Hornbill Unleashed

December 4, 2013

Time to abolish Malay reserves

Filed under: Politics — Hornbill Unleashed @ 12:00 AM
Tags: , , ,

Zaid Ibrahim

This week, all eyes and ears will be on the Umno General Assembly. I have no doubt that many far-reaching proposals, especially those dealing with how to bring about more economic prosperity and security for the Bumiputera, will be tabled and discussed.

Umno President Datuk Seri Najib Razak will probably give a firm undertaking that Malays and other Bumiputera will be “taken care of” by the party, and that the “great Malay race” will emerge from the shadows of the past despite the unending attempts of various enemies to deprive them of their rightful place in the country. Expect a soul stirring speech from the Prime Minister.

We’ve already heard ideas floated around by economic experts about how Malay Reserved Land can be developed using taxpayers’ money. The idea is that Khazanah Nasional is a bottomless pit of ready cash (according to these experts) which can be used to develop Malay Reserves so owners can sell them to other Malays.


The argument is that once these properties are developed, they’ll fetch better prices and the Malays will make good money when they sell them to other Malays who somehow also have a lot of money to spend.

My response is that this is an old chestnut that’s only good for speeches. In reality, it’s neither practicable nor at all feasible. Many Umno assemblies have come and gone and, without fail, we’ve been given proposals that look good on paper but are utterly impossible to implement.

There’s such a thing as “the market” which these chaps haven’t yet accepted or even understood. Malays are not exempt from market value and market forces (supply and demand).

Take Kampong Baru for example. It’s probably the most valuable piece of Malay Reserve Land in the country but the development plans mooted by Datuk Raja Nong Chik Zainal Abidin, who was Federal Territories Minister at the time, were rejected .Why? To make it economically viable the plan envisaged some of the lands had to be available to non-Malays and this was not an acceptable idea.

Some people would rather see Kampung Baru undeveloped, just to brag that these lands belong to the Malays.

For any property development to be successful that expected revenues from the development must be more than the cost of such development.  If the properties were available strictly to Malays only; or that the selling prices had to be much lower to “assist” Malay purchasers, then the economics will not work. How was Khazanah (or even Petronas) to recover its costs? And what hope could there be for other Malay Reserves in the country if prime land near KLCC couldn’t be developed?

To help the Malays realise the value of their land, Umno must be prepared to do one simple thing: Remove the restrictions and make them freehold lands; and tell the Malays in exchange for that; they no longer need the protection of Malay Reserve Land.

It’s after all a false protection that they have it now; a false protection that involves an artificial sense of security and ownership.

Today, the Tropicana-Kota Damansara area, for example, contains some of the choicest property in the Klang Valley. Not long ago, they were classed as Reserve Land or owned by Government agencies. Despite this “protected” status, the land eventually went into private hands and ordinary Bumiputera didn’t have the opportunity to own much of it. There are countless other examples but the point is this: protectionist laws and policies don’t help anyone except the powerful and well connected.

Here’s another example from the other side of the world: Native Americans were also given land “reserves” by the US Government but these have not progressed in the intended way. Today, many function as ghettos that do not generate economic benefits at par with the rest of the country. In fact, the quality of life in some reservations has been compared to that of the developing – not the developed – world. At the other extreme, many reservations are home to casinos, generating wealth at some serious social cost.

Anyway, the idea of Malay Reserves in Malaysia wasn’t an Umno brainchild. The Kampung Baru area was gazetted by the British long before Independence. In my own state of Kelantan, all land is reserved for Kelantanese. This was a British idea too, which came with the 1931 state land enactment.

In those days, the idea had some merit because Malays were poor and uneducated. They borrowed heavily from chettiars for non-productive purposes. Today, Malays form the bulk of the middle class in the country, thanks to Umno (it did get some things right, after all) but the protection of Reserve Land has become a burden to Malays.

Maybe it’s difficult to tell Malays that the idea of a reservation was useful a century ago but no longer. That the fact is Malays today don’t need this kind of false protection. They need a Government that isn’t in open competition with them in real estate. Moreover, no Malaysian needs a Government that spends too much time worrying about doing business for itself and making commercial profits.

Malays need productive land. They need to be active traders in real property and must be able to make money by trading on the open market. In other words, Umno should free the Malays from the restrictions that limit the value of their holdings. It’s time to unleash real Malay economic power by removing the limitations of Malay Reserve Land and other such crutches.

If Umno members opened their eyes, they’d see that reserving 25% or more of land in the country for Malays and other Bumiputera has not stopped big corporations and well-connected developers from “changing” the status of the land in question. After all, the state executive council can do and undo anything in relation to land in Malaysia – Malay Reserves included.

The biggest private property developers in Kelantan, Perak, Kedah and Johor (i.e. the states with the largest Malay Reserves) are non-Malays and foreigners. Nominees are used to acquire Reserve Land, and in some cases the state government itself can award such land to the developers outright, provided they promise the unsuspecting Malays that the alienated land will be “replaced” with land of comparable type and value.

Sometimes the replacement doesn’t occur at all, which is why we’ve seen a clear depletion of Malay Reserves since 1957. The whole idea of Reserved Land being “security” for the Malays is false in all respects. So, wake up guys.

Umno will probably find all this unacceptable. They might even call it an act of betrayal or heresy. They’d rather treat Malays the way the US once treated Native Americans. They will say that without their “protection”, the Malays will have no future.
Malays must learn to take risks as others do, and to save or multiply their profits with other investments. This is the only way for future generations of Malays to prosper. It’s certainly the only way they can get some real economic security. They can do it if only they are allowed by these self-appointed guardians of the Malay race.

Until Umno leaders have the gumption to tell Malays this truth, they will continue to believe the old colonial untruth that their future can be protected only by restricting the sale of land to other Malays. Real security comes when people are allowed to realise the full value of their properties so that they can sell them or develop them as they see fit on the open market.

That’s real empowerment.


1 Comment »

  1. This pm is a pm for umNO Malays only. When giving speech in front of an umNO assembly or audience, you can see all the vigor and the veins sticking out of his neck with all the shouting, rhetoric and clambering for attention. But when called for a debate with Anwar in front of the Malaysian public, he would shy away as if he has lost his balls, for whatever reason, only he himself knows.

    Comment by Sharpshooter — December 5, 2013 @ 10:24 PM | Reply

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