Malaysia’s New Economic Policy and Affirmative Action: A Remedy in Need of a Rethink

Malaysia maintains one of the world’s most extensive affirmative action regimes, buttressed by the transformative and iconic New Economic Policy (NEP). Constitutional provisions, political imperatives, and socioeconomic conditions gave rise to the establishment of preferential policies in four broad sectors – higher education, employment, enterprise, and ownership – favoring the political dominant but economically disadvantaged Bumiputera majority. This chapter elucidates the origins, programs, outcomes, and implications of affirmative action in Malaysia. A brief historical overview explains the language and context of the constitutional authorization of Bumiputera quotas and the modest implementation in the early post-independence years, followed by policy expansion, centralization, and intensification from 1971 under the NEP, which was forged in the aftermath of May 13, 1969, racial conflagration. The NEP judiciously conceptualized a two-pronged strategy of poverty eradication regardless of race and “social restructuring” through Bumiputera-targeted affirmative action as distinct but complementary elements of the ultimate goals of national integration, which entails redressing imbalances and ultimately rolling back overt preferential treatment. However, the NEP lacked a systematic articulation of policy objectives, instruments, and outcomes. Malaysia has registered immense progress in facilitating Bumiputera access, participation, and upward mobility in the four designated policy sectors. Recent discourses have popularized misguided notions of reform that conflate the NEP’s twin elements and omit attention to the decisive shortfall of affirmative action – its inefficacy in building capability and competitiveness among the Bumiputera beneficiaries, which are requisite for Malaysia to attain the ultimate NEP goals. Malaysia has substantially remedied destabilizing inequalities but, moving forward, must fundamentally rethink affirmative action.