KUALA
LUMPUR: The Pakatan Harapan government should focus on reducing income
disparity between the rich and poor, regardless of race, in its pursuit
to eradicate poverty, said economists.
The
New Economic Policy (NEP 2.0) must be amended based on the gains of the
old NEP that has substantially closed the gap between the majority and
minority ethnic groups.
Sunway
University Business School economics professor Dr Yeah Kim Leng
suggested that a pro-poor or inclusive NEP should be emphasised to
strengthen Malaysia’s socio-economic foundations.
“This
could help to shape more sustainable and resilient economic policies
for Malaysia to attain high income status by 2024, as envisioned in the
mid-term review of the 11th Malaysia Plan,” he told NST Business
recently.
Yeah
said the government’s intervention programmes like education,
employment and business quotas and fiscal as well as financial
incentives would raise the income of the bottom 20 per cent (B40) group.
“The
attention on growth with equity should still be the primary policy
focus. Without growth, restructuring of the economy and raising the
living standards will be much harder and less sustainable,” he added.
Yeah
said greater transparency and accountability will be important for the
people to eliminate the identification of race with government policies.
He
noted that steady economy growth over the years has strengthened labour
demand which in turn has increased the ethnic diversity of employees in
most organisations across sectors and industries.
“An
inclusive and pro-poor NEP will foster national integration and
equitable income distribution between and within each ethnic group.
“It
will also lead to a more confident, cohesive and resilient multi-ethnic
society without the country being labelled as one of the very few where
affirmative policies are needed for the majority rather the minority
group as seen elsewhere,” he added.
Malaysian
Institute of Economic Research (MIER) executive director Professor Dr
Zakariah Abdul Rashid, meanwhile, said socio-economic development in the
current context of Malaysia was all about growth with equity as
outlined by Prime Minister Tun Dr Mahathir Mohamad.
“Now
everything lies on the implementation of good strategies. Bumiputera
should also get its equal share of the prosperity of economic growth and
development of the country,” he said.
Zakariah
said the country’s largest Bumiputra population cannot be left behind
economically for sustainable and stable economic growth of Malaysia.
“While
subscribing to the principle of a free market, the strategy should be
equally friendly to the major racial groups which have significant
political and economic presence,” he said.
Bank
Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said
the NEP 2.0 seems to be a delicate balance between promoting an
equitable economic growth and instilling financial discipline.
“The government is committed to reducing the level of its debt and plugging any loop holes in spending,” he said.
“In
this regard, the development of Waqf asset such as land and cash can be
the right policy tools which can be harnessed to complement fiscal
policy.”
Afzanizam
said through Waqf, redistribution of income and wealth can be more
equitable and effective, and would lessen the need to introduce new
taxes as the wealthy could be more than willing to take part.
MIDF
Research chief economist Dr Kamaruddin Mohd Nor concurred that the NEP
2.0 should make way for the poor to better themselves and improve their
livelihood.
“Education, training and income generating programmes with direct assistance and guidance are vital to raise their income.
“Assessing
the effectiveness of existing programmes and their respective
weaknesses are key elements to ensure the success of the programme,” he
said.
Kamaruddin
said the improvement of the rakyat’s wellbeing, regardless of social
orientation, should be the government’s primary objective.
“Equitable distribution of wealth should be promoted via various skill enhancement programmes to enable faster social mobility.
“More
customised social economic programmes are essential to address unique
characteristics of various categories of the rakyat,” he said.