Malaysian New Economic Policy - History

History

During British colonial rule, Malays were given certain privileges over their non-Malay counterparts, such as quotas for public scholarships and employment in the civil service. When the Federation of Malaya (West Malaysia) declared independence in 1957, its Constitution contained a provision called Article 153 that provided special position for the Malays. The Reid Commission, responsible for drafting the constitution of Malaya, stated that "in due course the present preferences should be reduced and should ultimately cease." When Malaya merged with Singapore, Sabah, and Sarawak in 1963 to form the Federation of Malaysia, the new Constitution retained Article 153, and the definition of Bumiputra was expanded to include all the indigenous population of Sabah and Sarawak in East Malaysia. Due to increasingly strained relations between the federal and state governments, and a dispute over the special rights of Malays, Singapore separated from the Federation in 1965.

The Reid Commission stated that the intent of Article 153 was to address economic inequality among ethnic Chinese and Malays. In the period following Malaysian independence, however, the Bumiputra share of the economy did not substantially increase; as late as 1970, it was estimated that Bumiputras held only 2.4% of the economy, with the rest in Chinese and foreign hands. Friction between the Malay and Chinese communities grew, reaching its peak in 1969 during the 13 May race riots.