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  • I am Senior Fellow at the ISEAS-Yusof Ishak Institute, Singapore. I was previously Senior Lecturer in the Department ... moreedit
Wage stagnation is a perennial problem in Malaysia which the country has addressed primarily through enforcing the minimum wage. The Progressive Wage Policy (PWP) piloted in June-September 2024 will introduce multiple wage floors above... more
Wage stagnation is a perennial problem in Malaysia which the country has addressed primarily through enforcing the minimum wage. The Progressive Wage Policy (PWP)  piloted in June-September 2024 will introduce multiple wage floors above minimum wage and help employers pay Malaysian workers PWP-determined wages. Malaysia’s PWP is modelled after Singapore’s Progressive Wage Model (PWM). Both set wage floors corresponding with occupations, skills and training. Whereas Singapore enforces mandatory compliance and a proportional wage credit, Malaysia will start with a voluntary scheme with fixed amounts of wage subsidy. Promoting wage increases above the mandated minimum is a timely policy priority, and the top-down mechanism might help compensate for weak labour bargaining power. Nonetheless, Malaysia’s approach faces questions on how it will: credibly set multiple wage floors and account for cost-of-living variations; effectively raise productivity and enable employers to be self-reliant; establish an enforcement framework and manage the ramifications of exclusive application to Malaysians; adequately facilitate worker representation in governance structures. The piloting phase must subject the above to rigorous scrutiny before deciding to institutionalise the progressive wage policy. At the same time, Malaysia should consider wage policies that account for geographic cost-of-living differentials and maintain focus on the structural causes of weak labour bargaining power.
Research Interests:
This paper examines affirmative action in Malaysia and South Africa, two regimes that favor majorities. Malaysia’s highly centralized and discretionary programme is in contrasts with South Africa’s more democratized, decentralized and... more
This paper examines affirmative action in Malaysia and South Africa, two regimes that favor majorities. Malaysia’s highly centralized and discretionary programme is in contrasts with South Africa’s more democratized, decentralized and statutory structure. With regard to affirmative action outcomes, both countries have made quantitative gains in increasing representation of Bumiputeras in Malaysia and blacks in South Africa, in tertiary education and high-level occupations. However, there is also evidence to suggest continuing, primarily qualitative, shortfalls, in terms of graduate capability, dependence on public sector employment, and persistent difficulty in cultivating private enterprise. The results reported here emphasize the importance of implementing affirmative action effectively in education, while exercising restraint in employment and enterprise development.
Malaysia maintains one of the world's most extensive affirmative action regimes, buttressed by the transformative and iconic New Economic Policy (NEP). Constitutional provisions, political imperatives and socioeconomic conditions gave... more
Malaysia maintains one of the world's most extensive affirmative action regimes, buttressed by the transformative and iconic New Economic Policy (NEP). Constitutional provisions, political imperatives and socioeconomic conditions gave rise to the establishment of preferential policies in four broad sectors-higher education, employment, enterprise and ownership-favouring the political dominant but economically disadvantaged Bumiputera majority. This chapter elucidates the origins, programmes, outcomes and implications of affirmative action in Malaysia. A brief historical overview explains the language and context of the constitutional authorization of Bumiputera quotas and the modest implementation in the early post-independence years, followed by policy expansion, centralization and intensification from 1971 under the NEP, which was forged in the aftermath of May 13 th , 1969 racial conflagration. The NEP judiciously conceptualized a two-pronged strategy of poverty eradication regardless of race, and "social restructuring" through Bumiputera-targeted affirmative action, as distinct but complementary elements of the ultimate goals of national integration, which entails redressing imbalances and ultimately rolling back overt preferential treatment. However, the NEP lacked a systematic articulation of policy objectives, instruments and outcomes. Malaysia has registered immense progress in facilitating Bumiputera access, participation and upward mobility in the four designated policy sectors. Recent discourses have popularized misguided notions of reform that conflate the NEP's twin elements, and omit attention to the decisive shortfall of affirmative action-its inefficacy in building capability and competitiveness among the Bumiputera beneficiaries, which are requisite for Malaysia to attain the ultimate NEP goals. Malaysia has substantially remedied destabilizing inequalities, but moving forward, must fundamentally rethink affirmative action.
This chapter provides an overview of Malaysia’s efforts to foster decent work, assessment of the impacts of the Covid-19 induced recession and discussion of pertinent legislative and policy shifts in the post-Covid period. Minimum wage... more
This chapter provides an overview of Malaysia’s efforts to foster decent
work, assessment of the impacts of the Covid-19 induced recession and
discussion of pertinent legislative and policy shifts in the post-Covid period. Minimum wage was raised in 2022 but the reversion to a single national rate limits the scope of this policy instrument to redress the problem of low salaries, especially for fresh graduates. The Employment Act amendments and proposed legislation for 2023 mark progressive steps towards better work conditions and work-life balance, such as lower hours, extended maternity and paternity leave, flexible options and regulations against forced labour and discrimination. These initial steps must be built upon, with decent work as the guiding principle. Breaking out of a low-wage regime will need continual progress to transition the economy towards quality jobs, good work conditions and high worker productivity. Decent work encompasses multiple dimensions. This chapter will focus our Covid-19 impact assessment on unemployment assistance, job protection, wage growth, and workplace and living conditions that particularly affect migrant workers.1 We will also focus on minimum wage as a primary wage-raising instrument, while discussing policy implications more broadly, especially in light of contemporary and broad-ranging legislative changes.
