Malaysia’s creamy layer
Malaysia is deservedly regarded as among the relatively few countries which have made significant and sustained progress, while fairly successfully managing a multi-ethnic society.
The Malays and indigenous population (called Bumiputeras) constitute three-fifths of the total population of 24 million. The Chinese, who constitute less than a quarter of the population, hold dominant economic power. As Malays are politically not cohesive, the Chinese have also come to wield significant political influence, a development also helped by the rise of China.
The Indians constitute about seven per cent of the total population. Their socio-economic status is the lowest among the three ethnic groups, with little immediate prospects for improvement.
Malaysia’s international trade -dominated $130 billion economy, with a per capita GDP of $4,700 is currently benefiting from the favourable international macro-economic environment and the commodity boom.
But as it completes 50 years of independence, Malaysia is facing several challenges. It needs to develop it in the face of rising assertiveness by the Bumiputeras, and growing doubts among the non-Malays about their future role in Malaysia.
Many analysts have concluded that its past success notwithstanding, the annual recurrence of a haze due to forest fires is an apt metaphor for the nation’s future. Policymakers in Malaysia must address dilemmas arising from the entrenched political economy if they are to avoid a hazy future for Malaysia.
First, there are strong indications that Malaysia’s electronic exports (equivalent to 60 per cent of GDP in 2005) are facing increasing competition from China, Vietnam and other lower cost producers. In services, except for travel, Malaysia’s comparative advantage is declining, especially in IT and communications. Malaysia’s traditional advantage in the plantations sector is also eroding.
Second, there is increasing divergence between Malaysia’s political economy and the policies it needs to pursue to sustain economic competitiveness.
As Bumiputeras dominate political but not economic power, public sector expenditure has been high (30-35 per cent of GDP). Moreover, the public sector’s contracts have
been channeled to favored business groups, creating over-dependence on state patronage.
Third, Malaysia’s political economy has, since the late ‘60s, relied heavily on affirmative action programmes in favor of Bumiputeras (who by constitution must follow Islam as a religion), sharply reducing employment and education opportunities for the Chinese and Indians.
Inequalities in Malaysia are quite high and these programmes have increased inequalities within ethnic groups. Not surprisingly, the “creamy layer” is particularly evident among the Bumiputeras, the prime beneficiaries of these programmes.
The prosperity of the Chinese has permitted them to largely mitigate the adverse impact of these policies. But the Indians have been increasingly marginalised.
As the Chinese and Indians have traditionally emphasised professional education for socio-economic mobility; and they also exhibit strong entrepreneurial flair, their inequal treatment deprives Malaysia of the talent pool and dynamism needed to compete. This is an inescapable outcome of affirmative action programmes which are not time-bound, do not emphasise merit and become increasingly dysfunctional in managing globalisation.
India’s public policy debates, particularly concerning reservations, including for the creamy layer, should learn what to avoid from Malaysia’s experience. Polarisation and demoralisation in Malaysia among the non-Bumiputera groups runs deep. Their best and brightest are leaving the country, and even when the talented among them remain, their contribution is far below the potential.
Notwithstanding all its constraints, India should deepen its market-led economic engagement with Malaysia. The reported plans by Satyam to set up a 2,000 — strong software development centre in Cyberjaya is a positive step. Malaysia’s state investment company Khazanah should be encouraged to invest in India. India should judge Malaysia’s value as a partner by its actions and not just words.
(By: Mukul G Asher-DNA India)
The writer is Professor of Public Policy, National University of Singapore.
In Malaysia, official preferences remain, and tensions rise
Indonesia and Malaysia have much in common: language; a border that slices across Borneo; overlapping ethnic groups. But the two countries are moving in opposite directions on the fundamental question of what it means to be a "native."
With a new citizenship law passed this year, Indonesia has redefined "indigenous" to include its ethnic Chinese population — a radical shift from centuries of policies, both during colonial times and after independence in the 1940s, that distinguished between natives and Indonesia's Chinese, Indians and Arabs.
Malaysia, meanwhile, is sticking to its longstanding policy that Malay Muslims, the largest ethnic group in the country, are "bumiputras," or sons of the soil, who have special rights above and beyond those of the country's Chinese and Indian minorities.
Maintaining this controversial policy has led to what one commentator calls a retribalization of Malaysian politics, with rising assertiveness on the part of the country's Malay Muslims — who constitute about 65 percent of the population — and a push back by the Chinese and Indians, who make up about 26 percent and 8 percent, respectively.
The Malaysian prime minister, Abdullah Ahmad Badawi, warned last week that race relations had become "brittle."
