Malaysian The Kampung Baru Saga

In the early 1990s then-Prime Minister Tun Dr Mahathir Mohamad initiated a move to develop Kampung Baru in Kuala Lumpur. The sleepy Malay enclave desperately needed development so as not to become a slum in the middle of the Golden Triangle. At the time, the stumbling block was the unrealistic demands by some of the owners regarding the price that their properties could fetch.

Ownership in Kampung Baru is complicated: lands in Kampung Baru are usually jointly owned by members of the family. This is largely due to Islamic inheritance laws. An owner usually has an undivided share in the land, and as such, that owner has a say in the matter of the whole piece of property represented under that title. It matters not that he owns only one-twentieth of the total property — he can still veto any transaction.

Development in Kampung Baru must therefore take an innovative approach. It requires Government intervention and it needs a legal mechanism to ensure that unreasonable demands of a few are not allowed to scuttle the wishes of the majority of owners. In addition to a viable legal structure, it needs a capital injection that only the Government can provide. It also needs good marketing and a maintenance organisation to ensure that properties built can command good prices comparable to the surrounding area.

Today, 20 years after Dr Mahathir’s initiative, Kampung Baru residents have another chance at getting the development they need. The decision of the Federal Government to develop the area should be viewed positively. Of course, the proposal needs careful study and landowners must be able to get fair market value. It will be better still if owners can also have a share in the profit of the development of the area.

What is important is that landowners must not be coerced or influenced by politicians who pander only to emotion and say things like “the Malays are going to lose their land.” The Malays can be better off economically only if they participate in the development of their assets. Without development, Kampung Baru will continue to be an asset that produces no income.