1.

0 INTRODUCTION

1.1 Background Research

Increasing the number of urban residents has become a trend in many

developing countries today. The rapid development of the city creates

employment opportunities that attract urban-rural migration and contribute to the

increase in urbanization rates. The rapid growth of population growth and urban

boundary expansion is also a factor contributing to this phenomenon which in turn

creates urban poverty.

The problem of urban poverty is closely linked to the lack of job

opportunities and competition for lucrative employment. One of the policies and

directions of government development is to reduce the gap of poverty effectively

and proactively. Employment opportunities that exist in the city, whether in

formal or informal sectors are believed to be able to change the pattern of living

and improve the living standards of the targeted population.

1.2 Research Problem

Economic growth does not mean the elimination of poverty or the

improvement of income distribution. Although Malaysia is perceived by the

World Bank as an East Asian country experiencing a "magical economy" we must

be wise in addressing the problem of poverty. Poverty can hit every nation and

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nation. If it fails, its impact can be seen on various social and economic

phenomena including rising unemployment.

Economic growth is necessary in eradicating poverty. However, too rapid

economic growth as experienced by the country can not guarantee a more

equitable distribution of income to all groups, including those separated by gaps

between the rich and the poor.

Despite this, many government eradication efforts have succeeded in

reducing poverty. The problem of poverty is now more focused on poorest and

lower income groups who are marginalized and excluded from mainstream

development.

1.3 Research Objectives

 Obtain information on poverty rates in Malaysia especially in

Tawau District.

 Find out more about issues related to consumption and quality of

life such as the poverty problem that struck Malaysia as happened

in the study area.

 Knowing how far the government is able to address the poverty

problem in our country.

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2.0 LITERATURE REVIEW

Economic imbalance among races is a factor that has been identified previously as

one of the reasons that led to the May 13 event. The unhappy feeling of the socio-

economic imbalance between the races has given rise to various misconceptions and

persistent nervousness and persistence among society and this is exactly what happened

before the May 13 event.

Therefore, the government does not hesitate to draft a comprehensive action plan

to curb and overcome the problem. For that reason, in 1971 the government launched the

New Economic Policy (NEP).

The NEP was launched together with the Second Malaysia Plan. There are two

main goals in the launch of the NEP, namely the eradication of 'irrespective of race', and

the second restructuring of the Malaysian society aims to eliminate racial identification

based on economic function.

While the main objective of the launch of the New Economic Policy is to restore

inter-racial socio-economic relationships and imbalances. It is hoped that through this

move the distribution of wealth and income as well as a more balanced and

comprehensive economic opportunity will be possible. With that, it is hoped that national

unity will be further preserved. The NEP has been designed for 20 years from 1971 to

1990.

Indeed, efforts to eradicate poverty are not an easy matter. The implementation of

the NEP itself is quite slow. Efforts to eradicate poverty only involve actions that do not

threaten the interests of the wealthy. For example, the government's action to provide

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marketing and credit facilities to the peasants did not reveal a blow to the interests of

non-Malay capitalists.

Among the government's measures are the land exploration plan for those who

have no land, employment opportunities for unemployed, and productivity and rising

prices of goods for farmers. However such an action will be limited by the economic

situation. For example, the government may be able to control the price of padi in the

local market through certain measures taken, otherwise the government can not afford to

do so for rubber sold in the international market.

However, the government's move on addressing the poverty of the bumiputeras

has been successful. About 70 years of the growth of the Malaysian economy is rapid.

Although exports of rubber such as rubber are difficult for the government to

control its price stability due to the tidal wave of the international market, it also affects

the rate of poverty among farm workers, for example, rising from 40.0 per cent in 1970 to

47.0 per cent (1975), before falling to 35.1 percent (1980), then rebounded to 54.6

percent (1983).

Reversing the poverty rate among paddy growers has declined from 88.1 per cent

in 1970 to 77.0 per cent (1975), down to 52.7 per cent (1980), but has risen to 54.0 per

cent (1983). The real drop in rates from 1970 were the effects of subsidies provided by

the government. On the other hand, the increase in production costs, including increases

in prices of agricultural inputs such as fertilizers and poisons, has led to a rebound.

