Economic implications for Malaysian’s political future

Speech by Parliamentary Opposition Leader and DAP Secretary-General, Lim Kit Siang, at the Eighth Great Economic Debates organised by the University of Malaya Economics Society at the Dewan Tunku Chancellor University of Malaya, on Tuesday, 9th August 1977 at 7.30p.m.

Economic implications for Malaysian’s political future

The New Economic Policy, which inspires the Second and Third Malaysia Plans, has its declared objective the promotion of national unity through the two-pronged strategy of eradicating poverty regardless of race and of restructuring Malaysian society so as to gradually reduce and eventually eliminate the identification of race with economic function.

After eight years of NEP, it is neither eradicating poverty nor carrying out a genuine multi-racial restricting of Malaysian society, and national unity has suffered even more setbacks.

The underlying flaw of the NEP is that it is a strategy to create a class of wealthy Malays, to create Malay millionaires to keep company with non-Malay millionaires. This will not solve the problem of Malaysian poverty in general or Malay poverty in particular.

Although theoretically, the strategy of creating a class of wealthy Malays would possibly reduce inter-racial income inequality, it does so at the expense of increasing income inequality within the Malay community in particular and the Malaysian society as a whole.

There are those who argue that the spectacle of Malay millionaires rubbing shoulders with the Chinese millionaires will stabilise racial relations and contribute to racial harmony, but this is nothing more than the politics of race being used to perpetuate the interests of class. Furthermore, it is built on the myth that wealth in Malaysia is concentrated in Chinese hands, when, in fact, it is concentrated in hands of foreigners. It also fosters an even more dangerous myth that all Chinese in Malaysia are rich, grave disruptive political and economic consequences.

The creation of a Malay capitalist class is completely irrelevant to the problem of eradications of poverty.

In 1970, the lowest 40 per cent of the households account for only 12% of the total income, while the top one-tenth of all households accounted for nearly 40% of total income.

The majority of rural poor, in particular farmers and fisherman, have not benefitted materially from government development.

The Census of Agriculture of 1960 shows that 59% of all farms were under 4 areas. The average size of rubber smallholdings is 5.2 areas, with about 24 percent of the farms under 3 areas and about 46 percent under 5 areas. For wet rise, the average size of farms is 2.5 areas, with about 54 per cent of farms under 3 areas and 78 percent under 5 areas.

Further fragmentation into smaller and more uneconomic lots and the sale to absentee landlords must have proceeded space, since then, as poverty and indebtedness breeds further poverty and indebtedness.
The NEP has done nothing to deal with the basic causes of rural poverty by carrying out radial land reforms to give land to the tillers, expect for FELDA which benefit only a small percentage of the rural people. For instance, in the padi sector, ownership of agricultural land should be restricted to bona fide farmers only, and there should be a ceiling in the acreage allowed to be owned by an individual farmers or a farming family based mainly on the ability to form the land.

The Malay poor have no voice in UMBO or in the formulation of the NEP. The NEP was formulated by and to serve the interests of the new Malay capitalist class and its recruits.

Almost without exception, the new Malay rich have acquired their wealth from opportunities afforded by their domination of politics and the bureaucracy. Almost all rich Malays have been either political leaders or senior civil servants.

This also accounts for the low standard of personal integrity of many politicians in office, whether at the Federal or state levels.

Politics and office are regarded as the fastest short-cuts into the new capitalist class, and public offices have been used to accumulate personal wealth. Power struggles in the various states are often struggles for the opportunity to make money at the public’s expense.

This is why when in 1974, I moved a private member’s bill in the Dewan Rakyat requiring every Minister, Parliamentary and Political Secretary, Member of Parliament, Menteri Besar, Chief Minister, State Executive Councillor, and State Assemblymen to declare annually his or her assets and that of the net of kin, Barisan Nasional MPs rose in unison to reject my motion- for otherwise, many would not be able to explain how they had amassed fortunes in one or decades of “dedication to public good.”

This anti-poor bias of UMNO and Barisan leadership is well reflected by the recent rabid anti-unionism displayed in the two houses of Parliament and by the restrictive laws of the Barisan Nasional Government.

The creation of Malay Capitalists under the NEP is also irrelevant to the promotion of national unity.

Instead of strengthen the sense of Malaysian consciousness and consequent dimunition of racial consciousness, the NEP has accentuated racial differences. Though it professed to promote national unity, the NEP has in fact adopted as an official policy the highlighting of racial distinctions – a phenomenon of the Seventies where a Malaysian is from birth, tto school, to university, to work, reminded not of his Malaysian identity, but his racial origin and separateness.