Group-based redistribution is extensive and embedded in Malaysia, and has comprehensively transformed the country since the introduction of the New Economic Policy (NEP) in 1971. The NEP established a "two-pronged" framework of poverty... more
Group-based redistribution is extensive and embedded in Malaysia, and has comprehensively transformed the country since the introduction of the New Economic Policy (NEP) in 1971. The NEP established a "two-pronged" framework of poverty reduction irrespective of race and social restructuring to redress racial inequalities primarily through preferential programmes targeting the disadvantaged Bumiputera majority. The debate surrounding the NEP has under-appreciated its strengths and augmented its omissions and misconceptions, which in turn have shaped policy discourses and attitudes in two ways. First, there is marked polarization, largely along ethnic lines, with the majority group overwhelmingly predisposed in favour of Bumiputera policy and minority groups generally wary of its continuation. The polarization unduly reduces the debate to monolithic pro-NEP vs anti-NEP dispositions, and constricts the solutions to a false binary question of continuing vs terminating the NEP. Second, a broad but incoherent consensus has consolidated around the notion that "need-based" policies should comprehensively replace "race-based" policies. While "need-based" policies are widely embraced, they emphatically do not constitute a substitute for "race-based" policies, or group-based redistribution more generally. Surveys have captured the ethnic polarization surrounding "Malay privileges," but also show that Malaysians unanimously support universal basic assistance. A systematic policy reformulation with universal basic needs and group-based interventions as enduring and distinct domains might hold out possibilities for new and constructive compromise.
Malaysia’s labour policies and institutions have tended to lag behind international standards and the expected attainments of an upper-middle-income country on the cusp of high-income status. Notably, the country has sustained low... more
Malaysia’s labour policies and institutions have tended to lag behind international standards and the expected attainments of an upper-middle-income country on the cusp of high-income status. Notably, the country has sustained low unemployment rates but real wages also remain persistently low. Recent years have seen both a flourish of change that have advanced the catch-up process―but also exposés of shortcomings,
particularly forced labour conditions, which emphatically show the distances still to cover toward the national aspiration of a high-skilled, high-productivity, high-wage economy offering decent work and quality of life. Malaysia’s passage through Covid-19 and economic shutdown demonstrates the mix of progress and stasis that characterizes the country’s labour policies, with substantial job protection and wage support that mitigated higher unemployment, while forced labour and dismal work and living conditions of migrant workers also came to public prominence. This paper provides an overview of Malaysia’s labour policies, with particular attention to developments of the past decade. I survey the main legislative and policy landmarks, with some discussion of their distinctive
features and limitations. I then consider Covid-19 impacts and policy responses in 2020–2021―with a focus on unemployment and wages―and unpack the forced labour issues, predominantly affecting migrant workers, that simultaneously came to the fore. The paper concludes with discussion of the dynamics of positive change and systemic hurdles, broadening the perspective again to structural features of Malaysia’s labour regime and potential areas of reform.
Malaysia’s state governments may appear to be more autonomous and empowered with their elections taking place outside of the general election cycle. Only three states held elections concurrently with the November 2022 general election;... more
Malaysia’s state governments may appear to be more autonomous and empowered with their elections taking place outside of the general election cycle. Only three states held elections concurrently with the November 2022 general election; six Peninsular states went to the polls in August 2023. However, the sentimental resonance and political consequence of these elections outweigh the designated roles and material resources of state governments. In 2022, state governments received revenue of RM926 per capita, one-tenth of the federal government’s RM8,969. The constitution vests important roles in land management, social welfare and local government supervision to state governments, but heavily circumscribes them nevertheless. In practice, the states are restricted — notably in the overwhelming role the federal government plays in social welfare and public health, despite these being under joint federal-state jurisdiction. All state governments rely heavily on land-based revenue which arguably induces over-exploitation and commercial ventures that lack transparency. Only Sabah and Sarawak are mandated to collect sales tax. Local governments collect property-based revenue to deliver local services, in a logical structure of functions and circulation of funds. More federal functions should be devolved to the states, particularly in social welfare and public health, and state capacities should be bolstered by statutory expansion of revenue collection, especially through consumption taxes. Reforms are required to empower state governments to be responsive and for subnational governance to be effective.
The Pakatan Harapan – Barisan Nasional (PH – BN) pact retained power at Selangor’s 2023 state election of 12 August, but saw its seat count drop from 45 to 34. Rival Perikatan Nasional (PN) made major gains, burgeoning from 5 to 22 and... more
The Pakatan Harapan – Barisan Nasional (PH – BN) pact retained power at Selangor’s 2023 state election of 12 August, but saw its seat count drop from 45 to 34. Rival Perikatan Nasional (PN) made major gains, burgeoning from 5 to 22 and depriving PH-BN of a two-thirds majority in the 56-seat assembly. PH maintained incumbency advantages, leveraging its track record, steady administration and social programmes to win 60 per cent of the popular vote. However, PH lost ground in the Malay electorate and suffered a lower turnout of its base; the continuing decline of UMNO curtailed the benefits of PH’s partnership with BN. PN’s popularity has surged; the coalition expectedly dominated in Malay supermajority seats. A coordinated campaign, lavish manifesto and targeted messaging – notably at youths, women, and the Indian community – contributed to its increased share of Selangor votes, from 27.5 per cent in November 2022 to 37.8 per cent nine months later. The PH-BN government has a host of young assemblypersons, and with a fresh mandate for Chief Minister Amirudin Shari’s second term, has strengths to build on. However, PN’s expansion and morale-boosting wins presage a robust opposition and a more competitive political arena. PH’s 2008-2023 era of dominance has ended; the next chapter of Selangor’s politics remains to be written.