In an effort to eradicate poverty the government has categorized it into two

divisions, namely urban poverty and rural poverty. Based on the 1970 population census,

about 49.3 per cent of all families in Peninsular Malaysia received income below the

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level of poverty. 86 percent of them are in rural areas and 14 percent in urban areas. For

rural poverty, development programs are more focused on the provision of basic facilities

and land development. The target groups are farmers, smallholders of rubber and

coconut, fishermen, farm workers, new villagers and agricultural laborers.

Among the measures taken are the provision and extension of basic facilities such

as water supply, electricity, irrigation, housing, health, transportation, education or

training, credit facilities as well as marketing and agricultural subsidies such as seeds and

fertilizers. The government also multiplies the development and opening, exploration and

development of new land.

The next step, the government strives to channel modern technologies in

agriculture, fisheries and livestock. Additionally, two-year planting methods, off-season

crops and shrubs are also expanded. The statutory bodies responsible for implementing

this plan are FELDA, RISDA, FELCRA, MADA and KADA.

Urban poverty is often associated with rural-urban migration. Therefore, in the

city also requires the provision of basic facilities such as low cost housing, water

facilities, electricity and more job opportunities. In short, the step of providing a more

perfect basic facility is an effort to reduce poverty in the city.

In terms of achieving this effort, the government was successful in reducing

poverty in this country, of which 78100 poor families in 1970 were reduced to 66100 in

1980. It was a poverty rate falling from 49.3 percent to 29.2 percent. While the average

income of RM76 in 1970 was increased to RM186 in 1979. Although it was still below

the poverty line, it has seen an increase. This observation was made based on the figure

of the show between the years 1975 and 1980.

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 In essence, the Government through the Second Malaysia Plan attempts to outline

several new objectives, including trying to diversify the economy and agriculture to

reduce dependence on rubber and tin ore, both of which also aim to intensify

manufacturing companies with the aim of diversifying economic activities and reducing

unemployment problems as well as changing the pattern of the country towards a

Industrial state.

This is more apparent when Malaysia under the leadership of Datuk Sri Dr.

Mahathir Mohamad. Third, it aims to increase the production of foodstuffs especially rice

as the country was able to produce only one third of the country's demands. To carry out

all these purposes and plans, the government has allocated 14.3 million ringgit through

the Second Malaysia Plan. What is clear is that the launch of the NEP with the Second

Malaysia Plan is that the government is trying to emphasize the fate of the Bumiputera

fate especially the Malays more openly.

Although the country's poverty rate has declined, poverty is still ongoing,

especially among the rural population and the poorest. Therefore, it has become the core

of the achievement of the distribution objectives in the National Development Policy

(NUP) as contained in the Second Outline Perspective Plan (OPP2). Year 1990 is the

year ending the DEB implementation period. Even though the NEP did not show a

comprehensive achievement yet there has been much success achieved. Thus, in order to

fulfill all the desires set out in the NEP, the government has introduced the OPP2.

One of the ways governments overcoming the ever-increasing poverty of

Malaysia has been the government's strategy to restructure society. The restructuring of

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the community will emphasize the involvement of the Malays or Bumiputeras in the

modern and urban economic activities of the city.

This strategy aims to balance the position and participation of all races in the

economic sector. If it is observed that the distribution of population according to race

influenced by the colonial policy is still ongoing where the Malays live in villages,

Indians live in the interior as labor in estates and Chinese in towns as traders.

The fact is that not only dwelling in terms of socioeconomics and politics are also

different. Such a situation is a barrier to efforts to achieve national integration. The

effects of occupation, ownership and capitalization are largely dominated by foreigners.

Among the people of Malaysia, the ownership and control of most of the capital are in

the hands of the Chinese.

Hence, the restructuring strategy of ownership and wealth has been structured so

that foreign ownership can be reduced. Similarly, the capitalization of the Chinese in

industry and business should be reallocated to balance the capital's control.

For that reason, the NEP has developed a strategy so that by 1990, Bumiputera

can increase the company's share to 30% compared to 40% for non-Bumiputera

Malaysians and 30% on foreign parties.

This goal is still maintained in the Sixth Malaysia Plan but no specific timeframe

is set for its achievement. The following table shows the ownership of share capital in the

company sector over the period 1971 - 1990.

