The New Economic Policy
1. Tan Sri Ramon Navaratnam is vehement that the New Economic Policy is the cause of poor inflow of Foreign Direct Investments here.
2. One can fault the NEP for a lot of things but to blame it for the current slowdown in Foreign Direct Investments is not quite correct.
3. There are of course some investors who were and are put off by the NEP and the abuses involving it. But FDI actually contributed much to Malaysia’s industrialisation. And this happened when the NEP was in full swing, in fact picked up during the time when the NEP was being implemented.
4. Between 1986 to 1997, Malaysia attained the highest growth rates with FDI contributing much towards this achievement.
5. The FDI began to slow down only when China and Vietnam opened themselves to foreign investments. As the cost of labour in Malaysia rose, the countries with much lower cost of labour such as Indonesia and Thailand begun to attract more foreign investment. All these affected the flow of foreign investments into Malaysia.
6. Today foreign investments have decreased because of the financial problems faced by the developed countries.
7. Blaming the NEP is political. That is all there is to it.
8. That “the majority would argue that the (NEP) policy is the source of all problems facing the nation” as quoted by Dr Muhammed Abdul Khalid here, does not mean that he agrees with the said majority.
9. Therefore he was correct in saying that Tan Sri Ramon Navaratnam was “factually incorrect”.
10. Let us resurrect at the figures of FDI before NEP, and during the years the NEP was being implemented and compare them with those of neighbouring countries. We should also look at the economic growth figures of Malaysia since the NEP was implemented and compare with the period before NEP.
11. These figures would validate or disprove the claims of Tan Sri Ramon Navaratnam and the majority that the NEP was at the root of all the problems in Malaysia.
12. Finally Malaysia was able to tackle the depression caused by the devaluation of its currency by currency traders without the social problems as witnessed in other countries affected by the Asian Financial Crisis of 1997-98 and thereafter. Indeed it was the partial success of the NEP in correcting the disparities between the races in Malaysia that the racial problems seen in neighbouring countries did not plague the nation.