The Malays who voted in the past and who will they vote in GE14

(Analysis and comments below at the end of the article and in Bold blue)

The New Economic Policy (NEP) (Dasar Ekonomi Baru (DEB)) was a social re-engineering and affirmative action program formulated by the National Operation Council (NOC) [Malay: Majlis Gerakan Negara (MAGERAN)] in the aftermath of 13 May 1969 racial riot in Malaysia. This policy was adopted in 1971 for a period of 20 years and it was succeeded by the National Development Policy (NDP) [Malay: Dasar Pembangunan Negara (DPN)] in 1991

 

Policy overview

The New Economic Policy (NEP) which begins with the Second Malaysia Plan (1971-1975), and lasted until the Fifth Malaysia Plan (1986-1990), has three main objectives, namely

• To achieve national unity, harmony and integrity
• Through socio-economic restructuring (of the society)
• To minimize the level of poverty in the country (poverty eradication)

The NEP was conceived as a two-pronged strategy of eradicating poverty for all Malaysians as well as reducing and subsequently eliminating identification of race by economic function and geographical location. The Policy sought to achieve its objectives through rapid expansion of the economy over time and set its target of substantially reducing incidence of absolute poverty by 1990. To achieve this, the Policy called for aggressive improvement of economic status and quality of life for all Malaysians through:

• Access to land
• Physical capital
• Training
• Public facilities

Concurrently, the Policy also called for fairer distribution of opportunities to participate in the widening range of economic activities. The Policy opined that the core problem that stood in the way of national unity is compartmentalization of racial groups by economic function, particularly association of Malay and other indigenous races with subsistence agriculture. To dissociate Malay and other indigenous races with traditional agriculture, the Policy calls on the Malaysian Government to provide assistance to all Malaysians in:

• Finding employment
• Securing participation in economic activities
• Acquiring ownership in various economic sectors

As Malay and other indigenous races progress in modern economic sector, other Malaysians are encouraged to introduce modern agriculture to eliminate the identification of Malay and other indigenous races with subsistence agriculture.

The overarching principle of the Policy is the creation of 'a socio-economic environment in which individual Malaysians find self-fulfillment within a system which provides for proportional participation, management and control in the economic life of the nation'.

 

 

Implementation

The abstract policies and goals of the NEP were implemented by the Second, Third, Fourth and Fifth Malaysia Plans.

Some specific requirements were introduced to achieve the 30% Bumiputra equity target set by the NEP. Amongst these was a requirement that all initial public offerings (IPOs) set aside a 30% share for Bumiputra investors. These investors could be selected by the company being listed on the stock exchange, or the Ministry of International Trade and Industry, which would normally recommend such state-owned trust agencies as Permodalan Nasional or the Armed Forces pension fund. These shares were initially heavily discounted, as IPO prices were often significantly lower than prices after the listing had taken place. However, this advantage has disappeared in recent years. Nevertheless, this regulation has been criticized, especially as the 30% target continues to apply after the IPO has occurred; if the Bumiputra investors divest their shares, the company must issue new shares to maintain the proportion of Bumiputra shares above 30%

Results

Wealth in the hands of the bumiputras went from 4% in 1970 to about 20% in 1997. The overall wealth of the country as a whole also grew; per capita GNP went from RM1,142 in 1970 to RM12,102 in 1997. During the same period, absolute poverty in the population as a whole dropped from 50% to 6.8%.^[8] It is unclear what role the NEP played in these changes.

NEP Benchmarks	1970	1990	2004	2011
Bumiputra equity	2.4% (RM477m)	19.3% (RM20.9b)	18.7% (RM73.2b)	23.5%
Overall poverty	52%	17.1%	5%
Rural poverty	59%	21.8%	11%
Household income	RM660	RM1,254	RM2,996

The effects of the NEP on wealth distribution are disputed. The Gini index declined from 51.3 in 1970 to 44.6 in 1997, and 1987 figures indicated the mean income of the Malays had improved relative to both the Chinese and Indian communities.^[8] However, some have used 1997 statistics with 70.2 percent of households in the bottom 40 percent income group as Bumiputra, and 62.7 percent of households in the top 20 percent income bracket as non-Bumiputra, to argue that inequities remain.The Gini index also began to increase in the 1990s, going from 44.6 to 46.4 between 1990 and 1995; meanwhile, 1997 figures indicated that Chinese incomes were increasing at a rate double that of Malays'. Intra-ethnic income differences also increased markedly, especially among Malays.^[9]

