Lessons from NEP Architect–James J. Puthucheary

November 16, 2015

Lessons from  NEP Architect–James Puthucheary

by Adam Reza



Writing in 1960, a key architect of the New Economic Policy (NEP),   the late James J. Puthucheary, author of Ownership and Control in the Malayan Economy, made an astute observation about the troubles brewing within the seemingly idyllic setting of rural Malaya.

Ethnic Malay paddy farmers had found themselves trapped in a vicious cycle of low productivity and mounting debt. Defaults were widespread and the ensuing transfer of land to the hands of mostly ethnic Chinese creditors prompted the government to intervene.

In a bid to prevent land from changing hands through debt to non-Malays, the government introduced the Malay Reservation Ordinance. Unfortunately, this did nothing to solve the key underlying problem of low productivity. The farmers continued to default and the only difference was that the beneficiaries of the land were a small group of Malay elites.

This chapter of our economic history illustrates the perils of viewing developmental problems from a racial lens. Affirmative action done right yields positive results as our Malaysian experience shows. Done wrong, it ends up benefiting an elite few without solving the root cause of the issue.

The lessons are clear, but as is so often the case, men and indeed politicians rarely draw the right lessons from the past.In the context of today, over 40 years since the inception of NEP, it is clear to see how little we have learned.

For a start, the rhetoric has not changed. The old narrative remains ubiquitous: Chinese interests continue to dominate the economy, justifying the continuation of far-reaching affirmative action policies. It is often highlighted that inter-ethnic income gaps still exist and that the Bumiputeras are ill-equipped to compete in today’s economy.

These are valid concerns that should be looked at, but the question remains, why after over 40 years since the NEP’s implementation are Bumiputeras still ill-equipped to compete?

Now, this is not to say that NEP has been a failure. A big part of NEP’s initial success was in creating a new middle class through accelerated involvement in the great leveler of society – education, thus creating a new middle class.

Indeed, access to quality education was critical in the realisation first prong of NEP, the eradication of poverty regardless of ethnicity.This is something that is lacking today. It is no secret that education standards have declined. Rankings in our institutions of higher education are slipping, academic freedom remains illusive, and 400,000 graduates find themselves without jobs.

Like Puthucheary’s rural Malaya, the problem today is low productivity and perhaps the issue here is not so much a lack of affirmative action but more a failure to provide quality education and hence a lack of upward mobility, a situation which affects all of us regardless of our ethnicities. More needs to be done in this respect and hopefully our education blueprints will be executed well.

Second, is there any justification for continuing affirmative policy measures in business particularly for SMEs? According to Development economist  Tan Sri Kamal Salih, although noble in its intentions, it is on the execution side that we have found lacking and more often than not, the beneficiaries have not been the entrepreneurs.

A study by Dr. Terence Gomez of University of Malaya finds that programmes to nurture Bumiputera entrepreneurs were hardly successful as they were based on selective patronage, in turn sealing off non-Bumiputera owned companies access to domestic and foreign markets.

Again, we are caught in a situation where the industrious and innovative are left behind and the elite few and politically well-connected are rewarded. We need to be more transparent in this respect, ensuring that those with political interests do not exploit the system.

Perhaps we could take a leaf from our successes in the start-up industry, where more of those who are innovative and industrious have been allowed to succeed regardless of ethnicity or political connections.


Now, this is not to say that positive discrimination is completely uselesss. Where it may remain relevant is in the case of recent evidence of discrimination in hiring by the private sector in a study done by  Dr. Lee Hwok Aun and Dr. Muhammad Khalid.

Alternatively, we might want to consider is what the Conservative government is doing in the United Kingdom today, with name-blind job applications.

Yet at the same time, if our priorities are truly about creating a more diversified workplace, we need to address issues such as under-representation of non-Malays in the public sector where for me the need for diversity is most acute.

I would like to think that increasingly we want policy to be shaped from a more inclusive multi-cultural perspective. Suggestions that non-Malays ostensibly shun the civil service due to low pay are a complete hogwash.

Take the significant number of non-Malays in the government-led Perdana Fellows programme recently or my fellow millenials who shun the more high paying jobs to participate in initiatives like Teach for Malaysia. Clearly there is more to Gen Y than dollars and cents.

