Prime Minister Najib Razak’s Pemerkasaan Ekonomi Bumiputera (PEB) and his installation as the agenda’s council chief were announced with scripted infatuation in English and Malay newsprints, and denounced with fierce indignation in much of the online world. (I use PEB instead of Bumiputera Economic Empowerment [BEE] due to the 17 times that variations of “perkasa” resounded in Najib’s September 14 speech at UiTM, plus the absence of an English equivalent of that word.)
The backlash is expressing the expected sentiments, but one crucial question has been missing in reaction: should Malaysia pursue bumiputera participation in industry as a policy?
The loudest contention against the policy is that it does not benefit the vast majority of the bumiputera or the poor in general, and that the money should be allocated to social spending instead. Yes, this point is to some extent valid. But is this the most important question? No, I think not.
The time is ripe for Malaysia to ask whether we should in the first place promote bumiputera industry, and to think seriously about the consequences of our answer. The question must be sufficiently focused: should we endeavour to raise bumiputera participation in ownership and management of dynamic enterprises, especially in industrial sectors, and should we implement effective programmes that directly try to achieve that national objective?
We need to face this question head-on, because for the most part, we are largely split into opposing flanks, neither of which offers constructive and feasible prospects for reform.
There is the Perkasa-Umno-BN stance of explicitly supporting the agenda and perpetuating corrupt policies, epitomised in the PEB launch.
In rebuttal, there is a popular counterpoint of implicitly supporting bumiputera industrial development but advocating needs-based, pro-poor policies as solutions. This argument is usually paired with the claim that race should not factor into selection for empowerment opportunities, especially in government contracting and licensing.
High on rhetoric
Najib’s September 13 speech had the works: blatantly political motives, a shipload of ethnically exclusive plans, total ignorance of past failures or even any acknowledgment of lessons learned, and no delivery details. He made it easy - perhaps too easy - to repudiate the PEB agenda.
Rhetoric and popular momentum behind need-based policies and meritocracy are high, and much negative reaction to the PEB spring from these worthy principles. This is good, but it is better to keep things in proper perspective.
It is interesting that we often apply a different logic when it comes to matters of ethnicity, in that we acknowledge problems directly marked by ethnic lines - then insist on solving them through indirect measures. This is understandable but unhelpful.
I doubt we would reject sports programmes to promote outstanding success because they are predominantly going to benefit top athletes, not the masses. We accept that there is a place for such measures, while health, teamwork, discipline and the other innumerable benefits of sports to society can be fostered through common provisions, like sports fields and physical education.
One cannot project to win world championships by just increasing the number of playgrounds. I’m sure most will agree that we can and should do both special programs for the few and general programs for the many, especially those who depend on public facilities.
But on matters involving ethnicity, we have become quite accustomed to rejecting direct actions and insisting on the indirect route, whether or not that offers credible alternatives. We tend to support bumiputera industrial development (I do not hear loud opposition to this objective) but reject programmes that directly benefit bumiputera companies.
Of course, this particular bumiputera agenda follows a long line of failures, shortfalls and mishits. However, these past experiences do not in any way make social spending a viable alternative for the purpose of bumiputera industrial development.
Affirmative action vs meritocracy
Policies assisting the poor or bumiputera masses, I must emphasise, demand much higher priority and greater public funds. The amounts we spend on public education and health, infrastructure, social protection, microcredit and such, must for obvious moral and development reasons exceed allocations for bumiputera industrial development.
But such needs-based policies are pursuing distinct objectives. They will help level the field in basic needs and attainments, but can scarcely be depended on to produce dynamic bumiputera enterprises.
Again, the question pertinent is, should we engage in interventions and expenditures toward bumiputera industrial development? It’s plainly untenable to answer, “Yes, we need bumiputera industrial development policies” and then leave it to social spending to achieve this.
I think we can benefit a great deal by simply stating the obvious: bumiputera industrial development policies primarily benefit bumiputera businesses, and operate predominantly by targeting bumiputera beneficiaries.
Whether we reject such programmes is of course up to individual conviction and opinion, but rejecting such policies on the grounds that they “do not help the masses” is not really getting anywhere.
They are not meant to help the masses. If rejecting it, do so on the grounds that the objective itself is illegitimate, or the measures taken toward objective are pointless, or arguments along these lines.
