Malaysia after regime change – Lee Hwok-Aun

Affirmative action: A bipartisan consensus that does not make sense

If there is any bipartisan consensus in Malaysian politics, it probably has an affirmative action flavour. Since 2008, both alliances in the parliamentary divide have projected reform agendas, specifically, to replace race-based affirmative action with need-based affirmative action. However, the consensus does not make sense. Unless both sides grapple through a fundamental rethink, regime change will not result in any systemic shift in affirmative action policies, only selective modifications.

To be precise, Pakatan Rakyat (PR, People’s Alliance/Pact) took the lead in advocating reform to Malaysia’s affirmative action regime, formally incorporating this into Dasar Pakatan Rakyat, its policy platform, in December 2009. Moreover, PR constituents had been advocating such reforms to affirmative action long before the March 2008 elections and the coalition’s subsequent formation. Under the headline “Need-based Affirmative Action”, Dasar Pakatan Rakyat  resolved to provide economic assistance and fair distribution to all races based on need, to avail scholarships based on need and merit, and to utilise savings from curbing corruption toward poverty alleviation.

Barisan Nasional’s (BN) New Economic Model (NEM Part 1) declared continuation and revamp of affirmative action, to remove rent-seeking and market distorting features and to “consider all ethnic groups fairly and equally as long as they are in the low income 40% of households. Affirmative action programmes would be based on market-friendly and market-based criteria together taking into consideration the needs and merits of the applicants”. Prime Minister Najib Razak’s NEM launching speech in March 2010 stated a “renewed” affirmative action policy that would be market friendly, transparent, merit-based and need-based.

BN’s failure to acknowledge PR’s preceding articulation of the concept amounts to plagiarism; legitimately, PR contended that various portions of the NEM, especially the overarching theme of refocusing on the bottom 40 percent and need-based assistance, were starkly similar to its policy framework. But in spite of the common ground and the enormity of the task, no bipartisan efforts or fundamental reforms have materialised that resemble “need-based affirmative action”.

Much attention has fixed on the backlash from Malay ethno-nationalists, such as Perkasa, which railed against the NEM. Its vehemence gives the appearance that broad reforms were upended by extremist forces. This is a mistaken view. Perkasa can take some credit for BN’s affirmation of policies promoting Malay access to government largesse and wealth accumulation.

But need-based affirmative action – as a substitute for race-based affirmative action – was a non-starter. It is a vague, muddled, and ill-formed concept that was not, and cannot, be the basis for necessary systemic reform.

The motivation was fairly constructive and responsive to legitimate public sentiments. One set of issues resonates for Malaysians in general and the Malay community in particular. The worst excesses and abuses of Malay privilege have been all too apparent: cronyism, corruption, ill-gotten and loudly displayed wealth, the gaping disparity of benefits from NEP-sanctioned programmes that accrue to UMNO elites compared to ordinary Malays and Bumiputeras. Among the non-Bumiputera communities, the undermining of merit by preferential selection and resulting limitations on opportunity, especially in university admissions, have long been a source of contention. These factors evidently catalysed reform rhetoric and policy visions about affirmative action. However, federal government and opposition coalitions both ventured to replace unpopular policies with popular ones, without adequately considering the coherence of this proposition.

Four logical missteps have precluded or addled political, public and academic understanding of affirmative action. It is worth asking, what do we mean by the term affirmative action? Could policy differences stem from conceptual differences?

Logical misstep #1: Absence of definition of affirmative action

Indeed, this is the crux of the first misstep: neither BN nor PR defines “affirmative action” before proceeding to pronounce fundamental reforms. We can infer, from their focus on cronyism, corruption, inefficiency and unmerited selection as the main problems associated with affirmative action, that racial preference constitutes a key feature. But there is hardly any consideration of the overall purpose and structure of affirmative action.

No singular definition prevails, obviously, but a few elements are common to affirmative action in Malaysia and across the globe. Affirmative action can be defined as preferential policies to redress the under-representation of a disadvantaged population group in socially esteemed and economically influential positions.

These policies address a specific problem: under-representation of a population group – categorised by race, ethnicity, gender, region, etc. – in high socio-economic positions affects the collective esteem and stature of the group. For instance, a race group that is conspicuously and persistently absent among university students, doctors, lawyers, or managers may be perceived or stereotyped negatively, or discouraged from gaining upward mobility. This situation is further characterised by various disadvantages that the group may face – inferior schooling, shortage of work experience, and lack of capital ownership or access to credit – and compounded by barriers to entry into these positions, i.e. university entry grades, higher education qualifications for professional jobs, work experience and network connections for managerial positions.

With these specific problems and obstacles in view, the need for preferential treatment becomes evident. Affirmative action recognises that conventional criteria of need or merit will not sufficiently facilitate upward educational and occupational mobility. It is plain to see but hard to admit that affirmative action fundamentally recognises that persons of a particular group by and large will not qualify unless subjected to lower qualifying marks. Hence, it is necessary to confer preference based on group identity – in Malaysia’s case, race. Because affirmative action inherently grants preference based on identity, such policies must also not be permanent.

