The Potentiality of National Unity in Malaysia Yosuke Ogata

Proposition In spite of the economic recession, due to the currency crisis, is national unity still feasible? Can ethnic heterogeneity be an advantage to economic growth?

Objective Analyze the feasibility of national unity in Malaysia. To make a future reference in national unity and economical development for other ethnically populated countries.

Historical Background(1) The Forming of an Heterogeneous Nation Bumiputeras “ sons of the soil ” Malay - lived near the coastlines of Malaysia Non-Bumiputeras – Brought in as mine and rubber plantation workers Chinese - lived in the cities Indian - lived on rubber plantations

Historical Background (2) The Japanese Invasion Japan invades Malaya and British Borneo in 1941 (just after the Japan-China War) The brutalizing of Chinese The presentation of supremacy to Malays Confliction in the ethnic relations

Historical Background(3) May 13, 1969 Communal tensions + confrontations with Indonesia Economic recession and rise of anxiety in Malays(Bumiputera) Coalition(Malay party) loses majority vote Rio t

Bumiputera Policy The Need for a New Policy (1) Chart 1 Poverty by Ethnic groups in 1971 Ethnic groupPoverty (%)Mean household income Malay Chinese Indian Others

Bumiputera Policy The Need for a New Policy(2) Ownership in the Corporate Sector in 1971 Owner Amount(million Malaysian dollars) Ownership(%) Bumiputera Public Non-Bumiputera Foreigner

The Bumiputera Policy The Aim of the Policy Further economic imbalances between the Bumiputera and non-Bumiputera groups could result to national disaster. Bumiputera Policy The eradication of poverty regardless of race, to eliminate the identification of occupation with race. The economic elevation of the Bumiputera

Bumiputera Policy The Contents of the Policy An ambitious affirmative action program || Legal priority in Bumiputeras ’ economic participation. No doubt an unequal policy between ethnic groups

Bumiputera Policy The Non-Bumiputeras ’ Reasons for Approval Avoidance of another ethnic conflict leading to a national breakdown. The acknowledgement of the benefit from the policy For the policy to operate, the non-Bumiputeras ’ technology and work skills were essential.

Bumiputera Policy The New Economic Policy Contents- A more concrete policy of the Bumiputera Policy Achievements - Improvements in income, living standards.Reduction of poverty and higher Bumiputera employment. Improved income distribution without adversely affecting growth.

Bumiputera Policy Achievements of the NEP National incidence of poverty 52.4% 17.1% Share of Bumiputera em- ployment in manufacturing and services 37.5% 51.4% Gini coefficient 44% 59% Bumiputera to Chinese mean income Real mean income of the bottom 40% of the household $76 $176

Bumiputera Policy New Development Policy Contents – A broader policy framework which has the overall objective of attaining a balanced development. Achievements – Annual GDP growth of over 7.0% and an overall improvement in most sectors until the start of ’ 98. Economic Recession resulted from currency crisis

Results from the Currency Crisis GDP growth(%) GDP/Person (US$) Exports(million US$) Imports(million US$) Unemployment

The Reconstruction of the Economy Emphasis on Domestic Economic Conditions National Economic Recovery Plan(Aug. ’ 98) Exchange control measures(Sep. ’ 98) Restructuring of the financial sector(Oct. ’ 98) Rebuilding of economy without support from the IMF

The Reconstruction of the Economy For the Sake of Unity The reasons for turning down IMF support For the sake of national unity IMF support = Reduction of economy Reduction of economy = Ethnic imbalance Lessons learned from Indonesia and Thai

The Reconstruction of the Economy The National Economic Recovery Plan “ Plan for Action ” Stabilizing the ringgit Restoring market confidence Maintaining financial market stability Strengthening economic fundamentals

Conclusion(1) Possibility of National Unity in Malaysia || The trend of the economy This can be stated from the time The Bumiputera Policy started

Conclusion(2) Other Nations(IMF) The Malaysian Policy National Stability National Unity Economic Growth National Stability National Unity Economic Growth

Conclusion(2) The goal for economic growth and national unity(pertaining to multi-cultured nations) is the stabilization of the nation. The Malaysian Policy has chosen the fastest, but also the most risk taking road in forming a stable nation.

Conclusion(3) Reasons for the Risk Taking Policy The necessity to combine economic growth and national unity as one policy(Bumiputera Policy) Necessity- the over imbalanced economic gap between ethnic groups

Conclusion(4) Reason for the success of the Bumiputera policy Economic foundation built from the Chinese ethnic groups Strong leadership by the administration, particularly its Prime Minister, Mahathir Heterogeneous Ethnic Society ?

Conclusion(5) Is an ethnically heterogeneous society an advantage to economic development? Though historical statistics show the odds, the answers are yet to be clear. In future years we may learn that affirmative action programs like those of the Malaysian policies is the key to changing ethnic heterogeneous from a liability to an asset for economical growth.