A call for increased minority representation in Malaysia’s civil service recently sparked another fierce public debate. Ethnic Malays, comprising 57 per cent of Malaysian citizens, account for 78 per cent of federal government staff — and... more
A call for increased minority representation in Malaysia’s civil service recently sparked another fierce public debate. Ethnic Malays, comprising 57 per cent of Malaysian citizens, account for 78 per cent of federal government staff — and 80 per cent of top decision-making positions. The lack of diversity, and minority groups’ sense of exclusion, are legitimate concerns. However, the debate remains polarised and deadlocked, with proponents of change decrying the problem in absolute terms of Malay “domination”, “racial policy” and discrimination, while opponents intransigently defend the status quo often through invoking “Malay rights”. The government’s muted response to this sensitive topic is understandable. At the same time, promoting diversity in Malaysia’s civil service might be possible with coherent and measured approaches, and critical appraisal of past efforts to increase diversity and current employment practices, including the authorities’ claim that meritocracy already applies in recruitment exercises. Policy dialogues can start by clarifying the underlying principles and practical scope for promoting diversity and by cultivating new grounds for facilitating equitable representation of all groups. Shifting a colossus like Malaysia’s civil service will be difficult, and progress must be slow and incremental for it to be sustained. Nonetheless, such efforts are worthwhile and perhaps even viable — provided the debate dispenses with habitual posturing that detracts from systematic solutions.
Forced labour, encompassing various types of coercive practices and rights violations, is an entrenched problem in Malaysia. Recent years have seen more decisive and concerted efforts to resolve the problem and repair Malaysia’s damaged... more
Forced labour, encompassing various types of coercive practices and rights violations, is an entrenched problem in Malaysia. Recent years have seen more decisive and concerted efforts to resolve the problem and repair Malaysia’s damaged reputation, but the country’s forced labour woes escalated amid COVID-19, with exposés and trade embargoes in 2020–21. Most consequentially, the US has imposed withhold release orders (WROs) on major rubber glove manufacturers and palm oil producers. For two consecutive years, 2021–22, Malaysia has occupied the lowest Tier 3 in the US Trafficking in Persons report. In November 2021, the country’s National Action Plan on Forced Labour (NAPFL), formulated through tripartite engagements with the participation of the International Labour Organization, was launched, with the third National Action Plan on Trafficking in Persons (NAPTIP 3.0) operating in tandem.

The NAPFL outlines strategies and integrated measures for eventually eliminating forced labour by 2030, which requires systemic solutions commensurate with the magnitude of underlying problems. Forced labour has persisted despite the official termination of labour outsourcing and increased intergovernmental bilateral initiatives to better manage foreign worker flows. Continual challenges in the labour supply industry and the administrative system, including the problematic overlapping powers of the Ministry of Home Affairs and Ministry of Human Resources, complicate the creation and implementation of a more just, effective and accountable migrant worker system. Government-to-government (G2) agreements, through Memorandum of Understanding, have become the established platform, but are marred by inconsistency and lack of transparency. The new government of Malaysia will need to address deep-seated issues and confront vested interests, domestically and in the labour source countries, to realize the aspiration of eliminating forced labour by 2030.
Malaysia will hold its 15th General Election (GE-15) on 19 November, at the onset of the monsoon season. An unprecedented three national coalitions are vying for hearts and minds, six million of whom are new voters. Manifestos of the... more
Malaysia will hold its 15th General Election (GE-15) on 19 November, at the onset of the monsoon season. An unprecedented three national coalitions are vying for hearts and minds, six million of whom are new voters. Manifestos of the three national coalitions — Barisan Nasional (BN), Pakatan Harapan (PH) and Perikatan Nasional (PN) — have departed somewhat from GE-14’s overpromise and self-aggrandizement but nevertheless still present a litany of “offerings”. BN is rallying around “Prosperity and Stability”, maintaining its DNA of material bounty, with novel elements and an inclusive posture. PH re-evokes the spirit of change – “We Can!” – with a people-centric and reformist but more cerebral action plan. PN, with its “Concerned, Clean, Stable” clarion call, projects competency and responsiveness – and a counterpoint to BN. On socioeconomic policies, all manifestos tap into voter concerns and insecurities about economic, education, health and climate crises. BN and PN present vast arrays, delivered in a simple checklist format; while PH’s offerings, though also broad, pay more attention to structural solutions. All sides court the youth, East Malaysia, women, rural communities, and low-income households. Notably, only PN explicitly articulates policies for ethnic groups. BN can rely on their base’s tacit assurance that ethnically-targeted policies will be safeguarded, while PH is banking on its all-Malaysia stance, with some indirect outreach to minority groups. Governance and institutional reforms are prominent in all the manifestos. While PH’s plans are the most substantive, BN’s is reticent specifically on anti-corruption measures. The manifestos provide voters with plenty to consider and some insight into each coalition’s policy stances and election strategies.
The New Economic Policy has transformed Malaysia since 1971. Pro-Bumiputera affirmative action has been intensively pursued and continuously faced pushback. This paper revisits three key junctures in the NEP's fifty-year history that... more
The New Economic Policy has transformed Malaysia since 1971. Pro-Bumiputera affirmative action has been intensively pursued and continuously faced pushback. This paper revisits three key junctures in the NEP's fifty-year history that heightened policy debates-and the ensuing persistent polarization and stalemate in policy discourses. First, at its inception in the early 1970s, despite substantial clarity in its two-pronged poverty alleviation and social restructuring structure, the NEP was marred by gaps and omissions, notably its ambiguity on policy mechanisms and long-term implications, and inordinate emphasis on Bumiputera equity ownership. Broader discourses have imbibed these elements, and they tend to be more selective than systematic in policy critique. Second, during the late 1980s, rousing deliberations on the successor to the NEP settled on a growth-oriented strategy that basically retained the NEP framework and extended ethnicity-driven compromises. Third, since 2010, notions of reform and alternatives to the NEP's affirmative action program have been propagated, which despite bold proclamations again amount to partial and selective-not comprehensive-change. Affirmative action presently drifts along, with minor modifications and incoherent reform rhetoric stemming from conflation of the NEP's two prongs. Breaking out of the prevailing polarization and impasse requires a systematic and constructive rethink.
Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy... more
Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy objectives must be appreciated, but various misconceptions, especially regarding affirmative action, have resulted in polarization and stalemate after fifty years of the NEP. Social justice and affirmative action must be conceptualized and evaluated with clarity and rigor, with policy objectives, mechanisms and outcomes aligned. Malaysia needs to systematically formulate a new social justice paradigm, building on the NEP and anchored on the principles of equality and fairness. In the affirmative action sphere, this framework must focus on developing capability and competitiveness, and balance identity, need and merit in the allocation of opportunity.
