Economist: NEP has Outlived Its Relevance, Malaysia Must End It to Progress

Malaysia was only meant to use the New Economic Policy (NEP) for two decades as an emergency measure and now has to shift to helping the poorest citizens regardless their ethnicity, economist Prof Datuk Dr Woo Wing Thye has said.

Woo said the government has to put an end to “divisive” race-based economic policies in order for Malaysia to progress economically.

“I think Malaysia should switch straight to an income-based social policy, basically you want to help the poorest group of people, so the emphasis now on the bottom 40 per cent, that should be the centre of the focus, not race; whoever is in the bottom 40 per cent, gets preferential treatment,” the Jeffrey Cheah Institute on Southeast Asia president told Malay Mail Online yesterday after delivering a public lecture here.

Woo likened the NEP, which was introduced in 1971, to an “emergency room procedure”, and that the quota system then was an effective way of producing the largest quantity in the shortest time.

He said that both the country’s late prime minister Tun Abdul Razak Hussein and deputy Tun Dr Ismail Abdul Rahman had viewed the NEP as dangerous if extended beyond a 20-year period ending in 1990.

“Do you know why? Because they recognised it is emergency room medicine, so it can be used in the short-run, but in the long run, it’ll divide the country,” the professor of economics at the US’ University of California, Davis said.

But Woo noted that the NEP had re-emerged in the New Economic Model (NEM) under the Najib administration, calling it “old wine in a new bottle” with no difference between the two policies.

Failure to introduce economic policies based on income level will weaken the country’s economy, Woo cautioned, citing brain drain and capital flight.

Earlier in his public lecture at the “Malaysiaku: Rice Festival” titled “Changing the course of the Malaysian economy and the ringgit”, Woo outlined five measures to end Malaysia’s stagnation in economic growth.

These measures are putting in need-based policies and merit-based practices to replace race-based policies, unleashing tertiary education, freeing the markets to improve national competitiveness and to upgrade administrative performance.

The NEP was originally planned to eradicate poverty among Malaysians and narrow the economic gap between the Malays and the ethnic Chinese, by redistributing wealth to promote a 30 per cent economic ownership by the Bumiputera.

Although technically expiring in 1990, many of the NEP’s race-based policies continue to be enforced and even expanded, resulting in simmering discontent among the non-Bumiputera communities, who complain that it deprives them of equal treatment and opportunities.

A year after coming into power in 2009, Prime Minister Datuk Seri Najib Razak launched the NEM on March 30, 2010, with an eye on doubling the nation’s per capita income by the year 2020 to an estimated US$15,000 (RM49,500).

The three underlying themes of the NEM were “high income, sustainability and inclusiveness”, as the prime minister stressed on the need to reduce fiscal disparity between the rich and poor without relying on affirmative action policies like those in the NEP.

But critics were quick to argue that Najib’s NEM was merely a watered-down version of the NEP.

On September 14, 2013, Najib announced the new Bumiputera Agenda that will offer the country’s largest community access to over RM30 billion in aid and contracts — an apparent continuation of the very system of NEP-like affirmative action that he had pledged to do away with under the NEM.

Source: Malaymail online


Gopalasamy Reuben Clements

Associate Professor Gopalasamy Reuben Clements is a conservation scientist by training and a Research Fellow at the Jeffrey Sachs Center (JSC). He received his PhD in conservation science from James Cook University and obtained his MSc and BSc in biology from the National University of Singapore. Reuben’s research focuses on forest and biodiversity conservation and has published over 60 articles in international journals that include Nature, and his work has been featured in the BBC, New York Times and National Geographic. He also co-founded a local non-profit research organization known as Rimba, which conducts applied research on the conservation of threatened species and ecosystems in Peninsular Malaysia. Reuben’s team is currently collaborating with the Terengganu state government to manage 30,000 hectares of forests protected as a state park. He also collaborates with the Federal government on tiger and large carnivore monitoring, wildlife law enforcement and policy improvement, land use and conservation planning (using GIS and remote sensing), sustainable forest management and wildlife corridor design and management. Reuben’s current project at JSC aims to make more economic arguments for forest and biodiversity conservation through the development and implementation of novel biofinancing mechanisms.


Kong Phui Yi

Phui Yi coordinates the center’s Master in Sustainable Development Management programme. A graduate of Bowdoin College, USA, Phui Yi holds an interdisciplinary degree in English and Theater, and a minor in Religion. In 2015, Phui Yi received a Thomas J. Watson Fellowship to pursue an year-long independent project on a global scale in Civic Mindedness and the Physical Arts. Prior to joining JSC, Phui Yi worked as a high school teacher in Malaysia, teaching English, theatre and social studies.

