The Second Malaysia Plan 1971 - 1975: A Critique 9789814380102

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The Institute of Southeast Asian Studies

btablished as an autonomous corporation in May, 19(18 , the Institute of Southenst Asian Studies is a reg.ional research centre for scholars and other specialists concerned with modern Southeast Asia . The Institute's research interest is focussed on the many-faceted problems of modernization and social change in Southeast Asia . The Institute is governed by a 24-member Board of Trustees on which are reprcseuted the University of Singapore and Nanyang University. appotntees from the Government, as well as representatives from a broad range of professional and civic ~)rganizations and groups. A ten-man Executive Committee oversees day-to-day operations. it is ex afficio chaired by the duector. the Institute's chief academic and administrative ofiicer .

"Copyright subsists in this publication under the United Kingdom CL)pyright Act, t 9 II and the Singapore Copyright Act (Cap. 187). No person shall reproduce a copy of this publication, or extracts therefrom, without the written permission of the Institute of Southeast Asian Studies. Singapore ."

First Printing August 1972 Second Printing .lune 1974

THE SECOND MALAYSIA PLAN 1971-1975: A CRITIQUE

Syed Hussein Alatas

Occasional Paper No. 15 Institute of Southeast Asian Studies Singapore Price :

$ 3 . 00

Preface The publication of the Second Malaysia Plan was an It reflected important event in the nation's history . the thinking, the goals and the methods of the Tun Razak Government and set forth the guidelines the nation might be expected to follow for the next few years Any document as important as this deserves careful study and discussion so that it can be understood and evaluated , Such discussion can alert its authors to shortcomings or errors which m1ght have been overlooked in the drafting stage , S1nce the publ1cat1on of the Plan, the Inst1tute of Southeast As1an Stud1es has sought to gain the insights of 1nformed people on the mean1ng and ram1f1cations of the In October 1971, Dr . K. S N1Jhar gave a seminar document . It on the topic, the Second Malays1a F1ve Year Plan second a hold to decided proved so suc c essful that it was seminar on the same top1c at a later date. The Inst1tute learned recently that Professor Syed H . Alatas was study1ng and prepar1ng a cr1tlque of the Plan For reasons wh1ch remain for an audience 1n Penang. unclear, the paper was not read to the group for which it was or1g1nally 1ntended . Recognizing the seriousness of the paper and 1ts importance, the Instltute organized a seminar at the Un1vers1ty of Singapore on 21st June, 1972 on ''The Second Malays1a Plan 1971-1975" . More than fifty scholars, diplomats, JOUrnalists and others were in ', li1en Professor Alatas completed h1s presenattendance tation, a l1vely d1scussion followed . Because so many requested cop1es o f the paper, the Inst1tute decided to publ1sh ,_t 1n 1 ts Occas1onal Paper Ser1es . Profess o r Syed H. Alatas 1s Cha1rman of the Department of Malay Stud1es, Un1versity of S1ngapore and formerly a He 1s the author leader of the Gerakan Party in Malays1a of numerous arti c les and books; one of the latest is p ublished earlier l r 8 l -l8 26 , s ch ~ m e ~ o P r e f o rm er? Raffl~8: th1s year. The facts, lnterpretation and method of presentat1on are those of the autho r alone and the Inst1tute is not respons1ble n o r sh o uld ~t be considered as advocating or support1ng the 1deas or the lnterpretatlon of this paper . July 17, 1972 .

Josef Silverstein D1recto.r

The Second Malaysia Plan belongs to a tradition of five-year plans developed by the Alliance government since the Independe n c e All these plans are of the same style and ambition. The Second Malaysia Plan however contains some new ~lements, namely the specific policies concerning the Malays and other indigenous people . The plan, as a document, is relatively incomplete, inconsistent, and unintelligent in presentation. It has used statistical data in an unintellingent manner away from fundamental problems of the country. Statistical data has been presented out of their meaningful context, apart from being incomplete. To-night I should like to discuss the fundamental assumptions of planning as well as a critical assessment of the Second Malaysia Plan The fundamental assumptions of planning are the following: (1) That planning is a necessity, (2) that not all plans are equally good, (3) that planning, to be sound must have a sound philosophical background, (4) that p lanning 1nvolves the use of quantitative as well as qualitative data, in our instance, statistics, their interpretations, their relation to significant processes of society with reference to the avowed obJectives, ( 5) that planning presupposes the proper implementers for a good plan with bad implementers will defeat its purpose, and (6) that the plan must be conceived by the proper group of planners for there are good and bad planners . A combination of idiots and planners may result in a peculiar creation like the mule, an offspring between a horse anq a donkey . The mule 1s incapable of breeding itself . A bad plan wh1ch is the product of the combined effort of idiots and bad planners 1s not capable of development . It is usually negated by subsequent events To go deeper into the problem of assessment let us start with statistics. There is a difference between statistical reasoning and the mere compilation of statistics. The Second Malaysia Plan 1s full of statistics but lacking 1n statistical reasoning . We shall demonstrate this statement later . To beg1n w1th there are at least three degrees of reliability in statistics The first is where the statistics has a hundred per cent reliability. An instance is the growth of rural telephone booths from 131 in 1957 to 1,366 in 1968 . There are numerous reliable statist1cs of that sort , The compilation of such statistics is within government control in Malays1a " Stat1stics on export, import, production of rubber and palm oil, mining, government revenue and expenditure, and a host of other items, belong to that class of statistics w1th a high reliability.

