You are currently browsing the tag archive for the ‘NEM’ tag.

NB: This press statement was released on 9 October 2013 in Kuala Lumpur.

When Dato’ Sri Najib Razak first became prime minister, he promised national unity in the form of 1Malaysia and a New Economic Model (NEM) that preached needs-based economic intervention in favour of the bottom 40 per cent of household income earners regardless of race. This signalled a departure from the race-based policies from the past, and a clear indication that the way forward must include every Malaysian, especially those who most need help.

Unfortunately, Najib’s promises have all been undone with the recent launch of his new Bumiputera agenda. Dubbed the Bumiputera Economic Empowerment Agenda (BEEA), it entails a variety of race-based initiatives including the setting up of a powerful Bumiputera Economic Empowerment Council, the creation of Bumiputera Development Units in every ministry, an assurance that major Government-Linked Companies (GLCs) will increase Bumiputera vendor participation, as well as the launch of 10 billion units of new Skim Amanah Saham Bumiputera 2 (ASB2) shares by Permodalan Nasional Berhad (PNB).

While the NEM offered market liberalisation and needs-based affirmative action that would focus on narrowing the gap between the rich and poor, the BEEA appears to be a reversion to the old New Economic Policy (NEP) that has been proven to benefit mostly a select class of Umno-linked Malay capitalists at the expense of the poorer, unconnected masses.

This is made obvious by the fact that, despite four decades of supposed Bumiputera-targeted assistance, the bottom 40 per cent of Bumiputera households today earn a measly average income of RM1,686 per month. At the same time, the politically-connected rich are able to purchase RM7 million bungalows at a whim.

As such, the proposed launch of 10 billion ASB2 units is highly questionable. Who is set to benefit from more ASB shares made available? Would the bottom 40 per cent of Bumiputera households be able to invest in these high-yielding shares considering that they hardly earn enough to get by?

According to the PNB’s annual reports, the average investment of Bumiputera investors stands at RM14,097 per person as at end 2012. At a glance, this appears to be a decent amount suggesting that many Malays have attained significant savings.

However, upon closer inspection, this figure is actually misleading. When the numbers are broken down, it turns out that three-quarters of Bumiputera unit-holders actually have an average investment of a mere RM611 per person. It is only the top quartile of Bumiputera unit-holders who are able to invest heavily in the shares.

How then, would the availability of more units benefit the average Bumiputera, when they are unable to take advantage of even the current available ASB shares?

In fact, a study by economist Dr Muhammed Abdul Khalid found that the disparity of wealth is massive, whereby the top 0.1 per cent of Bumiputera investors have an accumulated portfolio that is 1,526 times more than the bottom 80 per cent combined. Hence, the likelihood is that this elite group of Bumiputeras will eventually reap the benefits of the additional 10 billion ASB2 units, rather than the common Malay who is able to invest only RM611 on average.

Thus, the question is – who is the ASB2 really for? Certainly not the average Bumiputera.

Zairil Khir Johari, Member of Parliament for Bukit Bendera

NB: This speech was  delivered at a forum hosted by the Penang Institute on 6 April 2012. The following reproduction is abridged.

As the global economy undergoes a paradigmatic shift and the world prepares itself for what is increasingly seen to be the “Asian Century”, Malaysia should be capitalising on our logistical and historical strengths as the epicentre of the next growth region.

Unfortunately, 21st century Malaysians have inherited a lagging economy stricken with the cancer of rent-seeking and patronage, where productivity is inhibited and where talent has become an export commodity rather than a growth driver. Faced with the dire problems of income inequality, spiralling household debt and slowing economic growth, the Prime Minister launched the New Economic Model (NEM) on 30 March 2010.

The NEM is a bid to transform the Malaysian economy based on three goals: achieving high income status by 2020, ensuring inclusivity in economic access, and creating sustainability in order to cater to future needs.

And so, in line with the objectives of the NEM, the Government through the Performance Management and Delivery Unit (Pemandu) sought to conceptualise the now much-famed Economic Transformation Programme (ETP) with its eight Strategic Reform Initiatives (SRIs) and 12 National Key Economic Areas (NKEAs), based on the premise that if successfully implemented, Malaysia’s gross national income (GNI) per capita would be doubled to USD15,000 by 2020, thus turning our country into a high income nation. Ultimately it is forecasted that RM1.4 trillion of investments in 131 entry point projects under the NKEAs will create 3.3 million jobs.

However, there has been much debate about the viability and success of the ETP. Critics such as the research institute REFSA (Research For Social Advancement) have recently released a series of articles attempting to debunk and deconstruct the ETP, pointing out many discrepancies and what they believe to be “creative accounting” on the part of Pemandu.

However, Pemandu has in turn issued responses to defend and deflect the criticisms levelled at the ETP. Two years in, they claim that most of their targets have not only been met, but even surpassed, and that they are well on the way to achieving their ultimate objectives.

