PENANG - With Malaysia's opposition in the ascendancy after stunning electoral gains last month and subsequent promises to form a new government through political defections later this year, questions are rising about how the opposition would differently manage economic policy.
The Pakatan Rakyat (PR), or People's Alliance, comprised of the multi-ethnic People's Justice Party (PKR), the Islamic Party (Pas), and the Democratic Action Party (DAP), now control 82 seats in Malaysia's 222-seat parliament. And the alliance is now promoting a new needs-based Malaysian Economic Agenda (MEA), specifically designed to replace the decades-old, race-based New Economic Policy, created and sustained by the ruling United Malays Nasional Organization (UMNO) to favor ethnic
Malays over the minority Chinese and Indian communities.
The PR currently also has control over five states in the peninsula, accounting for about 56% of Malaysia's total gross domestic product (GDP) and including three of the most industrialized states in the country - Selangor, Penang and Perak - and two among the poorest - Kelantan and Kedah. The ruling coalition, meanwhile, is mired in factionalism and internal rivalry with the most attention focused on internal politicking inside the UMNO.
In the months leading up to the general election, Prime Minister Abdullah Badawi had announced a string of state-led regional economic growth corridors, to be spurred by multi-billion dollar investments in infrastructure and other projects. However, critics charged those designs were indicative of the same top-down economic model the party has long championed, designed with little public consultation and with its prime beneficiaries likely to be major well-connected corporations.
The government has traditionally worked on the affirmative action principles outlined in the NEP, which after it was first introduced in 1971 initially lifted broad segments of the majority ethnic Malays into the middle-class. But critics say its race-based policies were later abused by ruling coalition politicians to award contracts, licenses and corporate equity to cronies and politically connected firms.
This, along with neo-liberal policies that cut taxes for the rich and slashed subsidies for essential services, has contributed to widening income inequality, which by some statistical measures represents one of the highest disparities in Asia. After last month’s election results, there's now a broad recognition that the NEP has run its course.
"The NEP is good but its benefits are only enjoyed by some, as many Malays in the country, including those in Penang, are still poor," said Lim Guan Eng, the chief minister of the DAP-led Penang state government. "The implementation of NEP has only made the rich richer and the poor poorer due to malpractices."
Advocated and designed by opposition icon Anwar Ibrahim, the MEA is aimed to replace the NEP with an economic policy that, regardless of ethnic group, provides equitable assistance to poor and marginalized Malaysians. "We always stress that under our leadership, the interests of the Malays will be maintained, and we are always committed to building a new system that is fairer, more just and we will ensure that no one will be left behind without regard to their race or religion," Anwar recently wrote in his blog.
He added that there are plans to introduce new mechanisms to channel economic aid to large groups of small traders within the Malay community and to ensure that educational opportunities, micro-credit schemes, social and welfare services and other forms of economic aid are available to the community.
Civil society activist and economist Charles Santiago, who was last month elected to parliament on a DAP ticket, says Anwar's PKR - and to a lesser extent the DAP - is committed to reducing the cost of living, especially for the poor in the five states the opposition now controls. Pas, for its part, is downplaying its Islamist religious agenda and is instead promoting the economic concept of a welfare state.
In PKR-led Selangor, for instance, the state government announced it would provide free water for the first 20 cubic meters to all the state's residents. The state's chief minister also said he would be looking to raise the job skills among youth. Others are hoping for a dialogue on how to bring together progressive forms of secular and Islamic community economics.
Santiago said he would like to see more public-public partnerships among the five PR-controlled states. "Transparency in contracts and open tenders are a big change [compared to previously]," Santiago told Inter Press Service.
In that direction, the Selangor government is hoping to learn from the experience of the publicly-owned Penang Water Authority, regarded as one of the most efficient in the region. Both states are also exploring how they can get their state agencies to cooperate and complement each other in human resources, education, physical development and manufacturing.
Santiago says he will also propose that the five states under PR rule raise their food production. State governments, he said, could play a big role in investing in food production to mitigate the rising cost of living. The state governments could work on increasing yields, providing more subsidies to farmers, and strengthening farms managed by smallholders, including family-run farms, he said.
So will the end of the NEP lead to radical economic changes?
Not necessarily, says political scientist John Hilley, author of the book Mahathirism, Hegemony and the New Opposition. For one thing, the international private sector would view the removal of the racially divisive NEP as another "necessary step" on the road to a more deregulated free market economy, he said. "And this begs the bigger question and problem for the opposition [PR] of how to advance policy ideas that don't just abandon 'outdated' social instruments for more market 'solutions'."
This he said was a serious dilemma for any socially ambitious "government-in-waiting", fearful of anxious free-marketeers and capital flight. "The blackmail threats and constraints of the global neo-liberal [dis]order cannot be easily dismissed," he told IPS in e-mailed comments. "Yet, until there are imaginative efforts to craft and pursue people-led economics, the same social divisions, inequalities and business-first agenda will prevail."
Support for a new social economics was clearly evident in polls in the run-up to the general election. Many Malaysians, especially from the working class, appeared drawn to election campaign pledges to increase subsidies for fuel and education, to do something about the rising cost of living, and to reduce income inequalities between the privileged elite and the toiling masses. There has also been widespread public disenchantment over perceived disastrous privatization policies that seemingly have only enhanced corporate profits and elite salaries while undermining public services.
Policies that truly promote social investment and poverty-focused spending would thus probably be more welcomed by the public. According to Hilley, what is lacking is the political will and radical creativity to realize such policies, adding that the post-election phase ought to be used to explore and build credible alternatives to those proclaimed by corporate interests and the "market evangelists".
He stressed that the key impetus for meaningful economic change would have to come from civil society itself - active non-governmental organizations, reformist lobbies, community groups, academic activists and others - rather than "a hopeful reliance on politicians whose idea of 'economic delivery' becomes mediated by political office and tamed by the 'realistic' demands of big business".
By Anil Netto
Inter Press Service
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