Inequality and Affirmative Action in Malaysia and South Africa
Paper presented at the New School – UMass Graduate Student Workshop,
October 25-26, 2008.
Hwok-Aun Lee
Department of Economics
University of Massachusetts, Amherst
Introduction
Malaysia and post-apartheid South Africa are almost inevitably paired in studies of
affirmative action (AA), sharing a rare trait as upper-middle income countries that implement
preferential policies in favor of a politically dominant and economically disadvantaged
majority racial group (See Table 1)1. In both countries, historical circumstance – the legacies
of colonialism and apartheid – and socio-political constitution – largely race-defined
economic fragmentation, social stratification and political organization – have compelled
affirmative action policies of extensive scope and scale to remedy systemic inequalities.
Income disparities between race groups reflect differences in educational attainment,
occupational mobility, and asset ownership, in which the Bumiputera2 and black populations
of Malaysia and South Africa are faced with systemic disadvantages3. Aggregate trends in
inter-racial and intra-racial income inequality in recent years warrant a deeper probe into
underlying distribution patterns and implications on affirmative action policies.
This paper’s motivation is threefold. First, it aims to fill a research gap on inequality
in Malaysia since 1990, and especially the post-1997 crisis period. Second, it presents
Malaysia and South Africa in comparative perspective, which in spite of being frequently
cited as mutually informative, have scarcely been subject to enquiry, especially in the past
decade. Third, I will focus on the distribution of earnings, given the crucial relationship
between earnings and two mainstays of affirmative action – education and employment. Our
1
Income levels are also remarkably close: Gross national income per capita in 2005 was US$4,970
for Malaysia, US$4,820 for South Africa (World Development Indicators, available at:
http://devdata.worldbank.org/data-query/).
2
Bumiputera – meaning ‘sons of the soil’ – encompasses the Malay and indigenous populations of
Malaysia, i.e. non-Malay Bumiputera.
3
Following convention, the term ‘black’ is used in this paper to refer to African, Colored and Indian.
1
empirical work will roughly span 1995-2005, owing to data accessibility in Malaysia and our
interest in the post-apartheid period in South Africa. The vast bulk of research on South
Africa and on Malaysia has used household income as the income variable, which does not
directly analyze earnings outcomes associated with policies in education and employment.
We will, however, consider the implications of affirmative action policies in the realm of
asset ownership and control in their relationship to the cultivation a managerial class, an
important – and elusive – policy objective in both countries.
Table 1. Malaysia and South Africa: Racial composition (percent of total population)
Malaysia (2000)
South Africa (2001)
Bumiputera
65.5
African
79.0
Chinese
25.8
White
9.5
Indian
7.6
Colored
9.0
Other
1.2
Indian
2.5
Note: Bumiputera is further comprised of Malay (53.9 percent)
and non-Malay Bumiputera (11.6 percent)
This paper is structured as follows. First, I provide an overview of the political
economic context of Malaysia and South Africa, with specific attention to aspects relevant to
inequality and redistribution. Next, I outline affirmative action policies, discussing
similarities and differences between both countries. Following that, I present some aggregate
inequality trends, from official documents and available research, that our analysis aims to
inform. Then we proceed to a presentation of patterns of earnings distribution of from 1995 to
2005. Using income survey data spanning that period, I outline and explain Malaysia’s
persistently high levels of inequality, both between and within race groups, and the problem
of rising intra-racial inequality in South Africa, with focus on earnings differentials
associated with educational attainment and occupation. This paper concludes with discussion
on some implications of these findings on affirmative action in both countries.
A note on terminology and concept of affirmative action
I use the term affirmative action with some reluctance, because it means different
things in different contexts to different people (Fryer and Loury 2005, Weisskopf 2006, ILO
2003). Nonetheless, affirmative action suffices to denote the amalgam of measures taken by
the state to redress systemic disadvantages members of a particular group(s) face in terms of
access to education and employment, and ownership and control over capital/land, which
have resulted from historical neglect or unfair discrimination. State intervention in these
2
spheres have been necessary to redress sharp racial divisions that ultimately projected vastly
unequal earnings, income and wealth levels. In most all cases, as in Malaysia and South
Africa, affirmative action has sought to uplift race groups. However, in South Africa,
historical disadvantage also applies in principle, but to lesser extent, to women and the
disabled. Malaysia and South Africa both bear historical scars of racial conflict and ongoing
strife, which are not solely determined by economic disparities but inextricably related. The
process of increasing racial representation of the disadvantaged majority is conventionally
termed ‘restructuring’ in Malaysia and ‘transformation’ in South Africa; these terms may be
used accordingly. The correspondence of race with economic disparity and past inter-racial
conflict and violence make redistribution across groups a political imperative. Socio-political
stability is requisite for economic growth, but the grounds for AA I maintain are principally
social and political. The disproportionalities of political and economic power between the
major race groups in both countries are unambiguous, and will be touched on later.
Political Economic Context
The countries under consideration, at the inception of affirmative action, both bore
legacies of racial separation and disparity under colonialism and apartheid. Importantly,
however, each underwent distinct forms of political transformation in their respective
transitions. In Malaysia, the New Economic Policy (NEP), initiated in 1971, expanded and
intensified AA programs. However, prior to that the state had already practiced a lesser extent
of AA in favor of the Malay population, through a shorter menu of programs in public sector
employment, education provision and scholarships. However, the Malay-led coalition
government maintained a largely non-interventionist stance towards inter-racial inequality.
Under heavy pressure, it began intervening more actively from the mid-1960s in cultivating a
Malay managerial class and in other programs to narrow disparities, but the extent of change
was politically insufficient and became a contributing factor to the May 13th, 1969 racial riots.
Underpinning the shift towards intensive affirmative action, in the wake of the riots, was a
consolidation of the Malay dominant state, expansion of executive power, and re-assertion of
Malay privilege. In addition, the domestic capitalist class at the time had not secured strong
bargaining positions versus the state, and capital was relatively less mobile internationally4
4
In 1970, 1.9 percent of total equity was owned by Malay, 22.5 percent by Chinese, 1.0 percent by
Indians, 60.7 percent was in foreign hands – and concentrated in the leading sectors, tin mining and
rubber plantations.
3
(Hart 1994). This configuration meant that direct domestic conflict over existing resources
was averted to a significant extent.