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There is another group of statistics in Malaysia with far l ess reliability . The Alliance manifesto for· the 1969 election, in 1ts effort to prove that the country has progressed under Alliance rule, pointed out that the country had increased the production of beef, mutton and poultry, among others. In 1968, 12,620 tons of beef was produced as compared to 9,210 tons in 1957 . This statistics is fairly reliable because government is in the position to know the amount of beef consumed . But what about the amount of cow bones? Strictly speaking beef does not include the bones. There is no available statistics on bones . Hence there is none on the consumption of bones " The actual consumption of beef is the consumption of slaughtered cows minus their bones, entrails, and other parts not classified as meat . Nevertheless the statistics is fairly reliable as an 1ndication of trend and approximate volume of beef pr odu c ed . Its production in Malaysia will have to pass through the government network which enables statistics to be campi le d . However it is different with the poultry meat ment ion ed by the Alliance manifesto. In 1957 it claims the co untry produced 27,000,000 pounds of poultry meat and in 196 8 120,000,000 pounds . It is obvious that this statistics 1s based on what enters the market , The government can only know what enters the market . It cannot at this stage possibly know the poultry that is slaughtered at private homes, hundreds of thousands throughout the villages of Malaysia . There is no law compelling a villager to register with the District Office whenever he wants to slaughter a chicken . Thus, the poultry slaughtered by the hundreds of thousands in homes in the villages of Malaysia do not enter the government statist1cal network . Thus the Alliance statistics on poultry is much less reliable then on beef because there are not many pr1vate homes owning cattle as they do poultry . We do not even have an est1mate of how many percent of the total national consumption of poultry meat do those figu r es represent . The danger with an improper utilization of statistics is that the d1fferent grades of re liability is presented as a single ty pe of reliable stat1stics . It 1s further l1nked with the ass~mp t io n that the country has progressed under Alliance rule with the increased consumption of beef, mutton, and poultry as an argument . If the Alliance party is familiar with sta ti stical reasoning it would not use the increased consumption of meat as an argument for its allegedly good government < To begin with how many per cent of the population consume the meat? What about the increase in its price?

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The increasing price of meat may lead to a decreasing percentage of people consuming it in decreasing frequency. If the rich become richer and the poor become poorer, the rich can raise the consumption of meat without having any bearing on the increased standard of living of the Thus statistics unconnected with a proper majority. The Second statistical reasoning can be misleading. utilized statistics such Malaysia Plan contains numerous without the benefit of a proper statistical reasoning behind it . There are usually the following obJectives associated Cll to provide employment and with a development plan: (2) to provide or elim1nate or minimize unemployment, (3' to provide adequate increase the standard of welfare, defence of the country, and ( 4) to provide an appropriate In the case of the system and practice of education . Malaysian development plan there is the additional objective of transform1ng the s1tuat1on of the Malays and other indigenous people in the structural economic field . Of these objectives employment 1s the most urgent for it How does the affects the solution to many other problems . unemployment? of Second Malaysia Plan treat the problem Out of 267 pages of the plan, only Not very seriously! Yet this constitutes 19 paqes are devoted ~o employment. Even these 19 planning. of ob)eCtlve important a very The treatment of pages are not efficiently ut1l1zed. is a rambling plan, entire the employment as 1t 1s with There are where 1mportant and triv1al 1deas are m1xed up. trained for manpower, of two tables of estimated demand teachers of secondary schools, West Malays1a, and trained agricultural manpower, West Malays1a. The estimated demand for college and university trained teachers for the plan per1od 1~71-1975 is 6,406 There is thus an while the available manpower 1s 5,499 , For the period. plan the for increase of 907 required trained agricultural manpower the demand is estimated at The est1mated 4,390 while the available supply is 3,670. The total increase requirement for the plan per1od is 720. What for the two est1mates of manpower demand is 1,627 is the meaning of th1s rambling? The plan estimated the Of what requirement to provide 596,000 JObs for 1971-1975 s1qn1ficance is it for us to be 1nforrned that two professlons require 1,627 posts during 1971-1975? The two tables orovided on these two profess1ons are the manifestation of The authors of the plan are not able to iSolate rambling. What they should have from the sign1f1cant. triv1al the done, if they are not rambling, is to give us, for instance,