The Bumiputera share value added is more dependent on public sector agencies

that serve as trustees on behalf of the Bumiputeras. Therefore, the ownership of

Bumiputera individual shares is very low.

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 However, through the RML, most Bumiputera property developments come from

the contribution of Bumiputera private companies as well as the Amanah Saham

Bumiputera Scheme (ASN) and Amanah Saham Bumiputera (ASB) implemented by

Permodalan Nasional Berhad (PNB).

In the meantime, the ASN Scheme has succeeded in transferring Bumiputera

wealth that is kept trustfully by the government through agencies to a large number of

Bumiputera communities. Through 1985, the scheme attracted many Bumiputera

investors, which accounted for about 43% of the total amount invested. Meanwhile,

Bumiputera ownership and participation in the business and small services sectors have

shown encouraging progress. For example in the retail trade sector the number of

Bumiputera establishments has increased from 13% in 1971 to 34.2% in 1981. The

increase was about ten times in 1971 - 1981.

However, the total Bumiputera capital ownership of the shares is still small. Of

the total investors, 85% invested 500 units or less. So the goal of the NEP remains

unreachable and it takes more time and effort in that direction.

In an effort to create an industrialized country, Bumiputera involvement is

essential to avoid any imbalance. Hence, the strategy to encourage the participation of

Malays or Bumiputera in the manufacturing sector is expected to increase the number of

Malay capitalists and thus help to create the effects of wealth melt generated by them.

In this process it is expected that more Malays will benefit from the growth based

on the enrichment of the Malay or Bumiputera financiers. But the assumption is difficult

to realize. This is because in the free market, especially in the context of Malay society

up to now, only a handful of Malay financiers emerged. So as long as the number of

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financiers does not increase, as long as the country faces a problem to create the

discharge effect.

Furthermore, an important requirement in that direction, economic growth must

be high. Thus the problem of income distribution among Bumiputeras is still in a state of

affection. There is even a saying that despite the benefits enjoyed by the Malays or

Bumiputeras since the launch of the NEP, the increase is not even as there are groups that

enjoy more than others.

If this pattern continues, then the gap between the Malays will increase. So the

current change will widen the problem of inequality among the Malays. Hence, the

poverty rate in Malaysia is difficult to eliminate.

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3.0 METHODOLOGY

3.1 Primary Data Collection

Through the collection of primary data, the study was carried out by

studying some places where poverty was problematic using observation method

and using questionnaire.

In the field, there are two targeted areas and can provide information on

poverty rates in Malaysia, especially in the State of Sabah. The two areas are Kg.

Titingan Tawau and also Kg. Pasir Putih Tawau.

3.2 Secondary Data Collection

Information about research is available through the internet. Preliminary

studies are conducted by obtaining reference materials on past studies through

search engines on the internet. There are two types of search engines that are so

popular and easy to use namely Yahoo and Google.

In addition, there are other reference materials available in the library such

as through journals, newspapers and articles related to the study.

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4.0 DATA ANALYSIS

4.1 Kg. Titingan Tawau

The village can be divided into 3 areas namely Kg. Titingan Tengah, Kg.

Titingan Dalam and Kg. Titingan Hujung. The entire settlement here consists of

squatter houses built in groups. 90% of the homes here are inhabited by those

with low incomes.

However, the problem here is that 60% of the residents here are illegal

immigrants from Indonesia and settled here. Meanwhile, another 40% are locals

who are originally from Tawau, Sabah.

Every year the settlements in this area are growing even though the

government has taken action to make this area vacant as soon as possible for

development purposes.

The rate of poverty in the country has increased with the presence of

illegal immigrants here. This is because the locals themselves are hard at work

because of the increasing competition. Meanwhile, entrepreneurs prefer to hire

foreign immigrants because they receive lower wages from the locals. Finally,

locals live in their own state.

Although the government continues its efforts to eradicate this

phenomenon, there are still a handful of parties who use their power and cause

this to continue until now.

For those responsible in this regard as the police are still doing their duty

to reduce the rate of entry of foreigners in the state. Meanwhile on behalf of the

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government, it will provide employment opportunities to local residents to reduce

poverty in the state.

4.2 Kg. Pasir Putih Tawau

For the second study area is Kg. Pasir Putih is located approximately 15

kilometers from the city center. This area has the most population in Tawau. It is

divided into areas inhabited by almost 5000 inhabitants.