Pemandu CEO Dato’ Sri Idris Jala, for example, points out that last year’s GNI figure of RM830 billion (at current prices) had exceeded the target of RM797 billion, while RM94 billion worth of private investments – the highest in five years – were recorded against the target of RM83 billion. The statistics for job creation is also expected to reach its target.

Now, one cannot deny that Pemandu’s efforts have been substantive and that their approach has certainly been proactive and novel, at least in the context of the public sector, yet many questions abound about its actual results and whether it makes sense in the bigger picture. For example, the objective of raising income and productivity must also address the issue of distributive justice. A GNI per capita of USD15,000 may sound like all Malaysians are going to be rich, but it could just as easily mean that we are going to create a few more billionaires while the rest of the country struggles with increasing cost of living and suppressed wages. And this is now apparent when we consider that while absolute poverty levels in Malaysia have decreased over the years, the relative poverty level has increased by folds. In other words, the income gap has widened. I could go on about this, but that would be digressing.

We at Penang Institute believe in encouraging more open debate and discourse, especially on public policy. After all, differing views and opinions are a sign of a healthy democracy and most definitely a step in the right direction as we seek to cultivate a more mature society. To that end, we are very pleased tonight to host this forum on the ETP.

I believe tonight’s discussion is timely, and will go a long to help us deepen our understanding and familiarity not only with key government policies but also with the critical challenges facing our nation.

Thank you.

NB: This press statement was released on 16.03.2012.

With the ambitious goal of lifting Malaysia out of the middle-income trap and turning the country into a developed and high-income nation by 2020, the Federal Government through the Performance Management and Delivery Unit (Pemandu) had in September 2010 launched the Economic Transformation Programme (ETP).

In many ways, the ETP is a departure from the past in terms of its action-oriented nature and its proactive engagement of the private sector through rigorous workshops and “labs” as well as its focus on the resultant 12 National Key Economic Areas (NKEAs). Its ultimate aim is to double our gross national income (GNI) per capita to USD15,000 by 2020 and creating 3.3million jobs from an estimated RM1.4 trillion worth of investments, almost all of which is supposed to be generated from the private sector.

In line with Pemandu CEO Datuk Seri Idris Jala’s motto of “big results fast”, Pemandu has claimed that, one and a half years in, most of their targets have been surpassed. For example, last year’s GNI figure of RM841 billion had exceeded the target of RM797 billion, while RM94 billion worth of private investments were recorded against the target of RM83 billion. The statistics for job creation is also expected to reach its target.

However, there has also been much debate about the viability and success of the ETP. Critics such as the not-for-profit research institute REFSA (Research For Social Advancement) have recently released a series of articles attempting to debunk and deconstruct the ETP, pointing out many discrepancies and what they believe to be “creative accounting” on the part of Pemandu. However, Pemandu in turn has issued responses to defend and deflect the criticisms levelled at the ETP.

We at Penang Institute believe that the differing views and opinions that are emerging are a sign of a healthy democracy. Therefore, to further encourage and facilitate deeper discourse and policy discussions in Malaysia, Penang Institute is hosting a public forum on the ETP, with details as below:

Date : 6 April 2012 (Friday)

Venue : Wawasan Open University

Time : 8.00 pm – 10.00 pm

Moderator : Dr Muhammed Abdul Khalid

As we would like all views to be represented fairly, we wish to invite one representative each from Pemandu and NCIA (Northern Corridor Implementation Authority), as advocates of the ETP, while the critique will be led by REFSA CEO Teh Chi-Chang and YB Liew Chin Tong, Member of Parliament for Bukit Bendera. To ensure neutrality, the forum will be moderated by Penang Institute Visiting Research Fellow Dr Muhammed Abdul Khalid, who is also a Senior Analyst at ISIS (Institute of Strategic and International Studies).

This forum represents an opportunity for both sides to engage face-to-face in a public forum, where each party will have the chance to clear the air once and for all on the disputed aspects of the ETP.

Malaysians are looking forward to the opportunity to witness a mature and policy-oriented public discussion between all the relevant parties on a very important topic, and we trust that the good people at Pemandu and NCIA will see it fit to respond positively to our invitation.

Zairil Khir Johari, Penang Institute CEO

Zairil Khir Johari

Menu

Twitter Updates

  • Majlis berbuka puasa anjuran SekDem di Kuala Lumpur. Puluhan alumni SekDem sempat berjumpa dan berdialog dengan... fb.me/20Fkgrwgg 2 days ago
  • Majlis berbuka puasa anjuran DAP Pulau Pinang. Sambutan baik walaupun julung kali diadakan. Insha Allah akan... fb.me/6hui8ONQ7 3 days ago
  • Majlis buka puasa bersama warga Tanjung Tokong anjuran JKKK setempat. Bantuan zakat juga diagihkan kepada golongan asnaf. [15 Jun 2017] 1 week ago

Categories

Archives

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 43 other followers