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| NEP(New Economic Policy) – What is it? |
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| Written by zen |
| Saturday, 31 May 2008 11:29 |
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The New Economic Policy (NEP), which in Malay is Dasar Ekonomi Baru is a set of policies which are widely regarded as both ambitious and controversial. The policies, aimed at restructuring the socio-economic landscape. The program was launched in 1971 by the Malaysian Government which was then led by Tun Abdul Razak and was in operation until 1990 of which it was then replaced by the National Development Policy. As the NEP is often regarded as a controversial program, its result had successfully reduced the inequality between the Malay majority and other races but some has claimed that the NEP have somewhat reduced the status of the non-malays to second class citizens having strengthen the Ketuanan Melayu. This is often met with much criticism especially when seen as part of the Malay Agenda where the Malays are granted special rights while the non-malays were granted citizenship. The NEP, is to target a 30% share for the Bumiputra, but has yet to achieve that target when it ended in 1990. Having done so, in 2005, some politicians voiced their concern to restore the NEP under the New National Agenda. How it started. Before independence, the British gave certain privileges to the Malays over the non-malays. This would come in forms of employment in the civil departments and public scholarships. When independence was achieved 1957, the Federation of Malaya's constitution had a provision that provided the Malays with special rights. This was contained in Article 153. In the Reid Commission who drafted the constitution it wrote "in due course the present preferences should be reduced and should ultimately cease." In 1963, with the merging of Singapore, Sabah and Sarawak, the constitution retained Article 153, but was altered to re-define the Bumiputra word which included the various indigenous tribes in East Malaysia. However, the dispute over the special rights would eventually see Singapore separating from the Federation 2 years later. According to the Reid Commission, Article 153 was intended to solve the imbalance in terms of economic equity between the Chinese and the Malays. However even after independence, there was no increase in the Bumiputra share of the economy even until 1970 when the bumiputras were recorded to hold 2.4% of the economy. The Chinese or the foreign people held the rest and this hostility sort of increased until eventually sparked off the 1969 May 13 riots. The May 13 riots were contributed largely due to the general elections. After the riots, a state of national emergency was declared and Tun Abdul Razak subsequently formed the National Operations Council. Aiming with a goal to "eventually eradicat[ing] poverty...irrespective of race" the NEP was implemented. This would be the NOC's first actions. The NEP would reduce the share of the economy held by the non-malays which would go t the Malays who at that time only had 1.5% of the economy. Tun Abdul Razak became the Prime Minister when Parliament was re-established following the emergency state in 1971 where he would officially announce the NEP and the Sedition Act which pretty much restricted the discussion of some repealing articles of the Constitution (which included the 153). The Sedition Act continued to be in effect way up to present time. What did the NEP want to achieve? Its main goal was to eradicate poverty and restructure economy as well as to eliminate the identification of ethnicity with economic function. The first target is first to balance the ratio of the economic ownership. From 2.4:33:63 (Bumiputra, other Malaysians, foreigners) to 30:40:30. This means that to achieve the 30% ownership, there would be a need to significantly increase the ownership of Bumiputra enterprises. Under the Second Malaysian Plan, the ‘expanding pie theory' was more or less applied. This would mean that while the Bumiputra shares increase, the non-bumiputra shares would not decrease. This would be done so somewhere in 1975 when the government provided incentives and new policies to further expand large-scale manufacturing industries and energy-intensive industries. There were various requirements in the NEP which seek to achieve the 30% bumiputra equity target. One of the mostly heard off would be the 30% share set aside in Initial Public Offerings allocated to Bumiputra investors. The investors are chosen usually by the company themselves or in some cases the Ministry of International Trade and Industry would recommend some state owned trust agencies. As the shares are Initial offerings, the prices are very much lower than the market rate when it goes public. This system has been widely talked about ever since then especially in issue like if any of the 30% shareholders decide to divest their shares, the public company would need to issue new shares to continuously balance the 30% proportion. Some statistics. In the span of 27 years, the Bumiputra's wealth increased from 4% (1970) to 20% (1997). The country's wealth grew from RM1142 per capita GNP to RM12102 in the same years. Absolute poverty dropped from 50% to 6.8%. The participation of bumiputras in