 I must also thank UNIWIDER for taking this project to another stage where they're bringing in politics and that's going to be our focus. I think that's an important dimension that has not been brought enough into the literature, the political dimension of the policy. So let me start quickly. I have only 20 minutes and I have a lot to take you all through too. First, let's be clear. When we talk about affirmative action, it's not a policy. It tends to be discussed as a policy in isolation. The reality is affirmative action is part of a cork of a huge range of policies. And it intervenes in all these different policies. And it mixes with them and the outcomes. That's why it becomes difficult to understand the outcomes. So let's go a bit further into affirmative action. It constitutes part of the social policy debate. The social policy debate, widely speaking, it's about whether it's universal or targeted. Within this universal versus targeted type policies, we have two types, vertical inequalities and horizontal inequalities. This is old school. This has just come to the fore. Vertical inequalities are basically talking about class. Horizontal inequalities is changing the focus to groups. We need to have a group-based understanding of conflict to solve real problems. A class-based perspective doesn't allow for it. And interestingly enough, one major horizontal inequalities approach is affirmative action. It is a race-based policy, ostensibly to attain social justice. Let's talk about what we mean by social justice. And also interestingly enough, the focus is on economic rent distribution. I'm happy to see in this conference there was a focus on other things. But generally speaking, most of the focus is on redistribution of economic wealth, equity. Now while this is going on, there are other policies that are also happening simultaneously. We have the developmental state policy, we have neoliberalism. And we also have this relationship between state and business in the implementation of these policies. Now developmental state, I come from Southeast Asia, East Asia. The World Bank called it the East Asian miracle. In the 1970s, 1980s, we saw the phenomenal growth of very poor countries. Malaysia was one of them. And the developmental state works in a manner in which it is highly interventionist. And here it is state-directed development also directing how affirmative action works. By the 1980s, a new model emerged, the rise of Thatcher and Reagan. And they introduced a more market-driven approach, neoliberalism. And this approach interestingly enough, while the developmental state was being implemented, which is interventionist in nature, they also brought in neoliberalism, which is to liberalize the market. So you see here now how complex the mix is. And one example of neoliberal policies is privatization. And privatization was closely linked also again to affirmative action. You can privatize targeting a specific group. And this is part of affirmative action. So you can see here how the mix occurs. So this brings me to my argument I want to discuss here. When we look at the policies, although they may look different, interestingly enough, if you look at affirmative action, it's a social engineering process. Now let me be clear, I'm sure Simone will talk about this. The way affirmative action is understood and implemented in different countries varies. It has many names, positive discrimination, for example. Now here I like to look at America. In America where this process was first started, Darity talks about social engineering. The key focus that Darity says is this. It is to redistribute wealth to the targeted so that the number of people in the class hierarchy between the non-targeted group is almost the same. So this is not, as he puts it, a really progressive policy in that sense. It is a policy to really redistribute wealth, to create an equity among people at the top level of the highest class. The second point I want to make, neoliberalism. Interestingly enough, this also targets the high income bracket. It is not a social policy of progressive in any way. But it's a policy which also tends to favor those among the elite class. So now that I've given you all the different policies, let's now focus on one country, Malaysia. Malaysia is interesting because it was the first country to introduce affirmative action targeting the majority group. And this majority group had political power. When affirmative action was first introduced, it was first in India. And then in the 1960s, following the civil rights movement in the United States. Now here in the United States, it's a policy of desegregation. The issue of desegregation was a real target. In Malaysia, it was not an issue of desegregation. It was about redistribution. So you can see here the first difference and a major difference. In the United States and in India, when they first introduced it, it targeted minorities who had no economic power and no political power. In Malaysia, when they introduced it, they targeted a group that had a lot of political power. And that makes a world of difference when we talk about how you implement the policy. The second point, the