However, nearly 70% of the population here comprises those with low

income. Most of the residents here work in factories located in the village.

As well as in Kg. Titingan, residents in this area are comprised of illegal

immigrants. Nearly 80% of the population is from Indonesia.

Competition in terms of job opportunities has led the local population to

be unemployed and the rate of poverty in the area is increasing from year to year.

The government's efforts to tackle this problem are still in a disappointing

phase. For the lower income group, poverty is widespread, and for those with high

income it gets richer regardless of the hardship of others.

4.3 National Development Program

The implementation of the national development program since the

achievement of independence in 1957 has changed the structure of the country's

economy from a system that is strongly dependent on commodities (rubber and tin

ore, and subsequently to palm oil), to the system of manufacturing and industry

contribution.

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 The same development planning has also witnessed efforts to develop

rural areas, which are commonly considered as a backdrop. Various regional

development agencies and land development agencies and in-situ development

have been established to implement the development goals of the rural areas, and

undeniably the plan has shown some success to change the economic and social

situation in the rural areas.

The economic development of the country since 1957 until the mid-1980s

was guided and led by the government. Through the machinery of public service

administration, and to the extent necessary, through public corporations, the

government mobilizes economic activity in the field and in the direction it wishes.

4.4 Government of Malaysia

In line with the liberalization, privatization and deregulation of the world

capitalist system, after 1985 the government began to reduce its involvement in

the economy and was no longer a major game in the country's economic

activities.

The government chooses the basis for assigning the task of leading and

managing the country's economic journey to the private sector. Even by

announcing the policy of shrinking the size of the public sector, the government

has also begun to deliver the role of providing public utility services to the private

sector. As a result, the privatization program has been implemented more widely,

and Malaysia is now the most advanced country in the effort to privatize public

utilities.

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 The launch of the Malaysian Incorporation policy as well as the

privatization policy is a new government commitment after the NEP to assist and

provide full cooperation to the private sector to develop the country's economy.

However, it will be pointed out in the next section, how the easing of the

NEP's implementation has also resulted in the resurgence of principal issues in the

country's political and developmental arena, the problem of the distribution and

inequality of opportunities in the country's economy.

If this is not monitored then any profits earned during the NEP will be

destroyed within a short period of time, and the country will face the possibility of

re-emerging racial problems.

Security and economic prosperity is the ultimate guarantee of a

harmonious relationship between ethnic groups. There is a possibility that there

will be social tensions between the corporate elite and the new luxury group with

the poor relative regardless of race or ethnicity. Social and moral problems

resulting from over-developed "economic driven" development have become a

sign in our society today. Social responsibility issues have begun to be raised by

some of our leaders. Can the private sector be fully accountable without the

participation of the public sector?

The main goal of the poverty alleviation program is to reduce the rate of

poverty among Malaysians to 5.5%, and for the poor to be reduced by 0.5% by

2000. This goal is not very difficult as the government has managed to reduce the

poverty rate from 16.5% in 1990 to 8.9% in 1995, or for the poorest group, from

3.9% in 1990 to 2.1% in 1995.

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 Although the figures show that poverty reduction seems good and

commendable, but in reality these figures can be disputed with their validity. The

use of these figures should be taken cautiously because the statistics of the poor

and poorest are calculated using the poverty line size, which can be disputed in

size and usage. There is an opinion that the basis of measurements needs to be

changed and different measurements need to be made according to different

location.

The measures to reduce poverty are usually aimed at those who experience

absolute poverty and we find that so far programs to reduce poverty are relatively

few. In the future, with the rapid development, poverty alleviation will be more

important. Also with the migration to the city, we also need to identify and

distinguish between rural poverty and urban poverty. The reduction of the role of

the government in providing public facilities and private sector practices imposes

higher fees for the services it supplies, and this way will increase the burden on

low-income citizens, and this situation will continue to exacerbate the relative

poverty situation.

The poverty alleviation approach focuses only on reducing poverty among

those who are considered the poorest, largely through the PPRT program. There is

no special program to reduce poverty among poor people. The impression is that

this problem will be solved by the country's economic growth in general. In line

with the need to reduce poverty among the poorest, a special approach should be

planned to address the problem of poverty reduction overall. Methods for RM7

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are still showing old approaches and methods. The use of the PPRT approach

needs to be reviewed.

