Not yet a failed state, Malaysia is decaying rapidly

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By Imran Shamsunahar

Beyond the economic cost, the NEP ultimately had a corrosive impact on the larger social fabric of Malaysia. Relations between the races in Malaysia deteriorated as non-Bumiputeras resented being hobbled from birth when it came to university admissions, government scholarships and housing.

In response to this system of institutionalised discrimination, thousands of non-Malays have since emigrated abroad to countries such as Singapore and Australia, bleeding Malaysia of vital capital and skills.

Concurrently, a whole generation of Malays born in the NEP era came to see these privileges as an unquestionable birthright, egged on by Malay elites eager to preserve the patronage system that sustained them.

It is never a good sign when your fellow Malaysians are seriously debating whether your country has become a failed state.

The country is currently undergoing its cruelest wave of Covid-19, already having surpassed a record 24,000 daily cases. Its healthcare system is teetering, suicide rates have spiked and citizens had at one point taken to waving a white flag from their window to request basic foodstuffs and rent money.

Economically, Malaysia has been caught in the so-called middle-income trap for at least a decade.

In the midst of these travails has been an almost complete dearth of leadership at the top, with the current administration of Prime Minister Ismail Sabri Yaakob comprising Malaysia’s fourth government in the span of three years.

Malaysia had undergone more than 17 months of political dysfunction since March 2020, when the then-multiracial Pakatan Harapan coalition under former prime minister Dr Mahathir Mohamed was brought down through the defection of MPs to form a new coalition with opposition parties organised exclusively for the Malay Muslims.

The collapse of Pakatan Harapan can be attributed in part to Malaysia’s highly racialised political culture, an ugly byproduct of the New Economic Policy, or NEP, one of Malaysia’s most consequential policies passed some 50 years ago.

Following race riots in 1969, the Malaysian government passed the NEP in July 1971 as a way to reduce poverty and restructure glaring economic imbalances between the Bumiputeras and non-Bumiputeras.

Initially intended as a short-term policy, the NEP laid the foundations for a never-ending series of affirmative action policies targeting the Malays. Thirty percent of corporate equity was to be reserved for the Malays, while quotas were established in many professions. Government licences and contracts were also to be reserved for Malay businesses, normally channelled through Malaysia’s ubiquitous government-linked companies, or GLCs.

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