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Sakmongkol ak 47

Monday 7 September 2009


New Economic Policy.

It's not easy to debate about the NEP. Sincere arguments to reason out will be taken as attempts to abandon policies that were put in place to help out Malays. It is universally accepted that as at 1970 and even now, Malays have remained, comparatively speaking, economically behind. We can argue back and forth as to the reasons why this is so. The fact remains that they are indeed economically challenged compared to the greater economic advancements made by the Malaysian Chinese and to a lesser extent, the Malaysian Indians. I am skeptical however that much has improved for the Indians. The Indians to my mind are suffering even greater intra ethnic economic disparities.

For a Malay to speak about the weaknesses of the NEP is hazardous. It can be misconstrued as being less Malay or even treasonable for a Malay to discredit policies that are claimed to be helping out your brethren. You can be labeled an ingrate.

This attitude must be rejected because it can be used as an excuse to justify the injustice committed by a few in the name of the race and sometimes religion. Sitting idly by when you are aware that something is terribly wrong, is even more treacherous to the Malay cause.

The basic question is whether we tolerate a set of policies that perpetrate the enrichment of a small group of Malays or rationalize such arrangement as a small price to pay, for a greater cause.

Everyone knows that the overriding objective of the NEP is to achieve racial unity. To achieve this overriding objective, the methods were:-

  1. To restructure society so that no one race is identified with a particular economic vocation. Simply means, no one race must be allowed to have a monopoly over any particular economic activity.
  2. To eradicate poverty irrespective of ethnic origins.

To rectify the imbalances, the two ways that were accepted as more or most effective were education and business.

The link between educational standards and economic standing is well established. The better educated you are, the better chances you have to earn higher incomes. The other way is to speed up the entry of Malays into the business world. Many ways were carried out- Malays given priority in certain businesses; Malays were given licenses and quotas, given direct awards of contracts and so forth. The most contentious is the granting of 30% equity to selected Malays. Most of them cashed out to realize higher capital gains. Indeed as admitted by the PM, out of the 54b allocated only RM 2b remains. That means, those Malays who cashed out have betrayed the Malay economic cause. They and the over 1 million UMNO members who did not vote UMNO candidates should be called traitors by number 2 bossman.

The government must have known this sort of behavior. To circumvent this act of sabotage, they created unit trusts so that the trusts can buy shares on behalf of Malays and have them sold to Malays in the open market. Ordinary Malays gaining access to buy share from unit trusts can still enjoy capital gains when selling. Because of this opportunity, the Malays are said to enjoy better income.

These two mean that catapult Malays to higher income brackets must be judged differently. You get good education; you enjoy a steady stream of income. You sell your stock, it's a one off addition to your stock of wealth. Unless of course, you are in the business of buying and selling shares. The first, advancement through education guarantees you lifelong earnings. It's a flow. The second, selling shares acquired confer one off benefit. One is long term, the other short. One empowers you by converting you into a wealth creating actor. The other doesn't generate wealth creating capacity.

This main difference is what troubles us.

Advancement through education.

As we have said, the government regarded educational opportunities as a means to jump-start Malays into higher incomes bracket. In the 60s and 70s, entry into 6th forms was made easier for Malay students. Those with grade 2 could enter form 6 as a pass at HSC or STP was the entry requirement into the universities. Malays students with minimum principal passes entered universities and most of them took advantage of the chance given. The general feeling was, Malays were handicapped in terms of education because they lacked many amenities. Many went on to train under INTAN to become MCS officers and went on to become head of departments, MCS officers and District officers. Of course they were fast tracked to become these. Even those who did not have the proficiency in English were also able to enter the job market. Many became professionals- lawyers, engineers and so forth. Private companies were eager to absorb qualified Malays and employ them where they received further training and gained experience.

It would be interesting if the government can produce data showing the number of Malays who got into the higher incomes bracket as a result of education with those who became richer as a result of getting and cashing out shares. We will then be able to compare the efficacy of the two approaches. It's a good guess however to say that those succeeding through education are bigger in number than those receiving goodwill.

Which route is better?