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tables of school leavers for 10 years at least and an estimated per capita cost for employment . These are highly essential and relevant . The absence of sufficient information on school leavers takes the seriousness away from the plan's It indulges in treatment of the employment problem. speculation where speculation is not permissible anymore If available data because reliable data are available. are ignored in the computation of estimates, then neglect and indolence can be attr1buted, if not crass ignorance , One such instance is the plan's es2imate of the increase It estimated an inof labour force between 1966-1970. labour force of the to entrants crease of 522,000 new 3,246,000 (1965) r The plan's estimate is ridiculous. The primary school entry between 1955-1959 was about The total school population that would have 1,100,000. left school by 1966-1970 would be thus 1,100,000 . That is an annua l average of 220,000 in 5 years, 1966-1970 , But the plan suggested an average of 104,500 in 5 years, If we include entrants from those who do not 1966-1970. go to school, the number w~uld easily be more , It is thus clear that employment figure of the plan is highly misleading . While ava1lable school leavers statistics point to an increase of 1 , 1 million to the labour force in 1966-1970, the plan suggested an increase This vast difference cannot be attributed of 0.5 million. It can only be due to the to normal errors of estimate ,. ( 1) ignorance of the educational statistics following: (3) de(2) neglect of its use, or published in 1968, unemployof gravity the down play to distortion, liberate ment , By the plan's own admission 350,000 jobs were estimated to have been created 1n the per1od 1966-1970. But the stat1stics of school leavers 1ndicates an entry of 1 . 1 m1ll1on into the labour force . Hence unemployment would be in the region of 1.1 m1llion minus c 35 million, The plan suggested that 1s . 75 million, or 750,000 people . an unempl oyment figure of 275,000 as the close of 1970, In reality unemploywhich was 7 . 3% of the labour force . ment was ar o und 22% of the labour forcev if we base our est1mate on only solid foundatl.o~, _ the school-leavers statist1 c s . Even 1f we excl.ude 33 1;3% from the labour force for ca ses of deaths, and girls who prefer to be housewives o r do household work, 1t will st1ll be twice The unemployment rate would be in the area of 14% as mu c h . 1nstead of 7 , 3%. There i s further a streak of decep t .1.on 1.n the plan Fi r st it clai med that 350,000 JObs we r e es t imated to have 4 been created in the First Malays1.a Plan per1od , 1966-1970. Five paqes later it claimed tha t ove r 4 45,000 new jobs were

- 5- actually created in the First Malaysia Plan period ~ At first glance one would have thought that the second remark was a correction and owing to carelessnes s the But by preceding figure was not accordingly altered deliberate a was It all~ at s jove, it was no carelessnes deception : The figure 445,000 new jobs created in the First Malaysia Plan period is a computation based on two estimates, the estimated employment figure for 1970, 3,493,000 minus the estimated figure for 1965, 3,048,000, which is 445,000. One estimate figure is substracted from another estimate figure becomes in the words of the plan, "actually created" figure . The entire deceptive passage 1s the following: "Gi ven the invesunent targets of the Plan and the addit i ona l emp l oyment-orie nted measures proposed, it is env i saged that at least 596,000 new jobs will be created This target dur ing the Second Malaysia Plan per1.od represents a cons1derabl e increase over the 445,000 new jobs actua l ly created during the F1rst Malaysia Plan This means the creation of more than 119,000 per i od new jobs per year dur1ng 1971-75, or an average of 30,000 more jobs per year than under the previous Plan . "5 An estimate 1s presented as an actual figure~ This is the deception ! The Plan's 1ntention to create 119,000 jobs a year 1n 197 1 -75, even as a mere intention, is a very poor intention . The total primary school entry between 1960They will constitute the new 64 was about 1,100,100 entry to the labour force 1n 1971-75 . The backlog from previous period is 750,000 , Thus the total 1.s about L . 8 mill i on . Against th1s background the intent1on of the The Second Malays1a Plan, as was p l an is extreme l y poor the fate of prev i ous plans, will depart w1dely from reality Not only 1s it incapable of owing to 1t.s shortcomi ngs pra c t i cal rea l 1zation, it cannot even have the proper It could not even dream of putting up an employment. dream . target more congruent with actual need - Between 1971 and . 1975 the annual average rate of school-leav ing shall be 6 The confused dreamers of the Second Malays1.a P1an 220,000 . did not r efe r to the facts of the 1966-70 average for the1.r Th1s ls what we ca l l backward d r eam1ng . dream on 1971-75 To est1mate the entry 1nto the labour for c e in 196670, the surest. fo u ndat1on 1s the school entry between 195559 , Those wh o entered school dur1ng th1s period did no~ disappear l ike m~gra~ory b1rds ~ The bulk remain ~n the ~he1r tota l 1s 1n the region of count ry and gr ow up eve in the Second Malaysia Plan. i bel 1,100, 100 . If we there was an entry of 522,000 into the labour force in 1966-70

