When the ruling Alliance-coalition of Malaysia suffered a painful defeat in the 1969 general elections, ethnic riots erupted in the streets of Kuala Lumpur, Malaysia’s capital city. These riots...Show moreWhen the ruling Alliance-coalition of Malaysia suffered a painful defeat in the 1969 general elections, ethnic riots erupted in the streets of Kuala Lumpur, Malaysia’s capital city. These riots proved a watershed moment in the history of Malaysia, since they convinced the country’s political leaders that more should be done for Malay Malaysians in order to prevent similar events from occurring in the future. For this reason, an affirmative action programme called the New Economic Policy (NEP) was adopted in 1971. As a consequence of the NEP, Malay entrepreneurs obtained a considerable stake in the domestic economy. The thesis analyses whether the favourable competitive position that accrued to Malay entrepreneurs under the NEP was historically unique. It addresses the following research question: to what extent did changes in the conditions for the development of entrepreneurship of varying ethnic origin during the period 1920-1970 anticipate the New Economic Policy? I argue that, although the favourable conditions facing Malay Malaysian entrepreneurs under the NEP were historically unprecedented, positive discrimination of Malays in government policies has deep historical roots. Initially such policies were fairly narrow in scope, gradually broadening as time went by. By the second half of the 1960s the policy climate already portrayed many of the features that would come to characterize the NEP.Show less