We can judge which of these two approaches and the principle/s behind them are better. My own thinking is that advancement through education is more democratic and closer to libertarian views while the route taken to enrich Malays by more or less arbitrary selection process isn't. How do you select who shall get your windfall? On the basis of you know them? That would certainly exclude a large number of Malays who can't even get close to leaders, decision makers and head of departments. The general thinking is, because the selection process isn't democratic, it has led to a belief that such policies only lead to enriching a few.

Giving educational opportunities to Malays is the same as empowering them. With education they can take a firmer place in society because now they have the tools to at least compete. But more importantly, it elevates their dignity because now, after education and training, they can advance by leveraging on their skills and individual efforts. The form of government assist takes the shape of an impersonal selection system. You offer your educational levels based on what you have put in up against a selection system. You gain access by offering the only asset you have- the education that you have attained.

In that way, the distribution of educational opportunities is more just and fair. The relaxation of entry rules into learning institutions, are faced by all Malays. Malays compete among themselves through their educational attainments. Against a selection system, the competition is only between you and the system.

But more importantly, access to educational opportunities, training and acquiring skills allow individuals to acquire wealth generating capacities. In the final analysis, the educational levels you get will depend on the efforts you put in, the discipline under which you subject yourself to. The more you put in, the more you can take out. You compete one to one with your brethren, and that makes your chances to succeed fairer.

You can't argue on these terms when your advancement is gotten through a gratuitous windfall in the form of being given almost free at times, shares in ongoing businesses. What have you offered to acquire them? Nothing except by being who you are. That makes the selection process highly subjective- because you now operate under a system that promotes you on the basis of who you are and not on the basis of what you can do. Can the government publish the list of the recipients of the RM54 billion shares and also publish the names of those who have cashed out? It is highly likely that the majority who got and later sold out are personages of the higher order.

Take the case of the 30% equity requirement. We don't have an impersonal system that filters who shall get and who shall not. What we have is a highly subjective assessment. This person deserves so, and therefore we give kind of thing. Who gets therefore depends on how well one knows the giver. We have a subjective system that is judgmental as to who shall be given. Access is not opened to everyone simply because the requirement of who you are is most probably inherited or acquired as a result of being known to decision makers. Decision makers decide who they shall enrich. Allowing that, means that our advancement now depends on the charity of others. Being dependent of others for our advancement goes against the principle of being a free man.

Access to the privileged head start isn't opened to everyone. Indeed, most times they are known well ahead among policy makers and it's impossible to set aside the suspicions that they will take first.

The biggest difference then is that while access to educational facilities is more democratic ad depend on what you can do, access to who gets what business advantages such as acquiring 30% shares is not democracy friendly. It depends on being who you are and depends on who you know.

Access to educational facilities and opportunities is opened to everybody and we need only one qualification which is we offer the educational attainment that we have. Access to getting business privileges does not operate that way. The government through the agency of various intermediaries such as politicians, government officers and so forth determine who shall get rich. It's a system of picking winners based on ascriptive norms. (Being who we are as opposed to what you can do).

Education gives a direct impact on wealth creating potential while distribution of assets on the basis of subjective criteria will only frustrate wealth creating potentials. Simply because you haven't developed the sustaining and supporting skills to manage the windfall you unexpectedly get.

Stepping up the ladder is achieved by way of individual efforts by each and one pursuing his/her own vocational interests. On the other hand, social advancement through gratuitous gifts involves expansive government intervention. In the pursuit of advancement through education, we compete one to one against an impersonal system. We use our abilities. But when government gets involved by conferring privileges on those who get so by being who they are, you are no longer competing one to one. What you have now, is you are competing one with another plus government behind him. Surely that cannot be fair play? In addition, bigger involvement by government will often lead to bad side effects such as abuse of power and corruption. Not to mention, the god playing mindset acquired by decision makers.

We object to this kind of strategy of selecting winners based on subjective assessments because we want a system which facilitates social advancement that rewards us on the basis of what we can do. That is the principle behind advancement through education. You are competing on your own using what skills you have acquired. We want to compete one to one and not against another one with the might of government behind. That's not fair.


Are You Gonna Go My Way,  7 September 2009 at 23:04  

Selamat Berbuka Puasa dan bersahur Dato’,

We the majority of Bumiputra including you Dato’...have a legitimate argument to voice our concern on NEP… to put it bluntly, we didn’t get that 30% portion except for the education that we get..during our varsity days… apart from that maybe some right to invest in ASN or ASB where we gave our money so that they have more money to take over large corporate belonging to foreigners and some Malaysian non bumi.

