Can Anwar Change the NEP?

So deep-rooted is the consciousness of the Malay identity that it has been nearly impossible to critically examine its role in shaping the socio-political landscape of Malaysia. So entrenched is the expectation that being Malay will automatically qualify one for preferential economic policies in the form of the NEP – the New Economic Policy, an affirmative action plan largely favouring the majority Malay community – that imagining an alternative has been for many years just that: plain imagination. Recent events, however, have reversed the trend.

This has taken place in the shape of Anwar Ibrahim, ex-Deputy Prime Minister of Malaysia. Hailing from Parti Keadilan Rakyat (PKR), the political party formed to promote justice against his arrest in 1998, Anwar has actively campaigned despite not qualifying to contest in the elections. The de-facto party leader has been extremely vocal in calling for an end to the NEP (in the form of the National Vision Policy today); replacing it with a "Malaysian Economic Agenda". Despite this, it is argued that Malays were still willing to vote for PKR against Barisan Nasional. Was the Malay swing significant enough to show support for NEP abolishment? This is difficult to determine since there were a multitude of other factors working against the BN, so that isolating the NEP itself as a deciding factor is erroneous.

More importantly, even if this were true, can Anwar really replace the NEP given the present Malaysian socio-cultural context?

First and central to the discourse is that many Malays cling onto a highly romanticised ideal of their special position in society. "Ketuanan Melayu", or Malay supremacy, is a social construct brought up time and again in public discussion on inter-ethnic relationships. That identity, in turn, finds its origins in what is now commonly referred to as the "social contract" between Malays and non-Malays, in reality a politicised term introduced in Parliament in the 1980s. Believed to be the "exchange of citizenship for special rights", this agreement is considered to be enshrined in the law.

True enough, Article 153 of the 1957 Federal Constitution does provide for the special position of Malays, natives of Sabah and Sarawak, and other marginalised groups. However, what this special position means is open for debate. Some believe it merely meant socio-economic position, one that changes dynamically and hence can be renegotiated. Further, pre-independence documents – the Cobbold Commission Report, Federation of Malaya Constitutional Proposals and the Reid Commission Report – reveal that this position was meant to be temporary. The special "right" of Malays was therefore understood not as a God-given mark, but recognition of socioeconomic status until such a time this could be elevated.

In reality, the worldview of the Malay as inherently privileged is deeply embedded. Changing this will take great convincing skill. It will be extremely difficult for Anwar to propagate an immediate and uncompromising economic agenda, thereby flattening out all racial rights.

Lim Guan Eng, newly instated Chief Minister of Penang, for example, was severely attacked for his comments that he would practice open tenders, quoted as "ending the NEP". As a result, 1000-odd UMNO members protested with banners saying "Don't Abolish Malay Results", and "Don't Abolish the NEP". Such sentiments still rage strong amongst the Malay community. The Malay Chambers of Commerce, Angkatan Belia Islam Malaysia, and numerous other Malay organisations represent thousands of Malays who harbour very real fears at the prospect of levelling the playing field.

Malays who have "made it big" in the business world are often touted as national heroes. Even Khalid Ibrahim, new Menteri Besar of Selangor from PKR, publicly owed his corporate success story to the NEP. He only accused the system of corruption, but admitted he was a direct beneficiary of it.

Second, it is arguable that it is corruption within the NEP, rather than the NEP policy per se, that has swung Malays in the direction of the Opposition. For example, although PKR's 2008 pre-election manifesto says unequivocally that "the NEP must be replaced with an economic agenda that seeks to assist and affirm all poor Malaysians regardless of their race", it also states upfront that "the key to recovery is sound economic policies that are completely free from the tinge of corruption and graft".

Although the NEP was originally instated in 1971 with noble intentions of eradicating poverty irrespective of race and eliminating the association of race with job function, the policy has in-built structural definitions allowing for greater wealth creation of the Bumiputera community. Far from helping the community, this has instead led to massive wastage through corruption and misuse of public funds. Hence, Malays are likely to be more critical of NEP's implementation than its theory, the latter of which Anwar opposes. Attempting to champion equal rights directly questions the NEP's philosophy.

Third, replacing the NEP with the Malaysian Economic Agenda is infinitely more complex than it sounds. It means a complete revamping of every institutional structure: the public administration, procurement processes, amending Securities' Commission requirements for publicly listed companies, banking and housing loans; not to mention the tedious process of redrafting policies to that end. Even baby steps in that direction means completely deconstructing most, if not all, of the country's developmental framework.

Finally, the most difficult cog in the wheel will be getting rid of the patronage system, in reality the main players using the NEP to justify cronyism. Imagine the gargantuan task of identifying the complex web of personal relationships, thereafter conducting a cleansing exercise. The structure is so well-oiled and watertight – to know the game, one must play the game, which just defeats the whole purpose of integrity.

Anwar's manifesto paints a glorious picture of the new agenda's objectives. But the devil lies in the detail. The best option is to phase out race-based affirmative action within a set number of years, with specific aims at each stage. He will also need political buy-in from a critical mass of Malays, more so than gave him support in the recent elections. This he should do by assuring their welfare will be taken care of adequately, and most importantly affirm their Malay identity will not ever be robbed of them. One's identity, after all, should not draw its significance from a mere economic policy but rather confidently exist in its own right.

A reality check, accompanied by strategic policy solutions, is most urgent for Anwar and his party if they are shooting for power. He cannot retract his move to abolish NEP anymore, but negative Malay response will be a political setback. Caught in a Catch-22, PKR may need more than one election to reform the Malay psyche. An impossible task, but then, who ever thought denying BN two thirds majority was possible?

*Written by Tricia Yeoh, a director of the Centre for Public Policy Studies. Originally published in 'The Edge' on the 3rd of April, and is also one of the selected contributions for 'Tipping Points: Viewpoints on the reason for and impact of the March 8 Election Earthquake' by The Edge (available in Malaysian bookstores).