Saturday, September 25, 2010

Fantasy or fallacy: ETP 6pc annual growth rate calculations

Source:http://www.themalaysianinsider.com/print/breakingviews/fantasy-or-fallacy-etp-6pc-annual-growth-rate-calculations-nurul-izzah-anwar/

Fantasy or fallacy: ETP 6pc annual growth rate calculations — Nurul Izzah Anwar


SEPT 24 — As a follow up to my article, “15 Questions on ETP” published on September 22, 2010, I have discovered that the manner in which the GNI annual growth rate presented was misleading.

It was publicly announced that the Economic Transformation Plan (ETP) will only provide 74 per cent or RM 1.258 trillion of the estimated RM 1.7 trillion GNI in 2020 against our RM660 billion GNI for 2010 which required the quoted six per cent annual growth rate.

However, in reality Malaysia as a whole, when ETP plus non-ETP contributions are calculated for the 10 years needed, it would indicate that it should have been disclosed that we need a nine per cent per annum growth rate to achieve the RM 1.7 trillion GNI in 2020.

Furthermore, at the 21st Multimedia Super Corridor (MSC) Malaysia Implementation Council meeting held on November 9, 2009, Prime Minister Datuk Seri Najib Razak announced that Malaysia was aiming for a nine per cent annual GDP growth until 2020.

In his opening speech Prime Minister Najib said:

“We aim to be a developed nation by the year 2020 and we are looking to more than double our per capita gross national income from US$7,000 (RM24,500) to at least US$17,000 by then in order to qualify as a high-income nation according to World Bank classifications.

“This would also mean that Malaysia has to grow its GDP by over nine 9 per cent annually until the year 2020.” (The Malaysian Insider, November 9, 2010)

However, in what has become the prime minister’s flip-flop approach to national matters, he had hours later in a press conference denied having said 9 per cent. He said: “I did not say nine per cent, I said around six per cent as nine is not realistic.”

So why hide the whole real number and mislead an entire nation?

What about other official statistics — CPI, NKRAs, PLI — are they reliable?

The rakyat and foreign investors must have confidence in our official data.

Wouldn’t any manipulation be seen as fraudulent, misleading and unacceptable?

I call upon the government to set the matter straight and immediately announce if Malaysia actually needs a nine per cent annual growth rate to achieve the RM 1.7 trillion GNI target in 2020?

How can this be achieved when the world economy and our competitiveness are equally in decline?

How does this indicate on the viability of the ETP just recently announced?

The people deserve to know especially with the upcoming budget announcement to be made in Parliament in October, so as to not to be seen as misleading that will have a profound negative impact on not only public confidence but also on international confidence on our data integrity in light of our more than 80 per cent decline in FDI.

We need to know the facts and the truth now even if the prime minister is still in New York supposedly to tell the “truth” to the world on Malaysia’s New Economic Model and 1Malaysia concept witnessed by our “First Lady”.

I hope that this explosive revelation which could submerge us is proven wrong for the sake of our nation’s credibility and world standing especially in front of the United Nations General Assembly and United State’s President.

I hope this is an honest mistake not based on APCO’s professional communication advice.

We do not need another Pinocchio to lead a sinking nation.

* Nurul Izzah Anwar is the MP for Lembah Pantai

* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.


Thursday, September 23, 2010

15 questions on the Economic Transformation Plan

Source: http://www.freemalaysiatoday.com/fmt-english/opinion/comment/10494-15-questions-on-the-etp

By Nurul Izzah Anwar

COMMENT The government has recently announced the launching of the Economy Transformation Program or ETP which is part of the New Economic Model (NEM).

As a background, the government’s National Transformation Agenda is based on meeting the Vision 2020 of being an industrialised nation driven by four national transformation pillars of the 1Malaysia inclusiveness concept, Government Transformation Plan (GTP-with 6 National Key Result Areas (NKRAs)), Economic Transformation Plan (ETP- with the New Economic Model goals of High Income, Inclusiveness and Sustainability by having 8 Strategic Reform Initiatives (SRIs) and 11 National Key Economic Areas (NKEAs)) and the 10th Malaysian Plan.

I congratulate the government for introducing a comprehensive economic development plan that aims to position Malaysia as a High-Income economy by 2020.

However, I wish to ask a few questions from a lay person’s understanding of the economy to seek clarification on the eventual implementation of the plan and to obtain answers to the many challenges and contradictions facing us today.

Although some of the questions might be obvious, but the answers would lead to a better public understanding of the assumptions used for the projections.

All the data was derived from publicly available information with some interpretation done as best as possible for clarity.

I invite comments by all Malaysians to my enquiries in the spirit of ‘constructive engagement’ with the purpose of moving forward for a Better Malaysia.

Gross National Income (GNI) Projections

Overall, the country’s GNI is projected to grow to at least RM1.7 trillion (US$523 billion) from RM660 billion (US$188 billion) in 2009 (using RM3.25 to US$1 exchange rate) for a 178% growth over 10 years (2010-2020).

Question 1: What is the impact to the GNI projections if the Ringgit weakens to RM3.50 and above per US$1?

Question 2: Will floating the Ringgit help in meeting the exchange rate needed to achieve the GNI targets?

6% Annual Growth Rate Target

This would require a 6% annual growth rate for 10 years (2010-2020).

However, from 2000 until 2010, Malaysia's average annual GDP Growth was 4.72 percent.

Question 3: How are we going to maintain a 6% annual growth rate for the next 10 years with the predicted global economy remaining weak as compared to the preceding 10 year annual average of 4.72% when the global economy was relatively strong (except for the 2008 financial meltdown)?

ETP’s GNI Growth Contribution Target

The ETP projects will provide RM1.258 trillion (US$387 billion) or 74% of the country’s gross national income (GNI) of RM 1.7 trillion (US$523 billion) by 2020. The remaining 26% is expected to come from non-ETP project sectors.

The RM 1.7 trillion GNI growth contributions in 2020 are as follows:

31% from the 133 Entry Point Projects (EPPs), RM527 billion
10% from EPPs multiplier effects, RM 170 billion
33% from the 60 Business Opportunities (BOs), RM561 billion
26% of incremental growth from other non-ETP projects, RM442 billion

The ETP projects are part of the 11 National Key Economic Areas or NKEAs. The four largest NKEAs (oil, gas and energy, financial services, palm oil and wholesale and retail) are projected to generate 60% of the 78% ETP based projects incremental GNI growth from the 11 NKEA sectors.

