Racial Inequality and Affirmative Action in Malaysia

In a response to clam racial unrest and narrow the income gap difference between different races, Malaysia government instituted affirmation action programs that were Malay-exclusive. Such policies caused strife within the minorities group, affected Malaysia’s education system and unintentionally brought adverse effects to the Bumiputera community. This paper urges the termination of affirmative action in Malaysia, conjoins with a change in societal thinking to build an accepting country that advocates for equal opportunities.

I. AFFIRMATIVE ACTION IN MALAYSIA

Malaysia stands out for having a majority race group that is politically dominant but yet economically disadvantaged. In light of the racial unrest in the late 1960s in Malaysia, an extensive affirmative action programs were instituted to favor the majority, the Bumiputera , which translates to ‘sons of the soil’. Bumiputera is a term to embrace the Malay people of the Malay Archipelago, including indigenous groups from Sabah and Sarawak, which joined the Peninsula to form Malaysia in 1963. The Malaysian Federal Constitution has clauses specifically addressing the area of Malay rights but does not explicitly protect any Bumiputera rights per se. Article 153 of the Malaysian Constitution (Refer to Appendix I) states that:

“the Yang di-Pertuan Agong (The King of Malaysia) shall exercise his functions under this Constitution and federal law… to ensure the reservation for Malays and natives of any of the States of Sabah and Sarawak of such proportion as he may deem reasonable of positions in the public service (other than the public service of a State) and of scholarships, exhibitions and other similar educational or training privileges or special facilities given or accorded by the Federal Government...”.

Affirmative action programs, notably in public sector employment and scholarships, have operated in Malaysia since Independence in 1957 as noted in article 153. What that would require our attention is the rapid expansion of affirmative action programs that were implemented from 1971 onwards under the New Economic Policy (NEP). Policies under NEP are Malay/Bumiputera-exclusive, have long been a controversy in Malaysia and regarded as a set of unusual public policies where preferential actions are benefiting the majority race of a country. Some argue that the advantages offered to the Bumiputera advocate outright racial discrimination in the nation.

II. CAUSES FOR AFFIRMATIVE ACTION

a. “We are the Bumiputera.”

In 1957, the various racial groups in Malaysia did not enter into Independence on equal footing. European, particularly British, held a gargantuan portion in the tin and rubber industry which was Malaysia’s rich and primary commodity production. Whereas large groups of the Malay population lived in rural area, detached from wage labor markets and private capital as they were heavily involved in rice plantations. As compared to the Chinese and Indians, Malays were unable to take advantage of the English school system due to locational and cultural reasons and could not gain sufficient entry into managerial positions or to the State’s office. They felt threatened by their minority status. The Malays and other indigenous people believed that they had a special claim to be dominant in government because they were the Bumiputeras, or, the original sons of the soil. British administrators recognized this claim. Thereafter, United Malay National Organization (UMNO) focused on consolidating Malay political control and its use to improve the condition of Malays.

b. Pressures Arising for State Support

Within the Malay community, sense of exclusion fuelled as they placed high emphasis on the difference between themselves and the Chinese. The result was adverse: manifestation of inter-racial conflicts. In the 1960s, the Malay community pressured for state support. Many development agencies were birth forth to train and fund Malay commerce and industry. Two of such agencies are the Bank Bumiputera which was established in 1965 and MARA (Majlis Amanah Rakyat, the Council of Trust for the People), set up in 1966.

c. Need to Pacify the Majority

On May 13, 1969, riots against the Chinese began in Kuala Lumpur, Malaysia. It was considered the worst racial riot in Malaysian history. Approximately 6,000 Kuala Lumpur residents (of which 90% were Chinese) became homeless. Galvanized by the May 13 tragedy, a top-down approach was used to set as a precedent for Malaysia’s government. May 13 riot seems to have legitimated Malaysia’s affirmative action programs as it was expanded in scale with the implementation of NEP from 1971. Some of these policies include:

• Companies listed on the Kuala Lumpur Stock Exchange (Bursa Saham Kuala Lumpur) must find Bumiputras to take up a minimum 30% of equity to satisfy listing requirements.
• the Industrial Coordination Act 1975 required non-Malay manufacturing firms (with more than $100,000 in shareholder equity and employing more than 25 people) to divest at least 30% of their equity to Malays.
• A certain percentage of housing in any development has to be sold to Bumiputra owners. Housing developers are required to provide a minimum 7% discount to Bumiputra buyers of these lots.
• A basket of government guaranteed and run mutual funds are available for purchase by Bumiputra buyers only.

As the saying goes, once bitten, twice shy, the Malaysian government implemented these policies in an attempt to prevent themselves from being ‘bitten’ by the inferiority of the Malays resulting in racial disharmony. However, introduction of NEP may not be the start of bliss for Malaysia.

