The Global Enterprise

Introduction

Malaysia is a developing nation with a population of 30 million and currently classified in the upper middle income category. It is situated in the South East Asia Region and is part of the Association of South East Asian Nation; which also comprises of countries such as Brunei, Cambodia, Indonesia, Laos, Myanmar, Philippines, Singapore, as well as Thailand and Vietnam (ASEAN, 2014). Malaysia is a unique country as it is made up of a variety of races such as Malay, Chinese and Indian as well as indigenous races, making it an ethnically heterogeneous nation. This thus sets a very diverse and vibrant cultural backdrop in Malaysia.

Important Benchmark in the Malaysian Economic Policy

In their study of strengthening entrepreneurship in Malaysia, Ariff et al (2000) describes that during the British colonial rule of Malaya (pre-1957), the British implemented the practice of separating economic activity along racial boundaries. Malaya’s main economic drivers at the time were tin mining and production of rubber. In order to streamline operations of the industry, Indian and Chinese migrant workers were imported to work on the rubber plantations and in the tin mines respectively. The Chinese were allowed to run certain businesses; becoming shopkeepers, peddlers and petty traders in the towns. The Malays were mainly concentrated in the agricultural sector and were the only ethnic-group that was allowed into the bureaucracy. However, only members of the royal or upper-class families of the different states of Malaya were usually allowed into the administration, whereas the majority of Malays were limited to the low-income agricultural sector. This resulted in a very multi-layered society, segregated economically and racially with the majority of Malays (Bumiputras) at the bottom rung. To rectify the economic disparity that existed within the country, the representatives of the three major ethnic groups (Malay, Indian and Chinese) agreed that upon independence from colonial rule, the Malays would be given certain “special rights” in the fields of religion, economics and politics. The main reason for this “positive discrimination” was to elevate the status of the economically marginalized Malays, and therefore create a more equitable and balanced society.

Under the New Economic Policy (NEP) established in 1970, these special rights received more comprehensive enunciation. This was a reaction to the growing discontent about the economic inequalities between the Malays and the other races who were still gaining economic ascendancy. The main objectives of the NEP were “to reduce and eventually eradicate poverty,” and “to accelerate the process of restructuring Malaysian society to correct economic imbalance, so as to reduce and eventually eliminate the identification of race with economic function” (Kuala Lumpur: Government Press, 1972) The NEP emphasised on increasing effective Bumiputra ownership and participation in the corporate sector, improving Bumiputra participation in high-income occupations, as well as narrowing income inequality and eradicating poverty.

Within these larger policies, the subject of constructing a Bumiputra Commercial and Industrial Community (BCIC), which involves fostering Bumiputra entrepreneurs, professi