How the NEP equity targets miss the point


So is the bumi share of corporate equity 18.9 per cent? Or 45 per cent?

Here’s something to think about this weekend.

In many ways, the NEP 30 per cent target has become almost sacrosanct. On it hinges much of the political legitimacy of a party like Umno – for persistent underachievement can be used as a clarion call to mobilise support along racial lines

But is share ownership a really meaningful indicator of economic well-being for most ordinary Malaysians?

This is an extract from a piece I wrote for the Malaysian Herald last October.

To measure economic justice by looking merely at equity ownership – i.e. the ownership of shares – among the various communities is misleading

Whether we use the par (nominal) value or market value of shares in our calculations, whether we use only listed firms or all firms, whether we include government-linked companies in the bumiputra share – all of this misses the point.

The truth is only a tiny percentage of Malaysians actually own shares. And among those who do hold shares, a small group of them control the bulk of the shares, while the rest are just small-time investors.

What about the vast majority who do not own shares or unit trusts? Where do they fit in?

In truth, the gap between the rich and the poor in Malaysia – like in the United States and many other countries in the world – has been widening. Even among the bumiputras, the gap between the rich and poor has grown larger.

According to the UNDP Human Development Report 2005, only nine countries have reduced the gap between rich and poor. On the other hand, 80 per cent of the world’s population have experienced an increase in income inequality.

Could this be the result of the headlong rush into full-blown market capitalism and corporate-led globalisation?

This is what we should be looking at.

So we need to look at how we can empower our own marginalized communities and other people displaced by ‘development’ – through education, through skills training, by creating the means for economic self-sufficiency.

At the same time, we need to develop our rooted-ness in our ancient cultures and spiritual traditions and not succumb to the overwhelming culture and materialistic values of the global market. We need to promote food security through organic, sustainable traditional farming – not through large-scale cash crops using pesticides and low-wage plantation labour. (I see the government has ‘temporarily’ lifted its ban on the toxic herbicide, paraquat.)

At the end of the day, full-blown market capitalism of the neo-liberal variety is deeply flawed and leads to wide income disparities. It focuses excessively on material development – to the detriment of the environment, the ancient cultures we share, the traditional wisdom and our rich knowledge-base in farming, in healing, in the spirituality found around Nature (see how Jesus often went to the hills to meditate), which are all sidelined.

We should go beyond statistics and look at the authentic development of the human person and create a climate that empowers communities by providing them the means to become self-sufficient.

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