the private sectors too increased significantly. In the years of 1970-1990 there were an increase of 7-14 Bumiputra accountants while engineers increased from 7 to 35%, doctors from 4 to 28% and architects from 4 to 24%. From the share market, bumiputra share ownership rose from 28.6% in 1990 and 36.7% six years later. The NEP officially ended in 1990 although there were a lot of remnants still remains. It was to be replaced with the National Development Plan (NDP) which would run from 1990 to 2000 which would subsequently be replaced with the National Vision Plan (NVP). This can be seen in around public policies and some practices. A local media reported in 2007 that "the government believes the aim of having 30 per cent Bumiputera equity has yet to be achieved". It was also reported that in 2006, the NEP might be reinstated and re-activated under the Ninth Malaysian Plan, which was due, to a large extend from Umno. The NEP has often been criticized and attacked as many believe that it provides a form of cushion that resulted in a more laid-back environment with the Bumiputras. As there are certain policies in the NEP which provide the advantage like company shares, property and ownership to the Bumiputras, if taken advantage seemed to be pretty much easy. Some critics have debated that there should be instead a 30% opportunity of business ownership or property purchase, the 30% should be a target where Bumiputras be trained and certified to run companies. This way it will be more effective in the balance playing field. But the former Prime Minister Tunku Abdul Rahman sort of rejected the 30% target totally. He said that "[a]n attempt was made to fill the target without thought for the ability and the capability of attaining it. ... Some became rich overnight while others became despicable Ali Babas and the country suffered economic set-backs". Another criticism that that NEP received was not being able to deal with the wealth distribution and economic inequality issues. The NEP's relevance has been in question as it no longer helps the poor but was more or less functioning as a system of handouts for the Bumiputras. As much as it sought to bring up the percentage of ownership for the Bumiputras, it did not have a proper mechanism within the NEP which equally divide the wealth in the 30%. Criticisms in the Education sector In the education sector, the NEP received one of the most critical remarks. Up until 2002, there were quotas for the admission of Bumiputras into the public universities. As the calculation method of the quota was done based on the figures in 1970, it became irrelevant in the recent years. Therefore the quotas were reduced until in 2003 when it was fully removed. The removal of the quotas though did not produce any significant results as prior to 2003 the matriculation programs were already in effect. Matriculation programs, which are typically 1 year course that are an option if one decide to skip the Sijil Tinggi Pelajaran Malaysia (STPM) which is often considered harder and more intensive. Matriculation programs comes with a 10% for non-bumiputra graduates who often are less than interested to apply for the course. The matriculation courses have in its own nature come under debate for many years. Prior to the programs, bumiputra students who studied at the public boarding schools would go on to do matriculation courses while non-bumiputra students who go to the public high schools would opt for the STPM. Furthermore, boarding schools were sort of admitted by only bumiputra students and non-bumiputra students would find it difficult to accommodate themselves in the schools. There has been a wide regard for the fact that the NEP has largely been the reason of brain drain and to some marginalization and racial polarization.
Comments
(22)
 written by Lok Say , August 07, 2008
Nonsense! If a person is desperate and if he is pakai-ing otak, this program should have been eliminated long time ago. We have achieved independence for more than 50 years and if these people still live as it is, it is their choice of living in this way!!!
Votes: +15
The figures does not show the fundamental behaviour of people, be it absolute or percentage. report abuse
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 written by Tangkup , August 11, 2008
Lok Say
Votes: +6
What nonsense? You know why this so called NEP is perpetuated? The exclusive bn leaders made used of it for their own advantages. THEY USED AND ABUSED IT TO THEIR ADVATAGES!!! Thats the primary reason why the writer did not show the absolute figure otherwise it will show the meagre number bumiputra who benefited from the NEP!!. I would say Samy Value and his cronies also benefited from the NEP. report abuse
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 written by Leumas , August 15, 2008
What NEP? Hasn't it come to an end? Even if were to talk about it, didn't it say eradication of poverty irrespective of races. Why and how did NEP come to be accepted as assisting only one race in Malaysia? That is discrimination by whatever name you may call it. Pardon me if I'm wrong, I believe every religion in the world scoffs at discriminating another on grounds of race, religion. colour or creed. Laws should be passed in Malaysia making discrimination a crime instead of practising positive discrimination.