Poverty is closely linked to the issue of income distribution. Figures in

RM7 alone show how rapid growth in recent years has led to the growing gap

between certain groups. RM7 itself shows how the gap between Bumiputera and

the Chinese has increased from 1: 1.74 in 1990 to 1: 1.81 in 1995. The gap

between Bumiputera and Indians has also increased from 1: 1.29 in 1990 to 1:

1.35 in 1995. Furthermore, the gap between rural households versus urban

households also increased from 1: 1.7 in 1990 to 1: 2.0 in 1995.

In terms of income, 1995 figures show that household income min for the

manufacturing sector is RM2,264 and for the services sector is RM2,462

compared to the agriculture sector of RM1,060. The Coefficient of Gini used as a

measure of income differential also increased from 0.446 in 1990 to 0.464 in

1995.

All the traditional indicators confirm the increasing income gap among

some groups, measured by ethnic, regional or industrial variables. The increase in

this gap, if not contained, will bring about a problem in the future. This widening

gap of divergence is the culmination of uneven growth rates among ethnic,

regional or industrial groups. It also shows how the economic liberalization policy

implemented in the mid-1980s has negative side effects, though there are some of

its advantages in efforts to generate country growth.

As the NEP was realized and nurtured in the planning and implementation

of the national development program, Malaysia was able to achieve both

16
development goals in line with the distribution. A few years after the DEB was

not fully implemented, the distribution was no longer in line with growth.

As mentioned earlier, Malaysia is the only country that has been able to

achieve growth goals in line with the distribution. This goal is achieved with the

full implementation of the NEP. It is no exaggeration if we conclude that

neglecting the NEP policy has negatively impacted the distribution efforts.

Implementation of the OPP2 based on the National Development Policy without

taking into account the distribution problem will widen the income gap.

Therefore it is important that the economic planning for the RM7 period

which is the second five years in the implementation of the OPP2 re-attention to

the issue of distribution as an option for growth. The strategy pursues growth

goals as a priority and puts the goal of distribution as a side goal that is expected

to be achieved through a comprehensive development program is a weak strategy.

While RM7 mentions the government's concern to address the problem of

increasing income disparity through zero inflation programs, improving the

quality of facilities such as education and health, or the implementation of low-

cost housing programs, we believe that in addition to low-cost housing programs,

other programs will expanding the income disparity gap.

In fact, for low-cost housing development programs, we have envisaged

that the RM25,000 ceiling ceiling is no longer considered appropriate, and pricing

at a higher level, however, justification, will lead to an increase in the difference

gap. Unfortunately, distribution as an issue will also be forgotten by the people in

the comfort they enjoy the higher quality of life, which is a positive impact on

17
growth. The tight labor market conditions and full employment of the nation can

also cause people to forget about distribution problems. The increase in salaries

that are not offset by overall productivity will ultimately affect development

efforts.

The DPN departs from the belief that the group now showing a lower rate

of growth will be able to repair their situation, either through general facilities

provided by the government or through the group's own efforts. General

observation shows that the confidence can be doubtful. The rising income gap

should force us to reassess the reason we ignore the NEP and receive a full NOP.

The unrestricted and uncontrolled privatization policy has also resulted in

an increase in income gap between races and groups. New and higher costs for

public services and facilities that have been received for free or at a minimum cost

will be subject to burden on certain groups. The unrestricted and uncontrolled

privatization policy has also resulted in an increase in income gap between races

and groups. New and higher costs for public services and facilities that have been

received for free or at a minimum cost will be subject to burden on certain groups.

Now the imbalance problem exists in multiple dimensions: space - urban /

rural background, between regions; between groups of people - poor compared to

rich, upper and middle classes and subordinates. The problem of this imbalance

should be taken seriously by the government.

To date, efforts to reorganize employment have two main dimensions:

first, the effort implies the change of focus of the national economic sector from

agriculture to industry. Second, the restructuring is required under the NEP to

18
eliminate racial identification with work. We find that there is progress in the

effort to restructure the workforce for both dimensions.

