Wednesday, June 23 2021 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
END OF DAYS FOR BUMIPUTRA LAWS?
WHETHER the incumbent, Najib Razak, or his key Opposition number, Anwar Ibrahim, wins the crucial Malaysian general election on May 5, Malaysia could well see a fundamental change to its economic policy – an end to existing Bumiputra laws . . .
THE bedrock of Malaysia's economic development over more than four decades has been its Bumiputra policy, in the guise of the New Economic Policy (NEP). This preferentially fosters development of the indigenous Malay population, known as Bumiputras.
The NEP provides the majority ethnic group, the Malays, with education, housing and employment preferences.
Depending on the margin of his win — if he wins — Prime Minister Najib Razak’s next Government could well be forced to make good on previous promises to reform Bumiputra policy.
Najib has spoken at length of reform — to bring Bumiputra policy up-to-date in response to international criticism. He is hamstrung because his Coalition Government draws its support base from the majority Malay population. And he f aces increasing pressure from stringent fundamental Malay political groups — like the Pan Islamic Malaysian Party, which goes by the acronym, PAS.
Pre-election polls show that Najib will, in fact, lose to the Opposition, led by Anwar Ibrahim.
Anwar has long been the nemesis of the ruling Barisan Nasional (National Front), which is made up of three key political parties, including the United Malays National Organisation (UMNO).
He has been a vocal critic of the Bumiputra policy, and has vowed to dismantle these outdated programmes, which were first implemented in the early 1970s to quell racial riots in Malaysia. Anwar charges that the policy fosters rampant cronyism — that Malay businesses closely linked to UMNO take advantage of the racially-biased measures.
He has reaffirmed his stand against the NEP, pledging to undertake major economic reforms, including putting an end to programmes that, in the past, have led to selective affirmative action. Anwar is quoted as saying: "We have to dismantle what we consider an obsolete race-based New Economic Policy to replace it with the Malaysian Economic Agenda, which romotes growth."
During the election, he has spoken of his goal to turn Malaysia into a growing vibrant economy, one that is more competitive — and more attractive to foreign investors.
He says Malaysia had fallen behind on the regional economic ladder over the past 20 years, as other countries, such as South Korea, Taiwan, Singapore, Thailand, Vietnam — and, more recently, the Philippines — have leapfrogged ahead.
These countries have captured a larger share of foreign investment and enjoy higher growth because of their more competitive economies.
Increasingly, Malaysia has come to rely on foreign investment to upgrade its economy. As a result, its Bumiputra policy conflicts with the demands of both foreign investors and significant sections of the country's non-Malay businesses.
If Anwar wins the election next Sunday, an Anwar-led Government will also look to address corruption — and to assist the poor and marginalised communities.
Anwar fell out with the Government in the late 1990s, when he split with then-Prime Minister Mahathir Mohamad, who was advocating currency and investment controls to protect Malay businesses. As the then-Deputy Prime Minister and Finance Minister, Anwar pushed for reforms prescribed by the International Monetary Fund to open Malaysia’s economy to foreign investors.
Since then, the Government has found ways to silence Anwar. He faced a long political battle after being sentenced to six years in prison for corruption in 1999, then to another nine years on charges of sodomy. A Federal Court in 2004 quashed the second conviction, and Anwar was released.
In January this year, the Court acquitted Anwar on a second sodomy charge. Malaysian prosecutors are appealing the verdict.
* Florence Chong is Editor of ATI Magazine