triggering event, 1969. We got our independence in 1957. And I must say in that period, and I'll show you also figures on this, in the 12-year period between 1957 and 1969, there was very little change in the economy. And this ultimately triggered a riot. It was unfortunately seen as a race-based riot. But what it meant was very clearly, now we have to change our policies. There was a significant policy shift. And the policy shift was most important in the sense that, from now on, the state was going to intervene directly in the economy. And the aim was to introduce affirmative action to achieve national unity by eradicating poverty and restructuring society. All noble aims. And nobody is going to say, this was bad. Even I, when I look back at that history, I will say, this is a good policy. We needed a policy to do something about the social and economic inequalities in this country at that time. The method, however, target one group. But even the leaders of that time, the Malays, even the leaders at the time knew, if you have a policy that targets only one segment of the population, it can, in the long run, cause a lot of problems. So they discussed how long. First it was 10 years, then it was 15, and finally they said 20. And then we must stop. They said that, we must stop. So it was a 20-year policy to be implemented between the period 1971 to 1990. Now here, at the same time, as I just mentioned, the developmental state idea came up. This was also in the 1970s. How did Japan grow so fast? This was an economy that was wiped out after the Second World War. By the 1960s, it was catching up with the U.S. By 1970s, U.S. was worried it was going to become the second largest economy, even overtaking them, and it happened. And then we have Korea and Taiwan. Korea and Taiwan were dirt poor states. By the 1970s and 1980s, they were highly industrialized nation states. Malaysia followed the developmental state model. Their model was Japan, Korea. Meanwhile, as I said, privatization comes along, Margaret Thatcher comes along, Thatcher and Reagan come along, and they captured imagination of many policy people. And that also comes into the mix. The question is, where does the power lie in decision-making? That is the point. That's why I'm happy with what Rachel said. Let's get to the politics of it. Where does the power lie in decision-making, which then dictates how these policies are done? Now, to understand outcomes, this was our big problem, understanding outcomes. How do you differentiate how the policies were implemented? And here I benefited a lot from the literature on state business relations. And they gave us different hands, the invisible hand. The invisible hand is a state providing public goods. The state provides all the incentives there, especially for foreign firms, take these incentives, use it for economic growth. It worked. It explained the industrialization in Malaysia. Malaysia's industrialization was driven by foreign direct investments, not domestic capital, foreign direct investments. The invisible hand helped a lot. Then we have the helping hand. The state intervenes to help companies, picking winners, and they help nurture domestic firms. That happened in Korea, in Japan, picking winners, as Korea in particular. It happened here in Malaysia too, and we saw this happening, especially through privatization and through affirmative action. And then we have the grabbing hand. You can't run away from the grabbing hand. A powerful state emerges, and then you see the rise of corruption and cronyism. And these three hands, like these policies, happen simultaneously. But by breaking up the hands and seeing which policy, what are you using, invisible hand or helping hand, grabbing hand, we can see through corruption. We can actually dictate or use the data to understand the outcomes that we're looking at. So here, my main point, the centrality of politics in public policy, planning, implementation, governance. This method helps us a lot to get to the outcomes. But here, let me just talk about just one policy, affirmative action. This is seen as a progressive policy. I do think it's a progressive policy, but there are limitations to it. In most countries, when they introduced it, the target was on education and public sector employment. Malaysia in the first 10 years spent a lot of time on education. And look at what it did. They took poor kids from the villages and send them to good residential schools. Kids from a young age were sent to very good residential schools, got high quality education. The best students among them were then sent to universities abroad and domestically. And from there emerged a new middle class. The greatest success story for Malaysia with affirmative action was the rise of a new Malay middle class within a period of just 20 years. Major success story, which is why many other countries wanted the followers, including South Africa and Fiji. They wanted the followers because this is a clear outcome. In rural areas, where poverty was concentrated, public enterprises were created, sent to the rural areas for agricultural development, land redistribution, and a new landed middle class