Thursday, March 25, 2010

It is the mechanics, not the arithmetic that matters

Thursday, 25 March 2010 Super Admin

If you compare what the Malays owned in 1990 to the wealth of the Chinese and Indians in 1970, the Malays may already have a 30% share of the economic pie. But when you compare it to what the Chinese and Indians owned in 1990, it is not 30%. It is just 3%.
Raja Petra Kamarudin
Zaid: Clueless Perkasa blames all but Dr M
By Stephanie Sta Maria, Free Malaysia Today
Pakatan Rakyat trouble-shooter Zaid Ibrahim believes that Malay right-wing pressure group Perkasa and its chairman Ibrahim Ali are trapped in a time warp.
According to the former law minister, the “Umno tentacle” appears to be clueless about the bigger picture, preferring instead to indulge in stone-age politics.
“They are worked up about Malay rights being threatened but do not care about what's happening to Petronas' money or about the massive corruption in the system,” he told FMT in a recent exclusive interview.
Zaid lambasted the movement for merely skimming the surface as opposed to diving deep into the issues which the Malay community is confronted with.
“Instead of conducting a serious analysis on the real reasons for the lack of progress among the Malays, they indulge in chest-thumping speeches.
“They blame everyone for the problem except themselves and (former premier Dr) Mahathir (Mohamad),” he said.
However, Zaid is confident that the Malays are much wiser now and will not fall for such political gimmicks.
Creating a sense of alarm
Last week, the PKR leader slammed Perkasa for twisting the facts concerning the special rights of the Malays, and described the movement as irresponsible.
He accused Perkasa of intentionally injecting a sense of alarm into the Malays in order to achieve its political aims.
Zaid also took its chairman to task for repeatedly stressing that Malay privileges as provided for in Article 153 of the Federal Constitution have to be protected.
"Even I am Malay but who wants to take our rights away that he (Ibrahim) has to protect them?" he added.
Perkasa is scheduled to hold its inaugural annual general meeting this Saturday, and was forced to make an eleventh hour change with regards to its guest of honor after the Sultan of Selangor decided to give it a skip.
Ibrahim is also mulling legal action against the Sun newspaper over a report which claimed that the sultan was concerned about Perkasa's image as a "chauvinist" group.
The Perkasa chief was particularly peeved with another report in the English daily which stated that the sultan had told Ibrahim to tone down his ultra-Malay image.
Now, Mahathir is slated to officiate the Perkasa annual meet.
For 35 years since the mid-1970s we have been trying to tell the government that the New Economic Policy is not working and unless the powers-that-be do something we are going to see the NEP end in 1990 with no solution to the grouses of the Malays. And when I say ‘we’, whom do I mean? I mean the Dewan Perniagaan dan Perindustrian Melayu Malaysia (DPPMM) or the Malay Chamber of Commerce and Industry of Malaysia.
This was back in the mid-1970s, 35 years or so ago. But we did not see Ibrahim Ali then. He was nowhere to be seen. And neither were any of the other PERKASA people. We did not see their faces. They did not see fit to involve themselves in the Malay Chamber that was fighting tooth and nail with the government to correct the shortcomings of the NEP.
I recently wrote about this matter so I do not wish to repeat what I have already said. In that previous article I gave a long commentary about the history of our ‘struggle’ and the frustrations we faced over 20 years from the 1970s to the 1990s. I also mentioned how the government blamed the Malays for this shortcoming and that the government can’t keep giving to the Malays when the Malays themselves have no sustaining power, as the Minister of Trade Rafidah Aziz said.
Let us rewind to 1970 when the NEP was first conjured.
It is said the NEP was the result of the 13 May 1969 race riots. And it is said the May 13 race riots was because of the plight of the Malays and their unhappiness about the wealth of this country being monopolised by the non-Malays, in particular the Chinese. So the Malays, Chinese and Indians from Umno, MCA and MIC respectively -- then under the coalition called the Alliance Party -- agreed that there would be a 20-year ‘correction’ policy so that the Malays can catch up with the rest and the gap between the haves and haves-not can be reduced.
This was a policy -- which was actually an aspiration (hasrat) -- which was agreed by the three parties in the Alliance Party. And it was agreed that it would run for 20 years.
But who were the architects of this policy? Who was the mastermind? Was this policy drawn up after consultation with the Malay business community or the Malay Chamber of Commerce or did some civil servant somewhere just put pen to paper and came out with the marvellous plan?
Back in the 1970s we already asked: why 30%? Someone decided that the target for the Malay share of the economic pie would be 30%. Where did this 30% target come from? Whose idea was it?
Malays make up more than 50% of this country’s population. Some say it is 60%, depending on what you consider Malay. So, if the objective of the NEP is to see a more equitable distribution of wealth according to the racial composition of this country, should the target not be 60% instead of 30%? Or, to be realistic, should the target not be 10% or 12% or 15% instead?
