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The Prime Minister should bite the bullet and abolish the New Economic Policy (NEP) instead of adopting an ad-hoc approach of NEP-Exempt Economic Regions

Speech during the Jelutong DAP Parliamentary Divison Dinner

by Lim Guan Eng


(Penang, Saturday): By announcing a new package of incentives for investors at the Iskandar Development Region (IDR) where qualified companies need not comply with Foreign Investment Committee (FIC) rules related to enforcing the quota provisions in the NEP, Prime Minister Datuk Seri Abdullah Ahmad Badawi is admitting that the NEP hinders economic growth and hampers the inflow of investment. The time has come for the country to abolish the NEP which was implemented in 1970 and was supposed to end in 1990 but instead continued right up to the 21 st century.


Iskandar Development Region Authority (IRDA) advisory council member Tun Musa Hitam even went a step further by suggesting a special briefing to explain to UMNO members why it was time to give up the New Economic Policy (NEP) for the success of the Iskandar Development Region (IDR). Musa said he realised that there was a need to have a change in mindset to draw foreign investors to the country who were not interested in the NEP, cronyism or nepotism as their primary focus was on making money.  


This is an admission by a former Deputy Prime Minister that NEP has outlived its usefulness and should not be allowed to hide abuses of power. Many Malay academicians are beginning to oppose the NEP and its quota system because it does not help Malays but only breeds corruption and cronyism. This is shown by the RM 3 billion 2nd Penang bridge project being directly awarded to UMNO-related UEM World without open or competitive tender.


Instead of an ad-hoc approach to exempt certain development regions from the "chains" of the NEP, the government should "bite the bullet" by boldly adopting 21 st century ideas and ideals of competition, merit, accountability and transparency by abandoning the NEP. Let us not use 20th century ideas of quotas, discrimination and crony capitalism to run a 21st century nation.


Why is there no Penang Development Region with corporate tax exemptions for 10 years and need not comply with Foreign Investment Committee (FIC) rules to further spur Penang's economic growth?


Otherwise there will be imbalance in development raising the natural question why Penang has been left out of such benefits accorded to Johor's IRDA or to Selangor's Cyberjaya and Multimedia Super-corridor(MSC). As Penang is the Prime Minister's home state, the 1.5 million people of Penang have a right to ask, "Why is there no Penang Development Region for qualified companies with corporate tax exemptions for 10 years and no necessity to comply with FIC rules to further spur penang's economic growth?"


Penang is one of three hubs of growth in Peninsular Malaysia with Selangor and Johor. With the MSC and IRDA, Penang has clearly lost out in the race for foreign investment which would draw the major portion of foreign investment following the target of RM 50 billion over the first five years and RM 383 billion target for IRDA over 20 years.


Penang Chief Minister Tan Sri Koh Tsu Koon can not remain silent at such "third-class" treatment for Penang when it is supposed to be the 3rd hub. Does this not show the lack of dynamic leadership and raises serious questions about the future growth of Penang, especially in growth and good jobs when Penang will trail behind badly to Johor and Selangor in drawing foreign investment?


The failure to preserve the future economic success and prosperity of Penang raises doubts whether Koh or Gerakan will be able to protect the political status of the Penang. Koh has been seen as a weak Chief Minister following his failure to face down a mutinous rebellion by UMNO Youth members who humiliated him with protest banners in front of the Prime Minister last year.


No Gerakan leaders dare to demonstrate with banners protesting against UMNO unlike Gerakan's courage in demonstrating against PPP for saying that Gerakan would close shop in 5 years. Why is it that Gerakan dare to demonstrate against PPP but not against UMNO when UMNO Youth President "Krishamuddin" Tun Hussein Onn waved the kris and there were fiery remarks threatening the Chinese during the UMNO Youth Assembly?


If a 4-term Chief Minister like Tsu Koon can not even handle UMNO division leaders or exert authority over his own administration, it is unlikely that a new Gerakan Chief Minister would have the courage and ability to deal with UMNO's demands after the next general elections? Dealing with UMNO would become crucial after the next general elections when the constituency delineation would be redrawn and UMNO's demands for more seats will have major impact on the future political structure of Penang. Would a new Gerakan Chief Minister or even Tsu Koon dare to say "No" to UMNO's demands for more seats and UMNO's ultimate objective of taking over the Chief Minister's post?


As long as both Gerakan and MCA subscribes to this politics of submission, only a stronger DAP representation in the State Assembly can play a "check and balance" role in confronting and opposing UMNO's political ambitions. Politics of submission has resulted in dispersal of powers and lack of dynamism in state leadership as shown by the following problems faced by the state in particular economic stagnation, poor governance of local councils and social injustice of neglecting workers' welfare.


Remember both MCA and Gerakan fight for UMNO, only DAP fights for the people. For voters to teach UMNO a lesson, they must reject BN in the coming general elections!



* Lim Guan Eng,  Secretary-General of DAP

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