Media Statement Calling For B40 Bumiputera Empowerment Under Budget 2023

6th OCTOBER 2022

Institut Masa Depan Malaysia (MASA) would like to urge the Government to take into account developing a high-value economy to solve racial economic inequities.

The aftermath of the Covid-19 pandemic on household income has badly affected the structure of household groups, giving rise to poverty and widening inequality. Undeniably, the B40 group, especially the poor and the vulnerable, have suffered tremendously.

The majority of households saw the income falling, with many households from higher income deciles shifting to the lower income deciles – 20 per cent of the M40 households with incomes ranging from RM4,850 to RM10,959 have moved to the B40 group. The Department of Statistics’ 2020 data reported that the B40 household saw a larger percentage decrease in income distribution to 15.9 per cent.

It is also important to note that the Bumiputeras make up the majority of people who fall into the B40 income band.

Programs aimed at allocating socioeconomic opportunity and facilitating upward mobility for the Bumiputeras have been outlined since the launch of the New Economic Policy (NEP) in 1971. Evolving over time as evidenced through the establishment of Bumiputera-centric organisations and institutions such as Unit Peneraju Agenda Bumiputera (TERAJU) and schemes such as the Bumiputera Economic Transformation (BETR) programme, these measures, however, have yet to bear fruits.

States with high Bumiputera population (Sabah, Sarawak, Kelantan and Kedah) recorded the highest incidences of poverty due to inequality and unbalanced development in terms of wealth, income, education and infrastructure. These states are leading the percentage of households with incomes under RM7,000. The economic performance of Sabah and Sarawak during the fast five years was also lower than the national average of 2.7 per cent per annum.

Bumiputeras with post-secondary education make up the largest proportion of the unemployed compared to other ethnic groups. Rate of labour force participation for the non-Bumiputera is higher than the Bumiputera who had the lowest rate of any ethnic group in Malaysia at 65.8 per cent.

The Government should outline a clear direction and objective in assisting the Bumiputeras, especially those living below the median income household.

There has been no strategic plan thus far based on the announcement by Prime Minister Datuk Seri Ismail Sabri vis-a-vis the Bumiputera Development Action Plan 2030 (TPB2030). Follow-up arrangements on the execution of TPB2030 must be made known to the public to ensure transparency and inclusivity. The implementation of the said action plan should be needs-based, with focus on developing the B40 Bumiputeras to build resiliency against any economic challenges that lies ahead.

On a micro-level, the Government should prioritise the basic capital required by entrepreneurs to elevate their small and medium-sized enterprises (SMEs) in less developed states. This can be done through several measures and incentives via direct cash transfers to business owners. This move would help improve business environment by bridging access to national markets in creating better paying jobs for the population and expanding the concept of wakaf (Islamic endowment) to diversify financial resources to finance business and enhance Bumiputera equity.

The Government should also leverage on data science to monitor the progress and output of Bumiputera SMEs through the development of a one-stop centre database based on industries.

Most importantly, bureaucracy and administrative issues must be lessened to expedite the giving of aid for businesses and to minimise leakages due to corrupt practices. The legislation to exercise open tendering should also be considered to ensure transparency in open competitive bidding for Bumi entrepreneurs.



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