Official communalism in Malaysia: racism or justice?

Leiden University Politics of Southeast Asia 5482K1A02 Lecturer: David Henley e 2014/2015: Semester 1

Official communalism in Malaysia: racism or justice?

Author: Fabian Hempel

Number of words: 2975

Malaysia is a deeply diverse or plural society with various communal groups following different traditional, cultural, ethnic, and religious occupations. However, contrary to expectations to which divided societies are more prone to polarization and social conflict, the Southeast Asian country appears as remarkably stable. Its economic and development success is second only to Singapore in the region. Yet, one of the most debated and contested communal characteristics in Malaysia is the institutionalized preference of the Bumiputeras – constitutionally defined as the Malays and natives of the States of Sabah and Sarawak and the dominant communal group in Malaysia – in order to advance its socioeconomic position compared to Chinese and Indian Malaysians, the other major communal groups. Based on a brief conceptualization, a historical contextualization, and a subsequent analysis of the state and impact of Malaysian communal politics, this essay argues that official communalism in Malaysia bears an inherent element of injustice towards non-Malays that even might become an obstacle for future economic and social development as communalist affirmative action policies appear to be one of the main drivers for an ongoing brain drain of non-Malay Malaysians. In order to analyze the current communal politics it deems necessary to situate Malaysia’s form of communalism in its historical context. As already mentioned, Malaysia is made up by three main ethno-religious communal groups: the Bumiputeras – sons of the soils which include mainly Malays, almost all of them Muslims, and other indigenous peoples of Malaysia –, Chinese Malaysians, and Indian Malaysians. The first Chinese and Indian settlers came during the Malacca Empire in the 15th century whereby the main wave of Chinese and Indian migration to Malaysia occurred during the British colonial period, especially in order to work in the semi-industrial tin mines and rubber plantations (Owen et al. 2005). During that period the majority of the Bumiputeras worked in rural low-yielding rice cultivation whereas the small Malay elite was involved with the colonial government, especially through the colonial civil service. At the beginning of the era of independence in 1957 when Malays accounted for almost 50 percent, Chinese for 37 percent, and Indians 13 percent of the population (Crouch 2001:227), communal groups could be in general identified by their respective economic function and status. Malays were mostly detached from higher education, white-collar work, and private capital. In contrast, the better educated Chinese Malaysians mainly lived in urban regions and established a large amount of private enterprises (Lee 2010:44). Table 1 and Table 2 show that these sizeable socioeconomic inequalities widened further between 1957 and 1970 and were in part one of the reasons for several incidents of communal violence between Malays and Chinese during the foundation years of Malaysia.

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Table 1: Peninsular Malaysia: Composition of population and poverty, by communal group and area, 1957 and 1970

Source: Lee 2010:48.

Table 2: Communal composition of occupation groups in 1970

Source: Lee 2010:48. Note: Rows do not sum to 100 due to exclusion of other groups.

The riots led to a consolidation of Malay political power and to the introduction of the New Economic Policy (NEP) in 1971 which had two main objectives: eradicate poverty and remove the identification of communal groups with economic status. The NEP and its successors introduced a communalist affirmative action framework that is more or less intact until today. Among other aspects, it included the following approaches (Lee 2010:50): 

increase of Bumiputera ownership of the total commercial and industrial activities in all economic sectors, in part through regulative and economic incentives;

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the employment pattern at all levels an in all sectors must reflect the communal composition of the Malaysian population;

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preference and support of Bumiputera businesses by the use of additional governmental subsidies, loans, credit, and training;

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communal quotas in higher education with emphasis on Bumiputera enrollment.

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Answering whether official communalism and its adjacent affirmative action policies can be justified requires the pursuit of several sub-questions, including: Are communal groups coherent socioeconomic entities? Can it be justified from a historical perspective? Did the NEP work in the sense that it eradicated poverty and removed the identification of communal groups with economic status? How might current communalist politics affect Malaysia’s further economic and political development? The term communalism was first used by the British colonial administration as a description of the situation of its colonies in India and Malaysia, “where religious minorities existed alongside a religious majority” (Vanaik 1992:48). In this respect that is suitable to the case of independent Malaysia. The Indian historian Bipan Chandra defines communalism as “the belief that because a group of people follow a particular religion they have, as a result, common social, political and economic interests” (1984: 1). He disputes that this belief has an automatic real world manifestation. Income inequality within communal groups is found throughout the globe. The level of unemployment, skill, education, gender bias, and access to work varies within communal groups as well which suggests that intercommunal bias cannot be the sole reason for communal disparities. As already mentioned, even though the majority of the Bumiputeras lived in rural areas, occupied low-skilled labor positions, and had less access to education, a small Malay elite cooperated with the British colonial power and enjoyed a comparatively high standard of living during the colonial era while remaining in political control after independence. Yet, affirmative action is actually an umbrella term that encompasses “measures to raise the participation of members of an economically disadvantaged group in the areas of education, employment and business, where they had been historically excluded or under-represented” (Lee 2005:211). The validity of communalist affirmative action has to be suspect if the community consists of different socioeconomic groups. As indicated by Table 2, this has applies to the case of the Bumiputeras. Especially as some of the affirmative action policies implemented economic preference to the apparently already affluent Bumiputera factions, for instance Bumiputera quotas in ownership of public traded companies or the requirement that all publicly listed companies must issue stocks at below market prices that only Bumiputras get to buy. Additionally, the NEP ignored in large parts of the poor among the non-Malay Bumiputeras, especially the Orang Asli, and other communal groups. In short, Malaysian communal groups were and continue to be no coherent socioeconomic entities. Therefore the communalist NEP appears to be, at least in part, misguided considering its official objectives of eradicating poverty and de-identifying communal groups with economic status. This particular framework appears not to be based on need, at least not solely. 3

