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BN And SUPP Must Explain How Sibu And Sarawak Can Be Progressive And Prosperous With The Extension Of The New Economic Policy (NEP) And Failure to Check Corruption Has Resulted In The Highest Income Inequality In South-East Asia?


Media Statement
by Lim Guan Eng


(Sibu, Thursday): BN and SUPP must explain how Sibu and Sarawak can be progressive and prosperous with the extension of the NEP and failure to check corruption has resulted in the highest income inequality between the rich and poor in South East Asia. Sarawak BN chairman Tan Sri Abdul Taib Mahmud said the BN general election manifesto of progress and prosperity was in line with the objectives of the federal government to make the Ninth Malaysia Plan (9MP) a success and help realize the nation's vision to be a developed country by 2020.

BNís general election manifesto is full of false promises because Vision 2020 of Malaysia becoming a developed nation has already failed. Abdullah has reported that the country generated an average GDP growth of 6.2 per cent per annum from 1991 to 2005 and the target for average real GDP growth in the five years 2006-2010 under the 9MP is 6 per cent per annum. Clearly Malaysia would not be a developed state by 2020.

When former Prime Minister Tun Dr. Mahathir Mohamad presented Vision 2020 on 28th February 1991, he required an average annual growth of 7% during the three decades to 2020 so that our GDP in 2020 can be RM 920 billion in real (1990 Ringgit) terms

Malaysia is capable of reaching its gross domestic product (GDP) growth target of RM920 billion in 2020 only if it achieves an average growth of 8.8 percent in the next 15 years from 2006-2005.  Malay Research & Strategy Foundation fellow consultant Datuk Dr Mohd Dahan Abd Latiff said the projection was based along the calculation of the GDP of RM262 billion in 2005.

He said with the 6% GDP growth already set for 9MP, or RM351 billion target in 2010, growth for the remaining 10 years -- 2011 to 2020 has to be at about 10.2 percent. The target of 10.2% for 2011-2020 is clearly impossible as the National Mission had set a growth rate of only 6.5% for this period. Even this 6.5% growth rate is doubtful as Malaysia is expected to be an oil importer from 2011-2020.

It is clear that Malaysia would not achieve Vision 2020 when it fails to give emphasis to value creation, heighten competitiveness and implement meritocracy as well as ensure political equality and socio-economic justice. If the basic fundamentals of having an excellent education system and trained workforce are not observed then how can Malaysia compete with emerging giants like China and India? In other words, emphasis must be given to wealth creation followed by wealth distribution.

NEP The Greatest Stumbling Block To National Unity, Competitiveness And Prosperity

The NEP is the greatest stumbling block to national unity, competitiveness and prosperity. The discriminatory nature of the NEP has resulted in Malaysia failing to achieve first-class mentality based on merit. For instance, DAP finds it difficult to believe that there are no qualified non-Malays to be a Vice-Chancellor of any Malaysian public universities or be Auditor-General or Accountant-General.

How can Malaysians attain first class mentality if the government is still gripped by racial considerations? Canada appointed a first ethnic Chinese, Adrienne Louise Clarkson who is a Hakka born in Hong Kong (Chinese: 伍冰枝), as the 26th Governor General from October 7, 1999 to September 27, 2005 even though Chinese formed 3.2% of the population. Judge Anand Satyanand of Indian and Fiji-Indian background will be the first New Zealand Governor-General of Asian ethnicity in August this year. A Chinese and Indian can be appointed as head of state for Canada and New Zealand despite the fact that they do not comprise one third of the population like in Malaysia.

As of June 2005, there were 899,250 public servants, of whom 77.04 per cent or 692,736 were Malays.  The rest were: 84,295 Chinese (9.37 per cent), 46,054 Indians (5.12 per cent), 69,828 other Bumiputeras (7.77 per cent) and 6,337 of other races (0.70 per cent). Before the launch of the New Economic Policy in 1971, the racial breakdown of the Malaysian civil service comprised 60.8 per cent Malay, 20.2 per cent Chinese, 17.4 per cent Indian and 1.6 per cent others.

