The former premier takes the policy's critics,
including Anwar Ibrahim, to task. He argues that NEP has done much for
the bumiputera while the non-bumis also benefitted.
PETALING
JAYA: Dr Mahathir Mohamad has defended the New Economic Policy (NEP),
the controversial socio-economic restructuring affirmative action
programme launched in 1971
Taking the critics, including Anwar Ibrahim, to task, the former
premier said NEP had been denigrated by opposition politicians to the
point that it appeared to be the worst policy ever conceived and
implemented.
“While (prominent economist) Ramon Navaratnam blames NEP as being the cause of foreign investors not coming to Malaysia, Anwar condemned it for the abuses and corruption involved in its implementation,” he said in a blog posting.
“Anwar loudly proclaims that NEP benefits only the cronies of the government and that the contracts, Approval Permits (APs) and licences given out under NEP, involve corruption.
“He makes it sound as if NEP did not benefit the Malays and other Bumiputera at all,” he added.
However, Mahathir admitted that a few of the recipients of APs, contracts and licences might know the leaders of government or were members of Umno
“And there may be corruption involved in some cases but the charge is not warranted because in most cases, the benefits of NEP have been enjoyed by almost every Malay and Bumiputera. In fact, indirectly and, in some cases, directly it has benefited the non-Bumiputera as well,” he said.
Giving them education
For example, Mahathir said, every Malay child was helped in his or her education with free textbooks and often with free meals.“Schools are built in the remotest areas where before there were no schools.
Hostels are built mostly for Malay and other Bumiputera children so that they can live a better life and are able to study in better surroundings than in their homes in the villages,” he added.
For the qualified, the former premier noted, tertiary education was readily accessible, with huge numbers of scholarships.
As a result, he said, many of the children of poor families or of families unable to pay high fees, now held university degrees, were highly qualified and many were professionals.
“Before only 5% of the doctors in Malaysia were Malays and Bumiputera; now 40% of them are Malays,” the doctor-turned-politician said, adding that it was the same with other professions.
“Just count the number of students in public universities in the country and those abroad on scholarships and one will appreciate how NEP has benefited the Malays and other Bumiputera in education,” he said.
Mahathir also said when, under NEP, shares of companies were allocated to Malay applicants, they invariably sold the shares for capital gains almost immediately.
“This is because they did not have the money to purchase the shares and had to repay bank loans. To avoid this, the government decided to create unit trusts so that the shares could only be sold back to the managers. Thus, the National Equity Corporation was born.
“Today, more than 10.5 million Malays and other Bumiputera hold shares in these unit trusts with total holdings valued at RM135 billion. This is a direct benefit from NEP. The unit trust makes up a substantial percentage of corporate wealth held by the Bumiputera,” he said.
Many success stories
Under NEP, Mahathir said, the role of the Federal Land Development Authority (Felda) was also greatly augmented and settlers benefited from the spin-offs into the transport business, refining and marketing of the produce.
“Felda was nursed until it has become the biggest plantation company in the world.
“The settlers have much higher incomes while their children are much better educated. All these are due to NEP,” he said.
Mahathir said microcredit was extended to the smallest village enterprises and this helped tens of thousands of Bumiputera villagers, especially the women in business.
“There are now thousands of Bumiputera businessmen who benefited from the importation of used and new cars, from becoming agents and vendors to the national car projects and also in the oil and gas business as a result of NEP.
“The best of them have grown big, some very big, becoming car dealers and assemblers, housing developers, steel fabricators, boat and ship builders; IT, transport, ports and shipping; food and cosmetic manufacturers and many other businesses.”
The privatisation scheme, noted the former premier, had also benefited Bumiputera business greatly, including the supply of materials and employment of engineers.
“Are they all cronies, these successful ones?” he asked.
“There are far too many of them to be cronies. That some are known to government leaders is to be expected because government leaders in Malaysia are accessible to everyone as a matter of policy.
“They may be Umno members. But then there are more than three million Umno members. Is the government expected to exclude them from the benefits of NEP?” he asked.
The fact was, according to Mahathir, that almost all of those who succeeded had benefited from NEP.
“Those who show capability cannot be excluded from the support under NEP. In fact, it is safer to help those with good records than to give to untried people,” he said.
“Why is it that the government is doing all these under NEP? The answer is simple. The Malay businessmen do not get opportunities from the private sector.
“They never get contracts or sub-contracts for supplies in the private sector. Even after they have proved their capabilities when carrying out government contracts, they would not get contracts from the private sector.
“On the other hand, even when NEP was being implemented, many of the government contracts still go to non-Malays,” he added.
