First Malaysia Plan - Results and Legacy

Results and Legacy

The government's ambitious plans to increase the standard of living in rural areas fell short of their objectives. Limited investment in social capital, despite the various land development schemes, had failed to either stem the tide of rural-urban migration or raise the incomes of rural families. In West Malaysia, 90% of all households earning less than M$100 a month were located in rural areas. The vast majority of these were Malay households.

However, the government's programmes to improve rubber output were largely successful. By 1970, the uniform-quality Standard Malaysian Rubber (SMR) comprised 20% of all rubber exports. The government also succeeded in reducing dependence on rubber at the same time by developing other fledgling industries.

Nevertheless, the First Malaysia Plan had visibly failed to reduce the inequity in the distribution of income. Discontent over this issue grew among the Malay populace, while the Chinese electorate, concerned by what they saw as more aggressive Malay "discrimination" against them, likewise became unhappy. In the 1969 general election, opposition parties advocating the reduction or elimination of Malay affirmative action policies made large gains in Parliament, nearly depriving the government of the 2/3 Parliamentary majority required to amend the Constitution—a majority the Alliance had always held since the first national elections in 1955. bull A victory march held by the opposition Democratic Action Party (DAP) and Parti Gerakan Rakyat Malaysia (Gerakan), both of which opposed the Malay-based economic policies of the government, turned ugly, with some participants shouting racial epithets at Malay bystanders. The United Malays National Organisation (UMNO), the leading party of the Alliance, in turn held its own march to "teach the Chinese a lesson". The march turned into a full-scale riot, later euphemistically labeled as the May 13 Incident. At least 200 people were killed, although unofficial estimates give a figure five times that, with the rioting lasting for two days.

The riot, whose participants had been largely from the lower-income classes, greatly concerned the government. A state of emergency was declared, and Parliament was suspended, to be restored in 1971. In the meantime, a National Operations Council (NOC) was established to govern the country provisionally. The NOC drew up the Second Malaysia Plan, the Outline Perspective Plan, and most controversially, the New Economic Policy (NEP) to address what it saw as an imbalanced distribution of income between the Chinese and Malays, and to reduce foreign control of the economy. Although the NEP's stated goal was to "eradicate poverty" and "eliminate the identification of race with economic function" through a "rapidly expanding economy", many non-Malays considered it to be "an open and blatant form of racial discrimination". The NEP expired in 1991, and was replaced by the National Development Plan (NDP). Despite the NEP's criticisms, it was also praised for having created a Malay middle class and creating a "greater ethnic balance in the professions".