Votes: +13
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 written by G 8 vodka , August 16, 2008
dear leumas,this is answer for ur question.
Votes: +17
anyway its a very good question that you has asked ,Firstly the origin rakyat of Malaysia is Orang Asli and take not it is not malays from Indonesia,Chinese from China and also Indians from India .In some sequences the people of sabah and Sarawak also can be said as origins as its joined the federation of malaysia. base on the facts,we came here as migrants,For an example Indians and Chinese came here about 150 -200 years ago. Indonesian came here about 50 years ago as migrants and which welcomed by the government and given them the Bumiputera status as their looks is same as ethnic origins here.Anyway generally the Bumiputra is a Sanskrit word which means(Bhumi=earth,putra=son) and can be said as the son of soil. The special Rights of malays was implemented by Tuanku Abdul Rahman by agreeing to grant citizenship for the Chinese and Indian communities and the time limit was given to Malay special rights was 15 years starting from the date of merdeka day.The reason why the special rights was given to malay communities was because the malays was very poor compare to other communities at that time.However the malaysian government continues the malay special rights under New economic policy (NEP) because of the Racial riot on 13th may 1969.The new economic policy was introduced by Tun Abdul Razak,the 2nd premier of malaysia in 1971 and based on the agreement it has allready officially ended in 1990. my question is why the government continued the NEP eventhogh its ended? to all malays is this NEP rights is fo all malays or only for the UMNO members who is in the positions? report abuse
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written by Tangkup , August 19, 2008
The NEP was formulated due to the May 13 1969 RIOT, which was triggered by the existence of an economic imbalance between the non-bumiputra and the bumiputra. In other words the non-bumiputra was responsible for creating the economic prosperity of the country. So the BN gomen in 1970 created the NEP to help the bumiputra get a share of the nation's economic cake
Votes: +13
 The target was that 30% of the economic cake by 1990, should be held by the bumis. Unfortunately 30% of the economic cake may have been attained but BY A HANDFUL OF PRIVILEDGED BUMIPUTRA  !!! Some bumiputra don't like the non-bumi and during the recent Bar Counsi'l Forum stormed the Forum and shouted "B**i pulang Cina". Lee Chong Wee, I believed a keturunan b**i. He brought Honour, by winning the Men's Single Silver Medal at the ongoing Beijing Olympic, to our beloved Malaysia. Have we got the right to tell him to "balik Cina"? I hope all sensible thingking Malaysians, regardless of our origin, religion and race as long as we are citizens of Malaysia, not to recklessly utter words of derogatory nature. Its of utmost important that "we protect the very fragile fabric of our multiracial society". we all should strive to strengthen the qualitymof this"fragile fabric" of our society  . Our present political leaders should never allow anyone to break this "fragile fabric". We dont want another May 13 to happen. report abuse
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 written by geramm'sia , August 20, 2008
hai Tangkup...i salute you.
Votes: +9
you are absolutely correct! 100% we can't dream of another MAY 13. eeeeeeeeeeiiiii..sungguh seram, walau untuk 'imagine' purpose of it.... report abuse
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 written by summo-san , August 30, 2008
Nep was introduced to make the malays more stupid.why ,becos mahathir can't stand be accuse by the malays of not helping them.so inorder to make them happy and shut their f**king mouth,which mahathir is good at,nep was born.Malays like hand outs becos mahathir knows malays are lazy and stupid.That is why after 20 over years show me how many malays have benefited from this nep.Those minority who have benefited are no where to be seen and most are dead or bankurpt.Nep life span is too long and its policies are bias towards all races.It was never intent to create ketuanan Melayu but was meant to keep their big mouth shut and prolong their hopes.Take for example proton cars.When this car was put on the market thousands if not millions of malays thinking that they could afford to buy one end up bankerupt.They are so poor in calculations so they end up been cheated by the salesman.The malays been told this is a national car supported it whole heartly not knowing that this was a ploy to finish them off.
