It can be all too easy to visit a country and focus on the visible: how people dress, the price of food, the different social norms. But it’s what people do for a living, and the challenges that they face in earning that living, where you can really understand a country’s story.
Being a foreigner living in Malaysia for the last 8 months, it surprised me how little I actually knew about the workforce dynamics and labor history. This article is a brief attempt to correct that gap in my own knowledge, and perhaps highlight some interesting insights about Malaysia’s economy.
A Historical Primer on Malaysia’s Plural Society
Rich in natural resources, the region was under foreign occupation by the Portuguese, Dutch, and British traders who were extracting rubber and tin, and expanding into palm oil production. With increased migration from Chinese and Indian workers, the population of the native Malays went from 90% in the early 1800s to around 50% by 1931.
The Federation of Malaya achieved independence on August 31st, 1957. What is East Malaysia today — the territories of Sabah and Sarawak, on the island of Borneo — joined the union in 1963, and Singapore separated from Malaysia in 1965. This plural society consists of the 3 primary racial groups: Malay, Chinese, and Indian.
With Chinese workers more likely to live in the country’s urban areas, and native Malays relegated more to agricultural work, the wealth divide began to fuel racial tensions, culminating in the 1969 Race Riots in Kuala Lumpur, where nearly 200, mostly Chinese citizens, were killed.
This incident is key to understanding the development of Malaysia’s economic and political system, where race plays an explicit role. Through the 1971 New Economic Policy (NEP), the government stepped in and asserted a social engineering agenda to raise the economic status of the native bumiputera or “sons of the soil.” This precedent has led…