We must eliminate all negative feelings toward each other," he was quoted in the Star newspaper as saying.
Both Indonesia and Malaysia have suffered race riots in recent decades. Indonesia's were much bloodier and more far-flung. Yet today, ethnic tensions are more likely to make headlines in Malaysia than Indonesia.
Malaysia's Chinese community was angered by the recent demolition of a Taoist temple in Penang. Both Muslims and non-Muslims are upset about a series of disputes over whether Shariah or secular law should take precedence.
And a nationally televised meeting of the Malay governing party last month shocked many Malaysians for its communalism, including comments by one delegate who said the party was willing to "risk lives and bathe in blood in defense of race and religion." He was subsequently reprimanded, but only after an outcry from Chinese and Indians.
Early in November, the chief minister of the southern state of Johor, Ghani Othman, went as far as to question whether a Malaysian nation actually existed, describing it as a "rojak," or mish- mash of races, that was diluting the Malay identity.
The government's apparently indefinite extension of an affirmative action program for the Malays, a policy that has been in place since 1971, has stirred impatience among the country's Chinese and Indians. The policy, backed by a special clause in the Constitution guaranteeing preferential treatment for Malays, imposes a 30-percent bumiputra equity quota for publicly listed companies and gives bumiputras discounts on such things as houses and cars.
Terence Gomez, a Malaysian academic who has written widely about Malaysian politics and the ethnic Chinese, and who is now a research coordinator at the United Nations Research Institute for Social Development in Geneva, says the notion that one race should have supremacy is an anachronism in a country where ethnic identities are becoming less important in everyday life.
"The idea of being Malay or being Chinese or Indian is not something that is part of their daily thinking or discourse," Gomez said. The political elite, he said, "seems to be caught in a time warp."
Paradoxically, some in Malaysia, which has long been wealthier and more politically stable, are looking admiringly at developments in Indonesia.
Azly Rahman, a Malay commentator on the widely read Web site Malaysiakini, said poor Indians and Chinese are neglected under the current system.
"A new bumiputra should be created," he said. "Being a Malaysian means forgetting about the status of our fathers. We need affirmative action for all races."
The government says the affirmative action program, which was promulgated after race riots in 1969, is still needed to narrow the overall income gap between the Chinese and Malays, the original justification for the policy. But determining which race has the highest ownership levels in the country is also now a point of contention, involving disputes over how assets should be calculated.
(BY: By Thomas Fuller - International Herald Tribune )
The government spent more than RM11billion in taxpayers' money to take control of failed privatisation projects, the Dewan Rakyat was told today.
Replying to a supplementary question from Ismail Sabri Yaakob (BN-Bera), Deputy Minister in the Prime Minister's Department Datuk Abdul Rahman Suliman gave this breakdown:
Both Klang Valley-based light rail transit systems now come under Syarikat Prasarana Negara Bhd.
Abdul Rahman said these entities were taken over when they faced either financial or management problems.
"The government took control in terms of the equity whereas issues involving management were determined by committees established by the government," he said.
Abdul Rahman added that the government fully took over management of some entities like the Kuching prison whereas other entities like the National Sewerage Scheme saw the previous management from IWK being maintained.
To the original question from Ismail Sabri, Abdul Rahman said since 1983 when the privatisation scheme was launched, 490 projects had been privatised.
He said that only a few faced problems which required government intervention.
Now, more bad news to the taxpayers : " Malaysia to rise road tolls from January next year". Malaysia will impose higher toll rates from January for highways into the capital, a junior minister said Wednesday, despite strong public outcry and concerns it will fuel inflation.
S. Veerasingam, deputy domestic trade and consumers minister told AFP that the government had no choice but to increase the toll rates between 10 percent and 50 percent.
"The government is already providing a lot of subsidies to the people. If we do not increase, we (the government) will have to pay the concessionaires of the highways," he said.
"The cabinet has approved the hike," (!!!) he added.
Works Minister Samy Vellu was expected to make an official announcement late Thursday and detail the toll hike.
Consumer and industry leaders were quick to criticise the hike, saying it was unjustified following a steep petrol price hike in February and electricity rate hikes in June.
"Of course we are concerned about the hike. It will hurt the man in the street. Many use their own motor vehicles. It will surely fuel inflation," Mohamad Yusof Abdul Rahman, director of communications with the Federation of Consumers Associations said.
Malaysia Abdullah Khairy Toll Hike
The Malays and indigenous population (called Bumiputeras) constitute three-fifths of the total population of 24 million. The Chinese, who constitute less than a quarter of the population, hold dominant economic power. As Malays are politically not cohesive, the Chinese have also come to wield significant political influence, a development also helped by the rise of China.
