KUALA LUMPUR: Deputy Prime Minister Datuk Seri Najib Tun Razak favours a return to the original New Economic Policy vision of improving conditions for the poor of all ethnic groups and not only Malays.
Najib, who is about to take over the leadership of the country, said the pro-Malay policy of the NEP had successfully raised living standards for the majority population.
However, he acknowledged that some mistakes had been made in implementation.
“We must accept policies that are attuned to the changing times, although we cannot have too drastic a move until people are ready for it,” he said in an interview with The Financial Times.
The policy, introduced by his father Tun Abdul Razak Hussein when he was Prime Minister in the early 1970s, has been said to have created an inefficient economy based on ethnic politics.
However, the policy is said to still enjoy widespread support in Umno.
As a way to ease the policy, Najib suggested that rules on foreign investment in the services sector would be relaxed.
Najib said he favoured gradual reform of the Government’s policy of preferential treatment of the ethnic Malays to help support economic restructuring.
On the economy, Najib said his goal was to increase the service sector to 70% of the gross domestic product from 54% in an effort to establish “a knowledge-based economy” which was less reliant on manufactured exports.
“This is part of the transformation of the Malaysian economy. Services offer tremendous scope for growth,” he said.
He said Malaysia wanted to expand service industries such as healthcare by attracting more foreign patients and to become a regional centre for education and eco-tourism.
Malaysia had one of the world’s most trade-dependent economies and the global recession underscored the need to make changes in the country’s economic structure, he said.
Manufactured exports now account for 72.5% of total exports against 14.8% for services.
Najib said Islamic financial services was an important area for growth.
He said Malaysia also hoped to focus more on high value-added manufacturing in electronics, biotechnology and green technology.
“We can no longer rely on cheap labour as a basis for our manufacturing,” he said.
Source : The Star