Political economy of new economic policy and income inequality in Malaysia

Abstract

Events that are classified as traumatic have always marked a turning point in the life of individuals, organizations and states. The racial riot of May 1969 that followed election victory celebration by the opposition parties in Malaysia, marked a turning point in her political economic history. Not only did it marked the beginning of intensive state intervention in Malaysia's political economy, it exposed the extent of discontent that had existed base on an assumption that the Malays may face extinction or better still assume the role of a fiddle in a country that belongs to the them bases on the concept of origin {indigenous people}. The assumption that government's economic policies favored foreigners and immigrant Chinese mostly, and a realization that the bases of a cohesive society lies in the extent of wealth and economic distribution of resources was the reason for the New Economic Policy with state intervention roles as a means to ensure equitable distribution of resources in Malaysia.