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The Potentiality of National Unity in Malaysia

The Potentiality of National Unity in Malaysia. Yosuke Ogata. Proposition. In spite of the economic recession, due to the currency crisis, is national unity still feasible? Can ethnic heterogeneity be an advantage to economic growth?. Objective.

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The Potentiality of National Unity in Malaysia

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  1. The Potentiality of National Unity in Malaysia Yosuke Ogata

  2. Proposition • In spite of the economic recession, due to the currency crisis, is national unity still feasible? • Can ethnic heterogeneity be an advantage to economic growth?

  3. Objective • Analyze the feasibility of national unity in Malaysia. • To make a future reference in national unity and economical development for other ethnically populated countries.

  4. Historical Background(1)The Forming of an Heterogeneous Nation Bumiputeras “sons of the soil” • Malay - lived near the coastlines of Malaysia Non-Bumiputeras – Brought in as mine and rubber plantation workers • Chinese - lived in the cities • Indian - lived on rubber plantations

  5. Historical Background (2)The Japanese Invasion • Japan invades Malaya and British Borneo in 1941 (just after the Japan-China War) The brutalizing of Chinese The presentation of supremacy to Malays Confliction in the ethnic relations

  6. Historical Background(3)May 13, 1969 • Communal tensions + confrontations with Indonesia • Economic recession and rise of anxiety in Malays(Bumiputera) • Coalition(Malay party) loses majority vote Riot

  7. Ethnic group Poverty (%) Mean household income Malay 64.8 172.00 Chinese 26.0 394.00 Indian 39.2 304.00 Others 44.8 813.00 Bumiputera PolicyThe Need for a New Policy (1)Chart 1 Poverty by Ethnic groups in 1971

  8. Bumiputera Policy The Need for a New Policy(2)Ownership in the Corporate Sector in 1971

  9. The Bumiputera PolicyThe Aim of the Policy • Further economic imbalances between the Bumiputera and non-Bumiputera groups could result to national disaster. • Bumiputera Policy The eradication of poverty regardless of race, to eliminate the identification of occupation with race. • The economic elevation of the Bumiputera

  10. Bumiputera Policy The Contents of the Policy • An ambitious affirmative action program || • Legal priority in Bumiputeras’ economic participation. • No doubt an unequal policy between ethnic groups

  11. Bumiputera PolicyThe Non-Bumiputeras’ Reasons for Approval • Avoidance of another ethnic conflict leading to a national breakdown. • The acknowledgement of the benefit from the policy • For the policy to operate, the non-Bumiputeras’ technology and work skills were essential.

  12. Bumiputera Policy The New Economic Policy • Contents- A more concrete policy of the Bumiputera Policy • Achievements - Improvements in income, living standards.Reduction of poverty and higher Bumiputera employment. Improved income distribution without adversely affecting growth.

  13. Bumiputera Policy Achievements of the NEP

  14. Bumiputera PolicyNew Development Policy • Contents – A broader policy framework which has the overall objective of attaining a balanced development. • Achievements – Annual GDP growth of over 7.0% and an overall improvement in most sectors until the start of ’98. • Economic Recession resulted from currency crisis

  15. Results from the Currency Crisis

  16. The Reconstruction of the EconomyEmphasis on Domestic Economic Conditions • National Economic Recovery Plan(Aug.’98) • Exchange control measures(Sep.’98) • Restructuring of the financial sector(Oct.’98) • Rebuilding of economy without support from the IMF

  17. The Reconstruction of the EconomyFor the Sake of Unity The reasons for turning down IMF support • For the sake of national unity IMF support = Reduction of economy Reduction of economy = Ethnic imbalance • Lessons learned from Indonesia and Thai

  18. The Reconstruction of the EconomyThe National Economic Recovery Plan “Plan for Action” • Stabilizing the ringgit • Restoring market confidence • Maintaining financial market stability • Strengthening economic fundamentals

  19. Conclusion(1) Possibility of National Unity in Malaysia || The trend of the economy • This can be stated from the time The Bumiputera Policy started

  20. Conclusion(2) National Stability National Stability Other Nations(IMF) The Malaysian Policy National Unity Economic Growth National Unity Economic Growth

  21. Conclusion(2) • The goal for economic growth and national unity(pertaining to multi-cultured nations) is the stabilization of the nation. • The Malaysian Policy has chosen the fastest, but also the most risk taking road in forming a stable nation.

  22. Conclusion(3) Reasons for the Risk Taking Policy • The necessity to combine economic growth and national unity as one policy(Bumiputera Policy) • Necessity- the over imbalanced economic gap between ethnic groups

  23. Conclusion(4) Reason for the success of the Bumiputera policy • Economic foundation built from the Chinese ethnic groups • Strong leadership by the administration, particularly its Prime Minister, Mahathir • Heterogeneous Ethnic Society ?

  24. Conclusion(5) Is an ethnically heterogeneous society an advantage to economic development? • Though historical statistics show the odds, the answers are yet to be clear. In future years we may learn that affirmative action programs like those of the Malaysian policies is the key to changing ethnic heterogeneous from a liability to an asset for economical growth.

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