Driving forces for the formulation of NECC:

•A transitional period (the end of the NEP and the preparation for the new

policy NDP)

•Increase racial tension due to the privileges that Bumiputras have

• Claims from the Chinese community to have more rights to participate in

the decision-making process

Formulation of NECC:

•In December 1988, the then Prime Minister (Dr. Mahathir) established the

National Economic Consultative Council which was formed by 150

multiracial members (50% Bumiputra and 50% non Bumiputra)

•The role of the council is to work out a consensus on recommendations for

an economic policy to replace the NEP after 1990

In the NEP:30-40-30

Chinese to employ 50% from the malays page 7Malay as a medium of instruction from primary to university

A NationalCultural Policy to promote Islamic values and Malay culture was

also instituted

In the end of the NEP the racial and ethnic tension was at its picks

Therefore there was a claim from the non malay community to restructure the NEP. The following points were raised:

•ethnic share of corporate sector,•educational opportunities, land ownership, participation in

land development•schemes, and public and private sector employment

NEP (National Economic Policy)

• policies & legislations to correct income and employment imbalances between Malays and

non-Malays (e.g: Industrial Coordination

Act 1974)

the result:

Increased racial tension between Bumiputras and non Bumiputras

The first few years, NEP policy was not fully institutionalizeduntil after the enactment of the Industrial Co-ordination Act in 1975, a delaywhich can be attributed largely to the role of MCA president and FinanceMinister Tan Siew Sin.

According to the Harvard-based economist, Just Faaland, who helped

formulate the DNU document, the Second Malaysia Plan’sweakness was its failure to set specific numericaltargets to reduce economic imbalances.

This oversight was rectified in 1973 when the Outline Perspective Plan (OPP)

established an equity ownership ratio of 30:40:30 for

Malay, non-Malay, and foreign interests respectively. However, an effectiverestructuring mechanism was not enacted until the passage of the ICA in1975.

This legislation, viewed unanimously by Chinese business interests as themost draconian of all NEP measures, originally required non-Malaymanufacturing firms with more than $100,000 in shareholders’ funds and

employing more than twenty-five workers to divest at least 30% oftheir equity to Malay interests.

They were also required to incorporate into their workforce a number ofMalay employees to reflect the Malay proportion in the country’s population,at least 50%.

At that point, almost all the influence and participation inthe policy were at the rhetorical level. Political parties and

interest groups - pro- and anti-government alike - attempted to directand shape public opinion, and went to extreme length to obtain

political support for their positions.

Those who opposed the NEP, including all Chinese-based

political parties and interest groups, saw the NEP as the most divisive policy ever devised.

While the October swoop of 1987 - when 106 active politicians and leaders from opposition and interest groups were detained

under the Internal Security Act (ISA) - was the result of intense racial maneuvering, it also marked the end of

public debate on the NEP.

NECC - forum for problem solving for the development o f a common economic policy.

Its establishment was "a sincere effort to get as many people as possible to be

involved in determining the destiny" of Malaysia.

NECC was criticized - lack of status & did not have the necessary base of legitimacy and authority

• NECC had no independent power in policy-making, and• NECC would merely be used as a political forum and a public

relations tool.

The provision was that proposals put forward by the Council must be reached by a consensus among all its members. In order to allay the suspicions of the

skeptics, the Deputy Prime Minister Ghafar Baba repeatedly gave the assurance that decisions reached by consensus by the Council would be implemented by the government.

The Council was finally launched on January 19, 1989. It was an

almost all-inclusive body, with a membership of 150, headed by Ghazali Shafie, who was reputed for having an influential role in the formulation of the NEP.

The Council's secretariat was the Economic Planning Unit of

the Prime Minister's Department. It held its first closed-door meeting on January 19,1989.

During the review stage (from January to May 1989),

two issues were frequently brought up.1. The accuracy of government data presented in the

Malaysian plans - Some felt that the government was trying to withhold vital information, and to disseminate false and misleading information.

2. The question of whether the 30% share of the corporate wealth held by Bumiputeras had in fact been attained. Non-Malay parties and interest groups insisted that the target had been reached, while Malays, argued otherwise.

The 2nd stage was the formulation of the proposals. During the

5th meeting in May 1989, five working groups were set up to deal

with data standardization, poverty elimination, restructuring of society, the national economy in the context of the international environment, and the development of human resources.

Some who attended the NECC's deliberations feels that the Council was not fair in its procedure.

These groups registered their protest by withdrawing from the NECC on August 25, 1989. Each having one representative in the

Council.• The United Chinese Schools Teachers' Association (UCSTAM) • The United Chinese Schools Committees' Association (UCSCAM). • The Selangor Chinese Assembly Hall.• The DAP suspended its participation on August 27,1989, but rejoined on September 11, 1989• The Inter-Religious Council also withdrew.

The NECC finally submitted its report to the government on February 9, 1990.

The plan, called Dasar Ekonomi Untuk Pembangunan Negara (DEPAN), was, according to one participant, a "paradigmatic break"

with the NEP as it proposed for an independent, non-partisan commission to monitor the implementation of the new policy, an idea which was

eventually rejected by the government.

Throughout the two-year life span of the Council, 19 members from various organizations withdrew for a variety of reasons. Some of the representatives claimed that their suggestions,

opinions and objections were not included in the committee's meeting notes, reports and observations.

ORGANIZATIONAL CHART OF THE ECONOMIC PLANNING UNIT OF THE PRIME MINISTER DEPARTMENT, MALAYSIA

PROCESS OF FORMULATING OF THE NATIONAL DEVELOPMENT POLICY

SECOND NECC (1999-2000)

• Launched by Tun Mahathir Mohamad

• Representative of 154 person from different groups and parties

• Evaluate performance of National Development Policy (1991-2000)-the Second Outline Perspective Plan (OPP2)

• Proposed new policy for national development beyond the year of 2000-National Vision Policy (2000-2010)

National Development Policy (1991-2000)The Second Outline Perspective Plan (OPP2)

• Primary Thrusts

– Striking an optimum balance between the goals of economic growth and equity

– Ensuring balanced development of the major sectors of the economy

– Reducing and eliminating the social, economic and regional inequalities and imbalances

– Ensuring material welfare while instilling positive social and spiritual values

• Progress and achievement

– The strategies and policies of OPP2 contributed towards strengthening and modernizing the industrial base of the country

– The nation achieved rapid economic growth despite being affected by the 1997-1998 financial crisis

– Significant improvements in the level of income and QOL

– Significant progress made in reducing the incidence of poverty

THIRD NECC (2009-2010)

• Urgent need for – The New National Agenda – Evaluate the National Vision Policy– Iron out differences that have arisen among all

stakeholders

• Must includes all levels of community• Should focus on Malaysia’s global competitiveness• In-depth analysis on the weaknesses of the Malays in

holding shares allocated to them• As a platform for dialogue and analysis on the Way

Forward for the nation• National Unity Policy

A new NECC under an eminent, independent and

non-politically aligned chair-person is the right

forum where the many complex issues of poverty

and wealth distribution, ethnic and other disparities

and imbalances, and other sensitive issues can be

analyzed and dissected with candor by the best

minds of the country to benefit all Malaysians.