IT would be a mistake to think that Datuk Ibrahim Ali is a true champion of the Malay Malaysian poor. But it would be equally silly to think that the Malay Malaysian poor do not support or sympathise with his call. After all, the Pakatan Rakyat (PR)’s failure to increase support in Malay Malaysian rural heartlands — like Hulu Selangor or Bukit Gantang — indicates two potential problems.
First, there is an information blockade that denies the rural folk an informed choice. And second, rural Malay Malaysians genuinely fear losing the ethnic zero-sum game. For some, the two questions are actually part of a bigger issue — if you have enough information, then you won’t be trapped in a zero-sum mentality. In other words, the fight for ethno-religious interests is really based on the outcome of false consciousness.
I see it differently — defining and articulating socio-economic interests in ethno-religious terms can be rational if one’s interests are more effectively advanced by a communal agenda rather than a class struggle. In other words, if the Malay Malaysian poor do not gain from de-ethnicisation of state policies, even well-informed urban Malay Malaysians may revolt against the so-called new politics.
At the moment, however, the centrist competition between the PR and Barisan Nasional (BN) to build a more inclusive Malaysia is being constantly challenged by Ibrahim & Co. In order to analyse what is holding back this centrist competition, one important question needs to be asked: What will the Malay Malaysian poor — not necessarily all Malay Malaysians — gain from a more inclusive Malaysia?
Traditionally, Malay-based opposition parties such as PAS and Parti Rakyat Malaysia were supposed to represent the underdogs in the Malay-Muslim Malaysian community. The 1998-1999 wave of Reformasi then brought a big portion of urban Malay Malaysians — middle-class and poor — into the fold of the opposition. And so, the 2008 electoral gains by Parti Keadilan Rakyat and PAS in urban areas from Kota Raja to Wangsa Maju could not have happened without substantial support from the urban Malay Malaysian electorate.
Will these Malay Malaysians continue to support a more inclusive Malaysia where ethnicity and religion should carry less — if not minimal — weight in one’s socio-economic and political well-being? After all, this is what the PR’s ketuanan rakyat and BN’s 1Malaysia are supposed to be about.
The deciders
Every policy will have winners and losers. The sure losers in such a new Malaysia are the distributional coalitions of Malay Malaysian political, bureaucratic and business elites and their non-Malay Malaysian allies. Ibrahim, for example, allegedly had links with billionaire tycoon Tan Sri Vincent Tan‘s gaming company, which he denies. Ibrahim has also hit out at Tan and other Chinese Malaysian tycoons for “controlling” the economy.
However, there are middle-class Malay Malaysians who do not support the New Economic Policy (NEP). They think it either doesn’t benefit the Malay-Muslim/bumiputera Malaysian community in globalised competition, or is unjust to the excluded non-bumiputera poor, or both. Often, these Malay Malaysians drive four-wheel-drives or multi-purpose vehicles to attend PR rallies.
But what about the Malay Malaysian poor, urban or rural? Who would they side? Malay nationalists such as Ibrahim and Deputy Prime Minister Tan Sri Muhyiddin Yassin who vow to protect Malay Malaysians’ economic interests? Or Malaysian-minded Malays such as Datuk Seri Anwar Ibrahim and Datuk Zaid Ibrahim who promise a better future for the poor regardless of ethnic and religious background?
In this sense, the Malay Malaysian poor are the most powerful bloc of electoral deciders. They will decide which direction the country will move in.
Affirmative action vs welfare state
The competition to win an alliance with the Malay Malaysian poor is not new. In fact, we should re-examine the historic juncture in the aftermath of the 1969 general election and 13 May riots.
No matter how one attributes the causes of the ethnic riots, the undisputed fact is that the Malay Malaysian poor clearly felt a sense of relative deprivation. They simply felt marginalised compared to other groups.
Many — including the critics of NEP within the PR — have used this as a departure to argue that the NEP was good and necessary. What went wrong was the implementation of the NEP and its successor policies.
I beg to differ. Present-day Malaysia actually has three choices before it, as it did in 1969, and not two:
1 A free market and meritocracy where the strongest competitors win.
2 An ethnic-based affirmative action policy where individual members — regardless of individual wealth — of the collectively poorest ethnic group are given preferential treatment.
3 A welfare state where the poor — regardless of their ethnicity — will be given support.
Because Malay Malaysians constitute the largest portion of the nation’s poor, both options 2 and 3 could achieve the NEP’s noble goals: eradication of poverty and restructuring society.
What are the differences between the two options then? Answer: The process and priority.
An ethnic preferential policy assumes that ethnic solidarity and inter-ethnic discrimination prevail in society. So to help a disadvantaged group, you need to cherry-pick and help the strongest within the group so that they will in turn help other members — the so-called trickle-down effect — and become role models for others.
