General Writings

Is Malaysia Free From Its Past?

“Let’s not use the crutches for support all the time, the knee will become weak.”

One scholar’s take on the future of race-based economic policies in Malaysia.

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by A.G.Y.

With the Federation of Malaysia declared in the year of 1963, what followed was not merely the right for all Malaysians to make decisions on their own behalf but also the responsibility to ensure the survival and development of their young country. Today, 54 years after the formation of Malaysia, the country is growing fast economically, with its GDP growth rate reaching 6.2%[1] in the third quarter of 2017, compared with Thailand’s 4.3%[2] and Indonesian 5.1%[3].

The diagram above shows the GDP growth of Malaysia in since 2015.


A Colonial Legacy

With the Malaysian growth rate running high, it seems like we are on the right track to achieving Vision 2020 set by the government with the aim to transform Malaysia into a developed, high-income country. However, the seemingly promising data of a fast-growing Malaysia may be illusory as Malaysia is still struggling with the legacy left behind by its colonial power, not to mention transforming into a modern, developed country.

With the British endorsing the use of the divide and rule policy in its colonies, Malaysia (then Malaya, Sarawak and Sabah) was one of the countries that was deeply affected, given its multicultural and multi-religious background. We had no power then to charter our own socioeconomic path; the outcome was thus inevitable. Today, decades after independence, we are now clearly the decision makers of our country. Yet, we Malaysians, ironically and confusingly, continue to pursue the same policy that was practised by the British.


The NEP: Good Intentions Gone Astray?


After the violent racial clashes of 13 May 1969, the New Economic Policy (NEP) was introduced and billed by the government in 1971 to reduce economic inequalities and racial tension existing among Malaysians. This race-based affirmative action initially focused on redistributing wealth to the poorer Malay majority group in the country from the then 2.4% to 30% of the share of national wealth; it had the stated goal of poverty eradication and economic restructuring so as to eliminate the identification of ethnicity with economic function. It was agreed by both the government and the opposition that NEP should be dismantled eventually.[4]However, the program was unduly extended[5] and was only halted in 1991. It was succeeded by the equally controversial National Development Policy (NDP) and other similar policies.


Effects of Race-Based Policies

In fact, the NEP had some success in achieving its policy aims. The percentage of household living below the poverty line fell from 49.3% to 17.1% and wealth distribution was made more equitable.It also had the positive effect of  increasing Bumiputera representation in industry and higher levels of employment. [6]

However, the effect of the NEP on citizens of different races was disproportionate. Many have highlighted the resultant neglect of poor Indian communities[7] and problems of policy abuse. Problems of implementation were also evident, with criticism being directed at how the relatively well-off in the Bumiputera class have benefited at the expense of poorer Bumiputeras and other Malaysians.[8] The policy has also been cited as a reason for brain drain in Malaysia, due to non-Bumiputera disillusionment.


Counter-Productive Effects

“Let’s not use the crutches for support all the time, the knee will become weak.”

Tun Dato’ Sri Haji Abdullah Badawi

It is certainly correct to point out the need to address economic inequalities between different racial groups, as it is essential to maintain a balanced society. However, former prime minister, Tun Dato’ Sri Haji Abdullah Badawi opines otherwise; “Let’s not use the crutches for support all the time, the knee will become weak.”

Some argue that race-based policies will ultimately weaken the competitiveness of Bumiputera and cause them to become even more reliant on the help of the government. One study highlights the low rates of callbacks (4.2%) that Malay fresh graduates receive when applying for jobs in the private sector, as compared to their Chinese peers (22.1%). This happens across companies controlled by all races in Malaysia, excluding public companies, highlighting the fact that Malays are generally less preferable when it comes to hiring in the private sector.[9]

A deep-rooted perception that Malays are generally less prepared for the competitive private sector could be a reason. Many employers believe that public universities, which are mostly attended by Malay students, are not effective in equipping students with core vocational skills.[10] However, other factors, such as the employers’ preferences based on their own ethnicities and languages, also contribute to the low rates of callbacks Malays receive.


A Future Beyond Race

1 M

Despite having noble objectives of addressing the socioeconomic issues existing among the multiracial and multicultural population, positive discriminatory policies adopted by the Malaysian government appear increasingly irrelevant today. Malaysians are now more open-minded in debating over the effectiveness of granting Bumiputera with outright economic opportunities in improving their financial conditions.

The Economist reports that 71% of Malaysians agreed that “race-based affirmative action” was “obsolete” and should be displaced with a “merit-based policy” (2013).[11]With this change of opinion of most Malaysians, particularly in the younger and more liberal population, towards favouring a meritocratic system rather than a system that rewards based on race, it is time for all to move on and leave behind the legacy that the British colonists left in the country.