Malaysia’s Bumiputera Development Action 2030 (known by its Malay acronym TPB2030) is a major blueprint. Its genesis can be traced to Pakatan Harapan’s rule; its continuity across changes in Prime Ministers reflects the embeddedness of... more
Malaysia’s Bumiputera Development Action 2030 (known by its Malay acronym TPB2030) is a major blueprint. Its genesis can be traced to Pakatan Harapan’s rule; its continuity across changes in Prime Ministers reflects the embeddedness of Bumiputera policies. TPB2030 largely maintains the focus of the Bumiputera Economic Transformation
programme, its predecessor, on cultivating dynamic and competitive enterprise. These are justifiably high priorities in Bumiputera development, and also areas of acute underachievement. The blueprint brings added focus and structure compared to preceding efforts, with targeted sectors, more integrated support, and high-powered oversight. Gaps in the
formulation of policy targets and funding, however, need to be addressed.  More fundamentally, TPB2030’s sweeping ambition – conflated with the expansive Shared Prosperity Vision 2030 – departs from its specific scope and may detract from policy coherence and efficacy. Median income of urban Bumiputera households is on par with urban Indian households. Disparities in well-being have diminished as a justification for Bumiputera development policies, underscoring the imperative of
TPB2030’s focus on disparities in participation and capacity. Policy design and evaluation programmes must resolutely and rigorously maintain focus
on TPB2030’s primary mission of developing Bumiputera enterprise. Malaysia must monitor progress and draw lessons, not just for Bumiputera policies but also for broader group-targeted policies based on ethnicity and gender.
The New Economic Policy’s 50th anniversary in 2021 provides an opportunity to reflect on its achievements and shortfalls, and imagine boldly into the future. Undoubtedly, Malaysia has been transformed by the NEP at all levels and aspects.... more
The New Economic Policy’s 50th anniversary in 2021 provides an opportunity to reflect on its achievements and shortfalls, and imagine boldly into the future. Undoubtedly, Malaysia has been transformed by the NEP at all levels and aspects. Its presence has been far reaching, enduring beyond the original timeframe of 1971-1990, and its legacy will continue into the foreseeable future. The debates surrounding the NEP tend to be polarising and often reach a stalemate; however, a more constructive engagement is possible through re-appreciating the NEP’s strengths and examining its weaknesses/omissions, grappling with its policy discourses as well as with its popular but misguided perspectives. This paper suggests that by doing all these, we can ultimately recraft the NEP to forge a cohesive and inclusive Malaysian society.
The Twelfth Malaysia Plan (12MP) clearly and vigorously advocates the “Bumiputera agenda”, while outlining policies designated for minority groups and women, saliently in higher education, entrepreneurship and decision-making positions.... more
The Twelfth Malaysia Plan (12MP) clearly and vigorously advocates the “Bumiputera agenda”, while outlining policies designated for minority groups and women, saliently in higher education, entrepreneurship and decision-making positions. The demarcation of the Bumiputera agenda, which is based on programmes under Bumiputera-mandated agencies instead of more systematic criteria, only partially accounts for the vast Bumiputera preferential system. The 12MP recognises that the major shortcomings in Bumiputera development pertain to higher education, skilled occupations and entrepreneurship, but fixates on equity ownership, especially in Prime Minister Ismail Sabri’s 27 September speech to Parliament. The 12MP also omits problems of inequality within the Bumiputera population, and questions surrounding majority and minority interests, especially in higher education. Malaysia missed an opportunity to reset the agenda by focusing resolutely on
developing Bumiputera capability and competitiveness, and formulating group-targeted policies in an integrated manner that accounts for majority and minority interests. Provisions for minority groups and women need to go beyond tokenism, and development policy on the whole must systematically balance need, merit and identity – giving preference to the disadvantaged, promoting achievement and fostering diversity.
The COVID-19 recession has exacerbated the already challenging labour market conditions for Malaysia’s youth (aged 15-24). Unemployment rose across all age groups in 2020. However, Malaysian youths continually registered higher levels of... more
The COVID-19 recession has exacerbated the already challenging labour market conditions for Malaysia’s youth (aged 15-24). Unemployment rose across all age groups in 2020. However, Malaysian youths continually registered higher levels of unemployment, and also withdrew from the labour force at a rate substantially higher than for other age groups. Job losses also rose in 2020 compared to 2019, especially in the middle- and low-skilled jobs. In this same period, the number of youth employees contracted, with many compelled to undertake self-employment or start businesses. However, this pivot was limited to a few sectors, particularly retail trade. Employee salaries have also declined across the board, but again, more steeply among young workers. Malaysia’s stimulus packages have prioritized the more experienced workers, understandably given the massive need to protect existing jobs and assist those who have households to sustain. A few measures have specifically targeted young workers and fresh graduates, whose vulnerability has become increasingly evident.  The freshly appointed government will face severe pressure to address the plight of the unemployed youths and young workers.
Malaysia’s public procurement system has come a long way, and will continually play a key role in providing public goods and services, infrastructure and amenities. Policy commitments to efficient and effective delivery, from cost and... more
Malaysia’s public procurement system has come a long way, and will continually play a key role in providing public goods and services, infrastructure and amenities. Policy commitments to efficient and effective delivery, from cost and quality perspectives, and to develop Bumiputera companies through public procurement, have heightened in recent years. A further concern, compounded by Covid-19, are the potential fiscal constraints. The convergence of various factors highlight the gravity of improving prudential standards and developmental pursuits – not only related to equitable growth, the overarching principle of this paper, but also sustainability. This report has provided an overview and update of Malaysia’s public procurement, with a focus on Bumiputera company development. Our explorations, through quantitative and qualitative data compiled from various sources, have helped broaden our understanding of Bumiputera participation in public procurement, and shed light on policy outcomes. The analysis signals some policy recommendations, but clearly, there is immense work still to be done. We hope that this report has engaged with the debates, generated some new insights, posed constructive questions and highlighted further areas of research.