As a result of the NEP, education, the best key to national unity, has become the major factor of disunity.

Every non-Malay student in the country and his or her parent worries about future educational opportunities, for diminished opportunities for post-seconndary, college and university education on grounds of race, regardless of merit, achievement or industry, has become part of the Malaysian education system.

During the Second Malaysian Plan, the share of the Malays and other indigenous people to total enrolments in domestic tertiary institutions people to total enrolments in domestic tertiary institutions increased of 13,925. In the same Plan period, the share of other Malaysian students in domestic tertiary institutions declined from 50% to 35% or an increase in absolute terms from 6,702 to 10,982 – an increase of only 4,280.

In the Dewan Rakyat last month, I asked the Education Minister, Dr. Mahathir Mohamed for this year’s enrolment figures for the five local universities, which are as follows:

Total university enrolment: 5,953
Malays 4,500
Chinese 1,187
Indians 266

This works out to an intake of 75% of Malay students as against 25% for non-Malay students.

These figures illustrate vividly the dimunition of higher education opportunities for Malaysian citizens in their own country. This is manifest proof that the NEP declaration that it would be implemented in a way so as to ensure that “no particular group experiences any loss of feels any sense of deprivation” has been ignored.

I want to reiterate here what I said in Parliament in the debate on the Third Malaysia Plant The non-Malays do not begrudge the increased opportunities for Malays in domestic tertiary education, as they accept that this is a necessary component in any national strategy to bring about a balanced qualified manpower. However, they are entitled to feel aggrieved when they experience opportunities for their children in their homeland.

The fear of non-Malays about future educational opportunities for their children is the major cause for the recent exodus of non-Malay professionals, especially doctors. A rational government would be concerned by such loss of “human capital” and seek to stem it. But there was only official indifference, and one can even detect that some quarters are not too displeased probably seeing this exodus as a useful contribution to bring about a more balanced qualified manpower.


The political development of the Seventies can be seen as the attempt of the UMNO and its underlings in the Barisan Nasional to protect itself from democratic and popular challenges to the NEP creation of a Malay capitalist class as the recipe to national unity, and the suppression of legitimate grievances of the have-nots of all races and the disadvantages and aggrieved groups.

After the 1974 General Elections, which the National Front claimed to be an overwhelming landslide victory, it armed itself with more and more authorititarian powers to trample on human rughts and democratic institutions.It first banned public rallies by opposition parties expect during by-elections. Showing how deeply the democratic government of Malaysian cherish freedom of speech. When dissent continued to build up, student activism was stamped out by the Mahathir Amendment to the University and University College Act in 1975. Student leaders were detained. Repression extended to unions with the passage of even more restrictive Labours Laws, and the threat of even more stringent ones. Opposition leaders were arbitrarily detained without trial, both from the PSRM and the DAP, on trumped- up charges.

I am conscious that by speaking here tonight, I am making some special Branch officer very busy tonight on my ever-thickening special Branch file, and may be , bring closer the day when I will again be the guest of His Majesty’s hospitality.

But this is a choice which we, not the Barisan Nasional government, but the people, the students, the peasants, the workers, must make – whether they want to have a democratic society where no one is omniscient or has a monopoly of truth, where the people have a right and opportunity to criticise those who rule and to express the views of governed where those who govern err, either through misunderstanding, or lack of sufficient knowledge, or self-delusion, or corruption, or insensitiveness, or sheer selfish interest.

Dissent and the legitimate grievances of the people will not disappear of themselves. Either they are channelled into democratic expression and satisfaction or they will go underground in the face of greater repression. The alternatives of a military dictatorship or a communist rule are both unpalatable to the majority of Malaysians.


We are presently heading towards the nightmare. Let us retrace our steps and realise our dream.

We can do this by recognising, firstly, that the NEP, through its pre-occupation with the creation of a Malay, and even worse, the eventual resort to the political of race to explain why the Malay poor masses remain poor after the NEP had created a Malay capitalist class. Secondly, the emphasis on race distinctions in every facet of Malaysia life from school onwards is highly detrimental to the task of nation building aimed at the inculcation of a Malaysian consciousness and identity transcending racial ones.

Both these factors if not checked will become major divisive forces poisoning the political future of the country, intensifying to a breaking point the polarisation both of races and classes.

We should retrace our steps from such a nightmarish future by:

1. Focussing on the upliftment of the poor regardless of race, most of whom, will be Malays.

2. A genuine, and not selective, restructuring of Malaysian society; and

3. Full acceptance in principle and practice of the multi-racial basis of our nation, where every Malaysian can develop his or her potential and capacity to the fullest and contribute to the development of the country.