Malaysia’s New Economic Policy, Growth and Distribution: Revisiting the Debate

Abstract

Malaysia’s New Economic Policy (NEP) has been a subject of intense debate since its inception. Admirers have acclaimed it as unleashing pro-poor growth while critics have labeled it with terms like cancer. Both parties have valid points. The implementation of the NEP has seen growth and addressed distribution, but has also heightened inequality, while the growth rate is diminishing. However, it is difficult to make summary judgments on a policy that has evolved and changed over nearly half a century. It is argued that assessments of the NEP should take into account changes in context as well as the manner in which the NEP has been implemented. Whilst summary judgments are unhelpful, an argument may nevertheless be made that, in common with experiences in many developing countries, a trade-off between growth and distribution exists where affirmative action is translated into ethnic discrimination.