The direct causes of economic marginalization.
Unequal rights and unequal opportunities in the Name of NEP
In the last two parts I have discussed the meaning of the…
The direct causes of economic marginalization.
Unequal rights and unequal opportunities in the Name of NEP
In the last two parts I have discussed the meaning of the term ‘Marginalization’, its various manifestations, gave a concrete example of this marginalization process in the life of Mariappan and discussed the basic historical events that led to it. In this part I am going to talk about the five different ways in which the direct causes of economic marginalization - unequal rights and unequal opportunities contribute to economic marginalization.
A quick recap of the term economic marginalization: - Economically marginalized is
to be denied opportunities for participating productively in the economic development of the nation,
to have been pushed out of the mainstream of economic development.
As I start this part, you may want to watch this video first: http://www.youtube.com/watch?v=NdmnN2bniq0
about Kampung Manis, an Indian squatter settlement besides the Malayan Sugar Mill in Prai, Penang. A video shoot of a squatter settlement which attempts to capture and explain what we are trying to portray in this series of articles on marginalization.
Squatter homes that are on the verge of being demolished, squalid living conditions, low income lives, unattended health and medical problems leading in many cases to short lives, especially among men, abandoned by the system, deprived of all luxuries of life, living from day to day, unsure about the meaning of life, manipulated by politicians whose attention spans are no more than the article in the daily newspapers or till the day of the election. This is economic marginalization, whose story has been told so many times over, just told one more time in Kampung Manis.
However this marginalized state for the poor Indians was not a forgone historical outcome. If there had been appropriate support in the 1950s and 60s when the Indian plantation workers were first being pushed out from the estates, in the form of FELDA or FELCRA or other rural land development programs the results today would be very different . But nothing like that happened, as the problem of the Indian poor was not a national priority for the UMNO led Government then…or even now. What started then as a problem with low priority soon became institutionalized by the expanded racist policies of the UMNO regime into conscious and intended neglect. UMNO saw in it, a way for them to maintain their supremacist position vis-à-vis the Indians.
This was an Apartheid type of racist system as far as the Indian poor were concerned. The Chinese community had taken a path of tackling their own problems using their own economic strength. The Indians found themselves without economic strengths as a community to chart an independent course and without political strength as a community to avoid the unequal treatment that was forced on to them by the UMNO regime. The inequality that was forced on them largely came from the implementation of the NEP.
NEP, though started with the objective of reducing absolute poverty irrespective of race, turned out to be a program to promote and secure the interests of the emerging middle class Malays while reinforcing and aggravating the poverty of the Indians. After the early years of the NEP, as the early Malay insecurity of being overwhelmed by the Chinese faded, the NEP became an aggressive racist patronage based program to consolidate, grow and protect the interests of the increasing class of rich Malays. It was in the period beginning with the NEP that the policy of conscious neglect of the Indians came into full bloom.
During this period the rights of the Indians as citizens steadily eroded, in spite of the explicit guarantees in the Federal Constitution.
Article 153 of the Federal Constitution states:
153. (1) It shall be the responsibility of the Yang di-Pertuan Agong to safeguard the special position of the Malays and natives of any of the States of Sabah and Sarawak and the legitimate interests of other communities in accordance with the provisions of this Article.
What has happened is a wholesale usurpation of the resources of the country by UMNO without consideration for “the legitimate interests of the other communities”. And it occurred with impunity.
This usurpation whose direct results were economic marginalization manifested itself in 5 different and often overlapping ways.:
1) By outright denial of basic rights
2) By direct denial of entitlements
3) By indirect denial of entitlements
4) By minimum allocation of Government budgetary resources,
5) By total non- allocation of Government budgetary resources.
1) Denial of rights
i) Employment opportunities in Government and in Public Sector enterprises for the Indian poor have reduced to zero in the Government Sector. The Government used to be a large employer of the Indian poor. In 1966, out of the 202,250 Indians employed, 48,850 or 24.2 per cent were employed in the lower rung of the Government; today employment by the Government of Indians at this level is practically zero. This was an outright denial of their rights for equal employment opportunity in the Government by the very Government that was supposed to safeguard such rights. On top of the opportunities in the Government sector that was denied, opportunities were also denied in the large number ( see the table below) of Government owned companies.