In contrast, South Africa’s transition to apartheid involved multiple transformations:
from apartheid to democracy, from minority to majority rule (with a formerly systematically
disenfranchised group taking power), from a closed economy to an open economy, and from
a system in which political establishment and business/administrative elites were on the same
side to one in which they sat on opposite sides of the table. Under apartheid, the white
minority had privileged access to state resources – education, employment, procurement, etc.
– and command over every sector. The formal economy had been structured to generate
employment for a minority of the population. South Africa’s capitalist class5, built on
agglomerations of minerals and energy resources, had gained a foothold on policy discourse –
and had taken the lead in the late apartheid period in advocating selective reforms. The
transition happened in the context of democratization, with checks instituted on executive
power. In short, the challenges facing South Africa in empowering its majority have been
much greater than in Malaysia.
As a result, we observe a distinctive contrast in the orientation and mode of
redistributive policies. Malaysia has enforced measures in a more top-down manner, through
the discretionary exercise of executive power. The NEP laid out a vision, and retains
symbolic significance, while specific affirmative action programs have been introduced and
amended in a semi-authoritarian manner, with the acquiescence (occasional resistance) of
capital and labor. South Africa has undergone a much more negotiated and legislative process,
with the black-dominant state and white-dominant capital grappling over terms and
concessions. The result is the establishment of codified, contractual, and statutory institutions
– e.g. the Employment Equity Act, and Black Economic Empowerment Act – that pursue
affirmative action goals through compliance with stipulated conditions, with the executive
branch of government having to exercise relative restraint.
A few features of the macroeconomic context should be highlighted. Malaysia has
enjoyed steady and high growth6, initially bolstered by commodity exports and massive
public expenditure, then manufacturing exports and massive FDI and foreign portfolio
inflows. The initial period of affirmative action – the 1970s until the mid-1980s – was rather
5
As a reflection of concentration of wealth and economic power, in the early 1990s, the four largest
conglomerates controlled 83 percent of the Johannesburg Stock Exchange.
6
Average annual real GDP growth registered 5.8 percent (1957-70), 6.3 percent (1971-87), 8.8
percent (1987-97), and 3.9 percent (1997-2006).
4
accommodative toward expansionary macroeconomic policies. Public expenditure per GDP
registered 29.0 percent in 1970, 39.9 percent in 1979 and 58.4 percent in 1981, on the back of
deficit spending and an OPEC-boosted oil bonanza (Ismail and Meyanathan 1993). The fiscal
debt burden caught up with government in the mid-1980s recession, forcing cutbacks,
accelerating the privatization agenda and shifting towards an FDI-dependent regime. This
shift was aided by fortuitous international circumstances: appreciation of the Yen, Won and
Taiwan dollar from 1985 induced massive relocation of production, of which Malaysia was a
major recipient. The 1997-98 financial crisis was a major disruption; economic and
employment growth rates have settled at lower levels than in preceding decades.
South Africa, in transition to the post-apartheid era, was emerging from international
economic isolation facing pressures to assimilate and threat of capital flight, as well as civil
unrest and a mandate for distributive justice. The initial priorities necessarily focused on
constructing a democratic constitution and basic economic institutions such as the Labor
Relations Act (1995) and Basic Conditions of Employment Act (1996). Affirmative action
remained on the agenda, but was not formally incorporated into the legislative framework
until a few years later. The international macroeconomic environment (neoliberal agenda),
and the government’s policy choices (exceeding international demands for deregulation), we
should note, compounded the already immense socio-political challenges mentioned above.
South African economy has seen sluggish growth and relatively low investment, with real
GDP growth of 2.6 percent (1994-99), 3.4 percent (1999-2003), 5.1 percent (2003-06), and
commitment to a neoliberal macroeconomic regime and an austere adherence to inflation
targeting. In the early years of democracy the economy suffered huge employment losses;
jobs were shed in the public sector as well as agriculture and manufacturing, while FDI did
not flow in as hoped, and privatization initiatives fell apart. Steadier economic growth from
around 2000 – and improved fiscal balances – have provided for expanded public expenditure,
especially social grants and public procurement. Public enterprises have been issued a
reinvigorated mandate to carry a significant share of the AA agenda.
Another area of contrast is the urban-rural balance of population and worker
absorption into formal labor markets (Emsley 1996). The urbanization rate in 1970 in
Malaysia was 30 percent, compared with 50 percent in South Africa in 1990. Urbanization
rates in 2005 are closer, at 64 percent in Malaysia and 58 percent in South Africa. At the
onset of intensive AA in 1971, Malaysia was faced with large numbers of unemployed or
under-employed rural Bumiputera, predominantly in traditional agriculture, who could be
5
transitioned to urban wage employment, thus alleviating conditions both in cities and villages.
South Africa’s transition has been fraught with high urban unemployment and persistent rural
poverty – another aspect in which South Africa faces greater redistributive challenges.
The depth of labor market institutions differ across the two countries. The union
movement in Malaysia has been systematically demobilized and steadily depleted of
influence and membership, by legislation, policy and labor market trends. Union density
touched 12.0 percent in 1980, and dropped to 9.4 percent in 1990 and 7.5 percent in 2000.
Organized labor has never had significant influence over government policy, reflected in the
absence of minimum wage legislation. The weak bargaining position of labor is compounded
by influxes of migrant, largely extra-legal, labor since 1990. South Africa’s union density
(membership per ‘narrow’ labor force) was an estimated 23.4 percent in 1995 and 22.7
percent in 2002. The role of COSATU in the liberation movement forged its place in the
governing alliance which has been sustained, albeit with diminished influence in recent times
(with perhaps a present resurgence). Workers’ interest, especially in formal employment, thus
finds much stronger representation in South Africa, both in wage bargaining and policy input.
Affirmative Action policies
Constitutional underpinnings
The Constitution forms the bedrock on which a nation’s institutions are built. This
rudiment tends to be under-appreciated in comparative study of Malaysia and South Africa
on the matter of discrimination or preferential treatment, perhaps because the matter is a fait
accompli in Malaysia and is superseded in South Africa by the myriad laws and policies that
have fleshed out the national objectives laid out in the Constitution. The Constitution of both
countries provide for government measures consistent with affirmative action, but on
fundamentally different grounds. Within the 1957 Federal Constitution of Malaysia resides
both the principle of equality and provisions for the special position of particular groups. The
individual equality and prohibition of discrimination set out in Article 8 is qualified by
Article 153, which makes provision for the Yang Di-Pertuan Agong (the national king) so
“safeguard the special position of the Malays and natives of any of the States of Sabah and
Sarawak [i.e. non-Malay Bumiputera] and the legitimate interests of other communities”,
through preserving licenses, scholarships, etc.