The Indians constitute about seven per cent of the total population. Their socio-economic status is the lowest among the three ethnic groups, with little immediate prospects for improvement.
Malaysia’s international trade -dominated $130 billion economy, with a per capita GDP of $4,700 is currently benefiting from the favourable international macro-economic environment and the commodity boom.
But as it completes 50 years of independence, Malaysia is facing several challenges. It needs to develop it in the face of rising assertiveness by the Bumiputeras, and growing doubts among the non-Malays about their future role in Malaysia.
Many analysts have concluded that its past success notwithstanding, the annual recurrence of a haze due to forest fires is an apt metaphor for the nation’s future. Policymakers in Malaysia must address dilemmas arising from the entrenched political economy if they are to avoid a hazy future for Malaysia.
First, there are strong indications that Malaysia’s electronic exports (equivalent to 60 per cent of GDP in 2005) are facing increasing competition from China, Vietnam and other lower cost producers. In services, except for travel, Malaysia’s comparative advantage is declining, especially in IT and communications. Malaysia’s traditional advantage in the plantations sector is also eroding.
Second, there is increasing divergence between Malaysia’s political economy and the policies it needs to pursue to sustain economic competitiveness.
As Bumiputeras dominate political but not economic power, public sector expenditure has been high (30-35 per cent of GDP). Moreover, the public sector’s contracts have
been channeled to favored business groups, creating over-dependence on state patronage.
Third, Malaysia’s political economy has, since the late ‘60s, relied heavily on affirmative action programmes in favor of Bumiputeras (who by constitution must follow Islam as a religion), sharply reducing employment and education opportunities for the Chinese and Indians.
Inequalities in Malaysia are quite high and these programmes have increased inequalities within ethnic groups. Not surprisingly, the “creamy layer” is particularly evident among the Bumiputeras, the prime beneficiaries of these programmes.
The prosperity of the Chinese has permitted them to largely mitigate the adverse impact of these policies. But the Indians have been increasingly marginalised.
As the Chinese and Indians have traditionally emphasised professional education for socio-economic mobility; and they also exhibit strong entrepreneurial flair, their inequal treatment deprives Malaysia of the talent pool and dynamism needed to compete. This is an inescapable outcome of affirmative action programmes which are not time-bound, do not emphasise merit and become increasingly dysfunctional in managing globalisation.
India’s public policy debates, particularly concerning reservations, including for the creamy layer, should learn what to avoid from Malaysia’s experience. Polarisation and demoralisation in Malaysia among the non-Bumiputera groups runs deep. Their best and brightest are leaving the country, and even when the talented among them remain, their contribution is far below the potential.
Notwithstanding all its constraints, India should deepen its market-led economic engagement with Malaysia. The reported plans by Satyam to set up a 2,000 — strong software development centre in Cyberjaya is a positive step. Malaysia’s state investment company Khazanah should be encouraged to invest in India. India should judge Malaysia’s value as a partner by its actions and not just words.
(By: Mukul G Asher-DNA India)
The writer is Professor of Public Policy, National University of Singapore.
**********
In Malaysia, official preferences remain, and tensions rise
Indonesia and Malaysia have much in common: language; a border that slices across Borneo; overlapping ethnic groups. But the two countries are moving in opposite directions on the fundamental question of what it means to be a "native."
With a new citizenship law passed this year, Indonesia has redefined "indigenous" to include its ethnic Chinese population — a radical shift from centuries of policies, both during colonial times and after independence in the 1940s, that distinguished between natives and Indonesia's Chinese, Indians and Arabs.
Malaysia, meanwhile, is sticking to its longstanding policy that Malay Muslims, the largest ethnic group in the country, are "bumiputras," or sons of the soil, who have special rights above and beyond those of the country's Chinese and Indian minorities.
Maintaining this controversial policy has led to what one commentator calls a retribalization of Malaysian politics, with rising assertiveness on the part of the country's Malay Muslims — who constitute about 65 percent of the population — and a push back by the Chinese and Indians, who make up about 26 percent and 8 percent, respectively.
The Malaysian prime minister, Abdullah Ahmad Badawi, warned last week that race relations had become "brittle."
We must eliminate all negative feelings toward each other," he was quoted in the Star newspaper as saying.
Both Indonesia and Malaysia have suffered race riots in recent decades. Indonesia's were much bloodier and more far-flung. Yet today, ethnic tensions are more likely to make headlines in Malaysia than Indonesia.
Malaysia's Chinese community was angered by the recent demolition of a Taoist temple in Penang. Both Muslims and non-Muslims are upset about a series of disputes over whether Shariah or secular law should take precedence.
