August 10, 2022

Shared Prosperity Vision must bring clarity and coherence

5 min read

THE arresting themes of the Shared Prosperity Vision (SPV) and Budget 2020, and popular reactions to them, reveal yearnings for a system that serves everyone and looks out for all underprivileged persons. They also show Malaysian tendencies to deflect or defer honest reckoning with the seemingly complicated and divisive issue of race-based policies.

It need not be so complicated and divisive. Malaysia has a chance to reset the narrative, and perhaps forge a new consensus, by first clarifying precisely where public policy guarantees basic needs and redresses poverty, and then distinguishing the specific policies targeting population groups as beneficiaries, whether bumiputra, Indians or Orang Asli.

This second set of policies revolves around promoting capability and participation, not providing basic needs, and they must be handled purposefully and effectively instead of the current tendencies to sidestep or switch on autopilot.

Prime Minister Tun Dr Mahathir Mohamad’s speech at the launch of the SPV (pic) and Finance Minister Lim Guan Eng’s budget speech both commit to providing decent living standards for all. The key thrusts of both the SPV and Budget 2020 are eminently agreeable and assuring – grow the economy and expand opportunity while ensuring equitable outcomes and inclusiveness.

However, the emphasis on bumiputra development in the SPV, and their familiar and rather routine appearance in Budget 2020, continue to polarise society. Advocates declare that the bumiputra community lags in income and wealth, backed by statistics in the SPV.

Opponents feel that such policies should have no place in Malaysia Baharu, and trot out the trite line that if we just help the poor regardless of race, we can dispense with these race-based policies. The good thing is many parties show an interest in this new vision. But all sides talk past each other and no one tries to fit the pieces together.

The plain fact is, “pro-B40” policies and pro-bumiputra policies have continually co-existed in Malaysia, each dealing with a different set of problems. They do not cancel each other out; one cannot be taken away and replaced with the other.

Providing aid to the poor and protecting the basic welfare of all are good and necessary but primarily involve delivering basic needs like primary and secondary schooling, healthcare, minimum wage and social grants. These have very little to do with the bumiputra programmes, which concern higher education, high-level employment, business participation and SME development.

Success, especially in broadly grooming a dynamic bumiputra managerial and professional class and competitive SMEs, hinges not on giving preference to the poor but on allocating opportunity to bumiputras with capability and potential, and inducing them to learn and become competitive and self-confident.

We actually have some inkling of this subliminally. Browse the Budget speech and you will notice that every programme targeted at bumiputras deals with promoting participation and upward mobility – NOT alleviating poverty. There is no Bantuan Sara Bumiputra or bumiputra minimum wage; national primary and secondary schools are open to all. But there are bumiputra SME loans and special access to government contracts.

The SPV presents a generational opportunity to inject desperately needed clarity and coherence. What should it do? First, categorically declare and systematically ensure that policies addressing basic needs and social protection are available to all Malaysians. A country longs for assurance that its citizens belong, and that the system provides for them as equals.

The contents of planning documents and annual budgets must be explicit about the wide range of provisions that fundamentally and unequivocally benefit everyone. Among these are primary and secondary schooling, healthcare, minimum wage and social protection.

The principle and application are straightforward: Everyone is entitled to these provisions because they are grounded in basic human needs and the right to a decent standard of living. These programmes emphatically operate on a needs basis because it is morally imperative and practically viable to ensure that those who do not meet these basic needs are provided commensurate assistance.

Second, coherently explain that policies designating ethnic groups as beneficiaries pursue the distinct objectives of building capability and broadening participation. The SPV must distinguish “race-blind” provision of basic needs and services from the array of other interventions which predominantly benefit bumiputras, although in recent years there has been some attention to the Indian and Orang Asli communities, and Sabah and Sarawak indigenous peoples.

To reiterate, the key areas of these agendas must be specified – tertiary education, upward mobility to professional and managerial positions, ownership and operation of business, and SME upgrading.

If it is a national priority for ethnically equitable participation – that is, for distinct groups to be represented in these arenas – then the key to success is for the opportunities to effectively cultivate capability and competitiveness.

This poses tremendous challenges. A full appraisal will take up too much space here; suffice it to say that Malaysia’s track record is a chequered one. But like it or not, it is an unfinished business that must be dealt with squarely and robustly.

There is no escaping trade-offs and contestation among bumiputras and between bumiputra and non-bumiputra interests, but these are dilemmas that cannot be resolved by simply invoking “let’s just help the poor”. The situation also calls for balancing preferential treatment with efforts to safeguard fair opportunity for all parties, or setting policy timelines and graduation or “sunset” clauses.

Spreading opportunities more equitably and propelling beneficiaries to the ultimate goal of being capable and competitive call for rigorous selection, effective monitoring, and transition strategies.

Budget 2020 informed us about a reopening of government contracting to new entrants, which was received exuberantly. Within the month of September 2019, 946 new G1 contractors were registered. But the next sentence blandly adds that “existing and new registered contractors will get to bid for government jobs.” We know that three quarters of bumiputra contractors are in this smallest G1 tier (out of seven) and most remain there. In 2011, less than 0.02% graduated to a higher tier within that year.

The Budget also allocated RM445mil for bumiputra SME development – mostly loans and grants – in a routine, almost nonchalant, manner not befitting the responsibility and potential of these programmes.

We hear no bold and visionary plans to steer contractors and bumiputra beneficiaries in general towards higher performance, and to implement policies that spur upgrading, upscaling and graduating out of preferential treatment.

Malaysia needs better policies and a clear formulation of how these will operate in a productive and fair manner. The SPV must start by seeing things clearly and coherently.


Senior Fellow at the ISEAS-Yusof Ishak Institute