The NEP provided a vision for intensifying preferential programs for the Malays
stipulated in the Constitution, fuelled at that time by dissatisfaction at the slow progress made
6
in economically empowering the community. The NEP declared a hope that AA programs
would aim to develop Malay self-sufficiency and independence from state support by the
conclusion of the NEP in 1990. The 1971-1990 timeline was rather arbitrarily chosen7, but
over time, the state and bureaucracy scarcely engaged in discourse on scaling back or
dismantling race-based AA, and have recently emphasized the perpetuation of the system.
Over the years, rhetoric has shifted from special position to special privileges to special rights
of the Malays. The Constitution and especially the NEP retain symbolic power as grounds for
race-based affirmative, even though their meaning of the Constitutional clauses has become
misappropriated and the timeline for the NEP has long passed.
Article 9 of the Constitution of the Republic of South Africa, 1996, establishes
equality of everyone before the law and prohibition of unfair discrimination, and provides for
measures “designed to protect or advance persons, or categories of persons, disadvantaged by
unfair discrimination”. This articulation of disadvantage and discrimination is substantively
distinct from the enshrinement of special position in the Malaysian Constitution. While the
racial dimension of past discrimination predominates in political discourse and policy design,
the conception of grounds for affirmative action is broader in South Africa, and opens up
debate over the terms for being considered disadvantaged as well as other dilemmas, e.g.
whether non-racialism – an express objective of development policy – can be achieved
through policies structured according to racial identity.
Education
Malaysia
Malaysia created new school-level institutions for Bumiputera and a quota and
scholarship system for university enrollment. The Ministry of Education established
exclusively Bumiputera residential science colleges. MARA (Majlis Amanah Rakyat, or the
Council of Trust for the People), an organization mandated to uplift the Bumiputera, also set
up junior residential colleges primarily for pupils in rural and underprivileged areas. These
institutes, which youth entered after six or nine years schooling, enjoyed higher standards of
teaching and facilities, especially in science classes (Leete 2007: 189). At the tertiary level,
new public universities were founded and a centralized unit was formed to process
applications and implement enrolment quotas. Quotas remain the predominant mode of
7
Interviews with former Economic Planning Unit officials.
7
operation, with alterations at the margins8. In recent years, matriculation programs have been
set up for Bumiputera students to gain entry to university, with academic standards widely
believed to be less difficult than the national exam. On the whole, affirmative action in
education has been characterized by a general lack of clarity on the place of Bumiputera
privilege, and the roles of merit, need or class, in selection processes. Much less emphasis has
been placed on balancing the pro-Bumiputera thrust against probable inhibitive effects on
education quality and employability of graduates, especially from local universities who are
found in surveys to be generally less competent in technical and professional occupations
(World Bank 2005: 89). Malaysia has attained notable achievements in raising the quantity of
education, and increasing access to Bumiputera, while also providing relief to nonBumiputera whose entry to public universities is restricted by quota. Private tertiary
institutions proliferated in the wake of the 1996 Private Higher Education Act. However,
serious questions loom on the quality of education, especially at the tertiary level.
South Africa
To the Malaysian observer, coverage of the education sector is conspicuously sparse
in the literature on inequality, income distribution and economic policy in South Africa. From
what I have gathered so far, however, affirmative action operates through two main
mechanisms: enforcing transformation of previously white schools, institutes and universities;
and providing scholarships for disadvantaged persons.
Employment
Malaysia
The restructuring of employment in Malaysia abided by a mandate that “employment
patterns at all levels and in all sectors, particularly modern rural and modern urban, must
reflect the racial composition of the population” (Malaysia 1971: 42). The main affirmative
action interventions in this regard comprised of public sector employment and minor
regulations on the private sector. Although the general objective is to have a racially
representative workforce in all sectors, there was no specified timeline for incrementally
achieving that target, nor a systematic approach to increasing Malay penetration at the higher
8
A quota of 10 percent non-Bumiputera enrollment in the 40 MARA junior science colleges was
introduced in 2000. The proportion of non-Bumiputera in these colleges was 10.5 percent in 2008
(The Star, May 15, 2008).
8
occupational levels. Indeed, employment practices in government and requirements imposed
on the private sector operated very much in a non-codified manner. Government and statutory
bodies served to absorb Malay urbanization and entry into formal wage employment. Public
sector employment also served as an extension of the university scholarship program. As
noted above, prior to the NEP, measures were already in place to maintain a high Malay
presence in the public sector9. Under the NEP, the government augmented the public sector,
especially in the 1970s until the mid-1980s. The share of Bumiputera was raised further from
62.5 percent in 1970, stabilizing around 85.0 percent by 2005 (MCA 2006: 4).
The Industrial Coordination Act, passed in 1975, was predominantly a measure to
enforce equity redistribution, but it also required manufacturing establishments to align their
workforce in accordance with the proportionality principle. Workers’ ranks, it turns out, were
easily filled, especially with young Malay women from villages who flocked to electronics
and textile and clothing factories. Compliance at managerial levels was harder to effect, and
no substantive research has been conducted on the outcomes, although it is likely that the
effect of the ICA in terms of increasing Malay representation was limited and concentrated in
non-technical responsibilities such as personnel management. The employment aspects of the
ICA were more strictly enforced before the late 1980s10. In the past two decades, little
emphasis has been placed on the racial composition of Malaysians within firms. There is no
general legislation of employment practices in non-manufacturing sectors, although some
strive for racial diversity in a selective manner, whether for reasons of strategy or licensing
requirements. For example, tellers and service workers of most banks are mixed, although
management tends to identify racially with the banks’ ownership11.
South Africa
The Employment Equity Act (1998) sets out the legislative framework for prohibiting
unfair discrimination and for redressing imbalances in employment, for medium to large
firms. The EEA requires government departments and private firms above a certain size, in
consultation with workers, to submit reports of their workforce profile, with disaggregation
into race, gender and disability categories (the disadvantaged groups), and devise own targets
9
In the elite Diplomatic and Administrative Service corps, a 4 to 1 ratio of Malay to non-Malay quota
was introduced in 1953 (CPPS 2006a: 5). Malays comprised 62.5% of civil servants in 1970
(Malaysia 1971: 38).
10
Interview with senior industry source, September 5, 2007.
