Friday, March 1, 2024

May it be the last ever Bumiputera Economic Congress

Having attended many such Bumiputra-themed discourses that the current on-going Kongres Ekonomi Bumiputera did not motivate yours truly to attend. Judging from the attendance yesterday, UMNO Youth Chief looked juvenile for misunderstanding Ti Lian Ker's critique.  

The intention of KEB is towards a forward moving transformation, an economically independent Bumiputera, and not to replace NEP, which was soiled by Mahathir's greed and self serving motivation. The gut feel there will be the repeatedly disappointing same ole, same ole tune of "desak kerajaan", "minta kerajaan", and "kerajaan patut" this and that in the moulding of another Ibrahim Ali.  

KEB is supposed to be a discussion to bring forth issues and proposal from the participants. It will end up being the platform for EPU or certain government agencies to shove their plan and get the discourse to rubber stamp. 

What was discussed and proposed will be lost in the piles of papers and diverted to serve non-economic and sometimes self serving interest. 

Civil servants will do the planning and implementation with the same expected outcome. Talk is easy, planning can get done but it is the doing that usually slackened disastrously over the years. 

As usual the wrong person empowered to take charge and run programs. Same will happen with the proposed Bumiputera Land Corporation.     

The benefit usually not reach the lower social classes. Those with access will be the main beneficiaries. And the same leakage for the choicest expenditure for any programs to a collusion of politicians and civil servants. 

Maybe it is the very reason the 45 and below of age, which will constitute 65% of voters, will not attend this gathering of old folks and old school thinking.  

The attendance to such discourses is only full at the opening session when Ministers attend and the group sessions could only see few rows of people. 

Though not attending, the Bumiputera issue remained close to our heart. Thus we share few critical views of the Congress that need highlight. 

FMT column below: 

Anwar’s Bumi economic congress must focus on real issues

Setting out a specific Bumiputera economic agenda is unlikely to encourage Bumiputera entrepreneurship.

Free Malaysia Today

Rosli Khan - 29 Feb 2024, 7:00am

The time has come for Prime Minister Anwar Ibrahim and leaders of all Bumiputera-based parties, especially Umno, Bersatu, PAS and PKR, to be courageous and advocate the real issues when dealing with the role of Bumiputeras in the national economy.

First and foremost, they must ensure that henceforth, all aid and opportunities given to members of the country’s Bumiputera communities benefit only those in the B40 segment, who are living at the lowest levels of our society.

Properly devised, such aid must not be limited to Bumiputeras alone, but must reach all Malaysians in that stratum.

Historically, educational initiatives that favoured Bumiputeras through English-medium residential boarding schools and ITM (now UiTM) had been successful in creating an educated Bumiputera class.

However, a shift to Bahasa Malaysia as the medium of instruction eventually led to Bumiputera graduates preferring government and GLC jobs over the private sector, contrary to the original intent.

Until recently, those jobs have been safe and secure, and the pay and perks they received have been quite rewarding.

Straying from their objectives

Unfortunately, over the years, these Bumiputera-controlled agencies and regulatory bodies have strayed from their objectives.

A number of them have quietly played a pivotal role in supporting non-Bumiputera private sector groups, allowing them to benefit instead of the Bumiputera business groups whose interests they were supposed to advance.

Such actions have not come without a cost. Corrupt practices within government agencies, including GLCs, have become widespread.

These often involve employees of these agencies entering into commission contracts, business partnerships and joint ventures that favour private sector entities rather than their own government-owned enterprises.

Over the years, Bumiputera-owned companies have entered numerous different ventures purportedly to assist rural Bumiputera folk.

Examples are abundant: independent power production (IPP) contracts, highway and mining concessions, oil and gas contracts, government land swaps, railway land development, and plantation land allocated by states to private sector companies.

The irony is that while the government languishes under a continued financial strain, with many of its GLCs reporting losses in their financial statements, their private sector partners appear to be doing well and amassing wealth.

True purpose

This raises fundamental questions about the true purpose and effectiveness of Bumiputera-controlled agencies.

Rather than fostering a robust economic environment for Bumiputera communities, these entities appear to be entangled in practices that benefit private sector interests, which in turn contributes to a widening wealth gap.

Let’s leave aside complaints of preferential treatment received by GLCs simply because they are Bumiputera-owned companies. That’s only a facade.

The real question is whether there is a need to review the operation of some of these GLCs, and if found guilty of corrupt practices, whether these GLCs should be shut down and those who run them sanctioned in some way or other.

It is high time that the government pushes for transparency, accountability and a re-evaluation of the roles played by Bumiputera-controlled agencies to ensure they genuinely serve the economic interests of the Bumiputera groups they are intended to support.

