A Doctor in The House: A Memoir of Tun Dr Mahathir Mohamad (42 page)

After my election to the Supreme Council I was invited to speak to numerous groups within and outside the party on many issues, particularly those relating to the problems of the Malays. I tried to advise the Malays on how to maximise the benefits of the Government’s New Economic Policy. I felt that unless people were properly guided, the opportunities would be wasted. Later events were to prove me right.

As Prime Minister, Tun Razak recalled Parliament in February 1972 in order to validate the laws passed in the interim period when Parliament had been suspended and the country had been ruled by the National Operations Council (NOC). There were amendments to the Constitution which required the support and approval of two-thirds of the Members of Parliament. Whereas before this the Constitution could be debated freely in and out of Parliament, with the new amendments there were certain “entrenched” clauses which could not be debated or challenged. The most important provision was that Malay would be the official language of the Government, but other languages (Chinese and Tamil) could be used for non-official purposes, including in education as the medium of instruction in the Government-assisted national-type primary schools. No other country in Southeast Asia allowed—or indeed allows—this linguistic latitude.

The other entrenched provisions included the special privileges of the Malays and the preservation of the rights of the Chinese and Indians as citizens, which also could not be questioned. Whereas during British rule the Chinese and Indians could be repatriated and their citizenship annulled, the Constitution forbids such action by the independent Government.

I thought the no-debate provision was a good move to prevent rabble-rousing and the fomenting of conflict between the Malays and Chinese. The Constitution is a well-balanced document. Close scrutiny shows that when something is given to the Malays, something is also given to the other races. While Islam is the official religion of the Federation, non-Muslims are guaranteed the freedom to practise their own religions. Malay may be the official language, but other races are free to speak, learn and publish in their own languages.

These are rights which are rarely noticed, especially by Malaysia’s international critics. Many observers don’t seem to realise that in countries like Indonesia, the Philippines and Thailand, you are not allowed to use Chinese in schools. While some like to point unfavourably to what was accorded to the Malays, implying that there is discrimination in their favour, they never mention the parallel rights accorded the non-Malays. Ever since Independence in 1957 our Constitution, while designating Islam the official religion, ensured that other religions may be practised freely. There can be no forced conversion of anyone to Islam. The Shariah laws here cannot be applied to non-Muslims.

Europeans in particular should note this last point since during the colonial period, forced conversions to Christianity by the Spanish and others were common. The British colonialists were more subtle. They did not force conversion through policy, but they made it easy for their Christian missions to open schools and hospitals and to use them as platforms to preach. In some instances, scholarships were preferentially awarded to those who converted to Christianity.

The Constitution also made provisions for Malay reserve land. This is often seen as legislated discrimination against non-Malays but the reality is otherwise. Since Malay reserve land can only be sold to other Malays, prices tend to remain low, as Malay purchasing power is low. But should the reserves fall into non-Malay hands for whatever reason, prices shoot up. The higher prices then would preclude the land from being bought back by the Malays. Should a Malay subsequently reacquire this land, that land would revert to being Malay reserve, losing value for economic exploitation. Effectively, these plots then become non-Malay reserves. Just as there is a duality of legal-religious space for Muslims and non-Muslims so that only Muslims are subject to the Shariah, so too are there two spatial zones for Malay and non-Malay land, two distinct land markets where different land values and prices prevail.

Malay reserve land can be excised and sold if it is found to be tin-bearing, for example. An equal-sized piece of land must then be identified for conversion to Malay reserve to replace the excised land. This land need not be tin-bearing, or hold any resources at all. This was a provision made by the British, so that Malay Reserve Land Laws would not prevent them from acquiring Malay reserve land to mine for tin or to open up rubber plantations. They appeared to want the Malays to own land, but they did not want the provision of the law to prevent them from acquiring land suitable for their economic exploitation. So Malays ended up with guaranteed access to the least economically valuable land. That is how the Malay reserve areas took shape and evolved.

The Malay Reserve Land Laws were put in to institute some degree of protection. Their rationale was that if there were no such reserves, the Malays were likely to sell most of their landholdings. At the same time, the rigid provisions of the law prevented them from exploiting the economic potential of their land through joint-ventures with non-Malays, using their land as capital or leasing the land for a fixed period while ensuring that upon the lease’s expiry, the land would revert to Malay ownership.

It is bizarre that many Malays seem to think that Malay reserve land is a recognition of their being “masters” of the country. This is disgraceful. Indigenous people should not have to live on reserve land. The Native Americans of the US do live on reserves but no one regards it as a privilege. Indeed, it is an open acknowledgement and a powerful statement on how they cannot compete with other Americans.

The Malay Reserve Laws should be nothing more than an interim measure, and at best, temporary crutches. The real solution lies in learning how to manage assets such as these lands and to develop business skills. Malays should not be isolated from competition but enabled to compete. But mastering these skills requires the right attitude.

This is where value systems come into play. Values shape personality, action and economic development. That is why I keep emphasising the importance of maintaining and also modernising our systems of Asian values. If you understand the value of what you have, be it material or ethical, you will not readily part with it. But to maintain one’s material and moral stake in the world requires strength of character. That is why we need a broadly based group of well-educated and well-to-do Malays in Malaysia. But they must make the effort—so long as they keep seeking the easy way and looking for effortless means of getting rich quickly, they will never be able to make gains from their assets. It is easy to sell what one has been given—including land—and then live off the money until it is finished. After that, Malays will become paupers in their own country in the long run.

In the past, most Malays lived along the rivers where there was plenty of fish and other food. Life held no great challenge. If life is easy, you have no reason to try too hard to improve. Immigrants do not have things so easy and they must work hard to raise themselves up. These are the basic ingredients of the immigrant mentality. The Chinese immigrants came here because in their time, life was difficult in China and they were prepared to come here to work hard and compete. They found the Malays easy to beat in all fields and, unused to competition, the Malays retreated before the Chinese onslaught. They would have sold all their land to the Chinese had there been no Malay reserves.

