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Ethnicity, Religion and Culture based Discrimination:A Study of Malaysia

S.N. Malakar

Chittaranjan Senapati

Working Paper Series

Indian Institute of Dalit StudiesNew Delhi

2010

Foreword

Indian Institute of Dalit Studies (IIDS) has been amongst the firstresearch organisations in India to focus exclusively on developmentconcerns of the marginalised groups and socially excludedcommunities. Over the last six year, IIDS has carried-out severalstudies on different aspects of social exclusion and discriminationof the historically marginalised social groups, such as the ScheduledCaste, Scheduled Tribes and Religious Minorities in India and otherparts of sub-continent. The Working Paper Series disseminatesempirical findings of the ongoing research and conceptualdevelopment on issues pertaining to the forms and nature of socialexclusion and discrimination. Some of our papers also criticallyexamine inclusive policies for the marginalised social groups.

The working paper “Ethnicity, Religion and Culture basedDiscrimination: A Study of Malaysia” has been taken out from ourreport on Caste Based Discrimination in South Asia. Drawn fromthe country report of Malaysia; the study emphasises on the colonialpolicy which had encouraged mass Asian immigration into Malayaand the influx of Chinese immigrants that have largely contributedin the emergence of multi-ethnic country such as Malaysia. Thepolitical economy of Malaysia shaped by colonial capitalism hadcreated certain patterns of uneven development, economicdisparities and social divisions. The paper broadly explores thenature and extent of ethnic, religious and cultural diversity withinthe communities and the degree of stratification and inequalitythat has become prevalent over the years. Also ethnicity, religionand culture have become convenient political resources in anunconstructive sense causing insecurity and disadvantages.

Indian Institute of Dalit Studies gratefully acknowledges ActionAid for funding this study. We hope our working papers will behelpful to academics, students, activists, civil society organisationsand policymaking bodies.

Surinder S. Jodhka Director, IIDS

Contents

1. Introduction 11 .1 Malaysia: An Overview 31.2 Emergence and Ethnic Composition 5

2. Exclusion, Division and Discrimination 102.1 Ethnic Division in the Economic System 1 22.2 Rural-Urban Divide 1 22.3 Exclusion and Discrimination in the Labour Market 1 3

3. History of Exclusion Practice 183.1 Origin of the Plural Society 203.2 Perpetuation of Differences and Inequality 223.3 Growing Sense of Alienation and Resentment 223.4 Cultural Impact 24

4. Nature of Deprivation: Access to Resourcesand Opportunities 24

4.1 New Economic Policy and Beyond (1971 - 2010) 254.2 Vision 2020 2 74.3 National Vision Policy (2001-2010) 2 7

5. Altered Ethnic Structures and Inequalities 295.1 Social Sector Policies 305.2 Governance: Public–Private Sector Divide 425.3 Governance and Public–Private Sector Overlap 445.4 Ethicised Civil Service 44

6. Economic, Social, Political and CulturalFallouts of Exclusion 46

6.1 Ethnic Policy in Malaysia 466.2 Representation and Domination 496.3 Ethnic Representation: Parliament and State

Legislative Assemblies 52

7. Conclusion 63

8. Recommendation and Suggestions 65

Ethnicity, Religion and Culture basedDiscrimination: A Study of Malaysia

*S.N. Malakar

**Chittaranjan Senapati

1. Introduction

In multi-ethnic state, ethnic identity plays an additional variable in socio-

economic development over and above those usually present in more

‘homogeneous’ societies. The role of ethnicity in development can be

negative or positive, in other words a potential challenge. In multi-ethnic,

multi-religious and multi-cultural societies, more often ethnic exclusion

and discrimination come to the notice rather than peace, inclusion and

equality. The scholarly efforts to study ethnic, religious and cultural

exclusion and discrimination have resulted in the development of a

substantial knowledge on the subject. Much of the pioneering work related

to the subject has been done in developing countries, from the societies

with a general standard of living and also characterised by functional

differentiation and cross-cutting interest affiliations.

Identities bearing markers of ethnicity, religion and culture are often the

sources of conflicts, exclusion and discrimination. The consequences of

adhering to such an assumption could be that the identification and

* S. N. Malakar is a Professor at Centre for African Studies, JNU, New [email protected]

** C. R. Senapati is an Associate Professor at Sardar Patel Institute of Economic and SocialResearch, Ahmedabad. [email protected]

Indian Institute of Dalit StudiesVolume IV, Number 04

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elaboration of the distinguishing characteristics between different ethnic,

religious and cultural groups assume more importance. The differences in

religious beliefs, languages, cultural heritage, national or geographical

origin of each ethnic group are distended. As such the implications at policy

level are that the solution to ethnic exclusion lies at the ethnic relation

level. This results in proliferation of community goodwill, racial relations

and so on; whereas the problems of economic and political inequality among

ethnic communities are marginalised.

Scholars, who believe in social and cultural incompatibility in a multi-ethnic society, suggest that ethnic, religious and cultural exclusion anddiscrimination are inevitable. This reinstates that ethnicity, religion andculture, are more often the symptoms rather than causes of the difficulty.In an exploitative economic structure, for example, exploitation wouldcontinue irrespective of its ethnic, religious and cultural identities andwithout delving into the economic structures, the replacement ofimmigrants by natives would in no way contribute to the resolution of theproblems.

In case the feelings of insecurity, uncertainty and fear arising from adversecircumstances do not exist; social groups tend to be less inclined toethnicity, religious and cultural identities. On the contrary, when suchfeelings creep in, ethnic, religious and cultural identities become a shield,a rallying point or a protective mechanism for members of the social groups.This is true about immigrant communities all over the world and is widespread among existing communities which face competition from theimmigrant groups. Ethnic identification and consciousness are strongeramong disadvantaged ethnic minority groups who largely endureunemployment, upward social and political mobility, incase of Indiansand Chinese in Malaysia. In this context, ethnicity has assumed animportant role for articulation and in an effort for social and economicjustice and equality. Ethnicity, religion and culture are also convenientpolitical resources that can be readily exploited to serve the purpose of anindividual politician, a political party or the system. It becomes easy tomobilise support and gain prominence for political success. The ethnicminority or majority groups have become scapegoats for the vested politicalinterests and Malaysia is prominent evidence undergoing such difficultiessince 1969.

Ethnicity, Religion and Culture based Discrimination: A Study of MalaysiaS.N. Malakar and Chittaranjan Senapati

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The second category of conventional wisdom that stratification on thebasis of class or ideology is healthy and that ethnic consciousness is to beabhorred has percolated as the blind faith. Undoubtedly, when a society isvertically stratified along ethnic lines; the potential to exploit ethnic issuesis far greater than stratification on the basis of class or ideology. This,however, does not in any way imply that the latter form of stratification isless capricious. Unfortunately, the process of emergence of moresophisticated social and economic infrastructures which could reduce therelevance of ethnic issues in the political arena is time consuming. In theinterim, such politicians are left with no positive frame of reference todevelop constructive policy or programme measures in order to resolveethnic issues. So far, the issue of ethnicity and outcome of an approach toit has been down beating. Ethnicity not being inherently unyieldingphenomenon can become a powerful resource for national development.Indeed in a multi-ethnic society, each ethnic community has its particularcharacteristics. For those involved in guiding societal development, thechallenge is to mobilise the strength of various ethnic groups as theresource-input in search for the realisation of the goals of development.Such an approach to ethnicity is likely to be beneficial for politicalendeavours that identify the societal interests with those of politicalprominence and fulfillment of the personal vested interests of few.Although a constructive approach to the issue of ethnicity is rare, it existsin a profound form in Malaysia which is today one of the flourishing society.

Before moving on to examine the Malaysian experience, it is important toexplore the background of the country to arrive at the understanding of itsethnic situation.

1.1 Malaysia: An Overview

Malaysia is a part of archipelagic South-East Asia, the Peninsular Malaysiaconnected to mainland South-East Asia via the long narrow isthmus ofsouthern Thailand. The Malay Peninsula, now usually called PeninsularMalaysia is contiguous to the land mass of Thailand to the north and linkedby a causeway to the Island-State of Singapore to the south. In comparisonto its closest neighbours, it is a medium-size country, both area andpopulation wise, (See Table 1).


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Table 1: Geographical Area and Populationof South-East Asian Countries

Sl.No Country Area (000 Population (0000)

1. Indonesia 1,904 222,611

2. Vietnam 325 82,481

3. Philippines 300 81,408

4. Thailand 513 63,763

5. Myanmar 677 50,101

6. MALAYSIA 330 25,493

7. Cambodia 181 14,482

8. Lao PDR 231 5,787

9. Singapore 1 4,261

10. Brunei Darussalam 5 366

Source : ESCAP, 2004.

Malaysia is an independent nation and a Parliamentary ConstitutionalMonarchy with Federal government structure. The country is one of theten nations (plus Timor-Leste) in South-East Asia comprising thirteen statesspread across two major regions separated by the South China Sea(Peninsular Malaysia and East Malaysia on the island of Borneo), and threeFederal Territories––Kuala Lumpur, established in 1974; Labuan,established in 1984 and Putrajaya, established in 2001. The other principalregion of Malaysia is the northern portion of the Island of Borneo—therest of Borneo being the small state of Brunei and Kalimantan, which is apart of Indonesia. This latter region was once called East Malaysia but thename has been dropped from official use. The Federation of Malaysia hasa total of 13 states. In Peninsular Malaysia there are 11 states, whichconstituted the Federation of Malaya up to 1963 and the remaining twostates are Sabah and Sarawak, physically located on the island of Borneo.These two states constitute about 60 per cent of Malaysia’s totalgeographical land area but only 18 per cent of its population. The issues ofisolated population, not totally absent in Peninsular Malaysia are morepressing in these states and strengthening of the transportation networkand access of small communities to basic amenities has been majorpreoccupations in the developmental activities. However, Malaysia hasabundant of natural resources like rubber, tin, timber, oil palm, andpetroleum and natural gas, which have been providing the basis for its keywealth and industrialisation.


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1.2 Emergence and Ethnic Composition

Singapore as part of British Malaya remained a British colony when Malayawas formed in 1948, and attained its independence in 1957. In 1963, theFederation of Malaya merged with Sabah, Sarawak and Singapore to formthe Federation of Malaysia. However, Singapore seceded from Malaysia in1965 as a result of irreconcilable differences between the Federalgovernment of Malaysia and the State government of Singapore.

Due to changes in the political structure of Malaysia i.e. pre-colonial Malaystates, British Malaya, independent Malaya, Malaysia between 1963 and1965, and post-1965 Malaysia, makes it difficult to present a full series ofconsistently comparable demographic data in a simple format. The rapidpopulation growth in Malaya and Singapore from 1911 to 1957, mainly dueto mass immigration from China and India saw the population of Malayaalmost tripling and that of Singapore increasing four-fold in this period(See Table 2).

Table 2: Population of Malaya, Singapore and British Malaya(1911–1957), Malaysia Including Singapore (1963)

and Malaysia Excluding Singapore (1970)

Year Malaya Singapore British Malaya

Malaysia (1963)

Malaysia (1970)

1911 2,338,951 303,321 2,642,272

1921 2,906,691 418,358 3,325,049

1931 3,787,758 557,745 4,345,503

1947 4,908,086 938,144 5,846,230

1957 6,278,758 1,445,929 7,724,687

1963 9,007,414a

1970 10,319,324

Since no census data was available for 1963, the 1963 total population figure is anestimate combining 1957 figures for Malaya and Singapore and 1960 figures forSabah and Sarawak.

Sources: Census Reports of Malaya 1911–1957, Sabah 1960, Sarawak 1960,Singapore 1957, and Malaysia 1970.

In 1957, the population of Malaya was 6,278,758. The merger of Malayawith Sabah, Sarawak and Singapore created a total Malaysian populationof 9,007,414 in 1963. After Singapore secession in 1965, the Malaysianpopulation subsequently grew to 10,319,324 in 1970. Peninsular Malaysiahad approximately 84 per cent of the total population in 1970, but its


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share of the population declined to about 81 per cent by 2000, mainlybecause of an influx of Filipino immigrants to Sabah and Indonesianimmigrants from Kalimantan to Sarawak ( See Table 3).

Table 3: Population of Malaysia, 1970 –2000

Peninsular Malaysia Sabah Sarawak Total

Year Number Per cent

Number Per cent

Number Per cent

Number Per cent

1970 8,809,557 84.4 653,604 6.3 976,269 9.4 10,439,430 100.1

1980 11,426,613 83.1 1,011,046 7.4 1,307,582 9.5 13,745,241 100.0

1991 14,475,400 82.4 1,398,900 8.0 1,700,000 9.7 17,574,300 100.1

2000 18,523,632 81.2 2,230,000 9.8 2,071,506 9.1 22,825,138 100.1

Note: Due to rounding, not all percentage rows add up to 100.

Sources: Census Reports of Malaysia 1970, 1980, 1991 and 2000.

Even the growth rate of population in three geographical regions ofMalaysia varies; in fact, the magnitude of population growth depends onthe level of development (See Table 4).

Table.4: Average Annual Growth of Population in Per cent

Year Peninsular Malaysia Sabah Sarawak Malaysia (Total)

1970-80 2.6 4.4 2.9 2.8

1980-91 2.6 3.6 2.9 2.7

1991-2000 2.0 3.5 1.5 2.1

Sources: Various issues of Census Report of Malaysia

For the purposes of this study, it is informative to note that the influx ofChinese and Indian immigrants helped to increase the population of BritishMalaya from about 550,000 in 1850 to about 2.4 million in 1911, the firstyear for which census data is available, and then to 4.9 million in 1947.Colonial policy was not intended to turn British Malaya into a “white settler”colony on the model of Australia, Canada, New Zealand or South Africa.Indeed, the last pre–Second World War census of 1931 showed that therewere only 17,768 Europeans, or 0.4 per cent of the total population.Instead, colonial policy, except for or reversed during economic recession,actively encouraged mass Asian immigration to Malaya, similar to thepractice in other British colonies such as Burma, East Africa and Fiji. By1931, the combination of 1.7 million Chinese and 0.6 million Indians hadalready exceeded the Malay population of just under 2.0 million (or 44


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per cent of a total population of almost 4.4 million). Thus, the Malaysiansociety emerged with multi-ethnic character (See Table 5).

Table 5: Multi-Ethnic Composition in Peninsular MalaysiaEthnic group

1911 1921 1931 1947 1957 1970 1980 1991 2000

Malays 1,367,245 1,568,588 1,863,872 2,427,853 3,125,474 4,685,838 6,315,000 8,433,800 11,485,341

Chinese 693,228 855,863 1,284,888 1,884,647 2,333,756 3,122,350 3,865,000 4,251,000 5,142,649

Indians 239,169 439,172 570,986 535,092 735,038 932,629 1,171,000 1,380,000 1,774,002

Others 85,358 43,377 68,254 60,408 184,732 69,183 75,000 537,500 121,641

Total 2,385,000 2,907,000 3,788,000 4,908,000 6,379,000 8,810,000 11,426,000 14,602,300 18,523,632

Proportion of total population (per cent)

Malays 57.3 54.0 49.2 49.5 49.0 53.2 55.3 57.8 62.0

Chinese 29.1 29.4 33.9 38.4 36.6 35.4 33.8 29.1 27.8

Indians 10.0 15.1 15.1 10.9 11.5 10.6 10.2 9.5 9.6

Others 3.6 1.5 1.8 1.2 2.9 0.8 0.7 3.7 0.7

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Note: Due to rounding, not all percentage columns add up to 100.

Sources: Census Reports of Malaysia 1911–2000.

But the growth of Bhumiputra is higher than other ethnic groups and thelowest is among Chinese (See Table 6).

Table 6: Growth Rates in Percentage by Ethnic Group,Malaysia, 1970–2000

Year Bhumuputra Chinese Indian Total Malaysia

1970-80 3.2 2.1 2.2 2.8

1980-91 3.1 1.3 1.9 2.7

1991-2000 2.7 1.4 1.7 2.1

Sources of data: Malaysia, Department of Statistics, 1983a, 1991a, and 2000e.

The typical representation of the multi-ethnic society of Malaysiacomprising of three main ethnic groups—Malays, Chinese and Indians—understates the ethnic diversity prevalent within these communities andequally complex are the ethnic diversities in Sabah and Sarawak. In ethnicterms, the present Malaysian population consists of different communities,several of which lend themselves to further sub-divisions. Based on theirdifferences in regional origin, for example, the Malay would includeimmigrants from parts of Indonesia to the Malay states or British Malaya.The Chinese make up groups of various dialects, for example, Cantonese,Hakka, Hockchew and Hokkien; while as the category of Indians not onlyincludes Malyalis, Punjabis and Tamils, but include Ceylonese andPakistanis. The major ethnic categories that are officially recognised and


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commonly accepted by the relevant communities themselves are used withno further reference to sub-ethnic categories. The post-1970 fundamentalofficial classification divides the population between “bumiputera(“pribumi” in the Indonesian language carries an equivalent reference toindigeneity.)” or indigenous people, and non-bumiputera as non-indigenouspeople (SeeTable 7).

Table 7: Population of Malaysia by Bumiputra andNon-Bumiputra Divisions, 1970-2000

Population division

1970 1980 1991 2000

Number Percent Number Percent Number Percent Number Percent

Bumiputera 5,738,250 55.6 8,059,537 58.6 10,656,500 60.6 14,621,468 64.1

Non-Bumiputera

4,581,074 44.4 5,685,704 41.4 6,917,800 39.4 8,203,670 35.9

Total 10,319,324 100.0 13,745,241 100.0 17,574,300 100.0 22,825,138 100.0

Sources: Census Reports of Malaysia 1970, 1980, 1991 and 2000.

