Malaysia Race-based Policy Under Fire

Malaysia's decade-old policy to lift ethnic Malays out of poverty and put them on economic par with the other races, has failed its purpose and is instead undermining the country's promising economy, experts believe.

Malaysia Race-based Policy Under Fire

"The policy is no longer serving the needs of a changing Malaysia," Professor Azly Rahman told Reuters on Monday, January 8.

"The race-based paradigm of looking at restructuring society and alleviating poverty must be radically revised," said Azly, a Columbia University graduate who teaches history and world religions in the US.

The New Economic Policy was initiated 30 years ago to lift Malays out of the poverty and put them on economic par with the other races.

It was born out of riots between impoverished Malays and affluent Chinese in 1969 that killed hundreds.

Malays make up more than half of Malaysia's population of 26 million and are overwhelmingly Muslim.

Yet, they own just 19 percent of the economy, well behind minority ethnic Chinese, whose ancestors came centuries ago as traders or mine workers shipped in by colonial rulers.

The Chinese, who make up 25 percent of the population, hold about 40 percent of the nation's wealth.

The government wants Malays to own 30 percent of the economy by 2020.


Many believe that over the last few years, the policy has strayed from its original aim and enriched only a small elite, while many rural Malays still live hand to mouth in wooden huts.

Malays, also known as bumiputras (sons of the soil) gripe that well-connected businessmen — rather than deserving candidates — have been handed billions of dollars in state contracts.

"Bumiputra millionaires are not self-made," Azly insisted. "Many are proxies or 'front-men and women' of the ruling party."

Pressure is growing for Prime Minister Abdullah Badawi's ruling United Malays National Organization (UMNO) party to address the future of the race-based policy.

"It's a thick minefield for UMNO to maneuver its way through," said political expert Ooi Kee Beng of Singapore's Institute of South East Asian Studies.

Political leaders of the ethnic Malay majority have repeatedly warned the nation's Chinese and Indian minorities to stop questioning Malay privileges or risk hurting race relations, a touchy issue in a country that has suffered race riots in the past.


Malaysia offers the image of a ideal Muslim country, heading towards the status of developed nation.

But the affirmative action policy is reportedly hurting the country economically.

Foreign investment is said to be falling as investors baulk at rules that keep strategic assets either in Malay or government hands.

"Our competitors are forging ahead and we cannot afford policies that introduce distortions and inefficiencies on such a massive, and socially unjustifiable, scale," said Lim Teck Ghee, a former World Bank senior social scientist.

Economists warn that Malaysia may have to forsake affirmative action or risk having its economy lag behind.

Complaints by ethnic Chinese and Indians of being marginalized have become more strident as the economic pie has shrunk, with Malaysia's average growth having almost halved to around five percent from the rate seen in the 1990s.

Additionally, the state spent more than $3.1 billion in the past five years to rescue cash-strapped firms such as Malaysian Airlines, many of which were privatized to Malay businessmen.

The policy also had its toll on education.

Malaysia has reportedly lost some of its best and brightest as non-Malays, kept out of universities by racial quotas, moved to Singapore and other countries.

Güncelleme Tarihi: 20 Eylül 2018, 18:16