The Fourth Malaysia Plan

(Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Petaling, Lim Kit Siang, when speaking on the Fourth Malaysia Plan in the Dewan Rakyat on Monday, 30th March 1981)

The success of Fourth Malaysia Plan will depend on whether it could inspire and commit the energies, talents and resource of all Malaysians, regardless of race, to the challenge of building a united, peaceful, just and prosperous Malaysia

Firstly, I wish to congratulate the Prime Minister, Datuk Hussein Onn, on his speedy recovery from his open-heart surgery, and I commend he gets ample rest before he returns to the rigours of his office.

The Fourth Malaysia Plan, presented in Parliament by the Prime Minster last Friday, is the third five-years plan in the 20-year Outline Perspective Plan from 1971-1990 to implement the New Economic Policy.

We must never forget that the two prongs of the New Economic Policy, to eradicate poverty irrespective of race and to restructure society to eliminate the identification of race with economic functions, are aimed to achieve one overriding objective – national unity among the various races, language, religions and cultures in the country.

The success of the Fourth Malaysia Plan, therefore, will be judged not by how many billions will be spend on public expenditure or total investment, or how many barrels of crude petroleum will be produced a day, or how many new industries are started, how many miles of roads are built, or how many ports and airports are built, but on whether it contributes substantively to creating a united Malaysian nation and people.

In other words, the yardstick to measure the success or failure of the Fourth Malaysia Plan, or even the Third Malaysia Plan or previous Second Malaysia Plan is whether it could inspire and commit the energies, talents and resources of all Malaysians, regardless of race, to the common national task of building a united, peaceful, just and prosperous Malaysia, or whether it sets Malaysians against Malaysians, race, against race, language against language, religion against religion, culture against culture, class against class.

Or put it another way; whether the Fourth Malaysia Plan will make distinctive contribution to Malaysianise the thinking, outlook, values and ethos of Malaysians, or to further communalise their thinking, outlook and values by making them more Malay or more Chinese, or more Indian, more Iban or more Kadazan – which is a direct opposite of the declared aim of the New Economic Policy to promote national unity through the two-pronged NEP objectives.

This is why I was particularly attracted to Chapter VIII of the Fourth Malaysia Plan on “National Building and National Unity” which concerned the whole objective of the NEP and even OPP exercise.

Para 329 of the FMP said:

“The past decade was marked by rapid economic growth and structural changes enabling Malaysians to enjoy a higher standard of living. While rising income, output and employment are important in themselves, the overriding objective of development is the achievement of national unity. No nation, however prosperous, will remain viable and secure if its citizens are disunited and lack a strong sense of commitment to the nation.”

Para 357 of the FMP states:

“Malaysians with differing backgrounds need to further identify themselves with the nation and cultivate a sense of pride and belonging to the nation. They need to regard their diversity as a source of strength and take advantage of the wisdom and richness of their heritage. They should emphasise more and more on their commonness in experience and in values, such as tolerance, goodwill, accommodation, mutual respect, devotion to duty, loyalty to family and spirit of humility reinforced by the teachings of Islam and other religions.”

The question of national unity is the most pressing challenge facing Malaysia in our 24-year history as we have never been confronted with such complex and intractable threats to our national integrity and sovereignty as now.

This is probably the reason for the Government’s decision on the highest-ever allocation for defence and security under the Fourth Malaysia Plan, standing at $9,371.5 million or 23.8% of the total allocation.

Internationally, Malaysia lives in a dangerous age and region, with an expansionist Soviet-backed and Hanoi-headed Indo-China Federation threatening the territorial integrity and regional solidarity of non-communist countries in South East Asian states.

The Vietnamese, with the largest military might in South East Asia, and the Soviet military build up in Asia, have completely altered the military equation in this region.

Vietnam has become the hub of Soviet military operations in the Asia-Pacific region, with the access to former U.S military base at Cam Ranh Bay – which was built by the United States at a cost of US$2 million with base and adjacent port facilities sited next to one of the finest natural harbours in the world.

This base lies astride major South China Sea oil and trade routes leading to and from the Indian Ocean. Operations of Soviet aircraft from Cam Ranh Bay means that Soviet heavy bombers are within two hours of the Straits of Malacca.

A persistent question in the minds of all South East Asians is whether Thailand, the front-line state, can withstand the mounting pressure from Soviet-backed Vietnamese proddings, testings and incursions. This question is of course linked to larger international questions, e.g. China and United States’ rule in a new war in South East Asia. For instance, there is no doubt that China’s announced intention to administer a ‘second lesson’ to Vietnam had an inhibiting factor on Vietnam expansionism.

When supporting the Prime Minister’s motion on the Fourth Malaysia Plan, the Deputy Prime Minister, Dr. Mahathir, said that Malaysia had to beef up her defence capabilities and internal security in the light of political uncertainties in other countries, particularly the threat of invasion and subversion faced by our neighbours.

Malaysia is veritably in a race against time to build her national defences and resilience. However, it is a grave mistake for anyone to think that Malaysia’s defences could be secured by thousands of millions of dollars of defence expenditure, for then, Saigon would never had fallen to become today’s Ho Chin Minh City.

Without national unity, no amount of military expenditure and hardware can defend Malaysia. This is why the paramount task for Malaysia is to promote national unity, as it is the most powerful means of building Malaysia’s defences and resilience, by the removal of political, social, economic and cultural inequalities and injustices which may prove even more fatal to national sovereignty and integrity than overt external aggression.

For Malaysia, the task of using every possible moment to constructively build up a united Malaysian nation, is the most pressing because, as one political writer recently noted about Malaysia, “for two long decades, there has been a constant feeling that the whole structure hung by slender threads which could at any moment give way”.

The single most urgent task in Malaysia is to make Malaysians out of the Malays, Chinese, Indians, Kadazans, Ibans, who have made this land their home. We must convince all Malaysians that although they do not share a common past, they have a common future. Either they hang together to work out a common destiny, or their fate is to hang separately.

Internationally, there are mischievous forces which want to keep Malaysia divided by pitting one race against another as, for instance, in spreading the dangerous line that the Malaysian Chinese are disloyal and fifth-columnists of Communist China.

