Malaysia’s Dismal Record
James Chin
The current affirmative action program in Malaysia, officially called the “Bumiputera” policy—Bumiputera means “sons of the soil”—has led to a deeply fractured nation and perpetual ethnic tensions. It is a cautionary tale of how ethnicity-based affirmative action policies can have unintended consequences.
In 1971, the government promulgated the New Economic Policy (NEP) which gives Malays and other indigenous groupings a wide range of government help, including easy entry to universities, cheap business loans, scholarships, public service jobs, employment quotas in private sector jobs, and special government tenders. This action was unusual for two reasons. First, the criteria for the benefits was based solely on race, rather than socioeconomic status. Second, the Malays and other indigenous populations of Malaysia constitute, at 60 percent, a majority of the country’s population. Affirmative action program are normally targeted at the disadvantaged economic class and usually at minorities, not the majority. The Malaysian government justified their actions by claiming to right a historical wrong, arguing that during the colonial era, British rulers favored Chinese and Indian immigrants over Malays.
To put it mildly, the implementation of the NEP was politically disastrous. First, the policy created a rentier class. Since the contracts were awarded on racial grounds, the elite Malays with the strongest political connections were able to secure the bulk of the Malay-only contracts, with huge profits to follow. These elite became the strongest defenders of the system, forcing the government to expand the NEP to other areas. Second, the non-Malay population, comprising mainly Chinese and Indians, were oftentimes relegated to second-class citizenship, no longer able to rely on government help or attend institutions of higher learning due to the quota system. Many non-Malay businessmen were forced to employ “Ali Baba” tactics to survive. In such an arrangement, the business belonged on paper to a Malay (“Ali”) while the business was actually run by a Chinese (“Baba”). Moreover, the policy has led to a dependency syndrome among the Malay population, with many Malays believing that they cannot survive without affirmative action.
There are several key lessons other nations may take from Malaysia’s history with affirmative action. Affirmative action policies should not be solely based on race or ethnicity. Such policies will only lead to an us-versus-them mentality, which will in turn manifest in unnecessary ethnic conflict. In Malaysia’s case, the NEP has lead to a deep mistrust between Malays and non-Malays. Even more seriously, the policy has led to brain drain among non-Malays, with a World Bank report stating than more than a million non-Malays, almost all with tertiary qualifications, have migrated to other countries to escape ethnic discrimination.
To mitigate these issues, governments implementing affirmative action programs should have a non-negotiable timetable or a staged reduction to end the policy. This is to ensure that the vested interests do not hijack the policy and push for expansion and retention. In Malaysia’s case, implementing affirmative action was politically easy, but pulling it back has been next to impossible.
Last not but least, affirmative action should be used for a single issue, like increasing the number of women or under-represented groups in key positions. It should never be used to re-engineer an entire society as was attempted in Malaysia. Had the NEP used socioeconomic- rather than race-based criteria, Malaysia may have avoided many of its current issues.
James Chin is director of the Asia Institute at the University of Tasmania in Australia.
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REFLECTIONS on the NEP after 50 YEARS 2hr 25min; THE POLITICAL DYNAMICS IN SABAH SARAWAK AND THE SEMENANJUNG; BORNEO DILEMMA: SABAH and SARAWAK under the MUHYUDDIN ADMINISTRATION 1hr 26min: Sabah and the Future of the Malaysian Constitution, 2021 by Professor James Chin; Formation of Malaysia, Peter Tong, 2020; The Complexities of the Borneo States to form Malaysia.
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