Affirmative Or Negative?(Book Review)

The Chinese Dilemma, by Ye Lin-Sheng; East West Press, 2004, $24.95.

Affirmative Action Around the World: An Empirical Study, by Thomas Sowell; Yale University Press, 2004, $38.95.

FROM A POLICY PERSPECTIVE, of the countries close to Australia, Indonesia is undoubtedly the most important, Papua New Guinea the most difficult and Malaysia the most perplexing. Prime Minister Mahathir appeared to have a chip on his shoulder when it came to dealings with successive Australian governments, who responded with feigned indifference. What is missing from Australia's response is an acknowledgment that among our neighbours Malaysia is one of the best governed.

Ye Lin-Sheng's new book, The Chinese Dilemma, goes some way to explaining why Malaysia is so successful. He describes a country in which each of the major ethnic groups--Malay, Chinese and Indian--has been socially and economically successful with the minimum of internal disruption. This he ascribes to Malaysia's New Economic Policy and its implementation by Prime Minister Mahathir. The New Economic Policy was introduced in 1971. It had as its objective the increase of Malay ownership of the private sector from 2 per cent to 30 per cent by 1990. This was in addition to measures already in place providing for Malay preference in public sector employment. It was later supplemented by measures discriminating in favour of Malays in the education system.

Ye is a Malaysian businessman who has been commercially successful within the environment engendered by the affirmative action policy. He contends that the New Economic Policy has made it possible for Chinese in Malaysia to be relatively successful commercially and even professionally without experiencing the racial backlash that emerged to an extent after the 1969 Malaysian election. In that instance Chinese triumphalism led to Malay resentment being manifested in violent riots. These were followed shortly thereafter by the New Economic Policy, which has led to a long period of prosperity and racial harmony.

Thomas Sowell, who has undertaken a detailed empirical study of affirmative action around the world, has confirmed Ye's analysis that the Chinese have done reasonably well in Malaysia, notwithstanding the government's affirmative action policy. The detailed statistics in Affirmative Action Around the Worm show that Chinese mean monthly incomes were twice those of Malays in 1970 just before the NEP was introduced and in 1999 they were still twice the monthly Bumiputera income. The average Bumiputera (son of the soil or Malay) could be forgiven for thinking that he was the victim of an elaborate Mahathir con trick.

Ye Lin-Sheng provides a number of explanations for the acceptance of the status quo. Malaysia has been well governed both politically and economically and has been one of the success stories of South-East Asia. Second, Malaysian participation in the professional classes and the bureaucracy has grown rapidly. Third, Malays have shaken off the sense of inferiority that Mahathir expressly referred to in his book The Malay Dilemma, to the extent that young Malays are unaware of the impact or even the existence of the New Economic Policy.