What is even more deplorable is that there are Malaysians who are out to set the races apart through the expousal of extremist and chauvinist or bigoted religious doctrines. There are political leaders who, for their own personal political gain and advancement, are prepared to make irresponsible, extremist and chauvinist demands regardless of the consequences and dangers of causing greater polarization of the races.

A good example is the call by UMNO Youth Leaders, Haji Suhaimi Kamaruddin, at the UMNO Youth Conference last year, to implement Clause 21(2) of the 1961 Education Act to close and convert Chinese and Tamil primary schools into national primary schools. Again, recently, Haji Suhaimi made the extremist statement in connection with the UMBC case, which is clearly an unacceptable and chauvinist interpretation of the New Economic Policy, although the DAP is opposed to any political party taking control of any bank, whether directly or indirectly through its satellite economic organisations

Belonging to this category of extremist is the call at the Third Bumiputra Economic Congress last year that the New Economic Policy target that by 1990, bumiputras should have 30 per cent share of commerce and industry by increased to 51%. This was followed by the call by Haji Suhaimi at the UMNO Youth General Assembly that control be imposed on the economic progress of non-bumiputras to reduce the economic gap between them and the bumiputras. Haji Suhaimi later avocated that the economic development of the country should be ‘slowed down’ in order to fulfil the NEP targets of bumiputras participation.

But what is not normally known is that at the UMNO Youth General Assembly, a high-level campaign for the 1980s was started which would out- Suhaimi Suhaimi. The third contender for the UMNO Youth President’s post, Hang Tuah Arshad, an ‘UMNO-putra’ par excellence being member of the privileged Malay elite who benefited from the NEP, expensively published a book with high-quantity paper entitled “Revolusi Sikap & Perjuangan Grand Ekonomi Tahun 2,000 (1980-2000)” stating the objective and programme that should be pursued by the Malays.

Hang Tuah Arshad demanded that the NEP be replaced by Dasar Grand Ekonomi with the objective of achieving 50% bumiputra participation in commerce in Year 2,000, and after that, to continue “mulai tahun itu kita mesti memperjuangkan ke MATLAMAT PENGUASAAN SEPENUHNYA activity ekonomi tanpa berperasaan uasa-uasa dan segan-segan” – “beginning that year, to struggle toward the objective of total control of economic activities without any hesitation or doubt.”

To achieve this objective, Hang Tuah Arshad also proposed that the subject ‘Malay economic problems’ – ‘Masalah Ekonomi Melayu’ – be ranked as a sensitive issue through a Constitutional amendment, making it unquestionable publicly.

Recently, in Bintulu in Sarawak, the Bintulu Development Corporation imposed the arbitrary, unconstitutional and anti-NEP regulation that before land development could proceed, 50% of the land must be extended to bumiputras or the BDA would not consider and process applications for subdivision and conversion of title of the land concerned.

The greatest irony is that all these extremist calls for the increase of Malay share from 30% to 51%, and the so-called Grand Economy objective of total 100% bumiputras monopoly of commerce and industry, do not come from the Malay peasants, workers or fishermen – who have not benefitted much from the 10 years of New Economic Policy. These demands come from those who have benefitted most from the NEP – the UMNO-putras, who have developed a great freed for more for themselves and not for the poor ordinary Malay rakyat.

While we applaud the speech by Datuk Hussein Onn when moving the motion last Friday that “Greed and extremism on the part of any group will undermine and destroy the peace and prosperity we now enjoy”, there is doubt in public minds whether the government leaders are referring to the above examples, or are in fact referring to those who are courageous enough to stand up and oppose such greed and extremism.

The Sixties and Seventies had been very divisive decades, which should not be allowed to go on if Malaysia is to build up the national unity and inner resilience to withstand external threats and pressures of the Eighties.

The Fourth Malaysia Plan, 1981-1985, should be a Plan of Unity and Reconciliation, to give every Malaysian, regardless of race, his or her place under the Malaysian sun commensurate with his or her undivided loyalty and citizenship.

For the Fourth Malaysia Plan to be such a Plan of Unity and Reconciliation as a coment to unite the races and the diverse people in Malaysia, the government must project itself, not in words but by deeds, that it is firstly a Government for all Malaysians, for all Races and Groups; secondly, it is dedicated to the abolition of poverty, and its war against poverty is not weighted more favourably for any particular racial group; thirdly, the restructuring efforts of the government to eliminate identification of race with economic functions in not a selective restructuring benefitting one racial group only; and fourthly, that it cares for the problems and aspirations of all Malaysians, regardless of race, as for instance, why in the 1970s, there had been such an exodus of professional Malaysians aboard, causing not only a severe brain-drain but highlighting the dilemmas of Malaysian who wanted to fully commit their energies, talents and resources to the national well-being but were constrained to emigrate because if the unfeeling, unsympathetic policies and attitudes of those Government in power.

I will be dealing with some of the above points in greater depth later when considering the Fourth Malaysia Plan. But I want the Government leaders to realise that one of the biggest obstacles to national unity is the attitude by certain political leaders, including several who have repeatedly expressed such views in this House, who regard non-Malays as basically disloyal and anti-national, although the overwhelming majority of them are local born and have no other country to which they regard as their home-land, and like my colleagues and me in DAP, are prepared to die in the defence of the national sovereignty and territorial integrity in the event of aggression against Malaysia from any quarter and country.

Elimination of Poverty

The FMP claims that its poverty eradication policies, coupled with the rapid growth of the economy and the favourable world prices for Malaysia’s major export commodities, led to a decline in the incidence of poverty from 49.3% in 1970 to 29.2% in 1980. In the absence of a full explanation about the definition of the poverty line, such figures are most dubious.

During the debate on the Third Malaysia Plan, I raised various objections about the use of a poverty line, the details of which are only known to the government. It is imperative that the government give a full account of how it arrives at the poverty line, whether income, whether a common income is used for both rural and urban poor, although the cost of living is higher in urban areas; whether the urban poverty line income has been revised for the year 1970, 1975 and 1980, etc. although the Third Malaysia Plan states that this poverty line takes account of the basic requirement of an average Malaysian household to maintain a family in good nutritional health as well as provide for minimum needs in respect of clothing, housing, household management and transport, the failure of the government to fully explain how it is worked out cannot but detract from the value of such claims.

