Kamal Salih - Capturing the Essence of the NEP

New Straits Times Online, by Kamal Salih, 21 September 2014, 8.08am

IN development thinking and practice, no policy has captured the imagination nor created more controversy in its implementation among scholars, politicians and the public alike than the New Economic Policy, introduced some 45 years ago. A generation had debated, lived and benefited from the NEP, until its formal ending in 1990.

Or so it seems in hindsight. The policy debate and the concerns surrounding the policy never really ended, for the issues of inequality along class and ethnic lines in our multiracial country remained stubbornly intransigent, even after its success (a controversial notion in itself) and new incarnations of the NEP in subsequent years.

Emotions, politics and myth-making continue to track the development debate even when statistics were adduced to support its successes (read economic growth, poverty eradication, rising middle class, interethnic distribution).

Now a new post-NEP generation has taken over. Dr Muhammed Abdul Khalid is a member of this second generation of scholars and policymakers. His book is an important scholarly contribution to development economics in Malaysia, in particular, to clarifying the controversies surrounding the NEP.

Employing a historico-statistical narrative, his book, The Colour of Inequality, rightly addresses the core of the NEP debate. This latest entry into the development policy debate, now clothed in the notion of inclusive growth, deals dead-on with the central issue of development in this millennium: inequality in all its dimensions.
Kamal Salih Colour of Inequality Muhammed Abdul Khalid

Kamal at the launch of Muhammed's book
The Colour of Inequality by Tun Daim Zainuddin

Most importantly, as the Latin American economist de Soto had shown two decades ago, that asset ownership and wealth are crucial to success and livelihood in the capitalististic economy, and later reinforced by Piketty the French economist's thesis on wealth and inequality. In my view, Muhammed, at some risk of being politically incorrect, has bravely succeeded, by using the latest data at his disposal, to cut through to the core issues of economic inclusion and inequality through the prism of ethnicity and class.

The NEP reincarnations, in particular, the Bumiputera agenda, slowly lost steam towards the end of the Mahathir era, was regenerated under the Abdullah Badawi administration through the Ninth Malaysia Plan and diluted further the distributive mission in the Malaysia Plans through the introduction of the New Economic Model.

In many ways, Tun Abdul Razak Hussein, our second Prime Minister and the main author of the NEP, had launched the first transformation in Malaysia’s development experience. The New Economic Model and the ETP/GTP, introduced by Datuk Seri Najib Razak, a generation after his father, is the second transformation.

For those wanting to understand the history of development policy over the last 45 years, to know what had been achieved, what has failed and what’s next in our drive towards developed status and social justice, Muhammed’s book is indispensible reading.

This is his contribution to the next generation of politicians, policy advisors and implementors, as well as the new millenials. Kamal Salih Colour of Inequality Muhammed Abdul Khalid