From a historical perspective, the Malaysian government has been constantly citing the communal violence during the 1960s – especially between Muslim Malays and Chinese Malaysians – as one of the main causes for the NEP and its more aggressive affirmative action policies. The riots of May 13, 1969 constitute a highpoint and a caesura in this respect. During the general elections on May 10, 1969 the opposition – consisting of the Chinese Democratic Action Party, the then rather liberal Malaysian People's Movement Party, and the Pan-Malaysian Islamic Party – gained ground while the ruling coalition lead by the United Malays National Organization remained in power, but suffered a large loss of votes. What followed was a celebration rally mainly by the Chinese part of the opposition which was met by a counter demonstration organized by the youth wing of the UMNO on May 13. In the following deadly communal violence erupted, but crucial details remain highly contested. The Malay ruling elite named the alleged “provocative” celebration of the opposition as cause for the incident. Yet, there may have been more deliberate political planning in play by factions within the UMNO and the riots were part of a premeditated coup to bring Tun Abdul Razak to power: […] the “May 13 Incident” was above all a coup d’etat by the then emergent Malay state capitalist class to depose the Tunku who represented the outdated Malay aristocracy. It was a critical political putsch which changed the course of Malaysian political history and ensured the rise and entrenchment of the new Malay capitalist class through the New Economic Policy. (Soong 2007:3)

While this cannot be a sufficient historical analysis, Soong’s perspective offers a reasonable ground to seriously undermine the historical and political justification for Malaysia’s past and present affirmative action policies, because the NEP was without a doubt deliberately designed to create a Malay business class and ensure its success (Crouch 2001:232) whereby the communal minorities accepted this institutionalized discrimination as the price for security. Subsequently, the NEP, its adjacent affirmative action policies, and additional economic policies had decisive impact on Malaysia and are constantly cited as one of the central reasons for its rapid economic during the last four decades. Yet, its socioeconomic results appear to “be decidedly uneven” (Wain 2008:104). For instance, while absolute poverty as well as communal income disparity was reduced, individual inequality remains high within the three major Malaysian communal groups and beyond, as demonstrated by the Gini coefficient data for the three major communal household groups in Malaysia (Table 3). Furthermore, the gap between urban and rural household income has widened. It is noteworthy that Malaysia has been experiencing an ongoing urbanization since independence. In the course of this the urbanization rate among Bumiputeras, especially non-Malay Bumiputeras, has been lower than that of Chinese and Indian Malaysians (Yaakob et al. 2012:100). This might be indicative for the

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notion that economic function and status might have been more influenced by geographic location rather than by communal affiliation. Another factor to bear in mind is the average household size. Poor households tend to be the larger ones for various reasons, especially due to the lower ratio of non-working members. During the last four decades Bumiputera recorded the highest total fertility rate (Mahari 2011:9). Therefore their average family size is larger than that of other communal groups. At the same time Chinese Malaysians have been experiencing a more lasting demographic transition and its subsequent dividend: a falling fertility rate which resulted in an increase of the portion of working-age group. Table 3: Mean monthly gross household income and the Gini Coefficient by communal group and strata, Malaysia, 1970 and 2012 Average Household Income (RM)

Income Ratio (Sub Group/Malaysia)

Gini Coefficient

1970

2012

1970

2012

1970

2012

264

5,000

1

1

0.513

0.431

Bumiputera

172

4,457

0.65

0.89

0.466

0.421

Chinese

394

6,366

1.49

1.27

0.466

0.422

Indian

304

5,233

1.15

1.05

0.472

0.443

Others

813

3,843

3.08

0.77

0.667

0.435

Urban

428

5,742

1.62

1.15

0.541*

0.417

Rural

200

3,080

0.76

0.62

0.473*

0.382

Malaysia

Source: Economic Planning Unit, Malaysia 2014: Table 2 and Table 5. Note: *Data only available since 1974.