As per this classification, the bumiputera of Peninsular Malaysia consistsalmost entirely of the Malays and the Orang Asli (Aboriginal Communities),while as the bumiputera of Sabah and Sarawak refer to the indigenouspeople of diverse ethnic communities. On the whole, the non-bumiputeracategory chiefly refers to Chinese and Indians whose demographic presencebecame significant with the waves of immigration from China and India,during the nineteenth and early twentieth centuries and subsequently themass settlement of the immigrants and their descendants. In censuses andbureaucratic tabulations, a category of “other” (likewise non-bumiputera)communities is usually reserved for Burmese, Eurasian, Portuguese, Thaiand other ethnic origins.

The ethnic composition of the population of Sabah and Sarawak, and thecomposition of bumiputera communities in particular, is more varied thanthat of Peninsular Malaysia. In case of Sabah, the categorisation of thedifferent ethnic groups was a major problem when the first census of Sabahwas conducted in 1960. For 1970 census, 38 ethnic groups, which wereformerly enumerated separately, were re-categorised into 8 groups: Bajau,Chinese, Indonesian, Kadazan, Malay, Murut, other indigenous and others.According to the 1970 census, Kadazandusuns was the single largest ethnicgroup, forming just over 28 per cent of the Sabah population, followed bythe Chinese comprising 21 per cent of the population. Since then, there hasbeen an official tendency in categorising the Sabah population inaccordance with the basic tripartite classification: (i) non-Muslimbumiputera (Kadazandusun and Murut); (ii) Muslim bumiputera (Bajau,


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Malay and other smaller groups); and (iii) non-bumiputera (Chinese andother non-indigenous groups) (See Table 8).

Table 8: Ethnic Composition of thePopulation, Sabah, 1960-2000.

Bumiputera

1960 1970 1980* 1990** 2000***

Number Percent Number Percent Number Percent Number Percent Number Percent

Kadazan 145,229 32.0 183,574 28.2 321,834 24.6 479,944 24.1

Murut 22,138 4.9 30,908 4.7 NA NA 50,255 3.8 84,679 4.3

Bajau 59,710 13.1 77,755 11.9 ,, ,, 203,457 15.5 343,178 17.3

Malay 1,645 0.4 18,244 2.8 ,, ,, 106,740 8.2 303,497 15.3

Other indigenous

79,421 17.5 126,274 19.4 ,, ,, 255,555 19.6 390,058 19.6

Subtotal 308,143 67.8 436,755 67.0 792,043 82.9 937,841 71.6 1,601,356 80.5

Non-bumiputera

Chinese 104,542 23.0 138,512 23.0 155,304 16.2 200,056 15.3 262,115 13.2

Others 41,736 9.2 76,037 11.7 8,365 0.9 171,613 13.1 125,190 6.3

Subtotal 146,278 32.2 214,549 33.0 163,669 17.1 371,669 28.4 387,305 19.5

All categories

Total 454,421 100.0 651,304 100.0 955,712 100.0 1,309,510 100.0 1,988,661 100.0

*In the 1980 census, all bumiputera categories were collapsed into one pribumicategory. ** Does not include 425,175 non-citizens. *** Does not include 614,824 non-citizens.

Sources: Census Reports of Malaysia 1960–2000.

A similar attempt at a more manageable re-categorisation has been adoptedfor Sarawak. The Ibans (“Sea Dayaks”), comprising about 31 per cent ofthe population in 1970 remains single largest ethnic community in Sarawak(See Table 9).

Table 9: Ethnic Composition of thePopulation, Sarawak, 1960-2000

1960 1970 1980 1991* 2000**

Bumi-putera


Iban 237,741 31.9 273,889 30.9 396,280 30.3 506,528 29.8 603,735 30.0

Malays 129,300 17.4 178,188 20.1 257,804 19.7 360,415 21.1 462,270 23.0

Bidayuh 57,619 7.7 83,313 9.4 107,549 8.2 140,662 8.3 166,756 8.3

Melanau 44,661 6.0 52,293 5.9 75,126 5.7 97,122 5.7 112,984 5.6

Others 37,931 5.1 50,528 5.7 69,065 5.3 104,391 6.1 117,690 5.9

Subtotal 507,252 68.1 638,21 71.9 905,824 69.2 1,209,118 71.7 1,463,435 72.9

Non-bumiputera

Chinese 229,154 30.8 239,569 27.0 385,161 29.5 475,752 28.0 537,230 26.7

Others 8,123 1.1 9,512 1.1 16,597 1.3 15,149 0.9 8,103 0.4

Subtotal 237,277 31.9 249,081 28.1 401,758 30.8 490,901 28.9 545,333 27.1

All categories

Total 744,529 100.00 887,292 100.0 1,307,582 100.0 1,700,019 100.0 2,008,768 100.0

*Does not include 18,361 non-citizens. **Does not include 62,738 non-citizens.Sources: Census Reports of Malaysia 1960–2000.


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The other major indigenous communities include Bidayuh (“LandDayaks”), Malays and Melanau. The remaining smaller communities suchas Bisaya, Kayan, Kedayan, Kelabit, Kenyah and Penan collectivelyconstitute less than 5 per cent of the total population. Among the non-bumiputera, the Chinese, who have had a long history of settlement in thisstate (although their numbers only grew substantially in nineteenth andtwentieth centuries) account for about 30 per cent of the population.

In recent years there has also been an official inclination to differentiatethe population along religious lines, the most important dividing line beingbetween Muslims and non-Muslims. Pragmatically, without exception, theMalays, including the ethnic Malays of Sabah and Sarawak, are Muslims.There is a substantial number of indigenous non-Malay Muslims in Sabahand Sarawak, Indian and Thai Muslims in Peninsula Malaysia and a smallnumber of Muslim converts of other ethnic backgrounds. As a rough guide,all other Malaysians are classified as or regard themselves as non-Muslims.The Constitution provides for Islam as the official religion of the countrybut Malaysia as a secular state maintains freedom of worship with onecritical provison: non-Islamic proselytisation among Muslims is forbidden,as is any organised attempt to convert Malays and Muslims to otherreligions. The basic ethnic and religious differentiation does not exhaustthe cultural diversity and complexity of Malaysian society. However, itoffers a convenient glimpse of the reality of a “plural society”, a conceptualcharacterisation of Malaysian society originally theorised by Furnivall(1948), that is compelling for most observers.

Malaysian social and political life seems overwhelmingly organised aroundits ethnic divisions and their attendant, if fluctuating, trends of inter-ethniccompetition, compromise and conflict. Political parties are openly ethnicin their membership, espoused interests and modes of mobilisation.Coalitions of political parties represent attempts at inter-ethnic compromiseor co-operation. National economic, educational and cultural policies, totake prominent examples, either explicitly or indirectly discriminate onthe basis of ethnic and religious differentiation. Nevertheless, manymundane and trivial issues are “ethnicised” or “communalised” very easily.

2. Exclusion, Division and Discrimination

Although not all forms of social exclusion derive from discrimination, yetall forms of discrimination lead to exclusionary behaviour. Exclusion and


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discrimination exacerbate poverty, unemployment, conflicts andinstability. This approach has been defined as a “way of analysing how andwhy individuals and groups fail to have access to a benefit from thepossibilities offered by societies and economies”. It identifies excludedpopulation groups’ need, assistance and allows for more targeted policiesto ensure their participation and integration in the development process.Societal and economic forces create and intensify various forms ofexclusion. In the extreme, individuals move from vulnerability todependency to marginality. The patterns of development in which benefitsof economic growth are shared by only certain identifiable groups furtherintensify exclusion.

The issue of livelihood (or its absence) can also be viewed through theprism of exclusion. In this context, exclusion takes various forms, such asexclusion from land, productive assets, and markets both in urban areas aswell as labour markets. Scholars have suggested that severe ethnic andracial antagonisms can often be traced to the point at which groups meethead-on contending in the labour markets. This theory argues that all formsof discrimination by ethnic, religious and cultural groups originate throughthis dynamics, wherein groups mobilise political and economical resourcesto amplify their material interests. The goal of such actions is the exclusionof competing groups from the market economy. Governments combatdiscrimination based on ethnic or religion and culture by

(a) promoting equality of opportunity by outlawing discrimination;and

(b) seeking equality of results by granting preferences to members ofdisadvantaged groups.

The second approach has been labeled variously, including benign quotas,reverse discrimination, reservation policy, employment equity, positivediscrimination, positive action and affirmative action. In contrast withequal opportunity, which focuses on procedures and individuals, thisapproach is result as well as group oriented. However, the two approachesare not mutually exclusive.

Exclusion is the process through which individuals or groups are wholly orpartially excluded from maximum participation in the society they live in.It has multidimensional characteristics involving exclusion in civil,


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cultural, economic, social and political spheres. In fact, exclusion anddiscrimination are the processes and cause of deprivation. The Malaysiansociety has a high degree of stratification and inequality associated withvarious kinds of group identities such as ethnic, religious, cultural, socialand regional origin. Ethnicity indeed becomes a powerful tool for social,cultural and economic segregation and unfavorable inclusion, particularlywith unequal treatment of some ethnic groups that have made way into thesocial system of Malaysia so far.

2.1 Ethnic Division in the Economic System

The indigenous communities suffer exclusion and marginalisation in accessto property and economy. The idea of equality remains alien to its basicgoverning principles and ethics. There is indeed recognition of inequalitiesand exclusion as well as severe deprivation of indigenous communities bygovernment although anti-discriminatory policies have been developedsince the New Economic Policy. These have brought about some positivechanges in the economic and social conditions of the indigenouscommunities but continue to increase economic deprivation and disparitiesbetween them and the dominant ethnic groups.

2.2 Rural-Urban Divide

On the eve of independence in 1957, the political economy of Malaysiashaped by colonial capitalism had created certain patterns of unevendevelopment, economic disparities and social divisions. Spatially,Malaysian west coast had a developed urban sector that stretched north-south from Penang to Singapore. This region has well developedinfrastructure that integrated the domestic economy with the worldeconomy. A broad spectrum of middle and working classes increased witheconomic diversification and bureaucratic expansion under colonialism.However, nearly 60 per cent of the economically active populationcontinued to work in the rural sector, mostly rice cultivators (either ontheir own land or rented land), small-holders growing rubber and othercash crops, wage labourers working in plantations and squatters, and alsoillegally raising cash crops on the state land. This rough rural-urban divisionin the distribution of population and economic activity has had its ethnicdimensions as well.

The dynamics of exclusion and deprivation can be seen from the rural andurban composition of Malaysian population, so to say, the rural and urban


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economy of Malaysia is divided ethnically . Between 1921 and 1970, theChinese consistently made up about 60 per cent of the urban population(See Table 10).

Table 10: Proportional Distribution of Urban Population byMajor Ethnic Groups, Peninsular Malaysia 1921-1970

Malays Chinese Indians

Year

Per cent total

population

Per cent of Total urban

population

Per cent of the

Malays urban

population

Per cent Total

population

Per cent urban

population

Per cent

urban

Per cent Total

population

Per cent urban

population

Per cent

urbana

1921 54.0 18.4 6.7 29.4 60.2 40.5 15.1 17.8 23.1

1931 49.2 19.2 8.6 33.9 59.6 38.8 15.1 17.8 25.9

1947 49.5 22.6 11.3 38.4 62.3 43.1 10.8 10.7 33.8

1967 49.8 22.6 19.3 37.2 63.9 73.0 11.3 10.7 41.1

1970 53.1 27.6 21.8 35.4 60.0 71.1 10.5 11.3 44.8

Sources: Census of Malaysia of different years

In contrast, the Malays who formed approximately half of the totalpopulation during that period accounted for not more than a quarter of theurban population. Even in 1957, only 19.3 per cent of the entire Malaypopulation lived in urban centres compared to 73 per cent of the Chineseand 41.1 per cent of the Indian population.

2.3 Exclusion and Discrimination in the Labour Market

The economic disparities and social divisions were complicated by an ethnicdivision of labour similar to the organisation of labour in other formerBritish colonies; Burma, Fiji, Guyana, Kenya and Uganda. The Colonialdesign in order to preserve the basic structure and fabric of traditionalMalay society1 as well as the peasantry’s “refusal to supply plantationlabour”2 left the Malay peasantry mostly engaged in food production,principally rice cultivation and fishing. Early Chinese migrant labourersmainly worked in the mines; whereas later migrants were engaged incommerce, industry and services, so that by 1930s “the occupations of theMalayan Chinese had varied a great deal, ranging from business activity inSingapore to coolie work in the tin mines” and “the great majority of themwere small traders, shopkeepers, artisans and, to a lesser extent,agriculturalists and fishermen.” (Li 1982:116). During the colonial period,migrant Indian labour was engaged in public works projects and the vastmajority of Indian labour was deployed at rubber estates. In 1931 and


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1938, respectively, Indian workers formed 73.5 per cent and 80.4 percent of the estate labour force of the Federated Malay States. 3 In 1931,when the total Indian population in Malaya was 624,009, Indian workersaccounted for more than 300,000 of Malaya’s total estate population of423,000 4. A smaller number of educated middle class and professionalIndians and Ceylonese also worked in the British colonial offices and publicsectors.5 Table 11 provides a summary picture of independent Malaya’sbasic division of labour that, by geographical separation was later officiallydescribed as “the identification of race with economic function”6, kept themajority of the major ethnic communities more or less separate exceptwhen they met “in the market-place”.

Table 11: Distribution of the Labour Force by SelectedOccupations and Ethnicity, Peninsular Malaysia, 1957

Occupation Total Number

Malays (Percent)

Chinese (Percent)

Indian (Percent)

Others (Percent)

Rice Cultivation 398,000 95.8 2.4 0.0 1.2

Rubber Cultivation 614,000 42.4 32.6 24.5 0.5

Mining and quarrying 58,000 17.7 68.3 11.6 2.4

Manufacturing 135,000 19.7 72.2 7.4 0.7

Commerce 195,000 16.4 65.1 16.8 1.7

Government services 34,000 52.4 15.4 26.3 5.9

Police, home guard and prisons

52,000

83.2 9.6 4.4 2.8

Armed forces 11,000 76.8 8.8 8.4 6.0

Sources: Government of Malaysia 1971-75

The four major ethnic groups in Malaya correspond approximately to foureconomic castes as that in India. The British were political rulers andcontrolled large businesses. The Chinese were essentially middle-classbusinessmen engaged in small trades. The Indians formed the bulk of labourpopulation, though a large number of them engaged in plantation operationand commercial enterprises. The occupations of the Malays have alwaysbeen rice cultivation, fishing, and hunting (Li 1982, 170). The consequenceof this ethnic division of labour increasingly bore political tensions justbefore and after the end of colonial rule. Historically, Malay peasantryevaded the harsh conditions of early colonial capitalism that took a heavytoll on migrant labour, but the rural Malay peasant community was lockedin a subsistence sector. This “most unfortunate circumstance of the past


15

half-century the non-participation of the Malays in their own country’seconomic activities” (Li 1982, 170) bred the so-called “relative economicbackwardness” of the Malays7, compared to Chinese and Indian migrantswho mobilised expanding urban sector to gain foothold in commerce andupward mobility through education and other professions.

In sociological terms, poverty and inequality were not to be explained byethnicity but the difficulty arose from observing and interpreting povertyembedded in the ethnic division of labour. In ordinary terms, inter-ethniccomparisons invariably led to inter-ethnic inequalities so that thereappeared to be no immediate comprehensible conclusion than that theMalay being relatively poorer than the non-Malay. Table 12 shows thatupto 1970, Malay households formed high majority group within the twolowest monthly income ranges. Given the Malay proportion of totalpopulation, it might have been generally expected but Malay povertyrelatively accounted for 42 per cent out of the 58.4 per cent of allhouseholds having a monthly income of less than RM200.

Table 12: Proportional Distribution of Households byIncome* and Ethnicity, Peninsular Malaysia, 1970

Income range

(RM per month)

Malay (per cent)

Chinese (per cent

Indian (per cent)

Other (per cent)

Total (per cent)

1-99 22.9 2.6 1.3 0.2 27.0

100-199 19.1 7.8 4.4 0.1 31.4

200-399 10.4 11.9 3.5 0.1 25.9

400-699 3.0 5.3 1.1 0.1 9.6

700-1499 1.1 2.9 0.6 0.1 4.7

1500-2999 0.2 0.7 0.1 0.1 1.1

3000 & above 0.0** 0.1 0.1 0.1 0.3

Per cent of Total Population 56.7 31.3 11.2 0.8 100.0

* Income includes cash income, imputed income for earnings in kind plus transfer

receipts.

** Proportion is negligible in relation to the total. Source: Government of Malaysia1973:3

Table 13 reveals a more pronounced picture of poor Malay households,vis-à-vis non-Malay households, that was politically more controversial.


16

Here, lower the income range, higher is the Malay representation in 1970with Malay community forming nearly 85 per cent of all households havingthe lowest monthly income. In contrast, Chinese representation increasedwith income range until the highest level, when it fell sharply. At the highestincome range, moreover, there was a statistical absence of Malayhouseholds while other ethnic groups seemed to be equally represented.

