Mixing ethnicity and economics can be a dangerous game

It is not uncommon for Malaysian ministers to make controversial statements. However, even by their standards, Minister of Agriculture and Agro-Based Industry Ismail Sabri Yaakob went too far when he posted on Facebook a call for Malay consumers to boycott Chinese traders as a means to complement the Government’s efforts to control prices.

Inflation is a key concern for Malaysians, especially with the coming introduction of the Goods and Services Tax in April. Boycotting businesses is a legitimate means of protest in Malaysian politics.

Notwithstanding these two facts, Mr Ismail’s call is unnerving. He virtually equates ethnicity with economic function, as if all price-raising traders are Chinese and all consumers bearing the brunt of inflation are Malays.

Back in 1969, in the aftermath of the ethnic riot on May 13, the overlapping of economic function and ethnicity was blamed for that dark episode in the young nation’s life.

Such an argument provided grounds for Tun Abdul Razak, father of Prime Minister Najib Razak, to introduce the far-reaching New Economic Policy (NEP) in 1971.

The NEP remade Malaysia by giving extensive privileges to Malays and the East Malaysian natives, collectively known as the bumiputra (the sons of soil), over Chinese and Indians.

Privileged access to education, employment, equity ownership and even the buying of houses are meant to correct the bumiputra’s backwardness as an outcome of policy negligence under the British colonials.

While the policy officially ended in 1990, its goals in eliminating poverty and restructuring society have continued as a policy paradigm. Some joke that its acronym actually stands for Never Ending Policy.

Interestingly, the Malaysian government has constantly demonstrated extraordinary modesty in denying the accomplishment of its mission in uplifting the bumiputras or Malays, especially in equity ownership, while the NEP’s critics in the opposition, civil society and academia have argued otherwise.

The four-decade-old NEP policy paradigm has clearly taken a toll on Malaysia’s economy and society. While it has inevitably caused resentment among the ethnic minorities, resulting in brain drain and capital flight, its real threat lies with the bumiputras.

As the administration of NEP privileges is highly politicised to reward loyalty for government supporters, the policy’s success in creating a powerful bumiputra business and middle class is counterbalanced by its failure to lift their competitiveness correspondingly.

While many independent bumiputra businesses have excelled even internationally, public enterprises predominantly run by bumiputra managers and bumiputra films profiting on government contractors are often underperforming, if not mismanaged.

Similarly, while many top bumiputra students sponsored by the government to study in top universities overseas become leaders in their respective fields, weaker bumiputra students going through local universities — where meritocracy is not prioritised for both faculty and students — are disproportionately unemployed.

THE BUMIPUTRA ISSUE

Though both absolute poverty among bumiputras and the interethnic wealth disparity have been greatly reduced now compared with 1969, the NEP policy paradigm has brought about two challenges.

One, a growing pool of less-competitive bumiputras trapped in state-run schools, state-run universities, state agencies and state-run enterprises. Two, growing inequality among the bumiputras.

The competition-adverse effect of the NEP policy paradigm is well known. Mr Najib’s brother Nazir, a successful regional banker, has been calling for change.

When affirmative action is not tied to the promotion of competitiveness, then the “affirmed” category cannot sufficiently fill the void of brain drain and capital flight left behind by those in the “discriminated” category. It takes a toll on the economy.

The policy also creates dependency on the part of the beneficiaries, often resulting in vehement objections to any talk of a sunset clause or exit plan. Former Prime Minister Mahathir Mohamad has frequently criticised the Malays for their “crutch culture”.

But the biggest crutch is in politics. The ethnic basis of the bumiputra-ism provides a natural captive market of Malay votes for Mr Najib’s party, the United Malays National Organisation.

The less competitive among the bumiputras are deeply anxious about the post-NEP Malaysia should Pakatan Rakyat (PR) come to power. The opposition coalition, led by former Deputy Prime Minister Anwar Ibrahim, won 51 per cent of the vote in 2013 and was denied power only because of malapportionment and gerrymandering of constituencies.

Solidly backed by the ethnic Chinese, PR was accused of being too pro-Chinese, the same allegation made against Tunku Abdul Rahman, Malaysia’s first Prime Minister, who lost power to Tun Razak after the 1969 riot.

To be fair, Mr Ismail is not the only mainstream politician playing to the gallery. Just last week, Mr Hadi Awang, president of Parti Islam Se-Malaysia, slammed his Pakatan partner Democratic Action Party’s advocacy of local elections.

The hardliner Muslim nationalist warned that restoring local elections would lead to Chinese political dominance and eventually another May 13 riot.

In comparison, Mr Ismail’s drumming up of hatred of the Chinese economic bogeyman did not make any reference to political violence.

However, this is no less alarming for students of ethnic conflicts. The Jews in Germany, the Armenians in Turkey, the Indians in East Africa and the Chinese in a number of South-east Asian countries were once all labelled as the nation’s economic plague before becoming target of hostility, riots and looting, and even ethnic cleansing and genocides.

No one knows how far Mr Ismail’s words will be taken on the ground if the economy crashes. His party colleagues are already cheering him as a hero.

Mr Najib has just defended Mr Ismail, insisting that the minister was not targeting any group. Perhaps, Mr Ismail is not speaking only for himself.

ABOUT THE AUTHOR:

Wong Chin Huat is a political scientist from Penang Institute in Malaysia.