- Corrupting Policies

August 2005 | Ratings Update

Prime Minister Abdullah Ahmad Badawi has questioned the success of affirmative action policies used for 35 years to benefit the nation's majority ethnic Malay population. The government has spent vast sums of state money, and used quotas in businesses and education, in an effort to close the wealth gap in Malaysia, but Malays still own just 19% of the economy despite comprising more than half of the population. While the policy has helped to preserve racial stability, after ethnic riots in the 1960s, Abdullah has accused 'rent seekers' of selling contracts and licences on for a short-term profit, leaving the Malay share of equity holdings well below the targeted 30%. However, weaning the Malays off indirect subsidies could lead to further unrest.

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