Number of Government owned Companies 1960-1992
Industry 1960 1980 1992
Agriculture 4 83 146
Building & Construction 2 65 121
Extractive Industries 0 25 32
Finance 3 78 137
Manufacturing 5 212 315
Services 3 148 321
Transport 5 45 68
Others 0 0 9
Total 22 656 1,149
ii) Rights to higher wages in the plantation sector were denied by the UMNO government policy of allowing in large numbers of foreign workers who depressed the earnings of the Indian workers from the 1980s. This benefited the owners of the plantation but it set the Indian workers back. There are an estimated 2 million foreign workers in the country today.
To illustrate, Boustead Holdings Bhd, Genting Plantations Bhd, IOI Corp Bhd and Sime Darby Bhd. are the four largest Plantation companies in Malaysia. The major shareholder of Boustead Holdings Bhd is Lembaga Tabung Angkatan Tentera (LTAT) , Genting Bhd and LTAT are two biggest shareholders of Genting Plantations, IOI Corp Bhd 's largest shareholder is one Tan sri Dato Lee Shin Cheng, Sime Darby's major shareholders are ASB, PNB and a Yayasan Pelaburan Bumiputra. Together these companies made a total profit of 7 Billion Ringgits in the last 4 years 2005-2008. The policy of allowing foreign workers benefited these elites but not the Indian workers, they were denied their rights for better wages and working conditions. UMNO had become the representative of the rich and the interest of the Indian poor mattered none at all.
iii) Rights to adequate resettlement compensation was denied as the workers not only lost their jobs in the estates, but, more importantly, housing, crèches, basic amenities, socio-cultural facilities and the estate community support structure. They also lost the plots of vegetable farming and cattle grazing land allotted to them by the plantation companies, which they had used to cultivate to supplement their household incomes. The retrenched plantation workers were only paid termination benefits as specified in the Employment (Termination and Layoff Benefits) Regulations 1980, i.e.20 days’ wages for every year of service. These regulations were originally passed to protect industrial workers when the companies that employed them went into receivership. It was not appropriate to use this law in the plantation sector because it did not take into account housing, other amenities provided and sources of secondary incomes to the estate workers as wage substitution. Secondly, the Government owned plantation companies were not making losses when they retrenched the workers. On the contrary, they made enormous profits when they converted plantation land for property development.
The examples I have given above are just the tip of the iceberg. The denial of rights became a very pervasive aspect of the lives of the Indian poor.
2) Direct denial of entitlements
i) A large number of Indian poor are without proper identity documents –birth certificates and or identity cards. This effectively means they cannot or did not attend schools, cannot get proper jobs, will have no EPF or SOCSO accounts, cannot get driving licences, cannot get licence or permits for petty trade, cannot open a bank account, cannot avail of the even measly benefits of the Government to name just a few of the more obvious loss of entitlements. In the estates the Indian workers worked in an informal context where birth certificates and ICs, among other documentation, were not emphasized. Once they were pushed out this became a serious requirement which they were not able to meet. The result is deprivation. Here is an example, not an altogether untypical one - Jeeva Santhrika gets about RM4 per day to feed 5 mouths in her family. Her husband is in jail (because of a poverty related crime). There is no water and electricity supply in her squatter house. Both she, her husband and all her children do not have birth certificates and of course as a result no identity documents. Which means they get none of the entitlements in the law. (although they may all be third, fourth and fifth generation Malaysiana). Jeeva Santhrika earns RM 10.00 per day, working in a second hand goods shop. She has to pay RM 3.00 for 10 pails of water from a neighbor and RM 3.00 to buy candles per day. Jeeva Santhrika has a balance of RM 4.00 per day to feed five mouths and also to feed herself. (The Star 18/12/09 page 51). In this way she and her husband have been robbed of their entitlements as citizens, let alone as human beings. I am not sure, but I would not be too much off the mark, if I said that, that was the reason her husband had resorted to whatever it was that landed him in prison.
