In 1970, based on government statistics, almost 50% of the population were categorised as poor.
The following year, Tun Abdul Razak launched the New Economic Policy, with its two-pronged stated objective of poverty eradication and economic restructuring so as to eliminate the identification of ethnicity with economic function. In terms of distribution of the national wealth, a target was set to redistribute the wealth to increase the ownership by Bumiputras from the then 2.4% to 30% of the national wealth. In tandem with this, the government was to spur economic growth so that, even as it was sought to increase the Bumiputra share of the national wealth, this, it was touted, would not impinge on the scope for expansion of non-Bumiputra businesses.
In 1974, national oil company, Petronas, was incorporated.
In 1976, Petronas entered into agreement with both Sabah and Sarawak in relation to their vast oil and gas reserves. In the result, both Sabah and Sarawak would receive 5% royalty for all oil and gas extracted.
That same year, Tun Abdul Razak died, and was succeeded by Tun Hussein Onn.
It is estimated that from 1974 to 2009, a period of 35 years, approximately RM2-3 trillion passed into federal coffers from the oil and gas industry.
To give you an idea of just how much is RM1 trillion, this amount would meet, in full, the cost of 25 million low cost houses at a cost of RM40,000 each.
You would think that with this amount of funds at its disposal, the federal governments from the 70s to the present day would have no excuse but to have done an excellent job in meeting the objectives of the NEP.
The Najib administration would have us believe that this is indeed so.
Government figures for 2009 have it that the incidence of poverty in the country has been reduced from 49.3% in 1970 to a mere 3.8% in 2009. See the powerpoint slide below.
Truly amazing, if true.
The truth, though, is that the Najib administration has conjured up these figures by the application of the most unrealistic poverty line income for Malaya, Sabah and Sarawak. See the powerpoint slide below.
Official Poverty Line Income (2009)
What this means is that, using the official PLI, a household of 4.4 individuals in Malaya that has a monthly income of RM764, a household in Sabah comprising 5 individuals that has a monthly income of RM1049, and a household of 4.7 individuals in Sarawak with a monthly income of RM913, will not be categorised as poor.
And that is how the Najib administration now claims that BN has done an excellent job in eradicating poverty.
The powerpoint slide below presents the real incidence of poverty when the poverty line income is raised to more realistic levels.
You can see from the slide that if you take an average, for Malaya, Sabah and Sarawak, of RM2000 as the PLI, the incidence of poverty goes up from the official government figure of 3.8% to 33.5%
And if you took it up to RM2500, the figure would now hover around 45%.
The powerpoint slide below shows the actual state of poverty in the country.
400,000 struggle to try and survive on a monthly household income of less than RM500.
2,000,000 have to try and manage every month on a household income of less than RM1,000.
4,400,000 have to somehow make ends meet on a monthly household income between RM1,000-1,500.
Another 3,300,000 Malaysians will barely manage on a monthly household income of between RM1,500-2,000.
Finally, 2,700,000 might just be able to afford all the bare necessities, with a monthly household income of RM2,000-2,500.
Search the internet and you will find report upon report narrating how Malaysia enjoyed tremendous economic growth from the 70s until at least the 90s. The World Bank report of 2010, in PDF, is linked below.
World Bank Malaysian Economic Monitor
So, with all that economic growth and the healthy federal coffers spilling over with the trillions of ringgit from the oil and gas industry, why do we still have near 45% of the people living in poverty?
I have spent some time researching both Razak’s and Hussein’s terms as PMs and I have to concede that very little is said of the latter, whether good or bad.
Hussein, it would seem, was a somewhat mediocre PM.
Corruption-free, but not dynamic.
Of Razak, though, much has been written.
Here’s just one, from the Amanah website, an excerpt from which I reproduce below.
“Tun Razak had left behind a legacy – the conception of initiatives such as the Razak Education Report and the Red Book; the establishment of educational institutions including University Malaya, Institut Teknologi MARA, Serdang College of Agriculture and Universiti Kebangsaan Malaysia; the creation of the New Economic Policy and setting up of relevant organisations such as FELDA, MARA, FELCRA, RISDA, FAMA, and Bank Pertanian; the development of trade and industry via FIDA/MIDA, PERNAS and State Economic Development Corporations (SEDCs) and the establishment of PETRONAS, to name a few. However, more importantly, he left behind a value system of integrity, honesty, hard work, morality, caring and loyalty to the nation. The evidence can be gleaned from Tun Razak’s behaviour and character”.
“…Tun Razak had a high respect for the rule of law. He did not interfere in the legal institutions or enforcement of the laws.
“…Tun Razak passed away without leaving much worldly wealth behind for his wife and children”.
If all that has been written of Razak is the unvarnished truth, then, whatever view one takes of the policies he put in place, one could conclude that he, too, like Hussein, was relatively corruption-free
Tun Hussein Onn served as Prime Minister from 1976 until 1981, when he made way for Dr Mahathir.
And that is when the nightmare begins.
I’ll save that for Part 2.
shakuntala
October 1, 2012
Guess that Mahathir was lucky enough to inherit a whole load of institutions….the economic legacy.
Looks like he had a head-start to do what he purportedly did, being clever enough to notice that officially there was not much monitoring of the results achieved, also the Rakyat then were not clever enough, or interested enough, to care and to notice the amount of monies involved in all these economically viable initials.