On the inter-related matter of meritocracy, undoubtedly there is a case to be made for abolishing racial representation in selection criteria for contracts and licenses, and making the process transparent, stringent, and competitive. But again, such policies have no direct role in facilitating bumiputera participation in industry.
Thus if we maintain, “No, Malaysia should not implement bumiputera industrial development policies”, we must acknowledge the consequences.
This entails purposefully omitting bumiputera enterprise development as an objective and bumiputera representation as a target, and leaving these outcomes open ended. Again, the reform holds out the possibility that bumiputera participation might not increase or be sustained - and may well decline.
Focus on effectiveness
It is reckless to advocate dismantling current forms of affirmative action and reducing quotas or preferences to zero, as I often hear, and merely presume that bumiputera participation will be preserved. A strict adherence to merit-based criteria will select more qualified - but possibly fewer - bumiputera firms. It is reasonable at least to expect slower growth.
We talk about resetting politics and resetting policies, but never about resetting expectations. Can we implement meaningful and difficult reforms, and continue to target accelerated change and widespread improvement? I am idealistic, but not prepared to be that wishful.
Here’s my position on the matter. I think we should pursue more restrained and effective bumiputera industrial development - and set suitably modest expectations and targets. Select policies are needed to continue long term bumiputera industrial development and to avert severe declines in bumiputera participation in the short term.
Surely this is better than what we have witnessed in recent history, where government announces “need-based” and “merit-based” affirmative action, provokes the ire of Malay contractors and the Malay Chamber of Commerce (and probably their Umno patrons) who claim to be “marginalised”, then makes concessions and yields the plot.
Courage and conviction are needed to seize the plot and admit that there will be some transition pains. The tough part is, these pains will be borne by some powerful people who have influence in state-controlled media.
Hence, a clear message should be sent to the bumiputera majority that Malaysia is reemphasising socioeconomic development that more directly benefits them, while making tough reforms to bumiputera industrial development policies.
Bumiputera participation will likely progress at a slower rate, but that is part of the necessary change. There are also benefits that can be broadly shared, such as cost savings from more competitive bidding and reduced corruption that can be channelled elsewhere.
Many alternatives and challenges will need to be negotiated; a follow up article will present some ideas.
To return to the central issue, we need to deliberate whether to have bumiputera industrial development policies at all.
If yes, think of effective measures and leave aside social spending for other conversations.
The backlash is expressing the expected sentiments, but one crucial question has been missing in reaction: should Malaysia pursue bumiputera participation in industry as a policy?
The loudest contention against the policy is that it does not benefit the vast majority of the bumiputera or the poor in general, and that the money should be allocated to social spending instead. Yes, this point is to some extent valid. But is this the most important question? No, I think not.
The time is ripe for Malaysia to ask whether we should in the first place promote bumiputera industry, and to think seriously about the consequences of our answer. The question must be sufficiently focused: should we endeavour to raise bumiputera participation in ownership and management of dynamic enterprises, especially in industrial sectors, and should we implement effective programmes that directly try to achieve that national objective?
We need to face this question head-on, because for the most part, we are largely split into opposing flanks, neither of which offers constructive and feasible prospects for reform.
There is the Perkasa-Umno-BN stance of explicitly supporting the agenda and perpetuating corrupt policies, epitomised in the PEB launch.
In rebuttal, there is a popular counterpoint of implicitly supporting bumiputera industrial development but advocating needs-based, pro-poor policies as solutions. This argument is usually paired with the claim that race should not factor into selection for empowerment opportunities, especially in government contracting and licensing.
High on rhetoric
Najib’s September 13 speech had the works: blatantly political motives, a shipload of ethnically exclusive plans, total ignorance of past failures or even any acknowledgment of lessons learned, and no delivery details. He made it easy - perhaps too easy - to repudiate the PEB agenda.
Rhetoric and popular momentum behind need-based policies and meritocracy are high, and much negative reaction to the PEB spring from these worthy principles. This is good, but it is better to keep things in proper perspective.
It is interesting that we often apply a different logic when it comes to matters of ethnicity, in that we acknowledge problems directly marked by ethnic lines - then insist on solving them through indirect measures. This is understandable but unhelpful.
I doubt we would reject sports programmes to promote outstanding success because they are predominantly going to benefit top athletes, not the masses. We accept that there is a place for such measures, while health, teamwork, discipline and the other innumerable benefits of sports to society can be fostered through common provisions, like sports fields and physical education.