And a nationally televised meeting of the Malay governing party last month shocked many Malaysians for its communalism, including comments by one delegate who said the party was willing to "risk lives and bathe in blood in defense of race and religion." He was subsequently reprimanded, but only after an outcry from Chinese and Indians.
Early in November, the chief minister of the southern state of Johor, Ghani Othman, went as far as to question whether a Malaysian nation actually existed, describing it as a "rojak," or mish- mash of races, that was diluting the Malay identity.
The government's apparently indefinite extension of an affirmative action program for the Malays, a policy that has been in place since 1971, has stirred impatience among the country's Chinese and Indians. The policy, backed by a special clause in the Constitution guaranteeing preferential treatment for Malays, imposes a 30-percent bumiputra equity quota for publicly listed companies and gives bumiputras discounts on such things as houses and cars.
Terence Gomez, a Malaysian academic who has written widely about Malaysian politics and the ethnic Chinese, and who is now a research coordinator at the United Nations Research Institute for Social Development in Geneva, says the notion that one race should have supremacy is an anachronism in a country where ethnic identities are becoming less important in everyday life.
"The idea of being Malay or being Chinese or Indian is not something that is part of their daily thinking or discourse," Gomez said. The political elite, he said, "seems to be caught in a time warp."
Paradoxically, some in Malaysia, which has long been wealthier and more politically stable, are looking admiringly at developments in Indonesia.
Azly Rahman, a Malay commentator on the widely read Web site Malaysiakini, said poor Indians and Chinese are neglected under the current system.
"A new bumiputra should be created," he said. "Being a Malaysian means forgetting about the status of our fathers. We need affirmative action for all races."
The government says the affirmative action program, which was promulgated after race riots in 1969, is still needed to narrow the overall income gap between the Chinese and Malays, the original justification for the policy. But determining which race has the highest ownership levels in the country is also now a point of contention, involving disputes over how assets should be calculated.
(BY: By Thomas Fuller - International Herald Tribune )
The government spent more than RM11billion in taxpayers' money to take control of failed privatisation projects, the Dewan Rakyat was told today.
Replying to a supplementary question from Ismail Sabri Yaakob (BN-Bera), Deputy Minister in the Prime Minister's Department Datuk Abdul Rahman Suliman gave this breakdown:
* RM3.256 billion for Star LRT.
* RM4.486 billion for Putra LRT
Both Klang Valley-based light rail transit systems now come under Syarikat Prasarana Negara Bhd.
* RM2.802 billion for Malaysia Airlines System Bhd
* RM142 million for Seremban-Port Dickson Highway by Projek Lebuhraya Utara Selatan Bhd.
* RM135 million for Bandar Kuching Prison with the Public Works Department taking over from a private company.
* RM192.54 million for the National Sewerage Scheme from its previous concessionaire, Indah Water Konsortium.
* RM8.3 million for the Muslim Food and Consumer Goods Research Unit, which now comes under the Malaysian Islamic Development Department (Jakim).
Abdul Rahman said these entities were taken over when they faced either financial or management problems.
"The government took control in terms of the equity whereas issues involving management were determined by committees established by the government," he said.
Abdul Rahman added that the government fully took over management of some entities like the Kuching prison whereas other entities like the National Sewerage Scheme saw the previous management from IWK being maintained.
To the original question from Ismail Sabri, Abdul Rahman said since 1983 when the privatisation scheme was launched, 490 projects had been privatised.
He said that only a few faced problems which required government intervention.
Now, more bad news to the taxpayers : " Malaysia to rise road tolls from January next year". Malaysia will impose higher toll rates from January for highways into the capital, a junior minister said Wednesday, despite strong public outcry and concerns it will fuel inflation.
S. Veerasingam, deputy domestic trade and consumers minister told AFP that the government had no choice but to increase the toll rates between 10 percent and 50 percent.
"The government is already providing a lot of subsidies to the people. If we do not increase, we (the government) will have to pay the concessionaires of the highways," he said.
"The cabinet has approved the hike," (!!!) he added.
Works Minister Samy Vellu was expected to make an official announcement late Thursday and detail the toll hike.
Consumer and industry leaders were quick to criticise the hike, saying it was unjustified following a steep petrol price hike in February and electricity rate hikes in June.
"Of course we are concerned about the hike. It will hurt the man in the street. Many use their own motor vehicles. It will surely fuel inflation," Mohamad Yusof Abdul Rahman, director of communications with the Federation of Consumers Associations said.
Malaysia Abdullah Khairy Toll Hike
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