Forward    Feedback    


Non-Malays are not angry with the NEP for helping the Malay poor, Malays are not angry with the NEP for helping the Non-Malay poor, but Malaysians are angry with the NEP for being used as a tool of crony capitalism to enrich the wealthy


Press Statement

by Lim Guan Eng



(Petaling Jaya, Wednesday): Prime Minister Datuk Seri Abdullah Ahmad Badawi is wrong to say that the New Economic Policy (NEP) was not a cost to doing business. Not only the European Union Ambassador to Malaysia Dr Thierry Rommel but even the director of the  business analysis group Economic Intelligence Unit (EIU) Justin Wood, have severely criticized the NEP as anti-competitive and an unacceptable cost of doing business in Malaysia. 

Abdullah should pay heed to Dr Rommel’s criticisms of a lack of a level playing field and that, “Together with an inefficient public service, corruption and the questionable and unchecked practices of Malay preferential treatment, it had also dampened the business environment and economy of the country.” And be wiser if he follows Wood’s advice that, "Faced with a thundering China, a rising India and the rapid development of countries such as Vietnam, Malaysia needs to work hard at boosting its competitiveness. Malaysia must invest in education and research and development, increase productivity, improve government effectiveness and transparency, and increase information technology and telecommunications usage.”

Abdullah impresses no one when he says that Malaysia will review in an ad-hoc manner those policies or regulations deemed to be hindering the distribution of equity in the most sustainable, competitive and meaningful way. Such approach is no different from “treating the head when the head aches and the feet when the feet aches” as it does not go to the root of the problem. No matter how much ad-hoc revisions are done, there will be no permanent solution with repeated correction of the flaws, so long as the source of flaws in the NEP itself  is not abolished. 

Even the government has conceded the defects of the NEP when it exempted investors in the Iskandar Development Region in Johor from the NEP. Measures implemented included scaling down the rules on foreign ownership for targeted sectors and areas in the Iskandar Development Region; reducing the number of approvals required from the local councils as well as reviewing price controls and entry conditions for the steel industry.  

DAP agrees that we can improve equity without sacrificing competitiveness. The universal opprobrium with the NEP is that NEP is a corrupt policy used to coddle the rich without helping the poor. What is the point of the NEP if inefficient Malay enterprises continue to be granted huge contracts without open tenders merely because of connections. The granting of the contract to build the RM 2.7 billion second Penang Bridge to UEM World without an open tender is a damning indictment of the failure of the NEP.  

Non-Malays are not angry with the NEP for helping poor Malays. Similarly Malays are not angry with the NEP if it helps poor non-Malays. What all Malaysians are angry with the NEP is that the NEP is used as a tool of crony capitalism to enrich the wealthy. For that reason many Malaysian, including Malays, have voted with their feet by emigrating.


A million Malaysians who voted with their feet by emigrating overseas for the last 35 years is the strongest indictment of the failure, injustices and discrimination of the New Economic Policy (NEP)

A million Malaysians who voted with their feet by emigrating overseas for the last 35 years is the strongest indictment of the failure, injustices and discrimination of the NEP implemented in 1970. This figure of a million Malaysians emigrating overseas is seen as conservative estimate of the 30,000 Malaysians leaving yearly. What is unexpected is that there are more Malays than non-Malays emigrating where 70% giving up their citizenship are Malays. 

According to Deputy Home Affairs Minister Datuk Tan Chai Ho, some 106,000 Malaysians had given up their citizenship between 1996 and April this year. Of the figure, 70% or 79,100 were Malays, 25,107 Chinese, 1,347 Indians and 350 of other races. Marrying a foreigner was the main reason given by women while most men cited better career options. The preferred top five destinations of ex-Malaysians were the United States, Australia, Taiwan, Singapore and Indonesia. These figures are believed to be understated as they do not include those citizens who do not inform the Malaysian authorities so that they can secretly enjoy dual citizenship or are Permanent Residents in foreign countries. 

For these Malaysians to cite better career options proves the failure of Malaysia human resource policy where there is no room for talented Malaysians. Now even Malays, the target of preferential treatment by the NEP, feel the same way as non-Malays that there is no equal opportunity for them to promote their career. 

Such a loss of human resources may be the reason why Malaysia has lagged behind in development as compared to countries such as South Korea or Singapore and is slowly being overhauled by Thailand and Vietnam. In 1966 annual per capita Gross Domestic Product(GDP) of South Korea was less than US$ 130 as compared to Malaysia’s US$350. By 2005 according to the International Monetary Fund., GDP per capita in South Korea had far exceeded Malaysia at US$16,421 as compared to Malaysia’s US$5,040.                               

The New Economic Policy(NEP) and the 30% bumi equity requirement are the principal reasons why Malaysia performed worse than South Korea. Instead of promoting transparency, we promote corruption. Instead of technical “know-how” we have political “know-who”.  

Abdullah’s vision of modeling our economy propelled by skilled human capital and innovation will remain a pipe-dream if he continues to rely on quotas instead of merit. Lack of competitiveness, inefficiency and poor productivity is the price we pay for the government’s continued reliance on the NEP.  

By denying talented Malaysians from realizing their potential, the government has caused a massive brain-drain of qualified Malaysians to foreign countries. Singapore is a good example where Malaysians comprise such a critical component of the country’s workforce, that Singapore’s economy and health system would collapse without Malaysians. 

The time has come for the abolition of the NEP. When we are celebrating our 50th Merdeka anniversary, Malaysia should be looking forward to the next 50 years instead of looking backwards by relying on policies such as the NEP that has failed. We are now in the 21st century and should be using 21st century ideas of merit, competitiveness and efficiency to increase economic productivity instead of racial quotas and crony capitalism.


* Lim Guan Eng, Secretary-General of DAP

Your e-mail:

Your name: 

Your friend's e-mail: 

Your friend's name: