Malaysian New Economic Policy - Results

Results

Wealth in the hands of the bumiputras went from 4% in 1970 to about 20% in 1997. The overall wealth of the country as a whole also grew; per capita GNP went from RM1,142 in 1970 to RM12,102 in 1997. During the same period, absolute poverty in the population as a whole dropped from 50% to 6.8%. It is unclear what role the NEP played in these changes.

The effects of the NEP on wealth distribution are disputed. The Gini index declined from 51.3 in 1970 to 44.6 in 1997, and 1987 figures indicated the mean income of the Malays had improved relative to both the Chinese and Indian communities. However, some have used 1997 statistics with 70.2 percent of households in the bottom 40 percent income group as Bumiputra, and 62.7 percent of households in the top 20 percent income bracket as non-Bumiputra, to argue that inequities remain. The Gini index also began to increase in the 1990s, going from 44.6 to 46.4 between 1990 and 1995; meanwhile, 1997 figures indicated that Chinese incomes were increasing at a rate double that of Malays'. Intra-ethnic income differences also increased markedly, especially among Malays.

Bumiputra participation in the professions and private sector increased as well, although Bumiputras remain somewhat under-represented. Between 1970 and 1990, the Bumiputra share of accountants doubled from 7 to 14 per cent, engineers from 7 to 35 per cent, doctors from 4 per cent to 28 per cent, and architects from 4 to 24 per cent. The Bumiputra portion of the share market — a figure frequently cited as "a measurement of overall community wealth", despite claims that it was misleading — increased from 2 to 20 per cent over the same period according to one academic's measurements. The Chinese share also increased from 37 to 46 per cent, at the expense of foreign participation. Official Kuala Lumpur Stock Exchange figures from 1998 were even more optimistic, indicating Bumiputra share ownership stood at 28.6% in 1990 and 36.7% in 1996.

The Chinese community in Malaysia accepted the NEP as a necessary evil to avoid Indonesian-style aggression. Furthermore, the Chinese community generally moved away from the public sector and set up businesses in the private sector, where the impact of the NEP was less pronounced.

In spite of the policies implemented under the NEP, the share of the national wealth owned by the non-Bumiputra races increased beyond the 40% mark. This figure, however, does not reflect that certain segments of the non-bumiputra population live in dire poverty. The Malaysian Indian and Orang Asli in particular form the lowest strata of the population in terms of economic ownership. The Orang Asli of Peninsular Malaysia are not considered Bumiputra under the Federal Constitution despite their indigenous status (see Bumiputra for further information).