New economic deal planned for
Malaysia By Anil Netto
PENANG - With Malaysia's opposition in the
ascendancy after stunning electoral gains last
month and subsequent promises to form a new
government through political defections later this
year, questions are rising about how the
opposition would differently manage economic
policy.
The Pakatan Rakyat (PR), or
People's Alliance, comprised of the multi-ethnic
People's Justice Party (PKR), the Islamic Party
(Pas), and the Democratic Action Party (DAP), now
control 82 seats in Malaysia's 222-seat
parliament. And the alliance is now promoting a
new needs-based Malaysian Economic Agenda (MEA),
specifically designed to replace the decades-old,
race-based New Economic Policy, created and
sustained by the ruling United Malays Nasional
Organization (UMNO) to favor ethnic
Malays over the minority
Chinese and Indian communities.
The PR
currently also has control over five states in the
peninsula, accounting for about 56% of Malaysia's
total gross domestic product (GDP) and including
three of the most industrialized states in the
country - Selangor, Penang and Perak - and two
among the poorest - Kelantan and Kedah. The ruling
coalition, meanwhile, is mired in factionalism and
internal rivalry with the most attention focused
on internal politicking inside the UMNO.
In the months leading up to the general
election, Prime Minister Abdullah Badawi had
announced a string of state-led regional economic
growth corridors, to be spurred by multi-billion
dollar investments in infrastructure and other
projects. However, critics charged those designs
were indicative of the same top-down economic
model the party has long championed, designed with
little public consultation and with its prime
beneficiaries likely to be major well-connected
corporations.
The government has
traditionally worked on the affirmative action
principles outlined in the NEP, which after it was
first introduced in 1971 initially lifted broad
segments of the majority ethnic Malays into the
middle-class. But critics say its race-based
policies were later abused by ruling coalition
politicians to award contracts, licenses and
corporate equity to cronies and politically
connected firms.
This, along with
neo-liberal policies that cut taxes for the rich
and slashed subsidies for essential services, has
contributed to widening income inequality, which
by some statistical measures represents one of the
highest disparities in Asia. After last month’s
election results, there's now a broad recognition
that the NEP has run its course.
"The NEP
is good but its benefits are only enjoyed by some,
as many Malays in the country, including those in
Penang, are still poor," said Lim Guan Eng, the
chief minister of the DAP-led Penang state
government. "The implementation of NEP has only
made the rich richer and the poor poorer due to
malpractices."
Advocated and designed by
opposition icon Anwar Ibrahim, the MEA is aimed to
replace the NEP with an economic policy that,
regardless of ethnic group, provides equitable
assistance to poor and marginalized Malaysians.
"We always stress that under our leadership, the
interests of the Malays will be maintained, and we
are always committed to building a new system that
is fairer, more just and we will ensure that no
one will be left behind without regard to their
race or religion," Anwar recently wrote in his
blog.
He added that there are plans to
introduce new mechanisms to channel economic aid
to large groups of small traders within the Malay
community and to ensure that educational
opportunities, micro-credit schemes, social and
welfare services and other forms of economic aid
are available to the community.
Civil
society activist and economist Charles Santiago,
who was last month elected to parliament on a DAP
ticket, says Anwar's PKR - and to a lesser extent
the DAP - is committed to reducing the cost of
living, especially for the poor in the five states
the opposition now controls. Pas, for its part, is
downplaying its Islamist religious agenda and is
instead promoting the economic concept of a
welfare state.
In PKR-led Selangor, for
instance, the state government announced it would
provide free water for the first 20 cubic meters
to all the state's residents. The state's chief
minister also said he would be looking to raise
the job skills among youth. Others are hoping for
a dialogue on how to bring together progressive
forms of secular and Islamic community economics.
Santiago said he would like to see more
public-public partnerships among the five
PR-controlled states. "Transparency in contracts
and open tenders are a big change [compared to
previously]," Santiago told Inter Press Service.
In that direction, the Selangor government
is hoping to learn from the experience of the
publicly-owned Penang Water Authority, regarded as
one of the most efficient in the region. Both
states are also exploring how they can get their
state agencies to cooperate and complement each
other in human resources, education, physical
development and manufacturing.
Santiago
says he will also propose that the five states
under PR rule raise their food production. State
governments, he said, could play a big role in
investing in food production to mitigate the
rising cost of living. The state governments could
work on increasing yields, providing more
subsidies to farmers, and strengthening farms
managed by smallholders, including family-run
farms, he said.
So will the end of the NEP
lead to radical economic changes?
Not
necessarily, says political scientist John Hilley,
author of the book Mahathirism, Hegemony and
the New Opposition. For one thing, the
international private sector would view the
removal of the racially divisive NEP as another
"necessary step" on the road to a more deregulated
free market economy, he said. "And this begs the
bigger question and problem for the opposition
[PR] of how to advance policy ideas that don't
just abandon 'outdated' social instruments for
more market 'solutions'."
This he said was
a serious dilemma for any socially ambitious
"government-in-waiting", fearful of anxious
free-marketeers and capital flight. "The blackmail
threats and constraints of the global neo-liberal
[dis]order cannot be easily dismissed," he told
IPS in e-mailed comments. "Yet, until there are
imaginative efforts to craft and pursue people-led
economics, the same social divisions, inequalities
and business-first agenda will prevail."
Support for a new social economics was
clearly evident in polls in the run-up to the
general election. Many Malaysians, especially from
the working class, appeared drawn to election
campaign pledges to increase subsidies for fuel
and education, to do something about the rising
cost of living, and to reduce income inequalities
between the privileged elite and the toiling
masses. There has also been widespread public
disenchantment over perceived disastrous
privatization policies that seemingly have only
enhanced corporate profits and elite salaries
while undermining public services.
Policies that truly promote social
investment and poverty-focused spending would thus
probably be more welcomed by the public. According
to Hilley, what is lacking is the political will
and radical creativity to realize such policies,
adding that the post-election phase ought to be
used to explore and build credible alternatives to
those proclaimed by corporate interests and the
"market evangelists".
He stressed that the
key impetus for meaningful economic change would
have to come from civil society itself - active
non-governmental organizations, reformist lobbies,
community groups, academic activists and others -
rather than "a hopeful reliance on politicians
whose idea of 'economic delivery' becomes mediated
by political office and tamed by the 'realistic'
demands of big business".
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road,
Hua Hin, Prachuab Kirikhan, Thailand 77110