It is to be noted that the above claims with regard to the reduction of the poverty group from 49.3% in 1970 to 29.2% in 1980 refers only to Peninsular Malaysia. There are no figures for Sabah and Sarawak, and as a result no specific targets have been set for the reduction of poverty in Sabah and Sarawak.

This is most deplorable, and justified the complaints by our Sabah and Sarawak countrymen that they were treated as step children in the national development process. In fact, the poor in Sarawak and Sabah, the Iban shifting cultivators, are probably even poorer than their counterpart poverty group in Peninsular Malaysia.

The attack on poverty in Sarawak and Sabah should become a priority government concern.

According to the Agriculture Census 1977, it was estimated that 37.7% of the total household were in poverty in 1976, the incidence for Peninsular Malaysia, Sabah and Sarawak being 35.1%, 51.2% and 51.7% respectively. In absolute terms, about 879,000 households were in poverty, of which 78.3% or 688,300 were in Peninsular Malaysia, 9.5% or 83,900 in Sabah and 12.2% or 107,100 in Sarawak. I call on the Government to modify the Fourth Malaysia Plan to include within it a progressive target for the reduction of poverty households in Sabah and Sarawak, which at present only applies to Peninsular Malaysia.

The Fourth Malaysia Plan spoke of programmes implemented to help specific target group to come out of the poverty line, namely rubber smallholders, padi farmers, coconut smallholders, estate workers, fishermen, mixed farmers and residents of New Villagers.

I am reminded of a visit I made to a new village in Pahang a week ago. When entering the Mengkarak new village in the Temerloh parliamentary constituency, the two-miles yellow-dirt road became a desert hit by a sandstorm when it is travelled. What is shocking is that previously the two-mile yellow dirt road was a black-tarred road.

While the country progresses with the various development plans, and now with the launching of a $40 million Fourth Malaysia Plan, Mengkarak new village has gone backward – where from a black-tarred road, it ahs got a yellow-dirt road.

Despite repeated request for the restoration of the black tarred road, the authorities concerned have not give them any heed. In fact, I found in Mengkarak new village the absence ogf the most basic care and facilities for the new villagers. The village road are also in deplorable stage, there is no dispensary as is to be found in neighbouring kampongs, no regular power supply, no Qualified Titles for the New village house-lots although the villagers have stayed there for some 30 years, and while the new village population has increased, the new village land has remained static.

In fact, the retrogression in development faced by Mengkarak where a ‘black-tarred road become yellow-dirt road’ typifies the neglect that the 450 new villagers in the country generally suffers in the country.


Although in the early 1970s, the DAP raised a storm in the Parliament for government care of the new villagers to ensure that they are inculed in the mainstream of development, the government has only made token gestures in this direction, like appointing a New Village Minister in the 1970s, and in the Third Malaysia Plan, mentioning as a specific poverty group. But nothing concrete has been done to raise their very depressed socio-economic conditions.

Between 1950 to 1970, the population in the new villages doubled to over 1 million, or some 10 per cent of the Malaysian population, but the land area of the villages remained the same.

Several studies conducted on the new village showed that overcrowding, indebtedness and limited economic opportunities were the major problems faced by the new villagers. Educational facilities were inadequate in some villages, forcing villagers to start work at a comparatively young age. Also, due to inavailability of land, farmers were cultivating uneconomic small plots, causing underemployment problems. New villagers also have high drop-out rates for primary students.

The new villagers were allocated about $30 million under the Second and Third Malaysia Plan, and under the FMP, another $30 million is being allocated. This is mostly inadequate when considering that there are 465 new villages to improve roads, drains and playgrounds.

The DAP calls on the Government to break away from its niggardly treatment of new villagers and should allocate $300 million under the FMP for the socio-economic development of the 465 new villages in the country, including the expansion of the new village boundaries to provide land for the increased new village population, and the creation of economic opportunities for the new villagers.

I was quite struck by Table 5-4 in the FMP on Selected Social Indicators, 1970 and 1980 which reflect the progress made during the decade to improve the quality of life of the people.

Although the Table is intended to to show how a more equitable distribution of social services improving the quality of life, like health, transport, communications, utilities and recreation facilities, is provided as between states, it is worth noting that in several states, there has been a deterioration of such social services.

Thus, with regard to the number of persons per registered doctor, the national position from 1970 has worsened in 1980.

In 1970, country-wide, there were 4,263 persons to one registered doctor, but in 1980, this ratio has worsened, leading to 4,321 persons to one registered doctor.

Reduced to State terms, it means that for Selangor, from a ratio of 1,801 persons per registered doctor in 1970, it had 2,293 persons registered doctor in 1980, for Penang, from a ratio of 2,502 persons registered doctor in 1970, it had 2,957 persons per registered doctor in 1980; and for Perak, from a ratio of 4,345 persons per registered doctor it worsened to 4,710 persons per registered doctor in 1980.

This is another instance of ‘black-tarred road becoming yellow-dirt road’ – where instead of development going forwards, there is a going backwards.

The root cause of this is the emigration of doctors abroad, resulting in a national in the doctor and population ratio.

This is also the position with dentists in regard to two states. In 1970, Penang had a ratio of 19,186 persons per registered dentist, but in 1980, the ratio went up to 19,396 persons per registered dentist. Pahang had a ratio of 22,796 persons per registered dentist, but in 1980 it became 25,619 per registered dentist.

This is also the case with the indicator on the number of person per acute hospital bed. In the states of Selangor, Negri Sembilan, Pahang, Perak, Penang and Trengganu, as is also the case with the Malaysian position, the ratio has increased instead of being reduced, showing that the facilities concern have worsened vis-à-vis the national population ratio.

The FMP states that the income levels of the lowest four deciles (these refer to the lowest 40% of households in the size distribution of income) of the population in Peninsular Malaysia, which formed the bulk of the poor had improve (Para 106). As shown in the Table 3-3, the mean monthly household income of these groups increased from $76 in 1970 to $142 in 1976. By 1979, it had increased to $186, about 145% above the level in 1970 without taking into the account the shrinking of the ringgit.