emerged. How can you complain about this? Aren't these good outcomes? These are fantastic outcomes that you're seeing here. But as time went on, there was a shift. It was a shift from education to business. And I'll come to that. But because of long-term implementation and a shift, poverty was reduced significantly from 65% in 1970 to 3%, according to the government's tabulation, 3%. But whatever it is, it is a fact. Poverty was significantly reduced. I spoke about the presence of new middle class, but here is the case. When you have education, you have education into tertiary institutions, bright students couldn't get into it, minorities. And so you see an outflow of very bright students leaving the country. A major brain loss for the country. And when they tried to have a brain gain program, it didn't work. When young people leave the country at a young age, very seldom do they come back. The second point, public sector employment. This is major. This is the easy part. Just bring them into the government. Give them jobs, which is what they did. And the government, the bureaucracy suddenly bloated. And because it was targeted and not merit based in the bureaucracy, Japan, Korea, Taiwan, Singapore, when they rapidly industrialized. One of the main reasons was because they had a top notch bureaucracy. The best brains went into the bureaucracy because they were responsible for public policy planning and implementation. It didn't happen here. It became bloated and became one ethnic community contributing to 90% of the public sector employment. How is that even possible? But that's exactly what happened. And the outcomes are, as you see here, serious institutional decline. Our universities used to be very good. They're really down in the doldrums now. If you look at the schools, nobody is interested in public education anymore. It's all private education now. And if you look at the public sector, it is seen to be, as I put here, bloated and inefficient. Hardcore poverty remains because the public delivery system didn't work any longer. If the public delivery system is not efficient, how do you deliver policies to the ground? And that doesn't work. And suddenly now we still have persistent hardcore poverty, selective patronage. The idea is selective patronage targeting to be done by the bureaucrats. They've become entwined with the political system and they become part of the system of selectively deciding who should get the rents on the state. And then you have a serious problem of crudism emerging from this. The other point, which I want to make here is this. And this is crucial. After the first 10 years, the government decided it's not just about education, it's really about business. Creating parity between the richest ethnic members of the ethnic groups. Prime Minister Mahade Muhammad was responsible for this. Said it. If the 20 rich, if the 20 Chinese millionaires, there must be 20 millionaires. And only then can we say parity has been achieved. Now, we're all bald, we laughed. But when I went to the US, I heard a similar argument. They were saying that's exactly what the whole idea, that's the idea behind the policy too. So here, we have to discuss these things. You have to discuss some of these issues about what exactly is the target, what exactly is the outcome of affirmative action. Now here in 1970, state intervened through what is known as state-owned enterprises, we call them government-led companies. They brought about a lot of good things. But what is also interesting is the shift in 1981 from institutions to individuals. Create a group of corporate captains, melee corporate captains, important shifter, institutions to individuals. Targeting within the targeted group. That's exactly what's happening here. Meanwhile, how do you achieve it? Privatization, neoliberal policies fits the bill. Just privatize it to this group. And you create the new rich. And then we have the defining moment, the test. In 1996, President De Klerk from South Africa came to Malaysia, looked upon this model in 1996, said this is the model he wanted and implemented it. I met him at one point and he said that to me. I told him he should have come in 1997. Yes, in 1997, when he came, that's when the Asian financial crisis occurred and everything collapsed. This model was not sustainable. Massive re-nationalization and suddenly the state is again a major player in the economy. Now I wanted to show you this figure. I have only five minutes left, so I'll go through it quickly. The focus is equity redistribution. I can't see it much, but what it's showing here is in 1970, it's true. Malaysia had only 2.4 percent of corporate wealth. The wealth was concentrated in the hands of foreigners, 63 percent. By 1990, significant changes had occurred. And the volume of corporate wealth reduced by 40 percentage points. That is a massive redistribution that went on. And if you look at the minorities, the Chinese and Indians, they too grew. So it's not that minorities didn't grow. They too grew. But the government decided after 1990, carry on. And now it's indefinite. And look at the figures today. All ethnic groups have stagnated or fallen behind. The Malays are far worse than they were in the 1990s. The Chinese and Indians are far worse than they were in 1970 when the policy began. And the group that is on the ascendancy is foreign capital. We are going back to 1970 when the NEP was introduced. That's the outcome of equity redistribution long-term. The figures are here, we all to see, for yourself. Now, actual breakdown, in 1971, Affirmative Action here, very quickly, foreign capital everywhere with few Chinese firms. By 1997, you see the shift. 