The Political Will for Change

By Dr. Collin Abraham

Joceline Tan has done well to highlight some of the positive new economic changes that hopefully will be implemented by Prime Minister Najib. In one important observation, she seems to have correctly pointed out (Star Online 5/6) that these changes have caught those Bumiputras used to walking on ‘crutches’ by surprise. Indeed, even Tun Abdullah Badawi who has just retired as PM, called these changes ‘bold’, implicitly suggesting that YAB himself did not have the ‘political will’ to bring them about while in office. 

But what is more interesting are some implications arising from the changes mentioned by Wong Chun Wai in his Blog posted on Malaysiakini (5/6). The latter draws attention to the fact that even Tuan Hadi Awang, the President of Party PAS, seems to have a ‘serious problem’ in not accepting the abolition of the 30% equity required for Bumiputra allocation for public listing on the stock exchange. Indeed, Chun Wai correctly suggests that other leaders of PAS, because of their silence on this issue, can be said to agree with Hadi Awang. 

Therefore it seems reasonable to suggest that opposition to this abolition and indeed that of the ‘liberalization’ of the economy itself seems to be essentially an elitist class-based Bumiputra (read Malay) response across the board. The fact of the matter is clearly evident when, according to Najib, from the 54 Billion Dollars allocated under this equity program to Bumiputras, only 2 Billion (less than 5%) remains. It appears that the lure of this class-based elite in “getting something for nothing” without any requirement to do something for the Malay community at large is simply too much to give up. 

But equally contentious is the question as to who were the recipients of the 52 Billion “leakage”?  It seems reasonable to suggest that many Malaysian Chinese investors would have taken advantage of this ‘transfer transaction’ in which case we are at least fortunate that the money did not leave the country. On the other hand, and as a result of this and other similar investments, the Chinese now apparently own between 70-80% of all real estate and this has opened them to the charge of being “Cina Kaya” compared to Bumiputras. This certainly complicates efforts at nation-building. 

This is not the place to attempt a full-scale “class analysis”. But it should be pointed out that theoretically there is nothing intrinsically wrong with the elitist class model in the context of development. This is because the model is based on the assumption that this class, while enhancing its own interests, will also be committed to the development of a ‘level playing field’ for the working classes as well. It has been argued that at the least this should result in a ‘trickle-down’ top-bottom effect. 

But it is now abundantly clear that this has not happened, and indeed is not happening even today, as envisaged by the current world economic meltdown that apparently began in the country, where it should least have happened, namely the US. 

Therefore while Najib’s proposed restructuring of the political economy offers the possibility of genuinely addressing and hopefully overcoming the problems of inequality and poverty eradication among all ethnic and racial groups, the creation of Equinas is nothing more than the re-introduction of the old model of elitist share holding and rent-seeking. ”This amounts to the perpetuation of privileges for well connected insiders, rather than a genuine assault on poverty”. Indeed, one can speculate as to whether the proposed talks on “Malay Unity” also can be said to have some relevance in the thinking behind the creation of Equinas. 

With respect, what seems necessary is to restructure the proposed Equinas to SME institutions so that manufacturing can be re-directed more effectively. As it is, only some 10% of manufacturing contributes to the GDP and this needs to be urgently reviewed so that we need not have to depend on the foreign sector for export.

Much has been touted about positive Government assistance to SME’s but I would, with respect, argue that much of this is irrelevant to the real needs of the producers which include questions such as land allocation, ownership and control. 

In conclusion, it is my duty to highlight the fact that YAB Tun Razak’s ideology and strategy on Development was essentially based on the bottom-top approach. To this end YAB created the post of State Development Officer in every State and charged them with the responsibility of initiating and successfully operating ‘peoples’ grassroots institutions such as JKKK, Farmers Associations, Fishermens’ Cooperatives, Youth/ Womens’ organizations and others. Their representatives would sit on District Development Committees along with officials of the respective Government Departments, at least once a month, to draw up plans for programs and projects and for their implementation. 

The same approach was subsequently adopted for urban development as well.

Najib might not have been aware of the introduction of these pivotal institutions while they were taking place, so it may be useful for me to testify that this Bottom-Top strategy worked excellently until the politicians and bureaucrats “got into the act” when Tun announced that ‘money was not a problem”! 

It is time to re-set the original approach to development.