Overall, we find a reduction in the participation of all races in agriculture,

and the increased participation of all races in the economy. In terms of efforts to

eliminate racial identification with employment, we see an increase in the

participation of Malays in the various sectors of modern services, including in the

field of professionalism. In the professional field, for example, the percentage of

Malay professional increase is much higher than the percentage of professionals

in other races. Unfortunately, since the number of other races in the professional

field has been much higher before then the number of Bumiputera professionals is

still lagging behind in terms of their number and position.

The positive development of the NEP's easing can be seen in the

elimination of economic rent received by Bumiputera professionals. In the early

stages of the implementation of the NEP we noted that some Bumiputera receive

unpaid wages with their qualifications and experience, and are employed only to

meet Bumiputera quota. On average this is no longer an issue. The hiring of

professionals to work in the private sector is now based on their capabilities and

qualifications.

What is currently a problem is that, since there is a tight labor market, all

employees receive economic rent. Higher rates of salaries and higher rates of

gains in the absence of total factor productivity will ultimately reduce the

competitiveness of the country.

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 In 1995, the size of the workforce was 8.14 million. Out of that, 7.91

million people work, this means that the overall unemployment rate is 2.8%. If

everyone can work is working, we will still have a shortage of labor. The number

of those who work actually includes 0.708 million foreigners. The number of non-

working Bumiputeras is 0.174 million people; This means that the unemployment

rate among Bumiputeras is 4%, and this rate exceeds the Chinese unemployment

rate (1.3%), and India (2.2%).

Rapid economic growth has created high demand for employment that can

not be met by local employment supplies. The vacancy was filled by foreign

workers, which in turn led to socio-economic problems. This is evident in terms

of relationships in communities that do not respect local cultures, the emergence

of new diseases that have already been eradicated in Malaysia, and pressure on

state social infrastructure facilities, such as educational, health, or housing

facilities. One of the reasons for the necessity and dependence on foreign workers

is because of low wages paid to local workers.

We can anticipate that the rewriting of employment that has been achieved

will be eliminated as a result of the reduction of Bumiputera students pursuing

science in schools and pursuing science and technology in higher education. The

lack of Bumiputera is related to the lack of facilities in primary and secondary

schools, both in terms of infrastructure facilities and teachers, especially in rural

areas.

Employment arrangement is not something that can be done suddenly and

without planning. We should learn from DEB's early stage experience: at that

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time we were forced to pay an unjust economic rent. We need to initiate serious

humanitarian planning to ensure that qualified Bumiputera are available when

needed. The demands for employment at professional, sub-professional, and at the

skill level should be made promptly taking into account the needs of the industry

until the year 2020. The Public Service Department should pioneer this effort and

create an integrated program to produce the necessary employment. A structured

training program needs to be made to ensure that students receive quality

education and training. Past practices send students to unreliable or unfavorable

institutions of higher learning just because the institution has a loose entry

requirement to be stopped. Such short-term practices will only result in a

complete half-graduates and this can affect the country's efforts to become a

developed nation.

The Public Service Department, the Ministry of Human Resources, and

the Economic Planning Unit should also be able to identify critical skills and

make appropriate planning to train Bumiputera students. Planning in the past is

planning the mastery of information technology by the Bumiputera in the future,

but the benefits that have been achieved will be lost easily due to the absence of

intensive planning to maintain that position.

One of the main problems of the workforce is to get the appropriate

number of employees at the sub-professional level. The passion of increasing the

number of professionals by submitting sub-professionals to follow-up courses has

created a vacancy at the sub-professional level. The rapid growth has also led to

increased claims against sub-professionals.

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 The economic growth and the easing of the NEP's implementation which

began in the mid-1980s also resulted in the Bumiputera intake policy to reflect

racial composition at every level in the corporate sector was no longer a major

consideration. The success of some Bumiputera in the corporate sector has given

confidence that the Bumiputeras no longer need the support of the NEP to enable

them to venture and succeed in the corporate sector. Such assumptions need to be

reviewed.

The NEP has clearly laid down the target of holding at least 30% equity by

Bumiputera in the corporate sector as one of its key strategies. To achieve that

goal, we note that efforts to ensure ownership and control of Malays in the

corporate sector for over 20 years during the NEP period have shown encouraging

results, even though their achievement is not at their desired level. In 1995,

Bumiputeras as a whole (including trust agencies) had 20.6% equity in the

corporate sector.