Thus, Table 3-3 shows:

t1970 1976 1979 Annual Growth rate
$ $ $ %
Malay 56.76 101.95 140.35 10.6
Chinese 135.93 242.27 280.11 8.4
Indian 112.48 197.21 263.43 9.9
Others 44.72 107.081 54.37 14.8
Total l75.90 142.19 186.19 10.5

In term of income distribution among the ethnic groups, the Malay mean income continued to be below the national average. However, the Malay mean income grew at the highest rate compared with those of other ethnic groups during 1973-1979, reducing the gap between the Malay mean income and the national average from 34.8% in 1970 to 32.7% in 1979. Although the Chinese and Indian mean income were above the national average, the proportion of their mean incomes to the national average declined during the period.

These figures, however, conceal the vast income disparities between and especially within ethnic group themselves.

Thus, at at recent Seminar on Development in the 80s ay Universiti Kebangsaan, Dr. Jomo Kwame Sundaram and Ishak Shari presented a paper on changes in come inequality between 1957 and 1976.

They said: “The income share of the top 20 per cent of households increased from 48.6% of total income in 1957/58 to 55.9 per cent in 1970 and 61.9% in 1976.

“IN contrast, the income share of the bottom 40 per cent of households declined from 15.9 per cent in 1957/58 to 11.6 per cent in 1970 and 10.3 per cent in 1976.”

They said income disparities appeared to be greater in urban than rural areas and among ethnic groups, which seem to be most serious among the Malays, followed by the Indians and the Chinese.

The ever concentration of wealth and income in the hands of a few regardless of race, is unhealthy and antithecal to the elimination of poverty or the creation of national unity.

Restructuring of Society – If Selective, would promote disunity

The restructuring of society to eliminate the identification of race with economic function is one of the two NEP prongs to create national unity. However, if the restructuring is selective, and applies to only one racial group, then it will foster national disunity and division.
In the last ten years, restructuring has been rather one-sided.

The Third Malaysia Plan (para 25) said socio-political stability could not be maintained for long in situations where, for example, a Malay farmer coming to town, even with an increased income, felt somewhat alienated, somewhat an outsider, simply because he saw so few Malays in the shops, restaurants and factories of the town. And so might the Chinese and Indians when going into Malay dominated agricultural area.

In the last ten years, much effort have been made towards restructuring the urban economic sector to comply with specified management and employment quotas; but nothing serious appeared to have been done to restructure the agricultural and other sectors which are indentified with race, e.g. the armed forces and the public service. JUST AS A MALAY FARMER SHOULD NOT BE FOLT MADE TO FEEL AS AN OUTSIDER OR SOMEWHAT ALIENATED WHEN COMING TO TOWN, SIMILARLY A CHINESE OR INDIAN SHOULD NO BE MADE TO FEEL AS AN OUTSIDER AND ALIENATED WHEN HE GOES TO GOVERNMENT DEPARTMENT AND FIND SO FEW CHINESE OR INDIANS.

For instance, in land development and settlement programmes in new areas aimed at producing viable farming communities, FELDA settled 42,200 families, FELCRA resettled 16,600 families and 4,100 youths in its fringe and youth scheme respectively. These land settlement schemes, however, are overwhelmingly of one race, despite the government’s pledge to restructure society to, among other things, to promote the growth of a more balanced residential pattern!

The police and the armed services are undergoing rapid expansion but since the start of the NEP in 1971, they are among the most visible symbols of ‘unstructuring’ sectors where there is a distinct identification with race.
For ‘restructuring’ to succeed to serve as an agent of national unity, rather than as a force of national division, it must be seen as an impartial force to ‘MALAYSIANISE’ the various sectors of the Malaysian economy, and not as an instrument to MALAY-ISE the Malaysian economy, as in clearly the rationale behind the UMNO Youth stand on the UMBC case.

This is why 10 years after the implementation of the ‘restructuring’ prong of the NEP, it has created so much reservations and opposition, leading to a sharp fall in the domestic private investment in during the Third Malaysia Plan.

It is also obvious 10 years after the NEP that the government is only pre-occupied with the redistribution of income and wealth between the communities, but has made no serious attempt at redistribution within the communities where grave disparities have appeared.

For instance, the recent government announcement of transfer of 660 million shares with an estimated market value of more than $1.5 billion from 21 trust companies to bumiputras raises the question whether in the end, it is the rich and privileged Malays, and in particular the UMNO-putras, who will benefit, aggravating the income disparity within the Malay community itself.

It is difficult to see how the padi farmer, the fishermen, the Iban shifting cultivators, or the Kadazan peasant, could benefit from the share transfer scheme.

In view of the obvious backwardness of the indigenous peoples in Sarawak and Sabah, I would like to ask the Finance Minister whether there is an allocation bumiputras, in particular the Ibans and and the Kasazans, or whether there would be a ‘free for all’ among the bumiputras in the acquisition of the shares.

The transfer of the massive government shares should be designed to serve two objectives; to increase bumiputras stake in corporate sector of the national economy, and secondly, to help relieve the poverty of the poorest in the land whether in Peninsular Malaysia, Sarawak and Sabah.
I would suggest that the $559 million shares, or the bulk of it, should be transferred to the all those below the poverty line, as the present share transfer scheme provided that all bumiputras are eligible to participate in the scheme provided that all making a payment of $10 for purchase of up go a maximum of 50,000 units.

As the government guarantees a minimum of 10 per cent bonus for ten years till 1990, until which time the shares are not marketable, these shares should be managed in trust of the shareholders by the National Unit Trust.

Control and Regulation of the UMNO-putras one of the key challenges if the 1980s

Since the inception of the NEP in 1971, in the name of restructuring the economy to ensure a 30% bumiputra participation in commerce and industry by 1990, a small group of Malay politicians and technorats – whom I would for short describe as ‘UMNO-putras’ –have control concentrated in their hands control of much of the private sector of the economy.