Table 13: Proportional Distribution of Households (Per cent)by Income* and Ethnicity, Peninsular Malaysia, 1970

Income range (RM per month)

Proportion (Percent) of Households in Income Group

Malay (per cent)

Chinese (per cent

Indian (per cent)

Other (per cent)

1-99 84.8 9.6 4.8 0.7

100-199 60.8 24.8 14.0 0.3

200-399 40.2 45.9 13.5 0.4

400-699 31.3 55.32 12.5 1.0

700-1499 23..4 61.7 12.8 2.1

1500-2999 18.2 61.6 9.1 9.1

3000 & above 0.0** 33.3 33.3 33.3

Percent of Total Population 56.7 31.3 11.2 0.8

* Income includes cash income, imputed income for earnings in kind plus transferreceipts. Source: Government of Malaysia 1973:4, Table.2.

Even after independence, the focus of advanced economic activity lay inthe foreign-owned plantations, mines and agency houses that producedand exported primary commodities, viz, rubber and tin being the mostimportant, to the rest of the world. It was another very important socio-economic disparity that was widely perceived in inter-ethnic terms. Thepioneering study of Puthucheary, James, “Ownership and Control in theMalayan Economy” in the 1950s found that European-owned companiescontrolled 84 per cent of large rubber estates (of over 500 acres each), 60per cent of tin output, 65 per cent to 75 per cent of exports and 60 per centof imports8. On the whole, “foreign, especially British, interests dominatednearly every facet of the colonial economy, including plantations, mining,banking, manufacturing, shipping and public utilities”9. Domicile Chinesecapital maintained a sufficiently strong presence in economic activitieslike banking, small-scale manufacturing, retailing and services, so that the“ubiquitous activity of the Chinese middleman” lent weight to the “popular


17

misconception that commerce is controlled by the Chinese” (Puthucheary1960: xv). Political control and administration of the state apparatus hadbeen mostly turned over to Malay aristocrats, who had been trained forcivil service by the colonial state. Thus, the social origins of the businessand political elites were those of the expatriate representatives of foreigncapital, indigenous Malay aristocrats and domicile Chinese capitalists andtraders.

Finally, political decolonisation in Malaya was not accompanied bysignificant economic nationalisation. Consequently, post-colonial patternsof “asset ownership” continued to show significant inter-ethnic differentials.Until 1970, their proportions of share capital in limited companies, foreigninterests dominated the corporate sector of the economy. Non-Malay andmostly Chinese ownership of share capital was substantial but theproportion of Malay ownership was very low (See Table 14).

Table 14: Ownership of Share Capital (at par value)of Limited Companies, 1970

Sector Malay* Non-Malay** Foreign

Value (RM

million)

Per cent of total value

Value (RM

million)


Value (RM

million)


Agriculture 14 1.0 339 23.7 1080 75.3

Mining 4 0.7 146 26.8 394 72.5

Manufacturing 34 2.5 510 37.9 804 59.6

Construction 1 2.2 37 63.7 20 34.1

Transport 11 13.3 61 74.7 10 12.0

Commerce 5 0.8 216 35.7 386 63.5

Banking & Insurance

21 3.3 283 44.4 333 52.3

Total 103 1.9 1979 37.4 3207 60.7

* Includes Malay interests. **Includes Chinese, Indian other Malaysian residents,nominee and locally controlled companies, although the ethnic ownership ofnominee and locally controlled companies is not known.

Source: Government of Malaysia 1973:86–87

The preceding discussion of earlier ethnic patterns of residentialsegregation, labour force participation, income distribution and corporateownership does not consider the complexities of inequalities within eachmajor ethnic group. A fuller approach to Malaysian political economy will


18

reveal that its divisions were not historically, and are not exclusively,determined by its multi-ethnic and multi-religious features as is claimedby politicians or mainstream analysts who view it only from an “ethnicperspective”. A deeper analysis would not overlook the Janus-like qualityof post-colonial Malaysian society, which has class cleavages that are noless significant than its ethnic distinctions.

Indeed, the difficulties of managing the fissures of Malaysian society andpolitical economy have always stemmed, to a large extent, from theintersections of ethnic differentiation with class divisions. These producedcolonial patterns of socio-economic disparities that grew into post-independent structures of inter-ethnic inequalities. In that sense, anenduring ethnic division of labour accentuated the Malay community senseof suffering a condition of “relative backwardness”. The Malay appearedat once to be excluded from the modern sector; confined to rural areaswith minimum facilities, amenities and opportunities; mired in povertyand finally to benefit less from the wealth of the country.

3. History of Exclusion Practice

Socio-economic exclusion and disparities existed in Malaysia since colonialperiod or more pertinent even before the arrival of the European colonialpowers (Portuguese in 1511, the Dutch in 1640 and the English in 1795). Ina pre-modern or traditional Malaysia, the population was relativelyhomogeneous but the social and economic disparities were existent;nevertheless, it was not an issue of social conflict. As the country wasgradually exposed to modernisation and immigrants from other countries,which altered the demographic features and population composition alongwith economic disparity among social groups, especially inter-ethnic, tobegin with resentment and discontent. Simultaneously the society wasincreasingly politicised either as a result of a nationalist movement againstcolonialism or as a by-product of electoral activity. Eventually resentmentand discontent aggravated sense of unfairness and injustice, which lead tooccasional uproar and finally major racial riots in May 1969.

The riots of 1969 have been interpreted and analysed from distinct viewpoints. As part of ‘gangsterism’, and ‘communist agents’, government reportsreferred it as the “political and psychological factors contributing to theconflict”. But a government White Paper issued in 1971 entitled, “Toward


19

National Harmony” stressed on the view “economic factor” for causingthe riot which was later amplified in public comments by the government.The failure of economic policies to address the relative deprivation ofMalays in comparison to non-Malays was root cause of the crisis. TheOfficial reports confirmed 196 dead and 439 injured. An adverseinternational publicity, which the country went through as a consequenceof the riots conveyed a loud and clear message to the government need forthe affirmative action in order to create more equitable society.

The history of social and economic disparities among the main ethnic orracial groups in Malaysia is inseparable from the growth of its multi-ethnicsociety. During the colonial period, Malaysia was called Malaya and wasdescribed as “an example of a multi-racial society par excellence10.TheMalaysian (Malayan) society is divided along numerous lines viz racial,religious, regional, linguistic, economic and social. Among each of the maingroups there are sub-groups, for example, in the single linguistic group afurther division can be discerned on the basis of dialects. In every religiousgroup there are several sects or schools of thought with sharp differenceswhich contain potential conflicts. In each ethnic or racial group, differencescan be discerned along economic, social and regional dimensions. Themore salient and significant demographic feature of Malaysia, especiallyin the early years of independence till today, is the association of ethnicidentification, economic activities and geographical areas.

Malays were mainly rice growers in the rural areas, while the Chinesedominated the commercial sector based in urban areas, and most of theIndians, largely Tamils were rubber plantation labourers. The nature oftheir profession and different localities of their residence minimised thechance of one ethnic group interacting with another. All this was largelyresponsible for the emergence of a “plural society” as defined by Furnivall“comprising two or more elements of social orders which live side by side,yet without mingling into one political unit.”11

The process of modernisation and population growth with their attendantramifications made it almost impossible for these ethnic groups to continuetheir “compartmentalised co-existence” characterised by lack of inter-mingling. Social and economic interactions were bound to increase and atthe same time bound to be more problematic due to differences andcontradictory demands of the groups. The ethnic differences nearly impliedlinguistic, religious, educational, social and economic differences, which


20

in turn, contributed to the differences in perceptual and worldlyorientations and ideal expectations. All these provided potential for ethnicconflicts of various dimensions with alarming consequences.

3.1 Origin of the Plural Society

The roots of “plural society” can be traced back to British colonial erawhen wave after wave of immigrants from China and India flooded theMalay Peninsula, the original geographical component of the present dayMalaysia. The British engaged and encouraged such immigration to providecheap labour for the tin mines and rubber plantation. The rapid increase ofthe Chinese population in Malaysia within a short span of few decades wasphenomenal. In one of the tin mining area in Perak, the Larut Valley, therewere only three Chinese before 1850. About more than a decade laterthere were between 20,000 to 25,000 Chinese newcomers, and by the endof 1871 their number increased to 40,000. By 1901, the Chinese constituted46 per cent of the population of Perak. Toward the end of 19th centurymass immigration of the Chinese to Malaysia coincided with rapid growthof country economy, especially due to tin mining which was attributedexclusively to the Chinese role. Indeed, the growth of tin mining industryshaped the economic dominance of the Chinese. The increasing number ofnon-Malay coupled with their increasing control of the economy has beena constant source of fear and insecurity to the Malay whose indigenousclaim dates back to thousands of years. Beside resentment against Britishcolonialism, this fear gave birth to Malay nationalism between the twoWorld Wars and the resentment against Chinese became another factor inorganising the Malays politically.

The Indians also migrated in substantial number to the Malay Peninsula,almost concurrent with the advent of British colonialism. The earliest Indiancontact with South East Asia, presumably with the Malay Peninsula datesback to sixth century B.C. However, there is no evidence of large-scalemigration of people from the Indian subcontinent to the Malay Peninsulauntil the end of the 19th century. The British colonial administration steppedfurther in promoting it by establishing an Indian Immigration Fund in190712. Labourers from Southern India were given accommodation andfree passage to their place of employment in Malaya and special agencieswere formed to facilitate them. The Chinese immigrant labourersconcentrated mainly on the tin mining industry, and the Indian migrants


21

were employed as rubber estate and railway workers. They lived as isolatedcommunities socially and geographically, away from the Chinese tin minelabourers and the Malay paddy planters. Similar to the Chinese pattern ofmigration at an early stage, the Indian labourers stayed in the MalayPeninsula for shorter periods before they went back to India either on“home vacation” or on permanent retirement. Over a period of time theysettled permanently in the Malay Peninsula and within a span of 40 years,from 1891 to 1931, the Indian population increased almost twenty fold,from 20,000 in 1891 to 380,000 in four main Sultanates of the MalayPeninsula, (namely Selangor, Perak, Pahang and Negeri Sembilan;otherwise known as Federated Malay States FMS).

The preceding account on the influx of immigrants from China and Indiato the Malay Peninsula brings forth three inter-related points:

• The British colonial administration not only introduced andimposed an open-door immigration policy (at least up to 1931) onthe Malay States but actively participated in bringing a greatnumber of immigrant labourers from China and India especiallytowards the end of the 19th century and at the beginning of the20th century.

• In the four Sultanates that made up FMS, there had been anextraordinarily rapid growth of population in a relatively shortperiod of less than 40 years, from 418,500 in 1891 to 1,713,100 in1931 i.e., more than 400 per cent.

• The phenomenal growth had an additional significance in the sensethat it drastically altered the population structure in terms of itsethnic composition especially pertaining to the indigenous Malaysvis-à-vis the immigrant groups.

At the beginning of the 19th century, the Malays comprised 90 per cent ofthe whole population of the Malay Peninsula, including the small Island ofSingapore. The proportion was reduced to 54 per cent in 1911, and declinedfurther to 49 per cent in 1921 and further lower to 45 per cent in 1931.Thus,there emerged a “plural society”, as defined by Furnivall, that effectivelyserved the economic and political interests of British colonialism in Malaya.The British colonial interests turned successful through skillful colonialmanipulation of various ethnic groups’ economic exploitation of Malaya.However, different concerns cropped up since the interests of variousethnic groups that made up the plural society came into question.


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3.2 Perpetuation of Differences and Inequality

In Furnivall’s definition of plural society, it is implicit that several socialorders (different ethnic groups) not only lived separately in differentgeographical locations and engaged in different economic activities, butalso grew and developed separately through different educationalprogrammes, different ideological orientations and a different rate ofeconomic progress. These differences were further perpetuated by a seriesof practices initiated by the colonial administration, either by institutingformal policies or by taking a laissez-faire attitude on selected matters orby sheer neglect, leading certain groups into backwardness. In addition,there were infrastructural developments that took place in an irregularmanner, benefiting certain groups and neglecting others.

While there was a rapid economic growth but the distribution of benefitswas not equitable. The disparity and inequality in sharing the growingeconomic pie took place in several dimensions:

• Between Europeans (British) and the Asians (indigenous orimmigrants);

• Between the immigrant and the indigenous population;

• Between the Chinese immigrants and the Indian immigrants; and

• Between the Malay aristocrats and the Malay peasants.

This followed in line, not only with “divide and rule policy” of the Britishwhich politically and economically served their interests but also saddledthe plural society with differences, resentment, suspicions and evenanimosity.

3.3 Growing Sense of Alienation and Resentment

As the British colonial rule was approaching to its termination in Malaya,the uneven development that featured Malaysian plural society becamemore evident. The immigrant ethnic groups earlier known as “transients”became permanent residents. Their much improved economic well-being,consciously or unconsciously had become a source of anxiety to theindigenous Malays. In the same vein, the Malay were increasingly resentful,and also fearful, of the rapid growth of the immigrant population. Thefollowing quotation from a leading Malay intellectual provides a summary


23

of how the Malay community perceived their plight and expressed theirsense of alienation first with the emergence, and then with the “maturity”,of plural society:

“The immigrant population was introduced on a very large scale,giving a new life to the peninsular economic activity, for the benefitof the colonials, but obviously at a great disadvantage to theindigenous people. New centers of plantation and mining activities,displacing the traditional centers of Malay economic activities grewalong the coasts and river banks. The new cities were populatedexclusively by the immigrants, and the indigenous people were inone way deurbanized, or were ruralised, and were largely deprivedof the new modernizing agents, especially the secondary and tertiaryeducation. The net result of this, until late 1960s, [was that] some85-90 percent of the new intelligentsia, the new intellectuals andprofessionals, were made up from the immigrant communities, lessthan 15 percent from the indigenous people, even though theyformed the majority of the population. Coupled with the economicdominance of the immigrant communities, more than 85 percentof the economic middle class were from the immigrants. This setthe basis for the balancing games of contemporary Malaysianpolitics, a game of communal reaction and counter-reaction insearch of a more equal society”.

This quotation from Ismail Hussein’s writing intend the following:

• The sense of bitterness Malays suffered as a result of Britishcolonialism with its open-door immigration policy drastically andsubstantially reduced the percentage of the Malay population. Thisled to their “ruralisation” or “marginalisation”, away from themainstream of economic growth and social development;

• To provide some indications about how the Malay were “left out”in the process of modernisation which gained momentum with theadvent of British colonialism

• To set an example of a fairly representative opinion or perceptionof a major component of the plural society; perhaps diametricallyopposed to that of another component, i.e., Chinese. If Malay werefearful and resentful of the fact that as “indigenous people” they


24

have been swamped by the “immigrants”, the Chinese wereconcerned about their disadvantageous position and politicalunder-representation.

3.4 Cultural Impact

Culturally, the effect of this intellectual and economic dominance of theimmigrant communities in Malaysia could easily be predicted. There hasbeen an attempt to reject the history and tradition of the indigenous peopleor attempt to displace or neutralise the indigenous culture. The use ofEnglish as an exclusive medium for the education of the new intelligentsiaduring and immediately following the colonial period had greatly helped inthis. For obvious reasons, the colonial government attempted to subjugatethe indigenous culture, or at least tried to neutralise it and the MalaysianEnglish education exactly appropriated that. The cultural capital couldnot reckon to the pride of the people. Malay intellectual and culturalconcern, for example, had been branded as communal or racial prejudiceequated with the cultural chauvinism of the immigrant communities. TheMalaysian English press avoided reportage or analysis of this indigenouscultural gamut, despite its importance in shaping the cultural politics ofMalaysia.

4. Nature of Deprivation: Access to Resources andOpportunities

The relatively advantageous situation of Malaysia in terms of per capitaincome and physical and administrative infrastructure at the beginning ofanalysis need be balanced against the challenges of substantial ethnic andgeographical inequalities in, for instance, income and access to basicresources, economic opportunities and social services such as health andeducation. Ethnic riots in 1969 signalled potent threat to the stability ofMalaysia and its economic progress. The riots were precipitated by tensionsfollowing the unexpected general election results in May 1969. Indeed,more basic precipitating causes were discouraging economic trends,growing urban unemployment and controversies surrounding languageand education. The most basic underlying cause, however, was probablythe imbalance between Malaysian ethnic groups in terms of poverty andparticipation in the modern sectors of the economy.

Thus in 1970, Malaysian future stability and economic growth were by nomeans assured, and its development strategy was intensively reviewed,with the intention of ensuring and achievement of growth with equity,


25

particularly between the ethnic groups. Politicians, planners, and the peopleat large had been obliged by circumstances to recognise that developmentas a process cannot be achieved by economic and technocratic means alonebut has strong social elements demonstrably involving different ethnic,religious, and social groups, providing all of them a stake in its outcomesand building bridges of understanding in between.

4.1 New Economic Policy and Beyond (1971 - 2010)

Out of this situation New Economic Policy (NEP) came into formulation.This policy and successor policies played a key role in social and economicplanning over the last three decades of the 20th century, and demonstratedthe strong political will and consistent commitment of the governmenttowards improving the living standards of the poor and decrease inequalitiesin the society. Before reviewing these policies, it is significant to describethe economic planning in Malaysia.

Malaysia follows a systematic planning process whereby five-year plansare set within longer-term Outline Perspective Plans (OPPs), and systematicreviews are conducted at the midpoint of these five-year plans. Annualplans are the vehicle of fine tuning and adjusting the five-year plans tochanging circumstances. The sequencing of NEP and its successors, aswell as fitting in of the five-year plans into this sequence is tabulated inTable 15.