11
Interview with National Union of Banking Employees (NUBE) officials, September 19, 2007.
9
for increasing the number of members of disadvantaged groups who benefit from training,
hiring or promotion, with reference to the population composition of the province where
firms are located. Employers also have to report on the progress made in meeting previous
targets, and revise their plan at specified intervals. The EEA has a broader scope and more
formalized mechanisms than Malaysia’s employment policies, since it encompasses public
and private sectors and integrates skills development as a component to enable disadvantaged
employees continue to progress within firms. Participation is mandatory, with stipulated
penalties for non-compliance; however, the content of EE reports are firm-specific, and the
extent this legislation has real impact on preferential hiring and skills development is
contingent on a variety of factors, such as firm structure, employers’ initiative, and the
consultative process between employers and shop stewards. Emphatically, employment
equity outcomes hinge on the efficacy of local union leaders in representing workers’ stake in
EE and in monitoring progress. For the most part, it seems, employment equity has been an
operational cost to which firms comply minimally, especially for medium-scale firms (smallscale firms are exempted)12. As in Malaysia, the public sector has expectedly undertaken EE
more vigorously than the private sector.
The Black Economic Empowerment mandate and legislation provide an incentive
scheme for employment equity and skills development in favor of historically disadvantaged
persons. The concept of BEE was formalized through the BEE Commission’s report of 2001,
and institutionalized in the BEE Act (2003). Beyond compliance with employment equity
legislation, BEE institutes a metering system – the BEE Scorecard – in which firms earn a
composite score for performance across seven weighted elements. The weightage of
ownership, skills development and employment equity are relatively high.
Managerial and enterprise development
Public enterprises
Malaysia
Throughout most of the NEP, the Malaysian government has adopted a state-centric
approach to enterprise development. Various agencies were created or reinvigorated to
12
Interviews with officer of Confederation of Employers of South Africa (COFESA), November 26,
2007, Deputy Secretary-General of Solidarity, December 3, 2007, and Employment Equity
Commission chairman, December 7, 2007.
10
support Malay business, particularly in the 1970s and 1980s13. The government’s five-year
plan expenditure on non-financial public enterprises flowed in accordance with funding needs
in these enterprises14. State Economic Development Corporations (SEDCs) were entrusted a
salient role in spearheading Malay business from the early 1970s, bolstered with seed funds
or guarantees from government. However, ventures largely turned out unsuccessful or
unsustainable, undermined by poor governance, inexperience, or corruption15. The Malaysian
government also secured ownership of hitherto British-owned companies through its
investment arms from the late 1970s, and facilitated entry of Malay managers and
professionals into these sectors. Such takeovers of foreign-owned companies contributed to
promotion of Malay management, although the numbers are small fraction of the employed
population. Cadres of public administrators, who had acquired some experience by this stage,
were positioned to assume places of leadership in private enterprise.
The 1980s witnessed major shifts in the state-sponsored Bumiputera capitalist and
entrepreneurial development agenda. In the early 1980s, the heavy industries program
commenced with the establishment of the Heavy Industries Corporation of Malaysia
(HICOM), venturing into various sectors, prominently automobile, steel, and cement. These
large firms were to be government-owned and Bumiputera-managed, with financial and
operational support from the Japan. The global recession of the mid-1980s hampered the
launch of heavy industries, but their pre-maturity also showed up in the emergence of excess
capacity, lack of competency and gross under-performance. The focus shifted again from the
late 1980s to procurement contracts and privatization of state entities, which facilitated the
development of individuals in the Bumiputera Commercial and Industrial Community
(BCIC), beyond agencies or institutions such as trust funds.
This policy watershed had two crucial implications. First, it positioned the private
sector and the BCIC as the main target of state priorities and largesse – while affirmative
action programs in education and employment continued without substantive revision.
13
State-owned enterprises, comprising public services departments, statutory bodies, and government
owned private or public companies, numbered 22 in 1960, 109 in 1970; 656 in 1980, 1149 in 1992,
with the largest numbers in manufacturing, services, agriculture, finance and construction. To put the
increases in perspective, the growth of new public enterprises averaged 9 per year in 1960s, 55 in
1970s, and 41 from 1980 to 1992 (Gomez and Jomo 1999: 29-31).
14
Specifically, such expenditures ballooned from RM3.9 billion (1971-75) to RM12.0 billion (197680) to RM27.7 billion (1981-95), then contracted to RM17.7 billion (1986-90) (Ismail and
Meyanathan 1993: 19).
15
In 1981, available information on 260 companies under the purview of the Ministry of Public
Enterprises showed that 94 were making losses and 21 had yet to operate (Jesudason 1989: 98-100).
11
Second, it ushered in and elevated private capital accumulation. The objective of
entrepreneurial development was raised to a further level with the handpicking and handover
of previously state-owned enterprises to individuals, a transformative process that has been
more strongly equated with wealth accumulation and state patronage. However, in 1997, the
financial crisis resulted in many individual, state-sponsored Malay capitalists foundering, and
the largest privatized corporations were effectively re-nationalized. The public enterprise
regime has been broadly reconfigured and injected with a more corporate ethos and mandate.
Government-linked corporations – both in financial and productive sectors – continue to be
major players in developing Bumiputera enterprise as well as in generating employment
opportunities.
South Africa
The position of public enterprises in within South Africa’s process of transformation
was unclear in the mid- and late-1990s, as the privatization agenda drifted in a tentative state.
Subsequent to the collapse of a privatization program, an ideologically driven project that
would have transferred public monopolies into private hands, however, public enterprises
have been issued a mandate to play a demonstrative role in black executive and managerial
advancement, prominently in energy, utilities, and transportation.
Public procurement
Malaysia
The NEP gave impetus to utilizing the public procurement system to stimulate and
finance Bumiputera commerce. A tiered procurement framework, in place since 1974,
reserves 100 percent of small projects and 30 percent of the total value of other projects for
Bumiputera contractors. The remaining 70 percent is open for bidding among all companies,
Bumiputera and non-Bumiputera. Bumiputera contractors also receive price handicaps, on a
sliding scale, that place Bumiputera bids on par with lower priced non-Bumiputera
competitors – except for the largest category of contracts16. The terms for receiving
preferential treatment mentioned in the Malaysian Treasury’s circulars on procurement policy
emphasize Bumiputera majority ownership, occupation of executive and managerial positions
and financial management. While it is stipulated that tenders must meet timeline, local
content and quality standards, the formal procedures for selecting contractors do not specify
16
Treasury Circular Letter No. 7, 1974.