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What happened to the rest, 580,000 of the 1955-1959 kids who entered schools? Did they not grow up? Did they disappear mysteriously? Did they dry up like frogs along the years? They would be around the 17-21 age group in 1966-1970 " An ommission of such a sizable number from the employment planning of the Alliance government is a very It showed that both the First and Second serious step. Malaysia Plan are unreliable and misleading attempts at planning. Coming to 1971-1975 the Second Malaysia Plan estimated an increase of 645,000 persons in the labour force while the first entry to school during 1960-1964 The most ridiculous totals also approximately 1,100,100. lS the estimate on unemployment . It estimates an unemployment of 324,000 in 1975 , What do the facts point to? In 1966-1970 there was an entry of about 1,100,100 to the The Plan claimed that 350,000 jobs were labour force. created dur1ng the period , The tendency of government statistics lS to inflate the good news and to deflate There would be 750,000 unLet us agree. the bad news . employed as a backlog to 1971-1975, the period of the The entry into the labour force in Second Malays1 a Plan. This this per1od wo uld also be approximately 1,100,100. figure the constltute would plus the bac kl og of 750,000 Hence 1,850,000 jobs would be requ1r1ng employment. regulred 1f a hundred percent employment is aimed at. S1nce this is unl1kely how many JObs do the Alliance Thus the Alliance government intend t o create? 596,000! government, 1n reality intends to allow a situat1on of unemployment of approximately 1,266,000. We shall be generous and deduct 20% from the figure for deaths, and g1rls who prefer not to work and become housewives. The unemployment f1gure would still be above 1,000,000 by 1975, appr o x1mately 18% of the labour force of 5.5 mill1on 1nstead of 4 4 as suggested by the Plan. The unreallstic att1tude of the Plan is further evidenced by the estimates on the unemployment increase . For the period 1966-1970 the 1ncrease of unemployment is suggested to be 77,000 while our statistics based on Now for the Second school leaving 1ndicated 750,000. reduclng the increase of dreams it Malaysia Plan period, By What a remarkable dream~ of unemployment to 49,000. 1975 the increase of unemployment would have crossed the There are two parts of the Second Malaysia million border! One is the part dealing with past statistics Plan book. and estimates, some reliable, some fairly reliable, and The other part deals with all the wild some unreliable. wildest dreams is the creation of the of One dreams.

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596,000 jobs during the period of the Plan, 1971-1975 0 The previous experience in planning and wild dreaming seem to be of no effect . The mid-term review of the First Malaysia Plan, 1966-1970, published in 1969, confessed the failure to achieve the employment target o 11 0verall, it does not appear It said the following: that the plan employment t arget for t he period under review was achieved . As a result, unemployment remains a serious problem, especially in th7 major towns, among youth and among ~10:r-..~n of all ages , 11 Based on past performance, it is unlikely that u nemployment will become less serious a prob l em in 1971-1975 . The Plan fails to t el l us how many jobs the government wants to create out of the 596,000 envisaged . If it dreams of providing jobs for the country, it should at least tell us how many t he government itself would create because such an i ntention i s within relative contro l of government itself. Hen ce such an indication will hav e a higher reliability value o As to job creation in the private sector, government has no control over it o The Alliance capitalist ph ilosophy regards free ent erprise in the private sector as va lid " That being the case an estimate of job creation in t he private sect or is highly speculative, parti cular l y i f it ignores past trends, as the Plan ' s estimate indica t es . Here is an examp l e . Ac c ording to t he P l an the agri cultural sector had increased job creation ~! 104,000 dur ing 19661970 . During 1971-1975 the increase is suggested t o be 125,000. Thus between the two Plans the agricultur a l sector will provide 11, 000 jobs more . Manufacturing increased by 53,000 jobs in 1966-1970 and i s suggested to inc~ease by 108 , 000 duri ng 19 71-1 9 75 0 Thus by 19 7 5 manufactur i ng would have c r eated an increase of 55,000 jobs more than that of t he First Malay sia Plan period c While the increase of agricu lt.ur e i s 11, 000 jobs more than that of the Firs t Ma l aysia Plan, manufacturi ng would increase by 53 , 000 than t hat of t he First MalaYsia Plan Period o This is easier sa i d on paper ~han d o ne , The mid-term review of the Firs t Malays i a Plan has this to say about agricult ure and manufacturing: 11 The creation o f job oppo rtunit1 es lS i mport ant in all areas o f deve lopment; howev e r, it must be recognized that the manufa ctur ing sector alone will provi de relatively few new jo'bs in the i mmedi a te future o The elimina tion of unemployment and underemployment, particul ar ly in rural areas, and t he narrow ing of the rural-urban i ncome gap beyond pri mari l y upon an aggress i ve po licy of open i ng up . new land for agriculture and forest development . 118 The Plan intends to s l ow down i n the

