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 7
Malay as a medium of instruction from primary to university
A National
Cultural 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 institutionalized
until after the enactment of the Industrial Co-ordination Act in 1975, a delay
which can be attributed largely to the role of MCA president and Finance
Minister Tan Siew Sin.

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

the Second Malaysia Plan’s
formulate the DNU document,
weakness was its failure to set specific numerical
targets 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 effective
restructuring mechanism was not enacted until the passage of the ICA in
1975.
This legislation, viewed unanimously by Chinese business interests as the
most draconian of all NEP measures, originally required non-Malay
manufacturing firms with more than $100,000 in shareholders’ funds and
employing more than twenty-five workers to divest at least 30% of
their equity to Malay interests.

They were also required to incorporate into their workforce a number of

Malay employees to reflect the Malay proportion in the country’s population,
at least 50%.

At that point, almost all the influence and participation in

the policy were at the rhetorical level. Political parties and
interest groups - pro- and anti-government alike - attempted to direct
and 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.
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.

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.
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.