ii) Primary schooling - 371 of the 523 Tamil primary schools are still only partially aided by the government. There is no funding at all for the infrastructure of the schools. This is a direct denial of the entitlement of these children as young citizens of the country. Primary education is foundation education and because of lack of proper resources this foundation is not done well and this results ultimately in loss of significant human potential in these children as they grow up. This directly contributes to their economic performance later in life. A total of 106 Tamil schools, mostly in the plantations, were identified in 2004 as in need of repairs. Many schools use containers for classrooms. Others are located in shoplots. All the 371 schools do not sit on land owned by them. Many of them are located in very hazardous sites. Several are under pressure to move out from the sites where they are located. The major recurring theme in this primary Tamil School system is struggle for basic requirements, not one searching for educational excellence or one attempting to create world class citizens.
iii) A large number of Indian poor have been denied even the miniscule amounts given out by the welfare departments . For those earning below RM 720.00 per month (poverty level) the government promises RM 400.00 per month as welfare help. (NST 29/3/09 page 23).. But in reality the welfare department that is largely manned by Malay officers turn away the eligible Indian poor for the smallest of reasons. We have so many reports of this. Here is one example of such a case. Widow Parameswary (47) a diabetic, lives with her five children in one congested room at the back of a garage. Their toilet is just a zinc enclosure without a door but a piece of cloth. Her daughter does not have a birth certificate. They cook next to a drain and the washroom. She does not get any Welfare aid or a government flat. (TN 6/1/09 page 14). The welfare program, meaningless as it is is meant for such poor people, but we repeatedly come across cases like Parameswary. The welfare system is a poorly funded and inflexible system. Decisions are made by the rule book. This is typically the case with the way the Malay welfare officers deal with non- Malay cases – they throw the rule book at you. Their welfare aid has become a joke, especially with the Indian poor.
3) Indirect Denial of Entitlements
i) Ignorance of entitlements. Because of the ignorance of the Indian poor of the ways of officialdom , their inability to communicate effectively with government officials, problems understanding the procedures and various requirements many of the poor Indians ousted from the estates were unable to get their birth certificates (BC)s and or ICs. They do not get any assistance from the Government officers in getting their BCs and ICs. Many have become demoralized and have given up applying for the identity documents – in effect, they have resigned themselves to a legal limbo that effectively prevents them from enjoying the privileges and benefits that is truly their entitlements. This ignorance became another useful and convenient avenue for UMNO to deny the Indian poor their entitlement. It is estimated that there could be as many as 100,000 Indians in this category of stateless people.
ii) Denial of participation in Government rural development programs. These programs never reached the poor Indians because the plantations, were classified as private business, and hence were outside the scope of the development program, very conveniently. All of these fine print are part of a grand scheme of exclusion.
The consequence was that plantation resident families, especially in the smaller estates, continued to live in squalid conditions without adequate water and electricity supply even though development funds were poured into rural areas during the NEP period. The plantation owners did not provide adequate living facilities and the UMNO government did not provide them either because they were living on private land.
iii) Complicity of the Administration in denying the entitlement in law by enforcing the law selectively – do not enforce where it involves Malay businesses and enforce more than necessary where it involves Indian interests. The plantation companies were required by law to provide basic amenities, which they often ignored. The Government Administration did not enforce the Workers’ Minimum Standards of Housing and Amenities Act 1990 that would have compelled plantation owners to provide the basic facilities to improve the quality of life of the resident plantation families. Then Director General of Labour, Tengku Omar Tengku Bot, justified the lack of enforcement of the law in the plantations by pointing out that the department has “to be sensitive to the employer’s feelings and limitations…. We are not dealing with criminals or criminal law… . we are enforcing social law here”(Sunday Star, July 28, 1991).
