The New Economic Policy (NEP) was implemented in Malaysia from 1970-1990 to address racial inequality following 1969 riots. It aimed to reduce poverty, especially among Malays, and restructure society to address wealth distribution. In 1970, 74% of Malays lived below the poverty line compared to 17% of Chinese and 8% of Indians. The NEP succeeded in reducing the national poverty rate from 49.3% in 1970 to 17.1% in 1990, lifting many Malays out of poverty. However, it benefited Malays more than other ethnic groups, failing to adequately address poverty among Indians and other minorities. While the policy was effective in its goals, the government needs to ensure future economic growth benefits all communities.

2. Malaysia’s socio-economic affirmative
action plan (1970- 1990).
NEP was implemented in 1971 after racial
riots in 13 may 1969.
The goal of the NEP:
• Reduce poverty rate.
• Restructure society.

3. Races Poverty rate(%)
Malay 74.0
Chinese 17.0
Indian 8.0
Races Wealth Distribution(%)
Malays 2.4
Chinese 27.2
Indian 1.1
Others 6.0
Foreigners 63.3

4. 0
10
20
30
40
50
60
70
Year 1970 Year 1990
Malay
Indian,Chinese and
Others
Foreigners
Reduce overall poverty to 16.7% by 1990.
Wealth Distribution (%)

5. Reduce Poverty Rate.
• Increase the job opportunities for all
unemployment.
• Increase the production and Income.
• Decrease the gap of Income between rural area
and urban area.
• Develop the rural area.
• Improve the standard of living through
education, health, infrastructure and so on.

6. Restructure Society.
• Raise the people’s ownership in the private
sector;
• Build a business society among the
bumiputeras;
• Develop areas that have remained backward
but are high in potential;
• Enhance education opportunities within and
outside the country.

7. 49.3 %
Year 1970
17.1 %
Year 1990
3.8 %
Year 2009
Poverty Rate

8. 0
5
10
15
20
25
30
35
40
45
50
Year 1970 Year 1990 Year 2008
Malays
Chinese, Indian and
Others
Foreign

9.  It failed to help many non-Bumiputeras who
deserved to benefit from affirmative action.
• The Indian poor, especially from the rural estate
communities, are one of the main groups that are still
in poverty until today.
• The data of results from the NEP showed that the
share of wealth of non-Bumiputeras increased to
46.8% in 1990;
• However of this 46.8%, 44.9% of the share belonged
to the Chinese, only 1% to the Indians and 0.7% to
Others.

10. New Economic Policy(NEP) is effective to
reduce the poverty rate and restructure
society.
However, the Government must to make
sure that no community should have been
left out and the economic growth must be
parallel with the increasing standard of
living of citizens.

11.  Malaysian government had created numerous
instruments and institutions for the Malays
and Bumiputeras, among which were:
• Bank Bumiputra;
• Federal Land Consolidation and Rehabilitation
Authority(FELCRA);
• Federal Land Development Authority(FELCRA);
• Jengka Regional Development Authority;
• Lembaga Kemajuan Terengganu Tengah(KETENGAH);
• Lembaga Kemajuan Kelantan Selatan(KESEDAR);
• Lembaga Tabung Haji;
• Majlis Amanah Rakyat(MARA);
• Pahang Tenggara Development Authority(DARA);
• Permodalan Nasional Berhad(PNB), which launched Skim
Amanah Saham Nasional;
• Pernas International Holdings Berhad(PERNAS);
• Rubber Industry Smallholders Development
Authority(RISDA); and
• Urban Development Authority(UDA).

12.  Anand, Sudhir, Inequality and Poverty in Malaysia-
Measurement and Decomposition.
 Economic Planning Unit, Prime Minister’s
Department, Second Malaysia Plan 1971-1975
 Economic Planning Unit, Prime Minister’s
Department, FIC Guidelines on Acquisition of
Properties by Local and Foreign Interest. Kuala
Lumpur : Government Printer, 2003.
 Mohd Zuhairi Safuan, Dimensi Asas Hubungan
Etnik Di Malaysia

13. End Of Sharing the Knowledge.
Thank You