WILL RACIAL DISCRIMINATION EXTEND BEYOND 2020?

Racial politics has characterised Malaysian society since Independence. The NEP was supposed to run from 1971 to 1990 but special “Bumiputera” privileges for the elite and their populist appeal have ensured that the NEP has become the “Never Ending Policy”.

Dr Kua Kia Soong, SUARAM Adviser

Prime Minister Najib Razak could have carved out a name for himself in Malaysian history as a great reformer if he had unveiled an 11th Malaysia Plan based on race-free affirmative action to help all Malaysians in need as well as race-free institutions to advance our industrial, financial, social and educational growth. The racially-discriminatory “Bumiputera policy” and its associated institutions have been the biggest obstacle to national unity and these are core issues that have to be addressed if we want to attain high-income status by 2020.

After the 13th general election, Najib introduced measures to further boost the economic participation of the ethnic Malay majority, entrenching race-based policies seen as shoring up support among the politically-dominant Malays. More incentives are expected in this five-year plan for the Bumiputeras, or “sons of the soil”.

The government has refused to recognize that Malaysia’s racial discrimination in business, whether involving large enterprises or SMEs, has failed to result in entrepreneurial firms with the capacity to compete globally. Najib’s government is bracing itself for a downgrade of its credit rating by Fitch and his administration has been shaken by new allegations of state corruption and mismanagement. Such murky questions surrounding the 1MBD scandal and the Altantuya murder are not the best conditions for a great Malaysian reformer to emerge.

The bloated bureaucracy and increased state expenditure on education has seen an ever-growing Malay middle-class and Bumiputera populism is expressed in terms of salary hikes, bonuses and other perks for civil servants and armed forces personnel. This will continue to take a substantial chunk out of our annual budget.

Racial politics has characterised Malaysian society since Independence. The NEP was supposed to run from 1971 to 1990 but special “Bumiputera” privileges for the elite and their populist appeal have ensured that the NEP has become the “Never Ending Policy”. It transformed into The National Development Plan which ran from 1991 to 2000; the National Vision Policy traversing 2001 to 2010, and under Najib, it has become The National Transformation Policy.

Until today, these racial discriminatory policies remain. Clearly, it has not encouraged the “entrepreneurial spirit” among those Malays when they have access to get-rich-quick schemes through rent seeking. The culture of cronyism has been a hallmark of UMNO. Even international corporate capitalists have had enough of the crony capitalism and racial discrimination in Malaysia when these frustrate their operations.

Racism and racial discrimination has been a convenient method of winning Bumiputera votes even though this is anathema to modern-day standards of governance. Racism has been thoroughly institutionalised in state institutions and even racist indoctrination in state institutions has been brought to light. But despite the widening income inequality within the Bumiputera community, the State relies on  “Bumiputeraism” as a hegemonic ideology to try and thwart any class consciousness that could develop among the Malay labouring class.

Even Dr. Mahathir has acknowledged that his policies had failed to achieve their goals and that affirmative action-based business patronage had created a ‘crutch mentality’. The government has shown no inclination to jettison Bumiputera crony capitalism, only to say that the selected winners of contracts will be those Bumiputeras who have shown entrepreneurial ability.

Enhancing inclusiveness

SMEs are largely located in the New Villages and are a critical source of job creation and entrepreneurial ventures in the dash to attain high-income status. While Malaysia has well-formulated SME programmes, enterprise development policies are mainly framed from a Bumiputera-based perspective and these have contributed to the marginalization of non-Bumiputeras with entrepreneurial talents. Ethnic-based ownership regulations also need to be liberalized because they do not encourage investors to put in their investments for the long haul.

Enhancing inclusiveness would also extend to incorporating workers’ representatives in discussions to formulate and implement policies to adjust wages to prepare for high-income status as has been done decades ago in Singapore, South Korea, Taiwan and Japan; involving stakeholders in the public education system to ensure highly skilled and well-rounded graduates, and institutional changes to ensure accountability, transparency and checks and balances in governance.

Race-blind affirmative action

Malaysia has a good record of reducing poverty, with significant decline in absolute poverty levels since 1970. However, this decrease in poverty has paralleled an appreciable increase in wealth and income disparities. Affirmative action to benefit the bottom 40% (B40) households’ income group is laudable as long as this policy is race-blind. In order to enhance inclusiveness, it is time the government emphasizes ALL ethnic communities in ALL poverty eradication programmes. Progressive affirmative action must exclude the well-off – the beneficiaries should only be the poor, regardless of their ethnicity. Incentives should also be provided for the poor to keep their children in school.

Meanwhile, preferential business concessions and discounts for Bumiputeras who belong to the top 40% (T40) households’ income group should cease since this is totally unjustifiable. For instance, according to the MHDR 2013, the income gap between the highest earning Bumiputeras and the poorest ones jumped by 20 times between 1970 and 2009.

Meritocracy in the Civil and Armed Services

Inclusiveness can be enhanced by re-introducing meritocracy in bureaucratic appointments and promotions now that Bumiputeras represent more than 90 per cent of the staff in these public services and our civil service is one of the largest in this part of the world. Good governance should be the rule in all aspects of public policy if we are to attain high-income status by 2020, for example, making its spending more transparent; publicly listing all development projects under the 11th Malaysia Plan;  declaring the financing and financiers of the projects and how any shortfalls will be met by the government.

Will Bumiputera policies extend beyond 2020?

During the seventies and eighties, we had looked forward to the end of the NEP which was expected to be in 1990. Now that this “Never Ending Policy” is set to continue until 2020, it is urgent that we ask the ruling party UMNO to declare whether racial discrimination will extend beyond 2020 when the country is expected to attain high-income status. This declaration should have been made in the 11MP since this reform was not incorporated in the new plan.

Even if UMNO refuses to make this declaration, all other political parties in the country including BN parties must take a stand on whether they want this racially discriminatory “Bumiputeras first” policy to continue beyond 2020. Failure to do so will condemn us to a fate of a society that is still unequal and certainly NOT “at peace with itself” – the stated objective of ‘Vision 2020’.