There is a well-known saying “if you give a person a fish, he will never learn how to fish. If you give this person a fishing rod and teach him how to fish, he can go fishing to feed for himself.”

A researcher, Dharma Kumar (1992) claimed that affirmative action, which covered subsidies, scholarship, governmental positions and special political representation were instituted by British to their colonies of India, Sri Lanka and Malaysia.

A search in the Wikipedia will give us more examples of affirmative action taken by governments or variety of institutions around the world. Universities in Brazil believed to be reserving quotas for racial minorities, the poor and disable persons. Canadian Employment Equity Act allows preferential treatment for women, disable person, aboriginals and “visible minorities” (defined as people other than aboriginal, non-Caucasian race and non-white). Even China has been using preferential policy to help ethnic minorities and women to gain easier entry into public universities and governmental position.

To correct the discrimination and inequality condition due to apartheid discrimination, South Africa government has Black Economic Empowerment (BEE). Australia has Reconciliation Action Plan (RAP) to increase opportunity for aboriginal and Torres Strait Islander people. A friend who has studied and worked in Germany has revealed that European communities have given informal preferential treatment to women for high position in order to narrow the gender gap. In Malaysia, the New Economic Policy (NEP) introduced in 1971 is widely taken as affirmative action policy to give preferential treatment to Bumiputera (son of the soil) to eliminate inequality gaps between ethnic.

There are two questions to ponder. Malaysia’s affirmative action policies aim to create equality. Thus, the first question is what type of “equality” we want to achieve? Second, is affirmative action still needed and compatible in a globalized and liberalized world? Without the first answer, affirmative action will be without direction. The second question will shed light on the need to continue, discontinue or amend the current policies.

What is “Equality”?
If Malaysian government has three boxes to be distributed to three people as shown in Figure 1, how can the boxes to be distributed with “equality”? Egalitarian approach will advise each of them to receive equal amount of box as in Picture A. Free market approach will urge the government let the market find its equilibrium in distributing those boxes. Of course, Malaysian government chose the Rawlsian approach that called for maximizing the utility of the least-well-off person. Thus, the shortest get more boxes relative to the tallest as in Picture B.

Inequality should also be viewed in a more holistic perspective. This includes economic imbalances between and within ethnics, geographical area (urban/rural, different states) and industries. Generally, rural average monthly income is about half the urban since 1970 (see Table 1). Nonetheless, ratio of rural-urban average monthly household income is improving. In 2012, Kelantan’s average monthly household income of RM3168 (lowest) is a mere 37% of Kuala Lumpur (highest). Should the rural folks in Kelantan get some extra boxes from city people of Kuala Lumpur?

Figure 1: How to Distribute the Boxes?

(Source: This picture circulated widely in Facebook without claim of copyright)

Affective vs. Effective
Data from Economic Planning Unit (EPU) shows average Bumiputera household monthly income in 1970 is just 43.7% of the Chinese and 56.6% of the Indian. Thus, Rawlsian approach of affirmative action in 1970s is needed. At that time, it will be hard for the Malay to achieve comparable income with the other ethnic groups without affirmative action.

The Rawlsian approach has been proven effective. Affirmative policy has significantly increased the Bumiputera-Chinese income ratio and Bumiputera-Indian ratio to as high as 0.723 and 0.906 respectively in 2009 (see Table 1). Most remarkably, this is achieved with monthly household income of all ethnic groups continue to increase from below RM400 to RM6366 for Chinese and RM5233 for Indian (see Figure 2). Bumiputera’s average monthly household income in 2012 is RM4457, which is a reasonable amount to get a good living even in urban area as compared to merely RM172 in 1970.

Table 1: Mean Monthly Gross Household Income by Ethnicity and Strata, 1970-2012

(Source: Economic Planning Unit)

Things have changed and so do how the boxes are being distributed. In the 1970s, the three people in Figure 1, namely the tallest, middle and shortest can be associated with the Chinese, Indian and Malay respectively in reflection to their income level. Nowadays, the same three people are more suitable to be associated with the elite rich group, middle class and lower income group that exist in every ethnic group. Intra-ethnic inequality justifies equal attention (perhaps, more) with inter-ethnic inequality. Box distributions are now also needed to be done within each ethnic group. Solving intra-ethnic inequality will surely reduce inter-ethnic or overall inequality. Table 2 and Table 3 show Gini-coefficient, which is a common indicator for inequality. Higher value of the coefficient implies greater inequality. There is no perfect equality nation with Gini-coefficient equal to zero. Hence, acceptable level of inequality is a value of 0.50 or below, being lower means better.

Figure 2: Mean Monthly Gross Household Income by Ethnicity, 1970-2012

  Table 2: Gini-Coefficient for Malaysia

(Source: Mid-term Review of Ninth Malaysia Plan, page 59)

Table 3: Average Value of Gini-Coefficient for Selected Countries

(Note: * Average is from 2000 to 2012, depending on availability of data from World Bank. It may differ from Malaysia’s data source due to unknown reason)

Values of Gini-coefficient for Malaysia (overall) for both year 2004 and 2007 are below 0.5-level (see Table 2). These indicated existence of moderate inter-ethnic equality. However, coefficient value for each ethnic group also about the same level which implied moderate intra-ethnic inequality also exists. Rural income distributions seem more equal as compared to their coefficient value with urban.

International comparison seems put Malaysia inequality (average coefficient of 0.43) at moderate level too. We are on par with neighboring countries of Thailand and the Philippines (no data for Singapore) as well as United States and China. Despite infamous racial riot in Indonesia, the country achieved an average Gini-coefficient ratio (0.34) lower than Malaysia. Of course, developed countries like Sweden and Germany have been known as “equally rich” nations since long time ago while apartheid discrimination may has caused South Africa’s average Gini coefficient so high at 0.63.

Overall, is Malaysia an unequal nation? Not really by international comparison. Does that mean affirmative action policies are successful? Yes, but outcome can be much better. Therefore, answer for the second question asked earlier is that the affirmative action policy in Malaysia should be continue but with modification.

Conclusion: New Twist to the Fishing Lesson Story
“Give the man a fishing rod and teach him to fish, he can go fishing to feed for himself.” This may not be enough nowadays. The “fishing lesson” story needs a new twist. The globalized world is not one man but various communities of men/women. Distributing a rod to each of them to fish for themselves are not enough. We still have to consider the issue of sustainability of the fish population and continuous learning curve of the people.

How about giving less fishing rod to them? While protecting them from potential outside intruders, let them compete and/or cooperate internally to bring the best out of each other. This is known as “competitive protectionism” and should be a model to modify our current affirmative action model.

References (Part 1)
Dharma Kumar. (1992). The Affirmative Action Debate in India. Asian Survey. Vol. 32 (3): 290 – 302.
Economic Planning Unit (EPU). (2014). Pendapatan & Kemiskinan Isi Rumah. Retrieved on 20th April from http://www.epu.gov.my/household-income-poverty.
Mid-term Review of Ninth Malaysia Plan. (published by Economic Planning Unit, 2008).
Wikipedia. (2014). Affirmative Action. Retrieved on 20th April from http://en.wikipedia.org/wiki/Affirmative_action.
World Bank. (2014). World Development Indicator databank can be accessed at http://databank.worldbank.org/data/home.aspx.