They managed the institutions which were given the task of spearheading government efforts in the creation if a commercial and industrial community among bumiputras through direct participation n the private sector. These institutions included MARA, PERNAS, UDA, State Economic Development Corporations, Bank Bumiputra, Bank Penbangunan Malaysia Bhd.

In the period between 1971 and 1980, PERNAS created and acquired equity capital of over $500 million through its subsidiaries and other interest in mining, construction, trading and plantation industries. Up to the end of 1980, PERNAS provided direct employment to 8,741 bumiputras out of total employment of 16,593 at all job levels.

In addition to providing credit, training, consultancy services MARA through its companies, including Kompleks Kewangan Malaysia Berhad, provided job for 9,421 bumiputras and help in trust equity shares totaling about $182.9 million up to the end of 1980.
The SEDCs undertook industrial and commercial ventures either on their own or in joint-ventures with the private sector, and they hold a total of $438 million in share capital as the end of 1980.

Under the Fourth Malaysia Plan, PERNAS would be allocated another $200 million, MARA another $495 million and the SEDCs$1,131 million.
UDA, which allocated $469 million from 1971-1980, would be given another $568.79 under the Fourth Malaysia Plan.
Permodalan Nasional Bhd, which was allocated $500 million on its formation under the Third Malaysia Plan, would be allocated another $1.5 billion under the Fourth Malaysia Plan to buy shares in trust for bumiputras.

From 1971 to 1980, out of a total public development expenditure amounting to $34,730 million, $11.1 billion was spent on transfer to the private sector as ‘disguised’ private investment. For the Fourth Malaysia Plan, $5,433 million of development expenditure would be used in the private sector for the same purpose to “accelerate the restructuring process, the creation of employment as well as to correct regional imbalances”
When we take into account Petronas, Malaysian International Shipping Corporation and Malaysia Airways System, we have a picture of billion of dollars of public money being controlled by a small group of UMNO-putras completely without adequate methods of ensuring public accountability and disclosure. Such large concentrations of economic power and decision making without the discipline of competition or adequate parliamentary scrutiny, is most dangerous.

We have seen from the Waterhouse investigations into the Bank Rakyat how vasts sums of public funds held in trust of the rakyat could be abused, misused and misappropriated – in that case requiring $155 million of government money to bail Bank Rakyat out of bankruptcy.
But the Bank Rakyat case came to light because of political power struggle, and if Datuk Harun bin Idris had not become a challenger to the UMNO leadership, there is no doubt that the Bank Rakyat scandals would have remained hidden from public view.
Similarly, in the various public enterprises which collectively control billions of dollars of public funds in the private sector, deviations and betrayals on the Bank Rakyat scale could be ruled out.

A system must be devised to keep these mighty public enterprises in check. The government argues that these public enterprises are registered as companies under the Companies Act to enable them to operate with the freedom and enterprise which is not possible as a government department. Be that as it may, it must never be forgotten that these public enterprises or public companies are controlling vast sums of public monies, and that they must be held under check and accountability.

The present system whereby a question could be asked in Parliament about these government companies through the Minister in charge is completely inadequate and ineffective to allow Parliament to discharge its responsibility to ensure that public funds are properly used and invested.

After 10 years of operation of such public companies and enterprises, who in fact are answerable to no one as the Minister in charge probably know very little than what he is informed by the public enterprise, the time has come for the country to take stock of the proliferation of such companies, to check any corruption or abuse and to improve on their performance, and to emphasise their accountability to the public and parliament

This can be done by the establishment of a Parliamentary Commission to review the operation if all public companies and enterprises in the last 10 years to ensuring that there have been no hidden Bank Rakyat s in the institutions, and also to review whole question of the accountability of these organizations to Parliament.

Call on Government to Fully Restore Domestic Confidence to Invest

The Fourth Malaysia Plan is the first official government document that I know of where the Government has admitted that Industrial Co-ordination Act (ICA) in 1975 has caused anxiety among investors and –had a depressing effect on privates sector investment in 1976 1975 and 1976.

However, domestic investor’ confidence has not been fully restored, –despite amendment to the ICA, which explains for the shortfall in domestic private investment.

The government must thank oil and the massive injection of public fund into the private sector to enable private investment (including oil) to expand at 12% per annum in real term during the first decade of the OPP.

This is no doubt that there is considerable domestic funds which could be mobilized and harnessed to the development of the country, provided the Government can demonstrate that the NEP would not be interpreted in an extremist fashion, as was done by Haji Suhaimi over the UMBC case and by the Bintulu Development Corporation over the requirement for 50% bumiputras ownership of land for the land to be developed.

The UMBC case is an important principle, for once it is established that non-Malays cannot acquire majority ownership of a bank, then very soon, it would be extended to all other enterprises and undertakings, and the New Economic Policy will take on a new horrific significance.
I call on the various component parties in the ruling government, the UMNO, the MCA, the Gerakan, the MIC, the SUPP, the Berjaya, to declare their stand on the important question of principle to the people.

I call on the various component parties in the ruling government, the UMNO, the MCA, the Gerakan, the MIC, the SUPP, Berjaya, to declare their stand on the important question of principle to the people

It is no use MCA branches issuing fierce statement about Haji Suhaimi’s extremist stand, while MCA Cabinet Ministers by their action or inaction agree to be establishment of the UMNO principle of the UMNO Youth. It would appear that Haji Suhaimi is more powerful than the entire MCA Cabinet Minister, MPs and entire Party put together.

I call on the Prime Minister to take a firm stand against all forms of extremism to assure all Malaysians that the NEP is not designed to ‘rob Peter to pay Paul’, or to ‘make any group suffer or experience any loss or suffer any sense of deprivation of his right, interest, income, privileges, etc’.

It is cases like the UMBC and Bintulu which, if not immediately clarified by the Government as not the policy of the government, would deepen the crisis of confidence among domestic investors.

DAP calls for establishment of another two universities under FMP

Higher education opportunities for Malaysian students was a burning issue in the 1970s, and promises to be even more burning in the 1980s especially with the further increase of university and cost of living fees in the United Kingdom for foreign students.

The Education Minister, Datuk Musa Hitam, was reported to have said that he was fed up with raising the matter with the British education authorities, and that the Government was taking action to send future scholarship students to other countries apart from the United Kingdom.

