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AWise: Malaysia's Quotas Proving Costly
By Lynette Ong
10/6/2001 10:26 pm Sun
Malaysia's Quotas Proving Costly
By Lynette Ong, AsiaWise
1 Jun 2001 14:30 (GMT +08:00)
In early May, Malaysians kicked off a debate on a once taboo subject -- the
country's university quota system which is a kind of affirmative action
program for majority Malays.
The debate started when 600 of the country's youngest and brightest --
some scoring 10 straight As in high school exams -- were refused
admission to state universities. The nation's young brains were assessed on
their school grades, participation in extracurricular activities and --
ethnicity, where they apparently got a failing grade.
This provoked a public outcry because, as it was, more than 7,000 places
reserved for Malays went unfilled due to a shortage of qualified candidates
who met the minimum requirements. In an unprecedented move, Prime
Minister Mahathir Mohamad announced the unfilled places would go to those
deserving Chinese and Indian students. But the euphoria quickly evaporated
when the education ministry suddenly announced the openings had all been
filled by Malay students.
The race-based quota system, the cornerstone of the New Economic Policy
(NEP) aimed at reapportioning national wealth in favor of indigenous
Malays, was instituted three decades ago. It officially ended in 1990, but was
succeeded by other plans aimed broadly at the same goal. Today, 55% of
university openings are reserved for Malays, while the remaining 45% are set
aside for Chinese and Indian students.
However much the policy may drain cash out of Malaysia, the quota has
proven a boon to Australia, which like the UK, is a popular destination for
Chinese and Indian Malays denied university at home. Indeed, Australia now
calls education a key "export industry."
Discounting the business Australian educational institutions drum up through
satellite operations in Malaysia, Malaysians spend a heap down under by our
conservative calculations. On average, a Malaysian student spends A$12,000
on tuition fees and another A$12,000 on living expenses. Multiply that by
the 16,000 students who go to Australia every year, and the net outflow is
768 million Malaysian ringgit. With about the same number of students going
to other countries, including the U.S. (11,500) and U.K., the total outflow
doubles to RM 1.5 billion annually.
There are other costs, of course, not least a tertiary education system that
putters along instead of roaring at the speed of the country's top students.
And the brain drain that starts in school ends up spilling over into the
economy, as students who study abroad stay where they are in hopes of
finding better-paying jobs. Many of them end up leaving Malaysia for good.
A year ago, a Kuala Lumpur online recruiter welcomed a government initiative
to attract IT talent, adding "the brain drain phenomenon is serious."
According to the Multimedia Development Corporation, which oversees the
government's much-hyped Multimedia Super Corridor, that project alone will
require 100,000 knowledge workers in 2005. That projection, admittedly,
was published before dotcoms morphed into dotbombs. But filling even half
that number without expensive talent and more drain on the national coffers
looks difficult, if not impossible.
The government has recently tried to lure some of its talented sons and
daughters home by offering tax relief and subsides -- but the calls seem to
have fallen on deaf ears.
Though Malay ownership of corporate assets has risen from 2.4% to 19% in
30 years thanks to the NEP and its successors, there is even more of an
income gap between those who benefit from the system -- many of whom
are well-connected to begin with -- and the vast majority of Malays left
And the educational preference system didn't work much better, at least in
the first half of the affirmative action era. According to a 1985 study
evaluating government scholarship policy (Mehmet & Yip), Malay students
from families of lower income groups (65% of the total) received only 14%
of the university scholarships, while the 17% I the top income group
received over half of the government assistance available.
Even the Bumiputras, the indigenous Malays, are getting fed up. Thirty years
of "molly-coddling" has bred a "back-door mentality", complained a recent
editorial in the national Malay newspaper,Utusan Malaysia. The quota system
has also led to low morale and compromised academic standards in the
institutes of higher learning. "No matter what, there will always be 60%
bumiputras. And yet, despite such quotas, local universities still have difficulty
filling their science and engineering faculties", writes a Malay intellectual
residing in the U.S., Dr. Bakri Musa in his book 'The Malay Dilemma
With traditional support beginning to splinter in the wake of the Anwar
Ibrahim controversy and the general malaise overhanging the economy,
Mahathir must walk a tightrope -- making gestures to the Chinese to garner
votes he will need to win the next election, while pulling back for fear of
displeasing conservative Malays who form the grassroots of his ruling