednesday, 19 March 2008
If the NEP goes, what will replace it? The Malaysian Economic Agenda? This policy calls for providing assistance to all those who need it, irrespective of ethnicity.
Fine, but PKR, DAP and Pas leaders must realise that the people voted for more subsidies and greater government social spending. This is what they were promised. They did not vote for “free market”, “business friendly” policies. Neither did they opt for neoliberal policies (privatisation, corporatisation and policies favouring the corporate elite), which have actually widened the gap between the rich and the poor.
Voting for greater democracy does not mean support for “free-market” policies. Actually, what we often have in Malaysia is a situation, as economist Charles Santiago puts it, “where you had subsidies for the rich and a free market economy for the poor. While you subsidise the rich on one side, the debt of the country is being borne by the middle-classes and the poor”.
So true - just think of the billions of ringgit in gas subsidies dished out to the lucrative Independent Power Producers, who are raking in the profits.
Remember, ordinary Malaysians voted in droves for people-centred development (projects that really benefit the ordinary people) rather than corporate-driven development (mega projects that primarily benefit the corporate elite while ruining the environment).
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Power shift to the provinces
By Anil Netto, ASIA TIMES ONLINE
Malaysia's race-based affirmative action policies have come under the spotlight in the aftermath of a pivotal general election which saw opposition parties making sweeping gains.
Opposition parties captured the "rice-bowl" state of Kedah and the industrialized states of Penang, Perak and Selangor in addition to retaining power in the Muslim heartland state of Kelantan on the east coast in the March 8 general election.
The three industrial states will be ruled by coalition governments made up of the multi-ethnic - but largely ethnic Chinese - Democratic Action Party (DAP), the multi-ethnic People's Justice Party (PKR) and the Islamic party PAS. The opposition parties won 82 of 222 parliamentary seats while the ruling federal coalition Barisan Nasional (BN), or National Front, clinched 51.5% of the popular vote.
The new state governments now have their work cut out for them to make good on their opposition campaign promises of ending the New Economic Policy in favor of their "Malaysian Economic Agenda". The NEP was introduced in 1971 to uplift the economic position of the majority ethnic Malays and remove the stereotyping of race with specific occupations.
But along the road, economic planners became obsessed with its 30% target for bumiputra (Malays and other indigenous groups) equity ownership while huge privatization projects and neo-liberal policies benefited the elite of all ethnic groups. This concentrated wealth in their hands while fueling discontent among the lower-income groups who have struggled to cope with rising prices for essential goods and services, as income inequalities grew.
One of the first things the new state government in Penang did was to announce a major policy shift in running the government free from "the New Economic Policy that breeds cronyism, corruption and systemic inefficiency".
"We will implement an open tender system for all government procurement and contracts," said new chief minister Lim Guan Eng from the DAP during his swearing in on Tuesday. The new state government would also practice transparency by uploading information of such tender bids in an Internet portal to be set up for public access, he added.
That did not go down well with leaders of the United Malays National Organization (UMNO), which along with coalition partner Gerakan, had just lost power in Penang.
On Friday, some 1,000 protesters led by UMNO representatives staged a demonstration outside the Penang chief minister's office. They were worried that ethnic Malays would be sidelined if the government disregarded the NEP.
"I do not think Malay contractors object to the open tender system as it is more transparent. I just want to rectify some of the mistakes committed during the previous administration," Lim later clarified.
The pro-NEP demonstration is the action of people trying to come to terms with what is going on, says Rustam Sani, one of the country's leading public intellectuals and writer on Malay and Malaysian nationalism. "The language of ethnic politics is suddenly not working and they are hanging on to it and trying to revive it."
"A few years ago, all talk about 'Malays losing power' would have invoked street demonstrations but it doesn't seem to work now," he added.
"For UMNO, the language and political idiom they have used all these years doesn't seem to be as effective as it used to be. They have to re-tool the political idioms or re-tool themselves! That's not easy - it's a political and intellectual challenge; it's a tough job."
As for the new opposition-led state governments, Rustam said he detected a certain impatience in its onslaught on the NEP from the start: "We need to go slow. I hope there is more wisdom. We must not let them use our impatience with trying to get rid of such policies [to their advantage]."
Prime Minister Abdullah Badawi, for his part, said the question of abolishing the 20-year NEP was a non-issue as the policy expired in 1991. Since then, he pointed out, the government has set up a National Economic Consultative Council (Mapen) to take responsibility for planning the country's economy.
"Through Mapen, many policies had been agreed upon for implementation by the government and among the policies were two policies taken from the NEP, with one being the overall eradication of poverty irrespective of race, and the second dealt with distribution," he said.
But the term "NEP", with its reminder of pro-Malay policies, carries huge historical and psychological baggage, said Rustam. "And it will take some time for the new state governments to explain their agenda. There is a need for both sides to handle change and the perception of change."
Opposition icon Anwar Ibrahim led the charge in calling for an end to the NEP in favor of a new Malaysian Economic Agenda in the run-up to the March 8 general election. Anwar himself believes in a pro-growth free market economy balanced by humane policies to ensure "equity and distributive justice".
The NEP has a certain flavor to it that UMNO can still exploit, warned Rustam. "I think there is no need to [actually] say that 'we are ending the NEP'. We can achieve more by implementing something that is different from what has been done all this while such as transparency and open tenders."
UMNO must realize by now that the Malays voted against the Barisan Nasional partly because they are unhappy with the party's approach to the NEP, said economist Charles Santiago, just elected to Parliament under a DAP ticket.
"While the original NEP aims were laudable, it later turned into a policy to enrich the Barisan putras [princes], largely from UMNO," Santiago said. "The average Malay was feeling the increase in prices, their jobs were no longer protected and inflation was eating into their income. Real wages were coming down [but] you didn't find UMNO providing support. In fact, it was removing subsidies for the average citizen."
"You had a situation where you had subsidies for the rich and a free market economy for the poor. While you subsidize the rich on one side, the debt of the country is being borne by the middle-classes and the poor."
Santiago said UMNO should come to terms with the fact that the way the NEP was implemented had made some Malays very rich while marginalizing a whole lot of poorer and middle class Malays. As a result, he added, UMNO's legitimacy as the "protector" of Malays has been called into question.
He, however, cautioned opposition politicians from interpreting the opposition gains and their mandate as a vote for free market policies. In fact, many ordinary people were promised more subsidies, including oil subsidies, if the opposition came to power (at the federal level).
"Opposition parties must realize it was free market policies, privatization and labor market restructuring that resulted in many people opposing the BN," said Santiago.
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