Question 4: What impact on GNI targets if commodity prices (oil, gas, energy, palm oil) that are the two main NKEAs become lower during the 10 year ETP period?

GNI per capita Target

Gross National Income (GNI) per capita will reach above RM48,000 by 2020 from RM23,700 in 2009, for an increase of 102% over ten years.

For context, the income distribution schedule indicates that there are 5.8 million households in 2007. Of that, 8.6% have an monthly income below RM1,000, 29.4% had between RM1,000 and RM2,000, while 19.8% earned between RM2,001 and RM3,000; 12.9% of the households earned between RM3,001 and RM4,000 and 8.6% between RM4,001 and RM5,000.

Finally, around 15.8% of the households have an income of between RM5,001 and RM10,000 and 4.9% have an income of RM10,000 and above.

Furthermore, increased GNI per capita should take into account the real cost of living situation faced by ordinary Malaysians.

In the 1970s a car may cost only RM7,000 but today it is at least RM45,000. A comfortable house in the 1970s may cost RM50,000 compared to today’s RM350,000. A basic meal in the 1970s may cost RM1 but it is RM5 now. And the starting salary in the 1970s would be RM1,200 compared to RM2,000 today.

And it can be assumed that even with the doubling or tripling of average salaries by 2020, the cost of the above items may have also doubled or even tripled likewise due to inflation.

Question 5: What is the Purchasing Power Parity (PPP) projected by 2020?

Question 6: What is the income inequality GINI index projected by 2020?

Question 7: What is the Poverty Line Income (PLI) projected by 2020?

ETP Workforce Requirement

ETP will create 3.3 million new ‘middle class’ jobs, of which half will require diploma or vocational qualifications.

The projected data based on available information would produce an annual average first degree graduates of 90,000 and vocational school graduates 60,000 for a total of 150,000; which in 10 years would produce slightly less than half the 3.3 million qualified workforce needed under ETP.

However, we can find that the quality of our workforce is based on the following characteristics:

30% of Malaysians obtained higher education qualifications (2005), compared to Singapore’s 46%, Thailand’s 41% and South Korea’s 89%.

80% of Malaysia’s workforce only received secondary level (SPM) education (2007).

Malaysia has 25% high skilled workers and 75% low skilled workers (2007), compared to Singapore’s 49%, Taiwan’s 33% and South Korea’s 35% highly skilled workers percentages.

Workforce productivity for Malaysian labour is an average of 2.9% (1998-2007), compared to China’s 9.2%, India’s 4.4%, Thailand 3.1% and Indonesia’s 3.0% labour productivity for the same period.

The low quality of our workforce is compounded by:

Inefficient education services delivery

In 2007, the percentage of Malaysia education expenditure as % of GDP was 4.5%.
Compared to Philippine’s 2.6%, Singapore’s 2.8%, Hong Kong’s 3.3% and South Korea’s 4.2% our student’s outcome for the workforce has been low.

Rising tertiary education costs and lower education quality trends

Malaysia has 20 public universities and 627 institutes of higher learning. Under the 10th Malaysia Plan, selected public universities will be corporatized and combined with private institutions of higher learning, the fee-paying structure will see fees increase from an average of RM10,000 to RM50,000 per student and it is projected that 90% of tertiary education students will enrol not in public but private institutions.

This makes accessibility and affordability for quality education (only 4% of private institutions compared to 33% of public institution’s academic staff has a Phd) a challenge in producing an educated workforce.

Furthermore, with 70% public institutions enrolment are bumiputeras while 95% of private institutions enrolment are non-bumiputeras, unless more proactive measures such as more scholarships and not PTPTN loans and drastic investments along with improvements in primary and secondary education are taken, the racial disparity trend will create its own set of challenges.

Low world university ranking

Malaysia’s oldest and premier university, Universiti Malaya (UM) has dropped from the top 200 of the prestigious 2010 QS World University Rankings, slipping to 207 this year compared to 180 in 2009.

This would indicate that more has to be done to improve the overall quality of Malaysia’s tertiary education capacity to meet ETP workforce requirements.

Question 8: How do we determine that the high quality of qualified workforce needed is available for the ETPs?

Question 9: Are we going to welcome qualified immigrants to join our workforce?

ETP’s Innovation Key Success Factor

Innovation is one of the most critical factors to move up the economic value-chain and escape the ‘middle income trap’.

However, Malaysia currently has a low research and development (R&D) capacity based on the following statistics:

2006 World Bank data indicates that Malaysia’s R&D expenditure as a % of GDP was 0.6%. Compared to South Korea’s 3.2%, Singapore’s 2.3%, Australia’s 2.2% and China’s 1.4%, Malaysia has a lot more to do to prioritise its spending.

And based on the number of R&D researchers per million population, Malaysia had 372 researchers per million population. Compared to South Korea’s 4,187, Singapore’s 5,736, Australia’s 4,231 and China’s 927 per million population, again Malaysia has to prioritise its human capital development.

Question10: How do we increase our innovation capacity while facing tremendous challenges in our education system and economic resources misallocations added with economic leakages?

ETP Investment Targets

The Economic Transformation Program (ETP) requires investments worth RM1.376 trillion (US$444 billion) over 10 years (2010-2020) for the following projects:

133 Entry Point Projects (EPPs)
60 Business Opportunities (BOs)

The total investments sources are:

60 percent private sector or RM825.6 billion
32 percent government-linked companies or RM440.32 billion
8 percent government or RM96 billion

However, the current reality makes these targets challenging based on the following facts:

In the past 10 years, private companies invested just RM535 billion and Malaysia's private investment rate of around 10% of gross domestic product (GDP) is among the lowest in Asia.

The World Foreign Investment Report (WIR) 2010 showed that FDI in Malaysia plunged 81 per cent last year, trailing behind countries like the Philippines, Vietnam, Thailand, Indonesia and Singapore. The Philippines attracted US$1.95 billion (RM6.24 billion) in FDI compared to Malaysia’s US$1.38 billion, while Singapore received the most — more than US$16 billion.