12
rules or incentives structured towards broadening entrepreneurial capacity, or promoting
greenfield investment, technological and skills development. Malaysia’s public procurement
regime is understood to function considerably as a political patronage network, where deals
are made on the basis of connection and positioning of powerful figures on company boards.
South Africa
The strongest arm of managerial and enterprise development is the preferential
procurement program, which was initially codified in the Preferential Public Procurement
Framework (2001) and given greater impetus and structure in under the aegis of Black
Economic Empowerment. BEE scores are factored into open tenders for government projects,
injecting a competitive dimension and giving bidders a fillip to pursue the various elements
of the BEE scoring system. Large companies earn also points in accordance with the BEE
score of subsidiaries and suppliers, of for providing assistance in the development of smaller
enterprises. BEE and preferential procurement is a recently institutionalized centerpiece of
government policy pursuing affirmative action objectives; hence, its material effect is yet to
be realized.
Table 4-5. Summary of Affirmative Action Programs
Malaysia
Education
Employment
South Africa
 Exclusively Bumiputera
residential and matriculation
colleges
 Transformation of formerly
segregated schools and universities
(historically white institutes)
 Enrollment quotas in tertiary
institutions
 Improvement of historically black
institutes
 University scholarships,
predominantly or exclusively
Bumiputera
 Scholarship programs
 Public sector employment
 Employment Equity Act 1998:
 Components:
1. anti-discrimination
2. affirmative action
 Applies to public and private
sectors
 Industrial Coordination Act
1975
 Skills Development Act 1999
13
Enterprise
and
managerial
development
 Public enterprises
 Black Economic Empowerment Act
2003:
 Encompassing ownership,
management, employment equity,
skills development, enterprise
development
 BEE codes formalized 2007
 Takeover of foreign
companies
 Privatization
 Licensing
 Licensing
 Public procurement
 Preferential public procurement
Income and Earnings Inequality: Aggregate Trends in Existing Literature
Malaysia registered declining inter-racial, intra-racial and total household income
inequality from 1970 to the late 1980s, but since then high inequality levels have persisted
(Figures 1 and 2). The country achieved substantial income redistribution and social
restructuring under the New Economic Policy (NEP), which bore an official timeframe of
1971-90. These outcomes have been the subject of various studies, largely or partly crediting
affirmative action for the reduction in inequalities (e.g. Leete 2007, Faridah 2003). The
Bumiputera population experienced changes on various fronts, making massive advances in
education, particularly in secondary schooling but also in tertiary institutions, while
undergoing steady urbanization and transition into wage employment in manufacturing and
service sectors. In sum, rural under-employment was reduced and urban labor force
participation increased, thereby raising incomes in both areas. Bumiputera entry into
professional occupations also proceeded rapidly, largely facilitated by public sector
employment. However, various attempts at cultivating a Bumiputera managerial class,
predominantly through public enterprises, met with limited success.
The redistribution program, effective for the first two decades of intensive affirmative
action, apparently lost momentum over following two decades. The late-1980s marks a
period of shifts in policy orientation, with the pursuit of more growth-oriented policies and a
massive privatization program, involving sale of public enterprises and appointment of
corporate executives, and with priority accorded to the Bumiputera Commercial and
Industrial Community (BCIC), i.e. a Malay capitalist class. Affirmative action programs in
education and employment, however, remained basically intact. Very little is known about
income distribution in the 1990s, although various studies have offers deductions and
conjectures on the increase in inequality, focusing on privatization and deregulation measures
14
(Ragayah 2003, Ishak 2000, Zainal 2001). Statistics on Bumiputera presence in the upper
occupational categories outline developments that are plausibly consistent with the break in
racial income gap-closing from the late 1980s. Further down this paper, we will observe
shifting patterns of inequality beneath the trend of fairly constant aggregate inequality.
Figure 1. Malaysia: Ratio of Mean Household Income, 1970-2004
2.4
2.2
2.0
Chinese:
Bumiputera
1.8
1.6
Indian:
Bumiputera
1.4
1.2
1.0
1970 1976 1979 1984 1987 1990 1993 1995 1997 1999 2002 2004
Sources: Ragayah 2003, Malaysia Plans, various years, Ishak 2000.
Figure 2. Malaysia: Gini Coefficient of Household Income, 1970-2004
0.55
0.50
Bumiputera
0.45
Chinese
0.40
Indian
Malaysia
0.35
0.30
1970 1976 1979 1984 1987 1990 1993 1995 1997 1999 2004
Sources: Ragayah 2003, Ninth Malaysia Plan, Ishak 2000.
Note: Bumiputera, Chinese and Indian Gini not available for 1993 and 1995.
15
There is widespread agreement that income inequality in South Africa has increased
since the mid-1990s, most markedly within the African community in the first half-decade of
the democratic regime (Figure 3) (Hoogeveen and Özler 2005, Leibbrandt et al. 2005, Van
der Berg and Louw 2004). Research on income or earnings in the 2000s, and on inequality
between race groups, however, is sparse, perhaps due to data controversies (although
sampling and income reporting issues should apply to both inter-racial and intra-racial
inequality computations). One available calculation, from OHS and LFS data, finds an
increase in the White: African earnings ratio over 1995-2000 then a decline over 2000-04.
This apparent breakpoint around 2000 is noteworthy, and relevant in light of macroeconomic
and policy shifts. First, South Africa experienced net employment losses from 1995 through
2000/01, and recovery thereafter (Seekings et al. 2004: 14). Second, affirmative action in
labor markets intensified from 1999, particularly with the enactment of employment equity
legislation.
Figure 3. South Africa: Gini Coefficient of Household Income, 1991-2001
0.80
0.70
African
White
0.60
Colored
Asian
0.50
All SA
0.40
1991
1996
2001
Source: Human Sciences Research Council.
16
Figure 4. South Africa: Ratio of Individual Earnings, 1995-2004
5.0
4.0
White: African
3.0
White: Colored
2.0
White: Indian
1.0
0.0
1995
2000
2004
Source: Author’s calculations from Leite et al. 2006.
Data
This study requires earnings data representative of the employed population.
