Wednesday, August 6, 2008

CRONYISM AND THE NEP


As posted by Dr. Mahathir Mohamad at www.chedet.com on August 6, 2008 8:49 AM

1. When the New Economic Policy began to show some results in the early eighties, the Western Press and local opponents of the Government began to talk about cronyism. Whoever succeeded in a developing country like Malaysia, did so because they were the chosen favourites of the Government, particularly the head of the Government.

2. I came in for virulent attacks because some Malays actually did well in business. They were all labelled my cronies whether they were indeed my cronies or not. Anyone who succeeded was immediately defined as my crony.

3. Many close friends, relatives and members of my family who failed in business would not be called cronies.

4. It is not the actual relation or association with the leader that qualifies one to be the crony of the Prime Minister. It is the success of the individual. Failures, no matter how close they may be to the Prime Minister would not be called cronies.

5. This left me in a quandary. As head of the Government I had to ensure the success of the NEP objective of reducing the disparities between the bumiputeras and the non-bumis. This reduction must be achieved at all levels, not excluding the rich and the very rich. It wouldn't do to have parity among the low income and middle income only, while big businesses are all in the hands of the non-Bumiputera millionaires.

6. While most Bumiputeras who were given shares and opportunities to do business abused these opportunities, a few tried seriously and some of them succeeded. Obviously, these would be the people who should get more opportunities. Those who had abused their rights were also given second and third chances but as they continued to mess up their contracts and projects they were dropped out. Giving them more opportunities would simply be a waste. It would not help correct the economic imbalances.

7. As new opportunities were created, those with good track records were given more projects and contracts. When privatisation was introduced these people were among the ones chosen to take over the big privatised entities.

8. Admittedly some of them failed and were dropped. The numbers who succeeded became smaller. As we cannot risk giving to failures, the few successful people seem to be getting all the Government contracts, privatisation projects and other business opportunities.

9. All the while the Government was on the lookout for new Bumiputera individuals who showed good business acumen. They too were given projects, contracts and business opportunities. Again if they were successful they would get more projects and contracts etc. Then they would be categorised as cronies.

10. The number of successful Bumiputera businessmen slowly increased. Angry that the NEP had actually succeeded in throwing up capable bumiputera businessmen and reducing racial imbalances the Western press and local opponents of the NEP began to label all the successful Bumiputera businessmen as cronies of the Prime Minister. It does not matter if the PM had never known these people, but if they succeed then they must be the cronies of the PM.

11. It would seem that the only way to avoid being accused of cronyism is to ensure that all Bumiputeras fail in business. Better still the NEP should be made to fail completely.

12. The continuing disparities between the Bumiputeras and the non-Bumiputeras which these will cause would then produce inter-racial tension and political instability. Then the Western journalists can say that these "natives" really should not be given independence. Look at the mess they are making of their country.

13. It must be very annoying to the know-all Western journalists that they have been proved constantly wrong about Malaysia. They had predicted the collapse of this country due to the Malays seizing the wealth of the Chinese after independence, but this did not happen.

14. When May 13th 1969 occurred they congratulated themselves as what they had predicted seemed to have happened. But the three races in Malaysia worked out their own solution and Malaysia once again stabilised and went on to grow and prosper.

15. Despite dire predictions about the unfairness of the NEP affirmative action and cronyism, Malaysia continued to grow strongly and noticeable improvement was made in reducing the disparities between the races. The target of becoming a developed country by 2020 seemed achievable.

16. When the financial crisis caused by rogue currency traders took place, Malaysia remained calm and peaceful. The Malays did not blame the Chinese as happened in other countries. Apparently the Malays were quite satisfied with their share of the nation's wealth after the NEP. The Chinese did not blame the NEP either.

17. Instead when the Government successfully overcame the crises, the Chinese were very grateful. In the 1999 Elections, the Chinese votes were overwhelming, helping to give the BN party the 2/3 majority, despite Anwar's black eye.

18. When I stepped down wealth distribution through affirmative action in the economic field had contributed towards eradicating the identification of race with economic function but not as much as targeted.

19. But the NEP was more successful in the field of education. When I wrote the Malay Dilemma in 1970, I cited education as one of the obstacles to progress of the Malays. At that time few Malays had university education. There were only a handful of Malay professionals.

20. In my class of 1947 at the Medical College there were only seven Malay students out of a class of 77. Even in the arts faculties the percentage was very small.

21. Under the NEP more schools were built in the rural areas and primary education was free. Secondary education was easily available and a lot of scholarships were given for the universtities in the country and abroad.

22. Residential colleges enabled the students to study under better condition than found in their inadequately lighted village houses. They were given better food in these hostels. Junior science colleges modelled after the English Boarding Schools provide ideal environment for selected students to study and play.

23. The results of all these efforts is very satisfying. Thousands of Malay boys and girls from poor village families gained access to better education and eventually obtained university degrees in various professions and fields of knowledge.

24. Many went on to study for post-graduate degrees and doctorates. They now work as professors in universities, as specialists in various fields of medicine, as scientists, engineers, architects, veterinarians, agriculturists etc. They have not been left behind by the advances in new knowledge such as information technology, telecommunications and space science.

25. They have also gone into management, obtaining MBAs from well known universities such as Harvard and Philadelphia. Armed with these qualifications they have been employed as management executives at all levels. Some actually head multinational companies.

26. In the education field the NEP has been very successful. It has helped to correct the imbalances not only in the professions but also in business. Strangely Malays have become very successful bankers.

27. The educational successes of the NEP have been largely ignored and not even recognised as a part of the poverty eradication and the removal of the identification of race with economic function objectives of the NEP. But in fact they are.

28. So think again whether the NEP simply enrich the cronies of the PM and Government.

29. Think of what would be the situation in Malaysia today without the NEP.

30. If there is still doubt then do a survey of all the contracts and scholarships given by the private sector and work out how much they have contributed toward eliminating disparities between races, and who would be the poor in this country.