Workers push boxes of vegetables for sale at a wholesale market in Kuala Lumpur on 15 June, 2020, as sectors of the economy are being reopened following restrictions to halt the spread of the Covid-19 coronavirus. (Photo: Mohd RASFAN/ AFP)

Workers push boxes of vegetables for sale at a wholesale market in Kuala Lumpur on 15 June, 2020, as sectors of the economy are being reopened following restrictions to halt the spread of the Covid-19 coronavirus. (Photo: Mohd RASFAN/ AFP)

Ditching Malaysia’s Bumiputera System: Three Utopian Scenarios To Consider

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A cold hard look at ways of departing from Malaysia’s long-held Bumiputera system throws up three scenarios, one of which is persuasive.

The question will inevitably touch raw nerves, and is being asked again, this time via a widely shared article by the former Deputy Governor of Malaysia’s central bank: Will Bumiputeras ever relinquish the privileges they enjoy?

It is an important question to ask, because the programmes providing Bumiputera privileges – in higher education, public sector government-linked corporation employment as well as equity and property ownership – were not meant to be permanent.

Malaysia’s most transformative policies implied as much. The New Economic Policy, launched in 1971, aspired for Bumiputeras to be “full partners” in the economy. In 1991, Vision 2020 proclaimed the goal of a “fully competitive Bumiputera community… on par with the non-Bumiputera community”.

As long as the Bumiputera system persists, however, Malaysia will be stuck in a dilemma: the majority who receive preferential privileges will not be fully empowered, and the minorities will feel aggrieved at unequal access to various opportunities, notably public university and business loans.

But the provocative question will inevitably be greeted by cries of “never” . Understandably, the Malays – or any group in their situation – will never allow it. The political establishment has too much at stake; the people enjoy special treatment, and bristle at the thought of losing it.

That said, there are ways in which we can think about the problem constructively. There is value in conjuring three utopian scenarios under which Bumiputera privileges might be relinquished, and appraising each from political, socioeconomic and psychological angles. The first two derive from dominant and popular views on the subject; the third arguably offers the best path forward.

The first scenario asserts that Bumiputera privileges cannot be sustained because they are unfair to the minorities, who have already lived with the system for too long. These sentiments, even if sometimes overblown, stem from real experiences and deserve to be acknowledged and not dismissed.

But this outlook faces prohibitive circumstances, because the surrender of privileges will need to be driven by a deep sense of guilt, or a desire to rectify injustice. Politically, this approach is too confrontational in a nation that resolves controversial matters by compromise. The position typically lacks socioeconomic analysis and omits consideration of whether the protected majority are able to let go. Psychologically, it is exceedingly difficult to envisage a majority group, anxious to preserve economic opportunities, acceding to such demands made by economically established minorities.

The second scenario holds that the system that is supposed to benefit the Bumiputeras has absolutely failed: it is a sinking ship that Malaysia must abandon. What will it take for privileges to be dismantled? At the heart: Profound regret, so much that everything must go at once.

No one has made a convincing case that this shock therapy approach is politically viable or socioeconomically desirable. No government will declare that it has failed as miserably as the argument requires. A change of government, as we saw with Pakatan Harapan, cannot simply swoop in and tear down the whole system.

The argument also rests on conceptually flawed and excessively biased presumptions about the socioeconomic outcomes of Bumiputera privilege. The system has, in fact, delivered a mixed bag of results. Patronage and corruption undermine the policy, for sure, but these are not the main deficiencies. Bumiputeras enormously benefit by getting access to opportunities and upward mobility. But the system inadequately develops their capability and competitiveness – this is the main deficiency.

Psychologically, this second scenario presents a vicious cycle that further precludes a path of change. If the system has thoroughly failed the majority, then the majority will be woefully ill-prepared to let go. Dismantling privileges will thrust them into an abjectly insecure state. The obstacle is not simply the elite’s vested interests and lack of political will, as widely assumed, but the preparedness and confidence of ordinary people.

A third scenario holds that Bumiputera privileges can only be rolled back when the system has succeeded in empowering the community, who start to believe that they can get by without overt quotas. Preferential treatment gets rolled back in the context of policy success (sufficient, not perfect) rather than failure – arguably, a more tenable political situation.

Relinquishing privilege, concurring with the spirit of the NEP and Vision 2020, is motivated by empowerment. Bumiputeras can only graduate out of needing privileged access when a critical mass is capable, competitive and confident enough to face the change. This scenario more rigorously analyses the socioeconomic conditions, recognising policy achievements while being mindful of failures. By focusing on empowerment as the driving principle, scenario 3 stands a better chance of fostering psychological conditions in the Bumiputera community that are conducive for them to undertake challenging policy decisions.

Relinquishing privilege, concurring with the spirit of the NEP and Vision 2020, is motivated by empowerment. Bumiputeras can only graduate out of needing privileged access when a critical mass is capable, competitive and confident enough to face the change.

Still, the prospect is wishful and idealistic. Will a critical mass of Bumiputeras actually accept more open and competitive access to various opportunities they currently receive with special treatment? But holding out this scenario provides a distinctly productive goal to work towards, rather than emphasising guilt and injustice, or amplifying regret and failure.

Working it out requires resolve and systematic planning to broadly cultivate capability and competitiveness, particularly through Bumiputera programmes in higher education and enterprise development. Along the way, Malaysia should also increasingly incorporate preference based on disadvantage instead of preference based on race – such as, awarding more admissions or scholarships for higher education to the poor regardless of race, or converting Bumiputera microfinance to microfinance targeted at lower-income groups, say the B40.

In the end, the reality is a choice among seemingly impossible futures. Of the three scenarios, the third presents the least improbable and most constructive path forward. It will remain a utopian ideal, but as yet, will be the most persuasive one to take.

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