Yes, this was one of the questions we posed back in the 1970s. Is the 30% target realistic? Is it achievable? Is it fair? And whose idea was it that it should be 30%?
No one could tell us. In fact, no one appeared to know the answer. Someone, somewhere, said that the target for the Malay share of the economic pie should be 30% and everyone just agreed without exploring whether this is fair, realistic, achievable and whatnot.
We were not disputing the 30% target or stating that it should not be 30%. We just wanted to know what the basis was for pegging it at 30%. Was research done and did the findings of the research show that it should be 30%? Or was 30% a figure plucked from the air, a ‘look good’ figure, with absolutely no basis whatsoever?
No one could enlighten us. Someone, somewhere, somehow decided that the Malay share of the economic pie should be 30% and everyone went along with this because the figure of 30% looked good. 60% will make the Chinese jump and 10% will appear like Umno is not serious enough in helping the Malays. So 30% just looked like a great figure. It was a ‘look good’ figure.
The problem is, today, we are ‘locked’ in that 30% target. Never mind if it is fair, realistic or achievable. It had already been somehow decided by someone that the target should be 30% so we have no choice but to go along with that figure. It is too late to change it now.
That is the main problem with the NEP. A target had been set but no one knows whether this should have been the target. And now that target can’t be met so there is pressure to extend the NEP, although by another name, so that the 30% target can be met. They can’t change the target. So they change the duration to meet that target.
However, has anyone done any research on this matter? If the 30% target can’t be met in 20 years (and we now know it can’t), if it can’t be met in 40 years (and we know it still can’t because it is already 40 years), then how many more years will we need? Do we know? Does anyone know? Is this going to be a never-ending policy? In other words, will the NEP go on and on for as long as the 30% is not yet met, even if it needs to go on another 100 years or 200 years?
Perkasa wants the NEP to be fixed according to the target and not the duration. It should not be 20 years or 40 years or 100 years. It should be for as long as the 30% is still not yet met. That could be till the end of time.
Is this fair? Is it realistic? Is it achievable?
The next point that we raised 35 years ago back in the mid-1970s is about the implementation of the NEP. The NEP is good in theory even if we can question the logic of the 30% target. But the way it was being implemented would guarantee its failure. Malays are too focused on the arithmetic. No one talks about the mechanics. Even if the arithmetic (the 30% target) is correct, the NEP will not work if the mechanics is wrong. And the mechanics is very wrong, as I pointed out in my previous article.
The Malays blamed Umno and the GLCs. It is the unfair competition from the Umnoputeras and the GLCs that resulted in the problems faced by the Malays. The government, in turn, blamed the Malays. The government gave so much to the Malays but the Malays were not able to hold on to it. The Malays lost it all. And that is why the Malays failed to meet the 30% target, argued the government. If the Malays had held on to what the government gave them then the Malay share of the economic pie could even exceed 30%.
Then we had the ‘moving target syndrome’. The architect of the NEP and whoever it was that fixed the target at 30% assumed that the world would stand still for 20 years while the Malays tried to catch up. In other words, the Chinese and Indians would go to sleep and would not do business and would not increase their wealth for 20 years. Then, in 20 years, the Malays would have caught up with the Chinese and Indians and would own 30% of the economic pie.
But the Chinese and Indians did not stand still or go to sleep. They continued to do business and make money. And they increased their wealth over those 20 years. So, 20 years later, when the Malays compared what they own to what the Chinese and Indians own, they discovered that they had only 3% of the economic pie and not 30% as planned.
No doubt the Malays started at just 1.5% and therefore managed to increase their wealth 100% over 20 years. But the Indians and Chinese also increased their wealth over that same 20%. So, if you compare what the Malays owned in 1990 to the wealth of the Chinese and Indians in 1970, the Malays may already have a 30% share of the economic pie. But when you compare it to what the Chinese and Indians owned in 1990, it is not 30%. It is just 3%.
Let me put it another way. The Malays were jogging at a speed of 10kph (slow and easy). But the Chinese and Indians were not sleeping under a tree. They were running at a speed of 20kph like there was no tomorrow. But then the Chinese and Indians were already 20 kilometres ahead of the Malays to start off with. So, after an hour, the Malays had gained a distance of only 10 kilometres while the Chinese and Indians were 40 kilometres in front, 30 kilometres ahead of the Malays.
Now, if the Chinese and Indians had stopped running and instead had slept under a tree or had run backwards rather than forwards, today, we would have no more problems.

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