Moving forward, our future developmental solutions must continue to have the Bumiputera agenda in mind but must also be more inclusive.For starters, we need to go back to the core of what Prime Minister Dato’ Seri Najib Razak proposed in 2010: an urgent revision of the NEP, towards a national development strategy that is more transparent, merit driven, and market friendly, and towards a new needs-based affirmative action.

That is the right way and we must not lose track of the end goal that affirmative action should be temporary in the first place.

As Tun Dr Ismail once said:

“The special privilege or position accorded to the Malays under the Constitution is mainly intended to enable them – to borrow an expression from the game of golf – ‘to have a handicap’, which would place them in a position for a fair competition with better players. Therefore like a golfer, it should not be the aim of the Malays to perpetuate this handicap but to strive to improve his game, and thereby reducing, and finally removing, their handicap completely.”

As an ethnic Malay myself who believes that we can be the community of aspiration and hope, I long for this day.


On Leadership–Rafidah Aziz

October 28, 2015

Former Trade Minister Rafidah Aziz is right to advocate a mindsetDin Merican@Rosler change to enable Malaysians to think critically, have a passion for learning, undertake research, open their minds to new ideas by love of reading. Malaysian have to become global citizens.

The question is where to begin? My simple answer is that we should not be spending millions of ringgits on producing glossy master plans and blueprints prepared by foreign consultants (like Mckinsey and others) , which are  not read and understood and implemented by our Ministers and civil servants.

Permandu CEO, Idris Jala should no longer talk about transformation of the Malaysian economy, while that is important; in stead he should make the re-education of our inept and self-serving ministers and top civil servants and timid GLC chief executives as matter of priority. We need ethical leadership so that we have the capacity to implement much-needed administrative and structural reforms.

ITT Harold GeneenOur Ministers, senior civil servants and others in business have to be taught to lead by example. We need competent individuals, men and women in leadership roles, be it politics, business, public administration, and academia, who are knowledgeable and respected for their character, intelligence and conceptual skills, not a bunch of apple polishers, sycophants and jaguh2 kampong (village champions), who cannot think beyond their narrow self interests.

If we wish to operate in the blue ocean, instead of navigating the Pahang River, then we should educate our politicians and civil servants on good governance and ethical leadership. Everything starts at the top. There must be cultural change if we are to be a respected member of a global community. Being a developed nation requires us to think beyond GNI/GDP terms.

Our politicians, civil servants and business leaders, as champions of the status quo, are major obstacles to change. We need enlightened leaders who understand what leadership means. To me, to be a leader one must have impeccable character imbued with a high sense to duty to our King and country. –Din Merican

Time to change Malaysian Mindsets, says Rafidah Aziz

by Jennifer Gomez


RafidahMalaysia must identify what has made it fall behind and determine whether such factors were reality or people’s perceptions, outspoken former minister Tan Sri Rafidah Aziz said today.

She said the country must take stock of what areas needed to be transformed, adding that transformation could not take place in conferences, seminars or laboratories.

“You must have a developed country that is matched by a society that can think forward, that is not lagging behind in terms of expectations of a developed country,” she told reporters after speaking at a conference by the Malaysian Institute of Accountants in Kuala Lumpur.

The former minister of international trade and industry added that mindsets needed to be transformed first, and that Malaysia had to move away from politicising important issues.

“Mindset moves everything.We are politicising education to the disadvantage of our future generation, we are politicising issues based on the racial divide. We are politicising issues based on the gallery we speak to which is very divisive, we are politicising issues, which are far removed from the good of the people and the country.”

Najib-Razak-and-Rosmah-Mansor-Thumb-DownAntithesis of Moral and Ethical Leadership

Rafidah has of late been vocal on social media about current issues affecting Malaysia, including the country’s political turmoil and lack of confidence towards the government.

She has urged national leaders to provide clear answers to alleged wrongdoing involving the government, and only yesterday said Malaysia, which once enjoyed rapid economic growth, needed to rebrand itself.

Rafidah today said the school system must also be revamped so that students were taught correct values such as integrity and honesty.

Asked about Budget 2016 meeting the targets of becoming a high-income nation, Rafidah said there should not be too much excitement about it, given that it was just financial planning for one year.

She said instead, there should be more concern about longer term strategies to move towards 2020.

