Friday, August 13, 2010

No School Of Hard Knocks! Why The NEP Failed ?

Hantu Laut

He is as blunt as a kick in the shin.

Former premier Mahathir Mohammad never munches his words, he does not know how.Those who dislike him called him racist.

No prime minister of this nation can afford to be a racist. Mahathir is just one man who shoot straight from the hip, he has no niceties, no political correctitude.A racist but he is not.

His statement here would be very upsetting to non-Malays particularly the Chinese.Literally, Chinese do not need political power, they were already rich.Certainly, the Chinese per capita is much better than the Malays.It's not a wild guess, it's a statement of fact.The Chinese should be proud of it.

Mahathir himself, while he was in power, did not push the Malay agenda as aggressively as he is doing now.Why? Does he feel the Malays are losing their grips on political power.

Mahathir said the Malays have not attained the desired equity proportion after almost 40 years of NEP and out of which he helmed the nation for 22 years and had the best opportunity to correct the imbalance.

The greatest chance of the NEP being made successful should have been under his regime.UMNO politicians shrivelled in fear at the prospect of falling out with him.He could have hard-nosed the NEP then.Why, didn't he?

Should Mahathir shoulder greater part of the blame for failure of the NEP or are the bumiputras to blame for their indifference and lamentable attitude toward hard work that smothered the government's efforts to turn them into shrewed businessmen and corporate leaders.

We have seen how GLCs handed over to selected bumiputras had gotten into trouble because of bad management.They are not small entities but big corporations, some, have existed since colonial days.Over the years billion of ringgit of taxpayer's money have been lost to corruptions and bad management of such companies led by manufactured entrepreneurs.

GLCs under bumiputra's management have also suffered the same fate.The recent debacles in Sime Darby and Felda are big embarrassment to bumiputras and the government.

The question is why have the Malays not grown better in business? What are they lacking in? Lack of business skill and acumen may be one of them but than skill can be learned. We are either taught or learned it empirically.If Malays can become doctors,engineers, lawyers,architects and many other professions, why can't they be good businessmen?

If I remember well Mahathir was of the view that all he needs to do was to make few Malays rich who in turn will make many more Malays rich.

Obviously, Mahathir's principle of multiplier effect was a failure.There was no quantum jump in bumiputra's equity. His dreams of Malays helping Malays in the business and the corporate world did not happen. The rich Malays stay rich and the poor Malays stay poor.

The nouveu riche Malays become a class of their own, leading flatulent lifestyle with horrid distaste for the proletariat.They ride on their high horses ignoring the fact that the millions they have were not the fruits of hard labour but were the windfalls of political connections.

I have no doubt there are many hard-working honest Malays but they are the forgotten lot.

In this country it is 'who you know not what you know' and a policy with fatal consequence.The good brains left the country where their talents would be better appreciated.

Mahathir's policy of helping only few selected Malays have not brought the desired result and one that led him to coin the phrase "Melayu mudah lupa", a reflection of his frustration with failure of the Malays to achieve higher economic success.

It is simple logic which Mahathir overlooked.

If you have RM100 to distribute and you divided it into RM10 each and give it to 10 people you would have made 10 Malays happy and maybe 5 out of the 10 would have used the money wisely and succeed.If you give the RM100 only to one or two than you only make one or two Malays happy and this one failure mean total failure.

During his time Mahathir did not push the NEP as aggressively because he knew without active participation of the Chinese the country could never attain the higher growth rate that would help push his vision 2020 to reality. The Chinese are the economic engines and their big contribution to the economy is undeniable.They also hold bigger slice of the economic cake due to hard work and business prudence.Mahathir had openly admitted the Chinese larger contribution to the economy by the amount of taxes they pay.

The Chinese are mostly urban and semi-urban dwellers.Most real estates in urban and semi-urban areas are owned by Chinese and over 90 percent of retail trade and most of service industry are done by them. This is one area where the government seems to lack the will to encourage bumiputras to be actively involved in.If there are some, it is negligible.

Most wholesale and retail businesses are dominated by the Chinese. Other than the typical restaurant business that bumiputras seem to prefer they shunned other type of business in this category instead preferring the easier option, chase government contracts where the money is bigger, faster and easier to make.More often than not such contracts go back to the Chinese where Ali sat on his ass and Baba joyfully working hard to make lots more money.

Even in the remotest areas deep in the interior, where I observed during my time as a logger, it is likely to be a Chinese family running the village shop and does everything as seller, buyer and financier.

Other than selling the essential commodities the Chinese towkay would also buy local produces and gives financial aids (advances) to reliable natives to secure the products which he than export to the bigger towns and cities to another Chinese middleman.In another word the Chinese is not just mere shopkeeper but also the banker in the village.

Retail,whole selling and contracting are tedious and competitive business and these are the places where most Chinese business had its early existence before making it big.It does not make your rich overnight but it teaches you hard work and the art of doing business, of being competitive and of being able to survive the cruel business environment.This is the school of hard knocks.

Are the bumiputras willing to take up the challenge or continue to rely on their leaders for government handouts.

It is not that the Malays or bumiputras can't become good business people and are at fault, it is the Malay leaders that spoiled them, Mahathir included, resorting to quick fix solution and politics of political patronage.

As the English say "Take care of the penny and the pound will take care of itself"
A business built purely on political connections would eventually fall.

The next time you hear Ibrahim Ali cry wolf, take it with a pinch of salt.

1 comment:

eddy said...

Yes Bro the Chinese should be mighty proud that they are the engine of Malaysia's economy, without the industrious Chinese Malaysia would not be where it is today.

Same goes for the Malays who should be proud too because without the Polis DiRaja Malaysia, the Angkatan Tentera and the security and emergency agencies like BOMBA, Immigrations, Customs, LHDN etc etc which are are overwhelmingly made up of Malays who defends our borders, ensures domestic security(no car or roadside bomb here dudes) which make Malaysia safe,stable and secure for commerce and trade to thrive plus the administrative skills of the mostly Malay Civil Servants who determines and makes policies for the Government to ensure Malaysia thrives and compete in this increasingly globalised world.

Don't forget the nations biggest money maker PETRONAS which pays for the economic growth Bro, and managed so well by almost all Malays that it is one of the new seven sisters of the modern oil industry. FELDA is OK too it has been without Government aid since 1996 and Sime Darby would have been OK if PM Sleepyhead last hadn't decided to merge Sime Darby with IOI and Guthries last time and put in an inept Board.

I agree that its a shame that the NEP which have produced many Malay/Bumi Doctors, Neurosurgeons, Heart Specialists, Professional Engineers, Architects, Nuclear Physicists Ph.Ds, MScs and BEs and BScs etc have not been able to produce many businessman and I may add Accountants as well. But hey, I am not complaining we can't have everything, we can't have all the cake and eat it as well can we.

But really the NEP is never about producing selected rich elite malays but is designed to uplift the income and standard of living of the Malays and other races who are less fortunate. This is so as to prevent another May 13 which was largely caused by too big disparity between the poor and the rich.

Its unfortunate that some parts of the NEP were hijacked by rent seekers who happen to be mostly Malays but also some very successful Chinese and Indians as well. It is also a big undisputed facts that many Chinese Businessman and Indian too who became fabulously rich from the NEP.

I think Bro in a multiracial country like ours no one race should think that they contribute more for Malaysia's economy than the other as it is a very complex symbiotic relationship that we are having.

Actually, the Malays need the Chinese and Indians, The Chinese needs the Malays and Indians and the Indians needs the Malays and Chinese to survive and prosper in a place that we all call our home Malaysia.