Malaysia's pro-Malay affirmative action stokes tension

KUALA LUMPUR, Jan 9 (Reuters) University professor Azly Rahman has benefited from Malaysia's affirmative action policy which favours ethnic Malays in education, jobs and business.

But he thinks it's time the government abandoned the policy as he says few people have profited from such policies in the past decade and many Malays have been alienated by them.

''The policy is no longer serving the needs of a changing Malaysia,'' said the 45-year-old son of a taxi driver, who attended a school for bright, poor Malays on a government scholarship.

''The race-based paradigm of looking at restructuring society and alleviating poverty must be radically revised,'' said Azly, a Columbia University graduate who teaches history and world religions in the United States.

More than 30 years after it was launched, Malaysia's National Development Policy to promote Malays risks becoming a flashpoint that splits the politically dominant Malays, unsettles racial peace and weakens the economy.

Discontent is growing as years of affirmative action have left a trail of failed Malay tycoons and struggling Malay-managed conglomerates.

At the same time, Malays -- the policy's target group -- continue to constitute the poorest racial group in Malaysia.

The economic costs are mounting: foreign investment is falling as investors baulk at rules that keep strategic assets either in Malay or government hands.

Malaysia has also lost some of its best and brightest as non-Malays kept out of universities by racial quotas move to Singapore and other countries.

The state spent more than 3.1 billion dollars in the past five years to rescue cash-strapped firms such as Malaysian Airlines, many of which were privatised to Malay businessmen.

AFFIRMATIVE ACTION Pressure is growing for Prime Minister Abdullah Ahmad Badawi's United Malays National Organisation (UMNO) party to address the future of the race-based policy. But it will have to juggle Malay interests while keeping minority races happy.

''It's a thick minefield for UMNO to manoeuvre its way through,'' said political expert Ooi Kee Beng, of Singapore's Institute of South East Asian Studies.

Malaysian affirmative action began after bloody riots between affluent Chinese and impoverished Malays in 1969 killed hundreds.

Malays make up more than half of Malaysia's population of 26 million and are overwhelmingly Muslim, yet they own just 19 per cent of the economy, well behind minority ethnic Chinese.

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