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increase of job intake in agriculture and double the rate in the increase of job intake ~n manufacturi ng. It is pressing the brake on agriculture and the accelerator on manufacturi ng . The sad thing is that the government puts the brake on a sector it can very greatly influence 1n JOb creation, while dream1ng of a highly accelerated rate of increase on a sector it Hence the has no control or does not wish to control , unrel1able h1ghly becomes creation JOh of planning cons1dered be The figures stated 1n the est1mates are to as mere dreams, and that too w1th bad approximatl on to real1t:y. Wh1le unemployme nt 1S a very ser1ous and pressing problem, part1cularl y amongst the Malays 1n rural areasi where there 1s a slower rate of 1ncrease 1n JOb creat1on, the All1ance government introduces a novel element 1n The plann1ng revolution wh1ch the hlstory of plann1ng has character1z ed the present century 1s d1rected to uplift the maJOrlty . Although the Plan does profess this a1m, lt pegs another contradicto ry object to it, the creat1on of a ~alay cap1tal1st class, the capitalist It 1s the f 1rst time 1n the history of entrepreneu rs. the world that a capitalist government officially plans to create cap1tal1sts . The Plan 1ntends to incubate entrepreneu rs. Entrepreneu rs in the h1story of capitalismf both anc1ent. and modern, have never been the product of They emerge from the soc1al .and offic1al incubation h1St.or1cal process and dominated governments with t.he1r 1nt.erests . What governments can do 1s to provide a sett1ng where1n they could emerge 1n full force . Th1s was what the Br1t1sh colon1al government did 1n Malays1a, The Ch1nese immigrants 1n the 19th and early 20th centur1es who came to Malays1a or1ginated ma1nly from the peasant A number of them became cap1t.al1st entreclass 1n Ch1na preneurs 1n Malaysl.a not through the econom1c; pol1.t1cal and soc1al setting created by the B.ritl.sh , An important t.ralt 1n the foLmat1on of cap1tal1.st A entrepreneu rs l.S a l1.fe of struggle and hardsh1p experth1s of depr1.ved be shall 1ncubated group off1c1.ally Furthermo r e, the soc1a1 cost of the emergence of lence. the cap1tal1st entrepreneu rs have to be borne by the The r1.se of the cap1t.al1.st entrepreneu r class maJOrl.ty. always 1nvolve some form of explo1tat1o n. The Plan by off1c1ally attemptlng to create th1s class will have to condone exploltatl.O n . As an 1nstance let. us tdke one of 1ts obJeCt1Ves. Among the ser1.es of pol~cy the Plan 1ntends to 1.mplement one deserves spt:c1al at.t.cnt:.lon, t.hat. s peel. a 1 me as ur e to pr emote 111a lay ent.:re preneur sh1.p ~s the and ensure adequate supply of flnance . "9 The rest l1.ke 11

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the provision of training in foreign owned business and industrial establishments. For the government to create the setting for the greater participation of Malays in business and industry, this is a commendable, necessary, and timely policy , But for the government to act for a temporary period as Malay capitalists would do, running and owning a business, and then handing it over to them, this is absurd and exploitative. The Plan intends the following: "In a number of cases, the Government itself will initiate the setting up of enterprises and train Malays and other ind1genous individuals to take them over in due course . "lO Now, if the enterprise set up by the government 1s successful, why should 1t hand it over to a private group of Malays? Why should this private group lick the cream of the profit? Such a successful business run by government can ensure Malay part1c1pation and employment, but not ownershlp by a handful. If ownership should be otherwise than government only, it is better to allow the workers to have shares in it Transferring it to a group of Malay capitalists, a bus1ness which is thr1ving, and which they did not create, is the height of absurdity which has never entered the 1magination of even the most fanatical capitalists in the entire history of mankind. Why should a small handful of greedy and unenterprising Malays get the henef1t of the transfer as opposed to the Malay commun1ty represented by the workers of the enterprise and governments 1nterest in it. For the Malay commun1ty it is better for government to reap the prof1t rather than a handful of Malays who shall not use the profit for public welfare as the government would but rather to stuff themselves w1th beer, to let each ch1ld have a car, to parade the golf-cour se,. to frequent nlght-clubs, to grow fat at the expense of the maJority~ On the other hand, if the group of Malays to whom the government shall hand over the bus1ness is enterpr1sing and seasoned 1n the trade, they should have no d1fficu~ty to start the1r own enterprise, particularly with credi~ facilities made available and unfa1r obstacles broken down by government legislat1on . If on the other hand th1s group constitutes of weakl1ngs then it will be ext1ernely 1d10t1c for the government to hand over a flourishing bus1ness to them. Thus whichever way you see the problem it leads LO ser1ous contrad1ct1ons . This is a character1stic of a bad pol1cy. It 1s a policy born out of unth1nking. Otherw1se we shall have to cons1der it as a d1sabol1cal scheme by a group of Malays in power to enr1ch themselves at publ1c expense .

