Relevant, but needs updating: M’sia must rethink NEP, says economist

KUALA LUMPUR – The government should find new ways to carry out both universalist and group-targeted policies instead of trying to completely replace the “race-based” New Economic Policy (NEP) with “needs-based” policies, said economist Lee Hwok Aun.

“It has been almost 50 years since the NEP (was introduced), with this stance of not having any race-based policies at all, but only need-based policies instead.

“Malaysia needs to stop thinking this way. The two approaches do not contradict each other. Instead, we need to find a balance between the two,” he said.

Lee, a senior fellow at the Iseas-Yusof Ishak Institute, said this at a seminar titled “Rethinking the New Economic Policy: 50 Years of Polarisation and Impasse” at Universiti Malaya (UM).

He said the NEP’s two prongs – poverty eradication irrespective of race, and restructuring society to the principles of equality and fairness – are still relevant, but the country’s overall perspective and views needs to be modified and updated.

“The approach should be to find new ways to carry out both universalist policies that provide basic needs and group-targeted policies that promote participation and capability.

“There should be a continuous need for both types of policies as each has their objectives and own instruments, and to find ways they can reinforce each other, instead of one replacing the other,” he said.

He said social restructuring cannot be achieved by merely focusing on it alone.

“You can’t just help the poor and expect Bumiputera small and medium enterprises to pop up as competitive, dynamic, and regional players.”

Lee had previously said that politicians in Malaysia are fixated on the 30% Bumiputera equity set out in the NEP, but have neglected to build capacity and competitiveness within the community.

Meanwhile, Bangi MP Ong Kian Ming, who was also present at the seminar, said it would be good for the country if politicians from all sides looked at public policies from an impact perspective, rather than just through a racial lens.

“For example, if you have good public transport policies, it will help everyone in the urban areas, irrespective of race. The focus should be on better public transport policies and not policies that only benefit certain races.

“Another example would be looking at public universities. The policies there should be targeted at how to improve the quality of teaching and research, rather than looking at who gets in and who does not.

“If we can start to change that narrative and mindset, we would have a more substantive public policy discourse among politicians and also other interested stakeholders, whereby we can look at things beyond race.

“This is not to say we ignore race completely, but look at things from a more comprehensive level,” he told The Vibes.

Previously, veteran economist Tan Sri Kamal Salih had called on the government to abolish the NEP and replace it with a needs-based policy to overhaul the economy. – The Vibes, October 4, 2022