Some 35 years after the NEP, the already under-represented Chinese percentage in the Malaysian civil service had fallen further from 20.2 per cent to 9.37 per cent, while Indians who were somewhat over-represented with 17.4 per cent before the NEP are now under-represented with 5.12 per cent. The government must be serious in finding out why the Chinese and Indians have become so under-represented in the civil service 35 years after the New Economic Policy, with the Chinese falling by 10.8 percentage points and the Indian by 12.3 percentage points from 1971 to 2006.

Corruption Causes Socio-Economic Inequalities.

Corruption is one the main causes of socio-economic inequalities resulting in the United Nations Human Development Report showing that Malaysia has the worst income inequality in South-East Asia with the richest 10% in Malaysia controls 38.4% of our economic income as compared to our poorest 10% controlling only 1.7%. Lest we forget, Sarawakís poverty level increased from 3.8% in 1977 to 7.5% in 2004. How many poor and ordinary Malays and non-Malays who are not related or cronies of BN own shares or APs?

Such huge financial malpractices would have made Malaysia bankrupt, if not for oil. Since Petronas was formed in 1974, its earnings have exceeded RM 500 billion as compared to Singapore which does not have a drop of oil. If a non-oil exporter like Singapore can give S$2.6 billion (RM 6 billion) cash under the 2006 Budget this year to all Singaporeans, especially the poor, why canít the Malaysian government do so when Petronas has earned nearly RM 500 billion, Oil importer Singapore has given S$ 10.675 billion  (RM 24 billion) directly to its people since 2000 as compared to Petronas which has not given a single cent.

To seek accountability and economic justice for Malaysians and prevent all our oil revenue from being misused by the select few, DAP proposes that our Petronas profits be distributed fairly to needy Malaysians. Based on current year profits of around RM 40 billion, each Malaysian can receive at least RM 1,500 per year. To further ensure that oil producing-states like Sarawak benefit from their oil resources, royalties must increased from the present 5% to 15%.

The fixation of NEP quotas of 30% is based on a false premise that bumis have not achieved the target. Bumis have 18.9% as at 2004 as compared to Chinese 39%, Indians 1.2%, nominee companies, 8%, foreigners 32.5% and others 0.4%. The 9MPís figures are based on ownership of share capital of all limited companies, including both private and public limited companies. This is not accurate as shares in private limited companies are not an accurate reflection of real value as they are easily hidden.

However this is not the case with publicly-listed companies, which must be transparent and fully disclosed. According to a reply in Parliament on the ownership of ownership of share capital at Kuala Lumpur Stock Exchange (KLSE) on 18 April 2006 to state the latest figures on the percentage of ownership held by Bumiputera, non-Bumiputera and foreign equity based on par value.

Based on the financial reports of listed companies submitted as at 30.6.2005, the percentage of share ownership are as follows:

        Bumiputera*  36.1%

        Non-Bumi      41.0%

        Government** 6.4%

        Foreign             16.5%

*    includes government agencies meant for Bumiputera

**  government agencies which include non-Bumiputera interests like Khazanah, MoF Inc., Bank Negara, EPF and Pension Fund

All the above figures are calculated on the par value and not net value and therefore do not reflect the true Bumiputera equity. If calculation is based on current market value, the bumi equity would be higher. It is interesting to note that if shares held by GLCs, which are recognized as Bumiputera private sector investments, are included it would bring Bumiputera equity to more than 40 percent. Further if shares allocated to Bumiputera are not sold but still retained, it would further increase Bumiputera equity.

This begs the question who owns the bumi equity? Ordinary bumis or the few BN-putras?

SUPP must explain their continued support for the NEP when it has clearly achieved its target of 30% as far as publicly listed companies are concerned. Clearly, Sarawakian voters who do not support the NEP which has bred corruption, cronyism and inefficiency must vote for the DAP to signify their determination that NEP must not be extended, royalties to Sarawak must be increased 3 times to 15% from 5% and fighting corruption must be the first priority of the government , royalties to Sarawak must be increased 3 times to 15% from 5% and corruption must be the first priority of the government

(18/05/2006)      


* Lim Guan Eng,  DAP Secretary General

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