Following this line of thought, stronger Malay Malaysians would actually come before weaker Malay Malaysians in receiving state support so that they can beat stronger non-Malay Malaysians in competition. Hence, ethnicity before equality. Connections count, too.
A welfare state, on the other hand, operates in a different manner. All the poor will be helped — say, through subsidised education, healthcare, housing, transportation — regardless of ethno-religious background.
Beneficiaries of different policies
| Main beneficiaries | Poor | Rich |
| Malay Malaysian/bumiputera | NEP; welfare state | NEP |
| Non-Malay Malaysian/non-bumiputera | Welfare state | Free market and meritocracy |
The most disadvantaged group would receive the lion’s share of state assistance, naturally. Nevertheless, the stronger members in this group may be excluded if they are not weak enough to qualify for benefits.
In Malaysia’s context, if the policy works, there would be no poor Malay Malaysians just as there would be no poor non-Malay Malaysians. However, a Malay Malaysian middle- and upper-class might take a longer time to expand because the stronger Malay Malaysians would need to compete with the stronger non-Malay Malaysians on their own merit.
While a welfare state would rule out state-imposed ethnic discrimination, the state might still need pro-equality legislation to stamp out ethnic discrimination practised by individuals and businesses. Malay nationalists have often argued that Bumiputeraism is the answer to the discrimination against the Malays by the non-Malays.
The differences between the two policies are stark. Why, then, didn’t we choose the welfare state? The simple answer is that Umno and its allies would then have had to transform themselves into leftist parties. Umno elites would also have to give way to both poor Malay and non-Malay Malaysians in receiving state assistance.
Learn from Singapore
In contrast, Singapore’s People’s Action Party, which started as a centre-left party, rules the country with a certain flavour of a welfare state. For starters, most Singaporeans now stay in homes built by the Housing and Development Board (HDB). More importantly, they have also a means testing scheme for hospital patients. The less you earn, the less you pay.
In Malaysia, PR state governments in Penang and Selangor are giving away the same amount of money to the elderly, newborn, university students and families of deceased senior citizens regardless of their income status.
Now politicians are talking about cutting back subsidies to prevent Malaysia from becoming another Greece. In the past, economic recessions have fuelled communal tension. Will cutting subsidies trigger more ethnic fear and antagonism? Will it not at least make the end of the NEP harder to stomach for insecure Malay Malaysians?
If PR and BN are serious about dismantling ethnic politics, shouldn’t they start introducing similar means-testing policies so that the subsidy cut will hurt the poor much less than it hurts the rich? Only then will poor Malay Malaysians be convinced that they may actually be better off even if the NEP is discontinued and replaced by a more class-sensitive policy. 
A political scientist by training and a journalism lecturer by trade, Wong Chin Huat believes in Adams Smith‘s ideological wisdom. However, he also believes Malaysia needs a welfare state to induce class consciousness and reduce ethno-religious mobilisation.
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Hang Jebat says
Means testing requires an objective method for testing income and asset levels. In most countries with welfare systems, this requires a high proportion (preferably all) of the working age population to file an annual tax return (preferably on both income and assets as it is quite easy to understate income via accumulating assets). With the grey or cash economy still playing a big part of Malaysia’s economic life, how is that going to happen?
Farish A Noor says
Spot on. The de-linking of ethnicity and economics is still relevant as we are nowhere near that goal; and to make things worse our blindness to history means that we still cannot see how the present mode of racialised capitalism is a by-product of the colonial era that has been left largely intact.
xkcd says
I beg to differ mate. Every example in recorded history of people being delivered from abject poverty is when free-market reforms have been undertaken fairly and equitably in a continuous manner on a reasonable time frame. I’m all for disability, medical and aged welfare. However welfare to able bodied individuals act as a drag on the system by unnecessarily expanding the government sector and by acting as a disincentive to gainful employment.
Singapore, Hong Kong, Taiwan, China, South Korea. All of these countries went from poverty to a relatively high income status due to embracing free market reforms. Even till today Singapore and Hong Kong do not have any middle-class welfare!
Junglewalla says
In nature there can be found many relationships between species and intra species. There are symbiotc(both parties benefit), comemsalism(one party benefits w/o harming the host, parasitic (one party benetits but at the same time harming its host) relationships. In nature most organisim behave acording to what is imprinted in its DNA i.e aworker bee must do what a worker bee must do and has no choice in the matter, the parasite mistleto must do what is in its DNA and nothing else. Homo-sapiens seem to be the only creature that has the ability to choose what relationship he/she would like conduct with others.This too includes his conduct with the planet.
