Malaysia's Shared Prosperity Vision 2030 needs a rethink: academic

Tuesday, December 24, 2019 - 15:00
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MALAYSIA'S new draft economic blueprint needs a rethink to make a breakthrough, a Malaysian academic has suggested, as a lack of clarity of its objectives could reduce the impact of this statement.

In a paper published by Singapore's ISEAS-Yusof Ishak Institute on Monday, Lee Hwok Aun, senior fellow with the Malaysia Studies Programme at the institute, called the draft Shared Prosperity Vision 2030 (SPV) a "laudable move", but said: "A closer examination reveals crucial omissions and narrow conceptualisations that attenuate the potential for this visionary statement to forge path-breaking change for Malaysia."

Malaysia's prime minister Mahathir Mohamad unveiled the draft blueprint in early October with the ultimate goal of creating a "decent standard of living for all". This will be achieved, he said, by ensuring development for all, addressing wealth and income disparities and in building a united, prosperous and dignified nation.

Specifically, the government wants to narrow inter-ethnic income gap to within 10 per cent by raising the earnings of the bumiputera majority.

"The gap, whether between the bumiputera or Indians with the Chinese, has expanded between 3.5 and four times in the past 27 years," Dr Mahathir said in October.

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However, Dr Lee said the SPV can do more to specify how its policies can safeguard equality and basic needs, for example through basic schooling and public health services to ensure that "pro-poor, need-based assistance" help all Malaysians regardless of identity to enjoy a decent living.

He added that specific disadvantaged, vulnerable and marginalised groups that need help should be highlighted, while the interventions to cultivate capability and broaden participation should be identified.

"These programmes, striving to reduce inter-group inequalities, operate by targeting beneficiaries primarily based on identity rather than poverty or socioeconomic status," Dr Lee said, adding that they apply specifically to tertiary and higher education, representation in professional and managerial positions, participation in operating and owning business, especially SMEs, and ownership of wealth and property.

He also said the reform plans should also spell out the ways that particular programmes benefit rural and/or low-income households.

On the subject of higher education, Dr Lee said the policy framework should take into account the differences between the aspirational nature - and limited vacancies - of higher education and the universal and compulsory nature of basic education, so that the expectations are coherent and aligned.

"Providing opportunity to higher education should not be wedded to principles of equality and provision for all, but should abide by a commitment to fair treatment in a policy sphere that must balance a range of principles and interests that are sometimes in tension: academic ability/merit, access for the disadvantaged, group representation and diversity," Dr Lee wrote.

He added: "In the enterprise development policy sector, the need is as great as ever to introduce more competitive and merit-based selection among bumiputeras, with performance incentives and support mechanisms, and more stringent monitoring and effective oversight."

With proper emphases and guiding principles, and policies aligned methodically, Dr Lee said Malaysia can better sustain productivity and value-added gains in its bumiputera programme, which can subsequently translate into higher income and wealth accumulation in a manner that puts the concerns over corruption, profiteering and rent-seeking into proper context.

"In focusing on fairness in more complex matters of distribution, and on capability development in Bumiputera, the SPV can potentially demonstrate prescience toward the potential perils of a wealth redistribution agenda and the risks of derailment by patronage and rent-seeking," he said.

He added that the current message then is essentially to do the same thing as predecessors, of pursuing wealth ownership, but by avoiding rent-seeking and corruption in implementation.

"It is arguably more effective to firmly commit to building capability and broadening participation as the driving force, which builds in mechanisms against rent-seeking and abuse, and builds up toward gains in productivity, income and wealth," Dr Lee said.

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