Malaysia's biggest liability is racial discord ?

With ethnic Tamils under attack in Malaysia, the Government on Friday told the Rajya Sabha that New Delhi was taking up the issue with Kuala Lumpur.

"The matter is being taken up through diplomatic channel," Minister of State for Parliamentary Affairs Suresh Pachouri told the House during Zero Hour.

He was responding to the concerns of members who took strong exception to a senior Malaysian minister asking Tamil Nadu Chief Minister M Karunanidhi to "lay off" from the happenings in that country.

Terming as condemnable the ill-treatment being meted out to ethnic Tamils, Pachouri said that after the matter was taken up with the Malaysian authorities, the External Affairs Minister would make a statement in the House.

Raising the issue, R Shanmugasundaram (DMK) drew the attention of the Governnment to the statement of the Malaysian Minister on the Tamil Nadu Chief Minister. "This is highly condemnable as the Malaysian Minister has no business to talk like this. The Governnment of India should take appropriate action," he said.

S S Ahluwalia (BJP) demanded that the Malaysian envoy to India should be called to explain.

B S Gnanadesikan (Cong) expressed serious anguish over the manner in which the Chief Minister was snubbed by the Malaysian minister. He was joined by his party colleague V Narayanaswamy.

- The Hindu News

Malaysia's biggest liability is racial discord

By Andy Mukherjee Bloomberg News

For a country that abhors public protests and suppresses them with strict rules against illegal assembly, Malaysia has had two big demonstrations in Kuala Lumpur just this month.

With elections expected to be held next year, a certain rise in political temperature isn't surprising.

However, two large street rallies within a month may also be a sign that the 50-year-old code defining the rules of engagement between the state and the three main ethnic groups - the "social contract" of Malaysia - is fraying.

The biggest source of discontent is race, a four-letter word in a country where three-fifths of the 27 million people are Malays, about a quarter of the population is Chinese and 10 percent is Indian.

Many in the minority Chinese and Indian communities are disenchanted with economic policies that favor the Malays. And while privileges granted to the Malays can't be taken away abruptly, the case for separating entitlements from racial identity is building.

There are, of course, limits to how far Prime Minister Abdullah Ahmad Badawi of Malaysia may be prepared to go and how soon.

To the extent affirmative-action policies make Malaysia unattractive to foreign investors, Abdullah has already shown a willingness to respond. The government has said that companies setting up tourism or logistics businesses in the Iskandar Development Region of Johor won't need to comply with a rule requiring foreign companies to have at least 30 percent ethnic Malay ownership.

This is a welcome step because Malaysia received just $6 billion of foreign direct investment last year. Thailand got $10 billion and India received $17 billion.

Ending preferential treatment for Malays in lucrative government contracts is going to be more problematic.

Free-trade talks with the United States and Australia have been delayed and the ones with New Zealand have had to be suspended primarily because Malaysia's policy of discouraging non-Malays - including foreigners - from bidding on government tenders is unacceptable to these countries.

The same issue might also jeopardize a free-trade deal between the Association of Southeast Asian Nations - of which Malaysia is a member - and Europe.

The Federation of Malaya's 1957 Constitution, drafted as the British were leaving, recognized that the indigenous Malay community needed special help, including quotas in government jobs, business permits and university places, to improve their abject economic standing.

The acceptance of this arrangement by the minority Chinese and Indian communities - "foreigners" in the land of the ethnic Malay Muslims - was seen as the basis of their citizenship and participation in a grand political coalition that has ruled Malaysia uninterrupted since independence.

Following bloody race riots in 1969, the New Economic Policy of 1970 made it an avowed goal of state policy to lift the share of corporate ownership for the Bumiputeras to 30 percent, from just 2 percent.

There was an uproar last year when a Malaysian economist argued in a study that the goal may already have been more than met and that it was time to dismantle economic policies based on race.

The political rhetoric is still staunchly against any such dilution of affirmative action. At his party's annual congress this month, Abdullah described Malay interests and the social contract between communities as "sacred."

However, the economic reality is different.

Malaysia's annual per-capita income has jumped an impressive 26-fold in the past 50 years to 20,900 ringgit, or $6,200. But the decades of sustained, rapid growth in prosperity are now history.

The rise of China and India is forcing Malaysia to discover new sources of competitiveness; in such an environment, the policy of race-based discrimination is increasingly untenable.

The area where Malaysia has paid the heaviest price is education. In the 1980s, government policy reduced national schools to "Malay enclaves," in the words of a University of Sydney political scientist, Lily Zubaidah Rahim; as a result, the Chinese opted out in large numbers.

Thus, the ideal place to integrate the races became the starting point of segregation.

While ethnic quotas in higher education were removed in 2002, university entrance norms for non-Malays are still significantly tougher. Talent that Malaysia badly needs to build a knowledge-driven economy is forced to migrate.

The Nov. 10 protests called for an improvement in the electoral process so that the next elections are free and fair; the second rally, however, had an overt racial tone.

The Hindu Rights Action Force, which organized the demonstration, is suing the British government for not protecting the rights of the minority Indian community at the time of independence. The colonial rulers had brought in Indians as indentured labor to work on rubber plantations.

The real purpose of the protesters is, of course, to draw attention to the unfairness of the 1957 constitutional arrangement and to show that the Malays aren't the only underclass in Malaysia.

The Tamil-speaking Malaysians, not counting the very wealthy businessmen such as the pay-TV and telecommunications czar, T. Ananda Krishnan, remain rather poor as a community.

A renegotiation of the Malaysian social contract so that entitlements are realigned with real economic needs will be a slow, challenging process, though nothing short of it can really heal the wounds festering for half a century.