Bumiputra participation in the professions and private sector increased as well, although Bumiputras remain somewhat under-represented. Between 1970 and 1990, the Bumiputra share of accountants doubled from 7 to 14 per cent, engineers from 7 to 35 per cent, doctors from 4 per cent to 28 per cent, and architects from 4 to 24 per cent. The Bumiputra portion of the share market — a figure frequently cited as "a measurement of overall community wealth", despite claims that it was misleading — increased from 2 to 20 per cent over the same period according to one academic's measurements. The Chinese share also increased from 37 to 46 per cent, at the expense of foreign participation. Official Kuala Lumpur Stock Exchange figures from 1998 were even more optimistic, indicating Bumiputra share ownership stood at 28.6% in 1990 and 36.7% in 1996.^[8][10]

The Chinese community in Malaysia accepted the NEP as a necessary evil to avoid Indonesian-style aggression, which the ruling party consistently instigate and deemed appropriate as their threat based policy. Furthermore, the Chinese community generally moved away from the public sector and set up businesses in the private sector, where the impact of the NEP was less pronounced.

In spite of the policies implemented under the NEP, the share of the national wealth owned by the non-Bumiputra races increased beyond the 40% mark. This figure, however, does not reflect that certain segments of the non-bumiputra population live in dire poverty. The Malaysian Indian and Orang Asli in particular form the lowest strata of the population in terms of economic ownership. The Orang Asli of Peninsular Malaysia are not considered Bumiputra under the Federal Constitution despite their indigenous status (see Bumiputra for further information).

My comments below in Blue

 

The objectives below were noble and far reaching to uplift the Bumiputras to the 20th century and be an economic power house to fuel Malaysia’s growth and propel it as an Economic tiger country on par with South Korea and Japan. The failure of the policy was the difference between the policy objectives and its implementation to propel the Bumiputras (Malays) in a Middle class and create also a Businessmen class. The policy was hijacked by the implements and enrich and empower the ruling BN Party especially UMNO and not the general Malay population who were left out of the main stream wealth creation and business opportunities

 

I will not go into details but I will list the Failures of the NEP policy which is having a boomerang effect for the ruling BN coalition come GE14

 

Creation of Bumi Middle and Business class

 

 

To create Bumiputra professionals, the government opens up new universities, to create education opportunities for the Malays to enrolled in the Universities will lesser entry level grades as doctors, engineers, Lawyers, accountants and so on. The duration of courses was shortened  as the universities did not have enough seats for students to enroll in the universities. With the NEP the university staff were majority Malays and with a suspected command proficiency in English . The enn rest were graduates who were unmarketable in the Private sector except in the Government service and the GLC companies. To rectify this , the brighter students were send overseas to be educated and on return serve as University staff in various capacities to churn out better qualified graduates who will marketable in the private sector , as the private sector is the only sector able to observe the new graduates and create a Malays professional and middle class  .

 

The idea was a great idea but then again the graduates who were sending overseas were from the well-connected group (UMNO party members) and not all send overseas that were the cream of the crop. The graduates on return most served their mandatory government service and resign on competition to go into business or open up their own consultancies with contracts from GLC companies and government contracts thru the very same connections which got them the scholarships to pursue studies overseas.

 

The local graduates were absorbed into the civil service and GLCs. The average working span of a graduate in the government service and GLCs were 32 to 35 years when retirement age was 55 years and now 37 to 40 years with retirement age of 60. The civil service and GLCs could only absorbed 35,000 per year as the average renewal rate per year on average is 1,200,00 million civil servants divide by 35 years and keeping this in mind if the civil service is not expanding and leaving 70% of graduates to fend for themselves,

 

In the 70’s 80s 90s all fine with universities student population was low and graduates were absorbed into the Government service as the government treasury was awash with booming revenue from Oil and Gas , taxes from exports of manufactured goods , rubber Tin Palm oil prices at peak and also the income tax from the 5% of the population ( Chinese contributed 95%of the income taxes ) and also the taxes on the business sector which was majority Chinese run business ( The Malay run business were GLCs which do not pay business tax and therefore do not turn in profits and real contribution to the treasury or to the economy as these GLCs  and were kept afloat with year government grants.