Government conducted income / labor force surveys are the only resources that meet this
criterion. The Malaysian Household Income Survey (HIS) is conducted twice every five
years, using a questionnaire and methodology that has been consistent since the inaugural
survey in 1984. On the flip side, methodological and questionnaire design flaws inherited
from the early surveys have not been addressed. I was granted access to the HIS of 1995,
1997, 1999, 2002, and 2004, all of which have a substantial number of observations of
income earners – roughly 60,000. Critically, however, the race variable was purged from the
datasets. We are therefore unable to directly analyze the dynamics of race in income and
earnings inequality. To fill the gap in a very limited way, we make inferences with
supplementary sources that provide information on racial composition.
South Africa’s income data is fully accessible, although fraught with controversies
over questionnaire design and sampling. The relevant datasets are the October Household
Surveys (1995-1999) and the September Labor Force Surveys (2000-2006), of which we
refer to at intervals: 1995, 1998, 2001, 2004, and 2006. The debate over data quality
primarily surrounds the fact that a sizable proportion of respondents in the OHS (except 1995)
and LFS that indicate their income by selecting a bracket instead of stating a point value. The
incidence of reporting in brackets is also found to be nonrandom, with disproportionate
17
numbers of blacks selecting zero or low income brackets and highly educated whites
selecting high income brackets (Posel and Casale 2005). The sample sizes also vary quite
widely, from 20,000 to 30,000, and thus pose some concern about representativeness. The
data thus has to be handled circumspectly, but the above concerns aside, it is worth noting
that data quality and reliability problems are endemic to surveys. The problems that arise in
South African data are faced in national survey data in any setting (Leibbrandt et al. 2006).
These sources remain, the repository with widest spatial and temporal coverage income and
earners’ characteristics, and reasonably consistent format, and thus will be used as crosssectional snapshots of patterns of distribution over intervals.
Aggregate Inequality
I first compute aggregate inequality figures. The source of data in all tables that
follow, unless indicated otherwise, are the HIS for Malaysia, and the OHS and LFS in South
Africa. In Malaysia, possible differences between Gini levels and trends for individual
earnings and household income are of particular interest, since official figures are only
available for household income. We find that inequality as captured in the Gini barely
changes over 1995-2004, and the figures hardly vary between earnings and income (except in
1997), hence it seems not unreasonable to maintain that earnings inequality followed the
same trends over the 1970s and 1980s as outlined for household income in Figures 1 and 2.
While the Gini indicators in aggregate show no significant trend between 1995 and 2004,
ratios of earnings at the extreme percentiles indicate widening disparity between the top and
bottom ends of the distribution (Table 2). These findings suggest that disparities between the
richest and poorest strata have increased, but income growth in the middle has moderated the
effect on overall inequality as captured in the Gini coefficient.
Table 1. Malaysia: Gini coefficient
Gini coefficient
Individual Household
Year
earnings
income
1995
0.459
0.468
1997
0.445
0.483
1999
0.457
0.462
2002
0.472
0.475
2004
0.474
0.468
18
Table 2. Malaysia: Ratio of earnings at percentiles
Ratio of
1995
1997
1999
percentile earnings
50th : 10th
2.84
3.13
2.97
50th : 25th
1.64
1.67
1.66
th
th
75 : 25
2.68
2.65
2.69
th
th
75 : 50
1.63
1.59
1.62
90th : 50th
2.71
2.50
2.66
th
th
90 : 10
7.68
7.82
7.90
95th : 10th
10.82
10.88
11.24
95th : 5th
17.06
18.41
17.53
2004
3.07
1.73
3.05
1.76
2.81
8.61
12.35
18.45
For South Africa overall, we find no clear trend in the Gini over our intervals (Table
3). This finding, however, is at odds with most available estimates, including Leite et al.
(2006), who find an increase in inequality over the late 1990s. The figures for 1998 warrant
further attention. Disaggregating by race, we find a broad pattern of increasing earnings
inequality among blacks, and decreasing inequality among whites. Thus, results so far are
consistent with developments in South Africa’s policy and macroeconomy, which
respectively intensified affirmative action and shifted to a more robust phase in 1999-2000.
Table 3. South Africa: Gini Coefficient of earnings, by race
1995 2001 2004 2006
Overall (own)
0.585 0.594 0.586 0.599
Overall
(Leite et al. 2006) 0.566 0.594 0.598
Black
0.504 0.536 0.534 0.558
White
0.520 0.474 0.448 0.468
Table 4. South Africa: Ratio of earnings at percentiles
Percentile ratio
1995
1998
2001
2006
50th : 10th
4.02
15.00
5.00
4.00
50th : 25th
2.22
5.00
2.50
2.22
75th : 25th
4.41
14.33
5.47
4.67
75th : 50th
1.98
2.87
2.19
2.10
90th : 50th
3.50
7.00
4.00
4.75
90th : 10th
14.07
105.00
20.00
19.00
19
Table 5. South Africa: Ratio of earnings at percentiles, by race
Black
White
ratio 1995 1998 2001 2006 1995 1998 2001
50th : 10th
3.7
9.4
4.8
3.5
2.9 10.3
2.6
50th : 25th
2.2
3.3
2.4
1.9
1.7
2.4
1.7
75th : 25th
3.8 14.4
4.4
3.9
2.8
4.6
3.2
75th : 50th
1.7
4.3
1.8
2.0
1.6
1.9
1.8
90th : 50th
3.0
7.7
3.3
4.5
2.8
4.5
5.3
90th : 10th
10.8 72.0 16.0 15.8
8.1 46.3 14.7
2006
3.5
1.8
3.4
1.9
4.0
14.0
Table 6. South Africa: Ratio of earnings between race
1998
1995
2001
2006
White: overall
2.45
2.77
2.58
2.59
Black: overall
0.65
0.59
0.65
0.72
White: Black
3.77
4.70
3.94
3.62
White: African
4.04
5.46
4.40
3.96
White: Colored
4.08
3.71
3.25
3.11
White: Indian
1.57
1.76
1.79
1.56
Inequality by educational attainment
The effect of educational attainment on earnings shows some interesting trends.
Between 1995 and 2004, the earnings of degree holders relative to those who complete
secondary schooling declines noticeably, while other ratios remain stable (Table 7a). This
trend has crucial implications on affirmative action, since higher education is one of its pillars.