However with scrap metal traders, the approach by officialdom is quite different. Of the scrap metal traders in Malaysia, 85 % are Indians. According to the Malaysian Indian Metal Traders Association secretary General Mr.R.A. Param,( July 22 2008 The Star) the livelihood of the scrap metal traders has been getting more and more difficult. He says that they have to get approval from seven government departments – the Local Council, the Land Office, the Fire and Rescue department, the District Health Department, the Drainage and Irrigation department, Public Works Department and the Police. Does that not sound like the racist UMNO government is trying to make it real difficult for this trade and the traders. This is the systematic way the racist UMNO blocks even in those areas where the Indians have by some turn of events developed an advantage. Many of the traders operate without licences as a result and are harassed daily by the authorities. This is a surreptitious way of denying the Indian operators their entitlements.
See how the officialdom has been trained to exclude. Biro Tata Negara would have played no small part in allof this. The Malaysian Administration took on an appearance close to the completely white Adminitsration of South Africa during the height of Apartheid – all 500,000 of the SA administration. We often hear the Politicians saying the policies are Ok but the implementation was at fault – as if that exonerated the politicians. It was part of a big game to stealthily esxclude and to deny entitlements.
iv) The UMNO Government indirectly blocks Indians from seeking upward mobility through denying asssitance for education . Overseas degree programs where the majority of students are Indian Malaysians are denied recognition in the name of not meeting the required educational standards. This is nothing more than an indirect way of blocking. Recent clear example of this is the derecognition of Medical degrees offered by Crimean State University after Mahathir made a visit and found that most of the students from Malaysia there were Indians. He came back and new Ministry certification requirements were introduced and the Crimean University Medical degree was derecognized.
The poor Indian students who go overseas for Law, Engineering or Medicine are denied loans by PTPN. Denial of loans for overseas education is a way of making it more difficult for poor students from getting degrees which would make them upward mobile.
One other way of minimizing entry of poor Indian students into local public Universities was to have all Indian students wanting to go to public Universities to sit for the extremely difficult STPM examination while Matriculation which is a much easier exam is reserved exclusively for the Malay-Muslim students. This way you can still call it meritocracy as the basis for selection to the local public Universities, while conveniently ignoring the uneven playing difficulties of the entrance exams – how is that for ingenuity.
All these are devices which do not directly block but have the effect of making it more difficult for Indians to gain their entitlements and become upward mobile. This is directly a result of the Malay supremacist agenda of UMNO.
4) Minimal allocations of budgetary resources
i) Limiting the amount of money spent by the government for the Indians in tertiary education is another tactic to block Indians. Places are limited in public universities, polytechnics and technical schools and places in appropriate disciplines. There are 163,779 students studying at the 20 government Universities nationwide at an annual expenditure cost of RM 2.8 Billion. Our estimate is a mere 1% of this expenditure will accrue to Indian Malaysian students. Very few scholarships are awarded to Indian students for local universities and for overseas universities. Most of the Indians students who have made it through University in the country have done it largely by family support. Many parents have spent their entire life’s savings to put their children through tertiary education. The statistics the Government often puts out to show the number of Indian students in all Universities does not reflect Government support, it only reflects the degree of sacrifice of the otherwise poor parents.
ii) Places for PhD programs in local universities, are limited to a handful. 8,132 Phd graduates have been produced from the 20 government Universities. We suspect that not more than a few would be Indians. Teacher’s training college intakes are pitiful. Only 4 (1.45%) students out of 581 new student intake at the Sultan Idris Teachers Training College for the year 2009 (TN 3/1/08 at page 16) were Indians. This just shows how much Indians count in the UMNO’s scheme of things.
Only a handful of seats in Medical Faculties of the Malaysian Government Universities are made available to Indians. Exact statistics are not available but it is estimated to have been around 1 -2 percent of the places.
