The Bumiputera Economic Transformation Roadmap builds upon the achievements in promoting the bumiputera agenda over the last 40 years under the New Economic Policy (NEP), says Peneraju Agenda Bumiputera (Teraju).

“However, there is still a significant need to address existing imbalances with regard to income levels and economic assets ownership,” it said in ‘The Bumiputera Economic Transformation: A Roadmap’ document launched by Prime Minister Najib Razak today.

According to Teraju, the bumiputeras' share in the national economy was still small in relation to their population composition.

It said there was significant potential to improve bumiputera representation in high value-added jobs, management posts and high-income positions.

While bumiputera households make up 65 percent of total households, they represent a higher proportion of households in the lower-income group, it said.

Bumiputeras' share capital ownership (at par value) of limited companies remained at 21.9 percent in 2008, still short of the 30 percent target for corporate equity ownership set at the macro level, it said.

Income disparities have improved

Teraju, the secretariat to the Bumiputera Agenda Action Council, noted that the NEP, implemented in 1970, has had a number of major achievements.

Among the key achievements are the significant reduction in bumiputera poverty rate from 64.8 per cent in 1970 to 5.3 percent in 2009 in tandem with the overall poverty eradication from 49.3 per cent to 3.8 percent.

“Bumiputeras' income disparities have also improved substantially,” it said, citing statistics from the Economic Planning Unit in the Prime Minister's Department.

In 1970, Teraju said the mean monthly gross household income of bumiputeras was RM172 compared with RM264 the national average in Peninsular Malaysia.

In 2009, the bumiputeras' mean monthly gross household income increased markedly by more than 20 times to RM3,624 compared with the national average of RM4,025, up by 15 times, it said.

On bumiputeras' corporate equity ownership, Teraju said it had increased by almost 10-fold in percentage terms (from 2.4 percent in 1970 to 21.9 per cent in 2008) and more than 200 times in real terms from RM125 million in 1970 (or RM160 million in 2008 value) to RM127 billion in 2008.

Also, there has been success in creating a bumiputera professionals class as the percentage of registered bumiputera professionals has increased from five percent in 1970 to 45 percent in 2008, it said.

In absolute terms, the number of registered professionals have increased by more than 200 fold during the period, it said.

Teraju said bumiputeras' overall representation in management had also improved from 22 percent in 1970 to 43 percent in 2008.

“We now have strong bumiputera representation in key professions and management and on boards of directors of listed companies,” it said.

In addition, it said, strong bumiputera investment institutions, such as Permodalan Nasional Bhd, Tabung Haji Fund Board and Armed Forces Fund Board  were established to pool Bumiputeras' wealth and sustainability and to hold equities in large companies.  

Key issues faced by bumi players

Teraju said the roadmap is a significant step forward by the government to further strengthen bumiputeras' participation in the Malaysian economy via wealth creation; balanced representation in employment in high value-added areas and driving entrepreneurship.

In developing the roadmap, representatives from both the public and private sectors were engaged to provide valuable insights to ensure the direction of the transformation was relevant based on the country's current socio-economic landscape, it said.

As part of this process, Teraju said a laboratory involving over 200 public and private sector participants representing various industries was conducted to identify in detail the key issues faced by bumiputera industry players today.

They also contributed to strategy formulations and initiatives contained in the document.

In addition, Teraju facilitated an event called ‘Moving Forward Bumiputera Agenda’ to take stock of existing programmes and identifying challenges and issues faced by development financial institutions (DFIs); entrepreneur development organisations (EDOs) and industry development organisations (IDOs) in promoting the bumiputera agenda.  

The roadmap is an action-oriented agenda of policies and programmes to spearhead further the progress towards ensuring meaningful, resilient and sustainable bumiputeras' participation in the economic sector.

It sets the journey to ensure that when Malaysia attained developed nation status in line with Vision 2020, the bumiputeras will be proportionately represented in high-income jobs, ownership of large companies and participation in high-growth economic sectors.

The roadmap holds firm to the principles embedded in the New Economic Model of being market-friendly, needs-based, merit-based and transparent.

The Bumiputera Agenda Action Council was set up to lead, coordinate and drive bumiputeras' involvement in the economic sectors through existing and new initiatives and to formulate institutional reforms to bolster effectiveness and serve as the ‘game changer’ in realising the desired results with regard to the Bumiputera Development Agenda.

- Bernama