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Another absurdity is the policy of equity shares The Plan explains that institutions such as MARA and PERNAS will initially buy shares in joint ventures Such shares will eventually with the private sector . "In ownership by Malays, individual be transferred to this connection, their household savings will be mobilized and invested through unit trusts and other investment channels."ll Again why should the shares be transferred to people who can buy shares < If MARA buys shares, keep them~ The profit can be used to run If at MARA which a~s to assist the Malay community . a certain moment Malays want to buy shares, let them go to the share market. A reservation of equity shares for Malays shall be immediately taken up by the Malay community if it is alert to the stock exchange. There shall be no need for MARA to buy them first on their behalf . The Plan a1ms to transform the business and in30% dustrial structures ethnically within 20 years. of the total commercial and industrial activities should have participation by Malays and other 1ndigenous people in terms of ownership and management ,- 12 This is a utopian dream unheard of in the history of planning within a liberal capitalist system ~ As long as the government does not control the entire development of business and industry, how can it set a target based on percentages? Would not it be sufficient to encourage participation of Malays and other indigenous people specifying percentage targets? The danger of reasoning in percentages on such a histor·lcal change which eludes percentage predict1on is that it creates false hope and false despair when it is not It creates false hope because 1t is bound to realized . It creates false despair because to otherwise in reality. if it appears later to have not been achieved, the improvement achieved would be read in the light of a failure to achieve the planned target. As it 1s as a bad policy, 1t 1s ful~ of ambiqultles. To begin with why should it be 30% 1n 20 years, instead of 40% in 20 years or 20% in 40 years? There are two ways If the government has s of understanding the statement ~ Is the 30% clear mind on 1t, it should have ment1oned it. change to be taken as the curnulat1ve effect at the end of 20 years or is it the intention to arr1ve at the change by instalments of 5 years? I presume the last mentloned is intended for otherwise what is the use of a five-y.ear plan intending something to happen 15 years after its expiry? Assuming the instalment theory, the goverrunent should then intend to bring about 7~% of the change during Even this 7~% is h1ghly improbable 1n a the plan period.

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liberal-capitali st system where the government has no power to deploy human beings and force them into categories of occupation , If Let us analyse it in operational terms , today 925 servtce stations are run by non-~alays, after 5 years in 1975, there should be about 1,000 service stations of which 75 are owned or managed by Malays. There are thousands of such enterprises, night-clubs, massage parlours, restaurants, cinemas, hotels, all sorts For of factories and shops of different categories. each type, for the purpose of simpl.Lfication, we shoQld If for each kind of bus1ness and need 7~% Malays . industry for instance massage parlour, hote~ service station, restaurant, we need only 10 Malay addit1onal manager or owner, our requirement of such people shall How can a easily come w1th1n the reach of 10,000. government artlficially incubate 1n 5 years 10,000 owners and managers, uith seasoned exper.Lence and capital, to run the d1fferent areas of business and industry, which they have not entered previously? This shall constitute the m1racle of history. Another aspect of the transformat1on refers to the totality of those 1n bus1ness, .Lndustry, and commerce . In West Malaysia 1n 1970, according to the Plan, there were 757,000 people engaged in m.Lning, manufacturing, construction and commerce . We have excluded the services If the Plan's concept of particlpation and other sectors . were to touch th1s aspect, there should at least be more than 60,000 Malays in th1s sector by now and 110,000 by 1975 based on the forecast of emp l ovment.l3 This means equ1pping a? proximately 22,000 Malays per year to enter this sector, ~i nus these already in it, which 1s relatively small. The Plan's lack of seriousness on this issue is further evidenced by the fact that no statistics havebeen carpiloo to Jr.nON 'i.·l'1ere and :-1a:1 IT'any :alaf3 ar2 alreai~l enployecl, are already .a.vners, an:l are alr:eady man.age1.·3. ~ht.'1out a ~ackgrow1d survey of such 1tems, there is no foundat1on for the Plan. If the government is seriously concerned with reforming the Malay commun1ty, the first thing 1t should have done after the Independence in 1957 was to conduct a survey of the If entire Malay part1cipation in bus.Lness and .Lndustr y . r e1the .LS .Lnterpreta~ion the then w1th, dispensed is this neglect through .Lgnorance, or the preva l ence of a d1sbo lical plot of a group of Malays 1n power des1r1ng to enr1ch themselves with a hur ri ed ly and carelessly thought-out plan .

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I am in favour of uplifting the Malay community as part of the overall attempt to uplift the nation " As I had time and again said in the past the Malays require a special approach to their problems . Take 2 unemployed in a modern industrial setting, one a nonMalay, the other a Malay . The great majority of Malays entering the industrial modern sector are from rural areas . For the non-Malay it is a matter of providing him with a job . For the Malay from the rural area it is not only a matter of providing him with a job , He has to be protected from further exploitation in a He He ~s not a member of unions .. settlng new to him. works in a place where he is ethnically a minority. He has to look for a home in a new setting . He is furthermore turned down by many an employer on the prejudice that he cannot work hard , The employment problem of Malays ~n the urban area in an industrial and commercial setting ethnically different just~fies us to consider the problem as worthy of a special All this I am in favour of. approach. I am also in favour of government attempting to create poss1b~lities for tra~ning more Malays in indusI am in favour of government offering try and business credit facilities to bonafide Malay business. But what I am opposed to is for the government to be unproclaimed slave of a group of Malay capitalists whose interests are not the ~nterests of the poor fishermen who toil day and night for a meagre subsistence, the poor peasants and estate cultivators who eke a miserable existence, the lowly paid workers, the clerks in the services, those members of the Malay comrnun~ty who struggle hard to earn $10 extra a month, the students who make ends meet, the hundreds of thousands of parents who try hard to keep Starting and running an entertheir ch1ldren ~n school. to a group of Malay capiover prise and then handing it Who but a talists, qua l if~es for the term enslavement. another to over handed be to slave would run a business owner while the business grows and thrives? Who ~Jut a slave would prov~de the labour for such an enterprise? Med~eval slavery is superior ln at least one respect, In the case the master provided the initial capital . of the Alliance government lt wishes to act worse than a slave to a group of Malay capitalists , exploitat~ve nature of thls actlon lies in the divers~on of profit and resources from areas which The m~llions offer more benef~t to the great major~ty ,

