Najib's credibility takes fatal hit with rollout of castrated NEM

Najib - back to square one, fatal hit to credibility

Wong Choon Mei, Malaysia Chronicle

It looks like Prime Minister Najib Razak has gone full circle and is now back to square one, with his much-touted New Economic Model the latest in a series of grandiose programs to join his prized 1 Malaysia slogan on the trash heap.

“The real losers are the Malaysian people and the winners are groups with vested interests such as Perkasa, Mahathir, Muhyiddin and other Umno warlords who object to the NEM because they want to oust Najib and not because they really support the NEP or think it is better,” PKR vice president Tian Chua told Malaysia Chronicle.

“It is also a great disppointment that after so many promises and offering the people so much hope, the final NEM was castrated and offers nothing in the way of reforms. So the old things remain – the NEP, theKetuanan Melayu and so forth. Nothing has changed despite the millions of taxpayers’ ringgit he has lavished on consultants to draft out what is basically rubbish.”

Both social and financial planks failed to take off

The NEM is the financial plank of the Najib administration's core set of programs to reform Malaysia, just as 1 Malaysia is his social plank.

Azizah - BN must stop the lies

On Friday evening, a defensive Najib presented the second and final part of the NEM, which aims to revive Malaysia’s credibility as a choice investment destination, and more importantly, to stave off bankruptcy which may be inescapable if the endemic corruption in the country remains unchecked.

The 57-year old had previously promised to replace the race-based New Economic Policy, introduced by his father in 1971, with a needs-based NEM.

For decades, financial experts and Malaysians themselves have expressed concern at the wastage and corruption spawned by the NEP as the Umno elite rushed to take advantage of the goodies it offered at the expense of the poor Malays for whom the plan had originally been drafted to help.

“Malay supremacy is a slogan used by a small group of Malay elites who are cheating the Malays as a whole for their own interests,” PKR president Wan Azizah had pointed out last week.

“After 53 years in power, the Malays and bumiputera are still neglected. The 30 percent Malay-bumiputera equity has yet to be met. Of the RM54 billion equity and shares for bumiputera, only RM2 billion still belong to them.”

96% of the poorest are still Malays

Ketuanan Melaya or Malay supremacy has long been used by top Umno leaders to tie the NEP to the Malay community but not for its economic welfare, rather to rally support for the continuation of the NEP, which actually only states that its goals are to eradicate poverty.

Tian - final NEM was castrated

Malaysia’s federal constitution stipulates "special position" of the Malays for receiving government assistance in economic and educational sectors, but does not give the community special rights above the other races.

The 30 percent target is a government target set by past administrations and in the final part of the NEM, Najib had been expected to remove or reduce this protectionism barrier in favor of a fresh policy that specifically allocates aid based on income level so that the poor could really benefit. Despite the NEP, 96 percent of the poorest Malaysians are still Malays.

“This is another flip-flop. But it is a really serious one with very drastic consequences for Malaysia. It also has big consequences for Umno-BN because Malaysians now know that if the country is to be saved, the BN federal government must be replaced,” DAP MP for Taiping Nga Kor Ming told Malaysia Chronicle.

A golden opportunity missed

Experts have said the success of the NEM would depend private sector investment, which is supposed to fuel 92 percent of Najib’s RM1.4 trillion Economic Transformation Program, and the effectives of the delivery system.

Kor Ming - disastrous flip flop

The ETP is a slew of mega projects recently announced by Najib. It includes a RM43 billion MRT system for Kuala Lumpur and a controversial RM5 billion 100-stories tower, but despite the mind-boggling sums, most Malaysians believe the ETP is just more hype from Najib as they are aware the country’s coffers are nearly empty.

Najib himself has warned of bankruptcy by 2019 if subsidies for consumer essentials are not drastically reduced to improve cash flow and repay massive debt the government has undertaken.

“By maintaining the quota system, Najib has missed the golden opportunity to reform the outdated NEP, which was the fertile ground for corruption and wasteful rent-seeking behavior. It is the root cause why FDI has gone elsewhere,” PKR Gopeng MP Lee Boon Chye told Malaysia Chronicle.

“There is no clear measure with regards to fighting corruption or measures such as restoring credibility of the MACC, Freedom of Information Act, open tenders, abolishing the Official Secrets Act, freeing the press and an independent judiciary. How do we attract private sector investment to drive the ETP then? If corruption remains rampant, how do we improve the delivery system?”

Nothing left from Najib, but price hikes and asset sales

Boon Chye also slammed Najib for rushing to raise prices on fuel and sugar , even as the PM chickened out on serious and vital reforms for the country.

Lee - golden opportunity gone!

“Civil service reforms should have a clear roadmap such as reducing the the current 1.2 million civil servants to a more manageable level. What happenened to the Government-Linked-Companies transformation plan now that GLCs are to be sold off?” he asked.

“If we are serious about improving effeiciency and reducing protectionism, we should remove the preferential tax for national cars e.g. Proton and remove Aps immediately. Lastly, in conjunction with the NEM’ second part, the rakyat has been burdened with increased fuel, gas, diesel and sugar prices. Rakyat has not become high income but high living expenses. No point having high income when expenses skyrocket even more.”

Najib had also announced the establishment of a sovereign wealth fund to house the proceeds of the sales of government shares in the GLCs, but did not give full details.

"It looks like Najib intends to use this sovereign wealth fund to finance the ETP projects. But isn't that pushing money from the left pocket to the right pocket. Another key question, is he so sure there will be buyers for the GLC stakes, and as for Malaysians, they must ask what are the checks and balances to ensure the GLC shares not sold to cronies at unfair prices," said Tian.