Corruption must be condemned
Mahathir said the accusation of cronyism was made without any real basis as there were far too many benefiting from the NEP at all levels and in all fields for the policy to be enriching only the cronies.
“There may be corruption but NEP would not have succeeded to the extent shown if corruption prevailed in every case. The focus on cronyism and corruption is political, not based on the real role and achievements of NEP.
“If there is no NEP, the economic position of the Bumiputera would be dismal. There would not be as many Bumiputera professionals as there are now. The disparities in all fields of economic activities would be very much greater as the national economy grows,” he added.
Mahathir also took a swipe at some of the Malay beneficiaries of NEP who were now calling for the policy to be scrapped.
“They dislike the benefits they obtained from it to be mentioned as this would amount to, what the Malays called, ‘ungkit’, that is, to remind one of a debt of gratitude.
“Yet in Malay culture one should never forget the ‘budi’ of another. As Muslims, they should know that thankfulness for any benefit is enjoined by Islam,” he added.
Mahathir said while corruption and cronyism should be condemned, most of the accusations with regard to the NEP were unjustified.
“They are motivated by personal and sectarian politics. The fair-minded must consider also the good achieved by NEP. It is sad that people who benefited from NEP should want to deny it to others who are still in need of it,” he said.
Non-Bumis benefited as well
Mahathir conceded that while the NEP did not achieve the target to remove the disparities between races in Malaysia completely, it however reduced the disparities enough to keep Malaysia stable even during the financial crisis.
“What is more, it did this without stifling the remarkable growth,” he said.
The former premier said that non-Bumiputera also benefited from the policy, which critics claimed reduced non-Malays to the status of second-class citizens by cementing “ketuanan Melayu” (Malay supremacy).
“They have benefited simply because invariably what is given to the Bumiputera must spin off to the non-Bumis. In some cases, the Ali-Baba phenomenon is exhibited, with the Bumiputera merely getting a small portion for just lending his name.
“But even if a Bumiputera contractor decides to implement the contract, he still has to procure building materials, skilled labour etc from the non-Bumiputera companies.
“Specialised work must also be given to non-Bumiputera as there are hardly any Bumiputera sub-contractor capable of doing this. In fact, a substantial part of the projects during the NEP period went to non-Bumiputera. It cannot be that the non-Bumiputera earns no profits from these contracts, sub-contracts, supplies and skilled labour,” he said.
Mahathir, who remained in power for 22 years, said politicians must find issues to support their bids for power but condemning NEP could only be done by twisting or ignoring the contributions of that policy to political stability and the economic success of Malaysia.
“While (prominent economist) Ramon Navaratnam blames NEP as being the cause of foreign investors not coming to Malaysia, Anwar condemned it for the abuses and corruption involved in its implementation,” he said in a blog posting.
“Anwar loudly proclaims that NEP benefits only the cronies of the government and that the contracts, Approval Permits (APs) and licences given out under NEP, involve corruption.
“He makes it sound as if NEP did not benefit the Malays and other Bumiputera at all,” he added.
However, Mahathir admitted that a few of the recipients of APs, contracts and licences might know the leaders of government or were members of Umno
“And there may be corruption involved in some cases but the charge is not warranted because in most cases, the benefits of NEP have been enjoyed by almost every Malay and Bumiputera. In fact, indirectly and, in some cases, directly it has benefited the non-Bumiputera as well,” he said.
Giving them education
For example, Mahathir said, every Malay child was helped in his or her education with free textbooks and often with free meals.“Schools are built in the remotest areas where before there were no schools.
Hostels are built mostly for Malay and other Bumiputera children so that they can live a better life and are able to study in better surroundings than in their homes in the villages,” he added.
For the qualified, the former premier noted, tertiary education was readily accessible, with huge numbers of scholarships.
As a result, he said, many of the children of poor families or of families unable to pay high fees, now held university degrees, were highly qualified and many were professionals.
“Before only 5% of the doctors in Malaysia were Malays and Bumiputera; now 40% of them are Malays,” the doctor-turned-politician said, adding that it was the same with other professions.
“Just count the number of students in public universities in the country and those abroad on scholarships and one will appreciate how NEP has benefited the Malays and other Bumiputera in education,” he said.
Mahathir also said when, under NEP, shares of companies were allocated to Malay applicants, they invariably sold the shares for capital gains almost immediately.
“This is because they did not have the money to purchase the shares and had to repay bank loans. To avoid this, the government decided to create unit trusts so that the shares could only be sold back to the managers. Thus, the National Equity Corporation was born.
