Second guessing the New Economic Model

Once again, I had the singular honor of meeting up with the Oracle of Syed Putera. Until he chooses to reveal himself, let's just say that he was an important person to have ever walked the corridors of power. Friend to PM's, kings, counsel to anyone who cares to solicit his wisdom. Above all a man of practical wisdom in a world sometimes made complicated by elegant theories. I suspect he is not inhibited nor constrained by esoteric and elegant theories. He is moved more by practical considerations- does this method work? If it works, then theory has to be treated as secondary Theories are just necessary evils.

Case in point: how can we define capitalism in practical terms? Answer: capitalism- application of capital to any economic endeavors by man. You lack capital; the solution is to capitalize the economic agent.

You lack financial capital; the solution is to make finance available. You lack human capital- education is the answer. You have physical constraints- the solution is technology. Economic advancement then becomes the art or science of applying capital to economic endeavors. That's capitalism. No need for Friedman. No Adam Smith. Just apply capital to the economic agent.

We talked over a number of issues. This time around, I am not going to narrate our conversation ala dialogue style. What I propose is to expand on the number of pointers raised. In that way, the expansion is not attributable to the Oracle. He gave the germ of an idea. He is in no way responsible over the accuracy or even the version of my interpretation of what were discussed about. They are entirely my understanding and any deficiencies therein are not at all referable to the Oracle.

The oracle is doing an important research. He will soon submit the research to a university for the benefit of posterity. He has promised to give me chapters in the research. Again, another singular honor. He is also a widely read person and I have benefited too in the sense of being able to share his reading material from time to time.

Let's not talk about NEP anymore. It was finished in 1990. It has been replaced by the NDP. It's long dead and gone.

Plans to help out the unfortunates will always remain. The marginalized, the fringe groups, the economic- left behinds will always need help. Governments help them, whether they have plans or not. Whether they have actions called affirmative or not affirmative.

The qualification for getting help isn't because they are Malays. They must be assisted because they are the unfortunates. Whether they are Malays or not isn't material anymore. Even other Malaysians (not Malays) who are economically disadvantaged must be helped.

Let's be clear about one thing. The NEM is not an economic agenda for Malays. It's an economic blueprint for the whole country. How to get Malaysia to a high income economy?

Within that blueprint, Malay economics should be an important subset. If this isn't taken into account, that would be problematical for Najib administration. I am saying this because our objection to the NEM shouldn't be because the blueprint was advised upon by a team of foreign experts. We will object if the recommendations have excluded distributive mechanism of an expanding economy. We shall object, if the NEM doesn't address the issue of inclusiveness. Will Malays participate meaningfully and if so how will do so?

Through agencies? Through a selection process based on rapport with the leadership? Through a method of picking winners decided upon by personal knowledge of awarding parties? Is this method effective? That is, we replace the invisible hand of laissez faire (let the market decide) with a politically visible hand? Ibrahim Ali is talking about a clenched fist intervention.

In Malaysia, the reality is the majority of the less fortunate are Malays. So, we helped them. But it's very important for us to frame the reality correctly. Maintain our sober perspective. Don't allow loony bins like Ibrahim Ali derail us. If we do allow ourselves to be off-balanced, that lowers our confidence in the quality of this government. Its response to what Ibrahim Ali represents will determine whether it slides further down the confidence scale.

This government can't be spooked into altering its battle plans just because someone named Ibrahim Ali stirred up some rearguard commotion as an excuse to cave in. if that happens, then what we have done is to have the reality that's confronting us now be Ibrahimized.

The reality is we have article 153 and other clauses in the Constitution that make the position of Malays, religion, language, employment and all that virtually unassailable. On top of that, Malays have the demographic advantage. It's unlikely the other Malaysians can procreate by quantum leaps and suddenly eclipse Malay Malaysians.

Ibrahim Ali and his gang are mounting a rear guard action that supports rent seeking culture that is commonly associated with old school UMNO. Zaid Ibrahim wrote a very terse essay on this.

I have said earlier, that it's unlikely that those in power will abandon the needy Malays. The NEM will never do that because that would be suicidal. If they do, then our economists and policy makers reviewing the recommendations by the team that is culling up the NEM are, sorry to say, dullards. We are better off if we assign [perceptive people like Wenger Khairi to assist the planners.

As regards the NEM- let me quote the beautiful Walla( I hear many are falling heads over heels at the representation of Walla in Walla's calling card):-

Lastly, no one is naive to think the new model will not remain accommodative to Malay privileges intractably sold as 'rights'. Nomenclature and intent aside, what is portrayed and what the world cares about are not synonymous. Investors in the present global economic situation don't have time or patience to play our game of political niceties. They answer only to their shareholders who will only ask the Malays and others in the same honey jar to grow up and realize the real world is about modernization and progressive mindsets, not the ibrahimization of reality.

As to the reality that the majority of the economically marginalized are Malays, Walla presented this reasoning:-

But as concerned citizens, we must all nevertheless not just be satisfied that such a realization has come about. We must do whatever we can to help all races overcome their internal dilemmas. If the community that is suffering the most from a modernization crisis are the Malays, then let's put our heads and hearts together to see what positive measures can be taken to lift them up. They cannot do it on their own. Their leaders have only messed up everything for them and taken this whole nation down the same road with it. They need brotherly support in an open and frank environment that thrives on a new level of trust and understanding free from caginess and past shadows.

Because all will have to realize that never again must affirmative measures be a zero-sum game of trying to come up by making sure others go slower or be labelled as cattle to be milked of their labour in order to support free-rides and unearned goodies that only open the Pandora box to ill-gotten gains for a bunch of unethical and hypocritical elite who will then without the slightest shred of conscience use the other Malaysians as bogeymen to be blamed so that the Malaysians who happened to be Malays can be cowered into some unsupportable fear to continue supporting such divisive affirmative policies. That is not Malay supremacy. That is national suppression, swindling and siphonage.

I couldn't have said it more directly and in as piercing a manner as Walla did.