Much as Malaysian parents appreciate Datuk Musa’s attempt to intercede with the British education authorities on behalf of Malaysian students in the UK, the problem really lies at home with Datuk Musa Hitam himself and the Barisan Nasional government.

This is because the it is precisely because of the Barisan Nasional’s higher education policy which had compelled Malaysian students to seek higher educational outlet overseas.

The aspiration for higher education opportunity is a legitimate aspiration which must be entertained by a responsible government.

The Deputy Prime Minister, Dr. Mahathir, said in his seconding speech that human resources is probably the country’s most importance resource, but the Malaysian government appears to be indifferent to the aspirations of Malaysians to develop their talents and abilities to the fullest.

Instead of expressing his frustration with the UK Government for not being sympathetic with the problems of intending Malaysian students going abroad, Datuk Musa Hitam should understand and sympathise with the frustrations of Malaysian students who could not find university or higher education opportunities locally.

I give below the comparative figures of enrolment of Malaysian students in the five local universities in 1970 and 1980:


Bumiputra Chinese Indians Others Total
University Malaya 2,843 3,622 525 277 7,267
University Sains M. 67 126 33 5 231
U. Kebangsaan 174 4 1 179
3,084 3,752 559 282 7,677


Bumiputra Chinese Indians Others Total
U. Malaya 4,045 3,162 676 162 8,045
U. Sains 1,956 1,354 270 17 3,597
U. Kebang 4,997 621 180 9 5,807
U. Pertanian 1,460 223 88 12 1,783
U. Tecknologi 680 90 34 9 813
13,138 5,450 1,248 209 20,045

This means that from 1970 to 1980, university student enrolment in the local universities represents a 326% increased for Malay students from 3,084 in 1970 to 13,138 in 1980; a 45.2% increase for Chinese students, from 3,752 in 1970 to 5,450 in 1980; 123% increase for Indians, from 559 in 1970 to 1,248 in 1980; while university student population increased by 161% from 7,677 in 1970 to 20,045 in 1980.

In 1970, the breakdown of students according to race for local university students were: Malays 40%, Chinese 49%, Indians 7.3% and others 3.7%. In 1980, the racial breakdown is now Malays 65.5%, Chinese 27.2% Indians 6.2% and others 1.1%.

The Fourth Malaysia Plan gave as students studying in tertiary education oversea in 1980:

Malays 5,194
Chinese 11,538
Indians 2,676
Others 107
Total 19,515

It would save foreign exchange and train human resources which could be harnessed to the development and progress of Malaysia if we provide university education opportunity for the 19,515 who are now in foreign universities. The government should immediately establish two more universities under the Fourth Malaysia Plan, so that we can train our own students without having to send them abroad to beg for places or for reduction of university fees.

With the oil wealth that Malaysia is lucky to enjoy, we should put the oil money to good use. And there is nothing more productive and for the good of Malaysia’s long term future than to train to the maximum the human talents, resources and abilities we find in our people.

Apart from 19,515 Malaysians who are abroad in foreign universities, there are also 5,263 Malaysian students abroad who are doing certificate courses and 4,953 students abroad doing diploma courses.

The government should also consider expanding facilities of local technical colleges and polytechnics to provide places for local students for certificate and diploma courses without their having to go abroad.

Corruption and Bribery of Development Expenditure

Between 1937 and 1980, a total value of $4,426.7 million of government contracts were issued. It is a well-known fact that in major government contracts, corruption and bribery is rife involving a mark-ip of some 5 to 10%, which would mean a hefty sum of $300 million to $400 million of public expenditure going to the line pickets of the corrupt.

Coincidentally, Time Magazine of March 16, 1981, in an article on “Big Profits in Big Bribery” reporting on under-the-table payoffs in various countries, has this reference to Malaysia:

“While the goal of bribery is same in Asia, the style is often very different. In Malaysia, aspiring foreign businessmen reward government officials by making use of the Malaysian mania for gambling. A common approach is to invite a minister or government official for an afternoon of golf, bet heavily and then spend the next three hours swatting the ball into sand traps. An only slightly more straight-forward method is to get into an after-dinner poker game with a key civil servant and lose heavily. ”

In special column on ‘Big Takers’ mentioning five countries, Malaysia has the honour or dishonour of being listed. Malaysia is mentioned in the compony of Argentina, Indonesia, Mexico and Saudi Arabia where it is stated that the “approximate mark-up on contracts” is 5 to 10%.

As I said during the debate on the Yang di-Pertuan Agong’s speech, corruption in Malaysia in high places has become so rampant that it has become a way of life, and the wonder is that there is a National Bureau of Investigation which appeared to be living in a completely different world of its own.

Under the Fourth Malaysia Plan, there would be even a higher rate of governmental expenditures and contracts, with the dangers of even greater corruption.

I am particularly concerned that there must be the strictest scrutiny and integrity in expenditure involving hundreds of millions of dollars for a five or 10 per cent mark up can create a few millionaires overnight. This is particularly the case with defence expenditures which will hit the record high of $9.3 billion for the next five years.

At the end of last year, the International Defense review carried an article in which reported the protests of defence vehicle manufacturers at the way the Malaysian Ministry of defence was selecting defence vehicles.

The Ministry of Defence wanted to buy Fire Support Vehicles(PSV) and Armoured Personnel Carriers(APC) for the formation of a new Armoured Corps, needing 350 Armoured Personnel Carriers and Fire Support Vehicles.

Many European and American manufacturers of armoured vehicles submitted their vehicles for consideration by the Ministry of Defence in 1979, but the complaints by the manufacturers were the inconsistency by the Mindef with regard to the original outline requirements and subsequent changes in regard to the requirements.

According to the International Defence Review, 4/1980, early in APC and FSV selection process, Malaysian officials told representatives of the manufacturers that they had two key requirements for the new vehicles:

  1. The Army wanted only production models for which there was an established sales record and for which there were established data regarding reliability and maintainability;
  2. The Army wanted guarantees that after the initial sale there would be an adequate supply of spare parts during the projected life cycle of the vehicles.

