Changes needed, even if they cause pain

(The Straits Times) KUALA LUMPUR, May 21 — Malaysia has no choice but to change its affirmative action programme even if it causes “pain” to the Bumiputera community, said Prime Minister Datuk Seri Najib Razak.

The usual process of allocating quotas and equity stakes to close the wealth gap is hampering growth and will need to be adjusted, he said.

While Malaysians support the idea of a more equitable and just society, the issue was over how to achieve it.

“The traditional way of imposing quotas, for example, and equity restrictions, seems to be hampering achievements and growth. And a lack of a principle of meritocracy could also be another source of irritant to a number of Malaysians. So we have to look at how we can make adjustments to it, without forgetting the ultimate goal of having a socially just and equitable society,” he said in an interview with The Straits Times and Business Times this week.

He was asked if there was a roadmap to the dismantling of the New Economic Policy (NEP) that has undergirded Malaysia's affirmative action programme for the Malays.

The two-pronged approach to eradicate poverty and build Malay equity to 30 per cent of the economy has been a source of growing disenchantment among not just non-Malays but also among Malays who feel that only the elite few have reaped its benefits.

The ruling Barisan Nasional coalition's shocking slide in last year's general election, leading to the loss of its two-thirds majority in Parliament, has been blamed partly on such frustrations.

Since taking over as Prime Minister on April 3, Najib has sought to build a 1 Malaysia, a new slogan affirming equality for all and a call to stand together regardless of race. He was also behind a recent move to liberalise 27 sub-sectors in the services industry, lifting a longstanding requirement that investors need to find Bumiputera partners who will own 30 per cent of the business.

The move has been received with cautious optimism by some. But detractors say it is a sign of further erosion of Malay rights and will undermine Malay support for the ruling coalition.

Commentators, including former New Straits Times chief Datuk A. Kadir Jasin, have criticised the liberalisation, fearing the loss of more Bumiputera privileges. Kadir warned that if the lessons of the past were not learnt — NEP was introduced by Najib's father Tun Abdul Razak after the bloody May 13 racial riots of 1969 — history could be repeated.

Najib was asked what he thought of such criticisms.

“Every time there's a change, there will be those who will be affected by the change for one reason or another. It could be for personal reasons, or could be differences in ideology, but the alternative is to (maintain the) status quo, which is worse. I don't think it's an option for us,” he said.

“If it remains status quo and there's no change, then Malaysia will be out of sync with what's happening globally. Malaysia will be less competitive. Then everybody will lose out, including the Malays, the Bumiputeras,” he said, not mincing his words.

There will be some people who will be unhappy but he believed it could be managed. “I believe the gains will outweigh the pain,” he said.

Asked if his own Malay-based party Umno understood the need for change, given the preponderance of warlords who control sections of the grassroots with patronage, he quipped: “That's all right. The warlords are close to me, most of them. Don't forget, I'm the biggest warlord.

“They are chiefs but they're smaller chiefs. I'm the big chief.”

On the flight of the non-Malay vote from Barisan to the opposition, he said this was part of the reason for the change.

“It's a question of managing the strong base that we have — and Umno is still the strongest party viz a viz the Malays — but we have at the same time to win back the non-Malay support. So it's going to be a delicate balance in reality, but it's not something that is insurmountable.”

Political scientist James Chin, who researches affirmative action policies, told The Straits Times that Najib will likely be very cautious when it comes to actually amending the NEP. The key is to keep the economy efficient without losing the core support of the Malays that keeps Umno afloat.

Najib may modify certain less sensitive aspects of the NEP, such as the awarding of scholarships, but no country which has started affirmative action policies has ever been able to remove them, noted Chin.

“Najib is in a no-win situation,” he said.