There are 62,000 diploma places and 60,000 degree places for 2010 at 27 Polytechnics in Malaysia (NST 22/11/09 at page 25). Our estimate is a mere 0.1% of these places will be allocated for Indian students no matter their qualifications
5) Total non- allocations of budgetary resources
i) In the following Rural Development programs there is zero or almost
zero allocation of resources for the Indian poor:
FELDA( Federal Land Consolidation and Rehabilitation Authority)
FELCRA (Federal Land Consolidation and Rehabilitation
RISDA (Rubber industry Smallholder Development Authority)
MARA (Majlis Amanah Rakyat Malaysia)
FAMA (Federal Agricultural Marketing Authority)
KESEDAR(South Kelantan Development Authority)
DARA( South East Pahang Development Agency)
KEDA ( Kedah Development Authority)
PERDA (Penang Regional Development Authority)
KEJORA (South East Johore Development Authority)
KETENGAH (Trengganu Regional Development Agency)
Taking just one very indicative rural development program of FELDA - Federal Land Development Authority is a Government agency handling the resettlement of rural and landless poor into newly developed areas. It focuses on opening smallholder farms growing cash crops. FELDA's schemes are open only to Malay settlers drawn from rural Malay poor. Priority was given to the landless. New settlers are assigned to a particular settlement, and are given 10 acres (40,000 m² or 4.1 hectares), 12 acres (4.9 hectares) or 14 acres (5.7 hectares)[of land to cultivate usually either rubber or oil palms.The costs of acquiring, developing and allocating the land are borne by loans made to FELDA settlers. These loans are repaid in monthly instalments deducted from the settlers' income over a 15-year period
Nowhere in the Federal Constitution does it say that programs like this must exclude Indians. But that is exactly what has happened. This is very clearly basic UMNO policy. The original Land (Group Settlement Areas) Act of 1960 governing the development of scheme areas does not specify any ethnic preference in settler recruitment, merely requiring settlers to be Malaysian citizens. Also, Felda’s own policy guidelines permit it to recruit 30% of any scheme population from non-Malays for schemes that are located outside Malay reservation areas.
In 1980, the World Bank raised concerns over the ethnic bias in FELDA settler selection by pointing out that if the government was serious “about increasing the non-Malay share in agriculture, some increase in the non-Malay share of settlers was warranted.” It was especially concerned about Indian estate workers who faced increasing under-employment following the estates’ conversion from rubber to oil palm and who in normal circumstances “would be good candidates for land development schemes.”
The World Bank’s concerns went unheeded by UMNO and condoned by the Mandore MIC. No change whatsoever was permitted to the policy emphasizing Malay participation and restricting non-Malay participation in rural development programs. It became a platform for patronage that has been developed and honed and fine tuned over the last 50plus years, and provides the necessary opportunities for accumulation of wealth for the growing appetites of the UMNOputras..
Large part of the National Budget (easily 500 Billion Ringgits – a very conservative estimate of RM 10 Billion per year for the last 50 years) was channeled through these agencies for the various development programs for the rural and agricultural sector. There was zero allocation in any of the programs and projects for Indians in the country.
Even if the allocation were commensurate with the percentage of Indians in the total population, the Indian allocation should have been about 10 Billion Ringgits. Not an insubstantial amount. The picture today would be very different, had this happened. Clearly this shows that the outcome of marginalization of the Indian rural poor was not an unavoidable one, but was a direct result of non allocation of any resources to the problem.
ii) Zero allocations or almost zero allocations in the following educational programs by UMNO
Elite shools like MRSM, RMC, Aminudin Baki Institution, MCKK,
Special academies like the Aviation training Centre and Flying academies
Various MARA programs -IKM, Kolej Kemahiran Tinggi,Institut Kemahiran Belai Negara
Taking one of these educational institutions - UiTM. UiTM began in 1956 as RIDA training centre, became MARA college in 1965, now has 4 satellite campuses, 15 branch campuses, 9 city campuses and 19 affiliated colleges. a workforce of 15 000, the university offers more than 300 unparalleled academic programs, almost 120,000 students. This is the biggest University in Malaysia. It is an open policy that this institution will not take in any non-Muslim Indian students. Need I say more. Had there been a similar program for Indians today the problem we have with Indian youth so embroiled in crime would have been totally averted not to mention other positive outcomes.
