Najib has tough fight against NEP ‘cancer’, says report

By Shannon Teoh

February 24, 2011

Najib Razak

KUALA LUMPUR, Feb 24 — Datuk Seri Najib Razak is taking “an unprecedented gamble” by pledging to dilute the system of Malay patronage that has kept Umno in power, said a foreign report yesterday.

The Centre for Independent Studies (CIS) — an Australia-based think tank — said that the large support for the status quo and Umno’s current vulnerability meant that “Najib will have a difficult task convincing his colleagues to ‘risk all’ for the sake of Malaysia’s long-term future.”

Its foreign policy research fellow Dr John Lee also questioned the prime minister’s capacity to introduce economic reforms as the introduction of the New Economic Policy (NEP) in 1970 has cultivated a “vast and deep network of rent-seeking and patronage.” While acknowledging that the New Economic Model (NEM) introduced by Najib last year was “enormously significant,” Lee said that the decades of pro-Bumiputera affirmative action was now a “millstone around the neck of the struggling Malaysian economy and the cancer behind the country’s growing structural problems.”

However, the public policy think tank backs Najib’s gamble as an opinion poll by the Merdeka Center for Opinion Research in 2008 found that 71 per cent of Malaysians — including 65 per cent of Malays — believed that affirmative action needed to be reviewed.

Lee’s paper, “Malaysian Dilemma: The Enduring Cancer of Affirmative Action,” said that the NEM has the potential to win back disaffected Chinese and Indian voters to Barisan Nasional (BN).

But the researcher, who was born in Ipoh but migrated to Australia, added that there has “been few initiatives aimed at reducing the role of the state in the Malaysian economy—which is essential for cutting back rent-seeking opportunities by Malay elites in the name of affirmative action.”

Calling steps such as relaxing Bumiputera equity requirements in 27 service subsectors “piecemeal,” the paper noted that Najib has had to placate pro-Malay groups including senior Umno figures who are “far from unanimous in their support of Najib’s gamble.”

The largely Malay civil service with its deeply entrenched ‘pro-Malay’ culture means it will be difficult to effect genuine reform, Lee added.

Commenting on the paper, local libertarian think tank Institute for Democracy and Economic Affairs (IDEAS) believes that it is time to debate the policy of affirmative action.

Project manager Afif Abdullah said that “the evidence against affirmative action is now clearer. The prime minister must not succumb to demands from far right groups, be they Malay, Chinese, Indian, Dayak, or anything else.”

Established in 1976, CIS states that it supports a free enterprise economy and a free society under limited government where individuals can prosper and fully develop their talents.- Malaysian Insider