Bumiputras

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Lately I have been a lot more interested in the political and economic life in Malaysia.  We are constantly commenting to each other how interesting it is to live in Malaysia right now as it rapidly develops.  Economically, in the past 40 years Malaysia has gone from a resource based economy to a multi-sector economy with a large manufacturing sector.  This has resulted in the creation of a substantial middle class with a substantial demand for “things”.  Just in the past two months, two new malls have opened here in Ipoh.  The rate of change is quite incredible as motorbikes are replaced by cars, malls replace markets and international chain restaurants replace food stalls.

There are three ethnic groups in Malaysia: the Malays (Muslim), Chinese and Indians, who seem to live quite harmoniously together, without really mixing.  After independence from Britain, the Malays as the largest group gained political power.  When we first arrived here, Paul had told me that Malays received lower interest rates on loans, preference at universities, and required quotas in public and foreign companies.  I usually believe everything my husband says, but I just couldn’t believe that there could be such blatant discrimination in a fairly developed country.

This week we had our Malaysian (Chinese) friend over for dinner and I learned that Paul had it quite right actually.  So here is your history lesson on the bumi putra policies of Malaysia.  Bumi putra means “prince of the land” and recognizes the “special position of the Malays” – Muslim Malays and the aboriginal people of Malaysia (thanks Wikipedia for filling in some of the blanks).  When Malaysia received its independence in 1957, the Malays mostly lived in rural areas in the kampongs working small farms, the Chinese were the merchants and the Indians filled professional roles and were agricultural labourers.  At that time, the Malays owned only 2.5% of the wealth in Malaysia, although they made up the majority of the population.  The rest of the wealth was owned by Chinese-Malaysian merchants (30%) and foreigners (67%).  In 1971, the New Economic Plan (NEP) was introduced as an affirmative action plan to catch the bumi putras (Malay Muslims) up.  Here are just a sampling of the policies that were instituted:

  • housing developers must provide a minimum of 7% discount to bumi putras on new homes, regardless of income
  • a 60% quota for bumi putra students at post-secondary institutions
  • 30% bumi putra ownership for public and foreign companies operating in Malaysia (resulted in an interesting phenomenon called Ali Baba, where Ali (bumi putra) are included solely to satisfy the requirement and Baba (non-bumi putra) pay Ali in exchange
  • bumi putra quotas for government organizations and scholarships for bumi putra students to study abroad
  • higher rates of return on investments for bumi putras and lower rates on loans
Most of these policies have remained the same 30 years later.  This forced discrimination has been effective in increasing the bumi putra share of wealth to 23% (still less than the intended 30%).  It has created a Malay middle class and brought many Malays out of poverty.  There is a small group of bumi putras elites who have significantly benefited from this crony-style capitalism.  A common criticism is that it  has provided a crutch the Malays now feel entitled to.  I kept asking our friend how the other ethnic groups (Chinese and Indians) live with these policies.  Her response was that they were likely brain washed into supporting the program in school and that they accepted the NEP as a way of living peacefully.
As an outsider, it is hard to not be appalled at these policies.  However, we do have affirmative action

programs in Canada (eg. with our native population) with the goal of creating a more equitable country.   But what really smacks me in the face with the bumi putra policies is the complete divergence with Malaysia’s current “1 Malaysia” program which is supposed to unite the three ethnic groups.  The “1 Malaysia” logo is slapped on everything and is everywhere here and it is hard to see how the bumi putra policies can contribute to a true 1 Malaysia.

As you can see, I am finding the political history of Malaysia very interesting these days.  I think politically and economically Malaysia is approaching crossroads and it will be very interesting to see what the next 10 years hold.

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