The MARA Junior Science Colleges (MRSM) is another prime example of exclusion of Indians students - there are 42 such schools throughout the country. Their intake is 5,100 per year. (Source UM – 19th Nov 2008 page 10.) The purpose of these schools is to target the cream among the students for development into future leaders of the country. But it is obvious UMNO has no need to develop future Indian leaders so do you think that any of the 817 Indian children who scored 7As in the 2009 UPSR exam will get in to the MRSMs. Or even if a few are given admission, they will be many indirect blocks to them joining these programs, like concerns about food, religious practices for which there will not be any special consideration for non-Muslims.
There are a total of 11,000 students in MRSM. Each of the MRSM is built at a cost of around RM100 million. Compare this with the RM100 million promised (only promised mind you) for the 523 Tamil schools throughout the country. These kinds of programs are very glaring examples of gross usurpation of the national resource.
iii) The Government give zero or almost zero support for Indian entreprenuer development. The following are few entrepreneur development programs of the UMNO Government. There are many many more.
Small and Medium Enterprise development
Just taking the Agropolitan project, this is basically a womb to tomb
entrepreneur development project in the Agricultural sector. This totally excludes Indian participation. Their womb to tomb program is:
• Initial Study – markets, products, technologies, demand, sweet
• Establish overall scheme – roles of different govt depts.,
budgets for the development project
• Provide finance. Seed capital
• Provide know how – training, exposure,
• Provide basic requirements – land, seedlings, fish fry..etc,
• Provide technical support – yield improvement, troubleshooting
• Provide marketing support
This kind of special support is required in order to really build an entrepreneurial community from scratch. Not even a small portion of the funds or services are made available to budding Indian entrepreneurs.
iv)No Indian small businessman ever gets assistance from the programs of any of these funding schemes of the UMNO Government.
SME bank schemes
AGRO Bank scheme
Tekun Nasional Schemes
Taking one of these, the Tekun Nasional scheme – the objectives of the
• Provide business funding which is easily available and
• Provide information on entrepreneurs and business opportunities
• Offer training and support to entrepreneurs participating in
• Create a community of Tekun entrepreneurs who will form a hard
driving, innovative and progressive business network.
• Nurture a culture of entrepreneurship within the Malaysian
• Encourage and foster a culture of prudence in the Tekun
To give you an idea of the participation in the Tekun program of Indians see what Samy Vellu has to say and compare that with the statement from the Tekun MD. Samy Vellu said 352 Indian entrepreneurs from Perak, Kedah (205), Penang (20) and other states (1,258) had received TEKUN Nasional loans this year and last year. A total of 93 entrepreneurs received loans amounting to RM761,000 on July 24 2009 in a ceremony.
Compare with the following statement from Datuk Abdul Rahman Hassan,
the Managing Director of Tekun ’ Sehingga 31 Disember 2007 , TEKUN Nasional telah menyediakan pembiayaan sebanyak RM 772.0 juta kepada 139,000 orang usahawan diseluruh negara. Untuk tahun 2008 ini, TEKUN Nasional telah memperuntukkan sebanyak RM 182 juta sebagai pembiayaan kepada seramai 19,000 usahawan.’ That is close to 1 Billion Ringgits. Have you ever heard of any loan disbursements to any Indian businessman friend or relative of yours.
What Indian entrepreneurs get is just an eyewash, to make it look like the Indians are being assisted, when in fact it is just the MIC Mandores helping themselves to the little crumbs thrown their way while creating an illusion of Indian entrepreneurial development program.
I have tried to show , how by taking away the rights of the Indian poor progressively and by denying equal opportunities to them, in the name of NEP the UMNO led Government with connivance from their Mandores MIC have pushed Indians out to the fringes of Malaysian society to be economically marginalized.
In part one of this series I started with a definition for economic marginalization - to be denied opportunities for participating productively in the economic development of the nation. To have been pushed out of the mainstream of economic development.
Hopefully, the common thread behind how all that occurs is clearer now.
Viva la Makkal