III. IMPACTS OF NEW ECONOMIC POLICY
a. Bumiputera

In the Bumiputera community, there was expansion of tertiary education and growth in the proportion of professionals with degree and diploma level qualifications ever since the implementation of NEP. However, the number of well-qualified Malays in the pool of university graduates is lower than that of non-Malays, despite preferential admission to universities and scholarships. In addition, officials raises concern for the relatively lower performance of Malay graduates. The lower performance of Malay graduates may be explained by the fact that some had deemed education and or work opportunities as a special racial right and discount the need to put in the required effort. So it is crucial to evaluate the effectiveness of preferential admission to universities as if this phenomenon persist, what that might be expected is a workforce that would not be competitive but self-content.

b. Minorities in the land: Chinese and Indians

Without a shadow of a doubt, unhappiness would surfaced within the minorities in Malaysia. Within the employment sector, surveys of officials revealed the minorities’ resentment and frustration over denial of promotion opportunities as the higher positions are often filled by the Malays. In the political scene, minorities namely the Chinese and Indians have formed action parties to fight for their rights. In one of the biggest demonstration by Malaysian-Indians, 30,000 of them demonstrated in Kuala Lumpur in late 2007, followed by a demonstration of another 20,000 Indians a few weeks later advocating their rights on issues pertaining to the mistreatment of the Indian minority community by the government in Malaysia. The policies, which were set to bring harmony to the land, is not serving the very purpose.

c. On Meritocracy

Since the inception of NEP, scholarships and enrolments into tertiary education have been awarded based primarily on race rather than merit. Assessment standards and prerequisites were lowered to match the standards of the Malay students. Such alteration were needed as Chinese and Indian students generally tend to score better than the Malay students As one anonymous Malaysian government official in the tertiary education sector puts it:

“ I have to be frank about it. The quota system that we have may encourage... lowering standards (in higher education) and therefore erode the comparative capability of the nation and slow down the growth in technological capability.”

IV. THE WAY FORWARD

From the above discussion, it is clear to us that the affimative action programs has limited aid in calming social unrest and proven to have brought much unintended negative effects to the Bumiputera and meritocracy level in Malaysia. Nonetheless, according to official figures, the annual household income of Malays increased from RM$276 in 1970 to RM$2,376 in 2002. The disparity ratio in household incomes between the Chinese and Malays dipped from 2.29 to 1.8 in the same year. Absolute levels of poverty followed a declining trend: from 49.3% in 1970 to 16.5% in 1990 to 5.1% in 2002. Therefore, these affirmative action policies had seemingly achieved what the NEP had set out to do in poverty reduction and increased household incomes.

The NEP was an understandable (and controversial) response to the racial riot that happened in 1969. In present time, 4 decades have passed and the financial positions of the Malays have improved tremendously. The government has favored the ‘sons of the soil’ for 40 years. Having said that, let the positive figures as seen in the above paragraph signal the end of the affirmative action programs that favor the Malays. With the Malays now having a higher standard of living and closer income gap with other racial groups, it is time for everyone to start afresh: with an equal right in the nation.

If the Malaysian’s government is concern with the anguish views of Malays on the removal of affirmative action programs, perhaps what is needed is not another set of NEP but a change in mindset that needs to be cultivated in every citizen in Malaysia where ‘all men are created equal’ (quoted from Thomas Jefferson, in Declaration of Independence).

Former Prime Minister Mahathir Mohamad, wrote in his book, The Malay Dilemma, considered special rights for Malays to be a crutch and accused the Malays of relying too much on affirmative action and failing to work hard. Ending the affirmative action should thus not be seen as a stumbling block but a stepping-stone for all Malaysians to work with equal opportunities in an accepting and accommodating nation.

APPENDIX 1

CONSTITUTIONAL PROVISIONS FOR AFFIRMATIVE ACTION
Federal Constitution of Malaysia

Article 153.
Reservation of quotas in respect of services, permits, etc., for Malays and natives of any of the States of Sabah and Sarawak.

1. It shall be the responsibility of the Yang di-Pertuan Agong to safeguard the special position of the Malays and natives of any of the States of Sabah and Sarawak and the legitimate interests of other communities in accordance with the provisions of this
Article.

2. Notwithstanding anything in this Constitution, but subject to the provisions of Article
40 and of this Article, the Yang di-Pertuan Agong shall exercise his functions under this Constitution and federal law in such manner as may be necessary to safeguard the special position of the Malays and natives of any of the States of Sabah and Sarawak and to ensure the reservation for Malays and natives of any of the States of Sabah and
Sarawak of such proportion as he may deem reasonable of positions in the public service (other than the public service of a State) and of scholarships, exhibitions and other similar educational or training privileges or special facilities given or accorded by the Federal Government and, when any permit or license for the operation of any trade or business is required by federal law, then, subject to the provisions of that law and this Article, of such permits and licenses.