Malaysia’s New Economic Policy
The majority of Malaysia’s population consists of ethnic Malays who,
along with a number of minority indigenous peoples, are known as Bumiputeras.
Ethnic Chinese and Indians, however, make up substantial minorities
a result of the years Malaysia spent under British colonial rule.
During that period, which ended in the mid-twentieth century,
there was a massive influx of foreign workers, whom the British imported
in the belief
they would be easier to control than the ethnic Malay population.
Discriminatory British policies designed to exploit labor essentially segregated
the population
both geographically and occupationally based on race, resulting in economic
disparity
and social friction between Bumiputeras and minority immigrant groups that
persisted
even after Malaysia gained independence.
In addition to a drastic difference in median income
between Bumiputeras and nonBumiputeras, one of the main sources of discontent
was
the fact that just 2.4 percent of corporate wealth was owned by Bumiputeras.
Ethnic Chinese, however, owned 34 percent, despite being far outnumbered
by Bumiputeras.
This situation came to a head in 1969 with a series of bloody riots
following a disputed election.
The riots led to the formation of a new government, which instituted what
is known
as the New Economic Policy (NEP) in 1971 to achieve national unity.
The program employed two main strategies, the first of which was uncontroversial:
eliminating poverty regardless of race.
The second, however, specifically entailed preferential treatment for Bumiputeras
intended to fix the economic imbalance among racial groups to better reflect
the country’s ethnic composition.
Quotas were established to ensure Bumiputeras were represented
in every profession and enjoyed privileged access to universities,
along with other economic benefits.
The NEP initially found acceptance across ethnic lines.
This was partly because it sought to achieve economic equality
not by removing existing wealth from one part of the population
and redistributing it elsewhere but
by growing the economy to reach the established quotas.
According to Professor James Chin of the University of Tasmania,
however, the NEP evolved into “a monster with a life of its own.”
While it has been instrumental in reducing income inequality
and achieving some political stability, Chin argues its scope has broadened
due to demands the nation be transformed to favor Bumiputeras
on the basis of a Malayfirst political ideology that is often interpreted
as an assertion of Malay supremacy.
Since the mid-1970s, Bumiputeras have received billions of dollars in subsidies,
and the privileges initially afforded by the NEP have expanded to include
things
like sole eligibility for certain government contracts and exclusive housing discounts.
NEP quotas in the public sector have led to the overrepresentation
of Bumiputeras in government and public education
and have given them the upper hand in applying for scholarships.
Critics say admission standards at public universities have been lowered
because of the prioritization of criteria based on race,
and that favoritism in the job market after graduation has sapped young Bumiputeras’
drive to achieve true upward mobility.
There are no eligibility requirements for acquiring NEP privileges other
than being a Bumiputera, and wealthier Bumiputeras have benefited disproportionately.
After receiving preferential treatment in obtaining government contracts or licenses
and permits unavailable to nonBumiputeras, Bumiputera business owners
often outsource the daytoday running of their companies to skilled nonBumiputeras
in a partnership that is comfortable for the owners and increases their
wealth
but does little to help many Bumiputeras develop the business skills necessary
for longterm success in a competitive economy.
Compounding the problem is the NEP’s failure to include basic economic
tools
such as a minimum wage and appropriate, needsbased welfare assistance.
These things have resulted in resentment among Bumiputeras in the lower classes,
who still make up a large majority of those at the bottom of the economic
ladder.
Many critics argue that policies centering on socioeconomic status rather
than ethnicity would succeed in promoting the welfare of impoverished Bumiputeras
because they make up the majority of the nation’s disadvantaged,
while also constituting an important step toward achieving reconciliation
among the ethnic groups.
Numerous experts, however, consider such ideas naive,
as any attempt to rectify the status quo would likely be opposed
by wealthy and influential Bumiputeras who interpret it as an affront to
their livelihood.
Proposed solutions, meanwhile, stop short of offering viable,
constructive pathways for improving, and ultimately overhauling, NEP schemes;
rather, they simply call for general reform or abolishment.
What was originally conceived as a twodecadelong measure
for rapidly restructuring Malaysian society has become an enduring policy.
The NEP has become so entrenched in Malaysia’s economic and political system
that many Bumiputeras see the elevation of their status as an ancestral
right
rather than a transitional approach to developing a nation
where such measures are unnecessary.
This means bargaining and compromise will be of paramount importance
to satisfy the majority, yet the racial polarization stoked through the
decades
by the NEP makes it difficult to envision meaningful discussion and reform
on the horizon. |