By Ammar Syabil Mohammad Azam
The “bumiputra economic transformation plan” has once again re-entered Malaysia’s national policy agenda.
While it is a commendable initiative, certain modifications warrant constructive criticism. Policymaking will always be flawed at its granular level, especially when centred on the majority ethnic group, rendering it a crucial national and political issue.
Pro-bumiputra policies are deeply entrenched, spanning equity ownership, education, government concessions and public sector enrolment, echoing the longstanding New Economic Policy (NEP).
Political viability of pro-bumiputra policies
In my view, practicality and political viability must be carefully weighed.
Pakatan Harapan’s attempt to transition to needs-based affirmative action and, in 2018, to ratify the International Convention on the Elimination of All Forms of Racial Discrimination sparked strong backlash among ethnic Malay voters, opportunistically stirred by political actors.
The “Gerakan Selamatkan Syariah” (Save Sharia Movement), the outrage over a proposal to open UiTM to non-bumiputras and other events highlight the need to tread carefully in navigating social justice without inflaming bumiputra sentiments.
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Prime Minister Anwar Ibrahim has clarified that the bumiputra economic transformation plan will not marginalise the ethnic minorities.
The persistence of pro-bumiputra policies is justified by inter-ethnic and regional inequalities: a 2023 World Bank Report attributes 20% of Malaysia’s wealth inequality to these disparities.
Intra-ethnic inequality is even starker among bumiputras. Amanah Saham Bumiputera data reveals that a small group of affluent bumiputras own 80% of ASB wealth, while most others have very little.
Employeers Provident Fund (EPF) reports show bumiputras – especially “other bumiputras” from East Malaysia – have dangerously low retirement savings, making ethnicity still a relevant economic indicator, contrary to some academic claims.
Tragic legacy of NEP in north and east coast
A case study by Maznah Mohamad on Jeli, Kelantan, illustrates the unintended consequences of unbridled NEP industrialisation. Although infrastructure projects were meant to uplift villagers, commercialisation displaced them instead, with jobs going to foreign labourers.
Today, Kelantan suffers high absolute poverty (13.7%) and alarming rates of rape, incest and drug addiction, according to the Department of Statistics.
The state alone saw a 22% rise in rape and incest cases in 2024. Just recently, an 11-year-old allegedly impregnated his 15-year-old cousin in Kelantan.
According to the National Anti-Drugs Agency, Terengganu, Perlis, Kedah and Kelantan are the top states on the drug addiction charts.
Such conditions have psychologically crippled many youths, discouraging educational advancement and fostering cycles of poverty and dysfunction, predominantly among Malay-Muslims and bumiputras.
These social ills are not mere coincidence. They reflect a systemic failure worsened by poor policy oversight.
Thus, regional and interethnic inequalities and inequities persist, undermining Malaysia’s progress towards high-income status.
Importantly, being part of the ethnic majority does not automatically confer privilege. Malaysia’s colonial and postcolonial economic histories differ vastly from American racial narratives, and it is time to correct mis-contextualised arguments against ethnic-based policies.
Race-based institutions and inclusivity
Race-based apparatuses exist to support non-bumiputra communities as well.
It is common knowledge that absolute poverty is high among the ethnic Indians. Mitra, under the Prime Minister’s Department, has stepped in to raise the community’s socioeconomic status. This is done through upskilling programmes, educational aid, healthcare and business grants.
Land grant initiatives are also being implemented to promote agricultural empowerment among the Indian community.
However, without strict accountability, these programmes risk being tainted by corruption.
In September 2022, two months before the formation of his “Madani” (trustworthy) government, Anwar called for forensic audits on Maika Holdings, Maju Institute of Economic Development and Mitra funds. The idea was to ensure integrity and genuine socioeconomic progress for all.
So, rather than hastily abolishing ethnic-based policies, strengthening entities serving non-bumiputras could be a more viable path to reducing wealth inequality while respecting the political sensitivities of Malay-Muslim-majority dynamics.
Misgovernance at the root of NEP’s near-debacle
The NEP facilitated grand corruption and rent-seeking behaviour, as outlined by Prof Edmund Terence Gomez in The New Economic Policy and Misgovernance: Grand Corruption in Malaysia.
Misgovernance through cronyism and clientelism deprived many ordinary people of opportunities.
The Jana Wibawa programme, intended to support bumiputra small and medium-sized enterprises post-Covid, turned into a RM6.3bn scandal marred by political patronage.
This mirrors the concerns highlighted by anti-corruption watchdog C4 Center. The group’s policy proposals on government procurement noted how political actors and private entities have colluded in rent-seeking.
The goal of raising bumiputra equity ownership to 30% demands scrutiny. Rafizi Ramli, noting that bumiputras only control 64 out of 945 listed companies, has called for empowerment in the private sector.
Without governance reforms, the 30% target risks serving cronies rather than the broader community.
As Gomez aptly asked:
Why the continuing fixation with numbers when many Malaysians, among them even members of BN component parties, have questioned the veracity of these government-released ownership figures?
Even if bumiputera equity ownership is increased to 30 percent, would this mean that wealth has been more equitably distributed among members of this community or between them and other Malaysians? And, most importantly, should we continue to perpetuate a discourse on equitable wealth distribution among Malaysians along racial lines?
Publicly accessible data on politically exposed persons (PEPs) and the swift enactment of a government procurement law are critical steps forward.
The bumiputra economic transformation plan’s success hinges on cleaning the system, not merely setting lofty targets.
Good governance is key
It is encouraging that the Madani government is placing monitoring units in ministries to track bumiputra progress.
Past failures – such as during Najib Razak’s administration – highlight how the NEP became dormant not due to its objectives but due to poor tracking and declining commitment among corporate leaders.
The NEP remains relevant but must be realigned with good governance principles. While it significantly reduced poverty and accelerated income growth, its abuse by political elites has tarnished its legacy.
If the transformation plan is to succeed, anti-corruption reforms must be urgently enforced: political funding laws, rent-seeking legislation and genuine independence for the Malaysian Anti-Corruption Commission and the public prosecutor.
After all, Anwar himself quoted Isaiah Berlin: “Total freedom for the wolves means death to the lambs.”
True social justice demands firm rule of law, not mere idealism.
Ammar Syabil Mohammad Azam, a psychology graduate, is a committee member of the youth wing of Seremban PKR and former deputy speaker of the UKM students’ union.
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