Greed: The Cause of Wealth Disparity Among Races

Every morning as I walk down my street I see the same homeless Chinese man sleeping on asphalt. Just around the corner there’s a Malay guy lying on his back, oblivious to the office workers walking by the sidewalk that has become his makeshift bedroom since even before I moved downtown five years ago. I walk a little further and I see a dreadlocked Indian lady getting up at a bus stop to make her way elsewhere.

Come evening time, as I am strolling back home through the neighboring vicinity, I see an Indian man driving a 2010 Jaguar XJ. A minute goes by and my neighbor, Mr Lee passes by me in his classic red Ferrari but only to pull up behind a Brabus that’s parked in front of a swanky Italian restaurant. Mr Lee had to wait for a big shot Malay broad to board the chauffeur-driven car before he could proceed to wherever the party is at.

These are the sort of things I see in the city on a daily basis. As there are poor people of different ethnic backgrounds so are there affluent folks of diverse races. The rich are having their RM400 wine and dine while the hardcore poor and homeless are going through trash to look for empty bottles and cans to trade for money to buy food. A pretty balanced 1Malaysia, I would say.

But then again, when I visit any fancy condos (priced at RM800,000 and above), say in Mont Kiara, I clearly see that most of the owners of the units are non-Malays, predominantly Chinese, Indians and expats. Why are most of these units owned and occupied by non-Malays when the Bumiputras make the majority of the population (67 percent) and have even been given 10 to 15 percent discount on property purchase? Why are the Malays able to buy luxury vehicles yet we hardly see any Malay owners of these luxury condo units?

What Happened to the Malay Multimillionaires?

In economics point of view, in any country (except for maybe Brunei), there will always be poor people and rich people. The aim of any nation is to narrow the gap between the two. But why are the Malays don’t seem to be as rich as the Chinese? Or are they?

Even when you look at Forbes top ten richest Malaysian list you’ll see there’s only one Malay (Syed Mokhtar AlBukhary at number 7) while the rest are Chinese and there’s one Indian (Ananda Krishnan at number 2). Surely there must be more than a few more affluent Malays missing from the the Top 40 list. What happened to the Malay multimillionaires like Tajuddin Ramli, Daim Zainuddin (photo), Shamsuddin Abu Hassan, Wan Azmi, Halim Saad, Ahmad Sebi Abu Bakar, Taib Mahmud, Abdullah Ahmad Badawi and the other Umno cronies? These people are known to own more than a few properties and businesses (even banks) around the world so the reason can only be either these people don’t declare their assets or their assets are under someone else’s name.

The NEP and Umnoputras

I had some conversations on this riddling occurrence with some Malay and Chinese old-timers (age 50 and over). As it turns out, the answers to the baffling questions above has to do with the implementation of the New Economic Policy (NEP) and how Malaysians of all races exploit this policy which had been carved onto our Constitution since 1970.

When the NEP was introduced back then, it was conjured in haste and out of desperation to appease the perturbed Malays in the aftermath of the May 13 race riots in 1969. It was an idea agreed among all the components of the Alliance Party (Umno, MCA and MIC). So the NEP got the nod from both the Chinese and Indians who agreed to it for the sake of racial stability in a country in crisis.

But the NEP was not an open-ended policy as it was intended to be enforced for just 20 years so it is suppose to end by 1990. The then prime minister Dr Mahathir Mohamad (photo) agreed with this and he even reminded the Malays about it again and again so that they would buck up and get their acts together in preparation. At the same time, he advised the Chinese businessmen to work with the Malays to help them prosper together. This was so that the government can repeal the NEP which is clearly making the Malays appear weak.

The thing about the NEP is, contrary to popular belief, the policy is actually not just about the Malays. According to a former central committee member of the Malay Chamber of Commerce (who is currently a fugitive), “the NEP is a multi-prong attack (senapang dua mata) to reduce the gap between the haves and have-nots (regardless of race), to make the distribution of wealth more equitable, and to reduce the disparity between the different races. This was what the NEP was all about.” However, somewhere along the way, the Malays either forgot about this multi-prong attack or became confused and began to think that the NEP was just about them.

Apparently, at that time, Mahathir realized there was no way to help the 15 million Malays to become rich in such a short time period. So he decided to make a few Malays very rich instead by creating a handful of Malay billionaires in hope that these guys would later help the rest of the Malays. However, as chivalrous as it seemed, the plan didn’t work out. The chosen ones became billionaires but they did not help the other Malays. Instead, they chose to work with the Chinese and more and more Chinese billionaires were spawned from these dealings. Basically, a lot of Chinese became rich because of their partnership with the Umno cronies or Umnoputras.

When the NEP was first launched in 1970, the Malay share of the national equity was just 1.5 percent. It increased by 1985 but it was still just 3 percent. But the government was aiming for 30 percent by 1990. By this time, the government realized that it was just impossible to reach the targeted 30 percent in a mere five years as it took 15 years to grow from just 1.5 percent to 3 percent.

Should the non-Bumiputras be blamed for the Malays taking such a slow pace in catching up? Don’t get me wrong. The quality of life of the Malays has much improved and we owe this to the NEP despite some of its failures. It’s just that it can’t be helped that the Chinese and Indians did not remain static to wait for the Malays to catch up. All three races increased their wealth but the difference is the Chinese and Indians had a head start. And, at the same time, even when there were numerous programs created by the government for the purpose of wealth redistribution, these redistributive mechanisms were not as effective as there were so much corruption going on.