These findings suggest some problems in the transition between obtaining a degree and
entering the labor market. Indeed, we find that the decline in earnings premium of degree
holders is much sharper among young workers. Advances in tertiary education, especially for
Malays, are quantitatively immense. As displayed in Table 7b, the proportion of employed
with tertiary education is highest among Malays. Effects of the Private Higher Education of
1996 – partly a political concession to non-Bumiputera excluded by quotas from public
institutions – were immediately seen in a spike in average annual growth in public postsecondary enrolment from 8.8 percent over 1990-95 to 16.2 percent over 1995-2000.
However, declining quality of diploma and degree programs, in both public and private
institutions, continually pervades public discourse, and is embodied in a persisting incidence
of unemployed graduates. A 2004 survey found an estimated 60,000 unemployed graduates,
who are mostly female graduates from public universities. While such surveys do not touch
20
on race, it is probable that graduate unemployment affects Bumiputera disproportionately,
which suggests that the education channel to affirmative action is become less effective17.
Table 7a. Malaysia: Earnings by highest education attained.
Ratio to complete secondary
Highest certificate (no. years)
schooling
1995
1999
2004
No school / primary school
0.61
0.63
0.59
Incomplete sec. school
0.82
0.84
0.82
Complete sec. school
1.00
1.00
1.00
Upper sec. school (pre-univ.)
1.31
1.31
1.30
Diploma
1.65
1.64
1.59
Degree
3.45
3.30
2.91
Table 7b. Percent of employed with tertiary education, by race group
1995
1999
2004
Malay
18.2
21.7
26.8
Non-Malay Bumiputera
8.7
10.5
13.9
Chinese
13.6
16.5
23.4
Indian
12.4
15.4
19.2
Malaysia
15.1
18.1
23.8
Source: Labor Force Survey Reports.
In South Africa we observe an opposing trend: holding a degree is associated with
increasingly higher earnings relative to lesser formal education qualifications (Table 8).
These gains are most starkly showing among blacks, while no trend appears among whites
(Table 9). In addition, it is also among degree-holders that white: black earnings differentials
are declining at the fastest rate, with diploma-holders also showing a parallel pattern, though
of smaller magnitude (Table 10). The effects of labor market dynamics – higher employment
growth post-2001 – and policy – specifically, employment equity – will have to be discussed
with reference to other data. However, results here strongly suggest a dual contribution of
tertiary education: the earnings of highly educated blacks are closing the gap against
commensurately educated whites, but are widening their gap against less educated blacks.
17
The unemployment rate for all working age persons vary across race groups quite consistently
across time. In 2005, the rates were 5.3 percent among Bumiputera, 2.4 percent among Chinese, 3.1
percent among Indians, and 4.2 for all Malaysia.
21
Table 8. South Africa: Earnings by highest education attained
Ratio of earnings to complete
secondary schooling
1995
2001
2006
No school / primary school
0.26
0.27
0.33
Incomplete sec. school
0.54
0.49
0.49
Complete sec. school
1.00
1.00
1.00
Diploma
1.32
1.43
1.80
Degree
2.38
2.66
3.51
Table 9. South Africa: Earnings within race group.
1995
Black
No sch / primary sch
0.40
Incomplete secondary sch
0.66
Complete secondary sch
1.00
Diploma
1.46
Degree
2.24
White
No sch / primary sch
0.38
Incomplete secondary sch
0.85
Complete secondary sch
1.00
Diploma
1.30
Degree
2.05
2001
0.39
0.62
1.00
1.60
2.65
0.56
0.73
1.00
1.19
2.08
2006
0.43
0.58
1.00
1.89
3.84
0.44
0.74
1.00
1.37
2.23
Table 10. South Africa: White : Black earnings ratio within education category.
1995
2001
2006
White : Black
No school / primary school
2.23
3.50
2.47
Incomplete sec. school
2.95
2.91
3.12
Complete sec. school
2.30
2.44
2.41
Diploma
2.05
1.82
1.75
Degree
2.11
1.92
1.40
Inter-occupational earnings differentials
Inter-occupational patterns in Malaysia demonstrate major shifts in the relative
earnings position of different groups (Table 11a). In particular, officials and managers enjoy
exceptionally high average growth over 1995-2004 interval, and even higher gains if we mark
1997 as a starting point. At the bottom end, the earnings of agricultural workers demonstrate
a gradual pattern of decline relative to other occupational groups. These two groups are
highly relevant to inter-racial inequality and AA, owing to the under-representation of
Bumiputera in managerial occupations and over representation among agricultural workers
(Table 11b). Official data indicates a slowdown in momentum of Bumiputera entry to
22
managerial and professional positions from 1995 to 200518. In sum, then, these patterns are
consistent with Figure 1, i.e. no narrowing of inter-racial income disparities. Other sources
also supplement these findings, particularly data on public sector employment. Government
departments accounted for 19.5 percent of the increase in employment in Malaysia from 2000
to 2005, with the bulk of hiring happening among degree holders absorbed into teaching
(classified as professional) and nursing (associate professional) positions, which show
earnings levels close to or below the median (Table 11b)19.
Table 11a. Malaysia: Earnings ratios by occupation group
Ratio to service and sales workers
Occupation
1995
1997
1999
2004
Managers
3.14
2.51
3.37
3.89
Professionals
2.93
2.50
2.88
2.80
Technicians, assoc pro
1.88
1.67
1.83
1.70
Clerks
1.26
1.29
1.35
1.23
Machine operators
1.01
0.98
1.03
0.93
Craft
1.03
1.04
1.10
0.97
Agricultural workers
0.65
0.67
0.62
0.49
Elementary
0.65
0.68
0.73
0.73
Table 11b. Malaysia: Distribution of workers within occupation group, by race, 2005.
Bumiputera Chinese Indians Others
Managers and officials
37.1
55.1
7.1
0.7
Professionals
58.5
31.9
8.2
1.3
Excl. lecturers and secondary sch teachers
47.2
42.0
9.6
1.2
Lecturers and sch teachers
74.9
17.4
6.2
1.5
Technicians and assoc. professionals
59.5
29.7
10.0
0.8
Excl. primary sch. teachers and nurses
55.2
32.9
11.2
0.7
Primary sch. teachers and nurses
70.6
21.5
6.9
1.1
Clerks
56.7
34.3
8.5
0.5
Service and sales workers
51.5
39.6
8.0
0.9
Agricultural workers
80.8
11.3
4.3
3.7
Craft workers
46.0
44.6
8.2
1.2
Machine operators
60.4
24.8
12.9
1.9
Elementary workers
54.4
25.2
14.7
5.6
Overall employed
56.5
32.4
9.3
1.8
Source: Ninth Malaysia Plan
18
The proportion of Bumiputera in total registered professionals, burgeoned from 4.9 percent in 1970
to 29.0 percent in 1990, but grew at a significant slower pace thereafter, reaching 33.1 percent in 1995
and 38.8 percent in 2005. In administrative and managerial occupations (public and private sector),
Bumiputera representation grew relatively slower in the first two decades, from 22.4 percent in 1970
to 30.3 percent in 1990, before accelerating to 39.1 percent in 1995, then tapering off to 37.3 percent
in 2005 (An occupational reclassification exercise in 2000 may affect these figures).
