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Malaysia eases ethnic policy to attract foreign investors
Bloomberg - April 1, 2010
Singapore – Malaysia will revise its affirmative action policies to target the nation's poorest people across all ethnic groups, moving away from 39-year-old racial measures that the government now says may impede growth.
The new policies will be fair and transparent yet continue to benefit the Malay majority, the Prime Minister, Najib Razak, said in Kuala Lumpur on Tuesday.
The strategies will focus on the bottom 40 per cent of households by income, as the country must reduce income gaps in all races, he said.
"We must recognise that some policies, which served a purpose in a previous era, may now be impediments to success," Mr Najib said. "Our first priority must be to eradicate poverty, irrespective of race. We cannot have the high income, sustainable and inclusive economy we seek when disparities in income are not addressed."
Mr Najib's father, Malaysia's second prime minister, introduced a system called the New Economic Policy in 1971 that aimed to boost the economic standing of the ethnic Malay majority through preferential treatment in education, housing and business. The plan has been criticised by opposition leaders including Anwar Ibrahim as hindering economic growth.
Race relations are a politically charged issue in Malaysia, where rioting between Malays and ethnic Chinese following elections in 1969 left hundreds dead.
Since taking office last April, Mr Najib has vowed to repeal policies favouring the country's biggest ethnic group to lure investment.
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