All Malaysians - not just Malays - stand to lose out to big business should a free trade agreement (FTA) be
signed
between Asean and the European Union (EU), cautioned lobby group Monitoring Sustainability of Globalisation.
Its director Charles Santiago was picking up on revived public debate on the New Economic Policy (NEP) following
criticism
by European Commission (EC) envoy to Malaysia Thierry Rommel (
photo
) who described it as a deterrent to foreign investment.
While it is high time the government corrects the flawed aspects of the NEP, scrapping it in the context of FTA negotiations will not necessarily level the playing field for non-bumiputeras, Santiago said when contacted.
"If markets are opened up to EU businesses - and the ones with an interest in the FTA with Asean are huge corporations and conglomerates - it's not only Malay businesses that will suffer. We should realise that FTAs affect all Malaysians (and so should act collectively)."
He said many local retailers were sidelined following the entry of foreign-owned hypermarkets such as Tesco and Carrefour, and that the problem would multiply under a EU-Asean FTA.
"Just as the Chinese small retailers lost out when the hypermarkets came to dominate that sector, so too will other non-Malay companies lose out in the long run," he said.
Noting that Malaysians have been urging that the NEP be scrapped, Santiago said this is all the more pressing in light of evidence the policy is being abused by Umno leaders for political domination over the Malay electorate.
"Such problems with the NEP can be addressed by putting into place mechanisms in government procurement, for example, to ensure accountability, transparency, good governance are genuinely practised and competition is introduced," he said.
Rommel's target
Notwithstanding Rommel's comment on the impact of the NEP on public education, the real target of his criticism is government procurement, argued Santiago.
But rather than open government procurement to all and sundry, this should remain an instrument to advance socio-economic development and address imbalances, he said.
The government's decision to retain the NEP was among reasons for the breakdown of the US-Malaysia FTA talks last April. The EC is therefore intent on working through the matter before tackling the rest of the FTA, said Santiago.
Its director Charles Santiago was picking up on revived public debate on the New Economic Policy (NEP) following
criticism
by European Commission (EC) envoy to Malaysia Thierry Rommel (
photo
) who described it as a deterrent to foreign investment.
While it is high time the government corrects the flawed aspects of the NEP, scrapping it in the context of FTA negotiations will not necessarily level the playing field for non-bumiputeras, Santiago said when contacted.
"If markets are opened up to EU businesses - and the ones with an interest in the FTA with Asean are huge corporations and conglomerates - it's not only Malay businesses that will suffer. We should realise that FTAs affect all Malaysians (and so should act collectively)."
He said many local retailers were sidelined following the entry of foreign-owned hypermarkets such as Tesco and Carrefour, and that the problem would multiply under a EU-Asean FTA.
"Just as the Chinese small retailers lost out when the hypermarkets came to dominate that sector, so too will other non-Malay companies lose out in the long run," he said.
Noting that Malaysians have been urging that the NEP be scrapped, Santiago said this is all the more pressing in light of evidence the policy is being abused by Umno leaders for political domination over the Malay electorate.
"Such problems with the NEP can be addressed by putting into place mechanisms in government procurement, for example, to ensure accountability, transparency, good governance are genuinely practised and competition is introduced," he said.
Rommel's target
Notwithstanding Rommel's comment on the impact of the NEP on public education, the real target of his criticism is government procurement, argued Santiago.
But rather than open government procurement to all and sundry, this should remain an instrument to advance socio-economic development and address imbalances, he said.
The government's decision to retain the NEP was among reasons for the breakdown of the US-Malaysia FTA talks last April. The EC is therefore intent on working through the matter before tackling the rest of the FTA, said Santiago.
Questioning assertions that the EU-Asean FTA will benefit both
developing and developed countries, Santiago said the EU-Mexico FTA of
2000 reveals the lopsided results of an agreement between unequals.
According to him, promises that Mexico's exports to the EU would increase from US$4 billion in 2000 to US$30 billion in 2005 came up short when it was found that the Central American country actually exported less to EU in the first two years of the pact.
By 2005, Mexico had only US$10 billion in exports to EU, while its trade deficit increased by 79.6 percent. The EU increased its exports to Mexico to US$27 billion.
"So when they speak of Malaysia being able to increase its exports to EU, those promises mean nothing when placed next to the experiences of other countries," Santiago added.
According to him, promises that Mexico's exports to the EU would increase from US$4 billion in 2000 to US$30 billion in 2005 came up short when it was found that the Central American country actually exported less to EU in the first two years of the pact.
By 2005, Mexico had only US$10 billion in exports to EU, while its trade deficit increased by 79.6 percent. The EU increased its exports to Mexico to US$27 billion.
"So when they speak of Malaysia being able to increase its exports to EU, those promises mean nothing when placed next to the experiences of other countries," Santiago added.
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