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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (8535)	5/1/1999 2:24:00 PM
From: Stitch	Read Replies (2) \| Respond to of 9980

Gentlemen; Something that has been in the back of my mind as I have watched the effects of the Asian economic downturn in Malaysia over the last two years has surfaced in the form of an article that touches rather lightly on the issue. The issue, simply put, is that the downturn appears to be undoing much of what the Malaysian policies of favortism towards so-called "Bumiputera" businessmen was intended to accomplish. The intention of this discriminatory practice, on surface, was to accomplish a re-distribution of wealth in Malaysia to the benefit of Malay people. It was instituted under the banner of "affirmative action" and became official as a policy setting device in the form of the "New Economic Policy" in 1971 (only two years after this country saw its last major race riot in which hundreds of Chinese were killed). IMO the issue frames the reason that Malay politicians (Mahatir et.al.) can ill afford to embrace true market reforms and level the playing field. In doing so the mask would fall away and the real results of this ill fated policy, i.e. cronyism, corruption, and fiscal negligence, would fall away leaving the whole mess exposed to wide spread criticism. It helps to explain why Malaysia has taken the extremely questionable policy road they have taken. In the meantime the gap between Chinese owned businesses and Malay owned businesses continues to grow. Any reasonable observer would know that someday you have to pay the piper. No matter what official numbers may suggest I believe that day of reckoning will arrive and I wonder "what then"? At a minimum I do not see Malaysia as investable. feer.com Best, Stitch