To simplify that evolution only means “survival of the fittest” without taking in context the time that this is presented is we puting on blinders. Adam Smith,C. Darwin,herbert Spencer have something in common i.e Europe is in theage of the industrial revolutionwere a new and powerfull class of people is born called industrial capatilist. By promoting the view that nature is only about survival of the fittest i.e stronger it will allow the powerful to subjugate the weaker nations(Africa,Asia,S.America) for raw materials and markets. This single minded view of survival of the fittest to mean only competition and conflict of man vs man, tribe vs tribe, nation vs nation and race vs race will lead to catastrophy between the different idological european nations (capitalism,communism,monarchy, military juntas) resulting in the first world war and the death of 14 million europeans. Fighting in the trenches of this first war is none other than A. HItler who is not an accident but a child of
Junglewalla says
[Despite all] of the thinking [in] Europe then, [there came] the Second World War.
We must realise that in nature fundamentally, there is also survival of the most co-operative groups. We have a choice of how we should treat fellow [humankind] and the planet. There must be a new thinking in our relationship with each other. We can co-operate with each other and find ways to enrich each other. Do not allow vested interest to corrupt and pervert science and religion for personal advantage. Greed is Greed in what ever guise.
Sabah Sifu says
Guys, well and good if Malaysia means going beyond Klang Valley. The problem is that the Malaysian economic space does not include periphery states such as Sabah. Most of the economic activities are actually remote-controlled by its HQ in KL. Therefore wealth is centered not dispersed. The economic strength of the periphery states is not utilised properly, it is just being exploited.
ekompute says
When Malaysia goes bankrupt, I hope Ibrahim Ali will accept a bigger share of the blame.
D Lim says
The welfare state sounds terrible but is really not at all, if we look at the perspective of giving a safety net to the most disadvantaged irregardless of ethnicity and religion.
The invisible hand of Adam Smith is not without its fault. Look at USA, supposedly ‘richest country in the world’ and yet it has the gap in medical care for the super rich and very poor. This is not befitting of a superpower. There is no ONE perfect way, but to tweak and improve our system as we progress is proof of civilisation.
Jack says
Farish did made a point there by stating that we are still a by-product of colonialism. Free market capitalism does provide a solution but as we can see the market doesn’t reflect it’s true value. Our economy has expanded since the last recovery but people have forgotten that it’s just an echo of fiscal deficit stimulus.
This has weakened the core of financing as the government is running out of taxpayers’ money and [GLCs are overspending].
xpdc is talking about Singapore achieving high income status. Do we ever reflect the policies they uphold? Singapore and the US [encourages growth of] human capital no matter [the person’s ethnicity]. But are we open towards such policies? Concentrating to much on welfare will stunt […] development of expert, human capital which, will [continue to trap us] in the middle income stage.
Take Japan for example. [It] is a developed, high-income country but it values on [closing up to] foreigners had made it an aging country with a decreasing production and with no GDP growth for about a decade.
Ellese A says
Very good article and analysis. But are we not a welfare state already? Our food, oil, water, sewerage, health service, education, public transport and amenities and even our tolls, have been highly subsidised. If not for these ‘allocations’ our cost of living would have multipled.
For your info we already have means test for a number of services such as purchasing of Projek rumah rakyat (done by BN government 🙂 ).
I think we should not approach this development issues from political perspective. We must sort out a model first. A free market model, a welfare model, state interventionist model or hybrid model. We need to prioritize our needs which should focus more on goals of achieving a higher standard of living. This can be a topic itself. Then we must leave behind partisanship.
Ellese A says
Dear xkd,
Interesting point. But Singapore’s model is peculiar. It’s a highly state-interventionist economic model. To economists, it’s not a free-market model. A case in point is the gambling revenue generation which is driven by state actions.
We can debate which model we should adopt but I think we must acknowledge that Malaysia and Singapore share many commonalities. One option we should consider for our model is [the] ‘wild geese’ theory, i.e. just follow Singapore’s model but at a lower costs and with better variations. We should set pride aside. After all they followed our F1 and casino model as well albeit with variations.
Paul for Democracy says
I was at Hospital Ampang some time ago for medication due to a problem with my spleen. When I suggested that it could/should be removed surgically I was told that the procedure was not recommended for my case because of my age (?). I was a government employee with the Ministry of Education for 35 years and ten months. Could I please get an advisory comment form THE NUT GRAPH ? Thank you. {Attn: Mr C.H. Wong}
chinhuatw says
@Paul, I certainly think that one should deserve the healthcare s/he needs within the reasonable capacity of the state/society. Healthcare should very much be treated as a human right. In this case, I see no reason why your need should be ignored, not least after serving the nation for 35 years and 10 months.
kahseng says
The Nut Graph’s politically-corrected language is getting a little cumbersome and hindering the reading now.
