After 1969, the answer to Malay economic problem is solvable it was thought through command center economics and centralized planning. A variant to this command centre economics and centralized economic planning is we get to play god in choosing who we want to advance. What developed is not only siege mentality but could be more appropriately termed the bunker mentality. The high seats once occupied by the money changers are now seating officious and benevolent G Men. They are the public sector money changers in the temple of the New Deal for Bumiputeras. Once you are ensconced inside the bunker, comforted by the impenetrable walls, asking these people residing there to dismantle that edifice will not be a walk through the park. You are going to get stiff opposition and outright denunciations.
This led to an economics which I termed as Sieg Heil economics. You actually choose people who you want to succeed. They then become salutary examples of the Malay can-do-anything spirit if given the license, quota, monopoly chance.
Hence we saw the emergence of handpicked and anointed super Bumiputeras who were given quotas, exclusive licenses, protection and so forth. To this very day, this kind of sieg heil economics- where the chosen one is expected to raise his hands saluting Malay-can-do anything spirit is still happening. Witness for example the license given to Naza Group to build a RM600 million Matrade Centre in exchange for land valued to be worth RM15 billion. To me, we must add a new definition to the concept of usury in the Islamic Lexicon.
Groups of benevolent public officials huddled together to plan the industry and improvement of the Malays. Of course we didn't see the extreme form of centralized planning such as the Mahalanobis gigantic input output tables in Nehru's India planning every minutiae of economic life of the Malays. That kind of planning wasn't sustainable because that kind of planning was discovered to be not so successful. The more potent reason for its disavowal was because it conflicted with the idea of freedom.
Unfortunately, the failure of omnipotent economic planning hasn't stopped the expanded role of government. The expanded role of government took different forms such as nationalization by other means as in the formation of GLCs and even direct ownership of the means of production. It also took the form of regulatory activities.
Just like Roosevelt's New Deal, the new approach to solving the Malay economic problem was accepted by the public as successful because it did achieve successes for the Malays to shout in triumph. From a share of around 2% in corporate equity, by the end of 1990, the share of Bumiputera equity in corporate wealth was around 19%. Though short of the targeted 30%, it was hailed as a qualified success better than nothing. Out of the whole thing, emerged the acceptance that enlarged government participation in the economy is justifiable as a means to remedy the economic problem.
The idea of a caring benevolent government resonated well with the consuming public especially the Malays and definitely with policy makers and politicians. It gave them an added source of omnipotent powers. Hardly anyone would argue for example with the government's agenda to care for the Malays from the cradle to the grave. Indeed as is the customary practice, policy makers in almost all the Dewan Undangan Negeri will justify expanded government involvement and outright ownership of the means of production and therefore budget deficits as necessary to carry out welfare programs for the poor. Who would want to oppose such noble intention if it's meant for the poor?
Have the programs succeeded? That is another issue. Each year, the number asking for welfare assistance in the form of cash disbursements seemed to increase rather than decrease. Dissatisfaction over the actual disbursements has aggravated rather than subsided. The number partaking in the welfare disbursements in the PM's own parliamentary constituency is growing each year indicating that the number of poor people is increasing as the magnitude of the disbursements increases. Or the increasing number indicates, more are joining the cue to get free gravy from the gravy train.
It means that this expanded role of the government hasn't worked well. It worked well for those in the bunker who happen to be the very ones bitterly opposed to the dismantling of the Sieg Heil economics.
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