 

1. Government servants were given loans to buy houses, cars with low or no interest rates (Loans amounts did not move up with inflation and housing loans now are good for low cost house or flats and that also outside the cities and car loans good only to purchase a cheap Proton car and not even a Myvi and most opt to buy motorcycles)  

 

1.      Medical services were free ( and now Government hospitals have limited medicines , limit test can be done and other services are limited and patients are encourage to go to pharmacies to buy medicines and do tests at private clinics or hospitals and also operations as waiting period was long in government hospitals )

 

2.      Education was free at government universities and given also allowances for daily cost of living  ( Now students are given student loans , no cost of living and have to fend for themselves .Heard these loans have stopped or less loans are given out and expect the students on graduation to start paying off the loans in monthly installments , how to pay when cannot even land a job and even land a job in the government service the pay is barely to make ends meet and if loans not paid , bared from leaving the country )

 

3.      Government pensions ( The baby boomers from the start of the NEP policy implementation are have being to retire year 2000 onwards and are left with a pittance of a pension to survive with house mortgages to be paid as most have refinance the homes to buy Amanah Saham national shares , no kampung to go back as the sibling who stayed backed to care for the parents and till the land inherited the ancestors land and some living in government provided housing and did not buy a cost and a renting a hose not as they have retired.

 

4.      Large families as government encourage Bumi families to have more kids and Bumi parents did not cared how many kids they had or practice family planning and was under the assumption the government will feed, educate and employ their kids.

 

5.      The Malays with their needs taken care did not mind the rhetoric of race and religion by the government ruling party to gain votes and this was like a past time and sort of side show or entertainment to keep they occupied. All was fine when the treasury was overflowing and the leakage from corruption was acceptable as there was more than enough money to go around.

 

6.      Fast forward to 2017

 

The government can no longer absorb the graduates churn off from the government universities and the private sector is less inclined to hire these graduates , leaving these graduates jobless and increasing frustrated and angry  with the government with all the corruption and wastage happening in the government . Well-connected people getting jobs, contracts and loans (never will be paid back) to open business.

 

 The Malays now with their belly empty are more worried about where their next meal will come from , a roof over their heads and their kids future and less interested in Race and religion politics as this not feed them , cloth them and a give their kids a future. All these can be seen when BN or PAS calls for a rally and only the smallest stadium is used as to deceive the public that there is a large crowd in attendance.

 

The Malays of now  are going to vote with their bellies come GE14 and whoever gives them a glimmer of hope for the future for the and their kids and not a party will have time and time with the opportunity given failed to uplift their standards and well-being. UMNO and PAS are playing to an even smaller audience with their racial and religious politics.

 

The party when can offer practical ideas and alternative to uplift the living standards of the general Malay population will win hands down if they avoid racial and religious politics and focus  their message of good governances , better paying and more jobs , foreign  and local companies to invest and train graduates for the economy of the 21^st century , Upgrade the standards of local universities by having better trained teaching staff who are capable to educate and graduate students who will be equip with language , work skills and ethics for the 21^st century economy ,affordable housing , affordable medical care , care for the old /poor / the handicapp, better infrastructer and transportation , doing away will toll roads as it is the responsible of the government of the day to provide infrastructure for the country , clean water and electricity to the rural area , affordable internet and telecommunication for the rural areas and this party the majority of malays will vote for. The parties which can deliver is PKR Bersatu  and the malays will shy away from voting UMNO and PAS as race and religion does not fill their bellies or provide future for their kids. As saying goes God will only help if you help yourself and if you do not help yourself than you cannot blame god for not helping you.

 

The Malays are not worried about 30% equity as these see the equity is only for the ruling class and not for them as they were not included in the wealth creation and sharing by the government and the only people who benefited were the UMNO members and leaders and this disfranchise is very evident in the villages as the UMNO members doing nothing seem to have big houses and cars and well off and the Malays who till their land and work half remain poor.

 

 

I will continue update this analysis as time goes on