Press statement by Dr. Lim Teck Ghee in connection with MIM-KAF Economic Discourse, 12 July 2007
In his panel presentation, Dr. Lim called on the Government to appoint an independent commission to undertake an open, non-political and transparent examination of all the key NEP policies that are currently being implemented and the effects of the policies on social cohesion, distributional issues and economic competitiveness. The independent commission should comprise representatives and stakeholders from all sectors of the country’s economy and society, and should be tasked to provide recommendations and proposals in relation to the retention, refinement or termination of current NEP-type policies and programs, wherever they are to be found. Dr Lim pointed out that this public commission was urgently needed since many experts were of the opinion that the NEP -which currently affects virtually all aspects of the economy and human resource development – represents Malaysia’s biggest obstacle to competitiveness, social cohesion and meeting the goals of Vision 2020.
In particular, the NEP has encouraged corruption since it leads to unjust distributional coalitions that favor some Bumiputra and non-Bumiputra elite. It is also evident that the NEP has made it less attractive for local and foreign investors to do business in the country because of its equity and other Bumiputra-biased requirements. Of most concern is that the NEP is a major factor in promoting mediocrity. The policy is clearly having an adverse impact on Bumiputra self reliant development by providing disincentives to open competition. At the same time it has had the effect of demoralizing and demotivating non-Bumiputra and bringing about a brain-drain. It has also clearly driven local and foreign investors to create a ‘system outside of the system’ in order to circumvent the NEP.
In order for Malaysia to reach developed nation status by 2020, it is imperative that the country enjoys stable GDP growth over the short, medium and long term. If Malaysia continues current NEP type policies and programs the Government should not be surprised if we see a decline in GDP growth, decreased FDI, capital flight, growing unemployment and other negative social repercussions, especially when the oil revenue bonanza runs out shortly.
Kuala Lumpur, 12 July 2007