While initiating efforts to enhance the ownership of Bumiputera equity in

the corporate sector in the early 70's we have anticipated how difficult it is. With

the easing of the implementation of the NEP in the mid-80s and with the shifting

of the NEP's orientation to the NUP, focusing on "national development," this

effort would be more difficult to achieve.

Despite the progress in Bumiputera equity holdings in the corporate

sector, the holdings are focused on only a small number of Bumiputera. This is

not a positive development. The nation's hope is not to be burdened only by the

22
shoulders of a small number of people who will determine the failed economic

success and the continuity of all the achievements it has earned to date.

As stated in RM7, efforts to increase Bumiputera ownership in the

corporate sector require a lot of capital and high commitment. The Bumiputera

are understaffed in both fields. The role of financial institutions is important for

this purpose. The Prime Minister himself has called on financial institutions to

provide support to the creation of Bumiputera entrepreneurs and corporate

members.

The Malays are given the opportunity to participate in the equity of the

company either through direct shareholding or through a new issue of shares, not

holding such shares for a sufficient period of time to fully benefit the full equity

interest. The company's equity is sold once the shares are listed. This makes it

difficult to increase the percentage of Bumiputera equity in the corporate sector.

One of the reasons behind the weaknesses is the fact that Bumiputeras only expect

dividends to finance the acquisition of equities. This is not the best way.

Strong, competitive and sustainable MPPB development is among the key

policies of the government that are crucial for the future of the Bumiputera. Since

the era of the NEP has yet to be perceived that without a conscious and strong

effort, and which is encouraged and supported by high political commitment, the

development of the MPPB will only be a beautiful plan but does not show success

in the government's caveat.

RM7 and cabinet changes after the 1995 election show the government's

concern for the failure to create a strong and sustainable MPPB. The decision to

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create the Ministry of Entrepreneur Development in place of the Ministry of

Public Enterprise is a radical and courageous act, and shows the government's

seriousness in its desire to develop MPPB. However, we note that the change in

the name of the ministry does not guarantee that radical changes will also occur in

the ministry's planning and strategy. A comprehensive understanding of the

ministry's level of entrepreneurial intentions and hence the necessary steps to

create and develop the MPPB are also unclear.

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5.0 RECOMMENDATIONS AND CONCLUSIONS

About the problem of poverty is suggested that efforts to reduce poverty are

taken into account by the following points and approaches: -

a) The concept of poverty

Poverty is not seen as an economic problem but also as a structural, social,

moral, and cultural problem. Therefore, the solution approach must be

comprehensive, taking into account all relevant factors.

b) Reduction of poverty for welfare cases

Different approaches should be used for elderly, chronic illnesses, or physical

disabilities. For these groups the direct help is more appropriate.

c) The "free political" poverty reduction "

The efforts to reduce poverty should be an unprepared effort to the political

party line. In this regard, the identification of their poorly identified groups

should be done professionally by using certain index measurements, and not

by submitting to the consideration of the Village Development Committee

(JKK) members who are usually influenced by political considerations.

d) Integration of programs under one agency

Implementation of poverty alleviation programs should be consolidated under

one agency only (preferably under district officer) and not proceed with the

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 current method. Implementing programs through various agencies creates

duplication and can reduce the effectiveness of the program.

e) The Role of the Trust of Malaysia

The government should provide a substantial amount of poverty alleviation to

Amanah Ikhtiar Malaysia (AIM) which has proven to be successful in

assisting the poor as well as building self-assured support groups.

f) Relative poverty

The government needs to create clear steps and specific programs to help

reduce poverty.

In addition, it is proposed that the government reassess the issue of distribution

and growth, and thus, re-evaluate the method of implementation of the NUP. The two-

pronged goal of the DEB should be the starting point for the NUP and reflect all the

economic development programs planned under the NUP.

Growth at high rates should not be the main goal of the NUP. Growth should be

planned at a comfortable and non-stressed state infrastructure.

Growth and distribution issues need to be monitored and disseminated

continuously. Data relating to income, expenditure and distribution should be

disseminated once the research is completed to enable independent researchers and

researchers to interpret the meaning of the growth and distribution figures.

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