Taken together, says Jeff Ooi, an opposition MP, the reforms are “baby steps” towards improving Malaysia’s international competitiveness. Foreign investment may pick up. But the pro-Malay bias, he argues, has not really changed. Mr Najib still wants to lift Malay corporate ownership to the NEP target of 30 per cent, from a claimed 19 per cent now. Experts say it is much higher and that it suits UMNO to pretend otherwise. Calculating the correct share is complicated by “Ali Baba” companies, in which Malay equity holders subcontract the work to Chinese firms.

It is too much to expect Mr Najib to demolish his father’s policy in one go. But his apparent willingness to confront vested interests in his party bodes well for his leadership. His predecessor, Abdullah Badawi, left office in April without producing his promised reforms. In his speech, Mr Najib said there is no point in retaining privileges at the expense of economic growth. “We can only achieve our social equity goals by expanding the pie,” he concluded. Investors can only hope that he is right.

© The Economist Newspaper Limited 2009