Cracks appear in Malaysia's multi-ethnic settlement

[Harold Schiffman]

Cracks appear in Malaysia's multi-ethnic settlement

von John Burton (Singapore)

Recent protests have highlighted growing dissatisfaction with the
policy of providing preferential treatment for majority Malays.
When at least 10,000 ethnic Indians gathered late last year in Kuala
Lumpur to demonstrate against alleged racial discrimination, it
triggered political tremors in multi-ethnic Malaysia. Not only did the
protest defy a state edict against unauthorised outdoor assemblies, it
also broke a taboo against publicly questioning the country's
long-standing policy of preferential treatment for majority Muslim
Malays.

Malaysia's government was clearly rattled. Abdullah Badawi, the prime
minister, invoked the colonial-era internal security act for the first
time since coming to power in 2003, detaining without trial five
leaders of the Indian protest. The protest revealed underlying racial
tensions in what has been seen as one of the world's most successful
multi-ethnic states and one of its more open economies. Malaysia is
among south-east Asia's richest countries, regarded as a model for
other Muslim countries in embracing globalisation.
Many observers were surprised that the protest was mounted by ethnic
Indians, Malaysia's smallest and most quiescent racial minority, who
have been the strongest supporters of the National Front coalition
government since it came to power in 1957. But dissent has grown among
Indians recently with the destruction of Hindu temples that officials
said were built illegally and court cases that ruled that Muslim-born
Indians could not convert to the Hindu faith.

Malaysia suffered race riots in 1969 when ethnic Malays clashed with
Chinese, who have come to dominate the economy since they started
immigrating in the 19th century. Since then, however, peace has
reigned among the Malays (52 per cent of the population), ethnic
Chinese (25 per cent), Indians (8 per cent) and indigenous people (10
per cent). But there are signs of growing resentment among the
country's minorities to Malay political dominance and what they see as
"creeping Islamisation". "There used to be more mixing among the races
but increased urbanisation has brought more competition for jobs and
ethnic identities have become more important as a result," says Jawhar
Hassan, head of the Institute of Strategic and International Studies
in Kuala Lumpur.

The policy of preferential treatment for Malays, known as the new
economic policy, has contributed to this trend. Established in the
wake of the 1969 riots, the programme was meant to narrow the income
gap between wealthy Chinese and poor Malays and indigenous people,
known as bumiputra or "sons of the soil", by giving the latter
preference for university places and state jobs. Businesses were
required to have a bumiputra partner, who would hold at least a 30 per
cent equity stake.

The policy succeeded in eradicating poverty among Malays but has been
blamed for leading to an informal apartheid. The adoption of the Malay
language rather than English as the language of instruction in state
schools in the 1970s led Chinese and Indian families to enrol their
children in private schools to preserve their native language. The
overwhelming majority of students in state primary schools now are
Malays. The belief among ethnic Chinese and Indians that they are
being denied opportunities has led many to emigrate, while others who
do not have enough funds to start a new life abroad express
frustration with the system. "I was born and raised in Malaysia and I
consider myself as much a bumiputra as a Malay. But I'm treated like a
second-class citizen," says Anand, an ethnic Indian taxi driver.

Several recent court cases involving the conversion of Muslims to
other religions have exacerbated divisions. The civil courts have
ruled that Islamic sharia courts, which oppose apostasy, are the sole
authority on the issue since Muslims fall under their jurisdiction.
The decision has raised doubts about Malaysia's commitment to freedom
of religion and led to the formation last year of the Hindu activist
group that organised the recent Indian protest. Economists warn that
the NEP represents a barrier to improving Malaysia's economic
efficiency when the country is facing increased competition for
foreign investment from regional rivals such as Vietnam. Mr Abdullah
has sought to ease some affirmative action provisions in response to
those concerns. But when he announced last year that the government
would waive such rules for a new economic zone near Singapore, he was
criticised by hardliners in his own United Malays National
Organisation, Malaysia's dominant party.

The prime minister faces a tough challenge. He must appease Malay
nationalists to keep his post, since his power base within Umno is
weak. But his refusal to make concessions to minorities is likely to
cause Chinese and Indian voters to defect to the opposition at the
next general election, which could come early this year. The
government is expected to win the election easily, since it holds more
than 90 per cent of the parliamentary seats. But a declining share of
the vote for the National Front could undermine Mr Abdullah's
authority and derail his economic reforms. An erosion in support for
the Malaysian Chinese Association and the Malaysian Indian Congress,
the two main parties in the National Front that represent the ethnic
minorities, would further increase the influence of Umno on state
policy.

Mr Abdullah already appears to be bowing to pressure from Umno
conservatives, in spite of promising political liberalisation after
the autocratic rule of his predecessor, Mahathir Mohamad. "The protest
reflects the new openness that Abdullah sought to achieve by
encouraging the expression of grievances. But he may have decided to
use the ISA to calm down the power brokers within Umno, who don't like
to see their authority challenged," says Ramon Navaratnam, head of the
Malaysian branch of Transparency International.
A close aide to the prime minister painted a more alarming picture,
saying that the recent Indian protest could create a backlash among
Malays and lead to racial violence. "Abdullah appears to be genuinely
worried about the situation," says a foreign diplomat in Kuala Lumpur.

There are other signs of a U-turn in Mr Abdullah's reform agenda. He
recently scrapped plans to sell Proton, the troubled state-owned
carmaker, to Volkswagen or General Motors, caving in to pressure from
Malay subcontractors who feared a loss of business. Any significant
retreat from the NEP is unlikely as long as the National Front remains
in power. "In spite of the complaints about the NEP, the fact is that
the policy has ensured this country's stability and its abandonment
would destroy it," says Mr Jawhar. "The NEP was originally meant to
eradicate poverty among all races, not just the Malays," says Mr
Navaratnam. "But it has since evolved into a policy promoting the
interests of Malays. If it can regain its original intention, the NEP
can still play an useful role."

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