19
Author’s calculations from Labor Force Survey Reports and the Government Employment List.
23
Our findings on relative earnings by occupation in South Africa mirror the results
obtained for educational attainment. No clear pattern of inequality between occupational
groups is discernible on the whole (Table 12). However, we find some indication that interracial earnings disparities are narrowing at the top, at managerial and professional levels.
These findings will have to be checked for possibility of questionnaire design or sampling
discrepancies, e.g. whites in the professional and manager categories show a relatively high
incidence of reporting income in brackets, which may understate the white to black earnings
ratio. As with the earnings ratios between persons of varying educational attainment, we also
find the clearest patterns of inequality within the black population. As shown in Table 14, we
find earnings of managers and professionals pulling away, while technical and clerical
workers also enjoy relative gains. These preliminary findings are consistent with a
combination of skill scarcity and employment equity legislation that raises the bargaining
power of highly qualified blacks, as companies compete to increase the number of black
managers and professionals.
Table 12. South Africa. Earnings ratio by occupational group, per service workers.
1995
1998
2001
2006
Officials and managers
5.31
5.03
4.50
5.58
Professionals
3.60
4.28
4.67
4.45
Technicians and assoc. pro.
2.06
2.12
2.30
2.57
Skilled agriculture
1.18
1.18
1.67
1.75
Clerks
1.00
1.00
1.00
1.00
Sales and service workers
4.82
1.15
1.21
1.90
Craft
1.35
1.07
1.12
1.17
Machine operators and assemblers
0.84
0.86
0.92
1.19
Elementary workers
0.39
0.45
0.50
0.61
Table 13. South Africa. White : Black earnings ratio within occupational group
1995
1998
2001
2006
Managers
1.95
3.01
1.67
1.60
Professionals
1.97
1.97
1.88
1.40
Technicians
1.87
2.24
1.81
1.74
Clerks
1.42
1.85
1.68
1.65
Service and sales
2.07
2.20
2.44
2.30
Craft
3.07
3.15
3.54
3.13
Production workers
3.52
4.13
3.47
3.76
24
Table 14. South Africa: Ratio of earnings to service and sales workers, within race
1995
1998
2001
2006
Black
4.26
Managers
2.95
3.85
4.73
Professionals
2.92
3.33
3.87
4.25
1.92
Technicians
1.76
2.17
2.34
Clerks
1.21
1.05
1.61
1.62
Service and sales
1.00
1.00
1.00
1.00
Craft
1.08
0.95
0.99
1.08
Production workers
0.58
0.64
0.72
0.79
White
Managers
4.00
4.04
2.64
3.30
Professionals
2.78
2.98
2.98
2.58
Technicians
1.74
1.80
1.61
1.77
Clerks
0.84
0.88
1.11
1.16
Service and sales
1.00
1.00
1.00
1.00
Craft
1.60
1.36
1.43
1.47
Production workers
0.98
1.20
1.02
1.29
Concluding thoughts
We find different patterns of inequality in Malaysia and South Africa over the 19952005 period. In Malaysia, we observe declining earnings premium on tertiary education and
increasing gap between managers and the rest. These are two areas in which Bumiputera
share is notable – significantly high in tertiary education attainment, and significantly low in
managerial occupations. Therefore, these patterns plausibly fill in gaps in the aggregate
inequality picture we set out to inform. On South Africa, we find less clear patterns of
inequality between race groups, but evidence that disparities associated with education and
occupation are important dimensions in the problem of increasing inequality within the black
population. Not surprisingly, highly educated and upwardly mobile blacks have benefited
most in the post-apartheid period; a black middle class has arrived.
This paper has discussed inequality and affirmative action in Malaysia and South
Africa, situating these policies in their respective political economic contexts. Our focus on
education and employment addresses two pillars of AA, but other earnings determinants must
of course be controlled for in this study. Nonetheless, a few thoughts arise at this juncture on
implications for affirmative action. Given time and space constraints, I will focus on two
issues.
One implication of our findings concerns the interaction between inter-racial and
intra-racial inequality, in view of the different experience of Malaysia and South Africa in
their respective first decades of intensive affirmative action. Malaysia managed to reduce
25
both inter-racial and intra-racial inequality from 1970 to the late 1980s, but under domestic
and global conditions that are substantially different from those presented to South Africa in
the 1990s. It is difficult to discern how South Africa could have avoided increases in
inequality within the black population. However, the extent of growing disparity, and
growing sense of marginalization are ramifications of policy decisions or failures of
implementation, especially in the decline of schools and historically black tertiary institutions.
South Africa’s developed legal institutions – employment equity, skills development, BEE –
are arguably ahead of their time, which is no surprise given advisory sources (employment
equity legislation was largely modeled after Canada). However, they operate within the
constraints of a population where the majority live in deep-seated poverty. An urgent and
vital challenge, after passage of a complex of AA institutions, is to spread the gains within
the black population more broadly. At present, AA regimes in both countries are under as
much, if not more, societal pressure to reduce intra-racial inequality. In plotting progress and
anticipating change, both countries may heed from shortcomings of Malaysia’s AA
experience the need to temper ambition with patience and opt for more gradualist approaches,
avoiding entrenchment of programs that fail to monitor qualitative change (e.g. in education)
and that perpetuate government patronage, the sum of which is higher concentration of
earnings and income at the top.
Another implication of our findings surrounds the two contrasting models of state
intervention. South Africa’s constitution and the evolving legal framework for affirmative
action are more formalized, codified, and contractual than Malaysia’s. The scope of
employment equity and skills development exceeds that of programs Malaysia implemented
for redressing imbalances in the workplace. On the other hand, the South African state is
more constrained and inflexible in responding pragmatically changes in economic conditions.
Malaysia may take pointers from the South African experience, particularly in government
procurement, while South Africa may gain from adopting a less ideological, more pragmatic,
disposition.
26
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