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A Malaysian debate
with merit
By Anil Netto
PENANG, Malaysia - The debate over
Malaysia's affirmative action policies has been
swirling in recent weeks after revelations that a
coterie of well-connected ethnic Malays has reaped
huge profits from import permits awarded to them.
The revelations have fueled a persistent
debate over whether ethnic-based affirmative
action policies are still helpful as Malaysia's
open economy grapples with the challenges posed by
globalization.
Last month, the debate
spilt into the open when some delegates at the
general assembly of the ruling United Malays
National Organization (UMNO) criticized the award
of lucrative permits to import foreign cars into
Malaysia to a chosen few. Critics outside UMNO
said the scandal showed how ethnic-based
affirmative action policies could be abused to
enrich a select group of well-connected
individuals.
Affirmative action policies
in favor of the indigenous bumiputera (sons
of the soil) groups were part of Malaysia's New
Economic Policy (NEP), a 20-year blueprint to
reduce poverty and to restructure society to end
the identification of occupations with ethnicity.
The policy espoused ethnic-based quotas
for university admissions, licenses, scholarships
and civil service recruitment to promote
bumiputera participation in the economy.
On the NEP's expiry in 1990, these
policies continued under a National Development
Policy. But the share of bumiputera
corporate equity appears to have stagnated at
about 20% since then - though some dispute the
figures - well short of the NEP's 30% target.
Leaders of UMNO's youth wing called for a
revival of the NEP, hoping that it would jumpstart
the quest to reach the equity target. "The NEP
definition itself should be reapplied as part of
the national development policy, so that Malays
will be empowered and not sidelined from now till
the year 2020," said UMNO Youth chief Hishammuddin
Hussein.
He said the NEP's "growth by
distribution" strategy should be pursued to ensure
the bumiputeras finally achieve the 30%
target.
But such calls set off concern
among UMNO's ruling coalition partners and
opposition parties, who feared it could mark a
return to the abuses of implementation.
Some Malaysians believe the time has come
for meritocracy to create entrepreneurs and
professionals who can face up to the demands of
the global economy. They feel that ethnic-based
affirmative action policies have spawned cronyism
and corruption and created a dependency syndrome.
Handing out of licenses and contracts to
well-connected individuals and firms has promoted
a culture of patronage, they argue.
"We
are dealing with a party, UMNO, that tells the
Malays that if you don't support UMNO your future
will be jeopardized," said former deputy premier
Anwar Ibrahim.
Anwar, who has now allied
himself with opposition parties, argued that the
time had come to end the "corrupt bumiputra
policy". Instead, he called for a "new compact"
among the various ethnic groups which would
include forgoing the bumiputra policy while
at the same time approaching ethnic Chinese firms
to increase their bumiputera staffing.
He was quick to add that he was not
calling for the abolition of the "special
position" of the bumiputeras in the federal
constitution. The Sedition Act makes it an offence
to question this provision.
Some
Malaysians favor affirmative action policies based
on need rather than ethnicity in a social
democracy that would provide assistance to those
who most need it.
Still others argue that
neither affirmative action nor meritocracy as
currently understood are sufficient. Meritocracy,
they argue, would merely provide more
opportunities for another class of individuals -
who happened to be born into well-placed middle
class families - to prosper, leaving the vast
majority trailing behind.
"I am worried
that we will be trapped into a more sophisticated
version of the quota system and fail to look at
the issue of how our children are learning to
become laborers in this globalized system of
production," observed Azly Rahman, a columnist for
independent news portal Malaysiakini, in a recent
commentary.
"We are using the wrong
assessment strategies to create another
colonial-styled pluralistic education system that
favors the children of the economically-privileged
in this nation that is increasingly cybernated and
bio-technologized."
Malays are the largest
of the various indigenous bumiputera groups
in Malaysia. The bumiputeras make up over
60% of the country's 26 million population,
Chinese account for a quarter and Indians about
7%, the remainder being foreigners.
After
independence in 1957, Malaysia practiced a
laissez-faire approach to its post-colonial
economy that did little to tackle inter-ethnic
income disparities and corporate dominance. Ethnic
Chinese and foreign interests controlled commerce,
many Malays worked as fishermen and farmers, while
large numbers of Indians toiled in plantations.
These imbalances persisted until 1969,
when bloody politically inspired ethnic riots
between indigenous Malays and the immigrant
Chinese community broke out, marking a watershed
in Malaysian history.
Few dispute that the
NEP, introduced after the bloodshed, has been a
qualified success. Poverty levels have clearly
improved, even though critics point out that the
official poverty line is unrealistic and the drop
may not have been as spectacular as touted. The
participation of bumiputeras in the
professions and other occupations has soared as
well.
Before the NEP, almost every
sizeable Malaysian company was under ethnic
Chinese control. Now many of the country's top
corporate personalities include
bumiputeras, and bumiputeras as a
whole own about 20% of corporate equity (compared
with 2.3% in 1970).
But relative poverty
and intra-ethnic poverty have widened as benefits
fell disproportionately in favor of the elite of
all ethnic groups. The corporate class, meanwhile,
has prospered on the back of cheap and imported
labor. Malaysia still does not have a minimum wage
and unskilled operators, many of them Malay, earn
about 500 ringgit a month (US$131) - about the
same level as the official poverty line.
Critics also question the obsession with
corporate equity as a measurement of income,
arguing that it only measures the way income is
distributed among the middle and upper-middle
class groups. The vast majority of Malaysians on
the other hand are not in a position to afford
shares; at most, they may only be able to take up
small stakes in state-run unit trust funds.
Not all bumiputera groups feel they
have benefited equally. Many bumiputeras,
in eastern Sarawak, for instance, are still
struggling to have their native customary rights
and land ownership recognized by the state. Ethnic
Malays in the northern state of Kedah and in the
east coast states of Kelantan and Terengganu on
the peninsula are generally much poorer than their
urban counterparts around Kuala Lumpur.
Within urban settings, too, a sizeable
underclass of all ethnic groups lives in squatter
settlements or cramped low-cost flats - a world
away from the glitz and city lights. Thus, the
intra-ethnic divides have grown and many analysts
are concerned that a continuation of ethnic-based
affirmative action policies could perpetuate or
even widen these gaps.
Some observers feel
that past policies have undermined the ability of
many bumiputeras to compete in the global
market place. "Do we know, for instance, the
percentage of Malay entrepreneurs who were knocked
out by the 1997 financial crisis and were unable
to rise again because their weak foundation was
built through the original NEP approach?" asked
political commentator Rustam Sani, author of a new
book Whither Malay Nationalism?.
"I
am not convinced that reverting to the NEP will
resolve the deeper structural challenges
confronting the economy and society."
(Inter Press Service) |
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