Dewan_Rakyat_Malaysia.jpgBig Question Citizenship & Identity Economy 

Positive Discrimination: Perspectives on Malaysia

World Policy Journal begins each issue with the Big Question, where we ask a panel of experts to provide insight into the cover theme. The question for the spring 2016 Black Lives Matter Everywhere issue is: Is affirmative action necessary to overcome institutional racism? Three respondents comment on affirmative action as its practiced in Malaysia, a nation with a complicated—and controversial—history of ethnicity-based preferential treatment.

Malaysia’s Dismal Record

By 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.

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James Chin is director of the Asia Institute at the University of Tasmania in Australia. 

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Affirmative Action: Many Ups, Many Downs

By Hwok-Aun Lee

Malaysia executes arguably the most extensive and intensive affirmative action regime in the world. This policy essentially aims to boost the upward mobility of the “Bumiputera,” a group comprising Malays and other indigenous groups, with a view to increase their participation in spheres of influence and power. The impetus partly stems from the group’s historic socioeconomic disadvantages, compounded by ways that inter-group disparities can systemically persist. Alongside many countries, Malaysia has undertaken to bridge disparities between groups in education achievement, work experience, and asset ownership.

However, the Malaysian experience with affirmative action based on ethnicity stands out for several reasons. First, Article 153 of the Malaysian Federal Constitution explicitly permits reservation of civil service positions, scholarships, training, and licenses for Malays and other native groups based on their “special position.” This legal authorization of ethnic quotas and preferential selection, deriving from racialized politics and driven by sociopolitical pressures, renders affirmative action a policy imperative. At the same time, the perils of policy overreach and overstay are perhaps greater in Malaysia than in most nations.

Second, the relationship between the beneficiaries of affirmative action receiving preferential treatment, and their counterparts who do not, is distinct in the absence of hierarchical, adversarial roots. British colonial rule created a racial division of labor where most Malays worked in predominantly rural and agrarian fields; however, the British simultaneously elevated Malay monarchies and elites. The non-Malay population, with whom Malays would form post-colonial Malaysia, were not historically in positions of power to systemically dominate or discriminate. Hence, the case for affirmative action as a means to redress past discrimination is relatively weak in Malaysia, unlike in many countries pursuing majority-favoring affirmative action, notably post-apartheid South Africa. At the same time, the arguments for rolling back affirmative action are also more difficult to consolidate, since it is not firmly grounded in socioeconomic conditions, which change over time.

The convergence of intergroup socioeconomic disparity, political imperative, and constitutional provision established, expanded and entrenched affirmative action in Malaysia. Interventions that grant preferential treatment to Bumiputera range widely, from nearly exclusive access to certain post-secondary programs (with some quotas as high as 90 percent), preferential admissions to university, exclusive scholarships, training programs and loans, preferential treatment in public sector employment and public procurement, and property and asset ownership.

Affirmative action’s benefits and costs, and its perpetuation and reforms, are controversial and hotly debated. The policy has surely promoted Bumiputera socioeconomic advancement by expanding access to higher education, cultivating a professional corps and producing a middle class. Bumiputera now have a major presence in the corporate world, especially in state-owned enterprises. Urban areas are more diversely populated, and stereotypes and stigmas have diminished.

The familiar pitfalls of affirmative action also weigh heavily in Malaysia, somewhat in proportion to the magnitude of racial preference. Racial and ethnic identities prevail, and in some ways have sharpened. Education institutions, a designated site of multiracial interaction and integration, have also become polarized spaces. On the whole, tolerance and stability cohabit with distrust and tension. The policy promotes empowerment, but also induces dependency.

Contemporary Malaysia continues to grapple with the complexities, potentialities and limitations of affirmative action, or positive discrimination. The policy has significantly assisted the disadvantaged majority and narrowed socioeconomic disparities between groups. However, the efficacy of affirmative action has diminished over time, and preferential treatment seems entrenched, partly due to constitutional authorization and sociopolitical vested interest in its perpetuity. The Malaysian experience underscores the need for an effective, credible, and methodical exit plan.

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Hwok-Aun Lee is a senior lecturer in the Department of Development Studies at the University of Malaya. 

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Is Affirmative Action Market-Friendly?

By Terence Gomez

The most contentious aspect of Malaysia’s affirmative action program is the practice of selective patronage: Awarding government concessions as a method to create an entrepreneurial ethnic group and equalize inter-ethnic equity distribution. Affirmative action of this sort is problematic for one huge reason. It targets “Bumiputeras,” the majority, ethnic-Malay group whose members hold most political power. In India and the United States, the countries that first implemented affirmative action, policies tend to target minorities who lack political influence. Recognizing that race-based business patronage is controversial, even more so under Malaysia’s circumstances, the government insists that this aspect of the policy is “market friendly.”

Malaysia’s affirmative action, officially a response to 1969 race riots, was originally a 20-year plan. However, it has continued indefinitely. On paper, it ostensibly achieves its goal of national unity by removing all remnants of the spatially- and class-divided society created under British colonial rule. The eradication of poverty and restructuring of society to achieve inter-ethnic economic parity comprises its grand narrative.

Affirmative action initially focused on providing high quality education to poor children. Though an expensive program, this resulted in a vibrant Bumiputera middle class. In 1981, its focus shifted to wealth redistribution, to nurture a Bumiputera Commercial & Industrial Community (BCIC). Ethnic targeting in business profoundly reshaped enterprise formation and development patterns among large and small companies. By 1990, a well-connected, conglomerate-owning ‘new rich’ was created, along with an even larger Bumiputera middle class. Fiji and South Africa subsequently emulated Malaysia’s BCIC in their own affirmative action programs.

However, Bumiputeras still figured in large numbers among the very poor. Since government-generated incentives had been disbursed without accompanying measures to ensure all members had equal access to them, the program’s competition shifted from inter-ethnic to intra-Bumiputera. Growing intra-Bumiputera wealth and income inequities have contributed to serious conflicts between the middle class and ruling politicians linked with the new rich. Similar trends have emerged in Fiji and South Africa.

The development of small firms, which constitute about 98 percent of the corporate sector, has not been ignored. But with the focus on BCIC, the government has bypassed highly entrepreneurial non-Bumiputera companies, particularly Chinese-owned ones, despite efforts to nurture domestic enterprises and industrialize the economy. Following the 1997 Asian currency crisis, as well as the global financial crisis in 2009, animated public debates transpired about the efficacy of nurturing domestic enterprises along ethnic lines in Malaysia. By 2010, grave problems within the economy were evident: Among other issues, Malaysia has suffered from poor quality of technological development, high dependence on foreign capital to generate growth, the inability of big business to drive industrialization, mounting corruption, and a constant reliance by Bumiputera companies on government aid to remain in business.

Affirmative action’s outcomes are complex. While its market-friendly dimension has seriously jeopardized high potential entrepreneurship, the new middle class reflects the value of high-quality education for the poor to equalize inter-ethnic relationships. Undoubtedly, however, its long-term implementation has reinforced institutionalized racism. Ethnic minorities suffer discrimination, and poor Bumiputeras are confronted with a major conundrum: Affirmative action’s removal may leave them all the more embedded in poverty, but access to most concessions now flow to an undeserving creamy layer.

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Terence Gomez is professor of political economy at the University of Malaya. 

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[Photo courtesy of Wikimedia Commons]

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