Chen Jit Ern

Dr. Chen Jit Ern is a Research Fellow at the Jeffrey Sachs Center on Sustainable Development and a Lecturer in the School of Biological Sciences at Sunway University. He holds a Bachelor of Arts degree in Natural Sciences and a PhD in Plant Sciences. His primary research interest is in the development and utilization of genetic engineering techniques and molecular tools on various microalgae, to study the underlying mechanisms for physiological traits such as lipid accumulation and heat tolerance. His previous Post-Doctoral position was in KAUST, Saudi Arabia, studying the potential for increased heat-tolerance in Zooxanthellae (Symbiodinium microadriaticum), the photosynthetic coral endosymbiont, native to the Red Sea. His current project in Sunway University is a continuation of this work, with a particular emphasis on the study of heat-activated Zooxanthellae retrotransposons.


Lee Chooi Yee

Chooi Yee plays a key role in the event planning, staff training, coordinates and implements new operation procedures for the Jeffrey Cheah Institute (JCI) and the Jeffrey Sachs Center (JSC). She oversees the operations, communications, event planning, website and database management. She has over 10 years of experience in administration, and expertise in event planning, project coordination and database management. Prior to joining the JCI-JSC, she was a tax consultant at Ernst & Young and senior research analyst at CEIC, ISI-Emerging Markets Group. She is a two-time winner of the Monash University Malaysia PVC’S Award to an outstanding administrative professional. Chooi Yee graduated with first class honours from University of Malaya in Economics (Honours) majoring in Applied Statistics.

Yeah Kim Leng

Professor Yeah is a Senior Fellow and Director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia at Sunway University. He holds a Bachelor of Science degree in forestry and a PhD in Agricultural and Resource Economics. His research interests span development economics, monetary economics, capital markets and industry studies. These topics reflect his previous experiences as an economic analyst at a national policy think-tank, a chief economist at a credit rating agency and a lead consultant at an economics consultancy services subsidiary. His current project at the Jeffrey Sachs Center focuses on tax systems and structures and their effects on fiscal sustainability, economic growth and income inequality. He is an external member of the central bank’s Monetary Policy Committee.

Shandre Mugan Thangavelu

Professor Shandre is the Vice President of the Jeffrey Cheah Institute on Southeast Asia at Sunway University. Before his appointment, he was a Regional Director at Centre for International Economic Studies at the Institute of International Trade in the University of Adelaide and the Director of the Asia Growth Research Centre at the university. He is an active researcher on human capital development, technology transfer, foreign direct investment, trade, government infrastructure investment, productivity and economic growth. He has written extensively on ASEAN integration, FDI, human capital development, technology transfer and economic growth and has published his research in major international journals. He has written several books on trade, investment, integration and outsourcing in Asia. He has also worked on several international projects commissioned by UNDP, World Bank, ASEAN Secretariat, APEC, and Asian Productivity Organization (APO).

Interview with Professor Shandre:



Mohamed Ariff Syed Mohamed

Professor Ariff is a Senior Fellow at the Jeffrey Cheah Institute on Southeast Asia and the Head of the Department of Economics and Finance at the Sunway University Business School. He was awarded his PhD from the University of Queensland, Australia in 1986 and his MBA from the University of Wisconsin-Madison, USA in 1976. Before joining Sunway University, Prof Ariff held positions at the business schools of National University of Singapore, Monash University and Bond University. His industry experience includes executive positions in a public listed firm and Singapore’s central bank. Prof Ariff is an active researcher in financial economics with contributions appearing in numerous international journals on finance and economics. His publications on Islamic finance have earned him international recognition. He manages the annual Foundation of Islamic Finance conference series.

Leong Choon Heng

Professor Leong is a Senior Fellow and Director of the Education and Social Progress Programme at the Jeffrey Cheah Institute on Southeast Asia at Sunway University. He teaches in the fields of sociology, public policy, transportation and logistics. His research is largely in the areas of sustainable development, community participation, sustainable transportation and education delivery systems. Prior to joining Sunway University, he was the President of the Malaysia University of Science and Technology and the Head of the Transportation and Logistics Programme. His experience also includes teaching at the National University of Singapore, working in the Institute of Strategic and International Studies which is a policy think-tank for the Malaysian government, and as consultant to several international organisations on social development and environmental assessment. He holds a PhD in Sociology from Harvard University and a Bachelor of Arts degree from Colby College, USA.

Koh Hock Lye

Professor Koh is a proponent for the practical application of research to achieve the Sustainable Development Goals. He conducts society-oriented research and outreach that integrates the three pillars of the SDGs (economic, environmental, social) in the areas of clean water and sanitation, and life under water and on land. His research has been published in various journals, spanning topics such as conservation, ecology, biodiversity, tsunami-resilient communities, affordable healthcare, climate adaptation strategies, and the application of mathematical modelling and artificial intelligence to enhance food security. Prof Koh Hock Lye received his BSc from University Malaya, and holds both an MA and a PhD in Mathematics from University of Wisconsin, Madison.