Meritocracy and its Merits

Meritocracy or merit-based policy, if adopted by the Malaysian government, can stimulate economic growth, reduce corruption and increase the efficiency of civil service by ensuring that the best and the most talented are given the opportunities to serve at the right positions.[12]

One particular success story that has been repeatedly discussed and highlighted by scholars all over the world is the rise of Singapore, our small neighbouring island-country. Singapore’s GDP, since its separation from Malaysia in 1965, has risen from roughly 150% of Malaysian levels to more than 500% today.[13] Furthermore, Singapore’s governance is renowned for its efficiency throughout the world, exemplified by the country’s outstanding rankings in the Worldwide Governance Indicators (WGI).[14] The drastic improvement in both the Singaporean economy and governance has much to do with the system –meritocracy– that it adopts. Unlike Malaysian system of rewarding based on ethnicity, performance and talents are valued first in Singapore.

“Unlike Malaysian system of rewarding based on ethnicity, performance and talents are valued first in Singapore.”

Having said that, despite the great results that Singapore has shown to the world, the system that it adopts is not perfect. One particular trade-off that Singapore has to make is the freedom of its people, with critics calling Singapore, together with Malaysia, a “soft authoritarian regime” as tough leaders, like the late Lee Kuan Yew and his party colleagues, often adopt uncompromising top-down approaches in making decisions.[15] Meritocracy, since it exists in a whole variety of different forms, has to be implemented with great care and with the right combination of elements to prevent it from evolving into an elitist system instead, harming the disadvantaged and the poor in the process.

The ideal meritocratic system that could be adopted by Malaysia has to provide enough incentives to motivate people in improving their performance and attract valuable talents to participate in the development of the country, while  maintaining social harmony in the nation. The precise form such a system would take is, however, beyond the scope of this article as it involves further discussion regarding socioeconomic and political conditions in Malaysia. Thus, I would like to end the discussion with one of my favourite quotes from Winston Churchill: “To improve is to change; to be perfect is to change often”. Changes are perhaps hard to make, but to improve you can never avoid making changes.


The author of this article has requested to remain anonymous for personal reasons. He welcomes discussion of any forms, and would personally like to know what you think about the issue mentioned. Please feel free to share your opinion in the comment section. A.G.Y.


[1] Trading Economics, 2017. Malaysia GDP Annual Growth Rate [online]. Available from: [Accessed 6 August 2017]

[2] Trading Economics, 2017. Thailand GDP Annual Growth Rate [online]. Available from: [Accessed 6 August 2017]

[3] Trading Economics, 2017. Indonesia GDP Annual Growth Rate [online]. Available from: [Accessed 6 August 2017]

[4] The Economist, 2013. A Never Ending Policy [online]. Available from: [Accessed 6 August 2017]

[5] James Chin, 2015. The Costs of Malay Supremacy. The New York Times. [online] Accessed from:

[6] Free Malaysia Today, 2012. NEP: The good and the bad [online]. Available from:  [Accessed 26 December 2017]

[7] Malaysiakini, 2017. Alternative and selective facts of the NEP [online]. Available from:  [Accessed 26 December 2017]

[8] The Economist, 2017. Race-based affirmative action is failing poor Malaysians [online]. Available from:  [Accessed 26 December 2017]

[9] Hwok-Aun.L., Muhammed Abdul Khalid. (2016) ‘Discrimination of high degrees: race and graduate hiring in Malaysia.’ Journal of the Asia Pacific Economy Vol. 21, No. 1, pp. 53-76.

[10] Greg Lopez, 2011. Bumiputera graduate unemployment and Malaysia’s world class education system – a recipe for disaster. New Mandala. [online] Available from: [Accessed 5 August 2017]

[11]The Economist, 2013. A Never Ending Policy [online]. Available from: [Accessed 6 August 2017]

[12] UNDP, No date. Meritocracy for Public Service Excellence [online] UNDP. Available from: [Accessed on 3 January 2018]

[13] Haas Faculty Bio, No date. On the Merits of Meritocracy. [online] Berkeley, University of California. Available from: [Accessed on 3 January 2018]

[14] The World Bank, No date. Worldwide Governance Indicators. [online] The World Bank. Available from: [Accessed on 4 January 2018]

[15]Sal DeFrancesco, 2015. The Curious Case of Singaporean Success. Harvard Political Review. [online] Available from: [Accessed on 20 December 2017]

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