Affirmative Action (Part 2): The Value of Affirmative Action

By Lord Bobo

LoyarBurok is publishing this 3-part article it received from a law student at a local university who prefers to be known as “Batu 5.” Part 2 takes an incisive look at whether the NEP has achieved its objectives?

In 1971, the Barisan National coalition launched the New Economic Policy (NEP) as a response to the 1969 race riots. They figured that, since economic inequality between the races was so entrenched that resentment would occur between the impoverished Malays and the wealthier Chinese, (another sterotyp: of course there were rich Malays and poor Chinese), more affirmative action policies were needed to accelerate the stake of the Bumiputera in the economic pie. So, new (positive) discriminatory policies were introduced such as the requirement that all initial public offerings (IPOs) set aside a 30% share for Bumiputra investors, the Amanah Saham Bumiputera scheme, Bumiputera housing discounts, more scholarships for Bumiputeras (JPA, Mara, PNB etc.), the establishment of Majlis Amanah Rakyat and ITM (though formed before 1970, it is still outside the bounds of the Federal Constitution) and many more policies. It is a privilege, not a right (a privilege is a special entitlement, whereas a right is an irrevocable entitlement).

Interestingly, the objective of this NEP was to ensure that the Bumiputera would have a 30% stake in the economy by the year 1990 (20 years). It’s 2010 and we’re still far from that ambitious goal of wealth redistribution. We’re still around 18%, and this includes stakes in government linked companies (GLCs). Why oh why? Were we (or they, BN) too ambitious? Were we firing blanks? Did we miscalculate?

First, most Malays do not appreciate the concept of affirmative action. As I said, the reason why affirmative action is implemented is to level the playing field. It gives a fair platform for everyone to compete and play. So, when affirmative action is conferred to a person, it becomes his duty to compete. He has a civil obligation (though I personally believe it should be a legal obligation) to compete with other races who are perceived to have the upper hand. The individual has no reason why he cannot do as well as his peers, or better for that matter. The moment he fails to compete with other races, he fails not only his race but himself. He is perceived to be equal and hence he should contribute to the Malay’s stake in the economic pie. The platform is beautifully set.

The problem is, most Malays are not aware that it is their duty to compete. Since they believe that affirmative action policies are rights (and not privileges) they believe that these policies would always be there not only for them but for their children as well. So we see most Malays taking fewer risks to improve their living conditions. They are content on being wage-earners or attaining a government job when the situation (of achieving 30% stake in the economy) demands them to open up businesses and become national champions. Open up corporations, own corporations and take more risks. Most of them have stakes in GLCs; having the word government with corporation doesn’t demonstrate your ability to compete lah!

Secondly, there is a problem with the implementation of the NEP. The Article 153 policies along with ITM and MARA covers a wide radius of Malays, be they urban or rural, because it is mostly about education and scholarship. And most of us know that these two elements are the key to the economic advancement. As we can see, the policies enshrined under the NEP targets urban Malays. I mean, IPOs or housing discounts in the middle of the city would not benefit those in the rural areas much.

Since most NEP policies target urban Malays what is the harm in that? It means that you’re benefiting those who have already benefitted. Instead of concentrating resources to help the rural Malays (the most prominent stakeholder), you’re advancing the interest of the urbanites. Urbanites become more and more complacent because they have more access to affirmative action status. So this dampens their ability to compete as the government is always there to bail them out.

What makes it worse is that in Malaysia, affirmative action is hereditary! Shocked? Yes it is, and you know it. The father who benefited from affirmative action would ensure that his son would go through the same process. If the father was in ITM, the son would be in ITM (or UiTM) because he can, and it’s cheap. The education fees can be channelled to renovating a house or to build a swimming pool. Or, maybe buy another house with the discount in housing for bumiputeras. What is worse is that a father might have strings (or cables) to pull to ensure that his kids can get a government scholarship to study overseas. Even if you are a smart kid, if your father can afford it, that scholarship is supposed to go to a smart, poor kid. It is presumed that if your father benefited from affirmative action, he can subsidise your tertiary education. This creates a vicious cycle where even when an urban Malay is rich, he would still be dependent on the government because he can, and it is more convenient to do so. As resources are finite, the more deserving rural kid would be deprived of his opportunities to succeed.

As such, the subsidy mentality, the fear of competition and the theft of opportunities prevails among us and prevent the noble goal of equality. The government has given everything to assist you to succeed, yet you still require crutches to thrive in the real world. What I’m saying is just a stark reality that we see in our everyday lives.

Next: Part 3 – Where Are We Heading?

Batu 5 is a law student and a debater. He considers himself a full time debater and a part time law student. He believes that intervarsity debating is the best thing in the world. He also is a dreamer as he plans to establish a company which is too big to fail for Malaysia with his girlfriend. He believes that Malaysia is in a class war, and his class, the learning/student class is losing out. Courtesy of Loyarburok.com