Table 15: Overview of Malaysian DevelopmentPlanning Framework

1960-70 1971-90 1991-2000 2001-10

Pre-NEP New Economic Policy (NEP) OPP1

National Development

Policy (NDP) OPP2

National Vision Policy

(NVP) OPP3

First Malaysia Plan

(1966–70)

Second Malaysia Plan (1971–5)

Third Malaysia Plan (1976–80)

Fourth Malaysia Plan (1981–5)

Fifth Malaysia Plan (1986–90)

Sixth Malaysia Plan (1991–5)

Seventh Malaysia Plan

(1996–2000)

Eighth Malaysia Plan (2001–5)

The largest group of Malaysian development plans viz, from second to thefifth plans continued within the period covered by NEP.


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New Economic Policy: 1971-1990

Poverty, unemployment and economic disparities among ethnic groupscontinued to be problems in early 1970s. In 1970, almost half of Malaysianpopulation was living in poverty. Consequently, NEP was formulated withthe following objectives:

• To reduce and eventually eradicate poverty by raising incomelevels and increasing employment opportunities among allMalaysians; irrespective of race.

• To restructure Malaysian society to improve economic imbalancesso as to reduce and eventually eliminate the identification of racewith economic function.

Based upon the philosophy of achieving growth with equity, the success ofNEP was predicated upon rapid economic growth, so that povertyreduction and restructuring of society strategies did not take place bymeans of the reallocation of existing wealth, rather from new and expandedsources of wealth.

These objectives were to be pursued through a number of means.Enhancement of productivity of those in low-productivity occupationswas pursued through the adoption of modern agricultural techniques, suchas double-cropping, off-season and inter-cropping, drainage and irrigation,alongwith improved marketing and credit, and financial and technicalassistance. Opportunities for movement from lower to higher productivitysectors were to be provided through land development schemes, andassistance in entering commerce, industry, and modern services. Specialattention was paid to the development of a Bumiputera Commercial andIndustrial Community (BCIC).

National Development Policy: 1991-2000

National Development Policy (NDP) maintained the basic strategies ofNEP, that is, growth with equity or equitable distribution in addition toseveral adjustments to policy:

• The focus of anti-poverty strategy was shifted to the eradicationof hard-core poverty.

• An active BCIC was developed to increase the participation ofBumiputera in modern sectors of the economy.


27

• There was greater reliance on the private sector to generateeconomic growth and income.

• Emphasis was placed on human resource development as a primaryinstrument for achieving the objectives of growth and distribution.

NDP programmes included loan schemes for small-scale agricultural andcommercial developments modeled on the Grameen Bank, landconsolidation and rehabilitation programmes, commercialisation of farms,agricultural productivity enhancement projects, provision andimprovement of services for the urban poor, and efforts to promoteemployment opportunities in manufacturing, construction, and otherurban-based industries.

4.2 Vision 2020

Shortly after the Sixth Malaysia Plan was launched, the then Prime Minister,Dr Mahathir Mohamad, in a speech to the Malaysian Business Counciloutlined a vision of Malaysia as the developed country by 2020; in termsof all dimensions of national life. This included national unity and socialcohesion, economy, social justice, political stability, system of governance,quality of life, social and spiritual values, and national pride and confidence.While moving towards these goals, he stressed the importance of humanresource development, export-led growth and industrial diversification,low inflation, and private/public sector partnerships. The importance ofthis document is that it put in visionary terms the national objectivespursued in Malaysian development planning to emphasise holistic natureof the developmental endeavour.

4.3 National Vision Policy (2001-2010)

National Vision Policy (NVP) builds upon and maintains the efforts ofNEP and NDP, and incorporates Vision 2020 objective of transformingMalaysia into the developed nation by 2020. It emphasises the need tobuild a resilient and competitive nation, as well as an equitable society toensure unity and political stability. The private sector will spearheadeconomic growth, while the public sector will provide supportiveenvironment and ensure achieving socio-economic objectives. To achievethese goals, the key strategies include developing a knowledge-basedeconomy, emphasising human resource development, and acceleratingthe shift of the key economic sectors toward more efficient production


28

processes and high value-added activities. At the same time, furtherprogress towards poverty eradication is expected to result from rapideconomic growth, assisted by specific poverty alleviation programmes,consolidated under the Skim Pembangunan Kesejahteraan Rakyat (SPKR),targeted towards eradicating poverty in areas and among groups where itsincidence is high, such as the Orang Asli and other Bumiputera in Sabahand Sarawak.

Both NEP and NDP have shaped up the socio-economic development ofthe country, guided by broad outline perspective plans that are embodiedin the series of five-year development plans. The story of Malaysiandevelopment since 1970 must be rated a real success story if the criterionis achieving improved level of broad-based welfare as defined by thevariables included in MDGs. The variables that were later to beincorporated by the international community in MDGs was alreadyprioritised in Malaysia and great strides were made in achieving them. Acommon thread running through these plans is the priority given to povertyeradication and equity. This consistency in defining and prioritisingdevelopmental problems has not only helped to focus economic governanceto eradicate poverty but also contributed in large measure to the successof those efforts.

It has already been noted that although Malaysia entered the 1970s withstronger endowment of wealth and infrastructure than many of itsneighbours, it also faced the challenges of a multi-ethnic society withmarked imbalances between ethnic groups. In one sense, however, thischallenge strengthened to focus attention on poverty alleviation.Moreover, since the Bumiputera, who held political power butdisadvantaged economically were concentrated in rural areas; thereforerural development was a strong and persistent focus in developmentprogrammes. There was thus persuasive political motivation for pursuingthe kind of policies that were most likely to meet MDGs.

The success of these policies could largely be attributed to political stability,strong foreign direct investment, and visionary leadership. A physicalevidence of success of these strategies is to be seen in the functional andphysical urban infrastructure of air and land transportation facilities, theCyberjaya Multimedia Super Corridor (MSC), the Putrajaya governmentoffice enclave and other elements of the built environment.


29

5. Altered Ethnic Structures and Inequalities

The three main ethnic communities in Malaysia are Bumiputera (Malaysand other indigenous groups), Chinese and Indians. Historically these wereseparated both geographically and by employment reflecting the differingsettlement patterns. In 1970, while (27 per cent) Malaysian (10.4 millionpersons) were living in urban areas, the Bumiputera (55 per cent)population was predominantly rural. They were engaged mainly in ricecultivation, fishing, and rubber tapping, distinct from the growing urbaneconomy. The Chinese (36 per cent) population was urban, dominatingtrade and commerce as well as tin mining and commercial agriculture;whereas Indians (approximately 10 per cent) population settled in townswere mainly concentrated in the rubber estates and plantations. By 1970poverty was markedly higher among Bumiputera than other ethniccommunities. About two-third of Bumiputera households were living belowthe poverty line ; poverty rates among Chinese and Indian householdswere 26.0 per cent and 39.2 per cent; respectively. As a result of policiesadopted by Malaysia, there has been tremendous decline in the povertyrate for each ethnic group, such that by 2002 it was 7.3 per cent, 1.5 percent, and 1.9 per cent for Bumiputera, Chinese, and Indians; respectively.

Ethnic income differentials generally narrowed over the period 1970–2002. The ratio of mean household income of Chinese and Indians to themean household income of Bumiputera decreased over this period, mostnotably in 20 years up to 1990. However, over the last decade of the lastcentury, relative incomes have been broadly constant and absolutedifferentials in income have widened. Moreover, Chinese mean householdincome remains about two times higher than that of Bumiputera. The spatialdistribution of poverty is closely related to the pattern of development,which in turn is closely linked to ethnic settlement patterns and industrialstructures. Historically, the Bumiputera community lived in settlementsalong the coasts and riverbanks. Chinese and Indian migrants settled alongthe western coastal plains around the tin mines, agricultural estates, andurban centres. Relatively fewer communities settled in the east coast states,especially in Kelantan and Terengganu, which were sparsely populated in1970. The big states of East Malaysia, Sabah and Sarawak were also sparselypopulated and under developed. Selangor, Perak, and Johor were the mostpopulated states with more than one million persons. In 1970, there werewide disparities in poverty levels between states; the lowest in west coast


30

states of Melaka, Selangor, and Johor and the highest in Sabah, Kelantan,and Terengganu. There have been significant reductions in poverty ratesfor all 13 Malaysian states and Federal Territory of Kuala Lumpur overthree decades since 1970. However, there are still sharp state differentialsand geographical and historical factors that continue to influence. Thewest coast states of Peninsular Malaysia are more developed and havetended to attract Foreign Direct Investment (FDI). The rail and road systemin these states became accessible to seaports, facing the Straits of Malacca,a key maritime highway for international trade in South-East Asia. On thecontrary, Kelantan and Terengganu, until the discovery of offshore oil inthe east coast, were less accessible and attracted lesser FDI.

Currently, the poor in Malaysia are mainly concentrated in the states ofKelantan, Terengganu, Kedah, Perlis, and Sabah, particularly in the ruralareas. In 2002, while the national poverty rate was 5.1 per cent, the povertyrates for the poorest states were as follows: Sabah, 16.0 per cent; Kelantan,12.4 per cent; Kedah, 10.7 per cent; Terengganu, 10.7 per cent; and Perlis,10.1 per cent. Overall, the levels of poverty in these states are two to threetimes higher than the national level except Terengganu. Also, these stateshave per capita GDP levels significantly below the national average andthe population is predominantly Bumiputera.

5.1 Social Sector Policies

Social and economic development is an inter-related phenomenon. Socialchange is an integral component of economic development and not just itsby-product. While economic growth leads to improvements in the qualityof life, a better quality of life enables the population to participate more ineconomic development. The commitment to socio-economic developmentcan be seen in the strategic thrusts of all three national development policieswhere poverty eradication has been a constant and integral component ofall policies. This commitment is also reflected in the steadily andsubstantially rising share of the social sector in total public developmentexpenditure viz. from 11 per cent in 1970 to 45 per cent in 2003 (See Table16). In addition, expenditure on economic services include the provisionof public utilities (such as electricity, piped water and sewerage services),and infrastructure and transportation to both rural and urban areas,enhancing the quality of life.


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Table 16: Federal Government Development Expenditure bySector, Malaysia, 1970–2003 (Percentage of Total

Development Expenditure)

Sector 1970 1980 1990 2000 2003

Security 23.7 16.4 9.9 8.3 15.3

Social services 11.2 15.9 24.5 39.6 45.0

Education 6.1 7.5 15.3 25.4 25.9

Health 2.8 1.1 4.3 4.6 6.8

Housing – 4.0 0.4 4.3 4.9

Others – – 4.5 5.4 7.4

Economic services 62.2 64.8 62.7 41.7 35.0

Agriculture and rural development 27.3 15.2 12.1 4.2 4.1

Public utilities 2.8 8.9 7.5 5.4 2.3

Trade and industry 13.8 20.8 25.5 13.1 8.8

Transport 11.0 13.8 17.3 17.4 18.7

Communication 7.3 5.7 0.0 0.8 1.0

Others – – 0.3 0.6 1.1

General administration 2.9 3.0 2.9 10.4 4.7

Education and health sectors are mainly responsible for distinct rise in thesocial services’ share of development budgets. Education receives themajor share of Federal government development expenditure on socialservices. Towards the second half of 1990s, enrolments expanded rapidlyboth at the bottom and the top rung of education ladder–in pre-school andtertiary education; respectively. Both these levels of education make animportant contribution in building the quality of human resources of thenation.

The public sector took on a multiplicity of roles generated and justified byNEP.

• The public sector emerged providing opportunities for the Malays.It enlarged the existing service of Malay entrepreneurs, graduatesand professionals and gave to the aspiring Malay entrepreneursfinancial assistance, credit facilities, contracts, preferential shareallocations, subsidies and training. Also, it established new publicuniversities and all-Malay residential schools and colleges at home,and sent tens of thousands of Malay young students and mid-career


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officers to the universities abroad. The result of this socialengineering was a wide range of Malay entrepreneurs andcapitalists13, a sizeable Malay middle-class14 and a considerable“bumiputera participation rate” in the professions15.

• The public sector functioned as a stringent regulator of businesses,both local and foreign that enforced compliance with restructuringrequirements of NEP by using legislative means, i.e., IndustrialCoordination Act (ICA) in 1975 and bureaucratic procedures,which were set by the Foreign Investment Committee. Therestructuring requirements of NEP set a quota at least 30 per centbumiputera equity participation and employment in companiescovered by ICA. In “expanding government power over firms”,ICA gave the minister of trade and industry wide discretionarypower over licensing, ownership structure, ethnic employmenttargets, product distribution quotas, local content and productpricing. Even at the state and local level government, (non-Malay)businesses came under strict bureaucratic regulation. In a non-manufacturing area such as real estate development, for example,many state authorities including land offices, town and countryplanning departments, municipal councils and state economicdevelopment corporations imposed an array of “NEPrequirements” on such seemingly technical matters as land-useconversion or planning guidelines.

• The public sector became a major investor. In order to raise theMalay ownership of corporate equity, it used state resources toexpand its ownership of assets via “restructuring” exercises thatincluded setting up companies by public sector and buying into orbuying up existing as well as new local and foreign businesses.These entries into the corporate sector eventually allowed thepublic sector to control the “commanding heights” of the Malaysianeconomy i.e., plantations, mining, banking and finance, andproperty and real estate16

• Finally, the public sector functioned as the trustee of Malayeconomic interests. The state-owned agencies, banks and fundssought, bought and otherwise held equity “in trust” for thebumiputera. Some of the best known of these “trustee” agencieswere Bank Bumiputera, Urban Development Authority,


33

Perbadanan National (Pernas, or National Corporation),Permodalan National Berhad (PNB, or National EquityCorporation), Amanah Saham National (ASN, or National UnitTrust Scheme) and the state economic development corporations17.

To perform these new extensive and intensive roles, the public sectorrapidly grew in size and resources, as can be inferred from the indicatorsTable 17. The structure of the public sector was altered as a whole slate ofpublic enterprises emerged. These public enterprises proliferated innumber from 22 in 1960 to 109 in 1970, 656 in 1980, and 1,014 in 1985.Table 17. By 1992, the number had risen to 1,14918. However, under NEP,the public sector concerns were vast development, the direction of whichwas increasingly ethinicised.

Table 17: Growth in the Number of PublicEnterprises, 1960–1992

Sector/industry 1960 1965 1970 1975 1980 1985 1992

Agriculture 4 5 10 38 83 127 146

Building and construction 2 9 9 33 65 121 121

Extractive industries 0 1 3 6 25 30 32

Finance 3 9 17 50 78 116 137

Manufacturing 5 11 40 132 212 289 315

Services 3 6 13 76 148 258 321

Transport 5 13 17 27 45 63 68

Others 0 0 0 0 0 6 9

Total 22 54 109 362 656 1,010 1,149

The expansion of public sector served two priorities under restructuringobjectives of NEP. One was to provide employment for Malays, which wasgenerally satisfied by absorbing Malay personnel into the civil services atall levels, notably via a massive civil service recruitment drive. Between1982 and 1987, a period for which analysis has been conducted, thebumiputera proportions of civil service staff for all categories of personnelrose steadily and always exceeded 60 per cent of all civil service personnel.19

The magnitude of growth is drawn below (See Table 18).


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Table 18: Public Service Personnel* by ServiceCategory and Ethnicity, October 1999

Ethnic Group

Service Category

Managerial/ Professional

Support Total

Number Per cent

Number Per cent

Number

Percent Number Per cent

Bumiputera 78,422 67.9 517,488 78.4 595,910 76.9

Chinese 27,198 23.6 98,253 14.9 125,451 16.2

Indian 7,044 6.1 35,239 5.3 42,283 5.5

Others 2,814 2.4 8,815 1.4 11,629 1.4

Total 115,478 100.0 659,795 100.0 775,273 100.0

* Includes personnel in state public services, federal statutory bodies, state statutory

bodies and local authorities but excludes military and police personnel.

Source: Government of Malaysia 2000:198

Although civil service lists after 1987 do not reveal the distribution ofofficers by their ethnicity; such data having become politically “sensitive”by then, Table 18 confirms Malay domination of the public sector, in both“managerial and professional” category and among lower-level “support”staff, persisting into the 1990s. At the higher echelons of the civil service,especially the elite Perkhidmatan Tadbir dan Diplomatik (PTD, orAdministrative and Diplomatic Service), Malay “over-representation”,already sanctioned before NEP, was such that Malay officers averaged 85per cent of the PTD’s total number of appointments.20 Thus, the state traineda whole generation of Malay administrators, technocrats and professionalsat public expense and equipped them with the resources to take charge ofeconomic development under NEP.

In the process, the state management of education, especially tertiaryeducation was also ethnicised in Malaysia. Under NEP, student enrolmentin public institutions of tertiary education, the award of state scholarships,the determination of fields of study, the recruitment of academic staff,inter alias, were subject to quota and target based “affirmative action”. Asearly as 1975, the effects of ethnic discrimination of NEP in tertiaryeducation, which favoured bumiputera in general and Malays in particular,were already discernible for all levels of tertiary education in local publicinstitutions (See Table 19.)