Despite dominating key sectors like banking, securities and entrepreneurship, Bumiputera-controlled enterprises in these sectors appear to be in doldrums with GLCs repeatedly reporting losses.

And despite their failure to perform, those who occupy management positions in these entities feel safe and secure in their employment. Their real economic contributions are never measured, let alone scrutinised in terms of growth. Wrongdoers are also seldom brought to book and punished.

Meanwhile, the real commercial activities are left to the non-Bumiputera entities and “second-class Bumiputeras”, those whom nobody wants to touch unless they are successful in their own right.

The bottom line is that GLCs, filled with Bumiputera employees, do not contribute to Bumiputera enterprises, resulting in a lack of success.

Many tasks ahead

Since the turn of the century, no notable new Bumiputera enterprise has emerged, especially in the digital field that has come to dominate our economy.

Blaming the country’s past leaders, like Dr Mahathir Mohamad, Abdullah Ahmad Badawi, Najib Razak, Muhyiddin Yassin, and Ismail Sabri Yaakob is easy, but does not offer a solution.

The reality is that Anwar has inherited these challenges, which include a significant national debt of RM1.5 trillion.

As living costs soar, the question arises: are businesses assisting the rakyat by lowering their prices, and are the members of the Bumiputera communities truly willing to unite behind the prime minister?

Anwar has many major tasks ahead of him.

However, setting out a specific Bumiputera economic agenda at this juncture of the economic crisis is not going to provide the missing link to encourage entrepreneurship.

Neither is it expected to improve the Bumiputera communities’ low support for his government.

In an era of global economic uncertainty, and given the sliding ringgit and funding difficulties, Anwar would do well to avoid stoking the Bumiputeras versus non-Bumiputeras conflict within Malaysia. That is the work of the opposition, usually with ulterior motives in mind.

In any case, that is a rhetorical debate.

The real challenge is to prepare and equip Bumiputeras to work together with all Malaysians to catch up with the changing business world.

Shouldn’t that be the focus of the Bumiputera economic congress?

The views expressed are those of the writer and do not necessarily reflect those of FMT..


More to the wider masses of Bumiputera beyond the UMNOputera, the Aliran article below:

Open letter to delegates of the Bumiputra Economic Congress

By Jeyakumar Devaraj -29 Feb 2024


I agree that the economic status of the bumiputra community in Malaysia is still lagging compared to the ethnic minorities.

This fact is displayed in the figures of total Employee Provident Fund savings by ethnic breakdown, before and after the first movement control order. These statistics were reported in the House of Representatives in early 2023.

Because of this reality, it is necessary that we craft measures to handle the economic problems faced by the ethnic Malay and other indigenous communities. I hope that this economic congress will come up with effective policies. (Stating this is not to deny that there are also ethnic minority groups who are poor and are facing economic problems).

Same demotivating sad story taken at the Congress

To enact accurate and effective policies, it is essential to first understand the causes of poverty in the bumiputra community. Based on my experience as the Sungai Siput MP for two terms, the causes of poverty in the Malay community there are:

1. Lack of job opportunities

Although there are many job opportunities in the plantations, the Felda scheme in Lasah and in the factories in Sungai Siput and in the adjacent Kanthan industrial area, unemployment is a major problem for the Malay community in Sungai Siput.

Factory employers are predisposed to hire foreign workers because these foreign workers will work 12-hour shifts continuously. Foreign workers are also easier to control as they are afraid to question the employer, for example, if the overtime payment is wrongly calculated.

Oil palm harvesting contractors, small farmers and fish breeders prefer to hire undocumented migrant workers because this group can be paid much lower wages. And in Malaysia, there is no short supply of this category – we have three to four million undocumented migrant workers.

The oversupply of undocumented foreign workers pushes wages in the informal sector to below the minimum wage level and is a major reason why the bottom 40% of Malaysians face difficulties in finding decent work with reasonable wages. The Bumiputra Economic Congress should address this issue.

In my analysis, the main reason for this oversupply of labour is because the migrant labour importing agencies earn RM 5,000 to RM 10,000 from each foreign worker they bring in. So, they use their strong ‘cables’ with the Ministry of Home Affairs and the Immigration Department to get inflated quotas and thus make good profits, but as a result, the bottom 40% of locals (ethnic Malays and Indians as well) face difficulties in finding work.

2. Weak gross demand among the Malay community

Entrepreneurship is promoted by several government agencies as a way to escape from poverty. There are several hundred small traders in Sungai Siput. They run stalls in the night market and on the sides of roads in the village areas. But the majority of them get small and uncertain returns and continue to be enmeshed in poverty. The problems they face are:

    • Their customers, the kampong folk, earn low incomes. Thus, they are unable to buy many products
    • There are too many stalls selling the same products.