While I have the right to complain, I don’t think people like Zaid Ibrahim has the right to even suggest that NEP was a failure since his firm was the one getting most of the takeovers, mergers, acquisition and privatization legal work that made him a millionaire.

I don’t think Anwar Ibrahim has any right to complain too, since he was the one that had all the pink form and giving it out to all his friends.

Most of us between the age of 40 to 50 years old with good education still struggling in business till today except those who took the safer route by working for government or some large company (now should be GM or KSU)…I think you too know some of them… we missed the boat Dato’,,,we neither here nor there.. but still we never give up.

Kala Jengking,  8 September 2009 at 00:15  

I agree to what you said. Everyone with just an average intellect know the problem. But how to change? Will UMNO change? I doubt so. I don't think Najib has the courage/will power to change. The 'warlords' will go after his throat if he does. Maybe also the number 2 bossman will call him a traitor to the Malay race if he does! So how to change? Can you offer a solution other than changing the current government?

You said "The better educated you are, the better chances you have to earn higher incomes." - True couldn't agree more with you. But we know and you also know that many of the uneducated (ex-storekeepers, ex-jaga, office boys etc) hold important positions in the cawangans and bahagians. Mind you, many of them earn higher incomes than the educated. Many of the educated realize this. How do you think they will feel? Who do you think they will vote? How to change this politics of patronage?

You said "The other way is to speed up the entry of Malays into the business world." Agreed. The problem is where are they now despite the speeding up? Ali Baba? Who are these people? Are they not UMNO people? Rent seekers? Like you said, we can also call these people a traitor to the Malay race.

Also, the current UMNO strategy to woo the people to their side will not work. They have to change by being inclusive not exclusive. Forget about the rhetorics. Start being honest and sincere and also change some of the "generals" including the information chief. he has yet to master the art of war! Otherwise, I don't see any light at the end of the tunnel. But again, will they? Sorry to trouble you with so many questions. It is meant for the "generals" in UMNO to answer. But then again, do they bother to even read your blog. I hope so.

walla 8 September 2009 at 01:07  

It's not easy to score 20 SPM A's in diverse subjects in one sitting. Yet a Malay youngster did that last year, piping the 16A's scored by a Malay girl some years back. And we can see more and more Malays scoring strings of A's in their overseas exams for admission to prominent UK and australian uni's.

So the brainpower is there; it was nascent only because of old hamperings like colonialism, traditional occupations and laidback environments. But some have seen that these are not real constraints and they have shown that great things can be achieved without the taint of race. In fact, for Muslims who are steeped in disciplined learning of the faith, the same mental discipline can also be channeled to gain education as springboard to lift oneself out of poverty and into fruitful occupation. It's like making your own wau and seeing it soar; much better than just buying one and trying to pull strings.

Therefore one may hazard that 1Malaysia in essence will come about the day no malaysian of any race believes that there is a fixed limit in any race to being able to achieve.

We should all believe in one another and do as much as possible to help each other.


But one must also admit that if distributive policies are seen to be unfair or inefficient, then it will be hard to (a) sustain them, (b) continue them, (c) avoid counter-reactions, and (d) cohere all races together in a powerful bonding that will erase unnecessary tensions in order to build a world-unique teamwork that is the acme of 1Malaysia.

If we look at our youngsters, there is a friendliness between them at an individual level which transcends the bickerings elsewhere. How is it possible that parts of a whole are healthier than the presumed whole of the parts?


So far we have been ignoring those factors mentioned above on the logic that if the playing field was unevenly paved from the very beginning, then it would be hard for those who have been abnormally disadvantaged to rise to the same level that will enable the uneven distribution to stop.

However this has not worked because the distribution was hijacked to favor some when it was meant to lift all up, and also because the target group has been outpacing the rate and capability of support.

More importantly, the whole situation was used for political expediencies which also ignored the fact that the others who did not receive any support had progressed even more because they worked hard, saved up for the future, invested in important things and did not waste their time and energy chasing frivolities.

