Is Umno the right party to help poor Bumiputera?

Delegates at the Umno general assembly are urging the party's leaders to do more to raise the income of the Bumiputera. – The Malaysian Insider pic, November 29, 2014.

Umno wants more control of the nation’s economic levers to raise the income of Bumiputera to be on par with other communities.

This is despite the fact it has been in power for more than 50 years and has limited success in this endeavour with all its affirmative action policies.

The first part was clearly the gist of the grassroots' debate at its assembly yesterday, while the second was the part it would not admit.

For who else was responsible for the affirmative action policies that were supposed to eradicate income disparities between Bumiputera and non-Bumiputera?

Yet the irony – demanding more chances after it had wasted so many – was lost on the party’s delegates.

What was of greater concern was not just that Umno members were demanding their leaders continue policies to “improve the lot of Bumiputera” but their refusal to give up on methods and the same policies that have failed the Malays.

Party must control government

Delegates, who are essentially representing the grassroots, started debating on the Bumiputera economic agenda since Thursday.

Datuk Zahidi Zainul Abidin of Perlis Umno railed against a civil service policy forbidding government departments and agencies from accepting support letters from politicians.

These support letters, usually written by elected representatives, accompany applications for almost everything, from loans to contracts.

Zahidi wanted party leaders, such as the president-cum-prime minister, to cancel this policy.

“The party must control the government,” said Zahidi, who is also Padang Besar MP.

His colleague from Federal Territory Umno, Datuk Norainah Musa, seconded this in her speech, saying that support letters from Umno division leaders should also be accepted.

“What’s wrong with support letters from division leaders? Are our signatures only valuable during an election?” asked Norainah.

Another favourite demand was that Petronas and other government-linked companies must be compelled to choose Bumiputera companies as vendors.

“Even (former prime minister) Tun Dr Mahathir Mohamad had said Petronas’s responsibility is to help local companies, especially Bumiputera ones,” said Pahang Umno delegate, Datuk Maznah Abdul Hamid.

Another “prescription” is that the government encourage lower-income Bumiputera households to dabble in small businesses to earn an extra income.

This, they said, could be done through microcredit loans under Tekun Nasional and more entrepreneur skills-training programmes under Amanah Ikhtiar Malaysia.

Is Umno the right one for the job?

The delegates' intention is not misplaced.

A Khazanah study on the state of households showed that there is inter-ethnic inequality even after more than 40 years of affirmative action.

The median household income for Bumiputera is RM3,282, while for Indians it is RM3,676 and Chinese, RM4,643.

Economist Azrul Azwa Ahmad Tajudin said the data justified the argument that affirmative action must continue.

The trick is how to do it without repeating past mistakes.

Umno supreme council member Datuk Seri Ahmad Husni Mohamad Hanadzlah, who listened to the delegates, said a Bumiputera-only economic agenda would not be effective.

“The Bumiputera have to accept that there are other communities, so any economic agenda must be inclusive.”

This is since the private sector, which contributes 48% to gross domestic product, was not as easily demarcated along ethnic lines, he said.

Company workers, managers, along with consumers, for instance, were made up of members of all communities who interacted in ways which are too complex for a mono-ethnic policy to work, said Ahmad Husni, who is also Second Finance Minister.

Azrul Azwa said that too much of the debate on reducing the wealth gap had focused on increasing Bumiputera corporate equity to 30%, a favourite talking point at Umno assemblies, including this one.

“More emphasis should be on what the man-on-the-street really needs to increase his income and to deal with cost of living pressure.”

Much of the approach of the past has also created a section of society dependent on subsidies and handouts, which are easily used for political gain, he said.

And then there is the emphasis on entrepreneurship, which automatically assumes every low-income household can be successful at business.

“Many people are good wage earners and workers. More focus should be given to increase their wages,” said Azrul Azwar.

The obsession with entrepreneurship then becomes a way of not dealing with a key structural problem with the Malaysian economy – that it is based on the creation of low-value products at low cost and low wages.

This structure ensures that wages for Malaysians would always be suppressed because Malaysian companies could choose foreign workers who worked for peanuts, he said.

“And the government continues to allow this to happen.”

- TMI