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Table 19: Student Enrolment in Tertiary Education byCourse, Institution and Ethnicity-1975

Institutions* Bumiputera Chinese Indian Other Total

Degree

UM 3,991 3,554 589 160 8,294

USM 1,218 1,479 195 21 2,913

UKM 2,396 134 35 5 2,570

UPM 539 132 24 3 698

UTM 456 74 3 0 533

Subtotal 8,600 5,373 846 189 15,008

Per cent of subtotal 57.3 35.8 5.6 1.3 100.0

Diploma

Ungku Omar Polytechnic 80 45 7 0 132

MARA IT 7,203 0 0 0 7,203

Kolej TAR 0 902 38 1 941

UM 41 7 3 2 53

UPM 1,694 143 27 2 1,866

UTM 1,487 126 11 16 1,640

Subtotal 10,505 1,223 86 21 11,835


Certificate

Ungku Omar Polytechnic 723 210 29 5 967

Kolej TAR 0 79 0 0 79

MARA IT 175 0 0 0 175

Subtotal 898 289 29 5 1,221


All levels

Total 20,003 6,885 961 215 28,064

Per cent of Total 71.3 24.5 3.4 0.8 100.0

* UM: Universiti Malaya; USM: Universiti Sains Malaysia; UKM: Universiti

Kebangsaan Malaysia; UPM: Universiti Pertanian Malaysia; UTM: UniversitiTeknologi Malaysia; MARA IT: MARA Institute of Technology; Kolej TAR: KolejTunku Abdul Rahman.

Source: Government of Malaysia 1979:204–205.

By 1985, the major ethnic shares of student enrolment in domesticpolytechnics, colleges and universities had been substantially reversedfrom that in 1970, when Malay students formed about 40 per cent of thetotal student enrolment (See Table 20).


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Table 20: Student Enrolment in Tertiary Education byInstitution and Ethnicity,1970-1985

Institution

Bumiputera Chinese Indian

1970 1985 1970 1985 1970 1985

Local enrolment by institutiona

UM 2,843 5,041 3,622 3,374 525 841

USM 67 3,996 126 2,509 33 657

UKM 174 6,454 4 1,914 1 468

UPM — 3,652 — 603 — 253

UTM — 2,284 — 567 — 154

UIA — 363 — 14 — 14

UUM — 488 — 161 — 44

MARA IT — 1,560 — 0 — 0

Kolej TAR — 3 — 2,099 — 42

Subtotal for local enrolment (per cent)

3,084 (40.2)

23,841 (63.0)

3,752 (48.9)

11,241 (29.7)

559 (7.3)

2,473 (6.5)

Overseas enrolment (per cent)

N.A. 6,034 (26.8)

N.A. 13,406 (59.5)

N.A. 3,108 (13.8)

Per cent of Total enrolment

N.A. 49.4 N.A. 40.7 N.A. 9.2

a UM: Universiti Malaya; USM: Universiti Sains Malaysia; UKM: UniversitiKebangsaan Malaysia; UPM: Universiti Pertanian Malaysia; UTM: UniversitiTeknologi Malaysia; UIA: Universiti Islam Antarabangsa; UUM: Universiti UtaraMalaysia; MARA IT: MARA Institute of Technology; Kolej TAR: Kolej Tunku AbdulRahman. N.A. = Not applicable

Indeed, were it not for the Kolej TAR which was MCA-managed, virtuallyprivate and almost exclusively attended by Chinese students, the Malaystudents would have constituted larger proportion of the local enrolment.In fact, tertiary education in local public institutions was closely identifiedwith the restructuring of NEP and the educational quotas denied manyqualified non-Malay students admission to local public institutions. WithinNEP, the role of education, especially university education, became highlypoliticised. To accelerate and actively facilitate the bumiputera demandfor access to higher education, Malaysian government implemented the


37

ethnic quota system where admission to public universities is based on theratio of 55:45 for bumiputera and non-bumiputera students. In order toeffectively coordinate the implementation of this policy, the Ministry ofEducation established a Central Processing Unit for Universities, whichdeals with all the selection of students for admission to public highereducation institutions21. This was a strong reason why many more non-Malay students were enrolled in overseas institutions than in local ones.

This situation of high bumiputera enrolment in public institutions of higherlearning persisted into the mid-1990s. As Table 21 shows that thebumiputera proportion of student enrolment at public institutions of higherlearning was at least about two-third of total enrolment at the first degreelevel.

Table 21: Enrolment and Graduation by Ethnicity at Degree,Diploma and Certificate Levels in Public Institutions of

Higher Learning,1990-1995

1990 1995

Bumiputera Non-bumiputera Bumiputera Non-bumiputera

Number Per cent

Number Per cent

Number Per cent

Number Per cent

Enrolment

Degree 35,361 65.9 18,309 34.1 97,836 69.9 42,084 30.1

Diploma 28,719 94.2 1,772 5.8 49,588 83.4 9,891 16.6

Certificate 624 24.4 1,929 75.4 725 17.0 3,551 83.0

All levels 64,704 74.6 22,010 25.4 148,149 72.7 55,526 27.3

Degree 7,487 62.1 4,567 37.9 14,660 60.0 9,735 40.0

Graduation

Diploma 8,588 89.9 965 10.1 8,701 73.4 3,161 26.6

Certificate 387 49.4 396 50.6 583 22.4 2,025 77.6

All levels 16,462 73.5 22,390 26.5 23,944 61.6 14,939 38.4

Source: Government of Malaysia 2000:198, table 2.61.

The bumiputera proportion of enrolment at the diploma level was higher;94.2 per cent in 1990 and 83.4 per cent in 1995. A roughly consistentpicture of a concerted effort to train bumiputera in other areas can beinferred from the almost exclusive participation of bumiputera in


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entrepreneurial training programmes organised by several public agencies(See Table 22).

Table 22: Participants in EntrepreneurialTraining Programmes,1981-1985

Sponsor/organizer No. of participants 1981 No. of participants 1985

Bumiputera Non-Bumiputera Bumiputera Non-bumiputera

National productivity centre 4,940 15 2,901 11

Public works department 222 — 398 —

Bank Pembangunan Malaysia 134 — 343 —

Bank Bumiputera Malaysia — — 1,109 —

MARA 14,614 — 15,000 —

Pernas 1,447 — 1,000 —

Source: Government of Malaysia 1986:116,Table 3.12.

The state intervention in various socio-economic sectors directly affectedthe ethnic structures and patterns of inequalities during NEP period;particularly the changes that “restructuring” directly imposed upon theethnic division of labour, ethnic distribution of corporate wealth and theemergence of a significant broad professional and middle-class componentof BCIC. The considerable alteration of the ethnic division of labour canbe seen from the occupational structures of the major ethnic communitiesin 1990 (See Table 23).

Table 23: Occupational Structures of MajorEthnic Communities, 1990

Occupational category

Bumiputera

(per cent)

Chinese

(per cent)

Indian

(per cent)

Total

(per cent)

Professional and technical 9.2 8.2 8.0 8.8

Administrative and managerial 1.4 4.4 1.5 2.5

Clerical 9.3 10.9 9.0 9.8

Sales 7.2 19.7 8.8 11.5

Service 12.4 9.5 14.5 11.6

Agricultural 37.4 13.5 23.4 28.3

Production 23.2 33.8 34.8 27.6

Total 100.0 100.0 100.0 100.0


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The distribution of occupations could not be identical for all majorcommunities, but there was not much difference in communityengagements in the “professional and technical”, “administrative andmanagerial” and “clerical” categories. In addition, the pre-NEPconcentration of Malays in agriculture, for example, had diminished thedirect result of rural-urban out-migration, an end to the former exclusionand discrimination of Malays from the “modern” sectors of the economyand the induction of Malay youth into various educational and trainingprogrammes.

The relative success of state intervention in attaining the objectives of“restructuring” is also evident from Table 24 which shows changes in Malayand bumiputera occupational structures during NEP period.

Table 24: Changes in Malay and BumiputeraOccupational Structures, 1970–1990

Occupational category

Per cent

in 1970a

Targeted per cent for

1990b

Actual per cent in

1990b

Change in per cent 1970–

1990

Professional and technical

4.3 6.6 9.2 4.9

Administrative and managerial

0.4 1.2 1.4 1.0

Clerical 3.3 6.1 9.3c 6.0

Sales 5.2 5.6 7.2 2.0

Service 13.8 25.0 12.4 (0.8)

Agricultural 65.3 36.3 37.4 (27.9)

Production 7.8 19.1 23.2 15.4

Total 100.0 100.0 100.0

a Malays only. b Bumiputera. c Teachers and nurses account for 3.9 per cent of thiscategory.

Source: Adapted from Torii (2003:227, table II; 237, table IV).

The reduction of Malay and bumiputera involvement in agriculture wasremarkable from 65.3 per cent in 1970 to 37.4 per cent in 1990. For otheroccupational categories, the targets set in 1970 for 1990s were attained oreven exceeded, with the sole exception of the “service” category. Since


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professional occupations are always a contentious category because of itsassociations with limited entry, educational attainment, higher qualificationand lucrative remuneration; the steady increase in Malay representationthat occurred between 1970 and 1997 is evident from Table 25.

Table 25: Registered Professionals* byEthnic Group, 1970-1997

Year Bumiputera Chinese Indian Others Total


1970** 225 4.9 2793 61.0 1066 23.3 492 10.8 4576 100.0

1975*** 537 6.7 5131 64.1 1764 22.1 572 7.1 8004 100.0

1980 2534 14.9 10812 63.5 2963 17.4 708 4.2 17017 100.0

1985 6318 22.2 17407 61.2 3946 13.9 773 2.7 28444 100.0

1990 11753 29.0 22641 55.9 5363 13.2 750 1.9 40507 100.0

1995 19344 33.1 30636 52.4 7542 12.9 939 1.6 58461 100.0

1997 22866 32.0 37278 52.1 9389 13.1 1950 2.2 71843 100.0

Note: Due to rounding, not all percentage rows add up to 100.* Includes accountants,architects, dentists, doctors, engineers, lawyers, surveyors and veterinary surgeons.**Excludes surveyors and lawyers. *** Excludes surveyors.

By 1995, Malay professionals had reached 30 per cent restructuring targetof NEP, an impressive gain, even if part of it might have been due to theemigration of non-Malay; especially Chinese professionals, mostly out ofdissatisfaction with discrimination of NEP against non-Malays.

In short, the new occupational structures suggested a substantialachievement of NEP goals of “abolishing the identification of ethnicitywith economic function”. The state-led social engineering had indeedsponsored the rise of a Malay professional middle-class component ofBCIC. More than that, judgment of NEP by the criterion of ethnic distributionof the ownership of share capital (corporate wealth), the other componentof BCIC, that is, a class of Malay capitalists had significant presence by theend of NEP period, despite the difficultly in nurturing and sustenance.Bumiputera ownership of share capital of public companies raised from2.4 per cent in 1970 to 20.6 per cent in 1995 (See Table 26).


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Table 26: Ownership of Share of Capital (at par of value)of Limited Companies, 1970-95

1970 1980 1985 1990 1995

RM million

Per cent of

total

RM million

Per cent of

total

RM million

Per cent of

total

RM million

Per cent of

total

RM million

Per cent of

total

Malaysian residents

1,952.1

36.6 18,493.4

57.0 57,666.6

74.0 80,851.9

74.6 129,999.5

72.3

Bumiputera individuals and trust agencies

125.6

2.4 4,050.5

12.5 14,883.4

19.1 20,877.5

19.3 36,981.2

20.6

Bumiputera individuals

84.4

1.6 1,880.1

5.8 9,103.4

11.7 15,322

14.2 33,353.2

18.6

Trust agencies

41.2 0.8 2,170.4 6.7 5,780 7.4 5,555.5 5.1 3,628 2.0

Other Malaysian residents

1,826.5

34.3 14,442.9

44.6 42,783.2

54.9 50,754

55.3 78,026.9

51.7

Chinese 1,450.5 27.2 N.A. N.A 26,033 33.4 49,296.5 45.5 73,552.7 40.9

Indians 55.9 1.1 N.A. N.A 927.9 1.2 1,068 1.0 2,723.1 1.5

Others N.A. N.A N.A. N.A 987.2 1.3 389.5 0.3 1,751.1 1.0

Nominee companies

320.1 6.0 N.A.

N.A 5,585

7.2 9,220.4

8.5 14,991.4

8.3

Locally controlled companies

N.A.

63.4 N.A. N.A 9,249.7 11.8 N.A. N.A N.A N.A

Foreign residents

3,377.1 100.0 13,927 43.0 20,298 26.0 27,525.5 25.4 49,792.7 127.7

Total 5,329.2 32,420.4 100.0 77,964 100.0 108,377.4 100.0 179,792.2 100.0

N.A. = Not applicable.

Sources: Jomo 1990:158–59, table 7.3; Phang 2000:116, table 4.9.

The latter figure, short of 30 per cent target of NEP, has often beensuspected of understating the extent of bumiputera ownership primarilybecause the “nominee company” shares have been officially regarded asbelonging to “non-bumiputera” owners when, as has been widely argued22

the “nominees” typically held shares on behalf of bumiputera owners. Onthe other hand, from the late 1980s to the early 1990s, some originallydomestic non-Malay capital might have re-entered the economy as foreigninvestment. Nevertheless, significant bumiputera ownership of sharecapital, as a proxy measure of the size of the capitalist component of BCIChad become a reality. The pressing issues of 1990s and beyond did notmerely concern that bumiputera share need be increased to reflect theirproportion of the national population. It also concerned the ability of thestate-nurtured bumiputera entrepreneurs to transform themselves into“real capitalists”, capable of holding their own local and foreign capitalwithout extensive state assistance.


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5.2 Governance: Public–Private Sector Divide

The changed structures and patterns of inequalities that emerged withinthe broad public sector were direct result of an emphatically ethnicinterpretation and discriminatory implementation of objectives of NEP.In administrative and regulatory terms, those adjustments were facilitatedby an ethinicised framework of governance in the public sector thateventually created three different sets of difficulties for governance undersubsequent NEP regimes:

• An inter-ethnic divide

• The problems of bureaucratic self-regulation

• The eventual subordination of the bureaucracy.

The preferences and discrimination favouring bumiputera were adoptedin principle. In practice, quotas and targets were set and continuallymodified for many areas of social and economic life. It became the normfor public sector to use price subsidies and discounts to offset what wasregarded as the lack of competitiveness of bumiputera. All suchpreferences, quotas and subsidies formed parameters of an unambiguouslyethinicised framework of governance to facilitate the performance of publicsector and different roles under NEP and to determine (differential ethnic)access to public services, the allocations of public resources and the detailedregulation of businesses in the private sector. The twenty-year target ofNEP of a 30 per cent bumiputera share of corporate assets in 1990 wasvirtually “institutionalised” as a minimum “30 per cent” “bumiputeraparticipation” in such areas:

• Employment in private companies subjected to the purview of ICA

• Issue or allocation of new shares in public listed companies

• Sale or transfer of corporate or other assets in selected sectors

• Award of government contracts and projects

• Admission of students in tertiary education, selection of their fieldsof study and awarding scholarships and financial assistance

• Development and sale of urban housing and commercial space.


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Since the inter-ethnic “imbalances” of the pre-NEP ethnic division of labourcould not be overturned within a short period without drastic measures,“bumiputera quotas” frequently exceeded 30 per cent of whatever wasthought to fall within the ambit of restructuring and “redistribution”.

One outcome of this practice of “ethnicised governance” was widening andstiffening public-private sector divide. This divide was beleaguered byethnically coloured dichotomies, so to speak, that were embedded in thepublic imagination, but found in reality too. For example, it was commonfor Malay politicians and bureaucrats to insist that the objective of publicsector that of “social enterprise” was a measure of balance against themotive of “profitability” of private sector. However, for others that wasnearly the same thing as conceding “public sector ineptitude” in contrastto “private sector efficiency”. Other constructs or ideologicalrepresentations of the features of the public-private sector divide included:

• poverty versus wealth

• redistribution versus growth

• social objectives versus economic rapacity

• nurture versus control

• support versus penalty

• expansion versus restriction

• fostering national unity versus threatening national unity

• constructive protection versus self-reliance.

Each of the above constructs carried public-private dichotomy thatimplicitly overlapped with “Malay versus non-Malay” polarity. As can beassumed, what the “Malay public sector” was inclined to proclaim as themeasures of NEP for “sharing” wealth; the “non-Malay private sector”, forinstance, tended to disclaim as acts of “aggrandisement”. Hence the publicservices, public enterprises and statutory bodies became increasinglyMalay domains, but the powerful private sector was still popularlyperceived as a Chinese domain.23 The public sector came to be regardedand justified as a bumiputera bulwark against non-bumiputera (and foreign)private sector.


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5.3 Governance and Public–Private Sector Overlap

The ethnically marked public- private sector divide only revealed part ofthe difficulties of governance emerging under the conditions of alteredethnic structures and inequalities. As far as BCIC was concerned, therewas crucially a public-private sector overlap because the borders between“Malay social enterprise” and “Malay private business” were blurred whenthe multi-dimensional state economic intervention of NEP took the formof “state capitalism”.

The extension of state capitalist interests are not confined to the new“public enterprises” which claim to represent “Malay interests” but thestate support for private capital accumulation by Malays can be seen in thesimilar light. Joint ventures involving Malay and non-Malay partners (so-called “Ali Baba” arrangements), appointments of Malays to companydirectorships and securing government contracts by politically well-connected businessmen are all manifestations of expanding Malay privatecapital. Private companies, for example, recognise the advantages to begained from having well-connected directors. (Jomo 1988:266)

The restructuring of NEP envisioned the state-sponsored creation of Malaycapital. Beside adequate financial and economic resources, the success ofthe ambitious project of social engineering was dependent upon threecritical requirements:

(i) Political power needed to push NEP agenda

(ii) Administrative capacity to implement NEP

(iii) Individual successes to vindicate NEP itself.