“The budget is just an annual allocation of funds, collection of revenue and programmes and projects, residual from previous years.I am not concerned so much on the quantitative aspect, money spent and projects done. I’m more interested in the mindsets of the people.

“Are the mindsets oriented towards first world mindsets?Are we readying the young to be the workforce of the first world? Are we readying the young to be able to interact globally?” she asked, adding that there was only five years left to achieve this.

Malaysia’s spectacular drop in inequality… for real?

October 18, 2015

Malaysia’s spectacular drop in inequality… for real?

by Lee Hwok-Aun*


Poverty has fallen sharply in Malaysia. The divide between rich and poor phenomenally narrowed the past few years. If only you knew.

Dr. Lee Hwok-Aun University of Malaya Kuala Lumpur, Malaysia

Dr. Lee Hwok-Aun University of Malaya
Kuala Lumpur, Malaysia

Judging by public discourses and perceptions, most people do not know. And most of the time we talk about inequality, we hear the opposite: inequality has been rising and rich-poor gaps are widening. Writings on our socioeconomic condition, such as the commendable Rich Malaysia, Poor Malaysians by Anas Alam Faizli, largely argue that the benefits of economic growth trickle down to the masses much less than the affluence sucked upwards to the rich.

The government knows about this massive decline in inequality; our official statistics plot out the trend. The Gini coefficient, a figure between 0 and 1, is a widely used, simple and effective measure of inequality. The higher the Gini, the more unequal the distribution.

Visualising it helps. Malaysia’s Gini coefficient series shows a clear downward trend in household income inequality from 2004 to 2012, after which it falls off a cliff. In 2014, inequality plunged to the lowest level ever.

These calculations are based on the Household Income Survey, a large and nationally representative dataset, and the best resource for computing income statistics. But are we handling the dataset properly?

The latest inequality figures painfully stretches the limits of plausibility. The data have been reported, without any attempt to explain possible causes for such a spectacular outcome. Even if we can rationalize this downtrend in inequality, could it have dropped so steeply?

Corresponding to the fall in overall inequality as captured in the Gini coefficient, income growth at the bottom segments is exceedingly high. From 2012 to 2014, the bottom 40 per cent enjoyed household income growth of 15.9 per cent PER YEAR, the middle 40 per cent saw a 10.7 per cent annual rise and the top 20 per cent got 8.1 per cent.

Curiously, the government itself whispers softly about this outstanding success. It almost seems as if Putrajaya does not want us to know much about it. I can think of two reasons. First, the record has simply escaped attention; second, the record plainly defies logic. Maybe we are just not in the habit of tracking inequality in total. For decades we have instinctively paid close attention to inter-ethnic inequality and cared less about general rich-poor disparity. We may also not realize how awesome Malaysia’s record is when compared to the world. I exaggerate not. Rising inequality is a true tale of our times, a problem that makes many governments sweat. The uptrend in inequality is documented and vigorously analysed in rich countries. The steadily growing major Asian economies of China, India, Indonesia and South Korea have registered increases in inequality, according to a landmark Asian Development Bank report.

A few places have bucked this trend, most prominently Latin American countries like Brazil, Argentina, and Mexico, whose experiences are examined in scholarly work.

The narrowing of inequalities in these countries is attributed to two main factors: declining wage gaps between tertiary educated versus less qualified workers, and expansion of pro-poor social assistance, such as cash transfers.

Malaysia’s Gini coefficient shrank by an exceptionally high 1.32 per cent per year between 2004 and 2014. Thirteen Latin American countries on average recorded a 0.96 per cent reduction per year in the 2000s.

Malaysia has handsomely outdone these fellow middle-income countries. Any other government would go to town trumpeting this success, but Putrajaya zips its lips.

This odd silence raises another possibility: these numbers do not just escape notice, they also defy logic. Perhaps the government does not fully trust its own statistics? The Eleventh Malaysia Plan blithely noted that the Gini coefficient had touched 0.401 in 2014, surpassing the target of 0.420 by 2015. This is a splendid overachievement! But again, no further comment, no attempt to explain how it happened.

Without access to the Household Income Survey raw data, we cannot go beyond inference and speculation on the credibility of Malaysia’s mightily perplexing decline in inequality. What is certain, however, is that the official report has overlooked stark red flags.