This think piece provides an overview of the Bumiputera development regime, its recent changes and lessons South Africa can draw from Malaysia’s experience. At the systemic level, Malaysia’s executive-driven, centralised, discretionary... more
This think piece provides an overview of the Bumiputera development regime, its recent changes and lessons South Africa can draw from Malaysia’s experience. At the systemic level, Malaysia’s executive-driven, centralised, discretionary and quota-based approach contrasts with South Africa’s system – characterised more by legislative, decentralised, codified and target-based interventions. It is important to situate group preferential policies in historical and structural context in order to appreciate the distinctiveness of each country and the cross-country transferability of policies.
This book studies the challenges for Indonesia, once a miracle economy, as it faces premature deindustrialisation, rising inequality and domestic and external factors impacting its export-oriented industrialization. Since the fall of... more
This book studies the challenges for Indonesia, once a miracle economy, as it faces premature deindustrialisation, rising inequality and domestic and external factors impacting its export-oriented industrialization. Since the fall of Soeharto, Indonesia has undergone a far-reaching systemic transition from centralised and autocratic governance to a highly decentralised and democratic system. Complicated by regional variations, the country is now being called upon to respect labour rights and, amidst slow global economic recovery, is facing increased competition from other low-labour-cost countries, especially within the ASEAN Economic Community. Tadjoeddin and Chowdhury posit that Indonesia cannot recreate its past miracle based on cheap labour and suppression of labour rights. It will need to move quickly to high value-added activities driven by productivity growth and to develop its domestic market.
This paper offers an institutional economic analysis of industrial development and equity distribution in Malaysia, with particular reference to the shift in Malaysia's redistribution regime in the mid-1980s. The regime gravitated... more
This paper offers an institutional economic analysis of industrial development and equity distribution in Malaysia, with particular reference to the shift in Malaysia's redistribution regime in the mid-1980s. The regime gravitated from manufacturing licensing toward a more liberalised investment environment. I set out an institutional framework for politicaleconomic analysis, which significantly incorporates concepts of legal institutions and the role of the state, with emphasis on those that are more relevant to the Malaysian context. An overview of Malaysian investment policy is presented, taking note of trends in equity distribution. This is followed by analysis of the mid-1980s investment liberalisation measures, with reference to: (1) the increased emphasis on industrial development, instead of equity redistribution, in the manufacturing sector, and (2) the concomitant shift from a redistribution-centred to a growth-centred development policy in the wider institutional econ...
Research Interests:
Malaysia’s New Economic Policy (NEP), which turns 50 this year, is most intimately associated with the 30% Bumiputera equity ownership target. Drafts of the forthcoming Shared Prosperity Vision 2030 have restated this target as the... more
Malaysia’s New Economic Policy (NEP), which turns 50 this year, is most intimately associated with the 30% Bumiputera equity ownership target. Drafts of the forthcoming Shared Prosperity Vision 2030 have restated this target as the perennial under-achievement justifying continuation of pro-Bumiputera policies. However, the equity target needs to be revisited, and the Bumiputera enterprise agenda reset, on three grounds. First, the NEP originally articulated to a broader vision of Bumiputera economic partnership but became narrowly focused on 30% equity ownership. The current Bumiputera agenda emphasises active control and entrepreneurship. The singular macro target was incongruous from the start, and outdated in light of current policy priorities. Second, the equity target is empirically problematic. The NEP originally set Bumiputera individual and trust agency sub-targets; the individual portion has long been surpassed. The data are also clouded by the combined effects of including foreign ownership and excluding Malaysian government ownership, which warrant a rigorous reconsideration. Third, continual fixation with macro equity ownership detracts from more important attention to Bumiputera enterprise development, especially SMEs. The time is ripe for Malaysia to dispense with one catch-all goal, and to reformulate a set of objectives and targets, with Bumiputera SME development at the centre.
MARA is one of the most important institutions for Malay and Bumiputera socioeconomic development, through its extensive programmes in education, entrepreneurship and investment. In October 2018, the Pakatan Harapan government appointed... more
MARA is one of the most important institutions for Malay and Bumiputera socioeconomic development, through its extensive programmes in education, entrepreneurship and investment.

In October 2018, the Pakatan Harapan government appointed a technocratic MARA Council which initiated a policy reset. The Council’s declaration of education as the foremost policy sphere, with emphasis on distributing more opportunity to disadvantaged Bumiputeras, is readily agreeable, but the accompanying objective of improving academic quality and graduate capability presents more daunting challenges.

MARA Corp, MARA’s investment holding company, also saw a change of guard in top management and energized its operations, but the Council’s declared intention to withdraw from non-education investments, which entails shutting down MARA Corp, prompted open conflict.

Within days of Perikatan Nasional seizing power, before the first parliamentary sitting and amidst the Covid-19 crisis, the new Cabinet terminated all the above appointments. This hasty action reflects MARA’s political significance, but also signals its potential utilization as a vehicle of patronage and the possible undoing of the Pakatan-appointed Council’s timely and worthwhile interventions.
These are tough times for young workers (aged 15-24) globally, but Malaysia’s youth face some distinct challenges arising from structural trends in the labour market and policy shortcomings of the past decade. While youths have... more
These are tough times for young workers (aged 15-24) globally, but Malaysia’s youth face some distinct challenges arising from structural trends in the labour market and policy shortcomings of the past decade.

While youths have increasingly attained tertiary-level education, they remain disproportionately employed in semi-skilled or low-skilled jobs, and their presence in skilled occupations falls far short of national goals. Most young adults are employed as service workers and many remain in elementary jobs, while the proportion holding professional or technical positions has barely grown in recent years.

