Investors, says Chinese group

Najib launched Teraju, a new unit created to enhance Bumiputera economic participation, last week. — File pic

KUALA LUMPUR, Feb 15 — The “shift in emphasis” away from the New Economic Model’s (NEM) initial focus on productivity and meritocracy to Bumiputera interests will leave Malaysia’s foreign direct investments (FDI) trailing behind regional rivals, a Chinese association said.

Kuala Lumpur and Selangor Chinese Assembly Hall (KLSCAH) president Tan Yew Sing said the formation of the Unit Peneraju Agenda Bumiputera (Teraju) “diluted” the NEM and would likely send the wrong message to foreign investors who had been hopeful of reform.

“Now, with this wrong image, I hope it doesn’t affect our country,” said Tan, who admitted he was surprised by Teraju’s formation.

While he agreed that there was a need for wealth to be spread out more equitably, Tan said it was more important that this be done based on need and not “skin colour”.

He said since the majority of those households in the lowest income bracket were Malay, a needs-based approach would invariably benefit Malays to a greater degree.

Tan nonetheless said he still had “high hopes” that the Najib administration would review its implementation of the NEM and specify a more concrete time frame for the implementation of economic reforms.

Prime Minister Datuk Seri Najib Razak has come under fire recently over the launch of Teraju, a new unit created to enhance Bumiputera economic participation, which Pakatan Rakyat (PR) claimed contradicted the spirit of the NEM.

DAP national publicity chief Tony Pua accused Najib of abandoning the purpose of the NEM, which is to restructure the affirmative action programmes to benefit the bottom 40 per cent of income earners regardless of race.

When launching Teraju last week, Najib had said that the unit will lead, co-ordinate and drive Bumiputera economic participation through new and existing initiatives, propose institutional reform to increase effectiveness and act as the secretariat for the Bumiputera Agenda Supreme Council (MTAB) which oversees Bumiputera economic development.

Najib had in the past promised that reforms to the economy would still see to the needs and interests of the Bumiputera community, which comprises the majority Malay population as well as indigenous people such as the Orang Asli.

He had said Bumiputeras account for 73 per cent of the 2.4 million households in the lowest 40 per cent income bracket.

In 2009, Najib had done away with regulations requiring a 30 per cent Bumiputera stake in 27 service and financial sub-sectors and limited the purview of the Foreign Investment Committee that oversees Bumiputera equity.

A 30 per cent Bumiputera stake in the national economy has been an objective of the government since the implementation of the New Economic Policy (NEP) in 1970.

Official statistics state that Bumiputera-held equity in the country stands at 18.7 per cent as of 2004.