In this seminar, Dr Lee Hwok-Aun shared his study of Malaysia’s New Economic Policy and argued that Malaysia can start afresh by building on the NEP’s two prongs with key resets and updates based on enduring principles and systematic policy design.
MALAYSIA STUDIES PROGRAMME SEMINAR
Tuesday, 17 May 2022 – The ISEAS – Yusof Ishak Institute hosted a hybrid seminar on “The New Economic Policy beyond 50: Retire or Refresh?”. Dr Lee Hwok Aun, Senior Fellow and Co-coordinator of the Malaysia Studies Programme at the ISEAS – Yusof Ishak Institute, delivered the seminar. Dr Lee has authored numerous works on affirmative action, including the book Affirmative Action in Malaysia and South Africa: Preference for Parity.
Dr Lee began his presentation with a brief overview of the objectives of the New Economic Policy (NEP). Launched in 1971, NEP’s objectives were crystallised by 1976 with a “two-pronged” development strategy. Firstly, NEP sought to reduce poverty across all racial groups and secondly, to reduce inter-ethnic economic disparity by uplifting the economic status and capacity of the Bumiputra. Dr Lee argued that the goals concerning Bumiputra empowerment within NEP remain ambiguous, with conflicting wording on the precise endpoint. The apparent contradiction is exacerbated as Bumiputra empowerment was implemented across numerous policy sectors, spanning from education to entrepreneurial development and in the stock market.
Dr Lee shared that NEP has proven to be largely successful in poverty alleviation, with the incidence of poverty falling from 50 percent in 1970 to 5.6 percent in 2019. Dr Lee subsequently addressed the salient criticisms of NEP, namely that Malay elites were the sole beneficiaries of NEP. Dr Lee argued that contrary to the common understanding, NEP had provided substantial economic mobility to ordinary Bumiputra particularly in higher education and among Small and Medium Enterprises (SMEs). Consequently, a large Bumiputra middle-class has emerged in recent decades. Dr Lee added that large-scale privatisation in the 1990s gave rise to the perception that NEP only enriched a handful of Bumiputra elites. In addition, the trend of increasing inequality among Bumiputra has declined significantly since the 2000s
Dr Lee argued that instead of eliminating the entire NEP, the policy should be scrutinised and amended on a sector-by-sector basis. A need-based or merit-based approach can be implemented in specific sectors, while affirmative action may be retained in other sectors. Dr Lee concluded that affirmative action – and NEP by extension – continues to receive broad support among Bumiputra as indicated in opinion polls, despite bearing much negative reception among Malaysia’s ethnic minorities.
In the question-and-answer session, Dr Lee addressed questions pertaining to the dilemma between fairness and equality, specific NEP policies to be replaced and amended, and the readiness of Malaysians to transcend NEP, among others. The seminar drew 80 online and onsite participants. Dr Francis Hutchinson, Senior Fellow and Coordinator of the Malaysia Studies Programme at the ISEAS – Yusof Ishak Institute, moderated the seminar.