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Backman, NEP and the pie

In his recent 'Malaysia bodoh' article, Michael Backman slams Malaysians for debating wealth division instead of focusing on how to create more of it. He goes on to elaborate on the excessive waste of the Malaysian government on many redundant projects when the money could be put better use in actually building the nation.

I agree completely that current government spending poorly thought-out, excessive and more concerned with image rather than substance. Indeed Backman's article alarmed me and shed light on just how bad things have become. I, however, do think that deciding how to divide the economic pie goes hand in hand in enlarging it. Arguments about the NEP are not just about income division, is it also about wasteful income division which is not inconsistent with the spirit of Backman's article.

To understand this, we must look behind the sentiments that give rise to these arguments which lie deeply rooted in drawing income division among racial lines and the continued abuse of the NEP. Arguing about wealth division here is not just talking about who gets what, it's about defining the motivation to work of the people.

A big caveat before I go any further. This letter is not intended to be a swipe at the bumiputeras. In fact, the average bumiputera are not the ones to blame. Provided with the right incentives, they can work just as well if not better than non-bumiputeras. The key point I'm trying to make is that the NEP pretends to give bumiputeras the opportunity to earn a bigger slice of the pie when what actually happens is that the pie is given out ... for free.

The NEP (although our PM says it no longer exists) permeates almost every aspect of our life. One of the major justifications of the NEP is to ease racial tensions by reducing income disparity and to a certain extent it has achieved that. But in implementing it overzealously, it has created racial tension and disparities of its own.

For Malaysia's economic pie to grow, it has to retain its highly-qualified graduates rather than constantly rely on outside expertise. On this point, I totally agree with Backman in his assertion that many of our so-called achievements are nothing to be proud about since they primarily rely on foreign help and this situation will remain as long as we don't retain our own professionals.

From an educational standpoint, the NEP discourages non-bumiputeras to be loyal to their country. As a result of the priority given to bumiputeras to local higher education and the general dismal standard of our education system (as evidenced by the falling ranking of our local universities), non-bumiputeras often have to go overseas to further their studies and often remain there.

The NEP should be about rewarding bumiputeras and providing them opportunities when they put in effort. Not when they do nothing. And who are these bumiputeras that gain the most from these incentives?

The average bumiputera on the street gains from the NEP by obtaining employment and education opportunities which is not a bad thing in itself. This is no small thing and although its idea is a good one, its implementation is something else where the bar is set lower and lower to the point where one can still be employed and educated even if no effort is put in. Minimum standards have to be enforced and incentives are meant to motivate people to do well, not serve them up on a platter regardless of performance. People with Cs shouldn't be doctors.

However, the ones that benefit the most from the NEP are not the average bumiputera which the NEP is supposed to be targeted at. For example, in the 30 percent public listing equity requirement, it is those who are already rich and have power who benefit the most from these measures. In that scenario, since the equity requirement has to be met in any case, shares are given to rich and influential people as a way to gain favour with them.

So the rich bumiputeras get richer while your average Joe on the street is supported by a overly generous informal welfare system based primarily on race. The NEP reduces income disparity? Don't make me laugh.

So as much as enlarging the pie is important, the very way the wealth is divided has a very real effect on creating a population capable of increasing wealth for the country. The saddest thing is that it seems from our recent Umno meeting, there is a proportion of bumiputeras who believe that these special rights are their birthright when actually it is a result of British-Malay negotiations that are meant to have expired.

As long as this attitude remains and its most clear manifestation of it, the NEP, carries on (in spirit or otherwise), I will always question whether there is a place for me in this country. I love Malaysia, I just wish it would love me back.