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The political economy of affirmative action regime formation: Malaysia and South Africa

Public Administration

policy-paperMalaysia and post-apartheid South Africa stand out as middle-income countries that implement affirmative action (AA) in favour of a majority population group. Malaysia intensified AA amid continuation of a political order and consolidation of executive power, while South Africa democratized and devolved power while promulgating majority-favouring AA.

The full paper can be downloaded here

Introduction 

Malaysia and post-apartheid South Africa are commonly paired in discourses on affirmative action (AA), sharing a rare trait as upper-middle income countries that implement extensive affirmative action in favour of a politically dominant and economically disadvantaged majority racial group.

The Bumiputera in Malaysia comprise the politically predominant Malays and other indigenous groups (67 per cent of the population in 2010); the “black” category in South Africa conventionally refers to Africans, Coloureds and Indians (91 per cent of the population in 2011).

Colonial and Apartheid legacies of exclusion, discrimination and repression entrenched systemic forms of disadvantage, resulting in severe group under-representation in socially esteemed and economically influential positions.

Gross under-representation of Bumiputera in Malaysia and blacks in South Africa in tertiary education, upper level occupations, and ownership and control of capital have compelled extensive and intensive state action to redress these disparities.

In the wake of racial unrest in 1969 in Malaysia, and in the face of uncertainty in South Africa’s mid-1990s formal transition from Apartheid to democracy, both countries expanded or introduced majority-favouring affirmative action programmes.

Affirmative action in Malaysia and South Africa has been viewed from particular angles, which have shaped and limited comparative analysis in three notable aspects.

First, Malaysia’s long experience and substantial achievements in redressing socio-economic disadvantage of the majority population have led cross-country work to be approached predominantly with Malaysia as a reference point for South Africa, not with both countries as mutually informing experiences.

In the early- to mid-1990s, when South Africa enquired into other countries’ experiences in devising its economic policies, Malaysia stood out as a potential model of majority-favouring affirmative action. Hart (1994), Emsley (1996) and Southall (1997) outlined possibilities for South Africa of adopting Malaysia’s policies, pointing out similarities and differences in economic structure and performance, in global macroeconomic conditions and in the extent of unemployment and poverty.

On the whole, they raised cautions against overestimating the commonalities between the two countries.

In recent years, attention in South Africa has fallen again on Malaysia, as affirmative action legislation and programmes have become established and debated (Hermann, 2007). In contrast, reference to South Africa is entirely absent in any literature focusing on affirmative action in Malaysia.

Chronological order, however, does not preclude analytical approaches that mutually compare countries across a set of systemic and institutional characteristics.

Second, much of the existing literature is also shaped by the discourses within each country, which gravitate toward particular conventions and norms in the definition of affirmative action and thus tend to circumscribe the conceptual framework of AA across countries.

Although AA encompasses interventions in education, employment and ownership in both countries, the bulk of research has centred on equity ownership in Malaysia and on employment in South Africa. The predominance of these sectors reflects their political significance and popularity as much, if not more, than their socio-economic importance or policy efficacy.

Wealth redistribution came to dominate Malaysia?s development policy and to occupy public mindsets not because interventions in education and employment dwindled, but due to political ascendancy of the Bumiputera capitalist agenda and the conspicuous nature of the resulting wealth acquisition.

In South Africa, the labour market was a major sphere of apartheid discrimination – and a ready source of material, remunerative gains to meet demands of an adult population previously denied upward mobility. Unsurprisingly, the labour market became the focus of post-apartheid redress, reinforced by employment equity legislation, which officially subsumed affirmative action under its aegis.

This equation of AA with employment equity results in the exclusion of interventions in education from consideration as AA institutions. In sum, the overlap of available writings on AA in Malaysia and South Africa is considerably less than a systematic framework would encompass.

Third, there has been inadequate attention to the formation of affirmative action regimes and their consequent characteristics. AA was established in particular political, social and economic contexts, which have shaped the orientation and structure of laws, policies and mechanisms.

