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ATimes: Malaysia's blueprint holds hidden dangers
By Anil Netto

7/4/2001 10:33 am Sat

[Setelah menyelamatkan beberapa kroni yang lebih berguna untuknya, barulah Mahathir kini nampaknya cuba mengambil hati rakyat marhain pula dengan beberapa ketul gula-gula yang nampak menarik pembalutnya. Itupun setelah tersedak oleh pergaduhan ngeri di Kg Medan dan ekspot elektronik yang semakin berkurang serta harga minyak kelapa sawit yang teruk menjunam.

Tetapi BSKL menjunam teruk di bawah paras 600 mata selepas beliau membentangkan rancangannya - seolah-olah pelabur melakukan satu demonstrasi perasaan di pasaran saham menyeru Mahathir berundur segera. Mana tidaknya, masalah penting di sebelah atas masih dipejamkan mata - sebaliknya rakyat di bawah disuruh sakan berbelanja pula. Padahal ada banyak cara lain untuk meningkatkan ekonomi tetapi tidak dilaksanakan kerana ia mengugat kroni.

Mahathir memerlukan kroni untuk menolongnya menang dalam perhimpunan agung yang akan datang. Politik wang masih hidup dalam Umno sebab itulah pemimpinnya ramai yang kaya raya sehingga berkilo-kilo beg berisi wang SAHAJA dibawa keluar negara. Musim pemilihan adalah musim beg itu diisi semula... dan kali ini lebih berat lagi kerana Mahathir sudah terdesak mahu berkuasa. Di sinilah kroni datang menyumbang samada wang atau kontrek yang sudah dingapkan.
- Editor

AsiaTimes : Malaysia's blueprint holds hidden dangers

From Asia Times
6th April 2001

Malaysia's blueprint holds hidden dangers

By Anil Netto

KUALA LUMPUR - If the stock market is any barometer of investor confidence, Prime Minister Mahathir Mohamad can take little comfort from the reaction to the country's new economic blueprint for the next 10 years, announced on April 3.

The day after the plan was unveiled, the Kuala Lumpur Stock Exchange Composite Index crashed through the 600-point mark to close at its lowest level in two years after heavy selling of the top three blue-chip counters.

The index plunged 6.15 percent or 38.91 points to close at 594.26 points on April 4 - the steepest fall in percentage terms since last April.

As if that were not enough, the economic blueprint was quickly overshadowed by news that jailed former deputy premier Anwar Ibrahim was briefly allowed to attend his mother's funeral after being at her bedside when she died.

A crowd of more than 1,000 supporters shouted "Reformasi" (Reform) and "Allahu Akhbar" (God is Great) as a wheelchair-bound Anwar made a brief public appearance, under armed guard, during a funeral service at the cemetery.

Under the circumstances, the impact of the Third Outline Perspective Plan (OPP3) was short-lived. "The plan marks the second phase of the nation's journey to realize Vision 2020," said Mahathir, when tabling the 200-page economic blueprint in Parliament on Tuesday.

The plan aims to strengthen inter-ethnic unity, produce a knowledge-based economy and prepare the country for globalization. It hopes to tackle poverty and introduce agricultural reforms to assist farmers and smallholders who are vulnerable to fluctuating commodity prices.

The blueprint also seeks to expand the ethnic Indian stake in the economy by increasing their ownership of shares to 3 percent. Indian Malaysians now hold only 1.5 percent of total corporate shares despite comprising 8 percent of the population. Racial attacks targeting Indians in slum areas around Kuala Lumpur have highlighted the depressing social and economic statistics of the community.

Under the New Economic Policy (1970-1990), the overall target of share ownership was 30 percent for bumiputras (indigenous groups, largely ethnic Malay), 40 percent for non-bumiputras (ethnic Chinese and Indians) and 40 percent for foreigners.

By 1999, bumiputras held 19.1 percent of shares in limited companies (almost unchanged from a decade earlier). The non-bumiputras share had dropped from 46.8 percent in 1990 to 40.3 percent in 1999. But the foreign stake had climbed from 25.4 percent to 32.7 percent over the same period.

Anxious to win back the votes of the Malays, many of whom have switched allegiance to opposition parties, Mahathir stressed that the government's target to achieve 30 percent corporate ownership for the bumiputras can only be realized if they cooperated. "We will never reach that target if the bumiputras to whom we gave the shares instead sell them to non-bumiputras," he said.

Nonetheless, the policy to double the share ownership of the ethnic Indians and Malays is likely to have little effect on the vast majority, many of whom hover on the poverty line, while others live in plantations earning subsistence wages. They have few financial resources to raise a family or to buy a decent house, let alone buy shares on the KLSE. If anything, the continuing emphasis on equity ownership along ethnic lines is likely to widen the growing income gaps and wealth disparities between the rich and the poor.

While focusing in the past on increasing corporate ownership of shares for the Malays to 30 percent, little attention was paid to how these shares - as well as contracts and licenses - were awarded and, in the end, a small coterie of favored tycoons and politicians of all ethnic groups became fabulously rich.

The plan also unrealistically anticipates that economic growth will average 7.5 percent over the next decade. Malaysia was forced to lower its projected economic growth rate for 2001 from 7 percent to 6 percent, a target that critics say is still too optimistic.

But Mahathir pointed out that despite the Asian economic crisis in 1997, the Malaysian economy grew by an average of 7 percent annually from 1991 to 2000, as targeted under the Second Outline Perspective Plan.

Circumstances have changed a lot since then, however. Foreign investment, which had previously fuelled growth, has slowed and the United State economic slowdown is likely to hurt the economy.

Still, Mahathir slammed critics of previous development plans. "Every project to improve the living standard of the people has been condemned, opposed and obstructed. If the opposition had their way, there would be no Penang Bridge [linking the island to the mainland], no Subang airport [the old Kuala Lumpur airport] and KLIA [the new KL international airport], no Proton [the national car], no New Economic Policy, no Malays in business and certainly none in the corporate sector or projections."

What was not highlighted was the failure of his administration to provide adequate affordable housing for all - in stark contrast to the way the government has funded prestige projects.

Neither was there any mention of privatization gone wrong, when contracts are awarded without competitive tender to favored bidders, resulting in higher costs transferred to the consumer.

The wheeling-and-dealing on the stock market, the bailouts of crony shareholders and the lack of meaningful political and economic reforms have also led to a drop in confidence in the capital market.

This could be one of the reasons why the stock market remains in the doldrums as investors shun the market, as seen in the massively undersubscribed Timedotcom public offer.

The tabling of the report in Parliament was delayed by 15 minutes after opposition members complained that the late distribution of the plan meant that they had little time to study it.

The impact of the blueprint, however, is likely to be lost in the coming weeks as the attention switches to political developments - especially opposition gatherings in April and the ruling party's much anticipated annual general assembly in mid-year. Observers will be watching closely for signs of dissent in party ranks in the run-up to the assembly. It is these developments and the effects of the US economic slowdown that are likely to determine how long Mahathir remains in office.