In such a rich landscape, it would have been easy to work one’s way to the top.And Mahathir reigned for 22 years….gosh, what a lot of convenient time!
Just wondering about the word …..Inclusion….in the Social Inclusion Agenda.
najib manaukau
October 2, 2012
Shakuntala,
The grand son of the pariah from Kerala, the shenanigan Mahathir has never being clever I am sorry to disagree with you. He was and still is at best a very cunning half breed, in fact I would say an innate cheat and see what has he done for Malaysia in his 22 years as P.M. except to rob like a pirate just to make his useless son to become billionaire.
Just like a snake he will always be a snake and nothing else even though he had the chance and the wealth to take Malaysia to the first world but instead he was more concern about stealing from the nation, in the name of being a Malay, especially when he is not and never will be because you are either born one or not.
If he truly believes in Allah, why was he not born a true Malay ? He has to make use of Umno made legislation to make him a Malay, Umno does’t make Malay, Allah does, therefore he is and never will be a Malay. When in fact by claiming to be a Malay he is in fact a bloody disgrace to the Malay when the Malay class mates and friends of mine are all honest ones.
The real truth is he just want to rob in the name of a Malay when he is not a Malay. His grand father left Kerala as a pariah just so to get rid of the stigma of a pariah to work as security guard inn the Kedah palace and could not find an Indian woman to marry so to satisfy his lust and ended up marrying a Malay. So did his father ! But those marriages did not and should not make them or the shenanigan Malay, at best just a mamak !
najib manaukau
October 2, 2012
What did the East Malaysians get from all these oil revenues ? Petronas is built in K.L. and also with oil money from East Malaysia and all the developments with the oil revenue are in K.L.. East Malaysia got nothing period. They even destroy your environment and clear the clear your forest for you and above all make Taib also an Umno scumbag and parasites the richest man in the country.
So it is about time the people of Sabah and Sarawak wake up and demand for independence , if you are unable to get it from these Umno scoundrels then it is time to vote them out of Putrajaya during the coming GE and then demand it from the coming ruling regime until you become an independent state like Brunei and Singapore ! Look at them how rich these countries are and how well the people are being looked after and cared for with all your own wealth. And one thing for sure your wealth will not end up in the foreign bank accounts of the scumbags and parasites from Umno. They are truly your colonial pirates pretending to be your masters robbing you of everything you have, your forests, your oil and even your most precious inherent , environment.
ablogsmith
October 2, 2012
Haris, are you sure of your facts? Tun Razak involved in the establishment of University of Malaya? I checked from Wikipedia and here are the facts:
UM: Established 8 October 1949
ITM: Established November 1956
Tun Razak: Prime Minister of Malaysia, ruling from 1970 to 1976.
Education Minister: Razak stood in and won a seat in Malaysia’s first general elections in July 1955 and was appointed as the Education Minister. No mention in Wikipedia as him establishing ITM in his second year as Education Minester
Here are the URL’s
http://en.wikipedia.org/wiki/Abdul_Razak_Hussein
http://en.wikipedia.org/wiki/Universiti_Teknologi_MARA
http://en.wikipedia.org/wiki/University_of_Malaya
Bro,
It is because I was unsure of the accuracy of what was said that I qualified myself in saying that if this was the ‘unvarnished truth’
shakuntala
October 3, 2012
Hi Najib Manaukau
I did not mean to compliment Mahathir when I described him as being clever. I ought to have used the same word you have used to describe him….CUNNING….As you read my comment you will get the meaning that I meant to convey, ie that Mahathir was an opportunist at the expense of the Rayat. That is why he never wanted anything less than being PM for that number of 22 long years. He had enough time to fill his pockets. What he did for the Rakyat was only the icing on the cake to sweeten the Rakyat so that they would fail to notice his many misdeeds.
Be happy that so many of the Rakyat are tired of his nonsense and like he himself said, people are not listening to him…..anymore.
shakuntala
October 4, 2012
One wonders at the value system left behind, reportedly by Tun Razak….ie integrity, honesty, hard work, caring attitudes and moralty….??? These ideals obviously did not stretch into our present administration. And what sort of loyalty is practiced when the present civil service has degenerated from these high ideals.
One hears of civil servants, enjoying a good time….in your mind’s eye, you think they would be so taxed with a work-load.
Does loyalty mean now, that you support blindly….there are some civil servants of the former Razak adminstration who are still around. Ask them what honesty loyalty and morality really mean. They did not enjoy any perks during their impeccable service except the trip to a part of the world as a thank you gift when they retired. This was extended to every so called ‘government servant’.
And with so much oil revenue flooding the coffers, after meagre hand-outs to Sabah and Sarawak (we are talking about oil belonging rightly to these two states) why is the national debt inflating? In a case like this the NEP sounds ridiculously stale and out-moded and frequently referred to like as if it was something sacred.
And it is so sad that Sabah and Sarawak are singled out for discrimination….and left lagging behind, economically, without much of a voice
We Stand Together
October 5, 2012
Mahathir was only able to do what he did because the groundwork had already been laid out for him over several decades. There cannot be a sudden leap from a voting democracy to a system of rotating paternal autocracy.
Surely the split and amazing difference between Dato Onn’s beliefs and then subsequently that of his descendents should have been enough to have gotten inquiring minds inquiring.