1997 was a defining year. They had created Malay capitalists. There was a redistribution of wealth. There were new corporate captains. Everyone thought that Malaysia was the great success story for Affirmative Action, creating a corporate class which were in the top 50 in the country. But here, power was concentrated in well-connected businessmen with a powerful state. And then the whole thing collapses. And then the whole thing collapses. Today, what do we have? Basically, re-nationalization. State-owned enterprises or GLCs are the key players in the economy. And if you look at this list, if you won't find any Malay, you'll find one. Two, maybe, and he's selling out. Two Malay corporate captains in the country, after more than 50 years of implementation of the policy. But they still insist on going on. So who's the key player in the economy? Here you are. This figure talks about state capital. In purple is what we call the GLCs, the government-linked companies. Here, we have the ministries, Ministry of Finance, Prime Minister's Department, Ministry of Rural Development. This is just a small segment of the state's involvement in the economy through the GLCs. It's significant. And that means a concentration of economic and political power in the hands of the state. So what are the outcomes? Affirmative action. What have you learned? Duration. Duration. You must have a time limit. The first 10 years were good. But after that, it was downhill all the way. The most important lesson, high quality education is key. When young, in one of the sessions I attended the first day, that was the focus. Primary level education of a high quality is the answer. But it's just one problem. It's so expensive to provide this kind of education at the lowest level. The third issue, very important, access matters. Access is meant for the poor. But access to the rents have been captured by the elites and therein lies the problem. The poor are still left behind. That's why we're still ostensibly, that's the reason for now for the policy. Affirmative action in business, there's no evidence that it works. And finally, the competition. The competition in 1970s was between ethnic groups. Today, it's within ethnic groups. That's a serious change. In terms of neoliberalism and development policies, the focus, individualistic competition, market participation, fine. But the result is a crutch mentality. Prime Minister Mahati, his own words, 22 years as Prime Minister, he said, I have created a crutch mentality. There are no malaise in the top 20 or top 20. There's no one in the industrial sector for highly industrialized country. The SMEs have been undermined. They are hardly involved in industrialization. And we have this process of ethnic bypassing. And meanwhile, ethnic bypassing means you bypass the most entrepreneurial firms. And that's only shooting yourself in the foot and making you more dependent on FDI. And in terms of power in politics, racialized discourses, identity politics is embedded. I have to go through this very quickly. The real feuding now is between elites. I want to conclude with this, the lessons from the policy mix. This is important. Governments are pragmatic and eclectic. You've got to know. You can't just discuss affirmative action, as I said, in isolation. H.I. and neoliberal policies, AA policies and neoliberal policies, you see an interesting convergence going on. Although their aims seem to be different. In terms of property rights, you cannot indefinitely give, take from one ethnic group and give to another. If you do that, you get a huge Malaysian diaspora as we see now. And in terms of issues to debate, this is what I want to leave you all with, affirmative action is a double-edged sword. Let's get to the heart of the matter. Unfortunately, we still haven't got to it yet. And we really need more studies. Hopefully, Rachel will leave this on how do we get to it. Second, and when we talk about affirmative action, must we focus only on asset-based wealth? Can we use other indicators? When I went to Sri Lanka and asked, why didn't you all use wealth to measure the differences between ethnic groups? I was told this was 20 years ago. They said, we dare not go there. Because if we do show how wealth is distributed, that this country is really torn. And I'll leave you with that. We need to find new indicators to discuss how do we do this. Oh, one final word. If you want to get any reforms done, you have to start with the politics of the state. Reform the state, break out the hierarchical structure, create a more democratic transparent system of governance. And then we can begin this process of bringing about real change. Thank you.