A systematic conceptualisation of affirmative action, such as the one offered here, helps identify Malaysia’s salient affirmative action programmes: MARA institutes and enterprise development programmes, matriculation colleges, public university admissions quotas, public sector hiring quotas, equity allocation requirements, preferential access to contracting and licensing. Notably, poverty alleviation, social transfers and income inequality do not fall directly under the affirmative action rubric.

Logical misstep #2: Failure to differentiate poverty alleviation and affirmative action

This brings us to the second misstep: failure to distinguish between poverty alleviation and affirmative action as distinct – albeit inter-related – objectives, which demand distinct policies.

The New Economic Policy (NEP) provided a lucid framework, but has become partially and carelessly transmitted over the years. The NEP’s “two prongs” are frequently cited, but with omission of vital words and meanings in the original articulation.

The first prong sought to eradicate poverty irrespective of race. Happily, and to the credit of Malaysian polity, this phrase has been restored to its entirety, after many years in which the ‘irrespective of race’ clause scarcely appeared. Policy dialogue now, explicitly or implicitly, acknowledge the poverty of various groups, especially Malaysian Indians, Orang Asli, and Bumiputera communities in Sabah and Sarawak, and stress the need basis of poverty alleviation.

However, a misguided view, typically following up on the above, has become popularised. This argument, in the context of need-based affirmative action as a replacement for race-based affirmative action, holds that Bumiputera will be helped the most if help is targeted based on need, since the community constitutes a disproportionate majority of the poor. While this is true, it begs the crucial question, what sort of help? Public programmes pertinent to poverty alleviation principally involve basic needs such as schooling, healthcare and social assistance. Bumiputera benefiting in proportion to their representation among the poor is a good thing, but there are marked limits to the extent these benefits impact on the goals associated with affirmative action. The possible effects of improved rural schooling on Bumiputera participation in law or accounting, for instance, are too remote to serve as a policy basis.

The second prong of the NEP purposed to accelerate social restructuring to reduce and eventually eliminate the identification of race with economic function. This concisely identified the problems targeted by affirmative action policies. The severe disproportionate under-representation of Bumiputeras in university and among professionals and managers, and their corresponding over-representation as farmers and agricultural workers, was deemed an unacceptable and unsustainable racial division of labour. Furthermore, this structure would persist, although some progress could be expected over time with economic development and poverty alleviation. Nonetheless, the NEP’s authors comprehended that, while social restructuring may happen as an indirect result of general development policies, for it to occur at a more accelerated – and socio-politically acceptable – pace, proactive interventions were necessary. Accordingly, ensuing interventions required conferring preference on Bumiputeras.

However, there are tendencies to conflate the first and second prongs of the NEP. This fuels the muddle and confusion. For example, real and perceived racialisation of poverty alleviation – i.e. poor Malay households receiving more assistance than poor Indian households – is passed off as affirmative action, such that to deracialise it becomes an act of reform, when it is really a repair job to fix abuses of essentially need-based policies. In NEP terms, the bold declarations of both BN and PR amount to a restoration of the NEP’s first prong, not a renovation of the NEP’s second prong.

Logical misstep #3: Equating wealth redistribution with affirmative action

The third error in thinking results from another tendency – to equate the second prong of the NEP, or even the entire NEP, with the agenda of increasing Bumiputera ownership and control. The strong association of equity ownership with affirmative action derives from the predominance of the Bumiputera capitalist agenda and the visibility of corruption and malfeasance. Granted, this project has consumed most political energy and attention, but it is but one of a range of affirmative action measures.

Equating Bumiputera preference in equity ownership or government procurement with the totality of affirmative action in general allows for deeply misguided perspectives. Saliently, reforming equity requirements and public procurement, such allowing full foreign ownership and increasing transparency in selection of beneficiaries have been projected as reforms to affirmative action in general, while massive programmes in education and employment remain basically untouched. Efforts to remove obstacles to investment and unproductive wealth transfers and to increase the weight of merit criteria are necessary and welcome, but have unfortunately been presented in a way that precludes attention to education, in particular, where stifling effects of affirmative action are apparent.

Logical misstep #4: Failure to see that need and merit can reinforce – but cannot replace – race-based affirmative action

The fourth logical misstep pertains to the relationship between race-based affirmative action and need-based or merit-based considerations. Need and merit, where applicable, serve to complement, not substitute, race-based affirmative action. Augmenting need and merit criteria can reinforce, but not replace, affirmative action. This is all the more true in Malaysia, where race-based affirmative action is deeply embedded. The way out, somewhat paradoxically, requires making affirmative action more effective in order that it can be genuinely phased out.