In addition, four technical requirements, not all of which had been made clear to the manufacturers, emerged from the subsequent trials:

  • a large interior volume for the APC to allow the transport of a maximum number of troops and equipment;
  • long range capability(up to 1,000 km) to allow the use of vehicles in areas where fuel supplies are unavailable;
  • a high practical road speed so the vehicles can be moved quickly to points where they are needed; and
  • a fire support vehicle that mounts the 90 mm Cockerill main gun in a production turret

Various defence manufacturers sent their vehicles for trials and evaluation in Malaysia, and complained bitterly when the Minder chopped and changed about with regard to the technical requirements, which were never specified clearly.

As the Defence Review article concluded its articles:

“Whatever the final outcome, there are some obvious inconsistencies in the way the competition has evolved. Malaysian officials requested production vehicles with proven reliability and maintainability, but then established technical specifications that such vehicles cannot meet at the time. Several vehicle producers have asked the Malaysian Ministry of Defence for clarification of the Army’s needs, and others have written strongly-worded letters of protest. Sending vehicles and personnel for trials is an expensive business, and some of the manufacturers feel that they have been not been treated fairly. At the very least there has been a definite breakdown in communications between officials and manufacturers. This confusion needs to be cleared up soon, especially if the Malaysian Army expects to see the APCs and PSVs it hopes to order deployed in the country by mid-1983”

Following the protests of the defence vehicle manufacturers, the Defence Ministry, although it had short-listed the Belgium-made SIBMAS (costing some $900,000 for 140 FSV) and the Brazilian-made Urutu (costing about $600,000), has after some three years of trials and evaluation, finally issued tender documents to the various manufacturers of FSV and APC – when this should have been done first thing some three years ago.

Can the Minister of Defence explain to the Parliament and the people for this scandalous way on the part of the armed services in going around shopping for defence hardwares?

What has amazed service people is that the specification of the armoured personnel carrier (APC) is for a four-wheeler while the spcification for a Fire Support Vehicle (FSV) is a six-wheeler

A six-wheel vehicle performs much better especially in cross-country than a four-wheeled vehicle. Furthermore, in normal battle formation, the APC and the FSVs will be moving together, and the inferior performance of the APCs in this context will hinder operations.

TAM Tanks – $250 million

The proposed purchase of FSVs and APCs are not the only instances where there appears to be improprieties and irregularities.

Thus the army proposed to purchase 56 thanks for the new Armoured Corps. The army considered the Vickers tank of United Kingdom, the AMX thank of France and the TAM tank of Germany.

These tanks were evaluated abroad and were never brought into the country for actual trials as conducted in the case for the FSVs and the APCs where army requested manufacturers of each type of vehicles to send their vehicles to Malaysia to undergo Malaysian-type trials under Malaysian conditions.

Thyssen Henschel, the German manufacturer of TAM, had been in Malaysia meeting treasury and mindef officials on the possibility of selling TAM tanks to Malaysia. The TAM tank is actually designed specially for Argentina and is produced in Argentina to meet Argentine specifications that the tank should not be more than 30 tons.

For some reason, the Malaysian army has also decided that it wants a tank which is not more than 30 tons, probably on the ground the Malaysian bridges in the North could only accommodate up to this tonnage, ignoring the fact that a tank regiment is a self-sufficient regiment in having its own bridge-laying capabilities so as not to rely on existing bridges for crossing in time of war.

The purchase of 56 TAM tanks, at about $4.5 million each, would cost Malaysia some $252 million. It is not only an expensive tank, but an unproven one for Malaysian conditions. I understand that the West German Government does not recognise TAM as a tank, but only as a heavy-armoured vehicle by NATO standards, which will mean that there will be a problem of obtaining export licence from the West German government if TAM is to be manufactured in West Germany and not in Argentina.

We must also ask ourselves why we want to have a tank corps. This is surely not to fight guerilla war with the communists in the jungle, but to fight a conventional tank warfare should war break out because of Russian-backed Vietnamese aggresion.

Vietnam, which not only has the third largest helicopter-borne force in the world because of the left-behinds of American military withdrawal from Vietnam, posessed both Russian and American tanks – wheather the Russian-made T54s and T55S, or the American M60s and m48s, which are of about 50 tons in weight.

In a tank warfare, the lighter TAM would be out-classed by heavier T54s, 55s or M60s,M48s, because the ballistic immunity of a lighter tank is much inferior to that of a heavier tank.

A FSV is to have a ballistic immunity where its armour would withstand firing of 7.62 ball-round from 30 meters and 7.62 AP (Armour-piercing) round from 100 meters. The question is whether TAM tank has this ballistic immunity of a FSV, and when the weight of the tank is reduced, the amount of metel or steel providing the armour is also reduced, making it more vulnerable to attack.

It is pointless buying more expensive tanks which cannot match tanks which Malaysian may have to meet. I call on the Ministry of Defence to re-evaluate, in the way it has done with FSVs and APCs, all tanks under Malaysian conditions, to subject to stringent tests as endurance, armour protection, etc. before a purchase is made. Let us not have another repetition of repetition of the Panhard Vehicles which clutter the army workshops in th ecountry.


The Ministry of Defence, in its defence build up to meet with external threats, proposes to buy 30 pieces of 155mm gun howitzers, the first time Malaysia will be acquiring such calibre weapon which will be capable both of off defensive and offensive qualities.

The army has short-listed four gun howitzers, but appears to have favoured the Swedish-made Bofors FH-77B, which is proto-type, costing some $314 million, when there is another gun-howitzer which is tested and proven and cost only about half the price.

Bofors supplied the army with about 12 anti-aircraft guns, the 40L70 Air-Crat guns about three years ago. Recently, the army found some problem with the guns, which cost about 55 million. The radar on the gun was found to be faulty, transmitting impulses and not receiving impulses and more seriously, the problem of barrel decoppering, i.e the barrel wear of the gun was more excessive than specified, affecting the life span of the gun. The Bofors anti-aircraft gun was also a prototype, which should warn the army about the dangers of untested, unproven prototype howitzer-guns.

