A couple of days from celebrating 50 years of Malaysia, the Barisan Nasional (BN) government has come out with a new economic plan for the dominant Bumiputeras and in the process, entrenching the state's role in the economy.
In not so many words, it would appear that BN is admitting that all previous plans, including the New Economic Policy (NEP) and the National Development Policy (NDP), have all failed to redress the Bumiputeras' economic plight.
Under the plan, Bumiputera students will be retrained and reskilled for jobs in the market place while ownership of non-financial assets such as houses will be increased.
Putrajaya will also enhance the availability of credit to Bumiputera entrepreneurs and, on this note, Amanah Ikhtiar Malaysia funds will be boosted as will Tekun funds, which will be raised to RM700 million.
Nothing new here. Even housing has been made a priority with the PR1MA and other affordable housing projects announced in the past two years.
Except increasing more of what has been given in the past and acknowledging that past plans did not work.
"If we do not bring up the economic participation of the Bumiputeras, the country will not be able to achieve developed nation status by 2020," Najib said today.
"Certainly we are doing what is fair, we are doing what is right and we are doing what is equitable," he added.
Fact is, the country has been doing this since the NEP was launched by Najib's father, Tun Abdul Razak Hussein, way back in 1971 in the aftermath of the May 13, 1969 race riots.
The NEP had two limbs, to eradicate poverty among all races and to restructure the economy. Has it worked? No. The government said it only achieved 23% of equity, against the target 30%, in 2010, 20 years after the NEP officially ended.
The other fact is this, Najib is essentially rolling back his plans of reforming and liberalising the economy that was introduced when he took office in 2009 – to reward the Bumiputeras who supported BN in the May 5 polls and ahead of his Umno party polls.
Respected pollster Ibrahim Suffian put it succinctly, "He is shoring up support of the Malays, particularly business people and contractors," he told AFP. "He's appealing to the base."
But more of the same is not expected to work this time. Even the government-sponsored Majlis Tindakan Ekonomi Melayu (MTEM) has expressed reservations about the latest plans.
"We wanted to see stronger outcome-based targets in the five strategies... Otherwise the risk is we end up only measuring inputs and outputs without knowing if we have achieved our intended outcomes," MTEM chief executive Nizam Mahshar said today.
There is also that deleterious effect on the economy if Putrajaya's plans are just about reallocating resources to various interest groups with an affirmative action policy and not ensuring the economy remains healthy.
Wan Saiful Wan Jan of the Institute for Democracy and Economic Affairs said Najib's reluctance to dismantle the affirmative action policy would harm Malaysia's economy in the long-run.
"It will definitely have a negative impact on the economy," he told AFP. "The announcement today further enhances the role of government in the economy."
Last month, Malaysia lowered its economic growth forecast for the year to 4.5-5.0%, down from 5.0-6.0%, amid weak export data, the news agency said.
Will the latest plan help the Malaysian economy or just be seen as pandering to the government's supporters? Will there be another plan to replace this plan in the next decade or so?
Malaysia's track record on this would suggest so, unless the government looks into the structural issues and ensure all Malaysians get a fair chance of moving up the economic ladder. – September 14, 2013.