5.4 Ethicised Civil Service

Over the years, through the operation of Malay “special rights” inrecruitment and promotion preferences, the whole structure of governmentservices has become a bastion of Malay power and the major avenue forMalay professional and economic advancement. This pattern is particularlypronounced at higher administrative and policy making levels where Malaydominance comes closer to reality.24

The emergence of a clearly Malay-dominated public sector has raisedconcerns over bureaucratic “responsiveness and legitimacy” and


45

“effectiveness and efficiency”, “governance and accountability”25, and asense of marginalisation and insecurity among non-Malay personnel. Theseare serious issues by any standard of public administration, and “politicallysensitive” issues much to the dismay as and when put in ethnic garb. As aresult, the public service in Malaysia has deteriorated in the quality andperformance of its personnel because of ethnically influenced decisionson recruitment and promotions, which favoured Malays over competentnon-Malay counterparts. Yet, arguably, Malay “over-representation” inthe civil service that antedated NEP and the changes to public sectorgovernance, are linked to the rise of the sector in the first decade of NEP.

Malayanised bureaucracy had practically to remain a preserve of theMalays. Thus, the Malay to non-Malay recruitment ratio of 4:1 for theelite Malayan civil service (MCS) was instituted, which ensured that “atleast 80 per cent of the service will be filled by Malays, far above theirproportion in the total population”. The post-independent civil servicesaw rapid Malay domination (See Table 27).

Table 27: Ethnic Composition of the Federal and StateServices (DI, II and III), 1969

Ethnic group

Federal services (Division I)

States services (Division II)

Federal and state services(Division III)

Number Per cent Number Per cent Number Per cent

Malays 36,618 60.7 12,328 79.1 48,946 64.5

Chinese 12,181 20.2 1,744 11.2 13,925 18.4

Indians 10,499 17.4 1,394 8.9 11,893 15.7

Others 986 1.6 125 0.8 1,111 1.5

Total 60,284 100.0 15,591 100.0 75,875 100.0

Source: Puthucheary 1978:57.

Table 28: Ethnic Composition of the MalayanCivil Service, 1950–1970

Ethnic group 1950 1957 1963 1970

Malays 31 124 250 603

Non-Malays — 13 31 93

British 114 221 9 —

Total 145 358 290 696

Malays as per cent of Total 21.4 34.6 86.2 86.6

Source: Puthucheary 1978


46

As disagreeable as this “pre-NEP quota” system might be to non-Malay oreven rational Weberian sensibility, there were few feasible alternatives inone critical respect. So long as the pre-NEP ethnic division of labour wasstiffening in non-expanding laissez-faire capitalism managed by theAlliance; the civil service was bound to be a site for zero-sum inter-ethniccompetition.

However, the whole socio-economic and employment sector of Malaysiahas become ethnic since NEP and has visibly divided the society. Thesocial problems prior to 1970s are re-emerging and the sectoral and biasedpolicies in favour of Malay communities have fractured the social fabric.It has virtually marginalised Indian and Chinese communities.

6. Economic, Social, Political and Cultural Fallouts of Exclusion

Malaysia is a multi-ethnic society and ethnic consciousness and identityare quite strong in day to day conditions. Indeed, the historical and presentimportance of ethnicity in social, economic, political and cultural relationsbecomes significant. Ethnicity has been an on-going debate and controversyin Malaysia. To a large extent, ethnicity is socially constructed but itsphysical attributes and deep cultural differences between the groups cannotbe denied. The differences in language, ancestry or customs surface nomatter how finely the lines are drawn. It becomes important to note thatpublic policy has much to do with group formation. These three ethnicgroups of Malaysia (Malay, Chinese, and Indian) would be considered anethnic group (“coloured”) under Apartheid Law in South Africa under whichthe Malays, Chinese, and Indians who migrated to South Africa would feelcloser to each other in terms of their cultural background than they wouldin Malaysia. Thus, any discussion of ethnic differences would be futilewithout contextualising the issues in society, economy, polity and culture.

6.1 Ethnic Policy in Malaysia

Groups are often referred to as “majority” or “minority”; whether the groupis majority or minority depends on the numerical size of the group, itspolitical power relative to other groups and in this sense, the majoritygroup in Malaysia is the Malay, consisting over 60 per cent of the totalpopulation. The Chinese and Indians are minority groups forming 30 and10 per cent of the total population; respectively.


47

In political or popular discourse in Malaysia, “ethnicity” is often usedinterchangeably with “race”; whereas social scientists use “race” to referto the physical or biological attributes and “ethnicity” refers to the culturalattributes. “Race” is primarily a description of skin color or visible physicalattributes. The skin color is continuous than categorical, particularlyamong descendants of mixed marriages. Thus, the term “race” lends littleto sociological or anthropological understanding of people. On thecontrary, “ethnicity” or “ethnic group” is used primarily in contexts ofcultural difference, which can be traced back to shared ancestry andcommon language, religion or place of origin. Therefore, the term“ethnicity” has greater claim to sociological analysis than “race”.26 InMalaysia, the differences in visible physical attributes among Malays,Chinese and Indians are relatively less, for it is the difference in cultures,particularly language and religion that form the basis for conflict.

Malaysian independence marked a political victory for Malays. Soon afterindependence, in 1961, the Education Act was enacted and NationalEducation Policy (NEP) was introduced. NEP stated two goals:

• To establish a national system of education

• To make Malay the national language as well as the medium ofinstruction in all government schools, colleges, and universities.

Under the policy, Malay language became the sole official language in thecountry and was termed “Bahasa Malaysia” - the Malaysian language.27

The ethnicity-based public policies in Malaysia was fundamentallyeconomic but masqueraded as cultural. Malaysian public policies havebeen formulated with an assumption that Malay majority needs economicsecurity from the non-Malay immigrants. Prime Minister Mahathir-Bin-Mohamad engineered Malaysian preferential policies since he took overthe office in 1981. He was lucid about the differences in “character” of thetwo groups. Although he used the term “hereditary” in his writing in 1970,but it laid emphasis that such differences in group “characters” were aconsequence of environment and economic conditions that shaped the lifeof Malay and Chinese communities. A new category “bumiputera” wascreated to refer to the beneficiaries of NEP and the formulated policy ofbumiputera ethnicity served two purposes.


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• It gave legitimacy to the group receiving preferential treatmentunder the policy. In Malay language, bumiputera means “son ofthe soil” which implied that the group is entitled to favorabletreatment for being original inhabitants of the land.

• Using the new term instead of “Malay” category created a broaderpolitical base as bumiputera refers not only to the Muslim Malayson the Peninsula, but it also incorporates the indigenous peoplesof East Malaysia of Sabah. These indigenous peoples do not sharethe same language and religion of Malays on the Peninsula.28 Thisbroader base helped in fostering smooth incorporation of Sabahinto Malaysia and created a clear numerical majority ethnic groupin the country.

The goal of NEP was to increase the economic share held by bumiputeras

from 2.4 per cent to 30 per cent. This was done by moving bumiputeras

into business by giving them special consideration for government

contracts and licenses. Initially, many bumiputeras sought the opportunity

to get contracts and licenses but promptly sold them to their so-called “Ali

Baba” joint venture partners or to non-bumiputeras.29 This clearly indicated

to the politically conscious policy makers that economic change would not

occur without cultural change. A cultural reformation, involving new skills,

new approaches and values was thought essential, if bumiputeras were

made to emerge as confident, commercially sophisticated community,

capable of competing with the non-bumiputeras business community.

Education and training, therefore, built up the strongest element in the

initiatives of NEP30 under which university education became the terrain

of ethnic contestation. Prior to NEP, few bumiputeras were admitted into

the university and were grossly under-represented in lucrative fields of

science and engineering. The institution of NEP quota system ensured

Malay pre-dominance amongst the university students, faculty and staff.

Almost four out of every five university scholarships were awarded to

Malay students31 who only needed to possess the minimum requirements

for admission.

To increase the access of bumiputeras to higher education, an “Off-campus

Universities Programme” was set up after the implementation of NEP.32

This programme brought into Malaysia American professors from 20


49

American universities of the Mid-West Universities Consortium for

International Activities (MUCIA), to prepare bumiputera students for

degrees in Arts, Science, and Engineering. The programme supported

bumiputera students overseas in Britain, Australia and Canada. In addition

to “Off-Campus Universities Programme,” public funds were directed to

establish several institutions, such as MARA junior colleges, which admitted

exclusively bumiputera students for post-secondary vocational training.

6.2 Representation and Domination

In the fundamental ways, BN which built upon the traditions of itspredecessor, the Alliance, is the institutional emblem of a system thatcombines “open ethnic politics” with inter-ethnic co-operation asadvocated by those in power and well developed in actual practice. This isso partly because BN is not only the historical product of a political systemin which party programmes, political mobilisation and voting behaviourare dominated by ethnic considerations and appeals. Partly, it is becauseBN being the most successful competitor in the electoral process has usedits uninterrupted rule at all levels of government with significant but rareexceptions among state and local governments to shape the political systemand the electoral process according to the ruling coalition ideas andrequirements.

Since its formal beginnings in 1974, BN has not been monolithic or static.Both obvious and subtle alterations have been made to works of the rulingcoalition. As a definitive example, the elite compromise of Alliancesupposedly based upon equitable inter-party consultations—notablybetween UMNO and MCA has been superseded by more centraliseddecision making of BN, grounded in implicit dominance of UMNO in thecoalition. This important change was a distinct movement, though not asharp break, away from “consociationalism” of the Alliance toward a“democracy without consensus”.33 But BN has invented a discernibletradition and institutionalised different mechanisms to which enduranceof coalition can be attributed. The most important of these formulas andmechanisms include a tested framework for managing inter-ethnic politicswithin and outside the coalition, relatively stable allocations ofopportunities for electoral representation and contestation; and functioningarrangements for power sharing at different levels of government.


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The control of BN over the electoral process has been derived from many

factors and sources. Since the political system is not a one-party state, yet

an unbroken tenure in the federal government has allowed BN virtually to

conflate state and ruling coalition, not least in the exercise of vast powers

of incumbency of the coalition. At its disposal, BN has an imposing array

of state resources including the command of administrative apparatus,

control over economic resources and an ownership and regulation of the

mass media. Moreover, the principal parties of BN have their own “fleets”

of corporations34 as well as those of their major business allies from which

to draw financial and other forms of assistance. Simultaneously BN

governments at all levels routinely deny the opposition access to the same

resources. The administrative machinery is regularly used to obstruct or

repress the opposition and its supporters, and not just when elections are

scheduled. The “deployment-denial” by BN of state and non-state resources

constitutes a massive structural advantage by any standard. In a typical

first-past-the-post electoral contest, this advantage tactically confers upon

the candidates of BN a leading, if not, winning edge. Between elections, the

same strategy usually taking the form of state-financed “public services”,

helps to entrench an incumbent BN representative—but pointedly not one

from any opposition party—in the constituency35.

Hence, across the electoral terrain, the advantages of BN in a general or

state election were historically overcome only at moments of political

crises; 1969 and 1984 in Sabah, 1990 and 1999; that generated sweeping

waves of anti-regime recalcitrance. Even then, the heightened dissent

tended to raise the share of popular vote for the opposition without securing

for opposition a commensurate proportion of parliamentary or state

assembly seats. The results of the elections of 1986, 1990, 1999 and 2004

attest to this systemic inequality (See Table 29).


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Table 29: Proportion of Popular Vote Comparedwith Number and Share of Parliamentary

Seats in General Elections, 1959–2004

Election year

Alliance/BN All opposition parties Total no. of seats

contested Per cent of

popular vote

No. of

seats

Per cent

of seats*

Per cent of

popular vote

No. of

seats

Per cent

of seats*

1959 51.7 74 71 48.3 30 29 104

1964 58.5 89 86 41.5 15 14 104

1969 49.3 92 64 50.7 51 36 143

1974 60.7 135 88 39.3 19 12 154

1978 57.2 130 84 42.8 24 16 154

1982 60.5 132 86 39.5 22 14 154

1986 55.8 148 84 41.5 29 16 177

1990 53.4 127 71 46.6 53 29 180

1995 65.2 162 84 34.8 30 16 192

1999 56.5 148 77 43.5 45 23 193

2004 63.8 198 90 36.2 21 10 219

* Rounded to the nearest 1 per cent. Source: Adapted from Funston (2000:49,Table 1).

The structural advantage of BN is allied to other features of the electoralsystem, such as gerrymandered constituencies and a carefully calibrateddistribution of constituencies. Consequently, BN has consistently gainedtwo-third majorities in Parliament that did not reflect the shares of thepopular vote for BN. It received 60 per cent or more of the popular voteonly four times; in 1974 when most of the opposition parties successful in1969 were freshly co-opted; in 1982 when the first Mahathir administrationwas greeted with popular expectations and in 1995 and 2004, followingfew years of very high economic growth. However, BN won less than 80per cent of the parliamentary seats twice; in 1990 following the split ofUMNO in 1987–198836 and in 1999 when the persecution of Anwar Ibrahimin 1998–1999 swung the Malay vote against UMNO.37 In the pre-BNelections, 49.3 per cent share of the popular vote of the Alliance in 1969was the lowest ever in Alliance/BN history; still, the Alliance took 64 percent of the parliamentary seats and retained its two-third majority in theParliament in December 1970 when the Sarawak United People’s Party(SUPP) which had five seats joined the Alliance.


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It is, arguably, the ability of BN to dominate electoral processoverwhelmingly by securing more than two-third majority in Parliamentand controlling almost all state governments that validates and sustainsthe claims of BN to being committed to inter-ethnic cooperation,collaboration between component parties and consensus building. Thefact that BN having to parcel out seats for contestation among 14 members,perhaps having more than two-third majority in politics is akin todependence of NEP on high economic growth. This could facilitateredistribution without provoking a sense of deprivation, exclusion anddiscrimination. None of these “articles of faith” is untrue of the modusoperandi of BN so long they are collectively located within BN framework,which

• determines ethnic representation in the electoral process byallocating seats to component parties before elections.

• maintains inter-ethnic power-sharing by distributing positions inthe federal government and in state governments under BN controlto component parties.

• entrenches the position of UMNO as dominant party in the politicalsystem.

6.3 Ethnic Representation: Parliament and State LegislativeAssemblies

Over 30 years, BN has grown into a standing coalition of 14 “componentparties” all of which could lay some claim to representing BN in any generalelection. Thus, the allocation of seats for electoral contest, always a criticalissue for BN, is a complex process. For the entire country, the process isbased largely on the overall ethnic composition of the electorate, the ethnicprofiles of constituencies and the relative strengths of component partieswithin BN. Thus, in Peninsular Malaysia, where the largest groups of votersare Malay and Chinese, most constituencies show a majority of Malay orChinese voters, and UMNO and MCA are the largest parties and obtain thetwo highest allocations of seats (See Table 30).

On the other hand, allocation of seats for BN parties in Sabah and Sarawakreflect more diverse ethnic composition of the electorates as well as theinfluence of the non-Malay bumiputera parties. In fact, UMNO only beganto feature directly in Sabah in the 1995 general election, for which UMNOwas established to replace previously “Muslim or Malay” parties, notablyUSNO. In addition, given the first-past-the-post electoral contests, themost important criterion for allocating a specific constituency to a


53

component party is the ethnic composition of the electorate of thatconstituency. In principle, a “Malay majority constituency” in PeninsularMalaysia will be allocated to UMNO, while a “Chinese majorityconstituency” will go to either MCA or Gerakan, these being “Chinese-based” parties of BN. This basic formula is modified to accommodate MICwhich receives certain number of seats although no constituency has amajority of Indian voters. The Constituency demarcation has been steadilyskewed to create much larger number of Malay-majority constituencies;allocation of BN which disproportionately favours UMNO over all otherBN parties (Sothi Rachagan 1980). Despite this fundamental inequalityand the component parties’ periodic disagreements over seat allocations,the mechanism of BN to provide for ethnic representation in electoralcontests has been flexible enough to meet changes in the coalitionmemberships over many elections (See Table 30).

Table 30: Allocation of Parliamentary Seats amongAlliance or BN Parties, 1959–2004

1959 1964 1969 1974 1978 1982 1986 1990 1995 1999 2004 Peninsular Malaysia UMNO 70 68 67 61 74 73 84 86 92 93 104 MCA 31 33 33 23 27 28 32 32 35 35 40 MIC 3 3 3 4 4 4 6 6 7 7 9 Gerakan 8 6 7 9 9 10 10 12 PPP 4 1 1 PAS 14 HAMIM 2 Berjasa 2 Sabah UMNO 12 11 13 USNO 13 6 5 6 6 SCA 3 Berjaya 10 11 PBS 14 14 4 UPKO 4 4 4 PBRS 1 1 1 SAPP 2 3 2 LDP 1 1 1 Sarawak PBB 16 8 8 8 10 10 10 11 SUPP 8 7 7 7 8 7 7 7 SNAP 9 9 5 3 4 4 PBDS 4 6 6 6 6 SPDP 4 Total 104 104 103 154 152 154 177 180 191 192 219

Note: In any election year, a blank for a party indicates one of the following: theparty did not exist at the time; had been dissolved; had not yet joined the BN; hadleft the BN; or its significance had diminished and it was not allocated any seat.

Sources: Suruhanjaya Pilihanraya (Election Commission), various years; New StraitTimes 2004:64.


