Economic policy

Seminar on “The New Economic Policy Beyond 50: Retiring or Refreshing?

At this seminar, Dr. Lee Hwok-Aun shared his study of Malaysia’s new economic policy and argued that Malaysia could start from scratch by building on the two strands of the NEP with resets and key updates based on enduring principles and systematic policy design.

MALAYSIA CURRICULUM SEMINAR

Tuesday, May 17, 2022 – ISEAS Institute – Yusof Ishak organized a hybrid seminar on “The New Economic Policy Beyond 50: Retire or Refresh? “. Dr. Lee Hwok Aun, Senior Researcher and Malaysian Studies Program Coordinator at ISEAS – Yusof Ishak Institute, moderated the seminar. Dr. Lee is the author of numerous books on affirmative action, including the book Affirmative action in Malaysia and South Africa: Preference for parity.

Speaker Dr Lee Hwok Aun (right) with moderator Dr Francis Hutchinson. (Credit: ISEAS – Yusof Ishak Institute)

Dr. Lee began his presentation with a brief overview of the objectives of the New Economic Policy (NEP). Launched in 1971, NEP’s objectives crystallized in 1976 with a “two-pronged” development strategy. First, the NEP sought to reduce poverty across all racial groups and, second, to reduce inter-ethnic economic disparities by improving the economic status and ability of the Bumiputra. Dr. Lee argued that the goals regarding the empowerment of Bumiputra within the NEP remain ambiguous, with conflicting formulations on the precise end point. The apparent contradiction is exacerbated as Bumiputra empowerment has been implemented in many policy sectors, ranging from education to entrepreneurship development and in the stock market.

Dr Lee shared that the NEP has proven to be largely effective in reducing poverty, with the incidence of poverty dropping from 50% in 1970 to 5.6% in 2019. Dr Lee then addressed the main criticisms of the NEP, namely that the Malay elites were the only beneficiaries. of the NEP. Dr. Lee argued that contrary to common opinion, the NEP had provided substantial economic mobility to ordinary Bumiputra, particularly in higher education and among small and medium-sized enterprises (SMEs). Consequently, a large bumiputra middle class has emerged in recent decades. Dr. Lee added that large-scale privatization in the 1990s gave the impression that the NEP had enriched only a handful of Bumiputra elites. Moreover, the trend of increasing inequality among the Bumiputra has decreased significantly since the 2000s.

Dr. Lee argued that instead of eliminating the entire NEP, the policy should be reviewed and changed sector by sector. A needs-based or merit-based approach can be implemented in specific sectors, while positive action can be retained in other sectors. Dr Lee concluded that affirmative action – and the NEP by extension – continues to receive broad support among the Bumiputra, as indicated by opinion polls, despite a very negative reception among Malaysia’s ethnic minorities.

During the Q&A session, Dr. Lee addressed issues relating to the dilemma between equity and equality, specific policies of the NEP to be replaced and modified, and the willingness of Malaysians to transcend the NEP, among others. The seminar attracted 80 participants online and on site. Dr. Francis Hutchinson, Senior Researcher and Malaysia Studies Program Coordinator at ISEAS – Yusof Ishak Institute, moderated the seminar.

(Credit: ISEAS – Yusof Ishak Institute)