Speakers blame NEP vestiges

They result in slow development, symposium told

Amcham president Datuk Nicholas Zefferys summed up the system of preferences given to bumiputra companies, oligopolies, cartels, price controls and subsidies as an “NEP run amok”. “An example is how a US company which wanted to supply products to the Government saw the original contract value rise to US$300mil from US$30mil via such business arrangements,” Zefferys said.

The Star

PETALING JAYA: Speakers from the civil society, business lobby groups and academia who took part in a symposium on the 10th Malaysia Plan (10MP) yesterday pointed out that vestiges of the New Economic Policy (NEP) were making the country falling behind in terms of socio-economic development.

They pointed out that ethnic-based affirmative policies, which had pervaded policy and decision-making over the past four decades, had also polarised the country.

The symposium, which saw Minister in the Prime Minister’s Office Senator Tan Sri Dr Koh Tsu Koon as the keynote speaker, was jointly organised by Asian Strategy & Leadership Institute, Centre for Pubilc Policy Studies and the American Malaysian Chamber of Commerce (Amcham).

Speakers at the first session were also pessimistic about whether the political will was there to drive reforms in order to make the country more competitive.

Amcham president Datuk Nicholas Zefferys summed up the system of preferences given to bumiputra companies, oligopolies, cartels, price controls and subsidies as an “NEP run amok”.

He said in the symposium’s first session that the situation had led to a negative perception of Malaysia by foreign companies, with many complaints over the years on how foreign companies had to go through bumiputera-owned companies in order to do business with government-linked companies (GLCs).

“An example is how a US company which wanted to supply products to the Government saw the original contract value rise to US$300mil from US$30mil via such business arrangements,” Zefferys said.

He said the fall in private sector investment over the years could be attributed to the “crowding out” of the private sector by state investment firm Khazanah Nasional Bhd and GLCs.

Zefferys said Malaysia was more ethnically polarised today as people were “not living side-by-side comfortably,” changes must come via redefining affirmative action, government decentralisation and strengthening the rule of law.

Koh said the challenges that came with a multi-ethnic and multi-religious society had to be seen more positively.

He said what was new in the 1Malaysia concept embodying national unity and efficient governance was the emphasis on outcome instead of input.

Koh said as part of the move to make the government machinery less wasteful, RM24bil was shaved off Budget 2010 mostly in operating expenditure compared with Budget 2009 while the 10MP’s budget allocation had been kept to the same amount as the 9MP’s.

“The political will is only as strong as the political endorsement,” he said, adding that the Government could not afford to ignore critical views on the ground despite the obstacles.

Among other speakers, Universiti Malaya’s Professor Edmund Terence Gomez said the weakness of property rights in the country made both locals and foreigners fear investing in the country.

“I believe the Government knows what needs to be done but can they deliver?” he asked.

There were still questions over whether the 30% equity policy would continue to be implemented, he said, adding that other critical issues were reform of the education system and the public sector.

Gomez also said it was “not possible” to have market-friendly affirmative action as it would not work in business. “We need to confront this clearly and openly,” he said.