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BN has successfully extended its method of seat allocation to contest atthe level of the State Legislative Assembly in each of the 13 states. Fineradjustments can be made at this level to suit local demographic featuresand also because larger number of state seats are available as compared tosmaller number of parliamentary seats, illustrated by the seat allocationfor state contests in 2004 (See Table 31).

Table 31: Allocation of State Legislative Assembly Seats among BNParties, Peninsular Malaysia-2004 General Election

State UMNO MCA MIC Gerakan PPP Total

Perlis 13 2 0 0 0 15

Kedah 28 4 2 2 0 36

Kelantan 44 1 0 0 0 45

Terengganu 31 1 0 0 0 32

Penang 15 10 2 13 0 40

Perak 34 16 4 4 1 59

Pahang 31 8 1 2 0 42

Selangor 35 14 3 4 0 56

Negeri Sembilan 22 10 2 2 0 36

Malacca 18 8 1 1 0 28

Johor 34 15 4 3 0 56

Total 305 89 19 31 1 445

Source: New Straits Times 2004:64.

Perlis, a small Malay-majority state has only three parliamentaryconstituencies. Here, Chinese voters make up 14 per cent of the electorate,none of the Chinese-based parties get a parliamentary seat but MCA contestsat the state level. Similarly, the non-Malay parties, MCA, Gerakan andMIC contest a limited number of state seats in the heavily Malay-majoritystates of Kelantan and Terengganu. In some cases, the allocation of stateseats serves to compensate “lesser” component party that has not beengiven a parliamentary seat to contest. For instance, Gerakan, regarded asthe smallest of the two Chinese-based parties of BN did not contest at theparliamentary level in Johor, Kedah and Selangor in 1999, but Gerakancontested at the state level in each of the three states.

In an electoral process where voting behaviour is heavily influenced byethnic concerns and the acceptability of a candidate is closely correlatedwith the candidate’s ethnicity, the successful deployment by BN of seat


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allocation as a mechanism of political representation lends credibility totheir claim of practicing “multi-ethnic politics”; despite its componentparties’ unabashedly ethnic character. Component parties have disputedseat allocations before and only the threat of severe penalties includingexpulsion from BN has prevented disgruntled component parties fromsabotaging electoral campaigns in constituencies not allocated to them. Inpractice, however, the reward of a disciplined adherence to the seatallocations to BN is the component parties’ ability to enjoy vital “mutualityof access” to each others “natural”, ethnically defined constituencies.

On the contrary, individual parties which appeal to “single” communitieseven if ideologically they renounce ethnic politics, such as PAS and DAP,are unable to penetrate predominantly Chinese and Malay areas;respectively, let alone campaign profitably there. BN parties for example,UMNO and MCA face no such limitations, albeit the actual extent of co-operation has to be negotiated at the local level, and sometimes localsquabbles among them lead to non-cooperation or sabotage. At theelectorate level, “mutuality of access” works for a partisan supporter ofBN component party. The supporter need not agree with all other BNcomponent parties but has the choice to vote, for either BN or theopposition. Thus, the status of BN as a standing coalition, with all itscandidates contesting on a “unified” ticket, demonstrates a practicalstrength that must be a prerequisite of any viable coalition, that is, theability to be inclusive in obvious and subtle, practical and ideological ways,and as it were, to be all things to all people, hence “multi-ethnic” to otherwise“ethnic” voters.

Power sharing: Federal Cabinet and State ExecutiveCommittees

Initially, the power sharing between Alliances reflected an inter-ethniccompact reached before independence. After 1969, BN was established toco-opt as many opposition parties as could be attracted to an enlargedruling coalition. Even so, BN continued to uphold inter-ethnic powersharing in real as well as symbolic ways. The ways in which coalitioninstitutionalise inter-ethnic power sharing is to translate ethnicrepresentation in elections into ethnic representation in BN cabinets. In2004, Table 32, the ethnic composition of the Cabinet approximated ethniccomposition of the electorate. Since ethnic composition of population


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and the electorate continually vary for different reasons, it would beunrealistic to accept anything but an approximation of ethnic compositionof the Cabinet as compared to the ethnic composition of the electorate atany given time.

Table 32: Ethnic Composition of the Electorate Comparedwith the Ethnic Composition of the Cabinet, 2004

Ethnic group

Per cent of electorate

Minister Deputy minister

Parliamentary secretary

Total

Posts Per cent of

totala

Posts Per cent of

total**

Posts Per cent

of totala

Posts Per cent of

total*

Malay 59.1 22 67 18 47 11 50 51 55

Chinese 28.5 6 18 11 29 7 32 24 26

Indian 3.6 1 3 4 11 3 14 8 9

Non-Malay bumiputera

8.8 4 1.2 5 13 1 4 10 10

* 1999 figures. **Rounded to the nearest 1 per cent.

Sources: Syed and Pereira 2004; Wong et al. 2004; www.pmo.gov.my/website/webdb.nsf/vf_Front_Gov? OpenForm&Seq=2#_RefreshKW_f3_SubPM, accessedon 15 July 2005.

This basic ethnic composition of BN Cabinets should not be taken asevidence of an ethnically proportionate influence over policy formulationor decision making. It is a tacit but crucial feature of the rule by BN thatprime minister and the deputies would be Malays. And while Chineseministers held the strategic portfolios of finance and trade during theAlliance period, since mid-1970s, only Malays have headed the keyministries of finance, home affairs, defence, international trade, andeducation. Nonetheless, leaving aside the wider implications of resourcecontrol and powers of patronage, the fact of ethnic representation in BNCabinets helps to uphold and legitimise the framework of coalition of inter-ethnic cooperation and power sharing.

There is a different dynamics by which this method of inter-ethnic powersharing works in post-1969 politics. Beside the original Alliance memberparties—UMNO, MCA and MIC other parties that joined BN would havehad their own reasons indeed. While the tense political milieu after “May


57

13” made it critical, even desirable for many parties to attempt at re-establishing a post-Alliance framework of inter-ethnic cooperation, not allparties that joined BN did it out of “ethnic interests”. The parties that havecontrolled different state governments at various times, such as PAS inGerakan and Kelantan in Penang in 1969 and Parti Bersatu Sabah (PBS) inSabah in 1984, took into account the enormous difficulties of administeringan opposition-led state government in the face of hostility from BN FederalGovernment.

Yet, membership in BN essentially held out the hope that a party wouldtrade its opposition for some influence in government insofar as the partydelivers the votes of “its” community. It is a hope that has been realised bymost BN parties inasmuch as they have found ministerial appointments inthe Cabinet at various times (See Table 33).

Table 33: Distribution of Ministerial Posts by ComponentParty, Selected Years-1973–2004

Component party

1973 1974 1976 1981 1999 2003 2004

UMNO 13 14 13 15 16 19 22

MCA 4 3 4 4 4 4 4

MIC 2 1 2 1 1 1 1

Gerakan * 1 1 1 1

PAS 1 1 1

PBB 2 1 1 1 2 1 2

SUPP 1 1 1 1 1 1 1

PBDS 1 1 1

USNO 1 2 1

PBS 1

LDP 1 1

UPKO 1 1

Total 24 23 23 24 27 30 33

* In a particular year, a blank for a party indicates one of the following: the partydid not exist then, had been dissolved, had not yet joined the BN, had left the BNor its significance had diminished.

Sources: Abdul Aziz Bari 2002; Syed and Pereira 2004; www.pmo.gov.my/website/webdb.nsf/vf_Front_Gov?OpenForm&Seq=2#_ RefreshKW_f3_SubPM, accessed15 May 2008.


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From power sharing perspective of BN, a component party claiming torepresent the interests of “its” community gains, through a Cabinetpresence, a voice, a place and an opportunity to bargain formally; unequallywithin the decision-making and policy-formulating councils of BN. Whilethe performances of specific component parties vary over elections, it isclear that the most powerful party in the Cabinet has always been UMNO.Table 34. Even so, the disadvantage of inequitable power sharing mightperhaps be less important, symbolically and otherwise to smaller partiesthan the mere fact of their inclusion in the Cabinet, if need be at lowerranks of deputy minister and parliamentary secretary (See Table 34).

Table 34: Distribution of Posts of Minister, Deputy Ministerand Parliamentary Secretary by Component Party, 2004

Component party

Minister Deputy minister

Parliamentary secretary

Total

UMNO 22 18 11 51

MCA 4 8 4 16

MIC 1 3 3 7

Gerakan 1 3 2 6

PPP 0 1 0 1

PBB 2 1 1 4

SUPP 1 1 1 3

PBDS 0 2 0 2

PBS 1 0 0 1

UPKO 1 0 0 1

SPDP 0 1 0 1

Total 33 38 22 93

Sources: Syed and Pereira 2004; Wong et al. 2004;

www.pmo.gov.my/website/webdb.nsf/vf_Front_Gov?OpenForm&Seq=2#_RefreshKW_f3_SubPM, accessed 15 July 2005.

Just as the method of BN of determining ethnic representation in electionscovers both the parliamentary and state levels, its power sharing ingovernment is extended to the level of the state governments that arecontrolled by BN. The State Executive Council is the state equivalent ofthe Cabinet. The current distribution of State Executive Council positionsin the 11 states, which BN heads in Peninsular Malaysia is indicated inTable 35. There is a broad accommodation of the main BN componentparties even though UMNO leads the state governments in all these states,except for Penang, which has been led by Gerakan since 1969.


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Table 35: Distribution of Executive CouncilPositions by BN Parties in BN-Led State

Governments, Peninsular Malaysia-2003

State UMNO MCA MIC Gerakan Total Perlis 9 1 0 0 10

Kedah 7 1 1 1 10

Penang 3 2 1 4 10

Perak 6 2 1 1 10

Pahang 7 2 0 1 10

Selangor 6 2 1 1 10

Negeri Sembilan 6 2 1 1 10

Malacca 7 2 1 0 10

Johor 7 2 1 0 10

Total 58 16 7 9 90

Sources: Web sites of the respective Malaysian state governments.

Roughly similar principles of ethnic and party representations are appliedto lesser prominent levels of government, namely, the Senate, “upperhouse” in Parliament and the Municipal Councils or “local government” ineach state. The senators have always been appointed, while municipalcouncilors have been appointed since early 1970s when local electionswere effectively abolished. In practice, the Federal Government controlsappointments to the Senate, and State Government controls their MunicipalCouncils. BN uses appointments to both Senate and Municipal Councilsfor a variety of reasons, chiefly to reward its own politicians who are unableto secure nominations for parliamentary or state elections. In the process,however, some pattern of ethnic representation is once again maintained(See Table 36).

Table 36: Distribution of Councilors by BN Parties,Petaling Jaya Municipal Council

Name of Parties Number of councilors Per cent of total UMNO 13 54 MCA 7 29 MIC 3 13 Gerakan 1 4 Total 24 100

Majoritarian and Dominant: UMNO’s Position

Even so, there is no overlooking of the domination of UMNO within theframework of collaboration with BN. If ever UMNO was truly only thefirst among equals during the Alliance period, UMNO has clearly been the


60

dominant party of BN. Qualitatively, this “fact of BN life” and, associatedwith it, the reality of “Malay [political] supremacy” can be seen from variousperspectives. The simplest is the exit of component parties from BN.Despite the dissatisfaction of MCA in partnership with Gerakan duringearly days of BN; submitted to the reality of UMNO dominated “enlargedAlliance”, while Gerakan, claiming to be the conscience of BN during late1980s, simply genuflected before the dictates of UMNO in policy areasand political conduct. However, PAS was virtually ejected from BN in1976–1977 and PBS was defected in 1990. Further, UMNO could claim tobe the source of hegemonic stability within BN for long, since 1974elections. The domination of UMNO was established to the extent thatMahathir repeatedly reminded the component parties of BN that UMNOcould rule the country on its own if UMNO was not committed to powersharing. Mahathir’s assertion of the supremacy of UMNO in the electoralsystem in late 1980’s rested upon a conception of electoral politics inexclusively ethnic terms and conveniently left aside any consideration ofthe complex, if not destabilising consequences, of any UMNO attempt torule by itself. In any case, the assertion candidly expressed an underlyingmajoritarian view of democracy that at the very least appeared to havearithmetic on its side (See Table 37).

Table 37: Distribution of Parliamentary Seats by UMNO,Other Alliance/BN Parties and all Opposition Parties in

General Elections, 1959–2004

Election year UMNO Other Alliance or BN parties

All opposition parties

Total no. of seats

Seats Per cent*

Seats Per cent* Seats Per cent*

1959 104 52 50 22 21 30 29

1964 104 59 57 30 29 15 14

1969** 104 51 49 15 14 37 36

1969–1970*** 144 51 35 41 28 51 35

1974 154 61 40 74 48 19 12

1978 154 69 45 62 40 24 16

1982 154 70 45 62 40 22 14

1986 177 83 47 65 37 29 16

1990 180 70 39 57 32 53 29

1995 192 90 47 72 37 30 16

1999 193 72 37 76 39 45 23

2004 219 107 49 91 41 21 10

*Rounded to the nearest 1 per cent.** Figures for Peninsular Malaysia only. Only 103seats were contested because of the death of a candidate in a constituency in


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Malacca.*** Figures for the whole of Malaysia after elections were resumed in Sabahand Sarawak in July 1970. The actual number of seats contested was 143.

Sources: von Vorys 1975:160, table 6.3; Means 1991:34, table 2.1; 68, table 3.3;186, table 6.4; Funston 2000:49, table 1; New Straits Times 2004:64.

UMNO had a majority in Parliament in the first two elections of 1959 and1964. In subsequent elections, UMNO held a large plurality of seats, itsapparent decline being attributable mainly to the co-optation of partiessuch as PAS and Gerakan into an enlarged coalition of BN. More than anyhypothetical argument, the National Operation Council post-May 13 Rule,showed that UMNO would exercise its governing plurality in anyemergency. The number of Malay-majority constituencies far exceededall others. Thus, it was conceivable that UMNO by an overwhelming victoryin these constituencies could form a government on its own. Notably, after1986 elections, when UMNO won 83 seats out of a total of 177 seats, onlyan improbable and unwieldy coalition of all the remaining parties couldhave contested UMNO claim to form UMNO government; incase UMNOdesired. UMNO could have contested and probably won even more seats,were it not expedient for it to concede some of its safe seats to non-Malaycoalition partners, namely, MCA and MIC. From 1960s to 1980s, UMNOmade some such concessions to MCA when the very strong oppositionsentiment in the large urban Chinese-majority constituencies left BN withno other means to buttress unconvincing claim of MCA to being “the partyof the Chinese”. The concession to MIC had a different motive; there wasno alternative to giving up a few seats by UMNO to secure some degree ofIndian representation in Parliament. Of course, it might be argued, UMNOconcessions wouldn’t be necessary if the composition and distribution ofconstituencies were not gerrymandered according to ethnic considerations.In fact, prominent candidates of one ethnic background won earlier inconstituencies largely composed of voters of different ethnic background.But that argument would take discussion into the realm of principles, maybeof systemic reform, rather than prevailing conditions of electoralcompetition.

For a long time, therefore, singular performance of UMNO vis-à-vis allother parties underwrote the integrity of BN as a ruling coalition. In 1969,1986 and 1990 elections, when the non-Malay opposition parties did well,the formidable performance of UMNO offset its non-Malay partners’losses. Twice, the number of parliamentary seats of UMNO was less than


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the combined seats of all other BN parties. Table 38. In 1974,parliamentary representation of UMNO was less than half of the total ofBN because of the co-optation of PAS, Gerakan and SUPP that had hadgood results in the 1969 election.

Table 38: Distribution of Parliamentary Seats by UMNO andOther Alliance/BN Parties in General Elections, 1959–2004*

Election year Total No. of Alliance or BN seats

UMNO Other alliance or BN parties

Seats Per cent** Seats Per cent** 1959 74 52 70 22 30

1964 89 59 66 30 34

1969 66 51 77 15 23

1969–1970 92 51 55 41 46

1974 135 61 45 74 55

1978 131 69 53 62 47

1982 132 70 53 62 47

1986 148 83 56 65 44

1990 127 70 55 57 45

1995 162 90 56 72 44

1999 148 72 49 76 51

2004 198 107 54 91 46

* Retabulated from table 36, above **Rounded to the nearest 1 per cent

It was in 1999 election that caused UMNO so many defeats and it’sParliamentary Representation (of 72 seats) went down to less than thecombined number of seats (76) held by its coalition partners. BN displayedits depth as a “permanent” coalition; while compensating the setbacks ofUMNO in 1999, MCA and Gerakan performed strongly which preventedDAP from advancing as a leading member of ad-hoc coalition of BarisanAlternatif (Alternative Front). The “mutuality of access” that UMNO andits non-Malay coalition partners enjoyed came to the rescue of UMNO inthe ethnically mixed constituencies in reversal of past trends when it wasnon-Malay component parties that needed assistance. Ironically, thatresult merely restored unquestioned domination of UMNO of the BNframework.

It is arguably the novel experience of 1999 elections that truly provedstrong peculiarity of the framework of representation of BN power sharingand domination within its system of open ethnic politics. By 2004 generalelections, with the opposition in disarray, its domination was re-established


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to greater effects (See Table 37). Additional evidence comes from themimicry to which the opposition parties have had to resort. In past elections,the best opposition performances were made possible when the opposition,among other things, adopted some variant of the Alliance or formulas ofcoalition of BN; by negotiating an electoral pact in 1969 or forming a“second coalition” in 1990 and 1999.

