This article, a combination of field research report and literature review, looks at affirmative-action policies both as a mechanism for managing cross-cultural conflict and as creator of other types of conflicts in multi-ethnic Malaysia. Socioeconomic imbalances and post-independence rioting prompted the implementation of these policies to reduce ethnic confrontations and uplift the majority Bumiputras. They were reluctantly accepted by the minority immigrant communities, but managed to change Malaysia’s pre-independence ethnic disparities. The article identifies some of the cross-cultural conflicts the nation still faces, after four decades of affirmative action: (a) the existence of a highly segregated educational system with little opportunity for intercultural interactions; (b) the ghost of latent inter-ethnic tensions beneath the surface; (c) the accentuation of intra-ethnic disparities; (d) complaints about alleged Malay cultural hegemony and Chinese economic hegemony; (e) the visible marginalization of ethnic Indians due to alleged discrimination; (f) the formation of ethnic enclaves in the market; (g) fierce debate about the effects of the affirmative policies; and (h) some challenging by-products of ethno-politics. It also identifies some of the positive factors that work in favor of a better management of these cross-cultural conflicts: (a) the capacity of the country to withstand the changing winds of the global economy; (b) the relative stability of the societal balance produced by the affirmative economic policies since 1970; (c) the reduction of poverty as a direct result of affirmative action; (d) the accentuation of the Malaysian character of the nation among new generations of immigrants; (e) the promise of formal programs to promote national unity; and (f) contemporary trends that promise mindset changes.
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