Wage growth for young workers shows a dual pattern, of sluggish gains in the 20-24 year bracket alongside higher rates for 15-19 year-olds, likely due to the minimum wage mandate. Nonetheless, young workers’ wage levels remain low, and prevailing work conditions detract from the work-life balance, interesting jobs and the economic security valued by this generation of youths – which are aligned with national objectives.

A growing proportion of young adults aspire to be self-employed and some will be poised for new ventures in the digital economy. They will need incentives and support to do so.

The vast majority will however remain employees. Malaysia must substantially enhance skills, wages and economic security for all working youth.
Youth unemployment poses pressing challenges for Malaysia. Structural problems deriving from education quality deficiencies, skills mismatch, and low-quality jobs have stressed labour markets in recent years – and are compounded by... more
Youth unemployment poses pressing challenges for Malaysia. Structural problems deriving from education quality deficiencies, skills mismatch, and low-quality jobs have stressed labour markets in recent years – and are compounded by imminent recession.

The labour force participation of youth – aged 15-24 years – steadily increased over the past decade. While overall a positive trend, some specific developments should raise concern: 15-19 year-olds are much more likely to choose work over upper- and post-secondary education in Sabah, the state with the country’s highest poverty rate; among ethnic groups, labour force participation of Indian young adults has dropped slightly.

Unemployment has been rising among 20-24 year-olds, particularly in urban areas, and remains persistently high among 15-19 year-olds. Male youth unemployment is notably high in Sabah, while female youth unemployment is high in most regions. Unemployment has also risen to alarmingly high levels in the young Indian labour force.

Youth will disproportionately bear the brunt of adverse effects from Covid-19. Young Malaysians are more vulnerable to employment loss in the face of tenuous job growth, coupled with a focus on worker retention which constrains new recruitment, and the increasing share of self-employed with minimal resources to absorb the downturn.

The weight of empirical evidence, on balance, underscores the need for Malaysia’s labour markets – and education and training systems – to work better for the country’s youth.
Malaysia’s recently launched draft of the Shared Prosperity Vision (SPV) 2030 presents a glimpse of the country’s plans to grow the economy and promote equitable distribution – and more generally to project a new narrative of development... more
Malaysia’s recently launched draft of the Shared Prosperity Vision (SPV) 2030 presents a glimpse of the country’s plans to grow the economy and promote equitable distribution – and more generally to project a new narrative of development and progress. The growth vision continues a decades-long emphasis on the need to elevate technology, skills, and value added, with new and bold attention to structural problems in the economy. However, Malaysia’s conditions call for a more comprehensive articulation of sustainable growth, holistic development and institutional reforms. The SPV places utmost priority on reducing disparities in income and wealth across various dimensions, especially between ethnic groups. This conception of the distributive dimension of development is unduly narrow in focusing on income and wealth. It omits a host of important and inter-related goals, and lacks clarity on basic need provisions versus policies targeting Bumiputeras and other ethnic groups. This historical juncture offers an opportunity for Malaysia to cast a more original, systematic and impactful vision, to provide decent living for all while ensuring fairness in distribution on many fronts, and to anchor the Bumiputera agenda on building capabilities and broadening participation.
The Mid-Term Review (MTR) of the Eleventh Malaysia Plan (11MP) was an opportunity for the Mahathir government to recalibrate its predecessor’s economic strategy. Unsurprisingly, it recommits priority to Bumiputera empowerment, but... more
The Mid-Term Review (MTR) of the Eleventh Malaysia Plan (11MP) was an opportunity for the Mahathir government to recalibrate its predecessor’s economic strategy. Unsurprisingly, it recommits priority to Bumiputera empowerment, but significantly designates some attention for minority groups. In three ways, Malaysia sets reasonable and timely objectives, but lacks clear perspective and systematic plans commensurate with the scale and complexity of these policies. First, the MTR appropriately emphasizes Bumiputera educational access and attainment. However, the programme of action falls short of a systematic framework for expanding need-based assistance in place of race-based preference and for promoting Bumiputera capability and self-confidence. Second, the MTR affirms Bumiputera enterprise development and wealth ownership, and boldly commits to acting against abuse and rent-seeking. But again, the policy agenda lacks focus and consistency in developing capability and competitiveness. Third, in allocating a segment for minority group empowerment, the MTR distinguishes itself from the Eleventh Malaysia Plan, but follows through in a fragmented and piecemeal fashion.
• The Pakatan Harapan (PH) government promised education reforms before getting elected in 2018, and presently grapples with the complexities of making good on those pledges while seeking to negotiate continuity and change with regard to... more
• The Pakatan Harapan (PH) government promised education reforms before getting elected in 2018, and presently grapples with the complexities of making good on those pledges while seeking to negotiate continuity and change with regard to the previous administration’s Malaysian Education Blueprint launched
in 2013.
• This article situates the education reforms in the context of Malaysia’s highly centralized administration, embedded practices and policy initiatives of recent years. Discussion focuses on three areas—quality, equity, autonomy—where PH has more distinctly differentiated itself from its predecessor.
– On the quality of national schools, efforts to alleviate teachers’ bureaucratic work load and enhance the schooling experience mark a positive start. However, transforming mindsets and practices will require more systemic changes, critical self-reflection, and sustained efforts on difficult matters, particularly in basic schooling and technical and vocational programmes.
– On equity, the government’s consistent attention to Bottom 40 (B40) households progressively allocates opportunity, and continual need to address ethnic concerns poses steep challenges. However, policy responses tend to unfold in an ad hoc manner, and the balancing of ethnic interests lacks clarity and coherence.
– On autonomy, at the institutional level, legislative overhaul in higher education is in the works, while at the personal level,
academic freedom clearly thrives more under PH administration. Meaningful and effective reform will hinge on devolution of power away from central government, institutionalization of autonomy, and depoliticization of the system.
