NEP - route to insincere partnerships

NEP - route to insincere partnerships
Pauline Puah, Malaysiakini
Nov 8, 2005

The New Economic Policy (NEP) was intended to push bumiputeras into
business between 1970 and 1990, but their lack of experience - some say
acumen - led to even more shortcuts being taken.

Enter the ‘Ali Baba partnership’, the name given to a business arrangement
that was ostensibly a win-win deal for the parties involved.

It enabled bumiputeras to be brought in as ‘sleeping partners’ of those
already in business, but who were no longer qualified to obtain
government contractors on their own merit.

“Malays know the government agencies very well, while the Chinese have a
lot of money. So they came together. There was no genuine partnership,”
said Syed Amin Aljeffri, president of Kuala Lumpur Malay Chamber of
Commerce.

It may have worked at a basic level, but not without stereotyping those
involved - typically, this painted the non-bumiputera as ‘greedy and
grasping’, and the bumiputera as ‘lazy and useless’.

In this respect, the NEP also tainted those seeking sincere partnerships
and whose business arrangements were beyond reproach or based on genuine
ability and mutual respect.

Loss of trust

Mistrust and suspicion were other manifestations of the fallout from
implementation of the NEP.

Federal Territory Malay Contractor Association president Mokhtar Samad was
candid in claiming that non-bumiputera entrepreneurs are still unwilling
to help their bumiputera counterparts.

“Malays just own about 18 percent equity, the Chinese own the remainder
because they are capable and developed. The Chinese don’t have to make
noise lah....they should support the Malays to be as developed as them,”
he said.

“They (the Chinese) just shout out that they want to help us. But actually
they do not give us a chance. Of course I know that I can’t force people
to help.”

Selangor Chinese Assembly Hall president Bong Hon Liong said bumiputeras
should move away from relying excessively on the government’s assistance.

“I don’t deny that, to a certain extent, some of them still need help. But
they must first change their attitude,” he said.

Bong said the NEP did not encourage competition on a fair platform or on
merit and that has led to mistrust among the business community.

“To get their way, the Chinese use Malays to get licences, while Malays
use Chinese capability in businesses. This is not competition, it is
using one another,” he noted.

Ting Chee Seng., Federal Territory Engineering and Motor Parts Traders’
Association cultural and education bureau chief is more inclined to
believe that only a small number of people are insincere.

“Chinese are cheated by Chinese, too. Cheating is a human trait that has
nothing do with the ethnicity of the person. Do you think only Malay are
lazy? They are many lazy Chinese, too,” he said.

Policy to blame

So what is at the root of the suspicion and mistrust?

Paul Low, vice-president of the Federation of Malaysian Manufacturers,
said this was due to the NEP itself.

“Obviously with the circumstances, it encouraged insincerity to come in.
It set the environment that the basis of partnership is through
affirmative action. So could the non-bumiputera be sincere?

“If required to comply with the 30 percent bumiputera equity rule, I would
identify a partner who will give me the least problems just so that I can
comply with the rule.”

He said even a sincere partnership between entrepreneurs of the same
ethnic group has to be based on trust and friendship.

“Two Chinese cannot go into business if they don’t know one another. Even
they can be exploitative,” he said.

In addition, two opinions prevail about going into business - while the
bumiputeras still believe they need government help, non-bumiputeras are
already learning how to succeed on their own.

“If bumiputeras have this insecurity, then they will always think that
they need help. But after so many years, they just have to believe that
they can compete and learn things. Of course the government could give
some support,” Low said.

“The earlier they realise the need to help themselves and become more
confident of their capability, the better for them. They should be more
self-evaluating and should not blame others. If they depend other races
to share (wealth), it will take a long time. So why not do it
themselves?”

This is especially since the “real world” and current global developments
demands survival skills of everyone, he added.

Need for transparency

One issue over which those interviewed found consensus was that the
transparency is very much required in any business sector.

“I hope the government will call open tenders for projects (to force)
bumiputera contractors to compete. The practice of negotiation to get
projects should be stopped,” Mokhtar said, claiming that the policy has
allowed inexperienced contractors to obtain large projects.

Syed Amin said there is a need to stem leaks arising from poor
implementation of policy because this has thwarted the objective of
producing successful Malay entrepreneurs.

This is illustrated by the experiences of a non-bumiputera entrepreneur
based in Kuala Lumpur, who declined to be named.

He said the government has wasted money by handing out projects under the
NEP without calling tenders.

“I still make profit by providing goods to bumiputera entrepreneurs who
obtain the government’s projects. But the government has to pay double or
even more when it can get the goods direct from us,” he said.

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