The

that shall be invested on behalf of the Malay capitalists

- 13 -

can better go to projects to relieve unemployment among rural Malays, or to improve facilities in rural areas . When a country is beset by serious unemployment problems, when the bulk of the population are poor, when the situation demands a fairer distribution of income, when hundreds of thousands of parents have the difficulty of paying book fees for their children in school, when corruption 1s on the increase, when existing legislations on employment, good on paper, are violated in reality, when prices of essential commodities are going up, at this time, and in such a situation, the Alliance government is thinking of investing huge sums and energy to create a group of Malay capitalists! This is a unique achievement in the h1story of capitalism. Only in Malaysia the government plans to breed capitalists. What shall take place 1n reality 1s that a group of present Malay in power shall seize the opportunity of transforming themselves with government aid to become capitalists. Thus we shall have an artificlal group of capitalists who shall only be able to function as a parasitic minority because they have been deprived of a natural history of growth -. An incubated capitalist can never be a genuine capitalist, with the innovative spirit, a commitment to methodical t1Jork, and sophisticated plann1ng , It is true that a successful entrepreneurship requires a setting that is favourable to it . To develop Malay entrepreneurship such a setting is necessary but this can be accomplished by an honest and serious government quite easily without government starting an enterprise and later handing it over to a group of cap1tal1st entrepreneurs . By thls act1on, government is cornrnltting an 1llogical act . While lt taxes people to get more revenue, it. abstains from reta1ning an enterprise which 1s g1v1ng lt profit . I have g1ven you my view of the Plan's policy to develop the Malay entrepreneurshlp What 1s the alternatlve to the Plan's view? To s1mplify the d1scuss1on let us take a trade, the print1ng press. The f1rst thing to do 1s for the government t.o have a su.rvey of printers 1n the country . F1nd out how many ~alay printers, where and how do they do bus1ness , F1nd out everych1ng about them, their prob.iem, the1r successes or failures . Ass1st them w1th some government o.r.ders , Those who are capable of expanding, provlde them w1th cred1t fac1l1t1es . If they have d1ff1cult1es 1n getting paper or other materials t.hey need owing t.o unfair practices of importers, overthrow those obstacles by

- 14 -

persuasion or by legislation , In this way# we ensure a fair setting for the Malay printing industry to develop . A number of things can be done but not to start a printing press and later give it to a group who probably enter the trade for the first time o I am all in favour for government to start a profitmaking enterprise but once started keep it~ Employ Malays as well as non-Malays in this enterprise o After all the experience gained by Malays in this enterprise is as valid for the business and industrial improvement of the manager of a government enterprise is a manager . A doctor in government service or a doctor in private practice remains a doctor , Thus we can improve the situation of the Malays without necessarily creating a group of capitalists . I have argued against the government's attempt to create by government funds a group of Malay capitalists . The fanatical Malay supporters of the Plan may accuse me of justifying a situation in the country wherein the big millionaire and capitalist groups are constituted of non-Malays . A.s I see it, if there is a hotel owned and managed by non-Malays, the important thing for me is that it is willing to employ Malay labour in reasonable proportion, that it does no exploit the workers, both Malay and non-Malay, that the management is not dominated by an excessive greed for profit, that it does not harbour communal prejudice, that it promotes the proper atmosphere c This is a thing which an honest and dedicated ruling power can bring about in the country .• As to whether the owner and manager are Malays or Chinese, it is of secondary importance. It is correct to imbalance in the occupational pattern rather than ownership and management by Malays . If there are 10 hotels, 7 owned by non-Malays and 3 by Malays, it does not follow that the national situation has improved " It may result in less employment for Malays and a further segregation of the ethnic groups a Most Malay workers may aggregate in the Malay owned hotels and Chinese workers in Chinese owned hotels. The result is less number of Malays employed in the entire hotel business. To me the general improvement of the welfare of the Malays is much more important than the welfare of a handful of incubated Malay capitalists , This is the same with the non-Malays , Their welfare is more important than those of a hundful of millionaires and capitalists . The planning of a progressive society should restrain the exploitative nature of capitalism, not to create by government funds a new breed of incubated capitalists on the ground that another community has it. The Malay conununity should aspire to strike a balance in the

