Abdullah says affirmative action programme for Malays not permanent

The Straits Times, February 17, 2007

KUALA LUMPUR - Malaysia's leader has reiterated that a controversial affirmative action programme for the majority Malays will end once they control 30 per cent of the country's corporate wealth by the target year of 2020.

'Once we have achieved it there is no reason why we should have that policy any more,' Prime Minister Abdullah Ahmad Badawi said in an interview broadcast on Saturday on cable news network Al-Jazeera's English service.

'The faster we get to the objective, the faster we will be able to throw away the crutch,' said Mr Abdullah in the interview, which was recorded on Friday just before he formally inaugurated the network's Kuala Lumpur office.

Malays, who comprise 60 per cent of the population, form the bedrock of political support for Abdullah's United Malays National Organisation party, so he can ill afford to cut back the affirmative action policy despite criticism that it has benefited only a few well-connected Malays, and created a class of super rich.

The affirmative action known as the New Economic Policy (NEP) was started in 1970 with the aim of raising the Malays' corporate ownership from 2 per cent to 30 per cent by 2010. At present it stands at 19 per cent while ethnic Chinese control 40 per cent.

But last year in a speech to Parliament, Mr Abdullah said the goal can only be reached by 2020, with only 20 to 25 per cent of the wealth likely to settle with Malays by 2010.

'We want to increase it to 30 percent. It is not easily achieved,' said Mr Abdullah in the Al-Jazeera interview. He said the new target date of 2020 - the year when Malaysia also aims to become a developed nation - remains unchanged.

The programme 'is aimed at addressing ethnic economic imbalance and to close the gap between the indigenous and non-indigenous people. I don't think it will be forever', he said.

As part of the NEP, the government requires publicly listed companies to allocate 30 per cent of their shares to Malays.

Companies without Malay directors or employees are excluded from lucrative government contracts. Employers have quotas for hiring Malays.