Although Bofors has produced a similar calibre weapon namely FH 77A for the Swedish army, the weapon has a different barrel, different elevation, from that of FH77B, and firing only Bofors ammunition which is not a standard NATO ammunition as required by the Malaysian army. As a result, to comply with Malaysian requirements, Bofors had to redesign the FH77A to produce a FH77B to meet Malaysian army specifications. But this is in fact a very major change in design, i.e change of barrel, increase of elevation, change of breach in order to fit NATO ammunitions.

The Malaysian team which went to Sweden to inspect the gun were in fact the first team to witness a firing demonstration and at that time, the FH77B had not completed the factory-firing trials.

Another problem which Malaysia will face when it purchases the FH77B is that in time of war, there will be difficulties of obtaining ammunition. During the Indonesian Confrontation, Malaysia was not able to obtain ammunition from Bofors directly for its naval 40L70 guns as Swedish neutrality fobid it to supply arms to warring nations in time of war. As a result, the Malaysian government had to utilise the Crown Agents in England for its supply of ammunition while, in the meantime, the Navy faced the danger of lack of stocks of ammunition.

Again, we must consider why the army is acquiring the medium-range howitzer for the first time. Malaysia has 105mm howitzer with a maximum range from 14 to 16 kilometres, which could be used in guerilla war to give covering fire, and also conventional warfare. The acquisition of 155mm gun-howitzers to have firing range up till 30 kilometres is clearly in anticipation of more conventional warfare, again from the direction of Indo China.

Before FH77B can only hit 24km using standard NATO ammunition. Although they have claimed that using EFRB (Extended Full-Range Bore) ammunition, they could fire up to range of 30km, this is still unproven.

Vietnam has Russian-made 130mm howitzer guns with a maximum range of 27 kilometres, which means that Bofors FH77B would be outgunned!

The Ministry of Defence must explain to the people why it is rejecting a cheaper, proven and tested gun-howitzer like the Austrian-made GC45 model, which cost only about $150 million, a tested model designed for simplicity, ease of maintenance and serviceability, minimized logistical problems but a high range with a ballistic solution.

I understand no international tender in the strictest sense of the word had been issued for the purchase of the 30 pieces of 155mm howitzer-guns. I call on the Minister of Defence to ensure that there is a proper tender exercise, and that the guns are selected on their merits and proven worth, as well from the point of view of price, and that purchase for defence hardware should not be a mysterious exercise in secrecy and backroom deals but an above-board operations where the choice of a certain model should be explained to the people.

Let us not bluff outselves that we should keep the acquisition of defence weapons secret for our security interest, for the simple reason that the whole security world knows what another country is shopping in the world armaments market. The only people who would be kept in the dark will only be the Malaysian rakyat themselves. Such secrecy can only benefit the corrupt.


With $9.3 billion earmarked for defence expenditures, it is essential that such massive expenditure of public funds must be subject to the closest parliamentary scrutiny, to satisfy the people and the public that everything is above board, for any deviation or will not only cause million and ten of millions of dollars of loss of public money, but may prove positively harmful to Malaysia’s defences and national integrity and sovereignty in times of war when defective or far from satisfactory defence hardwares are deployed.

I understand that in Malaysia, in the defence business world, there is a person who has virtually become the Czar of all defence procurements. It is said that all foreign defence and armaments manufacturers realise that he is the man to retain if they are to succeed in pushing their merchandise of war to the Malaysian Government.

This Czar of Malaysian Defence Procurements, who is an ex-brigadier general, has directly through himself, or though his close associates, bid successfully for the majority of the Mindef’s multi-million dollar defence procurements, like the $160 million SPICA M Fast Strike Crafts, the $200 million contract to provide two Corvette ships, the $450 million contract to supply four MCMV ( or Mine Counter Measure Vessels or commonly known as mine hunter), the $20 million contract to provide the Italian made 105mm Automorallen howitzers, the $80 million 5.56mm ammunition for rifles, the $50 million anti-aircraft Bofors systems, and is behind the lobby for the TAM tank, 155mm gun-howitzer and the FSVs and APCs.

A Parlimentary Committee on Defence should be established to provide continous scrutiny of defence expenditures to protect not only public funds but also national interests, to ensure that every ringgit spent on defence is worth the value in terms of adding to the strength, resilience and capacity of the nation to withstand any form of external threat or aggression.

The FMP said that Malaysia is committed to maintaining a political framework which allows for a democratic way of life, consistent with the maintenance of peace and stability within the country.

In reality, the democratic system has been seriously truncated in the decade of the 1970s. The FMP (Para 330) referred to the amendments to the Constitution to ban the discussion of ‘sensitive issues’. It went on to say:

“Discussions on these issues were conducted in the National Consultative Council, and on the dissolution of the Council, in the National Unity Board. Following the dissolution of the Board, discussion were then conducted in the Department of Rukun Tetangga and National Unity”

I find this very curious statement, for I am not aware that ‘sensitive issues’ forums were the National Unity board and now Department of Rukun Tetangga and National Unity – for such forums clearly served no useful purpose.

What disturbed Malaysians is that ‘sensitive’ issues is being given a one-sided interpretation, where the challenges of the ‘sensitive’ issues by leaders of one party, like the UMNO Youth Leader, Haji Suhaimi, to Article 152 of the Constitution when he called for the implementation of Clause 21(2) of the 1961 Education Act was overlooked by the Attorney-General despite a police report against the offence against the Sedition Act.

Democracy is a fragile plant, but it can only survive and grow if all leaders concerned honour not only the trappings, but also the essence and content of democracy.

The government should restrain itself from resort to more and more undemocratic legislation, like the proposed amendment to the Societies Act, and allow a freer flowering of freedom of beliefs, expression and assembly as entrenced in our Constitution.

Before I conclude, I would urge the Prime Minister to give democratic play to public opinion, and before draconian amendments are introduced to Societies Act to restrict the freedom of action and opinion of societies, give the several thousands of societies an opportunity to study and make representation to the government concerning their views with regard to the amendments to the Societies Act. The Societies Act amendments should not be rammed through Parliament next week, but should be brought up to Parliament at then ext meeting in June after there is a full airing of public views on the amendments by the societies in the country.