Due to anaemic demand, the net income of most small traders in Sungai Siput (and I believe in many areas throughout the country) does not even reach RM1,500 per month, and they remain poor.

3. The dishonesty of contractors who are given the responsibility of implementing projects or policies to ‘help’ the villagers

Two examples:

    • The replanting of oil palm has, in many Felda schemes, been ‘outsourced’ to private companies. The agreement between Felda settlers and the replanting company is that

o The company will bear all costs of replanting

o The company will pay a monthly stipend of RM1,500 to the settler until the smallholding is returned to the settler to manage

o The smallholding will be managed by the company and the produce sold to cover the cost of replanting and to settle the Felda settler’s debt to the replanting company

o The smallholding will be returned to the settler to manage once the debt has been paid up

The problem with this arrangement is alleged fraud in the accounting process – returns from the sale of produce are not recorded in full, but the expenses of managing the plantation are fraudulently augmented. Hence, the settler’s debt takes a long time to be paid back.

Felda, a good scheme targeting rural poverty, has been hijacked by replanting companies (with the cooperation of the Felda management).

    • The replanting of rubber plantations has also been outsourced to contractors certified by Risda, the rubber industry smallholders development authority. These contractors are paid to replant rubber smallholdings using high-yielding clones. These clones have to be purchased by the contractor. Many rubber smallholders complain that contractors have cheated by using normal rubber seedling to save costs and increase their profit margins, instead of the high-yielding clones they were supposed to use. Similar things happen in many of the other programmes that have been enacted to help poor bumiputras, such as the supply of fertiliser to rice farmers, the rice floor price guarantee scheme and the PPR house-building programme in village areas. Programmes to help the poor bumiputra have now been turned into a source of quick profits for the contractor group.

Class differentiation in bumiputra community

The bumiputra congress delegates should remind themselves that the bumiputra community has evolved in the past 60 years and now exists as various strata and classes.

At the peak of the community are the millionaires, politicians and CEOs of large government-linked companies.

At the second level are the professional groups – lawyers, accountants, doctors, engineers, professors – and government employees with a monthly salary exceeding RM10,000 per month.

The total of these two upper classes is about 20% of the number of bumiputras in the workforce. They make up the top 20%.

Below this top 20% layer, there is the middle 40% layer, with monthly incomes between RM 3000 and RM10,000. They consist of government employees, employees of large companies and small traders.

The next strata is the bottom 40%, who are made up of lower-grade government employees, factory workers, government-linked company and private company workers, gig workers, micro-business people, contract workers in schools, hospitals and other sectors, farmers, fishermen, young people who are looking for work, those who do ‘village work’ (kerja kampung) and the unemployed.

One of the questions I would like the to ask the delegates of the economic congress is – are the economic problems of the bottom 40% and middle 40% of the bumiputras the focus of this congress? Or are the interests of the top 20% layer the main focus?

READ MORE:  Untuk siapakah Kongres Ekonomi Bumiputera?

This question should be taken seriously, because the interests of the different strata are different and, in some cases, there are conflicts of interest. For example,

    • A small number of bumiputras control the companies that bring in excess foreign workers and depress the wages of the bottom 40% bumiputra layer, making it difficult for the bottom 40% to find work with a decent salary
    • A small number of bumiputra investors and managers of private hospitals promote the development of private hospitals. This increases the exodus of specialist doctors from government hospitals and affects the quality of treatment for the bottom 40% and middle 40% of bumiputras who depend on government hospitals
    • Several thousand bumiputra businessmen who get school and hospital cleaning contracts are oppressing bumiputra and other workers by not complying with the minimum wage, cheating in EPF payments and overtime calculations, etc

Which is the bumiputra category that will get the support of the congress when there is a conflict of interest – the millionaires and contractors, or the bumiputra marhaen [ordinary people from the lower social classes]? Will such cases of conflicting interests be identified and discussed?

READ MORE: Malaysiakini's 'Kongres ekonomi tak akan beri manafaat pada bumiputera kelas bawahan' - Zaid Ibrahim

One last question – wouldn’t it be better for the bottom 40% of bumiputras if we returned to Abdul Razak Hussein’s approach, which implemented programmes to help the bumiputra poor through non-profit government agencies?

Under Dr Mahathir Mohamad’s administration, almost all schemes to help poor bumiputras were outsourced to private contractors to manage. And as described above, the non-transparency and abuse of power have become the norm, and the intended assistance does not fully reach the target groups.

I hope the issues raised in this brief letter will be taken into account in the Bumiputra Economic Congress which starts on 29 February and that the bumiputra marhaen will get some benefits from this congress.

This is a slightly edited version of the original open letter

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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