Malaysia and South Africa conduct two of the most extensive affirmative action programmes in the world, and perhaps most distinctively, the policy encompasses the corporate sphere. Affirmative action seeks to promote the upward mobility... more
Malaysia and South Africa conduct two of the most extensive affirmative action programmes in the world, and perhaps most distinctively, the policy encompasses the corporate sphere. Affirmative action seeks to promote the upward mobility of a population group – often designated by race, ethnicity, religion, gender or disability – through preferential treatment, in order to increase their participation in areas in which they are under-represented. The policy beneficiary in both countries constitutes the demographic majority and politically dominant ethnic group, namely, the Bumiputeras in Malaysia and blacks in South Africa. While various countries implement affirmative action in higher education, public sector employment and public procurement, fewer pursue such policies in ownership, control and management of corporations.
This chapter provides a comparative overview of affirmative action in corporate development in these two countries. We survey political economic foundations, institutional frameworks and policy instruments, and discuss recent policy initiatives and future prospects.
EXECUTIVE SUMMARY • Pakatan Harapan's promises to reform the education system have raised expectations for broad meaningful changes in post GE-14 Malaysia. • Buku Harapan¸PH's manifesto, sets out some laudable goals, notably to raise the... more
EXECUTIVE SUMMARY • Pakatan Harapan's promises to reform the education system have raised expectations for broad meaningful changes in post GE-14 Malaysia. • Buku Harapan¸PH's manifesto, sets out some laudable goals, notably to raise the quality and esteem of national schools. The early pronouncements on enhancing schooling experience, broadening education access, de-politicizing top appointments and safeguarding academic freedom seemed headed in the right direction. • Early policy actions have largely focussed on gaining political mileage with some constituencies, such as easing student loan burdens and promising 1,000 matriculation places to the Chinese community. • The government will need to go beyond such political gestures, to formulate policies for systemic reforms which can balance the twin goals of enhancing the quality of education and pursuing national integration. Some fundamental tensions inherent between these two national objectives will present an extremely daunting challenge for the PH government in the days ahead.
Research Interests:
While foreign labour management is a top policy priority in Malaysia, the number of foreign workers in the country is a perennial mystery. The official estimate of total foreign workers dropped from 6.7 million in late 2014 to 3.8 million... more
While foreign labour management is a top policy priority in Malaysia, the number of foreign workers in the country is a perennial mystery. The official estimate of total foreign workers dropped from 6.7 million in late 2014 to 3.8 million in 2016. However, the Labour Force Survey (LFS) reports that the number of foreign workers, encompassing both documented and undocumented ones, increased from 1.8 million in 2013 to 2.2 million in 2016. The LFS is the authoritative reference on the Malaysian workforce but undercounts foreign labour. Other sources such as the National Employment Returns usefully report the share of local and foreign workers within establishments. Combining the respective strengths of the LFS and the NER, we estimate a minimum number of foreign workers of about 3.85 million. Given the clear undercounting in these datasets, the actual total must be significantly higher, possibly around 5.5 million. It is imperative, and possible, for the Malaysian government to provide credible estimates of the number of foreign workers. Increasing clarity and veracity in this most basic information will enhance public discourse and policy making.
Research Interests:
The stakes are high for Malaysia's 14 th General Elections in Selangor, Malaysia's richest and most urbanized state governed for ten years by the Pakatan Harapan (PH) coalition. PH has established a foothold in urban and ethnically mixed... more
The stakes are high for Malaysia's 14 th General Elections in Selangor, Malaysia's richest and most urbanized state governed for ten years by the Pakatan Harapan (PH) coalition. PH has established a foothold in urban and ethnically mixed constituencies, while Barisan Nasional (BN) is confined to Malay majority areas. PH is poised to retain the majority of the popular vote, amid widespread economic discontent and corruption scandals associated with the BN federal government. However, PH's prospects for retaining the majority of Selangor state assembly seats is clouded in uncertainty, due to three-cornered contests involving the two coalitions and the Islamist PAS, and the re-delineation of electoral boundaries that favours BN.
Research Interests:
Malaysia’s 2018 Federal Budget allocates copious funds for education. Under the banner of the TN50 – National Transformation 2050 – an upcoming development blueprint, the budget supports efforts to adapt to the digital economy and... more
Malaysia’s 2018 Federal Budget allocates copious funds for education.  Under the banner of the TN50 – National Transformation 2050 – an upcoming development blueprint, the budget supports efforts to adapt to the digital economy and finances school upgrading. However, the overall transformational thrust remains unclear; the TN50 brand largely co-opts existing programmes rather than launches new initiatives. The budget speech generously allocates funding to support the Technical and Vocational Education and Training (TVET) Master Plan and its plans to centralize, under the Ministry of Human Resources (MoHR), the current disparate system. Follow-through will be crucial, but difficult, as signaled by the speech’s promotion of technical institutions not under the MoHR’s jurisdiction. On education financing, the speech highlights infrastructure spending, giving scant attention to quality of schooling. Higher education receives a boost, in contrast to severe cuts in recent years, but it remains to be seen whether this funds injection marks a policy revision or is merely stopgap relief.