“Today, more than 10.5 million Malays and other Bumiputera hold shares in these unit trusts with total holdings valued at RM135 billion. This is a direct benefit from NEP. The unit trust makes up a substantial percentage of corporate wealth held by the Bumiputera,” he said.
Many success stories
Under NEP, Mahathir said, the role of the Federal Land Development Authority (Felda) was also greatly augmented and settlers benefited from the spin-offs into the transport business, refining and marketing of the produce.
“Felda was nursed until it has become the biggest plantation company in the world.
“The settlers have much higher incomes while their children are much better educated. All these are due to NEP,” he said.
Mahathir said microcredit was extended to the smallest village enterprises and this helped tens of thousands of Bumiputera villagers, especially the women in business.
“There are now thousands of Bumiputera businessmen who benefited from the importation of used and new cars, from becoming agents and vendors to the national car projects and also in the oil and gas business as a result of NEP.
“The best of them have grown big, some very big, becoming car dealers and assemblers, housing developers, steel fabricators, boat and ship builders; IT, transport, ports and shipping; food and cosmetic manufacturers and many other businesses.”
The privatisation scheme, noted the former premier, had also benefited Bumiputera business greatly, including the supply of materials and employment of engineers.
“Are they all cronies, these successful ones?” he asked.
“There are far too many of them to be cronies. That some are known to government leaders is to be expected because government leaders in Malaysia are accessible to everyone as a matter of policy.
“They may be Umno members. But then there are more than three million Umno members. Is the government expected to exclude them from the benefits of NEP?” he asked.
The fact was, according to Mahathir, that almost all of those who succeeded had benefited from NEP.
“Those who show capability cannot be excluded from the support under NEP. In fact, it is safer to help those with good records than to give to untried people,” he said.
“Why is it that the government is doing all these under NEP? The answer is simple. The Malay businessmen do not get opportunities from the private sector.
“They never get contracts or sub-contracts for supplies in the private sector. Even after they have proved their capabilities when carrying out government contracts, they would not get contracts from the private sector.
“On the other hand, even when NEP was being implemented, many of the government contracts still go to non-Malays,” he added.
Corruption must be condemned
Mahathir said the accusation of cronyism was made without any real basis as there were far too many benefiting from the NEP at all levels and in all fields for the policy to be enriching only the cronies.
“There may be corruption but NEP would not have succeeded to the extent shown if corruption prevailed in every case. The focus on cronyism and corruption is political, not based on the real role and achievements of NEP.
“If there is no NEP, the economic position of the Bumiputera would be dismal. There would not be as many Bumiputera professionals as there are now. The disparities in all fields of economic activities would be very much greater as the national economy grows,” he added.
Mahathir also took a swipe at some of the Malay beneficiaries of NEP who were now calling for the policy to be scrapped.
“They dislike the benefits they obtained from it to be mentioned as this would amount to, what the Malays called, ‘ungkit’, that is, to remind one of a debt of gratitude.
“Yet in Malay culture one should never forget the ‘budi’ of another. As Muslims, they should know that thankfulness for any benefit is enjoined by Islam,” he added.
Mahathir said while corruption and cronyism should be condemned, most of the accusations with regard to the NEP were unjustified.
“They are motivated by personal and sectarian politics. The fair-minded must consider also the good achieved by NEP. It is sad that people who benefited from NEP should want to deny it to others who are still in need of it,” he said.
Non-Bumis benefited as well
Mahathir conceded that while the NEP did not achieve the target to remove the disparities between races in Malaysia completely, it however reduced the disparities enough to keep Malaysia stable even during the financial crisis.
“What is more, it did this without stifling the remarkable growth,” he said.
The former premier said that non-Bumiputera also benefited from the policy, which critics claimed reduced non-Malays to the status of second-class citizens by cementing “ketuanan Melayu” (Malay supremacy).
“They have benefited simply because invariably what is given to the Bumiputera must spin off to the non-Bumis. In some cases, the Ali-Baba phenomenon is exhibited, with the Bumiputera merely getting a small portion for just lending his name.
“But even if a Bumiputera contractor decides to implement the contract, he still has to procure building materials, skilled labour etc from the non-Bumiputera companies.
“Specialised work must also be given to non-Bumiputera as there are hardly any Bumiputera sub-contractor capable of doing this. In fact, a substantial part of the projects during the NEP period went to non-Bumiputera. It cannot be that the non-Bumiputera earns no profits from these contracts, sub-contracts, supplies and skilled labour,” he said.
Mahathir, who remained in power for 22 years, said politicians must find issues to support their bids for power but condemning NEP could only be done by twisting or ignoring the contributions of that policy to political stability and the economic success of Malaysia.
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