Hypothetically, “can a non-Malay Malaysian talk to a Malay Malaysian about non-Malay Malaysians sympathizing with urban Malay Malaysians while not understanding the differences between urban and rural Malay Malaysians? This is not just a Malay Malaysian or non-Malay Malaysian issue, so would a Malay Malaysian trust a non-Malay Malaysian analysis? Even if there is a answer, would that be acceptable by both Malay Malaysian and non-Malay Malaysians?”
Hope The Nut Graph editors get the point. But due to this I can’t get Chin Huat’s point, perhaps due to a lack of racial super sensitivity.
The Nut Graph should probably just use the politically correct version once, at the beginning of the article, much like the use of full spelling of an abbreviation at the beginning of an article.
kahseng says
Let’s clarify the wording further:
Choice 1: Free market = free society = justice
Choice 2: race based affirmative action = race based welfare state
Choice 3: welfare state.
NEP (under Choice 2) is a race-based welfare state, which makes it a particularly bad and narrow form of welfare state.
Welfare state itself is the problem. As soon as you ask government to mete out welfare, what does it need?
1. Get the power to do so,
2. Get the resource to do so, using this power, ie, by threat of violence,
3. Override efficiency, justice, and creativity that creates those resources.
Results: A vicious spiral of:
1. Lost productivity due to lost efficiency, justice, and creativity,
2. More power needed to squeeze the same resources from less productive lives,
3. More power concentrated, until these three steps spiral down toward totalitarianism.
Malaysian intellectuals are all wrong about this: NEP is bad not because it has been “badly implemented”. As Chin Huat implicitly recognize, NEP is bad by itself.
But Chin Huat probably figures NEP is bad by itself because of the racist component.
Wrong. NEP is bad by itself because of its welfare state component. Racism only makes it worse and makes it fail sooner.
Choice 2 and 3 are bad choices. Only that Choice 2 is exposed sooner that Choice 3. Choice 1 is the only one that will lead Malay and non-Malays toward freedom and justice.
chinhuatw says
@Kah Seng
It’s a blessing for writers to get readers like you who disagree intelligently.
If you followed my last piece on NEP, you will realise that I won’t consider NEP as either race-based welfare state or even race-based affirmative action. I see it as party-based affirmative action, the economic tool to sustain Umno’s electoral one-party state.
There are two issues here:
(a) the scope and degree of state intervention in economy; and,
(b) the method [by which the] state intervenes
I still consider myself a liberal but think free market is something that works only after a sufficient bare minimum living standard for everyone is attained. It is on that ground that I accept and justify state intervention in the 1960s/70s’ context.
What I find problematic is the way the Umno-controlled state intervenes. Unlike many non-Malay [Malaysians], I don’t actually see race as the first problem. I argue in the “historical mistake” piece that had the NEP been truly faithful to the Malay interests, we would have either a competitive Malay middle-upper class or the disappearance of Malay poverty.
What I truly oppose is the unchecked discretionary power placed in the state’s hand in implementing the NEP. This makes the NEP’s express purpose to help the Malays forever unachievable while the non-Malays remain to be blamed.
In that sense, the greatest evil in the NEP to me is the partisanship, racism comes only second, the violent nature of the state (where we will be on the same page) third.
kahseng says
Hi Chin Huat,
One of your strengths that other analysts lack is your game-theory-like calculation to capture exhaustively all the possible outcomes. This makes your arguments powerful (and so threatening to some people) and valuable. Others don’t even bother to be logical.
An example is your statement above “had the NEP been truly faithful to the Malay interests, we would have either a competitive Malay middle-upper class or the disappearance of Malay poverty.”
But hold it there. From a libertarian perspective, the weakness of that argument is in that NEP can never be faithfully executed because state intervention necessarily means concentrated power, and corruption and threat of force. That is why three PMs dilly dallied with “muhibah” until strong man Dr M came along and saw that the only way to implement NEP is to cut corners, concentrate power, and off to the “lalang.”
Don’t think that Tunku Abdul Rahman, Tun Razak, and Hussein Onn were not intelligent enough. To me their indecision proves they were more principled that Dr M, about whether to invade the natural rights of non-Malay Malaysians and rural Malay Malaysians. Dr M decided that a handful of “elite” Malay Malaysians would be his focus.
It is the same logic with the 10th Malaysian Plan. What other countries implement 5-year plans? Soviet Union. Vietnam. Nepal. Pakistan. China. Malaysia.
OK, South Korea had some 5-year plans until the 1970s, long before the military fell.
In central planning (NEP is now substantially planned from the PM’s office, not from the Parliament, not even the cabinet), the pie may appear to grow, but the pie per mouth gets smaller and more expensive, until the mouths have to be restricted to Malay Malaysians, then Umno Malay Malaysians, then the “elite” Umno Malay Malaysian mouths, until even this becomes untenable and Perkasa feels left out.