Inequality in Malaysia: Does Ethnic-Based Economic Policy Relevant?

Abstract

This study attempts to answer the question of whether ethnic-based policy introduced under the Malaysian New Economic Policy (NEP) has achieved its objectives and still relevant. We adopt Hirschman (1983)'s method and utilize the 2010 census data. The findings suggest that NEP has eliminated the effect of ethnic as a factor that differentiate opportunities to participate in white collar jobs. NEP further reduced the role of ethnic in determining the opportunities to participate in the manufacturing and business sectors. However, ethnicity remain important in differentiating the opportunities of becoming employesr as well as workers in the private sector. Additionally, economic growth tends to favor Chinese in terms of opportunities to work and being an employer in the business sector. However, it has reduced the opportunities for the Malay ethnic.. The results suggest that Chinese still have the advantage in reaping the benefits of economic growth. Although NEP has generally successful in reducing the role of ethnic in the opportunity to participate in selected sectors, differences in opportunity to participate in business sector remain. This, suggests that ethnic-based policy is still relevant in contemporary Malaysia. Policy interventions which increase the opportunity of the Malay community to involve in business sector and ensure that economic growth creates such opportunity are still required.