09 March, 2010

Bolehwood presents : The New Malay Dilemma

Prime Minister Najib Abdul Razak apparently has decided that taking the wraps off his long-awaited New Economic Model, as he calls it, is politically too dangerous for now.

According to local reports, although Najib who doubles as Malaysia's finance minister, had been scheduled to introduce his new policy at the end of March, it is apparently off till June and he may not even introduce it himself, letting someone else take the heat.

Najib appears to be caught in a trap of his own, with a widening gap between what he would like to do as an economist and what a major chunk of his Umno constituency wants.

What they want is not only to not forward but to repeal the limited reforms he has already put in place, and they are increasingly angry about it.

That is playing havoc with his so-called 1Malaysia campaign, designed to bring the country's fractious ethnic groups together and rebuild the flailing Barisan Nasional ruling coalition.

One pessimistic aide to a prominent Umno politician told Asia Sentinel it is even possible that Umno could be superseded by a growing organisation of 80-odd Malay non-governmental organisations cobbled together in recent weeks under the title Malay Consultative Council, which is seeking to push the government to maintain so-called ketuanan Melayu, or Malays first, a slogan embraced by former prime minister Dr Mahathir Mohamad.

The assurance by the Deputy Prime Minister Tan Sri Muhyiddin Yassin that no Malaysian would be sidelined in the New Economic Model (NEM) is not convincing when from all indications, the NEM has been hijacked by Neo-NEP Umnoputras like Perkasa, forcing another delay in its announcement.

When Datuk Seri Najib Razak became Prime Minister last April, he announced that the government would introduce a new economic model for the country to ensure that Malaysia makes a quantum leap to escape the middle-income trap to become a high-income country through greater emphasis on innovation, creativity and competitiveness.

In May last year, the Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah said the new economic model would be announced in the second half of the year.

Time is clearly of the critical essence to launch a new economic model as Husni subsequently admitted in a very frank speech in December that the country had lost a decade in economic stagnation - Lim Kit Siang

Najib first talked about a new economic plan a year ago, but its introduction has been pushed back several times. Even as late as Feb 8, during a two-day conference in Kuala Lumpur, Najib told reporters that his administration is open to suggestions for what would go into the policy.

Principal elements are expected to be the removal of subsidies and further liberalisation of the economy that appear certain to bite into Malay privilege.

Absolute rule?

Many in Najib's cabinet want nothing to do with the plan, concerned that the voter rebellion that began in the disastrous March 2008 elections will grow.

The Malay NGOs are streaming into a perceived political vacuum for Malay ultranationalists, according to a source in Kuala Lumpur.

No one really knows at this point how strong they are despite the noise they are making.

There has been no independent polling. They are feeling marginalised by Najib's centrist politics and would like to take the country back to the days of absolute Umno rule, the course say.

So they remain frustrated and angry.

Any time word gets around that the fundamentals of the NEP are being tampered with, Umno politicians rush to the microphones to say it isn't true.

Mukhriz Mahathir, the former premier's son and a deputy International Trade and Industry Minister in Najib's government, for instance, was the latest to insist to reporters that the new policy "is in line with previous policies particularly the New Economic Policy."

Loss of perks

Najib has repeatedly said the country is confronted by a new reality, given the stagnating economy, which shrank by 3.3 % in 2009 and faces relatively anemic 3.7 % growth in 2010 and 5% in 2011.

Last year, he removed a requirement mandating ethnic Malay participation in 27 economic sub-sectors as well as removing a requirement that 30 % of shares in IPOs go to ethnic Malays.

That has played a major role in stoking ethnic Malay anger, although some observers say the leaders of the Malay Consultative Council are actually Umno wheelhorses who fear the loss of their perks instead of the wider community.

One of the leaders of the Malay rights groups is an NGO called Perkasa, which is headed by Independent MP Ibrahim Ali, a long time Mahathir ally and former Umno stalwart.

It has been holding strident rallies across the country, demanding close adherence to the Malays-first policy. Some pessimists say Perkasa members are trying to provoke the Chinese into a confrontation with the Malays that will result in the imposition of the country's draconian Internal Security Act ( ISA).

One Malay businessman told Asia Sentinel that "Umno leaders who are not particularly sympathetic to its aims are climbing onto the speakers' platforms to endorse them because they're afraid not to."

Others say they aren't particularly concerned and that the Malay Consultative Council and its member organisations more resemble the Tea Party movement in the United States, which is loud, angry and vocal but which almost certainly will remain a splinter group.

Asked about the concern that the Malay Consultative Council would grow big enough to replace Umno, and particularly Perkasa, a political analyst said: "Perkasa's appeal is not broadly based."

They may shout the loudest but it will take more than that to replace Umno.

Umno needs other component parties in Barisan to sell their multiracial appeal.

I doubt the component parties in Barisan can work with Perkasa as closely as Umno.

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