End New Economic Policy of quotas and ethnic percentages and adoption of principle of social equity and merit

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Debate on the motion of Thank On The Royal Address (Part 5)       
by Lim Kit Siang  
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(Dewan Rakyat, Thursday) : Thirdly, on International competitiveness. The Royal Address quoted the World Competitiveness Yearbook 2006 where Malaysia’s position has improved from 28^th place in 2005 to 23^rd place in 2006. 

Since last month, the government has tried to generate a  “feel good” atmosphere among the people with the message that good economic times are back.

Parliament was told that since 3^rd January 2007, the Bursa Malaysia Composite Index has been recording an encouraging performance and exceeded 1,200 points, a level which has not been reached since the Asian currency crisis in July 1997.  There was the record 2006  trade volume breaching RM1 trillion. We are told that in  2006, “total investments in the country remained strong, reaching its highest level in the history of our nation”. 

On February 13, International Trade and Industry Minister, Datuk Seri Rafidah Aziz announced that Malaysia is back on the global investment map, with a record RM46 billion investments in 1,077 approved manufacturing projects last year by local and foreign investors – a 48 per cent jump from the RM31 billion invested in 2005. This was made up of RM20.2 billion of foreign investments and RM25.8 billion in local investments. 

Is the government right that Malaysia is “out of the woods”, dispelling the gloomy news in the past few months that Malaysia is in danger of dropping out from the radar of foreign investors because of increasing lack of international competitiveness, whether in efficiency of public service, quality of education, good governance, transparency and integrity?

The United Nations Conference Trade and Development (Unctad) World Investment Report 2006 last October revealed unflattering figures about Malaysia for the year 2005,  viz:

• Foreign direct investment (FDI) in Malaysia dipped to US$3.97 billion in 2005  from US$4.62 billion in 2004;

• For the first time since 1990, Indonesia managed to overtake Malaysia in drawing FDIs. Inflows to Indonesia surged by 177% to US$5.26 billion in 2005. Indonesia  registered a 177 per cent  hike in FDI from US$1.89 billion in 2004 to US$5.26 billion in 2005, while Malaysia suffered a 14.3 per cent shrinkage of FDI.

• As a whole, FDIs to South, East and South-East Asia reached a new high of US$165 billion in 2005, a 19% increase over 2004, with China (US$72 billion), Hong Kong (US$36 billion) and Singapore (US$20 billion) as the biggest receipients of FDIs in 2005.

Rafidah’s FDI figures to justify her claim that Malaysia is back on the FDI radar  do not  tally with the latest Unctad figures released in its “Number 1, 2007 Unctad Investment Brief” which has given an even lower estimate for FDI for Malaysia for 2006 as compared to 2005.

In its preliminary estimates of FDI inflows in 2006, Unctad figures for Malaysia sees a shrinkage of 1.6 per cent to US$3.9 billion from US$4.0 the previous year, while  FDIs for the whole region of “South, East and South-east Asia” registers an increase of 13.1 per cent from  US$165.1 billion in 2005 to US$186.7 billion, with Thailand recording a 114.7 per cent increase  from US$3.7 billion in 2005 to US$7.9 billion and Singapore a 58% increase from US$20.1 billion in 2005 to US$31.9 billion.

Parliament is entitled to an explanation for  the RM6.4 billion difference in MITI’s  FDI figure of RM20.2 billion (or US$5.7 billion) for 2006 and UNCTAD’s preliminary estimates of US$3.9 billion (RM13.8 billion) for the same year.

This difference would increase to RM9.85 billion if we take into consideration two qualifications to the MITI figures released by Rafidah:

Firstly, the figures are for approved FDI figures for the year which are very different from actual FDI inflows for the year. For instance, for 2005, approved FDIs in manufacturing was RM17.9 billion (US$4.71), but actual FDI inflow into the country was US$3.97 (RM15.1 billion) – a shortfall of RM2.8 billion.

Secondly, the FDIs in manufacturing represents only 75% of total FDIs, which will bring the difference between FDIs for manufacturing as approved and actual inflows for 2005 to RM6.6 billion.

On the same basis that some 75 per cent of FDI inflows in 2006 was for manufacturing, then the difference between MITI and Unctad figures  for FDI inflows for manufacturing would increase further to RM 9.85 billion – which is no small figure.

A full and proper explanation for these different set of FDI figures should be given to the people in keeping with the government’s pledge of accountability, transparency and good governance. 

Bloombert has reported that former deputy prime minister Tun Musa Hitam has proposed that the government should exempt the Iskandar Development Region (IDR) in South Johor from policies that favour the bumiputras to help attract foreign investors to the huge growth area.

Musa, who sits in an advisory panel for the project, said policies that gave the bumiputras privileged access to government contracts and guarantee a minimum presence in the workplace may deter foreign companies interested in investing in the IDR.

Musa said contract awards "will have to be on merit" - "The Malays will have to face competition."

I fully endorse Musa’s call. In fact, it should be extended to the whole of Malaysia and not just to IDR, as it is not  just IDR that must maintain the best-possible posture in international competitiveness to attract FDIs, the same considerations apply for the whole country as well.