National debt has reached 53 percent of GDP which is an unsustainable level, and according to Idris Jala the government debt stands at RM362 billion and rising and may reach RM1.158 trillion by 2019 with the possibility that Malaysia may go bankrupt like Greece.

Question11: How do we increase our investment attractiveness while facing stiff competition from neighbouring countries?

Question12: Are the GLCs and government sector investment contributions totalling 40% of the investment amount to be obtained by more taxes, borrowings or asking Petronas to do ‘national funding service’ again?

ETP Real Beneficiaries

Who are the real beneficiaries of the ETP and NEM?

Based on our past ‘national expenditure pricing’ experience, could we assume that the following breakdown of the total investment amount of RM1.376 trillion (RM 1,376,000,000,000,000) will be as follows?

Legal Fees: (2%) RM27.52 billion
Consultancy Fees (8%) RM110.08billion
Facilitation Fees (10%) RM137.6 billion
Overpricing Costs (30%) RM 412.8 billion

Question 13: Does this mean that the total fees and costs payable of RM688 billion or 50% of the investment total is to be considered as a normal economic leakage, leaving the remaining 50% to actually be invested in the ETP projects?

Question 14: Who will become the real beneficiaries that will receive the ‘tax-free’ fees and cost portion of the investment amount?

ETP Viablity Burden Borne by the Rakyat

If the RM1.376 trillion ETP investment amount requires a ROI of 10%, then annually after 2011, the ETPs need profits after tax of RM137 billion and based on a 20% profit margin, means the entire EPP and BO entities must generate RM685 billion in annual gross revenues.

Question 15: Does this mean in 2020, the 30 million Malaysians must spend at least 80% (with the balance 20% being spending by foreigners as tourist or as importers)-which would be RM22,933 per capita that is 47% of the RM48,750 high-income GNI per capita target- to meet the ETP’s gross revenue needs of RM685 billion annually just to remain viable?

In conclusion

It would appear from this enquiry that the rewards for the ETP will benefit the few while the risk and true cost as always will be shared by the rakyat.

As I said earlier, that the government’s comprehensive economic development plan is commendable but if the government is sincere in making it a reality to benefit all Malaysians, then immediately, a fifth pillar to the National Transformation Agenda must be added which is a Political Reformation Plan (PRP) which would also be the ‘Political Contract’ that complements the ‘Social Contract’ of our country.

The Political Reformation Plan or ‘Political Contract’ would include repealing all anti-democratic laws, respecting separation of powers, reforming national elections and restoring local government elections, returning the judiciary’s and other state institution’s independence, fighting corruption, ensuring a free media and by abiding to the true meaning of our constitution, then and only then, will the economic transformation plan become a resounding success for a better Malaysia.

Isn’t that so?


Nurul Izzah Anwar is PKR's MP for Lembah Pantai

Wednesday, September 15, 2010

Real economic reform will face formidable obstacles...

Source: http://www.malaysia-today.net/low-bandwidth/index.php#Will Najib really push through an effective NEM

Malaysia “top-down” reforms set to disappoint

Posted on 14 September 2010

Najib is under pressure from Malay activists in his own party who fear reforms will erode their privileges as well as from ethnic Chinese coalition leaders whose only hope to win back voters is to be more vocal in promoting their own community.

By David Chance | Reuters

Malaysia’s plans to revitalise investment by backing national champions and ending race-based policies may sound ambitious, but the details are hazy and real economic reform will face formidable obstacles.

The government starts public consultations this month on a new round of reforms, but there is growing resistance from voters and disappointment from investors over measures taken so far.

A government think tank has identified a dozen growth industries such as oil and gas, biotechnology and Islamic finance to focus on in a drive to double Malaysia’s income per capita and propel it into the ranks of “developed nations” by 2020.

Prime Minister Najib Razak’s record on reform is patchy — he shied away from big subsidy cuts and reversed tack on race-based preferential equity ownership rules for the majority ethnic Malay population under pressure from activists.

“Earlier optimism that Najib will be able, and will be committed, to carrying out his plans for reforms has been replaced by resignation that Malaysia will not change course quite so quickly or easily,” said Southeast Asia political risk analyst David Kiu.

Najib took office last year and promised investor forums that on reforms, he would “execute or be executed”, after the National Front coalition that has now ruled this Southeast Asian country for 53 years stumbled to its worst ever election results in 2008.

In the past decade Malaysia has seen its dominant position as an investment destination in Southeast Asia crumble, its productivity gains lag and a worsening of its education rankings which mean it is less well equipped to meet its growth goals.

A survey last week by the World Economic Forum showed Malaysia slipped two places in its global competitiveness rankings to 26th spot out of 139 countries while neighbouring Indonesia surged 10 places to 44th spot. The quality of Malaysia’s institutions, ranked 17th by the WEF five years ago, has plunged to 42nd place since then.

Under its “Economic Transformation Plan” to be unveiled this month, Malaysia’s government wants to galvanise 2.2 trillion ringgit ($706.7 billion) in investments over the 10 years to 2020 of which 92 percent will come from the private sector.

That would be a big leap from the 535 billion the private sector has invested over the past decade, and few analysts expect detailed plans to be unveiled on how to boost investment.

Although hot money has flowed into the Malaysian bond market this year, reversing outflows in 2008 and 2009 and pushing the ringgit currency to 13 year highs against the dollar, Malaysia has slid off the investment map for many.

Foreign ownership of the stock exchange stands at just 21.2 percent of market capitalisation, down from 26.2 percent in 2007.

Many Malaysian companies like leading bank CIMB and telco Axiata are being wowed by the prospects of faster growth in countries like Indonesia and want to become major regional players, so they are exporting capital.

That means government-linked companies (GLCs) will lead the charge to invest more at home, said Wan Saiful Wan Jan of the Institute for Democracy and Economic Affairs think tank:

“They cannot talk about opening up our markets and at the same time give more for GLCs to do to meddle in our economy.”

MORE VOCAL RESISTANCE TO REFORMS?

