COMMENT | NEP at 50: Looking back and moving on

COMMENT | The New Economic Policy (NEP) is probably far off our minds with the Covid-19 pandemic and political pandemonium gripping the land, but its legacy is all around. The NEP, formulated under the post-May 13, 1969 emergency rule, transformed Malaysia more than any other master plan.

The 50th anniversary of its July 1971 tabling in parliament calls for a re-appreciation of its contributions, evaluation of its omissions and missteps in popular discourses, and consideration of where Malaysia can go from here.

Looking back: NEP strengths and shortfalls

The NEP’s signature contribution to Malaysia was its “two-pronged” strategy to (1) reduce poverty irrespective of race; and (2) accelerate social restructuring to reduce and eventually eliminate the identification of race with economic function. This strategy derived from its analysis of the nation’s defining socioeconomic problems. Malaysia’s poverty rate was estimated at 49 percent in 1970, inter-racial socioeconomic inequalities were severe.

Importantly, this distinction gave the NEP coherence, by distinguishing fundamental policy objectives and instruments. Poverty alleviation pursues a distinct objective of providing basic needs and uplifting livelihoods of the poor, largely through universalist interventions such as infrastructure, universal primary education, rural development, and measures to boost income.

On moral and practical grounds, assistance for the poor should operate on a universal basis, regardless of ethnicity or other identity traits. The NEP’s first prong, with its “irrespective of race” clause, also served as an assurance to all Malaysians, especially minority groups, that national policy looked out for them...