The Malay-Chinese Imbroglio

Being the majority race, the Malay economic predicament obviously has repercussions on the country and resulted in mounting pressure on the government to rethink about the NEP. It was also the main reason for Mahathir’s stepping down in 2003 (he also broke down in tears). One of the main issues of concern is that the Umno cronies have been awarding contracts to the Chinese and getting their cuts while the Chinese are the ones doing the actual work. At the same time, those Malays in the upper-crust are enjoying their very secured high posts, high incomes and highlife (more so back then when the Opposition was not as strong) while the everyday people are struggling to survive as a result of a biased distribution of wealth.

In a generalized Malay point of view, the Chinese are still richer as they can own condo units (and other luxuries) costing millions as mentioned earlier. So when MCA president Chua Soi Lek (photo) reiterated the Chinese sentiments in urging the government to consider reviewing the 30 percent Bumiputra equity the Malays perceived the Chinese as being greedy and insensitive as they already own 70 percent share of the economic ‘pie’.

Meanwhile, the Chinese sees that the Malays brought their predicament on themselves. While the Chinese were working, investing and saving for their future and their next generation’s future, the Malays were abusing their special position, getting their cuts and spending away their easy-earned cash. By the way, the Chinese are known to have exploited the Bumiputra special position too. The Malays were given 20 years to work on catching up so you can’t really blame the Chinese for feeling held back especially when NEP’s failure was attributed to corruption, government inefficiency, unfair competition from government-linked companies (GLCs) and the Umnoputeras.

This is why Najib’s 1Malaysia has become a laughingstock to many Chinese who had extended the slogan to “1 Malaysia, 2 Standards”. Not only that, they mock the Malaysian system of government and business for they do not adhere to meritocracy. Instead of appointing individuals or organizations based on ‘qualification’ they are appointed according to what the Chinese has termed as ‘kulitification’. Incidentally, many Chinese Malaysians tend to believe that somehow the Malays had actually already surpassed 30 percent equity ownership despite the the latest 9th Malaysia Plan (9MP) Report which claims the proportion of Bumiputra equity ownership remains at 18.9 percent while the share of the Chinese improved marginally to 39 percent.

Keeping the Majority Happy

Malaysia is not alone in its predicament where the Chinese minority has far greater wealth than the indigenous majority. It’s also been happening in other parts of the world like Thailand, Indonesia, Philippines, and even in countries in Africa, according to a recent CNN report.  Yale Law School professor Amy Chua (photo) in her book, World On Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability, explains that democratization can increase ethnic conflicts when an ethnic minority is disproportionately wealthy. Chua’s book which was published in 2002 is an academic study into ethnic and sociological divisions in regard to economic and governmental systems in various societies. In her book, she says:

"When free market democracy is pursued in the presence of a market-dominant minority, the almost invariable result is backlash. This backlash typically takes one of three forms. The first is a backlash against markets, targeting the market-dominant minority's wealth. The second is a backlash against democracy by forces favorable to the market-dominant minority. The third is violence, sometimes genocidal, directed against the market-dominant minority itself.  Also, "overnight democracy will empower the poor, indigenous majority. What happens is that under those circumstances, democracy doesn't do what we expect it to do – that is, reinforce markets. [Instead,] democracy leads to the emergence of manipulative politicians and demagogues who find that the best way to get votes is by scapegoating the minorities."

According to Chua, other examples of ethnic market-dominant minorities, besides the Chinese in Southeast Asia, include "whites" in Latin America; Jews in Russia; Croats in the former Yugoslavia; and Ibos, Kikuyus, Tutsis, Indians and Lebanese, among others, in Africa.

Delving into the peace vs prosperity issue, Chua discusses different reasons for the market dominance of different groups. Some groups achieve market dominance because of colonial oppression or apartheid. In other cases, it may be due to the culture and family networks of these groups. For many groups there is no clear single explanation. Americans can also be seen as a global market-dominant minority, which particularly when combined with using military might and flaunting political domination, cause resentment.

But, obviously, the situation in this country is nothing like the minorities’ predicament of the African American in the US. The black people there ended up in America as a result of more than 500 years of slavery and by no means were their enslaved ancestors’ arrival there were by choice. As for the minorities in Malaysia, their forefathers, as far as I know (and correct me if I’m wrong) weren’t forced to come to this country and they had chosen to live here among the Malays who were here much earlier. So there’s no such oppression or discrimination experienced by the minorities here that's comparable to the plights of the blacks or Latino immigrants or even the native Indians over in the states.

Our circumstances are unique in this region too. Unlike Thailand, Philippines and Indonesia where they made a real effort (sometimes with the use of violence) to naturalize other ethnic groups, in Malaysia people of all races are free to preserve their cultures, practice their religions and keep their original names as they are. This very spirit of diversity, freedom and unity is the reason why every Malaysian would want to increase the peace.

Class Struggle More Than Race Struggle

As rakyats of multiracial Malaysia, it’s very important for us to see past all the politicizing and understand that the conflict is not much of a race struggle but more ultimately a class struggle. Naturally, the ones who are really not happy are those who are underprivileged. The poor remains in the lower income bracket as they have been neglected by the rich who are too busy taking care of themselves. On top of this, there will always be hate mongers, namely politicians and politician wannabes, who will promote racism and make the problem seem worse than it actually is.

As Malay Muslims, we should not be envious of the Chinese for being rich. You’ll be surprised that a lot of them were grandsons and granddaughters of rubber tappers, farmers and security guards. Why be angry at the rich Chinese when it’s the rich Malays that should be blamed for not helping the poor Malays as they should have done? Many of the non-Bumiputras made it despite being devoid of the privileges enjoyed by the Bumiputras so they deserve to be proud about themselves. Hopefully, they are helping the poor too. So don’t hate the other races people, hate the game.