Votes: +11
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 written by aaa , August 31, 2008
NEP is a very good programmif it is done in the right way. I t will help the Malays and indirectly help the nation. It can be very very harming when it is being abuse. Instead of helping the Malays they use it as a tool for the political reason . Look what that they done.. Until today a lot of Malays have been pampered and still feel NEP is their survival kit. Without it they seems lost. UMMO you have made the greatest sin... you misused the NEP and instead to turning Malays into a better race, you have made them lame and weak. UMMO you are the betrayal of the BUMI. As i said before; UMMO is cheating on the Malays, MCA is cheating on the Chinese and MIC is cheating on the Indian. Hapus kan BN. BN is the traitor of Malaysia.
Votes: +10
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..., Low-rated comment [Show]
 written by RACIST because OF RACISTS , September 09, 2008
May 13 again
Votes: +16
You said it like as if it is YOUR RIGHT to kill people just because they were richer, smarter than you As if it is YOUR RIGHT to have some of other peoples fortune That is what Malays show to us by May 13 What is wrong with you Malays? you are not any different from any other people in the world...... you are not OKU...... You are against COMMUNISM , SOCIALISM , but on the other hand you are believing in it ........ Please wake up!! NEP has done much damage to every Malaysian.....this 'cushion' will only destroy you one day, aren't you tired of being despised by your fellow Malaysian ? Aren't you tired of being called 'b**i malas', 'disgusting', 'hopeless', watever.... Why cant you have some SELF-CONFIDENCE to compete fairly along side with other Malaysians ? their success is due to their own HARD-WORK and RESILIENCE without NEP.... Pardon my tone but it is so TRUE..... love you all but please change your MENTALITY report abuse
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 written by hasrul , October 22, 2008
i need to do some assign ment on " the extent the british shaped the socio-economic structure and its effects on malaysia society"
Votes: +0
if u have any opinion, information ( the best is your own opinion) about this topic .... email me at \n This e-mail address is being protected from spambots. You need JavaScript enabled to view it '> This e-mail address is being protected from spambots. You need JavaScript enabled to view it report abuse
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 written by newbie , November 16, 2008
IF only our political leaders are SINCERE and can garner support within a Race based party ; then Malaysians can hope for a better future .
Votes: +3
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 written by adk , December 01, 2008
Kebenarannya ialah DEB itu senidri memperkecilkan orang Melayu. Apakah orang Melayu begitu lemah sehingga memerlukan keistimewaan khusus untuk maju dalam aspek sosioekonomi?
Votes: +3
Orang bukan Melayu juga membayar cukai dan berbakti untuk negara melalui kerjaya masing-masing seperti orang Melayu. Apakah adil orang Melayu mendapat manfaat yang lebih berbanding bukan Melayu? Kalau dalam era sebelum merdeka, adillah untuk menganggap orang bukan Melayu pada masa tersebut ialah kaum pendatang dan tidak layak mendapat hak yang sama seperti Melayu kerana mereka bukan dilahirkan di sini dan cinta serta taat setia mereka masih pada negara asal mereka. Tetapi, apakah kaum bukan Melayu zaman ini masih sama seperti nenek moyang mereka? Apakah mereka dilahirkan di negara nenek moyang mereka? Apakah mereka lebih cinta dan taat pada negara nenek moyang mereka berbanding tanah tumpah darah mereka ini? DEB itu sendiri menjadi faktor rakyat bukan Bumiputra memandang rendah pada saudara-mara mereka yang berketurunan Melayu. Sekiranya mereka berjaya tanpa bantuan khusus daripada mana-mana pihak, apakah mereka masih akan dipandang sebagai kaum yang kononnya 'pemalas' dan tidak mamou 'berdikari'? Renung-renungkanlah, fikir-fikirkanlah. report abuse
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 written by usa tan ah kow , March 08, 2009
I‘m not agree at top comment (wawasan_melayu on 8-9-0
Votes: -2
 This is a backward comment,stupid.narrow. report abuse
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 written by Cheryl.k , June 01, 2009
Non-bumis came to Malaysia with practically nothing but they managed to overturn their fate and knowing that NEP does not favour them, they strived even harder for greener pastures. The I-need-NEP-to-survive mentality has to go, why not for once let go of the crutches and start walking with your feet! Bumis arent the only ethnic group suffering from poverty, what about those Indian plantation workers and rubber tappers who cannot even afford milk powder for their children?