Although Najib has only been in power since April 2009, he may soon have to shift to policies that will shore up his political base. Elections are due by 2013 and are likely to be called earlier.

His coalition of 12 parties, constructed along racial lines to reflect the Malay, Chinese and Indian populations as well as the indigenous people on Borneo island, is still fraying.

Najib is under pressure from Malay activists in his own party who fear reforms will erode their privileges as well as from ethnic Chinese coalition leaders whose only hope to win back voters is to be more vocal in promoting their own community.

A Malay pressure group called Perkasa which claims 300,000 members recently lodged a police report against the leader of the coalition’s ethnic Chinese party after he called for the removal of laws guaranteeing Malays and indigenous people 30 percent equity rights in public companies.

There has also been a steady drip of racial posturing in the media during the Muslim fasting month of Ramadan with an opposition ethnic Chinese politician being attacked for visiting a mosque and a Ramadan ad campaign being pulled for having Christmas overtones.

“The incitement of ultra-nationalist feelings is mainly conducted in the Malay media and hence is not so visible to foreign observers but it is a really worrying trend that is taking place under a so-called reformist government,” said Lim Teck Ghee, director of the Centre for Policy Initiatives.

Najib has sought to sidestep some of the blockages to reform by outsourcing the process to advisory bodies, but when it comes to implementation, he will still have to rely on the 1.2 million strong mainly Malay civil service.

The civil service employs one in every 20 Malaysians and Wan Saiful notes many of them are drawn from the constituency that has most to lose from any meaningful reforms:

“They are a force of their own, and they are far too big for the government to ignore.”


On the New Economic Model...

Source:http://www.malaysia-chronicle.com/2010/09/will-najib-really-push-through.html

Dr Chen Man Hin

It will take a liberal New Economic Model and a strong prime minister to push much needed reforms to transform Malaysia into a high-income country with democracy, justice and prosperity for all regardless of race or religion.

The political and economic outlook for the country is critical. We are riddled with multiple problems of corruption, lack of judicial independence, racialism, brain drain, with 40 per cent of households living below the poverty level of RM1,500, and four out of five poor households are Bumiputeras.

All these things are happening even after two years of PM Datuk Seri Najib Razak’s rule since April 2008. His 1 Malaysia and mediocre attempts at reforms have failed.

WORLD RANKINGS OF MALAYSIA

The sorry state of political and economic development is reflected in the world ranking status of Malaysia on areas which indicate whether a society is honest, democratic, transparent, and just.

CORRUPTION: Transparent International Corruption perception — Malaysia is ranked 56 among countries in 2009 having dropped from 47 of 2008 and from 23 in 1995. It indicates that corruption has deteriorated during Najib’s watch, whereas Singapore and Hong Kong are almost corruption free.


JUDICIAL INDEPENDENCE: Malaysia’s world ranking for year 2009-2010 was 52 compared with Thailand 54, Taiwan 49, Singapore 19, Australia 5, Finland 4, Denmark 3, Sweden 2, and New Zealand 1. Low ranking for Malaysia is not surprising, especially as the Sodomy 2 case against Anwar Ibrahim has raised international concern about the integrity of the judiciary in Malaysia.

UNIVERSITY RANKING: This year no university from Malaysia made it to the top 200 world universities list of QS World University Ranking 2010. Last year one Malaysian university, Universiti Malaya, was ranked 180. This year Universiti Malaya was ranked 207.

ACADEMIC RANKING OF WORLD UNIVERSITIES BY SHANGHAI JIAO TONG UNIVERSITY: No university from Malaysia was in the list, which indicates that the academic standards are questionable.

POLICE STATE: It is a fact that the government uses all the institutions — police, judicial, attorney-general and media — to exercise rigid and a repressive controls on the social, economic and political life of the people. The ISA is used to oppress the opposition. Press freedom is muzzled, as seen by the ranking for Malaysia which was 141 out of 196 countries. Which is not unexpected as the government has imposed a tight censorship of all opposition news. The government plans to impose censorship of the Internet, which is gaining popularity with the people.

FOREIGN DIRECT INVESTMENTS (FDI): The World Bank has released figures which showed that for 2009 there was an 81 per cent fall in FDI into Malaysia from US$7.32 billion to US$1.38 billion. FDI into Thailand and Indonesia has overtaken FDI into Malaysia, which has now joined the ranks of countries like Myanmar, Cambodia, Laos and Timor Leste. These are figures which indicate that investors, both local and foreign, have lost confidence and prefer to put their money in Indonesia and Thailand.

Poor global rankings of Malaysia are an indictment of the Najib regime, which under the cloak of 1 Malaysia is actually practising the politics of race, corruption, cronyism and rent seeking. If the same policies are continued, then inexorably, Malaysia will join the ranks of failed states like banana republics Myanmar and Zimbabwe.

THE ONE HOPE

Follow the advice and recommendations of the World Bank and IMF which have recommended that Najib follow free and liberal market policies. There has to be a structural reform, which means no NEP regulations like 30 per cent Bumiputera equity and cronyism or rent seeking. A culture of competitiveness and meritocracy must be practised.

At the same time, the reforms must be inclusive to look after the interest of the poor — Bumiputeras and others. A new type of affirmative policy must be practised where help is given according to needs and merit. This affirmation action should not interfere with the mainstream liberal free market economy, or the main economy will stagnate or collapse as it did the 40 years of NEP rule from 1971 to 2010.

The fate of Malaysia is now in the hands of the prime minister. The whole country is now watching the next move of the prime minister. Will he follow the NEM policies as endorsed by World Bank and IMF? Or will he wilt under the pressure of Perkasa?

“To be or not to be, that is the question.” – Hamlet. The whole country awaits.

(Dr Chen Man Hin is the life adviser of the DAP)

On ethnic relation and unity...

Source: http://www.malaysia-chronicle.com/2010/09/no-chandra-non-malays-are-not-belly.html

Ramon Navaratnam


LETTER Prof Chandra Muzafar`s interview in the NST dated September 8th 2010 comes out quite balanced, although he glosses over some important issues. These significant issues need to be clarified if the `empathy` that he appeals for, in his NST interview entitled A Plea for EMPATHY IN ETHNIC RELATIONS, is to be realized .

