The New Economic Policy (NEP) has encouraged corruption since it leads to unjust distributional coalitions that favour some bumiputera and non-bumiputera elite, said a political analyst.

This is just one of the reasons why Dr Lim Teck Ghee is urging the government to appoint an independent commission to study the NEP.

Lim is the former director of Asian Strategy and Leadership Institute's (Asli) centre for public policy studies.

"The independent commission should comprise representatives and stakeholders from all sectors of the country's economy and society," he said in a statement yesterday.

"(It) should be tasked to provide recommendations and proposals in relation to the retention, refinement or termination of current NEP-type policies and programmes, wherever they are to be found," he added.

Lim, who is also a former World Bank official, pointed out that this public commission was urgently needed since many experts view NEP as the country's biggest obstacle to competitiveness, social cohesion and meeting the goals of Vision 2020.

He said it was evident that the NEP has made it less attractive for local and foreign investors to do business in the country because of its equity and other bumiputera-biased requirements.

Promotes mediocrity

Lim also said the NEP is a major factor in promoting mediocrity and clearly has an adverse impact on bumiputera self-reliant development by providing disincentives to open competition.

"This has driven local and foreign investors to create a 'system outside of the system' in order to circumvent the NEP," he added.

He also highlighted that the NEP has the effect of demoralising and demotivating non-bumiputera resulting in the 'brain-drain' effect.

Lim stressed that the government should not be surprised to see the ill-effects of the NEP.

He cited examples such as a decline in gross domestic product growth, decreased foreign direct investments, capital flight, growing unemployment and other negative social repercussions when the "oil revenue bonanza runs out."

The NEP was the hot topic discussed in the economic discourse held yesterday in Ampang, Kuala Lumpur. It was organised by the Malaysian Institute of Manage-Konrad Adenauer Foundation.

Lim spoke alongside former deputy prime minister Tun Musa Hitam and Insitute of Strategic and International Studies director-general Dr Mahani Zainal Abidin.

The economic discourse - first in its series - seeks to analyse Malaysia's economic future, strategic measures needed and its competitiveness against other Southeast Asian nations.

The NEP was enacted in the 1970 as part of a bold blueprint to reduce income disparity among different ethnic groups. This include a wide range of measures such as the 30 percent bumiputera equity target.

It was given a shelf life of 20 years but the policy continued after 1990 under a different name - the New Development Policy - to be implemented up to 2000.

The National Vision Policy was set to be implemented between 2001 and 2010. However, the government in the Ninth Malaysia Plan unveiled last year, revived the NEP targets.