Bumiputeras vs ‘the Others’ in Malaysia’s 2022 Budget: Moral Outrage is Not Enough

Malaysia’s 2020 Budget, under Pakatan Harapan, allocated RM8.5 billion for support programmes designated for the country’s ethnic groups, of which 94.5 per cent was slated for Bumiputeras and 5.5 per cent to others. Then, there was barely a whiff of a protest.

The currently debated 2022 Budget, under UMNO-Perikatan Nasional, takes a similar tack to its 2020 predecessor. It plans to disburse RM11.4 billion for the same purposes, with 94.8 per cent going to Bumiputera causes and 5.2 per cent for the rest. However, the condemnations came thick and fast, with critics slamming the allocations for being ‘lopsided’ and ‘unfair’ terms in Parliament and public discourses.

Historically, group-targeted programmes were meant to promote upward mobility. They are ploughed into areas such as higher education, microfinance, small and medium enterprise (SME) loans and guarantees, public procurement, and equity ownership. Bumiputeras, which include Malays and non-Malay indigenous groups of Sabah and Sarawak, comprise 70 per cent of the population.

Two words explain the difference in reaction to the budgets: pandemic and politics. The widespread economic damage of Covid-19, affecting all communities, has acutely sensitised Malaysians to ethnic disparities in government funding. Politically, the budget mix stayed; only the messenger has changed. Budget 2022 is stewarded by a Malay-dominant government, while Budget 2020 bore the signature of a mainly multi-ethnic coalition. However, for all the fault-finding, the policy debates fail to break new ground.

Malaysia’s Budget speeches, including the current edition announced by Finance Minister Tengku Zafrul on 29 October, follow a template that tallies the total package for the vast Bumiputera programmes, along with allocations for ‘non-Bumiputera’ categories: Chinese, Indians, and the Orang Asli indigenous peoples of Peninsular Malaysia.

The Bumiputera-targeted benefits include decades-old MARA (the largest Bumiputera development agency which operates technical institutions and business facilitation), Universiti Teknologi MARA (UiTM), loan agencies PUNB and Tekun, and the newly created Bumiputera Prosperity Fund (Dana Kemakmuran Bumiputera). The Budget regularly apportions funding for Chinese new village development and small businesses, and for the Malaysian Indian Transformation Unit (MITRA) and an Indian microfinance scheme within Tekun. The Orang Asli allocations are less consistent and rather broad-brushed, revolving mainly around welfare provisions.

The table shows the ‘non-Bumiputera’ ethnic shares of 5.2 per cent in 2022 versus 5.5 per cent in 2020. The disparity is stark, psychologically amplified by the 2022 gross figure of RM11.4 billion for Bumiputeras against RM619 million for non-Bumiputeras. But the resemblances between the two budgets are equally astounding. Budget 2020 is significant because it was Pakatan Harapan’s second Budget. When it was tabled in October 2019, the coalition had been in power for one and a half years since winning power in May 2018. It had a long enough runway to impose a more equitable ethnic distribution, or to open up Bumiputera-exclusive programmes to multi-ethnic participation.

Alas, Pakatan did not. This reveals how embedded the Bumiputera-biased system is, and how hazardous it is to try to dismantle it. Pakatan feared a Malay backlash if it cut Bumiputera-targeted funding, yet curiously, it did not significantly expand provisions for Chinese, Indian and Orang Asli causes. Perhaps the institutions providing aid to the minority groups are too entwined with the long-ruling Barisan Nasional.

Put differently, Pakatan’s multi-ethnic composition did not compel it to re-engineer the system from scratch. Instead, Pakatan discreetly advertised the ethnically-labelled components, while the then UMNO-led opposition avoided drawing attention to them, which would have given Pakatan credit. Hardly anyone noticed the Barisan-conforming elements of the 2020 Budget.

The ambivalence and indecision remain, although there are positive glimmers.

The reproach of ethnic disparities in the UMNO-led 2022 Budget references both the fact that Covid-19 has hit the poorest the hardest and the principle that ethnicity has nothing to do with offering aid. Malaysia provides cash transfers, wage subsidies, employment incentives, public healthcare, and welfare provisions in general. Three programmes alone — cash transfers for low-income households, welfare payments for households below the poverty line, and employment subsidies — account for RM15.4 billion. The zeitgeist adds impetus to making these universally availed to all who need the help.

Pasir Gudang MP Hassan Karim, in an impassioned parliament speech on 10 November, called for this ‘unfair’ and conscience disturbing Budget to be revised. It was a rare, heartfelt, and courageous outpouring by a Malay politician, who also queried how much help non-Malay Bumiputeras receive and conveyed how his non-Malay constituents feel like second-class citizens.

The UMNO-Perikatan-governed Bumiputera agenda forges on, with a zealousness that, if unchecked, will spell trouble. But the critique must go beyond moral outrage at the ethnic disparities in the budget and grapple with real alternatives.

The thought process must be grounded in the fact that group-targeted programmes — whether for Bumiputeras, Orang Asli, Indians, or Chinese — operate in specific domains, chiefly higher education and skills training, entrepreneurship, SME development, and business support. In these policy areas, three courses of action can be considered: shut down Bumiputera-targeted programmes, start parallel programmes for non-Bumiputera groups, or open up currently Bumiputera-exclusive programmes to others.

PUNB would be following in the footsteps of its parent PNB, which started out exclusively serving Bumiputeras but later opened up unit trust offerings to non-Bumiputeras.

It is helpful to work with the example of the development finance institution PUNB (Perbadanan Usahawan Nasional Bumiputera, Bumiputera Nasional Entrepreneurship Corporation), a thirty-year-old subsidiary of the government-linked investment giant PNB. Terminating public funding for an entity like PUNB, which provides SME loans for Bumiputeras, is obviously a nonstarter. Such a move will be politically prohibitive and also forego the economic contributions of PUNB. Establishing a PUNB equivalent for each ethnic group may be more politically palatable, but a wasteful duplication of resources that also socially segregates the communities.

The pragmatic and constructive solution would be for established institutions like PUNB to apportion some of their disbursements to diverse ethnic groups. Difficult for sure, but impossible? Actually, PUNB would be following in the footsteps of its parent PNB, which started out exclusively serving Bumiputeras but later opened up unit trust offerings to non-Bumiputeras.

Alas, such vital debates are absent and will only take place when Malaysia stops being content with moral outrage.

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