1. He argues that there is a ``Gap in the way a lot of Malays and the Malaysians of Chinese and Indian descent , look at the nation``

It is clear that he does not describe Malaysians as Malaysian Chinese , Malaysian Indians and particularly ``Malaysian Malays`` ! And why not ? There in lies the main reason for the Perception GAP in our ethos and commitments as equal Malaysian Citizens. History will show that it is arguable as to which race came earliest to settle in Malaya. Some will claim its the Chinese , or the Indians or the Malays . But what is certain is that the Orang Asli were the real original people in our land.

What academia could do is the go back to the available archaeological research to establish the truth . I had hoped that Prof Chandra would have settled this issue as an academic himself? Once these facts are established by proper research , then this aspect of the Perception Gap , will be easily solved.

2. It is creditable that Chandra frankly ascertains that ``there is no Social Contract as such , but nevertheless the Constitution embodies a certain arrangement that was arrived at before independence ``

I agree with Chandra that our people do accept the Constitutional provisions pertaining to Special Position of the Malays and the legitimate of the other communities . But part of the problem of Perception Gap , is that there are deep concerns on part of the Non Malays that the legitimate interests of the non Malays have not been adequately or fairly addressed . They are discouraged that the MALAY Special Privileges have gone on well beyond the planned 20 year period of up to 1990 .

Many NEP policies have been abused and have been continued , much to the disappointment of the Non Malays , thus causing this Perception Gap to widen . The mainly Malay Government and especially the Civil Service has not shown sufficient Empathy for the equitable application of the NEP to provide for the ``legitimate interests of the Non Malays`` . Thus they are legitimately and very anxious over this skewed implementation of the NEP due to what Chandra calls ``excesses `` .

Therefore Non Malays should not be unkindly described by Chandra as `` bellyaching `` and worse still should not be hurtfully dismissed by some extremists as aliens in their own country .

3. There is also much that is made out about the generosity of the ``Social Contract `` in giving citizenship to about one million Non Malays and mainly Chinese individuals . But it must be realized that the perceived thinking behind this good move was based on the quid pro quo for the continuation of the Special Privileges of the Malays . The citizenship was also given in order to win the hearts and minds of the especially the Chinese to fight against deadly struggle with the Communist terrorists who were mostly Chinese ?

Hence, the so called Social Contract should not be regarded as some special favour given to the Non Malays, as this aggravates the Perception Gap in our general understanding of our national values and heritage .

4. I believe that the NEP has contributed much to our relative stability and the great socio economic strides that our country has made since Merdeka . However we have to sadly admit that the level of National Unity has declined over the years and particularly since the 1980’s. Furthermore we are now consequently caught in the Middle Income Gap

That is why it is so important for our ONE MALAYSIA to succeed .


Malay View?

1. From the Malay point of view - I have heard my Malay friends complain that the Malays too feel that they have lost out since Merdeka !

They claim that the most of the poor Malaysians are Malays. That is true . But it is partly due to the fact that the Malays were mostly in the Rural Agricultural areas of the country during the British times. They have only come out in larger numbers to the towns ( where they could earn higher incomes , if they are employable ) , after Merdeka in 1957.

However because of the Governments successful NEP fight against Poverty the Poverty rate which was about 50% of the population in 1960 , has improved remarkably to less than 4% at the present time . Hence the Malays and others in the low income groups have gained significantly .

2. In terms of Employment - thanks to the NEP again , and the democratization of the Education System, thousands of Malay Graduates from Primary to secondary levels ,have been employed in all sectors of the Government and Business sectors of the economy .

About 20 Government Universities and especially MARA have given preference to Malay entrants and produced thousands of Malay Graduates who are employed at senior levels in the Civil Service and the private sector

3. Following the Restructuring target of the Nep , the 30% Equity Ownership in the Corporate sector is again arguably achieved or even exceeded . Official interpretation is that this Equity target is still around 20% . However because of conflicting assessments , it would be imperative to have an internationally recognized study that will ascertain once and for all – as what is the real accomplishment

It would be useful for Government to Commission a high powered study on this matter – so as tio clear the present doubts of Investors .

4. The whole public service of about 1.2 million employees is mainly composed of Malays. The Armed Forces , the Police , the Judiciary and the Teaching profession is dominated by Malays

The major Utilities like the Railways , Telecommunications , Airlines , Shipping , huge Government Linked Companies (GLC’c) etc are dominated by Malays .

5. The Cabinet and State Executive Committees , except Penang are again led by Malay s.

Hence it is not clear what else needs to be done to assure the Malays that their position is very secure at all levels of society


Conclusion.

Nevertheless there is still this Perception Gap that Chandra rightly says has to be bridged . But how is this to happen ?

That is the Challenge Malaysia faces.

But the New Economic Model introduced and championed by the Government under Prime Minister Dato Seri Najib’s leadership , appears to be unfortunately challenged by some parochial and narrow vested interests at this time This resistance has to become soon if Malaysia is to move forward and not remain caught in the Middle Income Trap !

Finally however , Its not very difficult to strengthen empathy in our ethnic relations and to bridge the Perception Gap , if only we become more aware of the urgent need to regard all Malaysians as our own brothers and sisters and to treat them all Fairly as Malaysians - without regard to our different races , religions and political affiliations .

I wish to stress that our Prime Minister’s call on Hari Raya for Muslims to be Moderate is vital . His timely call would also apply equally to Non Malays, amongst whom we also have extremists . But if we all practice Moderation and show Empathy to each other - we will surely , become ONE MALASIA and TRUE MALAYSIANS God Willing .

Tan Sri Ramon Navaratnam
Chairman - Asli Center of Public Policy Studies

Singapore was cause of Malaysia’s racial problems, says Dr M

Source: http://www.themalaysianinsider.com/malaysia/article/singapore-was-cause-of-malaysias-racial-problems-says-dr-m/

KUALA LUMPUR, Sept 14 – Tun Dr Mahathir Mohamad said today that racism in Malaysia was clearly the result of Singapore’s short membership in the country, and not because the island was “turfed out” as suggested by the republic’s founding father Lee Kuan Yew recently.

“Can we really believe that if Singapore had not been ‘turfed out’ Malaysia would have no racial problem?