During the debate on the Mid-Term of the Fifth Malaysia Plan in Parliament on 28^th June 1989, I had specifically called for the end of the New Economic Policy and its policy of quotas and ethnic percentages in 1990 and the adoption of the principle of social equity and merit in the interest of national unity and international competitiveness.

Fourthly, on an independent judiciary – Malaysia was held in high international esteem until the 1988 judicial crisis, and the nation has not fully recovered from the trauma and fall-outs of the successive series of judicial crisis for the ensuing 15 years. How to restore full public confidence in the system of justice in the country?  

The answer by the Minister in the Prime Minister’s Department, Datuk Nazri Aziz  to Karpal Singh (DAP-Bukit Glugor) yesterday that  the government has no plans to set up a Judicial Commission for the appointment of judges is most deplorable. 

What is even more shocking is that this is also the view of the Chief Justice,

Tun Ahmad Fairuz Sheikh Abdul Halim who had likened the proposal for an independent judicial commission on appointment and promotion of judges as akin to nudity rather than transparency.  Such comment by the higher judicial officer in the land  is most  ill-advised, in poor taste and reflect badly  on the office of Chief Justice. 

Ahmad Fairuz may be unhappy with the proposal of an independent judicial commission to oversee the selection and promotion of judges, but he should realize that this proposal pre-dates his appointment to the top judicial post in the land  and meant to enhance public confidence in the system of justice and  in that context,  there is nothing personal against any personal holder of the office. 

Ahmad Fairuz should not have questioned  the motives of those who had made the proposal, such as the Bar Council and several prominent lawyers, posing the rhetorical question: "Are we to allow whoever has cases in court and who lost to decide on the fate of judges?"  He ignores the support of retired judges for the proposal. 

It is absolutely wrong and  inapt to categorise the proposal of an independent Judicial Commission as an exercise in nudity rather than transparency, especially when this judicial reform had been adopted by other countries such as Canada, New Zealand, South Africa and the United Kingdom. 

The proposal for a Judicial Appointments Commission was not made only during Fairuz’s  tenure as Chief Justice. 

I for one had been calling for a new system of judicial appointments to ensure transparency, top-quality judges  and a world-class justice system since the nineties – ever since the country was plunged into a series of  crises of confidence in the independence, impartiality and integrity of the system of justice lasting for over one-and-a-half decade since the 1988 arbitrary sacking of Tun Salleh Abas as Lord President and two Supreme Court Judges, Tan Sri Wan Suleiman Datuk George Seah. 

My arguments for judicial reforms especially in the system of appointments are as valid today as when I made them since the nineties, viz: 

1. That Malaysia needs a more transparent process of judicial appointments to ensure that the justice administered by the judges will be of superior quality because they are professionally qualified persons of integrity and good character, independent and courageous; and 

2. The continuing flaws of the present system of judicial appointment, which depend on the decisions by two persons, the Prime Minister and the Chief Justice, include:

• Selection and appointment procedure not transparent;

• Consultative process is selective;

• There is lack of appraisal of the candidates against pre-determined criteria.

Here, I want to know what has happened to Fairuz’s public undertaking on his appointment as Chief Justice some four years ago in 2003 to recast the Judges’ Code of Ethics to restore public confidence in judicial independence, impartiality and integrity.  

I had several times stressed that the recasting of the Judges’ Code of Ethics must deal with its three major defects: 

• Absence of satisfactory and accountable  mechanism for public complaints of breaches of the Judges’ Code of Ethics; 

• The Code of Ethics had not been satisfactorily formulated so as to deal in a more comprehensive manner with all instances of  judicial improprieties and misconduct as illustrated by the many judicial controversies and scandals; and

• How breaches against the Judges’ Code of Ethics could be invoked against the Chief Justice himself.

Has the Chief Justice reneged on his commitment to recast the Judges’ Code of Ethics to fully restore public confidence in the  independence, impartiality and integrity of the judiciary?

It is most surprising that  the post of Chief Judge of Malaya had not been filled for over two-and-a-half  months since the retirement of Tan Sri Siti Normah on 5^th January 2007.

The excuse that it will take some time to fill the position of the Chief Judge of Malaya because the name of the candidate had to be forwarded to the Prime Minister who would advise the Conference of Rulers on the appointment and that the Conference only meet once in three months is completely unacceptable, as it is known at least six months in advance when the position would definitely fall vacant – when Siti Normah was given a six-month extension (which cannot be further extended) when she turned 66 on July 6 last year.

It reflects poorly on the efficiency and professionalism of the Chief Justice that he cannot ensure a smooth transition for high judicial appointments so that a new Chief Judge of Malaya was able to take over from Siti Normah on her retirement on 5^th January 2007.

At present, Ahmad Fairuz is the Acting Chief Judge of Malaya. Is this proper and even constitutional?  Will Malaysia one day have a Chief Justice who even trebles up as Acting President of the Court of Appeal as well as Chief Judge of Malaya?

(22/3/2007)