The whole exercise of showing affirmative policies then tragically became one of massive neglect to attune the target group to the need to do the right things and to do things right in an increasing complex world that can only progress by bonding and knowledge.

In that world, it is no longer enough to be able to fish. One shall also have to know how to make the fishing rod and where to look out for the best shoal of fish. No man can be an island and it is by working hand in hand together and overcoming problems and difficulties together that knowledge is learned today to surmount new difficulties tomorrow.

Policies wrongly applied using only what they call zero-sum mode will only deepen rifts and create islands that divide a country - as one can see how countries made up of many islands are so difficult to logistically cohere.


walla 8 September 2009 at 01:07  

Our world has gotten more complex by the day. In recent memory, free market capitalism was toasted as the best method to building wealth but behold how imagination and greed has wrought havoc on business outcomes. Millions lost their jobs. Disenchantment ensued. People are now talking about caring economics, paying more attention to good governance, higher accountability, reasonable rewards and good corporate citizenship.

The same ideas apply as well to individuals. Each must hold fast to a set of values that will enjoin to form a value system. If we can afford to prosper our neighbors, we can afford to prosper our fellowmen.

But prosperity is not just material wealth. It is also about personal conviction that this country provides enough good living space for everyone so that on this conviction, it behooves every single Malaysian to be sensitive to the plight of all other Malaysians.


You will be able to measure the resilience index of 1Malaysia the day one will find an excuse for the other. And in so doing, draw a positive reaction from the other for recognizing the extra effort by one.

Indeed the heart sighs that we are still far off. That day has not yet arrived where a poor malay receiving something over and above the other poor's will stand up and insist that what he is given should also be parceled some to help the others on just the very fact that what is given came partly from the toils of the others on the whole inasmuch the emanates of this soil.

And on receiving that, the other equally poor will take a step back to understand that if a malay muslim takes exception to something within daily eyeview, it is because his beliefs are centralized on a way of life which has to be lived daily, constantly and evenly. And it is more central to him in direct proportion to his material difficulties. His enclave of the mind is faith which provides him the only shelter he has left from the contending and difficult forces of a material world he struggles to make achievements in every day of his life.

Therefore, if it is not 'hanya Tuhan yang kekal', then what is it?

By the same token of appreciation, so too for others. And what they ennoble.

1Malaysia has to live in 1World. And 1World is complex. It is like that chemical experiment to make a complex compound. You are given three hours. It is A+B to get C, and reflux C with D in the presence of E to get F and G which is reduced to get H and then purified to combine with the output of I and J to get K. But that's only the linear part. One sequential step after another. It cannot be achieved in the three hours given because each step takes time. So one must improvise by multitasking. While coaxing A and B to dance to give birth to C, you have to do something else, say X. While X is bubbling, you move to D, maybe spend a few seconds on what is coming out as E. And so on. Until Z suddenly appears.

In all this, knowledge, planning, hindsight, foresight, presence of mind, care, hard-work and intelligence must work together like a symphony.

The experiment won't work and cannot be repeated even if it works by one getting a free voucher to K.

For 1Malaysia to thrive in 1World, we must all craft our own symphony together. And not be envious of those who have honestly walked their own risk-filled, sweat-drained, high-octane road from A to Z.
And by the same token of this appreciation, we should do our level best to help those who are doing their honest best to come up. If for instance one is ill and wants to go get some medicine, why not the malay pharmacist? The son stands at the glass door to welcome you, the cheery daughter makes you feel like a happy customer, and the mother kindly advises you not to take the medicine unless not driving. Not that one can fall asleep on a bicycle.

I shall not write about half-past-six politicians and leaders this morning because it is already past half past twelve.


Anonymous,  8 September 2009 at 07:30  

RM54b 'given' under the NEP - thats a lot of money. Putting aside the question of whether this amount alone would have achieved the 30% coporate share of the pie, a fraction of this would have certainly taken care of rural poverty - yet we have politicains saying that there are rural schools without electricity etc. How can this be? Could it be a deliberate ploy to keep the poor forever poor so that UMNO can forever champion their cause? Sadly that would be the greatest act of betrayal by those in power against their own race.

Anonymous,  8 September 2009 at 10:34  


U have good points but u also have missed some - especially the educational part!