Take the inequality trend within the Indian Malaysian population (Figure 2). These figures are reported in the Household Income Survey Reports, but omitted in the Malaysia Plans. From 1989 to 2012 we observe a sustained increase – with some fluctuation – in disparities within the community: the Gini rises from 0.390 to 0.443.

Rising inequality among Indian Malaysians has recently been recognised as a policy priority, only for the data to show the trend is already reversed. After expanding for 23 years, in two years (2012 to 2014) inequality basically shrank back to its 1989 level. Is anyone seriously buying this?

More amazing developments have taken place far north, if we are to believe the official account. Inequality statistics within states throw up some mystifying results, especially in Perlis, where the Gini coefficient, like a stone in water, went from 0.455 in 2012 to 0.346 in 2014.

To put this in perspective, the scale of Perlis’ inequality reduction is equivalent to the United States, with its brand of brawny capitalism, transforming into the Netherlands and its mode of northern European welfare capitalism – all within the space of two years (In the last decade the Gini coefficients of the US and the Netherlands were, respectively, 0.408 and 0.309).

No reform or social policy can redistribute so much income in so little time – it takes a revolution. Was there a socialist uprising in Perlis that I missed?

Undeniably, we have seen some inequality-reducing interventions in the past few years – chiefly, Bantuan Rakyat 1Malaysia (BR1M) cash transfers and minimum wage. But the scale of these measures do not tally with the dent in national inequality. BR1M payments amount to only RM55 a month. Likewise, minimum wage kicks in at a mere RM900 per month for the Peninsula and RM800 for Sabah and Sarawak, and has largely affected foreign workers who are excluded from the official inequality statistics.

Let me state clearly that I am certain there is no deliberate manipulation of data, no attempt to deceive us with doctored reports that are contrary to some other objective accounts. But many of the numbers are too implausible based on what we know, and unbelievable without further substantiation.

One possible explanation derives from artificial addition of imputed rent to household income. Imputed rent is market valued rent of owner occupied houses that is added to household income, even though no such payment is actually received. Is this being over-calculated, particularly for low income households? Super high income growth in the low-income segments may also be due to over-counting of government welfare payments and gifts in kind. Who knows? I’m still stumped on what could drive the drastic drop in inequality within the Indian population and inside Perlis. These are mysteries that demand to be solved.

It is also worth noting that the World Bank’s Malaysia Economic Monitor put the 2014 Gini coefficient of gross household income at 0.421, exceeding the government’s calculation of 0.401.

But enough of highlighting aberrations and discrepancies. What we need is for government and citizens to strive together for clarity on these vital bits of information, which shape policies and track progress. And for this to work, the income data must be made accessible to the public – without restriction and at minimal cost, if not free. Data collection is fully paid with taxpayers’ money.

For the millions already spent collecting the income survey data, the rakyat deserve to get much more than inequality statistics that the government itself does not seem to believe.

* Dr Lee Hwok Aun is Senior Lecturer in the Department of Development Studies, University of Malaya.

Samdech Techo Hun Sen@ The United Nations

October 8, 2015

Remarks by Samdech Akka Moha Sena Padei Hun Sen, Prime Minister, Kingdom of Cambodia @United Nations Summit on Post 2015 Development Agenda

Over the past two decades, Cambodia has made remarkable transformation, especially in securing full peace, strong political stability, and improved public security with high growth averaging 7.7 per cent in real terms annually. The poverty rate has declined from 53 per cent in 2004 to 16 per cent, enabling Cambodia to reach the MDG targets on poverty reduction and other social sectors ahead of 2015.–Samdech Techo Hun Sen

Hun Sen at UNGA

Today, I have great honour to attend this United Nations Summit on Post-2015 Development Agenda. On the 70th Anniversary of the creation of the United Nations (UN), we now open a new chapter in the humanity’s history book, which is marked by stronger cooperation in global development.

The theme of our summit today highlights our globally shared undertakings and responsibility to achieve the Sustainable Development Goals (SDGs) in the next 15 years, advancing on the achievements of the Millennium Goals (MDGs) which had jointly adopted 15 years ago.

Over the past two decades, Cambodia has made remarkable transformation, especially in securing full peace, strong political stability, and improved public security with high growth averaging 7.7 per cent in real terms annually. The poverty rate has declined from 53 per cent in 2004 to 16 per cent, enabling Cambodia to reach the MDGs targets on poverty reduction and other social sectors ahead of 2015.