“While Kuan Yew talks about his belief that all ethnic communities should free themselves from the shackles of racial segregation in order to promote fairness and equality among the races, he also said that “once we are by ourselves (out of Malaysia) the Chinese become the majority,” said Dr Mahathir in a posting on his blog.

In an interview with the New York Times, Lee argued that if Malaysia had accepted a multiracial base much of what had been achieved in Singapore would have also been attained in Malaysia.

Lee, Singapore’s longest serving prime minister, claimed that if Singapore had not seceded from Malaysia, the country would have improved inter-racial relations and an improved holistic situation today.

“Now we have a very polarised Malaysia — Malays, Chinese and Indians in separate schools, living separate lives and not really getting on with one another. You read them. That’s bad for us as close neighbours,” he had said in the interview according to the transcript made available on the website of the Singapore prime minister’s office.

The remarks by the two retired prime ministers come ahead of Malaysia Day on Thursday.

Singapore joined newly-independent Malaya, Sabah and Sarawak to form Malaysia on September 16, 1963, but was subsequently expelled in 1965.

Lee’s and Dr Mahathir’s comments also come amid a heightened race debate in Malaysia, as a result of plans by the Najib administration to roll back some of the country’s affirmative action policies favouring the Malay and Bumiputera communities.

In his blog post, Dr Mahathir pointed out that Singapore’s population was made up of 75 per cent Chinese and that the community owned 95 per cent of the economy.

“It is therefore not a truly multi-racial country but a Chinese country with minority racial groups who are additionally much poorer,” he claimed.

Lee had said in his interview that all ethnic communities should free themselves from the shackles of racial segregation in order to promote fairness and equality among the races.

This, he said, had been his greatest satisfaction in helming Singapore.

“We made quite sure whatever your race, language or religion, you are an equal citizen and we’ll drum that into the people and I think our Chinese understand and today we have an integrated society.

“We will not as a majority squeeze the minority because once we’re by ourselves, the Chinese become the majority,” he said.

Lee also took a dig at the Malaysian scenario, pointing out that the Singaporean Malays were English-educated and were no longer like the Malaysian Malays.

Dr Mahathir’s stand contrasted sharply with that of Lee’s. He argued in his blog post that Singapore was a country dominated by one race and not really multiracial.

“Whether the PAP admits it or not, the party has always been led and dominated by ethnic Chinese and have won elections principally because of Chinese votes. The others are not even icing on the cake.

“If Singapore is a part of Malaysia the PAP can certainly reproduce the Singapore kind of non-racial politics because together with the Malaysian Chinese, the PAP will ethnically dominate and control Malaysian politics. No dissent would be allowed and certainly no one would dare say anything about who really runs the country.

“Amnesia is permissible but trying to claim that it is because Singapore had been ‘turfed out’ for the present racist politics in Malaysia is simply not supported by facts of history,” said Dr Mahathir.

Dr Mahathir also asserted that there was less racial politics in Malaya before Singapore joined the federation.

“In 1955, the Malays who made up 80 per cent of the citizens gave a large number of their constituencies to the few Chinese and Indian citizens and ensured they won with strong Malay support. As a result the Alliance won 51 of the 52 seats contested.

“The Tunku then rewarded this willingness of the Chinese and Indian citizens to support the coalition concept by giving them one million unconditional citizenship. This reduced Malay majority to 60 per cent.”

He claimed that it was because Lee had subsequently reneged on a promise that his PAP would not take part in politics outside the island that sparked racial tension.

Tunku Abdul Rahman, Malaysia’s first prime minister, was forced to expel Singapore because racism had taken hold, Dr Mahathir claimed.

This, Dr Mahathir suggested, led eventually to the 1969 racial riots in Kuala Lumpur.

Tuesday, September 14, 2010

Kuan Yew vs Dr M...On race relations...

Source: http://www.malaysia-chronicle.com/2010/09/mahathirs-rebuttal-to-kuan-yew.html#more

Malaysia Chronicle

Not to be left out of the action, former premier Mahathir Mohamad has given his side of what he believes led to Singapore leaving Malaysia in 1965 - racism by Lee Kuan Yew's PAP party. Malaysia Chronicle appends below the relevant portions of the interview given by the Singapore Minister Mentor, where he says he regrets "having been turfed out of Malaysia". Scroll down for Dr M's rebuttal.


September 1, 2010 interview with the New York Times
(Click here to read full interview: Lee Kuan Yew: Don't judge a man until you've closed his coffin ...)

Q: “Let me ask a question about the outside world a little bit. Singapore is a great success story even though people criticize this and that. When you look back, you can be proud of what you’ve done and I assume you are. Are there things that you regret, things that you wished you could achieve that you couldn’t?”

Mr Lee: “Well, first I regret having been turfed out of Malaysia. I think if the Tunku had kept us together, what we did in Singapore, had Malaysia accepted a multiracial base for their society, much of what we’ve achieved in Singapore would be achieved in Malaysia. But not as much because it’s a much broader base. We would have improved inter-racial relations and an improved holistic situation. Now we have a very polarized Malaysia, Malays, Chinese and Indians in separate schools, living separate lives and not really getting on with one another. You read them. That’s bad for us as close neighbours.”

Q: “So at that time, you found yourself with Singapore and you have transformed it. And my question would be how do you assess your own satisfaction with what you’ve achieved? What didn’t work?”

Mr Lee: “Well, the greatest satisfaction I had was my colleagues and I, were of that generation who were turfed out of Malaysia suffered two years under a racial policy decided that we will go the other way. We will not as a majority squeeze the minority because once we’re by ourselves, the Chinese become the majority. We made quite sure whatever your race, language or religion, you are an equal citizen and we’ll drum that into the people and I think our Chinese understand and today we have an integrated society. Our Malays are English-educated, they’re no longer like the Malays in Malaysia and you can see there are some still wearing headscarves but very modern looking.”

Q: “That doesn’t sound like a regret to me.”

Mr Lee: “No, no, but the regret is there’s such a narrow base to build this enormous edifice, so I’ve got to tell the next generation, please do not take for granted what’s been built. If you forget that this is a small island which we are built upon and reach a 100 storeys high tower block and may go up to 150 if you are wise. But if you believe that it’s permanent, it will come tumbling down and you will never get a second chance.”

