After gaining independence from Britain in 1957, Malaysia inherited a multiracial society with Malays as the majority of the population, and Chinese and Indians as the minority. Whilst foreign, particularly British interests, dominated the Malaysian e...
After gaining independence from Britain in 1957, Malaysia inherited a multiracial society with Malays as the majority of the population, and Chinese and Indians as the minority. Whilst foreign, particularly British interests, dominated the Malaysian economy during the early years of independence, income and sectoral imbalances between Malays (Bumiputera) and non-Malays (non-Bumiputera) had become disproportionately high by the 1970s. Chinese owned a much larger share of corporate equity than the Malays, and the poverty incidence was much higher among Malay households compared to Chinese households. The economic imbalance brought the conflict between ethnic groups in 1967, and then the government introduced the New Economic Policy (NEP) in 1970, which accorded the Bumiputera preferential treatment in order to correct the racial imbalances. New Economic Policy (NEP) is thus often held up as exemplary, having achieved exceptional economic growth and a dramatic reduction in poverty, while simultaneously redressing existing horizontal inequalities and avoiding significant inter-communal violence. This paper looks at the changing ethnic relations in Peninsular Malaysia in terms of the interactions between the state`s policies to advance Malay cultural dominance and reduce ethnic economic inequality and the aspirations and actions of the Chinese community with the NEP. The ethnic relations led to crisis beyond Peninsular Malaysia, specifically ASEAN. The study focuses on the change of ethnic relations and the results of NEP.