The New Economic Policy (NEP) which focused on poverty reduction and social restructuring has transformed Malaysia since 1971. Pro-Bumiputera affirmative action was intensively pursued and has continuously faced pushback, with heightened debate at key junctures. The NEP was marred by gaps and omissions, notably its ambiguity on policy mechanisms and long-term implications, and inordinate emphasis on Bumiputera equity ownership. Broader discourses have imbibed these elements and tend to be more selective than systematic in policy critique. During the late 1980s, rousing deliberations on the successor to the NEP settled on a growth-oriented strategy that basically retained the NEP framework and extended ethnicity-driven compromises. Since 2010, notions of reform and alternatives to the NEP’s affirmative action programme have been propagated, which despite bold proclamations, again amount to partial and selective – not comprehensive – change. Affirmative action presently drifts along, with minor modifications and incoherent reform rhetoric stemming from conflation of the NEP’s two prongs.
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The New Economic Policy has transformed Malaysia since 1971. Pro-Bumiputera affirmative action has been intensively pursued and continuously faced pushback. This paper revisits three key junctures in the NEP's fifty-year history that heightened policy debates-and the ensuing persistent polarization and stalemate in policy discourses. First, at its inception in the early 1970s, despite substantial clarity in its two-pronged poverty alleviation and social restructuring structure, the NEP was marred by gaps and omissions, notably its ambiguity on policy mechanisms and long-term implications, and inordinate emphasis on Bumiputera equity ownership. Broader discourses have imbibed these elements, and they tend to be more selective than systematic in policy critique. Second, during the late 1980s, rousing deliberations on the successor to the NEP settled on a growth-oriented strategy that basically retained the NEP framework and extended ethnicity-driven compromises. Third, since 2010, notions of reform and alternatives to the NEP's affirmative action program have been propagated, which despite bold proclamations again amount to partial and selective-not comprehensive-change. Affirmative action presently drifts along, with minor modifications and incoherent reform rhetoric stemming from conflation of the NEP's two prongs. Breaking out of the prevailing polarization and impasse requires a systematic and constructive rethink.
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Handbook on Economics of Discrimination and Affirmative Action
Malaysia maintains one of the world's most extensive affirmative action regimes, buttressed by the transformative and iconic New Economic Policy (NEP). Constitutional provisions, political imperatives and socioeconomic conditions gave rise to the establishment of preferential policies in four broad sectors-higher education, employment, enterprise and ownership-favouring the political dominant but economically disadvantaged Bumiputera majority. This chapter elucidates the origins, programmes, outcomes and implications of affirmative action in Malaysia. A brief historical overview explains the language and context of the constitutional authorization of Bumiputera quotas and the modest implementation in the early post-independence years, followed by policy expansion, centralization and intensification from 1971 under the NEP, which was forged in the aftermath of May 13 th , 1969 racial conflagration. The NEP judiciously conceptualized a two-pronged strategy of poverty eradication regardless of race, and "social restructuring" through Bumiputera-targeted affirmative action, as distinct but complementary elements of the ultimate goals of national integration, which entails redressing imbalances and ultimately rolling back overt preferential treatment. However, the NEP lacked a systematic articulation of policy objectives, instruments and outcomes. Malaysia has registered immense progress in facilitating Bumiputera access, participation and upward mobility in the four designated policy sectors. Recent discourses have popularized misguided notions of reform that conflate the NEP's twin elements, and omit attention to the decisive shortfall of affirmative action-its inefficacy in building capability and competitiveness among the Bumiputera beneficiaries, which are requisite for Malaysia to attain the ultimate NEP goals. Malaysia has substantially remedied destabilizing inequalities, but moving forward, must fundamentally rethink affirmative action.
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Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy objectives must be appreciated, but various misconceptions, especially regarding affirmative action, have resulted in polarization and stalemate after fifty years of the NEP. Social justice and affirmative action must be conceptualized and evaluated with clarity and rigor, with policy objectives, mechanisms and outcomes aligned. Malaysia needs to systematically formulate a new social justice paradigm, building on the NEP and anchored on the principles of equality and fairness. In the affirmative action sphere, this framework must focus on developing capability and competitiveness, and balance identity, need and merit in the allocation of opportunity.
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American Journal of Economics