Q: “I wonder if that is a concern of yours about the next generation. I saw your discussion with a group of young people before the last election and they were saying what they want is a lot of these values from the West, an open political marketplace and even playing field in all of these things and you said well, if that’s the way you feel, I’m very sad.”

Mr Lee: “Because you play it that way, if you have dissension, if you chose the easy way to Muslim votes and switch to racial politics, this society is finished. The easiest way to get majority vote is vote for me, we’re Chinese, they’re Indians, they’re Malays. Our society will be ripped apart. If you do not have a cohesive society, you cannot make progress.”

Q: “But is that a concern that the younger generation doesn’t realize as much as it should?”

Mr Lee: “I believe they have come to believe that this is a natural state of affairs, and they can take liberties with it. They think you can put it on auto-pilot. I know that is never so. We have crafted a set of very intricate rules, no housing blocks shall have more than a percentage of so many Chinese, so many percent Malays, Indians. All are thoroughly mixed. Willy-nilly, your neighbours are Indians, Malays, you go to the same shopping malls, you go to the same schools, the same playing fields, you go up and down the same lifts. We cannot allow segregation.”

Q: “So leadership is a constant battle?”

Mr Lee: “In a multiracial situation like this, it is. Malaysia took the different line; Malaysians saw it as a Malay country, all others are lodgers, “orang tumpangan”, and they the Bumiputras, sons of the soil, run the show. So the Sultans, the Chief Justice and judges, generals, police commissioner, the whole hierarchy is Malay. All the big contracts for Malays. Malay is the language of the schools although it does not get them into modern knowledge. So the Chinese build and find their own independent schools to teach Chinese, the Tamils create their own Tamil schools, which do not get them jobs. It’s a most unhappy situation.”


Mahathir Mohamad

Lee Kuan Yew, the Minister Mentor of Singapore, is three years my senior. That means he and I practically grew up in the same period of time. That also means that I have been able to watch the progress of Lee, and in fact to interact with him on various occasions.

His assertion in his interview with the New York Times that “Race relations (would be) better if Singapore (had) not (been) “turfed out” (of Malaysia) is worth studying. Is it true or is it fantasy?

Before Singapore joined the Peninsular, Sabah and Sarawak to form Malaysia, there was less racial politics in the Federation of Malaysia. In 1955 the Malays who made up 80 per cent of the citizens gave a large number of their constituencies to the few Chinese and Indian citizens and ensured they won with strong Malay support. As a result the Alliance won 51 of the 52 seats contested.

The Tunku then rewarded this willingness of the Chinese and Indian citizens to support the coalition concept by giving them one million unconditional citizenship. This reduced Malay majority to 60 per cent.

In the 1959 elections the Alliance of Umno, MCA and MIC won easily though Kelantan was lost. PAS with only Malays as members was rejected. Racialism even when implied failed.

In 1963 Singapore became a part of Malaysia. Despite having promised that the PAP will not participate in Peninsular, Sabah and Sarawak politics, Kuan Yew reneged and the PAP tried to displace the MCA in the Alliance by appealing to Chinese sentiments in the Peninsular. Of course the slogan was “Malaysian Malaysia” which implied that the Chinese were not having equal rights with the Malays. If this appeal to Chinese sentiments against the Malays was not racial, I do not know what is racial.

But the Peninsular Chinese favoured working with the Malays in Umno. They totally rejected PAP in 1964.

Following the Malaysian Malaysia campaign a few Umno leaders tried to rouse Singapore Malay sentiments. There were demonstrations in Singapore where before there were none. Kuan Yew accused Jaafar Albar for instigating the Singapore Malays. Although I never went to Singapore, nor met the Malays there, I was labelled a Malay ultra by Kuan Yew himself.

By 1965 racism had taken hold and the Tunku was forced to end Singapore’s membership of Malaysia. But the seed of Chinese racialism had been sown, so that even after the PAP left, the “Malaysian Malaysia” war cry was picked up by the DAP, an offspring of the PAP.

With the background of Singapore’s activities in Malaysia in the short three years of its membership, can we really believe that if it had not been “turfed out” race relations would be better in Malaysia?

But proof of what would have happened was shown by the politics leading up to the 1969 elections. The MCA began to criticise the Sino/Malay co-operation especially on so-called special rights and demanded for a Chinese university. Umno then began to clamour for a greater share of the economy of the country. The Umno/MCA conflict resultedin the Alliance faring very badly in the 1969 elections.

DAP and Gerakan, a new party largely made up of MCA dissidents, made gains. The Alliance was shocked and rattled.

Then the Gerakan and DAP held their victory parade near the Malay settlement of Kampung Baru, hurling racist insults at the Malays. The result was the May 13 race riots.

Till today the racist slogan “Malaysian Malaysia” is the war cry of the DAP. Racism in Malaysia is clearly the result of Singapore’s membership of the country for just three years. Can we really believe that if Singapore had not been “turfed out” Malaysia would have no racial problem.

While Kuan Yew talks about his belief that all ethnic communities should free themselves from the shackles of racial segregation in order to promote fairness and equality among the races, he also said that “once we are by ourselves (out of Malaysia) the Chinese become the majority”.

Singapore’s population is made up of 75 per cent Chinese and they own 95 per cent of the economy. It is therefore not a truly multi-racial country but a Chinese country with minority racial groups who are additionally much poorer.

In Singapore dissent is not allowed. People who contest against the PAP would be hauled up in court for libel and if they win elections would not be allowed to take their places in Parliament. Whereas in Malaysia opposition parties invariably win seats in Parliament and even set up state governments (today four out of the 13 states are ruled by the opposition parties); the PAP in Singapore has to appoint PAP members to represent the opposition.

Whether the PAP admits it or not, the party has always been led and dominated by ethnic Chinese and have won elections principally because of Chinese votes. The others are not even icing on the cake.

If Singapore is a part of Malaysia the PAP can certainly reproduce the Singapore kind of non-racial politics because together with the Malaysian Chinese, the PAP will ethnically dominate and control Malaysian politics. No dissent would be allowed and certainly no one would dare say anything about who really runs the country.