In Malaysia and South Africa, constitutional provisions for affirmative action, political transitions and concomitant racial dynamics, and the relative power of majority and minority groups, have fundamentally and distinctively impacted on AA. Attention to these conditions and factors enhances our understanding of the structure and logistics of AA.

This paper offers perspectives on affirmative action in Malaysia and South Africa that depart from the limitations outlined above. I explore three aspects of the formation of AA.

First, the constitutional provisions for AA lay out some fundamental differences.

Second, while the transition to intensive AA in Malaysia from the early 1970s was underpinned by continuation of Malay political power and consolidation of the group?s primacy, South Africa in the early 1990s witnessed the transfer of political power from white minority to black majority and the declaration of non-racialism and non-sexism as pillars for constructing a new society.

The political structure in Malaysia, where the executive is dominant and power is centralized, contrasts with South Arica, which transitioned from a fragmented polity to a federalized system with relatively more devolved power.

Third, minority economic power was relatively less pervasive in Malaysia and foreign ownership was high, whereas in South Africa minority control was comprehensive – spanning all industries, and public and private sectors, except for the Bantustans.

Differences in political economic context correspond with AA regimes that can be compared and contrasted in the following areas.

First, Malaysia is characterized by discretionary decision-making by a dominant executive branch of government, whereas South Africa has followed a more legislative route involving negotiation and enforcement of statutes and codes.

Second, the scope and intensity of AA varies broadly by sector. In Malaysia, preferential programmes in tertiary education and asset ownership have been direct and extensive, but interventions in employment have been limited to the public sector.

South Africa has intervened relatively less intensively and more indirectly in tertiary education and asset ownership, but enforces employment equity across all sectors.

Third, the instruments of AA differ, with Malaysia oriented toward group quotas or racially-exclusive programs administered by federal government against South Africa’s codified, statutory requirements to meet targets for equitable group representation under less centralized oversight.

At the same time, we also note some commonalities between our countries, particularly in the prominent role played by the public sector and public enterprises in employment and upward advancement of the beneficiary group.

On the whole, however, the differences stand out and warrant circumspection in considering how Malaysia and South Africa can inform each other.

This paper proceeds with discussion on the conceptualization of AA, pointing out the ways it is viewed within each country and setting out parameters for a more systematic definition of affirmative action.

Next, I discuss the formation of AA regimes in both countries, focusing on constitutional underpinnings, political transitions and dynamics of race relations, and the magnitude of economic disparity between groups.

This is followed by an overview of AA programs in Malaysia and South Africa, and discussion of the policy implications of differences and similarities in both countries’ AA regimes.

Conceptualizing affirmative action 

The comparative discussion to follow requires us to conceptualize affirmative action in a systematic manner. AA spans a wide range of definitions. Compounding the theoretical variety, country-focused studies conceptualize AA with reference to country-specific factors, such as Constitutional frameworks and socio-political conditions.

The lack of comparative analysis of Malaysia and South Africa, and the multiplicity of definitions of AA within and between the two countries, underscore the need to establish some common ground.

Affirmative action in this paper will refer to preferential measures to redress systemic disadvantages faced by a population group that is under-represented in socially esteemed and economically influential positions. Different approaches to affirmative action variously incorporate or emphasize aspects of the scope, basis, and mode of interventions under its banner.

The term affirmative action is reasonably established as referring to measures targeting group representation in higher socioeconomic strata, although the designation of these areas varies across the literature.

One set of definitions adopts a sectoral framework, commonly specifying higher education, high level occupations, business ownership and management (Fryer and Loury, 2005; Sabbagh, 2003).

Another set of definitions, basically denoting the same socioeconomic categories, place weight on the process of social mobility into those areas (Adam, 2000) or the esteem conferred by those positions (Weisskopf, 2004).