Cambodia is now in transition towards the next stage of development, of becoming a lower middle income country by 2016. In this regard, the Royal Government of Cambodia considers that all the 17 SDGs, which were built on the MDGs, are very relevant in the Cambodian context, especially for strengthening its achievements of the past 15 years. But they are even more important to support Cambodia’s transition into a middle-income country, especially in its early stage. Cambodia will incorporate the “clearance of land mine and unexploded ordinance” as an additional goal to the SDGs to fully reflect the actual situation and the need on the ground

As for the financing of the SDGs, the Royal Government of Cambodia fully endorses the Addis Ababa Accord and Action Agenda for financing for development that focuses on domestic resource mobilisation to meet the needs of development. However, Cambodia would like to request an extension of support to those least developed countries which are successfully graduating to the next stage of development until they can well stand on their own feet and can compete internationally by providing official development assistance (ODA) grants and/or concessional loans to address their basic needs such as infrastructure gaps and human resource development and institutional capacity building.

Forging consensus on the Post-2015 Development Agenda is a major achievement by our global leaders. However, ensuring success of this agenda as we had planned for remains a big challenge for all of us. For this reason, I believe we all should resolve to jointly address:

1. Ensuring the fulfillment of donor commitment to achieve the target of 0.7 per cent if ODA/GNI to developing countries and 0.15-0.2 per cent of ODA/GNI to least developed countries;

2. Further enhancing trade policies and trade facilitation, including the provision of preferential treatment to developing countries, according to the spirit of equitably and efficiently sharing benefits of globalization;

3. Further strengthening stability and promoting diversification of the financial sector, encouraging innovation and tapping the role and dynamism of the private sector to meet the financing needs for realizing the SDGs;

4. Further strengthening country ownership through building partnerships among all stakeholders.in development, including bilateral, and multilateral development partners, the private sector and other development actors; and

5. Ensuring policy coherence with transparency and accountability, aligning those policies of bilateral and multilateral development partners with national priorities and SDGs.

I believe that the Post-2015 Development Agenda will become an important instrument to help all countries to adhere to a right development path and ensure that the next generation will live in a harmonious and prosperous society.

In this spirit, while being ready to work with all development partners in a constructive way, Cambodia would like to appeal to all countries and relevant stakeholders to show their political will and commitment by taking required measures to achieve the SDGs. Certainly, the United Nations will have to continue playing an even more crucial role to support member states in implementing this agenda.

The Big University

October 7, 2015

The Big University

by David Brooks

John HarvardJohn Harvard-Founder

“Education…means emancipation. “It means light and liberty. It means the uplifting of the soul of man into the glorious light of truth, the light only by which men can be free. To deny education to any people is one of the greatest crimes against human nature.”–Frederick Douglass

Many American universities were founded as religious institutions, explicitly designed to cultivate their students’ spiritual and moral natures. But over the course of the 20th century they became officially or effectively secular.

Religious rituals like mandatory chapel services were dropped. Academic research and teaching replaced character formation at the core of the university’s mission.

Administrators and professors dropped spiritual language and moral prescription either because they didn’t know what to say or because they didn’t want to alienate any part of their diversifying constituencies. The humanities departments became less important, while parents ratcheted up the pressure for career training.

Universities are more professional and glittering than ever, but in some ways there is emptiness deep down. Students are taught how to do things, but many are not forced to reflect on why they should do them or what we are here for. They are given many career options, but they are on their own when it comes to developing criteria to determine which vocation would lead to the fullest life.

But things are changing. On almost every campus faculty members and administrators are trying to stem the careerist tide and to widen the system’s narrow definition of achievement. Institutes are popping up — with interdisciplinary humanities programs and even meditation centers — designed to cultivate the whole student: the emotional, spiritual and moral sides and not just the intellectual.

Yale CampusYale University@New Haven

Technology is also forcing change. Online courses make the transmission of information a commodity. If colleges are going to justify themselves, they are going to have to thrive at those things that require physical proximity. That includes moral and spiritual development. Very few of us cultivate our souls as hermits. We do it through small groups and relationships and in social contexts.