To paraphrase, not everyone can be like the Oracle of Omaha. Thus not every Malay M'sian can turn out to be like Dr Bakri Musa!

Provide good educational facilities & opportunities to the deserved Malays by all means. That's a OK.

But open the higher educational flood gate to all & sundries of the Malay M'sian, is definitely a no-no. More so, played within the context of zero-sum game.

(Pls read on before shouting racist!!)

The lowering of the passing means & additional pseudo-course credits, with out-right racial bias, to allow sub-standards to get professional degrees just to produce the desired quantity r known practices within our institute of higher learning!

It's far better to uplift a group of gifted Malay M'sian through whatever educational means. Then get these people to influence, inspire & uplift their subsequent brethren. I can think of Dr Bakri out-right for his reputation both in medical field & his single-handed march on education M'sia!

I believe what u have penned in yr article ignored this. Maybe I read u wrongly - u just want to provide higher education opportunities to all & sundries! get as many 'professionals as possible - quantity matter! Wasn't this the same approach to expect all will end up like Dr Bakri. A VERY tall order indeed.

Just imagine the subsequent problems of allowing hp6 administrators/managers/educators to play their charges? For that - U will have what we have NOW!!!


Kala Jengking,  8 September 2009 at 15:02  

Is that a photo of you? Mmm...very pretty. And you write well too. Not many ladies (especilly the pretty ones!)are interested in politics/national issues. Even though one is not a politician, giving honest and sincere comments for the benefit of the nation is laudable. Syabas to you.

Anonymous,  8 September 2009 at 15:43  

I am sure PM's magic RM 54 billion figure is completely off the mark...

Is the RM 54 billion the PAR value?the IPO prices?the market price (highest)?

Now..if RM 52 billion sold..tell me..

where are the>
52 billionaires?
or 520 guys worth 100 m
0r 5200 guys worth 10 m
or 52000 guys worth 1 m

The actual story is the 97/98 crisis i.e when share prices plummeted below IPO and PAR...and those who can't meet margin calls had their shares dumped.

At the end..if one had managed to survive the carnage and without offloading/change portfolio the values of the shares myb only 15 to 30% precrash.And for some..even TODAY a lot of IPO shares hv not recovered.

Sorry have to provide the actual data..not populist statements to justify the current search for a BN PRU13 formula.

Other races have their affirmative actions..

Anonymous,  8 September 2009 at 15:53  

Most of us between the age of 40 to 50 years old with good education still struggling in business till today except those who took the safer route by working for government or some large company (now should be GM or KSU)…I think you too know some of them… we missed the boat Dato’,,,we neither here nor there.. but still we never give up.


What would be the definition of success on a personal monetary terms wat would be the net worth?..1m?3m?10m?
I know a lot (200 at least and I am not ultra active socially.. )of Bumi bixmen with bungalows,big cars..thus i would presume their net worth should be a few million..

And I think govt should develop this group of experienced bixmen i.e those with 20 to 30 years hands on experience but hv not "been kissed" before.These are the hardcore that if given a little impetus can really FLY.

Form this the alternative Dewan.Members must have following attributes>
Tertiary Education
Minimum 15 years hands on biz
Financially..neither here nor there

I am sure there will be LOTS of members...

Are You Gonna Go My Way,  8 September 2009 at 19:25  

Anon at 15:53

while those 200 friends of yours can fly, do they want to? Or are they so comfortable now cruising on auto pilot.Most so called succesful bumi with bungalows and big cars cannot be the yardstick of a succesful person. They have the money but what can they do with the money.

Sucessful means you are able to be what you want to be to the maximum...usually you cant because of lack of funding. The funding goes to the big guys.

Anonymous,  9 September 2009 at 00:17  

AYGGMW..thats a mouthful..

I agree..successful does not only mean comfortable living but achievement in one's area of expertise.Thats wat Bumis lacked..a genuinely competitive business community that can network n provide that foundation..

And I believe the govt shld be looking at those group of Bumis..with 10 to 15 years hands on experience,who knows their business and have the skills,endurance and guts to want to grow the biz.The guys who wants to auto cruise shld be left to their own devices.

We need the alternative DEWAN...cos the current DEWAN is out of synch with the real biz environment.

Can Ekuinas appreciate the real struggle?

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