Additionally, despite the fact that household income for all groups has been increasing since 1970, the income disparity has remained almost unchanged from 1990 on according to the economic historian Muhammed Abdul Khalid (2014). He concludes that Malaysia’s economy has been growing rapidly for the last 40 years not because but rather despite its affirmative action policies. This is another argument against official communalism in Malaysia as long as social justice is defined along the distribution of wealth, opportunities, and privileges within a whole society and not between different communal groups. Khalid’s standpoint is disputed in part by more conventional analyses of Malaysia’s recent economic history. For instance Crouch (2001) suggests that the NEP and its discriminatory policies are directly related to the political stability and Malaysia’s successful handling of the 1997 monetary crisis. That might be true to a certain degree, but it is nevertheless no sufficient counter argument to exclude Khalid’s perspective. First, the NEP can be summarized by its affirmative action policies as 5

well as its emphasis on direct state intervention and investments, the latter more or less in unintended line with Keynesian economics which might have been more impactful on growth. Second, Malays have always been the power center in Malaysian politics and therefore the main determinant for stability while the minority groups have been constantly losing its electoral and political cloud due to their lower population growth during the last forty years (Mahari 2011). Third, Malaysia weathered the 1997 financial crisis mainly through Mahathir’s restrictive foreign exchange rate policies, expansionary fiscal policies, and the set up of debt restructuring agencies (Fane 2000). Not surprisingly, all these policies appeared to be more based on economic rather than on communal sentiments. Fourth, while Malaysia’s economic and general development record has been impressive, it is not without peer, precedent or outperformer. In 1971, at the time of the implementation of the NEP, Malaysia was the third richest country in East Asia in terms of GDP per capita, positioned only behind Japan and Singapore (Wain 2008:106). Today, it has fallen behind South Korea, Taiwan, and Hong Kong as well while the foci of growth have been moving to China and India. The current communalist affirmative action policies not only bear an element of social injustice and appear to be not the main driver of past economic growth, but additionally constitute a potential obstacle to further economic development. Malaysia aspires to become a highincome economy, mainly by focusing on knowledge intensive sectors (Abdulai 2004). A knowledge-based economy requires a highly educated and productive workforce. Yet, Malaysia has been experiencing a considerable brain drain – the emigration of intelligent and welleducated individuals – for decades. Two out of ten Malaysians with a tertiary degree migrated to Singapore – the premier destination – or to an OECD country in 2000 (World Bank 2011:106). This loss of skill is furthermore aggravated by a lack of compensating inflows of high earning and skilled immigrants. Malaysia's diaspora seems to have a communal dimension as it is to a disproportionately degree made up of non-Malays, especially Chinese Malaysians (World Bank 2011: 125). In addition, a World Bank survey (2011:121) among the Malaysian diaspora suggests that a perception of social injustice in connection with current affirmative action policies such as unequal access to scholarships and higher education in Malaysia features prominently in the decision to migrate, together with career prospects and compensation. This development has drawn considerable attention by the public and the Malaysian government which lead to a partial official acknowledgement of the shortcomings of the New Economic Policy: Another unintended outcome of the NEP was a sense of deprivation, discrimination and even resentment felt by the non-Bumiputeras, which was attributed to the over-zealous attitude and ap6

proach in implementation by some officers in certain agencies. [...] These factors have pushed many Malaysians, especially professionals, to work and reside overseas [...]. It is imperative that these issues [are] addressed, as not only is our economy’s competitiveness, stability and sustainability at stake, but continued widening and rising disparities will jeopardise national unity.

(Permandu 2010:76) Malaysia's aspired knowledge-intensive growth requires retaining and attracting skilled workers. As many of the non-Malays emigrate from Malaysia in part due to a perceived social injustice based on institutionalized preference of Malays, reforming communal politics – especially current communalist affirmative action into need-based policies – might be one important building block to achieve that. In short, brain drain offers an additional argument against the current state of official communalism in Malaysia. While this essay due to its limited size objective can neither offer all supportive and contrary argumentative perspectives on Malaysia’s official communalism nor a comprehensive indepth analysis of these, the presented conceptual, social, historical, and economic aspects bear at least a sufficient ground to question the political validity, the level social justice, and the beneficial impact of the communalist affirmative action policies of the NEP and its successors. Affirmative Action on communal, ethnic or religious grounds is by definition discriminatory and can therefore be deemed as racists. While such positive discrimination can be justified and reasonable given the respective context, the presented arguments cast in sum reasonable doubt on the notion for an unequivocal social justification and economic usefulness of Malaysia’s current and past communalist affirmative action policies.

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