Najib practices a two faced NEP cum NEM economic policy

By Dr Chen Man Hin, DAP Life advisor
23 Feb 2013

Events have shown that the NEP is still enforced in the economic development of the economy – two faced NEP and NEM economic policy.

Soon after being Prime Minister, Najib launched his New Economic Model to stimulate development with the aim of achieving a high economy like that of the Asian Tigers of Singapore, S Korea, Hong Kong and Taiwan

To do this he had to get rid of the economic handicaps wrought by the New Economic Policy. It is on record that Najib announced on May 2nd 2009 that he would replace NEP with his New Economic Model (NEM).

It is now 2013, and the signs of a high income economy are not encouraging. For Foreign Direct Investments (FDIs) of 2012 Malaysia scored 9 billion US dollars compared to Indonesia’s US$19 billion and Singapore US$130 billion. (World Bank figures)

Per capita income for Malaysia in 2012 was US$9500 thousand, compared to Hong Kong US$30 thousand, Singapore US$50 thousand and South Korea US$25 thousand. Can Malaysia reach a high income status of US$20 thousand by 2020.

Much has been publicised about huge foreign investments, but the Per capita income and FDIs are the tests to show the true state of the economy.

So what has pulled down the NEM. It is the NEP which caused the economy to be sluggish. It was presented by Najib’s father Tun Razak in 1971. The NEP is very much in force, not officially but its principles are still enforced in the ministries and state governments. Reliable sources say that the administration czars demand 40% control of all new investments.

Two days ago, REHDA the highest body of private housing developers complain that the NEP conditions were hampering housing development. The imposition of 30% allocation for bumiputeras was causing huge losses to the industry.

But government and UMNO cronies enjoy exemption of the 30% clause, and they make the money.

Examples: Felda Sendayan project , Ainsdale project in Labu and the latest Railyard Project in Seremban. All three projects are exempted from the NEP as they not required to build low cost houses.

However, private developers throughout the country, including Negri Sembilan, have to follow the requirement of building 30% low cost housing.

Najib is practising a two faced economic policy – a combination of NEP and NEM. It is no wonder that a high income economy will be impossible to achieve.