Our 2019 Merdeka and Malaysia Day celebrations were marred by calls from certain quarters for the Malay community to prioritise Muslim businesses and boycott non-Muslim businesses.
The supposed reasons for this initiative is to improve the economic standing of the Malays, as well as to somehow defend the position of Islam and Malays. The underlying reason was the upcoming Umno-PAS gathering.
But is a boycott a viable solution for both causes?
The economic problems of the Malays are not new. The British Colonial policy of divide and rule, as well as the failed laissez-faire policies of the post-Merdeka Alliance government, contributed to the May 13, 1969, tragedy.
After that, the New Economic Policy (NEP) was introduced, which aimed to eradicate poverty irrespective of race and to eliminate the identification of ethnicity with economic function.
In its earlier stages, the NEP involved large investments in education, with extensive scholarship opportunities. This is what largely drove the creation of today’s Malay middle class.
But the NEP was only supposed to last for 20 years, meaning its “expiry date” was back in 1990.
Today, the NEP, as well as the practices it inspired, are still in place. However, the gap between rich and poor Malays has widened.
No one is denying the good the NEP did.
However, today, this policy that only takes race into account disproportionately benefits the Malay elite. It gives them better educational and economic outcomes than their fellow Malay counterparts: the urban poor, low-ranked government employees, Felda settlers and fishermen.
Why? Part of it is because the NEP became a victim of its own success.
Let us consider the bumiputra-reserved Amanah Saham Bumiputra’s (ASB) investment statistics. A total of 7.4 million unit holders or 76.92 percent of them have unit sizes below RM5,000, based on ASB’s 2018 Annual Report.
Only 0.24 percent have a holding size of RM500,001 and above. However, 9.15 percent of the unit holders have subscribed to 81.83 percent of total units or more than RM127.5 billion! The 7.4 million holders of the smallest units only have RM4.1 billion or just 2.65 percent of the total units.
The same is true for Tabung Haji (TH). The original function of TH was to enable savings by the Muslim community to perform the Hajj. It was not supposed to morph into a form of investments for the public.
However, 50 percent of the funds in TH’s savings accounts come from only 1.3 percent of its contributors. There is, according to media reports, an individual who contributed RM190 million!
Widening gap between rich and poor Malays
These statistics show that although the NEP created a Malay middle class, it has done little to close the widening gap between rich and poor Malays. This is the community’s biggest economic challenge today.
Our focus has been on the disparities among the races, but not within Malaysia’s ethnic groups - including the Malays. Continuing to ignore this will condemn the less well-off Malays and Malaysians to indefinite penury and exclusion.
Progress away from this paradigm has been hampered by the fact that our economic model is still stuck in the old, low-wage export model framework. It’s typically used for emerging economies to compete.
This was the transition that South Korea, Taiwan and Singapore - economies that were once at the same level as us - had gone through. However, they increased productivity and wage rates by adding value to their economies.
However, unlike them wages in Malaysia have stagnated. Our open policy in hiring foreign workers has also not helped.
We must also not forget how our economy fell victim to corruption and abuse of power.
The damage that the 1MDB, TH, Yapeim and other alleged scandals have caused on not only Malaysia’s public image, but also the credibility of bumiputra institutions are well known.
Interestingly, PAS, which has backed the boycott campaign, had visited the 1MDB and TH managements when they first began to ally with Umno. PAS’ leaders reportedly even stated that they were satisfied with the excuses given to them over the various allegations.
Rather than act as a check-and-balance, PAS instead inexplicably chose to provide “cover” to the abuses of the previous government.
What must we do to move our community forward? We have a choice.
Yes, there have been studies on discrimination faced by the bumiputra in the private sector, and that must be dealt with.
But are we going to be swayed by demagoguery or are we going to take concrete steps to resolve the Malay - and hence the wider national economic crisis - by looking at the problems within our community?
Countries like Vietnam have surpassed us while Malaysia wallows in its archaic economic model and endemic corruption.
Need to free the T20 Malays to compete with other races
We need to free the T20 Malays to compete with other races while providing support to the urban poor, farmers and workers, many of whom are Malays and bumiputra.
Bumiputra affirmative action must be appropriate and needs-driven: T20 Malays should no longer exploit benefits meant for their B40 and M40 compatriots.
For instance, the government should consider whether ASB accounts that are over the investment limit of RM200,000 should be allowed to reinvest their dividends or if accounts only below that value are to be prioritised - because the latter make up the majority.
Currently, accounts are still permitted to collect dividends that can be invested on top of the RM200,000 cap, arguably benefiting only a small Malay elite.
Tabung Haji should also return to its roots as a savings fund for Hajj at a reasonable rate.
In 2019, the Muassasah Hajj cost stood at around RM22,900 while the subsidy given out by Tabung Haji is RM12,920. Therefore, those who wish to perform the Hajj only need to save RM9,980.
Non-core GLCs and those that have overlapping functions at the federal and state levels can be rationalised through management buyouts (MBOs), subject to terms and conditions.
The majority of GLC managements consists of bumiputras. Therefore, they will benefit from the experience of competing and succeeding in the corporate world. Also, the government sector will not monopolise the financial market.
It is likely that these proposals may spark further controversy. But if we are not ready to face these issues head-on and honestly, ordinary Malays will continue to be left behind.
I have delved more deeply into these issues in my book, Moving Forward: Malays for the 21st Century, which was first published in 2009 and has now been re-released with a new foreword and additional notes.
Boycotts are not the solution to uplift the Malays. Rather, our salvation will lie in a willingness to adopt bold and wise policies, as well as having leaders who are willing to see them through.
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