How best to evaluate Bumiputera economic programmes

 

The upcoming 7th Bumiputera Economic Congress (BEC) has prompted calls for the Bumiputera agenda to be re-evaluated to clarify the outcomes of past policies and identify lessons to be learned.

Independent analysis is necessary and this cannot be done by anyone with prior involvement in the ministries or agencies involved or with preconceived ideas that the Bumiputera Agenda policies are associated with or cause of wastage, leakages and corruption more than other policies.

These preconceptions give rise to an apprehension of bias and would be a bad start for any independent assessment which must begin by defining the metrics to be used and what we mean by “success” and “failure”.

For example the Bumiputera GLC Vendor Development Programme (VDP) would be a success if it created thousands of independent suppliers with non-GLC clients. A failed scheme would create companies dependent on GLCs, unable to trade without them.

The overall success of the Bumiputera VDP scheme would be that it was no longer needed and could be shut down.

From existing studies on Bumiputera programmes and other affirmative action schemes we know that there are many challenges.

Securing contracts in the first place is a challenge, whether in an open tender or through direct contracting.

Paperwork and compliance requirements often deter micro, small and medium enterprises (MSMEs). “Ali Baba” outsourcing by Bumiputera companies to non-Bumiputera firms is an issue.

In addition delivering on time, being paid for work in a timely manner, re-contracting and continuing engagements are an issue, while becoming dependent on a single GLC client can restrict MSMEs growth and scale-up.

Other commonly discussed issues include overreaching by suppliers who take on large, complex government contracts that overwhelm them.

This can happen in simple things such as supplying stationery or catering large events but it is often true of other things such as IT infrastructure, e-government services and even building contracts.

In truth most of these issues are common to all MSMEs and are not particular or more serious among Bumiputera firms. Universal policies would be better.

We already know that the role of the Bumiputera Agenda Steering Unit (Teraju) will be restructured to focus on scaling-up competitive Bumiputera enterprises, including upgrading from small to medium enterprises.

Actually following the logic of success, taking everything together we would hope that Teraju could be shut down.

If it was successful we would see significant improvements after more than a decade but we do not see that. Instead Teraju appears to be mostly focused on its own survival.

What we hope to see and what we expect to see are two different things. We would hope to see reforms to improve efficiency and effectiveness and to reduce replication of projects through an open and transparent system with proper governance and auditing.

From an optimistic perspective Malaysia should not need a new Bumiputera Economy Policy anymore. If these policies had worked in the past there would be clear improvements and no need for continuing help.

In fact there is strong evidence that Bumiputera entrepreneurs are successful. More widely the Bumiputera, especially women, are highly represented in universities, TVET and training and have good qualifications.

They have every opportunity and are fully capable of benefiting from that without patronage from the government.

Previous affirmative action policies have created dependency on government and an expectation that the government should run everything.

This is now holding back the new generation of Bumiputera graduates and entrepreneurs, as well as women and youths.

Reform of the Bumiputra Economic Policy should make assistance available to all Malaysians through standard, easy to understand policies which do not require interference from agencies and civil servants.

Just free-up the opportunities for everyone. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.