By John Lim and Melody Song, The Edge
“To claim that the Chinese are masters is a complete lie, extremely mischievous and calculated to arouse the Malays,” said Professor Lim Teck Ghee.That was the succinct reply of the former director of the Center for Public Policies Studies (CPPS) to Tun Dr Mahathir Mohamad's recent blog entry in which he alluded that the non-Malays, in particular the Chinese, were the real masters of Malaysia's economy.
“After 39 years of being implemented, the division of corporate wealth to them (bumiputeras) is only 20%, whereas other races have 50%, even though they represent 26% of the total population,” wrote Mahathir in his blog post Kaki Dalam Kasut on July 20.
His comments generated a wave of disgruntled blog entries among Malaysian bloggers, including political analyst Khoo Kay Peng, who called Mahathir out on having played a role in allowing the ascendancy to power by certain individuals.
Dr M's controversial comments over the ownership of bumiputera equity has drawn condemnation from all quarters, including Barisan Nasional component parties, with both MCA and Gerakan calling them baseless and a threat to Malaysia's racial harmony.
MCA secretary-general Senator Datuk Wong Foon Meng said by equating the liberalisation of Malaysia's affirmative action policies as taking over "something from the Malays is also to have an outdated mindset of a zero sum game".
Gerakan Youth deputy chairman Oh Tong Keong on the other hand said Dr M had “only made statements and presumptions and (has) not given any reasons for them”.
He also pointed out that Mahathir appeared to have forgotten that he oversaw 28 years of New Economic Policy's (NEP) implementation of the 39 years it had been enforced.
Lim, who is now adjunct professor at UCSI University, told The Edge Malaysia that Dr M’s statement displayed elements of “ultra-nationalism and fascism”.
“In fact, the Malays have done very well for themselves. If what Dr M says is to be taken up, there should be a proper analysis of it and he should be made to explain further how he reached that conclusion.”
Mahathir's remarks that only 20% of corporate wealth is owned by bumiputeras stems from the government's stance on the matter, which was brought up in 2006 when a study carried out by CPPS, under the Asian Strategy and Leadership Institute (Asli), estimated bumiputera equity ownership to be about 45% – well above the 30% target that NEP was meant to achieve.
The CPPS findings are also supported by a study carried out by Dr M Fazilah Abdul Samad from Universiti Malaya.
In her 2002 report, “Bumiputeras in the corporate sector: Three decades of performance 1970-2000”, she revealed that the 30% bumiputera equity ownership target was reached in 1997.
“Dr M is manipulating and distorting the figures again,” said Lim. “No one really believes that line, and the fact that they've now opened up the economy means that I've been vindicated.”
The controversial findings of the CPPS had cost Lim his position in CPPS as he resigned soon after in defense of his findings.
Tun Abdullah Ahmad Badawi, the then-prime minister, disputed Lim's findings, saying that they were inaccurate and had the potential to incite anger among non-bumiputeras in the country.
“If you conduct a survey, you would discover that only 13% was bumiputera-owned, with some 60% owned by non-bumiputeras,” he told The Star in October 2006 in response to the criticisms that the government's figures of equity ownership did not take into account GLCs.
Other criticisms of the government's stance were that it was based on par value, because it is an arbitrary figure, as opposed to market value, which is a recognised valuation.
Par value is understood as the face value of a bond, or the amount assigned to a security when representing the value contributed for each share in cash or goods. Consequently, par value varies and ranges from company to company.
Class, not race
Mahathir's comments came at a time when Malaysia, under Prime Minister Datuk Seri Najib Razak, is moving towards a more liberalised economy, and appears to be undoing key components of the NEP that Mahathir strengthened during his premiership.
This includes the abolishment of the 30% bumiputera quota rule across 27 service sub-sectors announced on April 22, which was followed by the announcement on June 30 that the 30% bumiputera stock allocation under initial public offerings (IPOs) would be reduced to 12.5%, and done away with if the takeup rate among bumiputeras was low.
These measures are baby steps towards a reversal of the NEP that Mahathir had overseen for 28 years. It is little wonder that the former premier, noted for his sharp tongue, is critical of these liberalisation measures.
Political analyst at Monash University Sunway Wong Chin Huat, who also has a background in economics, feels that Mahathir’s statements had less to do with economics than it had to do with politics.
“Mahathir feels ignored. He has praised the Chinese many times in the past; but his position on issues changes when his position in the political structure changes,” said Wong.
He added that Mahathir would disagree on any aspect of a policy that would “contradict his wisdom or exclude him in the inception or implementation of the policy”, even if the steps were economically viable.
On why Dr M was not consulted by Najib, Wong remarked: “I suppose everyone wants to be their own boss.”
Najib had in the past often taken steps to appease Mahathir, such as appointing his son Mukhriz as the deputy minister in the powerful Ministry of International Trade and Industry in lieu of Abdullah’s son-in-law Khairy Jamaluddin.
However, in recent times, the country has seen Dr M expressing his dissatisfaction of Najib’s steps over the economy and the scrapping of the language policy for the teaching and learning of science and mathematics in English (PPSMI).
Najib's new measures, which reduces the racial aspect of the country's economic policy, has struck a chord with many Malaysians.
In a poll carried out by Merdeka Center, 62% of the 1,062 respondents approved of the liberalisation measures and 60% believed it would help Malays in the long term.
Najib's overall approval rating had also improved from 40% when he first took office, to 65% in July after his first 100 days in office.
These include the reformation of education policies to produce a new generation of knowledgeable and competent graduates, desired by foreign companies.
Lim said these liberalization moves should have been put in place two decades ago.
“It is not too late,” he said. “Najib has the potential to be a good leader. The NEP has outlived its purpose, and now it’s time to open up the economy. If he doesn’t, it could cost him his job.”