I think it would be appropriate to term the New Economic Policy (NEP) as the "Never Ending Policy" simply because it has come to stay with us and will be with us for a long period of time.

Public discussion or debate about the NEP very often than not degenerates into non-Malay versus Malay discourse, leaving little or no room for open and rational discussion. Given the highly controlled media, any discussion of the NEP will be interpreted in such a way as to suit the objectives of those in power. In short, discussion about the NEP is a non-starter in Malaysia.

The NEP was introduced in the immediate aftermath of the May 1969 racial riots to address the socio-economic grievances of Malays. In a more specific sense, it was aimed at creating a Malay middle-class acquiring 30 percent of national equity by 1990 and to reduce poverty, especially in the country side.

Since Malays were not able to acquire the 30 percent equity by 1990, the NEP was extended as policy measure under the New Development Policy and the New Vision Policy. Lately, the 9th Malaysia Plan stipulates that the 30 percent target should be achieved by 2020; the year Malaysia is supposed to attain its developed nation status.

According to official figures, Malay ownership of national equity stands at 18.9 percent. However, some observers dispute this rather conservative figure. A recent study argues that Malay control of the economy is about 45 percent, especially if Malay control of government linked companies is factored into the overall analysis.

Even if Malays do not own 45 percent of the economy, there is popular belief that they have definitely gone beyond the 30 percent target mark. However, Malay politicians in Umno might not buy this argument. By relying on government official figures, they continue to say that the Malay target of the NEP has not been achieved and that the government should do more for Malays.

Sustaining the dominance

Khairy Jamaluddin, the controversial son-in-law of the Prime Minister of Abdullah Ahmad Badawi, thinks that the NEP should be continued. Last year during the Umno General Assembly, he said that since Malays have not attained the NEP target of 30 percent, the policy should be sustained.

Malaysians are not really surprised by Khairy's statement on the NEP. After his father-in-law became the Prime Minister in October 2003, he has become a millionaire. Obviously the NEP has benefited persons like Khairy and other members of the Malay elite with close political connections.

Former deputy Prime Minister Anwar Ibrahim thinks that the NEP has outlived its usefulness and that it only serves to benefit a few wealthy Malays. Following his release from prison, he had spoken on numerous occasions against the NEP.

Was the NEP a proper policy mechanism to address socio-economic grievances of Malays in the aftermath of the May 1969 racial riots? Whether it sprang as a result of the correct diagnosis of the reasons behind the May 1969 racial riots is not clear. But the idea that the relative deprivation of Malay contributed to the riots was seized by the radical elements within Umno to forge ahead with the NEP.

The late Tun Dr Ismail who was the Minister of Home Affairs in the cabinet of Tunku Abdul Rahman was concerned by the possible abuse of the NEP by certain elements within Umno.

Initially, the NEP was referred to as an affirmative action plan, but when Malay radicals consolidated their position in Umno during the periods of Razak, Hussein Onn and Mahathir Mohamad, NEP came to be interpreted as policy instrument to sustain Malay dominance or ketuanan Melayu.

In other words, its altruistic objectives of inter-ethnic integration and distribution of wealth became less important.

The NEP might have had certain positive impact in terms of addressing Malay grievances in the social and economic realms, but it is clear, in the last three decades or so, it has been hijacked to Malay elites, especially those who have close nexus with those holding political power.

The class bias

In a more broad sense, it has become a useful mechanism for Umno to dish out patronage in the form of business licenses, permits and contracts in return for political support. This would explain why it is so difficult for Umno leaders to discontinue the NEP as such a move would strike at the very core of its patronage system.

The on-going spat between Mahathir and Abdullah also touches on the NEP. While outwardly it appears that Mahathir is angry with Abdullah for not continuing with some of his policies, at a deeper level, there is the economic question.

Abdullah cancellation of the half-bridge to Singapore, the sale of Proton Augusta to an outside company, the distribution of AP permits and the wealth acquired by Abdullah's family members (son and his son-in-law) are issues that have affected the economic and business performance of those who are closely linked to Mahathir.

The NEP introduced in the 1970s to promote integration in Malaysia has failed. It has been hijacked by a small group of Malay elite for their own enrichment, without taking into consideration the larger Malaysian mass.

Even talking in ethnic terms, generally Malays have not benefited from the NEP; recent studies indicate the gap between the rich and poor in the Malay society has increased. In other words, the class bias of the NEP is rather blatant and vicious.

In terms of national integration, the NEP in the hand of cronies and those who benefit from political patronage is hardly equipped to deal and resolve the larger national question. On the contrary, the NEP has served to embitter the non-Malay communities so much so there is little incentive for them to contribute effectively to the development of the county.

The NEP has become a "Never Ending Policy" in Malaysia. At the time of its introduction, whatever the motives behind it, it promised wealth re-distribution, increase of Malay equity and the eradication of poverty among all Malaysians irrespective of race or religion to promote the overall goal of national integration.

It was supposed to have ended in 1990, but it never went away. Ironically, its continuation poses fundamental problems for national integration and the growing racial and religious polarization.

Professor P Ramasamy is a former professor political economy Universiti Kebangsaan Malaysia. Presently, he is writing two books on Malaysian politics, one regarding the power struggle in Umno and other about ethnic relations.