The government may abolish its affirmative actions under the New Economic Policy (NEP) for the bumiputra following criticism that it was practising nepotism and cronyism, said a news report today.

The Sin Chew Jit Poh report quoted Prime Minister Dr Mahathir Mohamad as saying the implementation of the NEP in recent years evoked accusations that the government only favoured those closely linked to the establishment.

However, the premier added that the possible abolition of the NEP will be decided by the next generation of leaders.

Mahathir said this in his opening speech of a lecture series organised by the Young Professionals Chamber of Malaysia (Promuda) in Kuala Lumpur last night.

The NEP was introduced in 1970 following the ethnic clashes the year before which witnessed hundreds of deaths and led to the suspension of Parliament.

The policy was aimed at eradicating poverty and narrowing the economic gap between various races.

It has since sparked off a series of affirmative actions to redistribute wealth in the country so that the bumiputra would own 30 percent of domestic equity while Chinese and Indian Malaysians share another 40 percent, leaving the rest in the hands of foreigners by year 2000.

Malay Malaysians form the largest ethnic group at about 55 percent of the population. Chinese Malaysians constitute about 26 percent, Indian Malaysians about seven percent and other Malaysians, including indigenous peoples of Sabah and Sarawak, make up the remainder of the population.

Wrong values

In retrospect, Mahathir conceded that the NEP achieved only a small part of its goals, adding that this was because the bumiputra have resorted to easy ways to get rich.

The premier lamented that the limited success of the NEP was a result of the wrong values, morals, and culture of the bumiputra.

The bumiputra now rely entirely on the government. The co-operation between Malays and Chinese only lead to an Ali Baba style of doing business (where Malays hold nominal positions in companies while the administrative reins rest in the hands of the Chinese), he was quoted as saying.

As an example, Mahathir cited the dependence of bumiputra contractors on government projects.

Without these projects, most of the bumiputra contractors would have gone bankrupt, he claimed.

According to Sin Chew, the premier who has been in power since 1981 however said that these weaknesses surrounding the bumiputra could be overcome in due time.

The bumiputra are not incompetent. They just refuse to try things and instead think that the government will take care of them forever, he said.

Societys failure

Mahathir also said that sometimes good policies fail because society does not practise it properly and does not adopt the necessary work attitude.

The premier said there was no such thing as a perfect policy or solution to problems as there are always flaws throughout its implementation.

The policies which are criticised today appeared to be perfect yesterday. Likewise, a seemingly perfect policy today will come under criticism tomorrow, he said.

Mahathir, however, defended the privatisation of public enterprises since 1990s and stressed that the process has taken place smoothly.

He pointed out that the once state-owned telecommunication company Telekom is now generating an annual profit of RM100 million to RM200 million compared with only RM2 billion to RM3 billion in the past.

Many of these companies were, however, deeply affected by the 1997 financial crisis, he said.