Abdullah Relaxes Race-Based Rules to Spur Malaysian Development
By Angus Whitley and Stephanie Phang
Sept. 26 (Bloomberg) — In the southwest corner of Malaysia, on a stretch of land between a mangrove swamp and a forest of dark green oil palms, groaning bulldozers are carving out a new city from red clay soil.
“This will be downtown Nusajaya,'’ says Zamry Ibrahim, 39, a marketing manager for state-controlled developer UEM Land Sdn. who sells the site to foreign investors. “In five to 10 years, the place will be totally different.'’
Prime Minister Abdullah Ahmad Badawi has eased 36-year-old rules favoring the ethnic Malay majority to help woo 382 billion ringgit ($111 billion) in investments aimed at transforming the economy of the southern state of Johor. Investors say his decision demonstrates that the race-based program is outdated and needs to be scrapped as the Southeast Asian nation loses investment to faster-growing neighbors.
“It’s an impediment,'’ said Ian Beattie, who oversees $1.5 billion in Asian stocks at London-based New Star Asset Management Ltd. “You’re stopping the market from operating at its optimum level.'’
Malaysia’s system of racial preferences, originally called the New Economic Policy, was introduced after bloody clashes in 1969 between ethnic Chinese and Malays. The policy, which aimed to increase the wealth of Malays, gives them privileged access to government contracts, jobs and discounts on homes. Of the nation’s 27 million people, about 60 percent are ethnic Malays. (more…)
