(Kuala Lumpur, Tuesday): UMNO Youth’s proposal to revive the NEP as a solely Malay agenda is a step backward, divisive, breeds corruption and malpractices as well as contrary to the national economic interest of the country. Malaysians, both non-Malays and poor Malays, will not be convinced that the NEP has fulfilled its function of wealth creation and equitable wealth distribution.  

DAP regrets that UMNO has considered such an important policy as a Malay agenda to the exclusion of non-Malays when non-Malays are equally affected. UMNO’s refusal to allow all Malaysians to debate and express their view is undemocratic and unconstitutional and is tantamount to refusing to respect that non-Malays are also Malaysian citizens. 

DAP will be organizing a nation-wide series of forums on “The Economic Impact Of Reviving The New Economic Policy & The Ringgit Peg: A Malay Agenda Or A Malaysian Agenda?” The first forum will be held on Tuesday 2^nd August in Seremban Chinese Assembly Hall followed by Wednesday 3^rd August in the Selangor Chinese Assembly Hall to get public feedback in a rational and reasoned manner on UMNO Youth;s proposal to revive  the NEP. Parliamentary Opposition Leader Lim Kit Siang will be one of the speakers. 

The NEP’s stated goal of eradication of poverty and economic restructuring so as to eliminate the identification of ethnicity with economic function. However its discriminatory quotas in business licenses and permits, housing, ownership of public company stock, government contracts, university places and government scholarships, has not only failed to achieve these twin objectives but deeply divided Malaysians between bumis and non-bumis. 

Eradication of poverty has succeeded only in absolute terms. Relative poverty persists and is particularly evident in urban areas. How NEP has failed can be shown by the latest United Nations Human Development (UNHDP) Report 2004 that shows Malaysia has the worst income disparity between the rich and poor in South East Asia. The UNHDP Report 2004 shows the richest 10% in Malaysia controls 38.4% of our economic income as compared to our poorest 10% controlling only 1.7%.   

NEP’s greatest weakness was breeding rampant corruption and abuses of power. The country could lose US$4 billion in foreign exchange trading in 1993, Perwaja’s RM 10 billion losses, Bank Bumiputra twin RM 3.5 billion scandals as well as wholesale distribution of APs and tens of millions of shares to cronies, children and relatives of BN leaders and Ministers.  

How many poor and ordinary Malays who are not related or cronies of UMNO own shares or APs? Such huge financial malpractices would have made Malaysia bankrupt, if the fortuitous discovery of mineral resources like oil and gas sustained the country’s finances.                                                  

Prime Minister Datuk Abdullah Ahmad Badawi is correct to say in the UMNO General Assembly that the Malaysia of today is different from the Malaysia in 1970 when the NEP was first introduced. In 1970, comparative advantages matters but in 2005, what counts are globalization, the internet, competitive advantages, efficiency and human resources. For this reason Malaysia can no longer apply the NEP by giving away shares and equity ownership because it would drive capital away to neighbouring countries, drive down the stock-market and drive out investors.

So Long As Malays Can Sell Their Shares To Realise Short-term Profits, Malay Equity Ownership Would Never Reach 30% Even If NEP Was Extended For Another 100 Years

So long as Malays can sell their shares to realize short-term profits, Malay equity ownership would never reach 30% even if the NEP was extended for another 100 years. If the Malays had held on and not sold the shares, the Malay equity would have reached 30% by its stated period of 1990. Such sales for short-term gains are not done by the poor Malay masses but by the few rich Malays.  

By 1990 Malay equity then was 19.3% but this did not include shares held by nominee companies of 8.5%. As nominee companies mainly held shares on behalf of Malays 5%, the Malay equity portion was actually 27.8%. However this 27.8% did not include shares sold.  An  estimated  half of the Malay preferential shares given were sold for profit gains.  

Documented verification is provided by an academic working paper titled, “Privatisation of Ports: A Malaysian Case Study” by Associate Professor Malcolm Tull and Dr James Revely of Murdoch University in January 2001: 

“… By 1995 the privatised companies accounted for 22.1 per cent of the total market capitalisation of the KLSE. Many shareholders took advantage of the opportunity to realise short-term capital gains and sold their shares. The sale of shares in Klang Container Terminal and other privatised companies has, however, led to a dilution of Bumiputra equity: between 1983 and 1990 it declined from 65 per cent to 38 per cent of total paid up capital on the KLSE.”

This Australian study showed that almost 41% of the shares in privatized companies held by the rich Malays were sold. Applying this rough ratio would mean that the 19.3% of Malay shares in 1990 only represented 60% of the shares given by the government. In other words Malays  had sold 12.9% equity stake.  If Malays had held on to every share given, they would have a total 32.2% equity stake. Adding on to the nominee companies’ stake of 8.5%, in 1990 Malay equity stake would have exceeded 40%. 

The same situation will apply now. For UMNO Youth President Hishamuddin Tun Husein Onnto claim that the Malay equity ownership target of 30% has not been achieved in not only deluding others, but also deceiving oneself. Such deceit is evident when Hishamuddin demands property ownership for the Malays in plantations, agriculture, telecommunication, aerospace, petroleum and banking when they are already dominated by Malays. How many banks or plantations in Malaysia remain in Chinese hands? 

DAP urges Hishamuddin to focus on a national Malaysian agenda that benefits and unites all regardless of race and religion in building a harmonious society instead of letting loose a narrow racial and divisive Malay agenda. The time has come to build a nation on the bedrock of needs, merit, hard work, moral and ethical values and not appeal to keris-wielding,  extremist and destructive emotions.  

Hishamuddin should be reminded of former Prime Minister Tun Dr Mahathir Mohamad’s words when introducing the Third Outline Perspective Plan 2001-2010:- 

“High on our priority list is forging a united nation consisting of a progressive and dynamic Bangsa Malaysia that lives in harmony and imbued with strong moral and ethical values. Diligence, discipline, credibility, pride in one’s work and achievements, as well as the relentless pursuit towards continuous self-improvement and output are important values and attitudes for all Malaysians to develop. It is also important for the Malaysian society to show political maturity by avoiding extremism or parochialism. We must never cease to remember that the vital ingredient for sustainable growth is a harmonious society."                   

(26/07/2005)