(Originally published on Dec 24, 2014)Today, Digital News Asia (DNA) begins republishing our top 10 stories of 2014, in conjunction with the ‘DNA Top 10 of 2014’ contest. For details on the contest, click here.
This particular story was a tough one to write because I was supposed to have been on leave – my first since we launched DNA! – but I felt that the Malaysian Global Innovation and Creativity Centre (MaGIC) needed some support for what it was intending to do, over which there were some negative murmurs. Also, I realised that the whole ‘bumiputera’ issue needed to be put in context for our non-Malaysian readers, which meant the article ended up being much longer than I would have wanted!
Ironically, despite my good intentions, MaGIC publicly criticised me on Facebook, saying the piece was “full of inaccuracies.” The agency was asked to point out and refute the inaccuracies, but has yet to do so. Oh well. – A. Asohan
- MaGIC under fire for special bumiputera programmes
- Going back to original vision of agency for ALL entrepreneurs?
LET me go out on a limb here: I realise that the technology startup community in Malaysia – on the whole, a largely egalitarian, liberal and meritocratic community, even if it’s only because market forces are driving them so – is none too happy with recent developments (or setbacks, depending on your point of view) within the ecosystem.
Concerns that the Malaysia’s bumiputera preference policies were starting to creep into their sphere have created a lot of chatter on social networks recently, especially after Digital News Asia (DNA) published two stories on what is happening with the Malaysian Global Innovation and Creativity Centre (MaGIC), the one-stop agency set up earlier this year to boost the entrepreneurial ecosystem in the country.
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There has been criticism that MaGIC has not done enough to engage bumiputera entrepreneurs, so it is now implementing more programmes to do so – and of course, is being criticised by others for doing so.
Let me go out on a limb here: I think MaGIC is doing the right thing, finally. And I say this even though, as a matter of principle, I am generally against race-based policies and programmes.
All I can urge you, dear reader, is to hear me out first. I intend to play devil’s advocate against both camps on the issue. Those who are easily bored by Malaysian politics should just skip to the next page.
First, some explanation is in order for our international readers. Malaysia’s bumiputera policies are so much an ingrained part of our lives that we take sides on the issue without taking into account how it all came about.
The grand-daddy of all these policies is of course the New Economic Policy (NEP), which was later given a new lease of life as the New Economic Model (NEM) but is still referred to, in most conversations, as the NEP because, really, the NEM is old wine in a new bottle.
That’s because the NEP was formulated in 1971 as a 20-year policy, after the May 13 race riots in 1969. Believing that income disparity was one of the root causes behind the riots, the Malaysian Government rolled out the NEP to address this disparity.
And let’s face it: There was a disparity. Bumiputera – from the Sanskrit words ‘bumi’ (soil) and ‘putra’ (prince) – generally translate into ‘sons of the soil,’ referring to the predominantly Malay-Muslim population but also including many non-Muslim indigenous peoples.
In 1971, despite making up more than 50% of the nation’s population, they only had 4% of the wealth, with 50% of the community living in absolute poverty.
So there was a critical disparity, and it needed to be closed. The NEP included many preference programmes – from university and civil service admissions to required equity in public-listed companies and preference for bumiputera companies when it comes to government projects.
There are even, incredibly, quotas and a 7% discount on homes no matter your income level, so a bumiputera tycoon buying his third mansion is still eligible.
The NEP had targets. Some were met, many were not. To address the shortfall, the Government just extended the programme with some tweaks that did not really address the criticisms levied at the NEP.
These criticisms include the fact that rural bumiputera have still been left on the wayside, while their politically-connected brethren have reaped enormous wealth, creating a new super-wealthy uber-class easily spotted at any meeting of the Malaysian Cabinet.
And it’s hard trying to explain why such an ‘affirmative action’ policy is needed for a community which holds all the political reins of power, and has been doing so for the more than 50 years of the country’s independence, but there you go.
The NEP had a noble overarching goal: To create a more equitable society, especially important in a multicultural and multiracial country where disaffection could easily boil over into racism.
The quota for university admissions and many of the corporate preference requirements aimed to create more educated and successful businessmen who would be able to generate the wealth that would be shared across the community.
Instead, it has created its own system of abuse. Malaysians have a term for it – ‘Ali Baba’ businesses, where a non-Malay businessman hires a Malay silent partner just to meet bumiputera requirements.
The ‘Ali’ in this equation makes a lot of money just sitting back. He doesn’t become a more capable businessman. He doesn’t learn to compete.
The need for needs-based policies
NEP critics have pointed out many times that a poverty-alleviation policy based on needs would still address the income disparity between the various communities in Malaysia, without needing to be racial.
The argument is simple and undeniable: Since the majority of those living in poverty are bumiputera, any policy that tackles the problem would still serve as well as the NEP in terms of alleviating poverty amongst the bumiputera community. In fact, they would still have the most to gain from it.
More importantly, by looking at needs instead of race, the marginalised members of other communities can be helped too.
Just as importantly, a needs-based policy would help reduce abuse by the wealthy and politically -connected.
From aid to privilege
Why this is not happening is simple: Over the last three decades or so, political discourse around the NEP has begun to portray it as not so much as aid, but as a privilege that cannot be questioned.
And this is not coming just from fringe hard-line elements, but from political leaders and ministers themselves.
Indeed, based on current thinking by the powers-that-be, my writing this would be considered ‘seditious.’ They would maintain that government policy cannot be questioned, forgetting that questioning government policy is the right of every citizen, and the duty of every journalist.
Next Page: So what does this have to do with MaGIC?