Votes: +3
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 written by adk , June 04, 2009
To usa tan ah kow. I kindly request your explain and elaborate more on your views which is not backward, stupid and 'narrow'. Thank you.
Votes: +0
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written by malaysian_anonymous , August 20, 2009
I just don't understand why we are not united as one. We are malaysian we are supposed to work hand in hand with each other, disregard racism/ favouritism and such. Dear malaysians, up to this date..i just couldnt understand why malaysians are not united as one. we have to accept one another, and not pointing fingers to one another. ?I can see in here,comments full with negative thoughts.
Votes: +1
We should be proud that we are malaysians..and thanks to our first PM Tunku Abdul Rahman for achieving independence for our country. To the immigrants, you guys should be be thankful because you are part of malaysia. If not because of Tunku, you guys won't be here. As for the malays, you should respect other races/religions! be thankful ...people! before it's too late.. TQ report abuse
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written by newbie , December 11, 2009
By abusing and perpetuating the NEP, the govt has made Malaysia less and less competitive.
Votes: +1
In this globalised world, there are no favours and only the fittest will survive and thrive. We can no longer be spoken of in the same class as Korea, Taiwan, Singapore or evev close to them. Worse still, Thailand and Indonesia will soon overtake us. But do not worry, Malaysia boleh as we still have Myanmar, Laos ,Phillipines and Cambodia for company. In another 20 years, Malaysia will be a large exporter of maids to other countries if our Leaders do not do the right things NOW. !!!! report abuse
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written by ktteokt , December 25, 2009
Daylight robbers!!!
Votes: +0
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written by ravee , January 26, 2010
NEP is for handicapped people
Votes: +2
All BN umno putera who are mentally and physically handicapped( cacat) &% discount for houses. #0% or more in patnership with AliBaba, No income tax coz 4 wifes 12 kids.. ha ha not pay income tax all adds umnoputrs are cacat report abuse
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| Last Updated on Thursday, 05 June 2008 17:19 |
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The analysis gives the impression that success was achieved because of the figures given in percentages (%). In this aspect it would have been clearer and convincing if the figures were given in ABSOLUTE FIGURES rather than in PERCENTAGES because PERCENTAGES does not reflect the TRUE scenario. I make this argument on the following basis: 1) There are over 16 millions bumiputra in Malaysia. Of the 16 million how many are considered wealthy if the bumiputra wealth increased from 4% to 20% by 1990? 2) The poverty rate decreased from 50% to 6.8%. by 1990. How many million were above the Poverty Line. I still maintain that more than 98% bumiputra are still below the Poverty Line, which means that about 15.6 million bumiputra are still below the Poverty Line. This means that only a small select group of bumiputra are in the wealthy group while the majority are still in the group "kais pagi makan pagi, kais petang makan petang" . 3) The NEP has a noble objective but the People In Power has abused and used the NEP to their advantages. Take for example the policy of distribution of shares to bumiputra in selected publicly listed companies through the so called PINK FORMs. This has been used and abused by the BN political leaders. Before any IPO is issued all the PINK FORMs were already taken by BN Ministers, Deputy Ministers and other cronies of politicians in power. This means that concentration of bumiputra wealth is concentrated in a very small group of privileged bumiputra. Just look around the major streets of big cities/towns in Malaysia. Who are the street vendors, who sell odd edible foods? Mostly bumiputra. They don't have departmental stores to run. WHY? WHY?. Because these bumiputras do not have access to financial facilities. If they borrow from the Banks, meant to help bumiputra, they cant raise loans because they dont have the means to do so. So they end up putting up sheds and illegal structures along roads.......THE NEP WAS ESTABLISHED WITH NOBLE OBJECTIVE BUT IT FAILED MISERABLY FOR THE MAJORITY OF BUMIPUTRA.