Private Sector Participation in Affirmative Action in Malaysia: - Asian ...

Such glaring disparities in wealth among ethnic groups and particularly severe Malay
underrepresentation in ever expanding corporate sector had become the main source of
ethnic tensions and full blown conflicts. As number of Malays in urban space with
tertiary education swelled, they were increasingly becoming restive as opportunities in
private sector were hard to be found for them. Therefore, frustration of this group were
directed against the Chinese. Despite the fact that foreigners still dominated the private
sector in Malaysia, Chinese became soft target as they were often visible in many of the
key sectors and were often in direct dealing with Malays on day today works. Some of
these tensions and other political power struggles between these ethnic groups led to a
worst ever ethnic riots in 1969. And 1969 riots became turning point in terms of
affirmative action.
Table 1 Employment by Occupation and ethnic group, 1970 (% of ethnic representation
in occupation)
Sector Malay Chinese Indian
Professional & Technical 47.2 37.7 12.7
Administrative & Managerial 22.4 65.7 7.5
Clerical workers 33.4 51.0 14.3
Sales 33.4 64.7 11.0
Production workers 31.3 59.9 8.6
Service Workers 42.9 42.5 13.4
Agricultural workers 68.7 20.8 9.6
Source: Third Malaysian Plan, 1976.
New Economic Policy and the Private Sector
In the backdrop of growing ethnic disparities and severe Malay underrepresentation in the
modern sectors of economy which many believed triggered the worst racial riots in 1969,
the ruling coalition which was overwhelmingly dominated by the ethnic Malays
introduced most radical affirmative policies under the banner of New Economic Policy
(NEP) in 1971. The NEP had two pronged strategies: eradicate poverty irrespective of
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