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Narrowing Disparity
Moving Beyond the NEP
The New Economic Policy (NEP) and its successors over the years
have succeeded in transforming the Bumiputera community
in terms of reducing inter-ethnic income disparities, increasing
participation in corporate equity, increasing the number
of Bumiputera professionals and overall representation in
management as well as eradicating poverty.
While there have been major achievements since the introduction
of the NEP, there is still a significant need to address existing
imbalances in income levels and ownership of economic assets.
The Bumiputera share of the economy is still small in proportion
to the Bumiputera population. There are significant opportunities
to improve Bumiputera representation in high-value added
occupations, management positions and high-income jobs.
Bumiputera households make up 65 per cent of total households
and also represent a higher proportion of households in the
lower income groups. Bumiputera ownership of share capital (at
par value) of limited companies remains at 21.9 per cent in 2008,
which is still short of the 30 per cent target for corporate equity
ownership set at the macro level.
The NEP has also led to unintended outcomes within the
Bumiputera Commercial and Industrial Community (BCIC) such as
the issue of quantity versus quality; small number of high calibre
Bumiputera entrepreneurs and small number of regional or global
Bumiputera players among others.
NEM and Narrowing Disparity SrI
Tan Sri Nor Mohamed Yakcop,
Minister in the Prime Minister’s Department,
Economic Planning Unit
SrI: Narrowing Disparity
The New Economic Model (NEM) introduced by the National
Economic Advisory Council (NEAC) builds on the work of previous
policies such as the NEP, with an emphasis on developing
Bumiputera Small and Medium Enterprises (SMEs) and
accelerating the BCIC development. The NEM’s recommendations
– clustered in the Narrowing Disparities SRI – are intended to
address existing imbalances in income levels and ownership of
economic assets. This is done through two policy measures to
establish specific programmes for Bumiputera SMEs and to focus
on capacity building programmes.
In the first policy measure, the NEAC proposes that these
programmes should be market friendly and transparent, and be
granted on the basis of needs and merit. The Bumiputera SMEs
that are products of these programmes should be self-sufficient
and able to compete in a liberalised environment independently,
making these Bumiputera SMEs more competitive.
The second policy measure proposes that capacity building
programmes should be provided to Bumiputera as well as
non-Bumiputera SMEs on the same market-friendly principles,
with a focus on building talent, identifying new technologies
and enhancing collaboration between Bumiputera and nonbumiputera
firms, as well with government linked companies
(GLCs) and multinational companies (MNCs). Bumiputera-support
institutions such as Majlis Amanah Rakyat (MARA), Perbadanan
Usahawan Nasional Berhad (PUNB), Permodalan Nasional Berhad
(PNB) and others also play an important role in identifying possible
opportunities for Bumiputera participation in the 12 National Key
Economic Areas (NKEAs).
The New Economic Policy (NEP) and its successor policies over the years have succeeded in
transforming the Bumiputera community in the aspects of equity, employment, household
income and poverty. The income and wealth disparity has improved significantly throughout the
last decade. The Government continues to improve the disparity gap for the bottom 40% through
existing policies and national level initiative such as the Government Transformation Programme
(GTP). At the same time we need to grow, develop and nurture the Bumiputera Small Medium
Enterprises (SMEs) in order for them to compete globally. It is the Government’s hope that these
SMEs will be able to meet the target of 20 per cent contribution to the nation’s gross domestic
product by the year 2020. I am confident that Bumiputera SMEs will take up this challenge and
identify ways of how we as the Government can facilitate and accelerate their growth.
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