Malaysia divides along ethnic lines

Najib - slammed for his hypocrisy on racial, economic issues

Ryuichi Ushiyama, Nikkei Weekly

KUALA LUMPUR - Policy favors ethnic Malays, drives many Chinese-Malaysians to choose Singapore.

Malaysia is dividing over its medium- to long-term social strategy, with the sticking point at whether it is time to overhaul the roughly four-decade-old, affirmative action programs for ethnic Malays.

According to Singapore's latest census, released at the end of August, the number of Chinese-Malaysians who hold Singaporean citizenship or permanent residency increased to around 350,000 as of the end of June, up more than 80,000 in the last 10 years.

Affirmative action

The main factor driving the increase is Malaysia's long-standing policy favoring the bumiputras, or indigenous people, in a range of fields from education and employment to entrepreneurship and corporate ownership. The policy was originally created based on the belief that ethnic Malays, who make up 60% of the total population, were at an economic disadvantage compared to Chinese-Malaysians and Indian-Malaysians, who account for 25% and 7%, respectively, of the population. Naturally, many non-bumiputras are strongly dissatisfied.

"I grew sick of the long-term discriminatory policy," one Chinese-Malaysian man said, explaining why he left Malaysia for Singapore.

The dispute over the pro-bumiputra policy was sparked at the end of March, when Malaysian Prime Minister Najib Razak announced that the policy would be reviewed. For the prime minister, who took office in April 2009, drawing up a road map to achieve the target of becoming a high-income country by 2020 is a critical task.

So he argued that the nation urgently needs to amend the rigid policies, which do not work well with the market economy and which hinder the efficient allocation of resources.

The suggestion ignited a heated debate. Malays are still at an economic disadvantage and thus amending the policy is out of the question, argued the representative of a large nongovernmental organization supporting Malay rights.

However, David Chua, secretary-general of the Associated Chinese Chambers of Commerce and Industry of Malaysia, calls for a fair system, saying that Malaysia will be unable to win in international competition unless its economic efficiency is improved. The group has some 30,000 Chinese-affiliated member companies.

The ruling coalition consisting of ethnicity-based parties has also started losing its solidarity. President Chua Soi Lek of the Malaysian Chinese Association has called for elimination of a target under the bumiputra policy of increasing the capital ownership ratios of ethnic Malays. Muhyiddin Yassin, deputy president of the United Malays National Organization, squarely opposes such suggestions, rather calling on others to "try to understand what the majority ethnic group thinks."

Political agenda

The prime minister also seems to have a political agenda. At the 2008 general election, many non-bumiputra voters critical of the affirmative action policy sided with the opposition parties, causing the ruling coalition to lose its two-thirds majority in the parliament for the first time in about four decades. Now that the possibility has emerged that government control may change hands for the first time at the next election, which will be held by 2013, it has become more urgent for the prime minister to win back support from non-bumiputra voters.

However, "drastic reforms would be impossible," predicted a local university professor. Drastic reforms could possibly turn away ethnic Malays. What is more, the constitution has a provision stipulating that native Malays' special position must be protected.

In other words, the discussion concerns basic policies that affect the way the country is run, so it is not a matter of simple choice between focusing on efficiency or protecting the disadvantaged.