Malaysia’s New Economic Policy and ‘National Unity

Abstract

Malaysia’s New Economic Policy (NEP) was announced in 1970 as part of a package of measures introduced after the political crisis of May 1969. It sought to ‘eradicate poverty’ and ‘restructure society to eliminate the identification of race with economic function’ in order to create the conditions for national unity. Since then, poverty in Malaysia has gone down tremendously as in neighbouring Thailand and Indonesia, which did not have comparable commitments to poverty reduction, but also experienced rapid economic growth and structural transformation. Not surprisingly, the NEP has been principally associated with ‘restructuring’, i.e. efforts to reduce inter-ethnic economic disparities between Bumiputera indigenes and the non-Bumiputera, especially between ethnic Malays and Chinese. Hence, ‘restructuring’ has come to be associated with ‘positive discrimination’ or ‘affirmative action’ on behalf of the mainly Malay Bumiputeras. Such state interventions have resulted in significantly greater Bumiputera wealth ownership, business participation, education opportunities, public sector employment and promotion, as well as representation among professionals and managers/administrators.