Research

Ramasamy Thillainathan ·Malaysian Journal of Economic Studies ·2021 ·JEL: R42, O17

The focus of the paper is on toll road privatisation. An overview of the choice of privatisation and the form it took, in promoting the entry of Malays into business, is followed by a review of other studies on privatisation in Malaysia. Given the highly confidential nature of the privatised concessions, data on ownership and likely terms have been gleaned from rating of the bonds issued, as the bond market has been the key source of infrastructure financing. From such data, the dominance of the Malay managerial class over its business class is readily evident, especially after the Asian financial crisis (AFC). The likely impact of toll road privatisation on the stance of distribution is also examined. As concessions are still awarded on a negotiated basis, the issue of rent-seeking is also explored. Uncertainty and variability in the financial performance of the concessionaires can be seen from the spread and deterioration in credit of the issuers, attesting to the greenfield nature of the projects undertaken or due to differences in gearing or in the support and subsidy enjoyed from the government. The separation in ownership and control, either due to continued ownership by state-owned enterprises (SOEs) or widely held public listed companies (PLCs), has increased the risk of expropriation by those who exercise management control.

Muhammad Najit Sukemi · Madeline Berma · Shamsul Amri Baharuddin · Faridah Shahdan ·Jurnal Ekonomi Malaysia ·2018

Affirmative action is a mechanism of conflict resolution in situation of ethnic tensions and socio-economic imbalances. In Malaysia, affirmative action was implemented through a New Economic Policy (NEP) from 1970 to address economic imbalances and wealth inequality among ethnics through the distribution of the equity with the goal of 30% Bumiputerasowned and 40% non-bumiputera owned. After 40 years of implementation, the goal of equity distribution still yet to be achieved. However, does the implementation of affirmative action affects the distribution of wealth for each ethnic groups? Thus, this study aims to evaluate the influence of affirmative policies to the distribution of wealth between ethnic groups in Malaysia. This study will use equity data for ethnicity holdings for a period from 1969 to 2012 and will be tested using the Autoregressive distributed lag (ARDL) approach. The findings show the implementation of affirmative action has significant influence in affecting the distribution of wealth between ethnic groups in the short term and the long term. The study also proves the wealth distribution between ethnic groups was distributed through growing economy rather than through the acquisition of the other ethnic ownership, especially Chinese ethnic was later and transferred to the Bumiputeras.

Muhammed Abdul Khalid · Li Yang ·Journal of Asian Economics ·2021

In this paper, by combining information obtained from national accounts, household surveys, and fiscal data, we document the evolution of income inequality in Malaysia, not only at the national level (for the period of 1984–2014) but also by ethnic group (for the period of 2002–2014). To our knowledge this is the first attempt to produce inequality measurements of Malaysia, which are fully consistent with the national accounts. Our research shows that despite Malaysia’s exceptional economic growth rate, its growth has been inclusive. For the period of 2002–2014, the real income growth for the bottom 50 % is the highest (5.2 %), followed by the middle 40 % (4.1 %), the top 10 % (2.7 %) and then the top 1 % (1.6 %). However, while average growth rates are positive across all ethnic groups (Bumiputera 4.9 %, Indians 4.8 %, and Chinese 2.7 %), the highest growth of real income per adult accrued to the Bumiputera in the top 1 % (at 8.3 %), which sharply contrasts the much lower growth rate of the Indians (at 3.4 %) and negative income growth rates of the Chinese (at −0.6 %). Despite the negative growth rate, the Chinese still account for the lion’s share in the top 1 %. In 2014, 60 % of the adults in the top 1 % income group are Chinese, while 33 % Bumiputera, and 6 % Indians. We conclude that in this period, Malaysia’s growth features an inclusive redistribution between income classes, but with a twist between racial groups.

Lee Hwok Aun ·Asian Economic Policy Review ·2021 ·JEL: D30, D63, I30, J15

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 longterm 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 ethnicitydriven 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.