7. Conclusion

The accommodation of differences is the essence of true equality38, andgroup specific rights are needed to accommodate differences. In a family,society and state individual rights and differences already allowaccommodation and on the basis of this proposition equal right of eachindividual; irrespective of the identity, requires for the cohesion of thesociety and state. But in the broader framework some minority rightseliminate those rather than creating.

In the contemporary scenario, ethnic exclusion and discrimination havereceived far greater attention than peace, inclusion and equality in multi-ethnic, multi-religious and multi-cultural societies. But at the policy level,the implication is that the solution to ethnic exclusion lies at the ethnicrelation level. Some scholars opine that social, economic and culturalincompatibility in a multi-ethnic society is inevitable. Such kind of notionbreeds practices of exclusion and discrimination in the multi-ethnic society.In an exploitative economic structure, exploitation, exclusion anddiscrimination are identical issues on the basis of ethnic, religious andcultural identities. Ethnic identification and consciousness are particularlystrong among disadvantaged ethnic minority groups who undergovictimisation, as in case of Indians and Chinese in Malaysia. Ethnicity,religion and culture are also convenient political resources in anunconstructive sense.

As for human philosophy, culture, organisation and technical know how,in a multi-ethnic society each ethnic community has strengths andweaknesses. The typical representation of multi-ethnic society of Malaysiacomprising three main ethnic groups; Malays, Chinese and Indiansunderstates the ethnic diversity that is found within these communities initself. In ethnic terms, the present Malaysian population consists of differentcommunities, several of which lend themselves to other subdivisions. Thebumiputera of Peninsular Malaysia consists almost entirely of Malays and


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Orang Asli (aboriginal communities), while the bumiputera of Sabah andSarawak refer to the indigenous people of diverse ethnic communities.The ethnic composition of the population of Sabah and Sarawak and thecomposition of bumiputera communities in particular, is much more variedthan that of Peninsular Malaysia. In the census of 1970, 38 ethnic groupswere formerly enumerated separately and re-categorised into eight groups:Bajau, Chinese, Indonesian, Kadazan, Malay, Murut, other indigenousgroups. According to 1970 census, the Kadazandusuns was the largestethnic group forming just over 28 per cent of the Sabah population, followedby Chinese who comprised 21 per cent of the population. There are sizeablenumber of indigenous non-Malay Muslims in Sabah and Sarawak, Indianand Thai Muslims in Peninsular Malaysia and a small number of Muslimconverts of other ethnic backgrounds.

On the eve of independence in 1957, the political economy of Malaysiashaped by colonial capitalism had created certain patterns of unevendevelopment, economic disparities and social divisions. This rough rural-urban division in the distribution of population and economic activity alsohad its ethnic dimensions. The economic disparities and social divisionswere complicated by an ethnic division of labour. Consequently, post-colonial patterns of “asset ownership” continued to show significant inter-ethnic differentials. The non-Malay, mostly the Chinese ownership of sharecapital was substantial, but the proportion of Malay ownership was verylow. The social and economic disparities are the breeding ground of inter-ethnic resentment and discontent.

The immigrant ethnic groups who used to be “transients” are permanentresidents. Their much improved economic well-being, consciously orunconsciously, became a source of insecurity to the indigenous Malays. In1970, poverty was markedly higher among the Bumiputera than otherethnic communities. Approximately two-third of Bumiputera householdswas living below the poverty line and the poverty rates among Chinese andIndian households were 26.0 per cent and 39.2 per cent; respectively.Since NEP, the ethnic income differentials narrowed over the period 1970–2002. The public sector took on a multiplicity of roles as justified by NEP.The public sector emerged as the provider of opportunities for Malays asit enlarged the existing group of Malay entrepreneurs, graduates andprofessionals. The re-structuring of requirement of NEP set a quota for atleast 30 per cent bumiputera equity participation and employment in


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companies covered by ICA. Even at state and local level government, (non-Malay) businesses came under strict bureaucratic regulation. The publicsector emerged as a major investor seeking to raise the Malay ownershipof corporate equity. It employed state resources to expand the ownershipof assets via “restructuring” exercises that included setting up companiesby public sector and buying into or buying up existing as well as new localand foreign businesses. Finally, the public sector functioned as the trusteeof Malay economic interests. Some of the best known “trustee” agencieswere Bank Bumiputera, Urban Development Authority, PerbadananNational (Pernas, or National Corporation), Permodalan National Berhad(PNB, or National Equity Corporation), Amanah Saham National (ASN, orNational Unit Trust Scheme) and the state economic developmentcorporations.

Within NEP, the role of education especially university education, wasstrongly politicised. In order to accelerate and actively facilitate bumiputerademand for access to higher education, the Malaysian governmentimplemented ethnic quota system where admission to public universitiesis based on the ratio of 55:45 for bumiputera and non-bumiputera students.This situation of high bumiputera enrolment in public institutions of higherlearning persisted into mid-1990s.

8. Recommendation and Suggestions

Ethnic identification and consciousness are particularly strong amongdisadvantaged ethnic minority groups like the Indians and Chinese inMalaysia. In this case, ethnicity has assumed an important role for thepurpose of articulation and in the struggle for social and economic justiceand equality. Ethnicity, religion and culture have become potential politicalresources in the Malaysian society and since 1969, emerged as tools in thepolitical process. All forms of exclusion in Malaysia are ethnicity baseddiscrimination. However, the major findings are:

• In this study, four kinds of exclusion and discrimination have beenelucidated; between Europeans (British) and the Asians (indigenousor immigrants); between the immigrant and the indigenouspopulation; between the Chinese immigrants and the Indianimmigrants; and between the Malay aristocrats and the Malaypeasants.


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• Again, as per the process of economic development and planningof the government in this study, it has also observed that theexclusion and discrimination are broadly in two forms. Before theimplementation of the New Economic Policy, the indigenous Malayethnic groups were discriminated from the main stream economyand the development process. The indigenous communitiessuffered the most and were excluded and marginalised from accessto property and economy. Since the introduction of NEP, theMalaysian government put entire thrust on the upliftment of theindigenous groups.

• Culturally there has been an attempt to reject the history andtradition of the indigenous people, or attempt to displace orneutralise the indigenous culture. The use of English, Chinese andTamil as the medium for education were attempts to subjugate theindigenous culture, or at least to neutralize it. Malay intellectualand cultural thinkers were branded as communal or racial, placedat the same level with cultural chauvinism of the immigrantcommunities which finally shaped the cultural politics in Malaysia.

• Since the New Economic Policy, the mechanism of the governmentfunctioned in the form of affirmative action. The public sectoremerged as the provider of opportunities for the Malays. It enlargedthe existing corps of Malay entrepreneurs, graduates andprofessionals and also provided aspiring Malay entrepreneurfinancial assistance, credit facilities, contracts, preferential shareallocations, subsidies and training. It established new publicuniversities and all-Malay residential schools and colleges at home,and sent tens of thousands of Malays, young students and mid-career officers to universities abroad. The result of this socialengineering was wider which produced a vast pool of Malayentrepreneurs, a sizeable Malay middle-class and a considerable“bumiputera participation” in the professions.

• The public sector functioned as a stringent regulator of businesses,both local and foreign, that enforced compliance with restructuringrequirements of NEP by using legislative means i.e. the IndustrialCo-ordination Act (ICA) in 1975 and bureaucratic procedures,which were set by the Foreign Investment Committee. Therestructuring requirements of NEP set a quota of at least 30 percent bumiputera equity participation and employment incompanies covered by ICA. In “expanding government power over


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firms”, ICA gave the minister of trade and industry widediscretionary power over licensing, ownership structure, ethnicemployment targets, product distribution quotas, local content andproduct pricing. Simultaneously, the public sector became a majorinvestor and raised the Malay ownership of corporate equity. Italso used state resources to expand its ownership of assets via“restructuring” exercises that included setting up companies byPublic sector and buying into or buying up existing as well as newlocal and foreign businesses.

• At the same time the public sector functioned as the trustee ofMalay economic interests. State-owned agencies, banks and fundsheld equity “in trust” for the bumiputera. Some of the best knownof these “trustee” agencies were Bank Bumiputera, UrbanDevelopment Authority, Perbadanan National (Pernas, or NationalCorporation), Permodalan National Berhad (PNB, or NationalEquity Corporation), Amanah Saham National (ASN, or NationalUnit Trust Scheme) and the state economic developmentcorporations. These intensive and extensive roles led the publicsector grow rapidly in size and number. These public enterprisesproliferated in numbers from 22 in 1960 to 109 in 1970, 656 in1980, and 1,014 in 1985. Table 17. By 1992, the number had risento 1,149. However, under NEP, the public sector concerns weredevelopmentalist, but the direction of those concerns wasincreasingly ethicised.

• Over the years, through the operation of Malay “special rights” inrecruitment and promotion preferences, the whole structure ofgovernment services has become a bastion of Malay power and themajor avenue for Malay professional and economic advancement.This pattern is particularly pronounced at the higher administrativeand policy-making levels where Malay dominance comes closer toreality. Malayanised bureaucracy had practically to remain apreserve of the Malays. Thus, the Malay to non-Malay recruitmentratio of 4:1 for the elite Malayan civil service (MCS) was instituted,which ensured that “at least 80 per cent of the service will be filledby Malays, far above their proportion in the total population”. Theemergence of a clearly Malay-dominated public sector has raisedconcerns over bureaucratic “responsiveness and legitimacy” and“effectiveness and efficiency”, “governance and accountability”,


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and a sense of marginalisation and insecurity among non-Malaypersonnel. These are serious issues by any standard of publicadministration, and are “politically sensitive” when they appear inethnic garb, as in Malaysia. As a result, the public service hasdeteriorated in the quality and performance of its personnelbecause of ethnically influenced decisions over recruitment andpromotions, which favours lesser competent Malays over theirnon-Malay counterparts.

• The mechanism of the affirmative action should be people friendlywithout distortion of the values and norms of the plural society. Inthe era of globalisation, the economy should be competitive withdue consideration of the interest of the indigenous people.

• In the social development sector, especially education should beimpartial. Malaysia is situated socially and economically in a verycompetitive zone and trade blocs viz. ASEAN and APEC. Thisregion requires more of human development engineering processrather than social engineering.

• The public sector became a major investor and raised the Malayownership of corporate equity. It used state resources to expandownership of assets via “restructuring” exercises that includedsetting up public sector own companies and buying into or buyingup existing as well as new local and foreign businesses. The overalleconomy of Malaysia has not only been reshaped by the indigenousMalay; although Chinese and Indians and other immigrantcommunities have equally participated and it is stronglyrecommended that irrespective of the ethnic groups, there mustbe equal equity in the economic opportunities.

• The public sector should function as the trustee not only for theMalay economic interests but for all. Presently, there are about1,149 public sector firms in Malaysia, the indigenous communitieshave dominance and the non-Malayan are marginalised which hasdiluted the vertical and horizontal growth of public sector firms.To benefit from globalisation, there is a need of equal participationof non-Malay communities.

• The “special rights” of the Malay in recruitment and promotionpreferences made the whole structure of government services a


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bastion of Malay power. This pattern is particularly pronouncedat the higher administrative and policy-making levels. Theemergence of Malay-dominated public sector has raised concernsover bureaucratic “responsiveness and legitimacy” and“effectiveness and efficiency”, “governance and accountability”,and a sense of marginalisation and insecurity among non-Malaypersonnel. These are serious issues by any standard of publicadministration, and “politically sensitive” when they appear inethnic garb. As a result, the public service has become monolithicwith in-competent features. There is a need of equal participationas per the proportion of different ethnic groups.


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Endnotes

1 I Dun Jen. 1982. British Malaya: An Economic Analysis. Second revisededition. Insan, Kuala Lumpur, p- 170

2 Latas, Syed Hussein. 1977. The Myth of the Lazy Native. Frank Cass,London. p-80

3 Elvakumaran Ramachandran. 1994. Indian Plantation Labor inMalaysia. Insan, Kuala Lumpur, p-50

4 Ibid, p-55

5 Ratsaratnam, Sinnapah. 1979. Indians in Malaysia and Singapore.Revised edition. Oxford University Press, Kuala Lumpur, p-34

6 His was the official formulation of the “racial imbalances” in theeconomy, which was adopted beginning with the Second Malaysia Plan1971–1975 (Government of Malaysia 1971).

7 Mahathir Mohamad. 1970. The Malay Dilemma. Donald Moore,Singapore., p-70

8 Puthucheary, James. 1960. Ownership and Control in the MalayanEconomy. Eastern Universities Press, Singapore. pp-26–86

9 Searle, Peter. 1999. The Riddle of Malaysian Capitalism: Rent-Seekersor Real Capitalists? Allen and Unwin, St. Leonards, New South Wales,p-28

1 0 R L Vasil, Politics in a Plural Society – A Study of a Non-communalPolitical Party in West Malaysia, Kuala Lumpur, Oxford UniversityPress, 1971, p 3

1 1 Furnivall, J.S. 1948. Colonial Policy and Practice: A Comparative Studyof Burma, Netherlands and India. New York University Press, NewYork, p-34

1 2 Andaya, Barbara Watson and Leonard Y. Andaya. 2001. A History ofMalaysia. Second edition. Palgrave Macmillan, Houndsmills, p-67

1 3 Searle, Peter. 1999. The Riddle of Malaysian Capitalism: Rent-Seekersor Real Capitalists? Allen and Unwin, St. Leonards, New South Wales,p-156

1 4 Abdul Rahman Embong. 1995, State-Led Modernization and the NewMiddle Class in Malaysia. Palgrave Macmillan, Houndsmills, p-77

1 5 (Jomo, K.S. 1990, Growth and Structural Change in the MalaysianEconomy. Palgrave Macmillan, London. 1990:82–83


71

1 6 Heng Pek Koon and Sieh Lee Mei Ling. 2000 “The Chinese businesscommunity in Peninsular Malaysia, 1957–1999”, in Lee Kam Hingand Tan Chee Beng (eds.), The Chinese in Malaysia. Oxford UniversityPress, Kuala Lumpur. P-136

1 7 Gomez, Terence Edmund and K.S. Jomo. 1997. Malaysia’s PoliticalEconomy: Politics, Patronage and Profits. Cambridge University Press,Cambridge, p-165

1 8 Ibid

1 9 Lucas, Robert E.B. and Donald Verry. 1999. Restructuring theMalaysian Economy: Development and Human Resources. St Martin’sPress, New York, p-125

2 0 Crouch, Harold. 1996. Government and Society in Malaysia. CornellUniversity Press, Ithaca, NY, pp-131-132

2 1 Lee, Molly N.N. 2004, Restructuring Higher Education in Malaysia.School of Educational Studies, Monograph Series No. 4/2004.University Sains Malaysia, Penang, p-44

2 2 Parti Gerakan. 1984, The National Economic Policy: 1990 and Beyond.Rakyat Malaysia, Kuala Lumpur, p33)

2 3 Jomo, K.S. 1990. Growth and Structural Change in the MalaysianEconomy. Palgrave Macmillan, London, p-229). ( Jomo, K.S. 1990.Growth and Structural Change in the Malaysian Economy. PalgraveMacmillan, London, p-229

2 4 Means, Gordon P. 1991. Malaysian Politics: The Second Generation.Oxford University Press, Singapore. 297–298

2 5 Ho, Khai Leong. 1999. “Bureaucratic accountability in Malaysia:Control mechanisms and critical concerns.” In Hoi-kwok Wong andHon S. Chan (eds.), Handbook of Comparative PublicAdministration inthe Asia-Pacific Basin. Marcel Dekker, New York. 26–29

2 6 Fenton, S. 1999, Ethnicity: Racism, Class and Culture. New York:Macmillan Press, p-189

2 7 Pong, S. 1995, Access to education in Peninsular Malaysia: Ethnicity,social class, and gender.”Compare, No. 25, Vol.3, ,pp- 239-52..

2 8 Khan, J.S. & Loh, K.W. 1992, Fragmented Vision: Culture and Politics inContemporary Malaysia. Sydney, Allen & Unwin, p-87

2 9 Mahathir, B. M.1998, The way forward. London: Weidenfeld & Nicolson,pp-43-67


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3 0 Ibid, p-12

3 1 Mehmet, O. Yip, Y. H. 1986,. Human capital formation in Malaysianuniversities. Kuala Lumpur, Malaysia: Department of Publications,University of Malaya, p-177

3 2 Ling, L. S., et al. (1988). The future of Malaysian Chinese. Kuala Lumpur,Malaysia: Malaysian Chinese Association, p-189

3 3 Von Vorys, Karl. 1975, Democracy Without Consensus: Communalismand Political Stability in Malaysia, Princeton University Press, Princeton,p-167

3 4 Gomez, Terence Edmund and K.S. Jomo. 1997, Malaysia’s PoliticalEconomy: Politics, Patronage and Profits, Cambridge University Press,Cambridge, pp-231-247

3 5 Loh Kok Wah, Francis. 2001, “Where has (ethnic) politics gone? The caseof the BN non-Malay politicians and political parties.” In Robert Hefner(ed.), The Politics of Multiculturalism: Pluralism and Citizenship inMalaysia, Singapore and Indonesia. University of Hawaii Press,Honolulu, P-189

3 6 Khoo Boo Teik. 1995. Paradoxes of Mahathirism: An IntellectualBiography of Mahathir Mohamad. Oxford University Press, KualaLumpur.

3 7 Khoo Boo Teik. 2003. Beyond Mahathir: Malaysian Politics and ItsDiscontents. Zed Books, London, P-44

38 W. Kymlicka (1995), Multicultural Citizenship: A Liral Theory ofMinority Rights, Clarendon Press, Oxford


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