An unbalanced economy
In the early years after independence, Malaysia faced deep economic problems. Wealth was unevenly shared, poverty was widespread especially in rural areas, and there was a strong identification of race with economic function — certain communities were concentrated in certain jobs and sectors. These imbalances were a major cause of resentment and helped trigger the tragedy of 13 May 1969.
The New Economic Policy (NEP)
To correct these problems, the government launched the New Economic Policy (NEP) in 1971, to run for twenty years until 1990. Its aim was national unity through economic balance, built on two main prongs.
Key idea / 要点
The NEP had two prongs: (1) to eradicate poverty regardless of race, and (2) to restructure society so that race was no longer identified with economic function.
Agencies and instruments
Many government agencies were created or strengthened to carry out development, especially in rural areas and among the Bumiputera.
- FELDA — opened land and resettled poor families on new agricultural schemes.
- MARA — the Council of Trust for the People, supporting Bumiputera in business and education.
- RISDA and FELCRA — helped smallholders and improved rural land.
- PERNAS and later PNB — expanded Bumiputera participation in commerce and share ownership.
Through these efforts poverty fell and more Malaysians entered modern sectors of the economy. The NEP was later continued in spirit by the National Development Policy (NDP) after 1990.
Remember / 记住
- The NEP ran from 1971 to 1990.
- Two prongs: eradicate poverty; restructure society.
- Key agencies: FELDA, MARA, RISDA, FELCRA, PERNAS, PNB.
- The NDP continued development goals after 1990.