By Robin Augustin
July 5, 2018
Economist Kamal Salih today mooted an
Islamic economic model that is needs-based and “somewhere between a capitalist
and a socialist system” to address wealth inequality in the country.
He said such a model could be adopted as an
alternative to the New Economic Model (NEM) proposed by the previous
The Universiti Malaya adjunct professor
said given that 70% of the Malay community did not vote for Pakatan Harapan in
the recent general election, it would be difficult to run away from dealing
with Bumiputera policies although race did not determine wealth inequality.
“Inequality within the Chinese community is
worse than before,” he told reporters after meeting the Council of Eminent
Persons (CEP) today.
He said the NEM, which is more market-based
with more liberal approaches, had failed to address unequal wealth distribution.
He also said inequality was growing between
income groups and that this cut across all races.
The NEM was introduced by former Prime
Minister Najib Razak in 2010 with the goal of doubling per capita income by
Kamal said he was looking at how growing
inequality could be dealt with, noting that the current system is pro-business,
capitalist and more driven by profit margins.
He also said the failure of the systems
Malaysia had tried over the past 40 years wasn’t due to systemic weaknesses but
rather the failure of institutions, adding that this had to be dealt with.
Kamal said the institutional failures in
the last 10 years showed that the past government had “run into the swamp”.
“I’ve been looking at this for 10 years, an
Islamic economic model which is somewhere between a capitalist system and the
socialist side of a market system.”
Although Malaysia’s population is 70%
Muslim and 30% non-Muslim, he said the value system of an Islamic economic
model was universal.
He said non-Muslims too would not agree to Riba
(interest) and that everyone was concerned about social welfare and protecting
“It’s not an antagonistic model but it
requires acceptability by all,” he said, adding that it was geared towards a
sharing economy which the Western world was also looking at.
“There is a counterpart to this, which is
the social solidarity economic model based on the Norwegian social democratic
In this system, he said, the government
would play a strong role in the distribution of wealth but this involved high
tax which Malaysians could not afford.
In the Islamic model, he said, the people
could grow as much wealth as they wanted but they must also share with the less
He said there were some practical issues he
needed to study further, such as Shariah compliance, but overall the Islamic
economic model was more holistic.
“The Islamic model is needs-based, not a
Bumiputera policy but one based on Islam, and minorities are protected in
“My current thinking is to look at Turkey
which is like Malaysia in the 1990s. (Turkish president) Recep Tayyip Erdogan
has managed to bring up Turkey and there’s a lot of excitement in the country.”
On how matters like alcohol and gambling
would fit into such a model, Kamal said the implementation of the model would
have to be adjusted to suit realities as there was a non-Islamic economic