Thursday July 21, 2:09 PM
Abdullah warns gov't can't keep playing Santa Claus to ethnic Malays
(Kyodo) _ Malaysian Prime Minister Abdullah Ahmad Badawi warned Thursday that the government cannot play "Santa Claus" anymore to ethnic Malay businessmen as it attempts to cut down on spending to trim the ballooning budget deficit.
"The government cannot be forever playing the role of Santa Claus, giving out awards in all seasons," Abdullah said in an address at the opening of a three-day annual meeting of the ruling party, the United Malays National Organization, of which he is president.
Malays, the country's largest ethnic group which has long been granted special privileges under the three-decade-old affirmative action policy, must face up to the economic realities of today, he said.
Singling out the construction sector, he said the government cannot go on spending lavishly on big projects.
"One of the most difficult tasks I did in my first year as prime minister was to reduce the nation's deficit...I know this is not a politically popular decision as some saw it as denying them the opportunity to make money like how they used to," said Abdullah, who took office in October 2003. This year, some 22 billion ringgit ($5.8 billion) has already been allocated to the construction and supply services businesses, the second biggest allocation in five years, after the 26 billion ringgit doled out in 2003, he said.
Despite this, Abdullah, who is also finance minister, said many Malay contractors are still calling out for more projects.
"There are too many players in a shrinking field," he said.
The number of Malay contractors has surged in the last 15 years, which saw a boom in the construction industry due to a penchant by the previous administration for big-ticket projects.
Small-time contractors that are eligible for contracts worth less than 200,000 ringgit ballooned to 46,000 in 2005, from 2,049 in 1992. Most are UMNO supporters, and contracts were often awarded as a form of patronage.
The patronage system, however, came crashing down when recession hit following the 1997 financial crisis.
Bowing to political pressure, the government then decided to boost the economy by going on a spending spree, thus pushing the deficit higher.
In 2000, Abdullah recalled, it allocated 3 billion ringgit to launch "preemptive" projects to aid the survival of small-time contractors.
But when Abdullah took office, he cut down on the mega-projects. Prominent among them was a controversial 14-billion-ringgit rail project that was postponed indefinitely.
The prime minister urged the Malay businessmen to learn from what happened in the construction industry and diversify themselves into other sectors.
Abdullah also issued a wake-up call to the ethnic Malays who remain behind economically despite over 30 years of special treatment under the affirmative action drive known as the National Economic Policy.
The NEP, which began in 1970 with the aim of closing the gap between the Malays and economically dominant but minority, ethnic Chinese, ensures privileges for the Malays from university scholarships to government contracts.
Abdullah said the NEP has enlarged the middle-class Malay population, with the Malay equity share of the country's economic pie rising from 2 percent in 1970 to 19 percent in 2000 but still far from the targeted 30 percent.
He blamed this on loopholes in the implementation and greediness by those who seek only short-term gain
"Permits, contracts and licenses that were awarded to bumiputras were sold to third party for short-term profit. After that, they asked for another chance until in the end a whole breed of Malays was born whose profession is that of the middlemen," Abdullah said. Bumiputras, or sons of soil, refer to ethnic Malays in Malaysia. The special privileges that the non-Malays had hoped would be dismantled to ensure a level playing field will continue until the Malays "earn 1 ringgit for every 1 ringgit earned by the non-Malays," the prime minister said. He said his government will "fix the shortcomings" of the NEP.
Abdullah warns gov't can't keep playing Santa Claus to ethnic Malays
(Kyodo) _ Malaysian Prime Minister Abdullah Ahmad Badawi warned Thursday that the government cannot play "Santa Claus" anymore to ethnic Malay businessmen as it attempts to cut down on spending to trim the ballooning budget deficit.
"The government cannot be forever playing the role of Santa Claus, giving out awards in all seasons," Abdullah said in an address at the opening of a three-day annual meeting of the ruling party, the United Malays National Organization, of which he is president.
Malays, the country's largest ethnic group which has long been granted special privileges under the three-decade-old affirmative action policy, must face up to the economic realities of today, he said.
Singling out the construction sector, he said the government cannot go on spending lavishly on big projects.
"One of the most difficult tasks I did in my first year as prime minister was to reduce the nation's deficit...I know this is not a politically popular decision as some saw it as denying them the opportunity to make money like how they used to," said Abdullah, who took office in October 2003. This year, some 22 billion ringgit ($5.8 billion) has already been allocated to the construction and supply services businesses, the second biggest allocation in five years, after the 26 billion ringgit doled out in 2003, he said.
Despite this, Abdullah, who is also finance minister, said many Malay contractors are still calling out for more projects.
"There are too many players in a shrinking field," he said.
The number of Malay contractors has surged in the last 15 years, which saw a boom in the construction industry due to a penchant by the previous administration for big-ticket projects.
Small-time contractors that are eligible for contracts worth less than 200,000 ringgit ballooned to 46,000 in 2005, from 2,049 in 1992. Most are UMNO supporters, and contracts were often awarded as a form of patronage.
The patronage system, however, came crashing down when recession hit following the 1997 financial crisis.
Bowing to political pressure, the government then decided to boost the economy by going on a spending spree, thus pushing the deficit higher.
In 2000, Abdullah recalled, it allocated 3 billion ringgit to launch "preemptive" projects to aid the survival of small-time contractors.
But when Abdullah took office, he cut down on the mega-projects. Prominent among them was a controversial 14-billion-ringgit rail project that was postponed indefinitely.
The prime minister urged the Malay businessmen to learn from what happened in the construction industry and diversify themselves into other sectors.
Abdullah also issued a wake-up call to the ethnic Malays who remain behind economically despite over 30 years of special treatment under the affirmative action drive known as the National Economic Policy.
The NEP, which began in 1970 with the aim of closing the gap between the Malays and economically dominant but minority, ethnic Chinese, ensures privileges for the Malays from university scholarships to government contracts.
Abdullah said the NEP has enlarged the middle-class Malay population, with the Malay equity share of the country's economic pie rising from 2 percent in 1970 to 19 percent in 2000 but still far from the targeted 30 percent.
He blamed this on loopholes in the implementation and greediness by those who seek only short-term gain
"Permits, contracts and licenses that were awarded to bumiputras were sold to third party for short-term profit. After that, they asked for another chance until in the end a whole breed of Malays was born whose profession is that of the middlemen," Abdullah said. Bumiputras, or sons of soil, refer to ethnic Malays in Malaysia. The special privileges that the non-Malays had hoped would be dismantled to ensure a level playing field will continue until the Malays "earn 1 ringgit for every 1 ringgit earned by the non-Malays," the prime minister said. He said his government will "fix the shortcomings" of the NEP.