Nevertheless, Malay reserve land actually leads to a larger problem. Overtly, the Constitution seems to protect the Malays but in reality it does not. It debilitates them, making them very dependent and disinclined to stand on their own. But it is hard to suddenly abolish the long-established Malay reserve land system. If that were to happen, the Malays would lose far more than they could ever gain. It is hard to throw away a crutch or give up a benefit when one has adapted to its presence and come to take it for granted. This, too, would in time become the problem of the NEP.

The Constitutional amendments of February 1972 were passed with a good majority because the Sarawak United People’s Party (SUPP) had joined the Alliance, giving the coalition control of 98 votes out of 144, a clear two-thirds majority. In addition, Gerakan, with seven members, and the PMIP with 12 members, also supported the amendments. The Alliance had now regained the strong position it had lost in the 1969 elections.

I continued to have doubts about the implementation of the NEP but I had not reckoned with the ingenuity of Tun Razak. He proposed that every state set up an economic development corporation to engage in various wholesale and retail businesses allocated to the Malays. I was appointed a Director of the Kedah State Economic Development Corporation and was also elected Vice-President of the Kedah Malay Chamber of Commerce. The President was Hanipah S. Alauddin, a prominent Kedah businessman and a close friend. Unfortunately, he died in October of 1972 and with his passing, I took over as President of the Chamber. Hanipah was also a Senator, one of the two the Kedah Government was entitled to appoint. In December, the Kedah State Council proposed that I also take Hanipah’s place as Senator.

The State Economic Development Corporations, or SEDCs as they came to be known, were in theory a brilliant mechanism for realising the NEP. The Malays needed capital and know-how to take advantage of the opportunities created by the NEP. Tun Razak decided these state units would go into the big industries like timber, mining and rubber plantations. Individual Malay entrepreneurs would then be brought in later when they had accumulated capital and business savvy. It was already clear that simply allocating shares to Malays was a problem, as they would not hold on to them. As with other assets given them, they would sell their shares almost immediately to non-Bumiputera for a quick profit. The SEDCs had to hold these shares for them to ensure the Malays retained their stake in the future.

But once the SEDCs had built up their business, they were disinclined to sell the shares to Malay individuals. Instead, they tended to behave like government departments. They were run by civil servants who allocated timber and tin concessions to the SEDCs; the few Malays who were already privately operating in the business or who wished to apply for timber or tin concessions found themselves competing against the SEDCs and were denied the opportunities. Yet despite being favoured by the Government and at times given monopolies, the SEDC-owned businesses often failed.

When I was invited to sit on the board of the Kedah SEDC, the responsibilities of the job were not clear. Business activities in Malaysia were not that dynamic or varied in those days. The construction and housing industries had hardly begun, there were no supermarkets or restaurant chains, and roads and other infrastructure projects were few and far between. The share market was insignificant and most companies were privately-owned and small.

The Kedah SEDC therefore decided to develop the state’s natural resources. Kedah had never been rich in tin nor was its forest land extensive. Of all the states, Kedah had been the most intensively cultivated. It was a “rice bowl” state. As elsewhere, the Chinese in Kedah had a near monopoly on timber extraction and ownership of the open-cast tin mines, although a small number of Malays were involved. The entry of the state corporation meant that almost all new forest concessions were now swallowed by it. This was not quite in keeping with the spirit of the NEP, but there was no arguing with the civil servants and Malay politicians who were on the boards of the state corporation and its subsidiaries.

Malay timber concessionaires who competed against the SEDC usually lost. In future, this would be the main grouse of Malay businessmen against the NEP. Invariably, their own prospective business opportunities were seized by the state corporations against which, repeatedly, they would find themselves competing unsuccessfully. Meanwhile, the Chinese also lost most of their concessions to the state corporations. But since these corporations had no experience in operating timber concessions and had no logging machinery, they had to sub-contract to the Chinese to do the actual extraction and market the timber to mills—which also belonged to the Chinese. The corporations seldom made profits. It was the sub-contractors who did best under these arrangements.

Similarly in Pahang, Majlis Amanah Rakyat, or MARA, the successor to the Rural and Industrial Development Authority,
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 obtained huge forest concessions. However, poor management meant no additional wealth flowed to the Malays. At one time, the timber cut down was piled up in the forests, as it allegedly could not be sold. Some of these precious logs, it was reported, were simply burnt.
 

There can be no excuse for this. If you cannot sell the timber in one form, common sense dictates that you try to sell it in another. If you can’t sell the logs, you need a sawmill or you must turn the logs into laminated plywood or fibre boards. It is crucial to learn how, so that you can understand how much return you can get on your investment. But the officers involved were

mostly administrators with no business experience. They were asked to extract timber and this they did. To do anything else would require directions from the Government, not just the management, and government directives take time as only the topmost men can make decisions. Sadly, the timber was not a priority for them and so the logs got burnt. The old-fashioned public service attitude is hard to uproot. It is a mindset that prefers to do nothing and maintain a “clean” copy-book, than to take the risk of making a mistake. And if that attitude is entrenched at the upper levels, which lower-level functionaries, no matter how much initiative they may have personally, are likely to go against it? In the public service it would be a fatal career move.

A Canadian timber company was engaged to help MARA, and expensive logging machinery was imported to modernise operations and improve efficiency. But the human resources on the ground were less sophisticated and the MARA officers directed the logging operations by radio from their offices in Kuala Lumpur. Not unexpectedly, they failed, despite the Canadian technical input.