KUALA LUMPUR, July 5 — An Islamic-based economic model is best suited for the Malaysian society as the current system has failed, says University of Malaya Adjunct Professor Tan Sri Kamal Mat Salih.

He added that the system over the past 40 years had resulted in institutional failures that caused the previous government to “run into the swamp”.

“The current system we use is very pro-business and largely capitalistic, based on profit motive,” he said.

“The failure in that system we’ve tried to implement over the last 40 years is not so much in the market mechanism like monopoly but there’s also institutional failure.

“The government of the last 10 years shows that it has run the government into the swamp,” Kamal told reporters after meeting the Council of Eminent Persons today at Ilham Tower.

The current New Economic Model was implemented by former prime minister Datuk Seri Najib Razak when he first came into power.

Kamal said that an Islamic economic model would allow for a more holistic approach in tackling issues like wealth disparity, social welfare and the economy.

“It is somewhere between a capitalistic and socialist market, but the value system underlined by the Islamic model is universal”, he said.

“Whether you’re talking about ‘riba’ or ‘non-riba’, non-Muslims also want to practise that. Everyone is concerned with distribution, social welfare and the environment. It’s not an antagonistic approach but it requires acceptance.”

‘Riba’ is a concept in Islamic banking that refers to and forbids the charging of interest.

The economist added that the flawed economic distribution of wealth was behind economic inequality in Malaysia, not racial differences.

“Basically 70 per cent of the Malay population still voted against Pakatan Harapan, you cannot ignore or run away from dealing with the Bumiputra policy,” he said.

“Statistics show that racial issues are not behind inequality, inequality comes in varying groups of income and covers all sorts people. In fact over the years, inequality in the Chinese community is worse than before.

“We have to focus on both growth and distribution, it’s the same set of issues but how you translate it into programmes and implementation is the argument.”

Kamal also noted that similar to the Islamic model is the Social Solidarity Economic model of the Norwegian social democratic system, but Malaysia could not afford this.

“The Scandinavian model is a high-tax strategy we can’t afford, we would have to increase taxes to implement (it),” he said.

“The Islamic model suggests that you can grow and accumulate wealth as much as you can for this world but you must also share part of that with the less fortunate, that’s called the third sector and that role must be enhanced.

“It’s not a Bumiputra policy, it’s an Islamic-based policy as minorities are protected in Islam,” he said.

On how such a model would fit into non-Islam conforming sectors of society in Malaysia, Kamal said it wasn’t too big a concern.

“There is always a non-Islamic sector in society, but so long as it doesn’t become the determining factor of social life it’s okay,” he said.