Malaysia dilutes its system of ethnic preferences

"We want to be fair to all communities," Mr. Najib

Sep 17, 2009

Malaysia’s Prime Minister Najib Razak announced a major rollback in the system of ethnic preferences that has defined the country's political system for almost four decades. The new policy would severely weaken a requirement that companies reserve 30 percent of their shares for ethnic Malays, the country's dominant ethnic group. The 30-percent rule was once considered politically untouchable, and Mr. Najib described the change in policy as a “tricky balancing act.”

Malaysia has long given ethnic Malaysia and members of other indigenous ethnic groups political and economic privileges. But that system has come under strain and from complaints by minority groups and poorer Malays. Anger among Chinese and Indians, the country's main minority groups, over the ethnic preferences was perhaps the main reason that the opposition made large gains in elections last year that nearly dismantled the governing coalition led by Mr. Najib’s party, the United Malays National Organization.

“We want to be fair to all communities,” Mr. Najib said in a speech in Kuala Lumpur, the Malaysian capital. “No one must feel marginalized.” Opposition leader and former finance minister Anwar Ibrahim, who leads a diverse group of opposition parties, has promised to undo the system of ethnic preferences.

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