Amnesia is permissible but trying to claim that it is because Singapore had been “turfed out” for the present racist politics in Malaysia is simply not supported by facts of history.

Lee Kuan Yew and I saw the same things and know the reasons why.

Sunday, September 12, 2010

Malaysia Tries to Curb Its Pro-Malay Policies

Source: http://www.malaysia-today.net/low-bandwidth/index.php#Malaysia Tries to Curb Its Pro-Malay Policies

Posted on 11 September 2010

(Bloomberg Business Week) Prime Minister Najib wants to undo affirmative action for the ethnic Malays and lure back the Malaysian Chinese and Indians who have emigrated

Malaysian Prime Minister Najib Razak wants to engineer a return to Malaysia's glory days between 1987 and 1996 when its economy boomed, investment poured in, and local share prices almost quintupled.

Although Malaysia's economy has expanded since those heady times, its average annual growth has declined from 7.2 percent in the 1990s to 4.7 percent in the last decade. A fast-rising China has attracted investment that might otherwise have gone to Malaysia, while neighbor Singapore has built new industries, wooed multinationals aggressively, and outstripped Malaysia in growth. "Beyond commodities, it's difficult to see Malaysia's competitive advantage vis-à-vis other Asian countries," says Joseph Tan, Singapore-based Asian chief economist at Credit Suisse Private Bank (CS).

In response, Najib, in office since April 2009, has moved to streamline the government, made it easier for foreigners to invest, backed cutting-edge industries, and promoted a productive, educated workforce. His most controversial initiative is to start dismantling the policies that favor the ethnic Malay majority that put him in office—policies adopted by his father 40 years ago, when Abdul Razak was Prime Minister and the country was still recovering from riots between the Malay majority and the Chinese minority that left hundreds dead.

Those 1969 riots started in part because the Malays felt the Chinese controlled the economy. To raise the share of national wealth held by Malays and indigenous groups to at least 30 percent, Najib's father crafted a policy that gave them cheaper housing as well as priority for college enrollment, government contracts, and shares of publicly traded companies.

For the most part, the pro-Malay policy has kept the peace. "Malaysia has done very well, and affirmative action was a strong contributor to the stability that allowed for such development," says Masahide Hoshi, a director at Phalanx Capital Management HK in Hong Kong. "However, these same policies could impede Malaysia in the long term. The government must make changes soon."

Najib and his advisers say changing the pro-Malay rules will level the economic playing field, encourage investment from both inside Malaysia and abroad, and promote ethnic harmony. Najib, 57, has already eased affirmative-action rules governing overseas investors, initial public offerings, and property purchases. Mark Mobius, the emerging-markets authority at Templeton Asset Management, is impressed: "Malaysia is going through a transformation with the political changes that we've seen," he says.

Najib's reforms are opposed by some politicians who helped him gain power, including ex-Premier Mahathir Mohamad. At a March rally, former Deputy Law Minister Ibrahim Ali brandished a traditional kris dagger as the crowd chanted "Long live the Malays." A spokesman for Ali's group says the dagger display was not meant to incite violence. Najib's Malay opponents say they are protecting the constitution and that his father's goals have not yet been reached. "Malays have not gained for themselves the 30 percent target in corporate ownership even," Mahathir blogged on Aug. 9.

Analysts wonder if Najib has the political capital to carry through. "Najib appears to be saying all the right things, but the actions of many within UMNO [the main Malay political group] are not necessarily in the spirit of what [he] is saying," says Stephen Hagger, head of Malaysian equities for Credit Suisse Group (CS). It will be up to the politicians and civil service to implement Najib's plan, Hagger adds. "This is where our confidence falters."

Some locals are voting with their feet. Leslie C., an ethnic Chinese, moved to Singapore in June. "I don't think any politician will be different," says Leslie, 36, who doesn't want his full name reported. "I want a better future for the kids, an opportunity for them to start on even ground."

The bottom line: As part of a drive to boost economic growth, Malaysia's Prime Minister is trying to dismantle policies that favor ethnic Malays.

NEP policies to be reviewed: Najib

Source: http://www.malaysia-today.net/low-bandwidth/index.php#NEP policies to be reviewed: Najib

Posted on 11 September 2010

By Bernama

The implementation of affirmative action under the New Economic Policy (NEP) is to be reviewed to make it fairer, more transparent and market-friendly.

Prime Minister Najib Razak said what worked in the past, may not work today, and Malaysia would slide backwards and lose its competitiveness without reform or changes.
"We are doing this because we are committed to Vision 2020, which was initiated by former Prime Minister Tun Dr Mahathir Mohammad in 1990," Najib said in an interview with Martin Soong in The CNBC Conversation today.

He stressed that to maintain the status quo was not an option.

However, the commitment in terms of balancing society to make it more equitable, leading to long-term stability, still remains.

"So, the essence of the New Economic Model (NEM) is not about changing the macro targets but to ensure that how we do it, results in greater success.

"By doing that, I think it would be more acceptable across the board and be seen to be fairer as well," he added.

Najib also said some people are concerned and may be in fear of change as well, but he added, this is nothing new.

Malay rights group Perkasa and Dr Mahathir Mohamad have voiced their defence of the special rights of Malays under the NEP and are against any changes being made to the existing bumiputera policy.

"They are not against us. They are talking more about bumiputera rights. But actually, we are not taking anything away from the bumiputeras, but saying, let us do it differently," he explained.

Najib emphasised that what is important is to achieve better results and a more equitable society.

"At the same time, we want to be fair to the non-bumiputeras as well. We want to build a 1Malaysia," he highlighted.

He said the commitment is also to bring more equitable development to including Sabah and Sarawak, which is a cornerstone of the NEM, which seeks to be inclusive.

According to Najib, quite a large chunk of resources would be channeled into Sarawak and Sabah under the 10th Malaysia Plan, especially in respect of the Government Transformation Programme (GTP).

He said this encompasses for example, infrastructure development, rural roads, electricity and water supply with the bulk of resources being spent on Sarawak and Sabah.

"We are seeing results because I monitor this on a regular basis. So, things are actually happening on the ground and we will see the achievements to be much higher as we move forward and gain momentum," he added.