- 15 -

occupat i onal distribut1on of the company held by nonMalays should be attempted also by Ma l ays . While i t is desirable for Malays to become accountants and engineers i t is not equally desirable for them to become bar managers! While it is des1rable for Malays to own a dispensary, it is not equally des1rable for them to own massage parlours. The fa c t that some non-Malays have become r·id1 throug~1 u·Jning massage parlour, 1s no just1ficat1on for the state to start one and later hand it over to a group of Malays on the ground that some Malays must become very rich because the logic 1s the same , Some Malays must become very rich because some Ch1nese are very rich . To me the ~mportant thing 1s that many poor Ch1nese and many poor Malays should be ra1sed 1n the1r standard of l1Ving . There 1s no JUStlficat10n to spend one cent of government money to create a c l ass of r1ch people be they Chinese or Malay , As for the problem of hav1ng more r1ch Malays, all the government should do 1s to allow the natural process of wealth a c qu1s1t1on to take place 1n the pr1vate sector by ensur1ng a sett1ng where1n unfa1r competit1on 1s el i m1nated and a reasonable d1stribut1on 1s ensured of government tenders and purchases . Th1s 1s withln the reach of an honest and ded1cated government . However if a government is bogged down by corrupt1on, no policy will work ~ Such a government should search 1ts own soul . It should look 1nto the m1rror . It should be more caut1ous in dev1s1ng plans wh1ch are doomed to fa1l ow1ng to the short c om1ngs of the 1mplementers as well as defect 1n policy th1nk 1 ng. These have been the problems all along . I do not mean t o say that everyth1ng in the Second Malays1a Plan i s unsound . Severa l a1ms and pronouncements of the Plan are sound but some of 1ts stat1st1cal foundations, 1ts prOJeCt 1 ons, and the pol1cy to create Malay capitalists by government 1 nvestment and labour, are unsound , Its intention to c orrec t the econom1c 1mba1ance between the Ma l ays and t he non-Malays 1s sound On the unemployment prob1em the attltude of the Second Malay s1a Plan res e mbles that of a doctor who tells his pat1ent that he 1s not very ser1ously 111 and that he will 1mprove wh1le the pat1ent 1s actually dying The doctor does prescr1be med1c1ne but based on a wrong d1agnos1s . ~eanwh1le he keeps foot1ng the b1ll . Th1s is what the gov e rnment 1s do1ng , It dev1ses a plan based on a wrong d1agnos1s, and lt goes on ra1s1ng taxes to pay for the plan . Some bel1evers 1n the Second Ma1ays1a Plan may po1nt to the fact that 1t 1s easy to cr1t1se . They shall say that such a cr1t1c1sm 1s not constructive They assume that the cr1t1c, b~1ng not 1nvo1ved 1n the

- 16 -

construction of the plan, is not qualified to criticize it. This is, however, a misunderstanding of the funct1on of reason and crlticism in general . If I were to crit1c1ze the construction of a flat with obvious defects such as the number and location of the rooms, the poor working of the lift, the early leak on the roofs, the early crack on the walls, how should we consider the reply of the contractor 1f he were to say "You have no business to crit1cize the flat I bu1ld because you do not build any flats . " Such a reply should be considered as coming from a grey matter encased in a tilted cranium. Such a contractor requires a polishing of his skull An art critlc is not requ1red to be an art1s~ himself although it is certa1nly requ1red that he knows suff1c1ent ar~ to criticize a work of art . It 1s not necessary to take part in draw1ng up the Second Malaysia Plan in order to criticize it. What 1s necessary is a knowledge on p l anning . However, to prove further the defect of the Second '1alaysia Plan, an alternat1ve plan can be drawn up . I am quite prepared to form a team of national experts to draw up a better plan if the government agrees. It should cooperate fully by g1v1ng us access to all requir~d data , The formation of the Second Malaysia Plan has been dominated by fore1gn advisors who do not have sufficient knowledge of the background Even the style of writing is foreign, full of general terms with little empir1cal content , Instead of deplor1ng my effort the government should thank me for doing them a service by alert1ng them to some serious shortcom1ngs of the plan. A society that s ·u ppresses criticism shall be doomed to injust1ce which will eventually need to a revolut1on.

- 17 -

Footnotes 1.

Second Malaysia Plan l9?l-l9?5 .

Tables 7-4, 7-5

pp . 1051 106 o 2.

Table 7-2, p. 102.

3.

Table 7-2, p. 102.

4o

Page 96 s

5.

Page 101.

6.

Based on the education statistics, in Educational Statistics of Malaysia l938-l96?, The Ministry of Education, Malaysia, Dewan Bahasa dan Pustaka, Kuala Lumpur, 1968.

7.

Mid-term Review of the First Malaysia Plan l966-l970, p . 17, Jabatan Chetak Kerajaan, Kuala Lumpur, 1969 ,

8

Op . cit .

9.

Second Malaysia Plan, p. 159.

p. 62.

.

10.

Op . cit .

p. 159

11.

Op. cit .

p . 160.

12 .

Op. cit .

p. 158 .

13.

Op . cit .

See Table 7-6, p. 109.

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Youth in Southeast Asia: Edited Proceedings o f t he Seminar of 5th - ?th March l9?Z.. Edited by Jo s eph B. Tamney, 1972. 75pp. $4.00.

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