Whither Malaysia's New Economic Policy?

Abstract

T HE YEAR 1990 was the last year of the Outline Perspective Plan (OPP) for the period 1971-90 under Malaysia's New Economic Policy (NEP). The NEP was declared in the aftermath of post-election race riots in May 1969 to create the socioeconomic conditions for national unity through reducing poverty and interethnic economic disparities, especially between the indigenous Bumiputeras (mainly Malays, especially in Peninsular Malaysia) and non-Bumiputeras (mainly Chinese and Indian Malaysians). Many people identify the OPP with the NEP itself, resulting in the widespread belief that the NEP would end at the close of 1990 unless the Malaysian Government declared otherwise. Quite understandably, there is much concern among many Malaysians about economic policy after 1990. Not surprisingly, in the light of how the NEP has been implemented and perceived, the main divide is ethnic-with many ethnic Malays concerned about their fate if the NEP is discontinued, while many ethnic Chinese hope for an end to ethnic discrimination, especially in the form of quotas, after 1990. It would therefore be useful to consider realistic policy options for the future in light of the experience of the last two decades. This article will therefore review the circumstances leading to the NEP, as well as progress in achieving the specific redistributional goals of the OPP, before considering popular perceptions of the NEP and alternative policies for the future.