Affirmative action to test Malaysian PM
By Kevin Brown in Singapore
Published: March 28 2010 20:49 | Last updated: March 28 2010 20:49
Najib Razak, the Malaysian prime minister, will on Tuesday make the
most important announcement of his year-long tenure when he reveals
how much of the discrimination favouring the country's majority
population group he is willing to eradicate.
Ministers have been discussing radical plans for a "new economic
model" that would greatly dilute affirmative action in favour of
Muslim Malays, who make up 53 per cent of the population. They are
also considering rolling back benefits accorded to indigenous people
from the two Malaysian states on the island of Borneo, who account for
about 12 per cent.
EDITOR'S CHOICE
Editorial: Malaysia's shame - Mar-24Malaysia looks at Trans-Pacific
trade deal - Mar-02Concerns for Malaysia's Petronas after Marican -
Feb-09'Allah' spat masks ethnic Malays' insecurity - Jan-12Malaysia
and China to tap Borneo resources - Jan-11Anwar upbeat despite setback
on sex charges - Dec-03However, there are widespread doubts that Mr
Najib will take the political risk of dismantling the privileges of
the Malay majority, which forms the core of political support for his
United Malays National Organisation, the main party in the governing
National Front coalition.
"Looking back over the year that Najib has been prime minister his
administration has been blowing hot and cold where reforms are
concerned, especially where they concern race-based affirmative
action," says Ooi Kee Beng, a Malaysia expert at the Institute of
South East Asian Studies in Singapore.
The Malay and indigenous groups, collectively known as bumiputra, or
sons of the soil, are regarded as economically disadvantaged and have
benefited from a range of policies intended to increase their
prosperity relative to the ethnic Chinese and Indian minorities, who
account for about 34 per cent of the population.
The policies were introduced in part by Malaysia's 1957 independence
constitution and in part by the "new economic policy" of 1971, brought
in after race riots in a drive to spread wealth more evenly.
Affirmative action programmes include cheaper housing loans, quotas
for university places and civil service jobs, and preferential
treatment in competitions for government contracts and for permits
required to operate businesses. Many companies must set aside 30 per
cent of their shares for bumiputra owners.
Mr Najib is expected to press ahead with some economic reforms,
including attempts to get Khazanah, the state investment agency, to
sell some of its holdings in a wide range of Malaysian companies as
part of a drive to increase liquidity on the Kuala Lumpur stock
exchange.
There is also likely to be some liberalisation of rules governing
foreign direct investment, which has fallen off since the 1997/98
Asian financial crisis, when Malaysia imposed capital controls against
advice from the IMF.
However, the proposed bumiputra reforms are trapped in a heated debate
between liberal Malays such as Nazir Razak, a business leader, and
defenders of Malay interests such as the campaigning group Perkasa,
the Malay word for a warrior.
Mr Nazir and others argue that bumiputra preferences are hampering
business. But Perkasa says Malays need to make more economic progress
before affirmative action can be scrapped.
Many Malays support some degree of reform, not least because the
system is regarded as benefiting mainly better-off Malays who know how
to exploit it. Anwar Ibrahim, the opposition leader who is on trial
for sodomy, has won significant support for demands that assistance
should be redirected towards poorer Malaysians of all races.
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