Malaysia has employed an extensive, constant and embedded Bumiputera preferential regime for several decades, but in recent years, the Bumiputera Economic Transformation Programme was introduced, aimed at building capable and competitive... more
Malaysia has employed an extensive, constant and embedded Bumiputera preferential regime for several decades, but in recent years, the Bumiputera Economic Transformation Programme was introduced, aimed at building capable and competitive Bumiputera businesses, and reaching out to disadvantaged Bumiputera students. Official rhetoric and public discourse recurrently – and erroneously – maintain that need-based and merit-based affirmative action have replaced ethnicity-based programmes. I propose a systematic framework for integrating need-based selection (prioritizing the disadvantaged or limiting benefits to the already empowered) and merit-based selection (cultivating capable and competitive policy beneficiaries) as enhancements of the Bumiputera preferential regime, taking into account specific conditions and implications from three main policy spheres: higher education, high-level employment, and enterprise development. I then evaluate the extent need-based and merit-based selection have been incorporated into the regime. Need-based selection remains under-utilized in higher education and wealth ownership to target the disadvantaged and facilitate inter-generational upward mobility, and in enterprise development as a means to curb rent-seeking and facilitate graduation. Merit-based selection has gradually expanded, but can be much more widely applied in all policy spheres, especially in enterprise development. Effective utilization of need and merit considerations bolsters Bumiputera empowerment, and lays foundations for graduating and exiting from overt Bumiputera preference. Formulating transitions away from the current Bumiputera preferential regime will require a systematic approach, integrated with programme-specific analysis.
Research Interests:
EXECUTIVE SUMMARY  Labour discrimination recurs in Malaysia's public and political discourses, and will likely feature in election campaigns to come. Unfortunately, reactive, accusatory and polarizing rhetoric predominates, perpetuating... more
EXECUTIVE SUMMARY  Labour discrimination recurs in Malaysia's public and political discourses, and will likely feature in election campaigns to come. Unfortunately, reactive, accusatory and polarizing rhetoric predominates, perpetuating gridlock on legislative and policy fronts.  The situation calls for clarity and coherence in thinking about discrimination, to precisely define and detect negative discrimination and guide anti-discrimination law enforcement, and to set terms of reference for positive discrimination and workforce diversity initiatives.  With clearer and more systematic frameworks in place, legislation and policy can then be crafted for monitoring and curbing negative discrimination and for facilitating positive discrimination and diversity.  The magnitude of these challenges – in mindset, legislation and policy – call for broad consultation, coalition building and national consensus.

And 18 more

Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income... more
Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income to high-income countries, and popular disaffection and economic anxiety prevail, even while official statistics may paint more buoyant scenarios. The age-old problem of group-based exclusion in the development process manifests in new ways. This book provides up-to-date overviews of inequality levels and trends, primarily related to income, but also wealth and other socioeconomic variables pertaining to education and health. The country chapters also examine salient themes of inequality, especially structural changes and public policies to redress inequality and exclusion, labour market developments, population groups, regional dynamics, and informal economies. We gain an appreciation for the unique conditions and diverse experiences of each country, and draw comparative insights across the region.
Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income... more
Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income to high-income countries, and popular disaffection and economic anxiety prevail, even while official statistics may paint more buoyant scenarios. The age-old problem of group-based exclusion in the development process manifests in new ways. This book provides up-to-date overviews of inequality levels and trends, primarily related to income, but also wealth and other socioeconomic variables pertaining to education and health. The country chapters also examine salient themes of inequality, especially structural changes and public policies to redress inequality and exclusion, labour market developments, population groups, regional dynamics, and informal economies. We gain an appreciation for the unique conditions and diverse experiences of each country, and draw comparative insights across the region.
Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income... more
Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income to high-income countries, and popular disaffection and economic anxiety prevail, even while official statistics may paint more buoyant scenarios. The age-old problem of group-based exclusion in the development process manifests in new ways. This book provides up-to-date overviews of inequality levels and trends, primarily related to income, but also wealth and other socioeconomic variables pertaining to education and health. The country chapters also examine salient themes of inequality, especially structural changes and public policies to redress inequality and exclusion, labour market developments, population groups, regional dynamics, and informal economies. We gain an appreciation for the unique conditions and diverse experiences of each country, and draw comparative insights across the region.
Malaysia and South Africa implement the most extensive affirmative action programmes worldwide. This book explores why and how to effect preferential treatment which has been utilized in the pursuit of inter-ethnic parity, specifically in... more
Malaysia and South Africa implement the most extensive affirmative action programmes worldwide. This book explores why and how to effect preferential treatment which has been utilized in the pursuit of inter-ethnic parity, specifically in higher education, high-level occupations, enterprise development and wealth ownership. Through methodical and critical analyses of data on education, workforce and population, the book evaluates the primary objectives of increasing majority representation in education, employment, enterprise and ownership. The book also critically considers questions of the attainments and limitations of ethnic preferential treatment in reducing disparity, the challenges of developing capability and reducing dependency and the scope for policy reforms.
Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy... more
Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy objectives must be appreciated, but various misconceptions, especially regarding affirmative action, have resulted in polarization and stalemate after fifty years of the NEP. Social justice and affirmative action must be conceptualized and evaluated with clarity and rigor, with policy objectives, mechanisms and outcomes aligned. Malaysia needs to systematically formulate a new social justice paradigm, building on the NEP and anchored on the principles of equality and fairness. In the affirmative action sphere, this framework must focus on developing capability and competitiveness, and balance identity, need and merit in the allocation of opportunity.
Research Interests:
The New Economic Policy (NEP) which focused on poverty reduction and social restructuring has transformed Malaysia since 1971. Pro-Bumiputera affirmative action was intensively pursued and has continuously faced pushback, with heightened... more
The New Economic Policy (NEP) which focused on poverty reduction and social restructuring has transformed Malaysia since 1971. Pro-Bumiputera affirmative action was intensively pursued and has continuously faced pushback, with heightened debate at key junctures. The NEP was marred by gaps and omissions, notably its ambiguity on policy mechanisms and long-term implications, and inordinate emphasis on Bumiputera equity ownership. Broader discourses have imbibed these elements and tend to be more selective than systematic in policy critique. During the late 1980s, rousing deliberations on the successor to the NEP settled on a growth-oriented strategy that basically retained the NEP framework and extended ethnicity-driven compromises. Since 2010, notions of reform and alternatives to the NEP’s affirmative action programme have been propagated, which despite bold proclamations, again amount to partial and selective – not comprehensive – change. Affirmative action presently drifts along, with minor modifications and incoherent reform rhetoric stemming from conflation of the NEP’s two prongs.