One cannot project to win world championships by just increasing the number of playgrounds. I’m sure most will agree that we can and should do both special programs for the few and general programs for the many, especially those who depend on public facilities.
But on matters involving ethnicity, we have become quite accustomed to rejecting direct actions and insisting on the indirect route, whether or not that offers credible alternatives. We tend to support bumiputera industrial development (I do not hear loud opposition to this objective) but reject programmes that directly benefit bumiputera companies.
Of course, this particular bumiputera agenda follows a long line of failures, shortfalls and mishits. However, these past experiences do not in any way make social spending a viable alternative for the purpose of bumiputera industrial development.
Affirmative action vs meritocracy
Policies assisting the poor or bumiputera masses, I must emphasise, demand much higher priority and greater public funds. The amounts we spend on public education and health, infrastructure, social protection, microcredit and such, must for obvious moral and development reasons exceed allocations for bumiputera industrial development.
But such needs-based policies are pursuing distinct objectives. They will help level the field in basic needs and attainments, but can scarcely be depended on to produce dynamic bumiputera enterprises.
Again, the question pertinent is, should we engage in interventions and expenditures toward bumiputera industrial development? It’s plainly untenable to answer, “Yes, we need bumiputera industrial development policies” and then leave it to social spending to achieve this.
I think we can benefit a great deal by simply stating the obvious: bumiputera industrial development policies primarily benefit bumiputera businesses, and operate predominantly by targeting bumiputera beneficiaries.
Whether we reject such programmes is of course up to individual conviction and opinion, but rejecting such policies on the grounds that they “do not help the masses” is not really getting anywhere.
They are not meant to help the masses. If rejecting it, do so on the grounds that the objective itself is illegitimate, or the measures taken toward objective are pointless, or arguments along these lines.
On the inter-related matter of meritocracy, undoubtedly there is a case to be made for abolishing racial representation in selection criteria for contracts and licenses, and making the process transparent, stringent, and competitive. But again, such policies have no direct role in facilitating bumiputera participation in industry.
Thus if we maintain, “No, Malaysia should not implement bumiputera industrial development policies”, we must acknowledge the consequences.
This entails purposefully omitting bumiputera enterprise development as an objective and bumiputera representation as a target, and leaving these outcomes open ended. Again, the reform holds out the possibility that bumiputera participation might not increase or be sustained - and may well decline.
Focus on effectiveness
It is reckless to advocate dismantling current forms of affirmative action and reducing quotas or preferences to zero, as I often hear, and merely presume that bumiputera participation will be preserved. A strict adherence to merit-based criteria will select more qualified - but possibly fewer - bumiputera firms. It is reasonable at least to expect slower growth.
We talk about resetting politics and resetting policies, but never about resetting expectations. Can we implement meaningful and difficult reforms, and continue to target accelerated change and widespread improvement? I am idealistic, but not prepared to be that wishful.
Here’s my position on the matter. I think we should pursue more restrained and effective bumiputera industrial development - and set suitably modest expectations and targets. Select policies are needed to continue long term bumiputera industrial development and to avert severe declines in bumiputera participation in the short term.
Surely this is better than what we have witnessed in recent history, where government announces “need-based” and “merit-based” affirmative action, provokes the ire of Malay contractors and the Malay Chamber of Commerce (and probably their Umno patrons) who claim to be “marginalised”, then makes concessions and yields the plot.
Courage and conviction are needed to seize the plot and admit that there will be some transition pains. The tough part is, these pains will be borne by some powerful people who have influence in state-controlled media.
Hence, a clear message should be sent to the bumiputera majority that Malaysia is reemphasising socioeconomic development that more directly benefits them, while making tough reforms to bumiputera industrial development policies.
Bumiputera participation will likely progress at a slower rate, but that is part of the necessary change. There are also benefits that can be broadly shared, such as cost savings from more competitive bidding and reduced corruption that can be channelled elsewhere.
Many alternatives and challenges will need to be negotiated; a follow up article will present some ideas.
To return to the central issue, we need to deliberate whether to have bumiputera industrial development policies at all.
If yes, think of effective measures and leave aside social spending for other conversations.
If no, think of the possible consequences, especially the politically unpalatable ones.
LEE HWOK AUN is senior lecturer in development studies at University of Malaya.
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