Bumiputera Economic Congress 2024: Seven Suggestions for the Seventh Convention

Malaysia will hold a Bumiputera Economic Congress (BEC) from 29 February to 2 March, the seventh in this series of ad hoc government-sponsored conventions. The historical record of BECs is chequered. This year, however, the Anwar Ibrahim administration’s spirited promotion of BEC2024 indicates that this one could be consequential.

The inaugural BEC of 1965, together with the Second BEC of 1968, prompted the establishment of institutions such as Bank Bumiputera and MARA (Majlis Amanah Rakyat, the Council of Trust for the People), and broader expansion of Bumiputera-favouring interventions. The next two BECs were spaced out in 1980 and 1992, during the era of UMNO dominance when the ruling elites deemed that the Bumiputera agenda did not need regular reaffirmation but could do with occasional reconfiguration.

Fast forward to the historic fall of the United Malays National Organisation at the May 2018 general election. In the aftermath, Malaysia saw two BECs in quick succession that did not gain much traction. The September 2018 rendition, fully named the Congress on the Future of the Bumiputera and Nation, was a rushed job that seemingly lacked buy-in from Prime Minister Mahathir Mohamad, and perhaps got overshadowed by the post-election euphoria. The September 2020 sessions, organised by the Malay Consultative Council and officiated and endorsed by the Muhyiddin Yassin administration, mainly provided assurance that the agenda would continue. To wit, all BECs are politically inspired; some of them actually influenced policy.

In this spirit, here are seven suggestions for making the seventh BEC substantive and constructive.

First, clarify the reason for the policy. When questioned on why the BEC should happen, the most vocal proponents tend to defend it as a right of the majority. This stance not only fails to enlighten, it also fuels polarisation between Bumiputeras and other communities. BEC2024 presents an opportunity to specify that the policies within its ambit involve special measures to promote participation and capability specifically in higher education, management and high-skilled positions, and owning and operating businesses. Malaysians deserve a clearer grasp of the policy and how it fits within the system of myriad group-based empowerment policies, such as Tekun which offers small business loans for Bumiputeras — and for Indians.

Second, project new driving goals. The BEC’s primary focus on developing dynamic, innovative and competitive enterprises stems from an acknowledgement of acute deficiencies. For decades, the Bumiputera agenda was fixated on 30 per cent equity ownership, which impeded progress in three ways: prioritising acquisition over productivity; confining ownership to equity while omitting various other assets such as land; and perpetuating acrimonious debates over the calculation of ethnic equity distribution. Equity ownership is increasingly disconnected from contemporary priorities – and should cease to be the rallying point.

The BEC’s goals would be more effectively driven by targets such as the quantity and quality of Bumiputera enterprises, and growth in mid-tier companies. Among Bumiputera enterprises, micro-, small- and medium-scale firms account for 88 per cent, 11 per cent and 1 per cent of the total. In contrast, among non-Bumiputera firms, 69 per cent are classified as micro, 28 per cent small and 3 per cent medium.

The imperative of sustaining the hard effort cannot be overstated, particularly for Bumiputera policies with their historical baggage and unfinished business.

Third, do not neglect higher education. While the BEC will focus on Bumiputera entrepreneurship, the advancement of the community critically hinges on constant cultivation of knowledge and skill through the education system. The efficacy of colleges and universities in reaching out to the most disadvantaged students, and in delivering quality education, must be given due emphasis.

Fourth, conduct focused and rigorous research, especially on the past decade’s experiences. The government agency Teraju, founded in 2012 and mandated to oversee Bumiputera economic transformation (BETR), implemented some novel and experimental programmes that potentially offer valuable lessons. The outcomes have been reported, but we know little about the process.

One of the BETR’s lauded accomplishments is the “carve out and compete” scheme for megaprojects which reserved a portion of contracts for Bumiputera companies. At face value, the term would suggest that competitive bidding was the success ingredient — but this would be the wrong conclusion. My research on procurement in Kuala Lumpur’s mass rapid transit (MRT) found that the Bumiputera contractor development programme, particularly for small contractors, is better described as “select and nurture”.  Project managers filtered applicants and awarded contracts by ballot. Crucially, main contractors and the Bumiputera SME finance institution PUNB provided guidance and support.

Teraju’s initiatives, from the Teras project designating “high-performing” companies to be afforded preference in public procurement to the SUPERB (Skim Usahawan Permulaan Bumiputera, or Bumiputera start-up scheme) grant for young entrepreneurs, have not been adequately studied. Teraju continues to be a key agency in Bumiputera development and operates more dynamically than its older counterparts, and is well-placed to contribute knowledge to policymaking.

Fifth, apply lessons across the board. Bumiputera programmes are implemented by a massive and often disparate network of government departments and agencies at the federal and state levels. Research findings from the past decade can offer insight into the rest of the network. These include lessons in grooming small businesses, and in targeting disadvantaged Bumiputeras and nurturing talent, notably Yayasan Peneraju’s (Leadership Foundation) dynamic initiatives in sponsoring professional, technical and specialist training.

Sixth, foster inclusion within the Bumiputera community and among all communities. The “Bumiputera” category accounts for 70 per cent of Malaysia’s population and is stratified and diverse. The government has consistently expressed priority for low-income Bumiputeras, the indigenous Orang Asli of Peninsular Malaysia, and Sabah and Sarawak Bumiputeras who have derived less benefit compared to Malay Bumiputeras. BEC2024 should resolve to firmly deliver on these promises.

BEC2024 could also begin to consider opening up formerly Bumiputera-exclusive programmes to other groups or introducing parallel programmes for all Malaysians. This is a tall order, but perhaps a young and nimble agency like Yayasan Peneraju can take the lead in demonstrating the possibility of such change. This is a fair expectation given the Madani economy’s commitment to equal opportunity.

Seventh, vigilantly monitor progress and demand results. Implementation mechanisms and a coordinating authority will be established, as is customary in Malaysian action plans. Nonetheless, the imperative of sustaining the hard effort cannot be overstated, particularly for Bumiputera policies with their historical baggage and unfinished business.

The seventh Bumiputera Economic Congress is continuing a grand project that stirs up mixed emotions of expectancy and unease. One hopes that the seven suggestions above can help the Unity Government strike a judicious balance.

2024/22