The fool's guide to our political economy and economic model-(post 1)

Today we are earnestly searching for an economic model. I presume then the existing model is deemed unsuitable and unacceptable by the people, or simply no longer relevant to our nation’s needs (depending on who define what these needs are).I have to presume this because the desire to change economic models can be due to many other considerations, such as political expedience, both internally (electoral votes?) and externally (foreign investments?), which does not necessarily mean the economic wellbeing of the citizens at large.

Before we discuss the new model, let us understand the old hag of an economic model, ordinarily referred to as the NEP( New Economic Policy). The best way to achieve this is to see the background and the rationale of it.  

Once upon a time, before the dawning of the NEP, the economic model was ironically more ‘liberal’ in the sense ‘the market’ was given a free reign, without much state intervention in the present sense. The catch phrase or principle then was ‘Malay political power, Chinese economic power’. Check all the major writings and documents of the era and you will see the great influence of this formula on the thinking of the time.  This principle of course had its origins in colonial times, when it was assumed that Malays are inherently rural folks, peasants, country bumpkins, who could not be otherwise. They are at best suitable as fishermen, padi planters, as food producers for the city, while the better off aspired only to be civil servants or penghulus. The pre-NEP era after independence continued this planning principle of ‘Malay political power, Chinese economic power’. Racial stereotypes reinforced this principle and vice-versa the principle engendered and reinforced the stereotypes that Malays ‘cannot compete’, while the Chinese are ‘money grabbers’ who are natural businessmen as fish in water, on whom the destiny of the nation’s economy should and must depend.

 The inevitable consequence of this principle was an economic pattern and development along ethnic lines, which conformed to the lopsidedness that attends the gap between rural peasant economy and modern industrial, capitalistic sector, a notable feature of which is the glaring gap in income and economic standing, with all its social and political implications.

The 1969 General Election shocked the nation into realization that the social, political and economic gap among ethnic groups was unhealthy for nation building. The naivety of the principle ‘Malay political power, Chinese economic power’ was generally felt and understood. The reality was that the Malays wanted to be rich and have a piece of the pie in the industrial corporate sector, while the Chinese and non-Malays did not content themselves only with economic power. As citizens they had political power and understandably wanted a say in the running of the nation.  There was introspection among Malaysians, Malay and non-Malays, that an imbalance economic development along racial or ethnic lines was a serious obstacle to nation building . The gap had to be corrected or redressed. Hence we had the declared objectives of the NEP, namely to eradicate poverty and restructure the economy so as to prevent the identification of economic activities along ethnic lines.

Few important points need to be highlighted here. The NEP then was really meant to be a plan for  social and economic reconstruction to redress specific problems. It set out to correct colonial legacy and the economic imbalance it bequeathed. Some would correctly see it as a plan of social justice, to redress economic and social imbalance. In this respect the NEP did not have a racial or ethnic basis, its main concern being social justice and economic reform. It had racial or ethnic reference only by virtue of the nature of the problems it set out to redress, since economic disparity was in fact closely along ethnic lines. In spirit and principle, however, the NEP should and could have been implemented to eradicate poverty and stimulate economic growth regardless of race or ethnicity by a principled, enlightened and just elite.

The evolution of the NEP however took a sad turn. In the hand of an opportunistic and greedy elite, it quickly turned into a racket of sort, camouflaging and justifying itself in the name of the Malay masses. I do not have to dwell too much on this episode in this fool’s guide, for it is by now a common knowledge, even for a fool. It suffices for me to say that in the end, the 'metamorphosis' of NEP led to the following situations: a) The aim of eradicating poverty had been marginalised and not been significantly achieved, b) the target of restructuring the economy likewise had not been realised in a meaningful way, c) the Malay masses had not benefited much by the policy, while being stigmatized as being over dependent and ‘spoilt’ ( in countless versions and renderings like ‘subsidy mentality’, ‘ crutch mentality’, etc), d) due to the abuses in its name, the NEP developed a negative image and assumed a racial character, with its own unique ethos, in the name of which influential, rich and middle-class Malays justify their vested interests,  e) the NEP engendered much resentment among the non-Malays, and understandably, as they see only the exploitative and acquisitive side of the NEP, most remote from its original aims and spirit, f) far from improving ethnic relations, the racketing image of NEP in fact deepened it.  

The 2008 General Election, the result of which almost mirrored the results of 1969, spurred another bout of this ‘electoral conscience’ and  introspection amongst our elite, just as it did in 1969. Once again the elite undertake a frantic hasty search for a new economic model purportedly to redress some ‘imbalance’.  

This raises many pertinent questions. I should like to touch on these in my next posting as I think my posting shouldn’t be too long and imposing on reader’s time or attention. I leave you with one question for now: Shouldn’t we distinguish the NEP, the policy and its spirit, from the abuses of it? In this respect, do we change the policy or check the abuses of it and the vested interests therein? Is the goal of alleviating poverty, rural and urban, no longer relevant? Has the problem of economic imbalance along racial or ethnic line been resolved and no longer a concern? More importantly we should be mindful that with or without a new model, the same opportunism and greed that hijacked and derailed the NEP could only promise failure and disaster for the future. There is no model capable of weathering the rot and decline inflicted by corruption and vested interests. If I may put it in a different way, had the NEP been implemented in a scrupulous, just and enlightened way, regardless of race or ethnicity, we could be in a better stead today, be it economically or as a nation.

The fool’s guide is to be continued…