The impossibility of escaping this logic is illustrated by Najib’s response to fears that his merit-based affirmative action would marginalise Malay business. A merit-based system implies no consideration of race. But Najib, and subsequently Mukhriz Mahathir (Mahathir’s son and currently Deputy Minister for International Trade and Industry), were compelled to clarify that the NEP would not be abolished but that meritocracy would be implemented to find “the best amongst Malays.” In other words, not choosing between any candidate, whether Bumiputera or non-Bumiputera, but choosing more capable Bumiputera contractors over less capable Bumiputera contractors. Of course, that is the only way it can make sense. Clearly, merit considerations can and should consolidate race-based affirmative action.

Tellingly, no one has yet outlined in detail how need-based affirmative action replaces race-based affirmative action. No programme of action exists, outlining in clear and practical terms how Malaysia can make this putative transition – i.e. how need-based affirmative action operates in matriculation colleges, Majlis Amanah Rakyat programmes, public sector employment, etc.

So what?

The four logical missteps are considerable, but it still worth asking, so what? Does it matter that BN and PR are both popularising the term need-based affirmative action?

Emphatically, yes. The implications are far more substantive and semantic. The current cross-partisan consensus on affirmative action is not just incoherent; it is damaging and delusional because the rush to find need-based or merit-based “reforms” has detracted from comprehensive and critical analysis of the current system and from bold explorations of possibilities to phase out the current affirmative action regime.

Some measures proposed and implemented mark progressive small steps. Need-based considerations undoubtedly can reinforce affirmative action in education. PR’s reemphasis on providing more scholarships based on socioeconomic background instead of ethnicity or race is welcome – but it has never been specified how the race-based system will be removed. The limits and downsides of such a programme are also not recognised, most consequentially the fact that students from lower socioeconomic backgrounds are on average less equipped for university-level study. Overall, need can be integrated more systematically into the allocation of scholarships and bursaries (qualification of the needy), and to some extent in the award of government contracts (disqualification of repeat recipients).

Merit-based considerations can certainly reinforce affirmative action in enterprise development. In the award of government projects, more transparency (open tenders) and less room for political manipulation (lottery for small firms or class F contractors to get government contracts ) enhance the prospects for selecting capable beneficiaries and for reducing wastage. The end goal of these interventions, however, must be firm and explicit – to eventually scale down preferential selection, and perhaps shift toward a system that balances performance and equity without overtly allocating group quotas.

Circumstances are more complex in other spheres, such as public sector employment. Practically, the implication of need-based preference in employment is that persons from poorer socio-economic background should be given priority. This is plainly unworkable; we cannot expect parents’ income be a criterion in recruitment or promotion. Interestingly, we hear calls now and again for the public sector to be made more reflective of Malaysian society – i.e. for non-Malay (including non-Malay Bumiputera) representation to be raised – by promoting the civil service as an employment option and committing to merit-based assessment.

The inability to completely depart from group representation demonstrates that racial representation does matter, especially in high positions in public institutions. Verbal commitment to merit alone, however, will not sufficiently attract non-Malay recruits, especially for a career-long oriented institution like the civil service. What will likely be needed is the opening of some senior positions to open and competitive application, to publicly and visibly demonstrate meritocratic selection. Such intervention will generate unease and insecurity and probably entail some form of quid pro quo from the private sector, perhaps the application of Bumiputera representation among professionals and managers – and not just shareholders or board members, as currently prioritised – as criteria in government procurement and licensing.

To assert the importance of viewing race-based affirmative action is not to defend its specific design and execution in Malaysia. On the contrary, it emphatically focuses attention on existing programmes and confronts the failures. The gravest omission in all of BN’s and PR’s analysis is arguably the affirmative action arena that is arguably the biggest stumbling block to the ultimate objective of removal racial preference: education.

The decline of public primary and secondary schooling, of course, looms large, but as a policy matter, falls under other jurisdictions. However, the parallel Bumiputera-favouring secondary and post-secondary route to higher education – residential colleges, matriculation colleges, Asasi Sains (Basic Science) programmes – through which the vast majority of Bumiputera enter university, by offering easier routes while claiming the illusion of meritocracy, have stifled achievement and chronically undermine its potential to narrow schooling gaps. Need-based or merit-based programmes do not provide any guidance on how to transition away from the on these institutions. Like public sector employment, abolishing Bumiputera priority in education is politically unthinkable, in view of the disruption to countless households that depend on the system, and socially irresponsible, given that the deficiencies in the public schooling and matriculation programmes. But Malaysians are not even talking about these deep-seated woes in the context of affirmative action.

A range of policy options can be explored; this essay has not even scratched the surface of the gargantuan tasks required to systemically reform affirmative action. My primary purpose has been to discuss the conceptual flaws and policy incoherence of the bipartisan notion of need-based affirmative action as a replacement for race-based affirmative action. To reiterate an unpopular but essential point, Malaysia’s race-based affirmative action must be made more effective in order that it can truly be rolled back. Unless these issues are considered honestly, critically and courageously, Malaysia will continue to muddle along, at best partial and at worst delusional, in the quest for an exit from the current regime of affirmative action.

Lee Hwok-Aun is a Senior Lecturer in the Department of Development Studies, University of Malaya.  - New Mandala