In short, for the past many decades colleges narrowed down to focus on professional academic disciplines, but now there are a series of forces leading them to widen out so that they leave a mark on the full human being.

The trick is to find a way to talk about moral and spiritual things while respecting diversity. Universities might do that by taking responsibility for four important tasks.

University-of-Chicago-Becker-Friedman-Institute-courtesy-Ann-Beha-ArchitectsUniversity of Chicago–Becker-Friedman Institute

First, reveal moral options. We’re the inheritors of an array of moral traditions. There’s the Greek tradition emphasizing honor, glory and courage, the Jewish tradition emphasizing justice and law, the Christian tradition emphasizing surrender and grace, the scientific tradition emphasizing reason and logic, and so on.

Colleges can insist that students at least become familiar with these different moral ecologies. Then it’s up to the students to figure out which one or which combination is best to live by.

Second, foster transcendent experiences. If a student spends four years in regular and concentrated contact with beauty — with poetry or music, extended time in a cathedral, serving a child with Down syndrome, waking up with loving friends on a mountain — there’s a good chance something transcendent and imagination-altering will happen.

Stanford@Palo AltoStanford University@ Palo Alto, California

Third, investigate current loves and teach new things to love. On her great blog, Brain Pickings, Maria Popova quotes a passage from Nietzsche on how to find your identity: “Let the young soul survey its own life with a view of the following question: ‘What have you truly loved thus far? What has ever uplifted your soul, what has dominated and delighted it at the same time?’ ” Line up these revered objects in a row, Nietzsche says, and they will reveal your fundamental self.

To lead a full future life, meanwhile, students have to find new things to love: a field of interest, an activity, a spouse, community, philosophy or faith. College is about exposing students to many things and creating an aphrodisiac atmosphere so that they might fall in lifelong love with a few.

Fourth, apply the humanities. The social sciences are not shy about applying their disciplines to real life. But literary critics, philosophers and art historians are shy about applying their knowledge to real life because it might seem too Oprahesque or self-helpy. They are afraid of being prescriptive because they idolize individual choice.

But the great works of art and literature have a lot to say on how to tackle the concrete challenges of living, like how to escape the chains of public opinion, how to cope with grief or how to build loving friendships. Instead of organizing classes around academic concepts — 19th-century French literature — more could be organized around the concrete challenges students will face in the first decade after graduation.

It’s tough to know how much philosophical instruction anybody can absorb at age 20, before most of life has happened, but seeds can be planted. Universities could more intentionally provide those enchanted goods that the marketplace doesn’t offer. If that happens, the future of the university will be found in its original moral and spiritual mission, but secularized, and in an open and aspiring way.

A version of this op-ed appears in print on October 6, 2015, on page A31 of the New York edition with the headline: The Big University.


Building a well formed mind: Dr. Shashi Tharoor

October 1, 2015

Dr. Shashi Tharoor On Education

Listen to Dr. Tharoor, an eloquent Educator and maybe we can begin to learn about a well formed mind.

Right now, we teach children by example of the present leadership that cash is king and there is nothing wrong about accepting bribes or becoming a crony or a proxy of some corrupt politician like Dr. Khir Toyo, former Menteri Besar of Selangor who is in Kajang as guest of Duli Yang Maha Mulia Yang DiPertuan Agong. Once a powerful man, Dr. Khir is now a felon who must pay the price for being utterly corrupt. There are still a lot of politicians out there who have yet to suffer the same fate as our convicted broom giver.

It is time we start thinking outside the box and come out with innovative ways of educating our young and showing them ways to lead meaningful and ethical lives. As Socrates said, lead an examined life. Only those engaged in the continual struggle to clarify their thinking and remove the clutter, confusion and incoherence can be said to live free and worthwhile lives. But not all of us are great thinkers or philosophers like Socrates, Plato and Aristotle.

The majority of us like me are simple folks who seek to lead a happy life, taking the good with the bad and overcoming adversity by staying always on the side of the affirmative and rejecting the negative and anything in between like the late Sam Berns.

Sam Berns was a Junior at Foxboro High School in Foxboro, Massachusetts, where he  achieved highest honors and was a percussion section leader in the high school marching band. He achieved the rank of Eagle Scout in the Boy Scouts of America. Sam was diagnosed with Progeria, a rare, rapid aging disease, at the age of 2. Listen to him. –Din Merican