WHY is there still a need to have Bumiputera affirmative economic policies in a new Malaysia, asks Universiti Malaya political economy professor Edmund Terence Gomez, who warned that this race-based policy will deter foreign investors.

“In post-racial Malaysia, or New Malaysia, one would think this Bumiputera economic community would be reviewed, with (business and economy) nurtured beyond racial lines.

“But the prime minister has put this at the centre of his speech. This is worrisome. It will not inspire confidence in investors across the board, even among some Bumiputera ones,” he told The Malaysian Insight.

However he added that Prime Minister Dr Mahathir Mohamad’s mid-term review of the 11th Malaysia Plan which was tabled in Parliament today was good for the institutional and policy reforms the government wants to implement.

In his review, Dr Mahathir talked about building a resilient and sustainable Bumiputera economic community, and enhancing the employability of Bumiputeras in high-income jobs, raising Bumiputera effective control and sustainable corporate ownership.

Gomez said former prime minister Najib Razak had also gone for the Bumiputera affirmative policies to consolidate Bumiputera support for Barisan Nasional when he was in power.

He said there was limited Bumiputera presence in the global supply chain because most did not have the know-how, despite the government’s affirmative policies to help them.

“Vendor development programmes, global supplier programmes… they didn’t work.

“If the administration insists on this Bumiputera economic community, it should also show some figures on equity ownership along the racial lines.”

Gomez also gave his take on other agendas mentioned in the prime minister’s speech, saying that it was not clear how some of the reforms and agendas would come through.

The mid-term review also noted the backwardness in states like Sabah, Sarawak, Kelantan, Terengganu, Kedah and Perlis; promising a more even distribution of development allocations to them.

Gomez said the Rural Department Ministry was the second largest ministry after the Prime Minister’s Department.

He said he had expected Dr Mahathir to say the government would use the various regional development agencies under the ministry that are already in the states, including Mara, to look into development.

“But there was no discussion on it. The government can easily deploy these agencies to deal with the regional disparity issue.”

Gomez argued that this effort can also help the local communities improve their economic state without requiring a Bumiputera economic policy.

Education and TVET

Gomez also noted that the review acknowledges research and development, and Technical and Vocational Education and Training (TVET) as important.

Dr Mahathir in his speech said the industries and the academia should have closer ties to match the supply and demand; and that the government is committed to boosting youth capacity in education and TVET to meet the needs of high-tech industries.

“There’s a structural problem. Under half of the academia has PhD qualifications, so universities may not be well equipped with the right academics to meet the demands of the market.

“There have also been problems in implementing TVET,” he said.

Gomez said reforming the civil service had been on the government’s agenda since the 9th Malaysia Plan during the tenure of Abdullah Ahmad Badawi as prime minister.

When Najib was in power, he set up the Performance Management And Delivery Unit (Pemandu) to deal with public policy planning.

“Reforming the public sector is important because we must have a good public delivery system. How will this administration enhance it? It was not discussed in detail.”

The review also promises help for small and medium enterprises (SMEs) and to increase their contribution to the GDP to 41% and exports by 2020.

Gomez said SMEs were in the lower end of the value chain, with low contribution to the GDP, while lacking in adoption of technology and innovation.

He said he wished Dr Mahathir’s mid-term review speech had discussed how the Energy, Technology, Science, Climate Change and Environment Ministry will be used to encourage greater innovation among SMEs.

Gomez, however, lauded the reforms promised in Dr Mahathir’s speech like the devolution of power to the states in the areas of public transport, social services and agricultural development; and the setting up of an ombudsman to independently report and probe complaints against government agencies.

He also praised the plan to limit the terms of the prime minister, chief ministers and menteri besar to two; and to institute a select committee system to appoint top officers in the Malaysian Anti-Corruption Commission, Election Commission, National Audit Department and the Judicial Appointments Commission; and to make the commissions answerable to parliament. – October 18, 2018.