When the Malay Economic Action Council (MTEM) was asked why multiethnic Malaysia should pay for another bumiputra-only development agenda, two stories were suggested:
First was of an honest, accomplished expert in his field, who was leading the Malaysian operations of a multinational corporation. He then ventured to build, what he had hoped would be, a successful bumiputra firm in that field. But after sinking RM30mil into a factory and even selling his products in overseas markets, he could not get enough government contracts even though he offered competitive prices. But because he did not get enough government contracts, he had to shut down the factory, which he had built in his hometown to give the local youth jobs.
Source: https://mtem.my/
The second story is of a bumiputra entrepreneur who invented a form of lithium technology that could be used in electric vehicles. But after filling out countless application forms, the entrepreneur just could not get enough funding from Malaysian agencies or state corporations to turn his invention into something commercially viable. This is despite the slew of government programmes and initiatives designed to help budding bumiputra entrepreneurs.
As they illustrate, they (MTEM) say Malaysia needs another bumi-focused economic policy because the previous ones had failed to achieve their aims despite the fact that they were overseen by governments that were Malay and bumiputra-centric.
Some 3,000 participants are expected to attend the three-day congress on 29 February, which will focus on, among other things, new technologies that are expected to be developed over the next decade as well as the performance of agencies that were set up and entrusted to champion the bumiputra agenda since the first congress in 1965.
However, since initiatives to help uplift bumiputras economically have been around for more than 50 years with the introduction of the New Economic Policy (NEP) in 1971 – and given that other sectors such as schools and hospitals are also in dire need of funds – rumblings remain as to whether Malaysia still needs more of these policies.
In 2022, the median household monthly income for a bumiputra household was RM 5,793 while for an Indian family it was RM 6,627 and RM 8,167 for Chinese families. According to the 12th Malaysia Plan (12MP) while bumiputras made up 65.1% of all households in 2019, 71.4% of them were in the B40 (lower) income group. Although Chinese households accounted for 25.9% of total national households, 39.2% of them were in the T20 (top income) group and 19.5% were in the B40 group.
The longest and most familiar bumiputra economic agenda is the second prong of the NEP after its primary objective of wiping out poverty regardless of ethnic group, gender or creed. The NEP’s second aim was “to restructure society by eliminating the identification of race with economic function”.
This would be done through quotas, reservations and other forms of special treatment for the community. According to the 12MP, 39.1% of medium, small, and micro enterprises are bumiputra. But of that number, 82.8% are at the micro level with low value-added products and services earning less than RM300,000 a year.
The attaining of 30% of all corporate equity has been an obsession.
It then became a distribution of rents – IPOs, shares, licenses, permits, APs, contracts. These are pure rents. Not even the means to create rents. And rents are not sustainable and their preservation is distortionary. Most of these rents went to a small, well-connected group of people who were unable to use these to make more profits.
Another big reason why past policies have failed genuine entrepreneurs are factors like corruption, patronage, cronyism and the Ali Baba culture.
We are in the cycle of renew, re-set and repeat. It takes courage to make so-called bumi agenda, a national economic agenda. We need to have an “Oversight Group” from Parliament to monitor corruption, collusion or cronyism for any policy initiative and to review progress of specific goals. Otherwise, we will continue to do more talking with little or no positive outcome!
Reference:
Why another bumi economic agenda? Sheridan Mahavera, The Star, 18 February 2024
No comments:
Post a Comment