These distinct forms of group disparity correspond with status and influence, and tend to be visible, contentious and fractious, sometimes to the point of violent conflict.

At the same time, high barriers to entry compound and perpetuate group under-representation, e.g. entry requirements for university admission, degree qualifications for professional occupation, and work experience for promotion to management.

AA policies thus substantially emerge out of the political unsustainability of particular groups’ under-representation in the above positions, as well as the propensity for such inequities to persist without coordinated action.

Accordingly, this study’s demarcation of AA will encompass areas that impute social esteem and/or economic influence, chiefly tertiary education, upper level occupations, and ownership and management.

While the areas of intervention associated with affirmative action are widely agreed on, we find sharper distinctions in the basis or justification for affirmative action, warranting some qualifying remarks at this juncture. Some approaches posit group discrimination, exclusion or disadvantage, which hinder advancement of group members, as an overarching purpose of AA (ILO, 2007; Sabbagh, 2003; Lee, 2005; Adam, 2000).

Other perspectives anchor AA on the objective of increasing the representation of under-represented groups (Fryer and Loury, 2005; Weisskopf, 2004). Undeniably, these problems are inter-related, and present to some extent in all societies engaged in AA.

References to discrimination or an analogous concept of unequal opportunity specifically situate the inequities to be redressed in historical or systemic perspective. The realities of racial exclusion or discrimination cannot be omitted in the contexts of Malaysia and South Africa.

However, to establish a useful basis for continual evaluation of rationales for AA and thus avoid justifications based on historical conditions that may have become ameliorated, this paper premises AA on the prevalence of systemic disadvantage that reproduce a group’s under-representation in socially esteemed and economically influential positions.

The modes of affirmative action – operational features of policies pursuing AA objectives – are often not conceptually stipulated. Some exceptional approaches specify preferential treatment based on group identity as a defining feature of AA (Weisskopf, 2004).

This arises from an assessment that the beneficiary group will not attain the targeted positions at a sufficient pace if evaluated on the strict basis of individual merit or socioeconomic need.

Therefore, some degree of preference must in practice be accorded, to facilitate and accelerate the process. There are good reasons to make this aspect explicit in the context of majority-favouring regimes like Malaysia and South Africa, where the beneficiary group holds political power, to draw attention to the perils of protracted implementation of preferential selection.1

As mentioned above, the importance of defining affirmative action is underscored by the lack of conceptualization of AA both within and across Malaysia and South Africa. Although AA is embedded in Malaysia’s institutional framework, a consistent and coherent concept scarcely appears in official documents and academic literature. As noted by Lee (2005), preferential measures and racial quotas were in place, in limited scope and scale, since Malaya’s independence in 1957.2

The genesis of affirmative action, institutionally and temporally, is the Federal Constitution provision for reservation of education, civil service employment, training and licensing as measures for safeguarding the special position of the Bumiputera.

The New Economic Policy (NEP) massively expanded and intensified AA from

1971, and has become a conventional reference point for AA in Malaysia, due to the transformations that took place subsequently, although AA policies did not originate under the NEP.3

The NEP outlined a two-pronged vision to “eradicate poverty irrespective of race” and to “accelerate… the restructuring of society to reduce and eventually eliminate the identification of race with economic function” (Malaysia, 1971: 1).

The second prong broadly corresponds with AA, its mainstay being the overwhelming under-representation of Bumiputeras in the upper tiers of the educational and occupational hierarchies.

Poverty alleviation and affirmative action were seen as to be distinct and complementary subsets of the NEP in the policy’s original articulation. However, affirmative action and the NEP are frequently conflated, underscoring the need for clarity and precision in defining AA.

In relevant literature on Malaysia, affirmative action is often conceived to include policies aimed at reducing racial disparity in any form, and is indirectly covered within broader studies of inequality, national integration, poverty alleviation, or specifically the NEP (Faaland, Parkinson and Saniman, 1990; Faridah, 2003; Chakravarty and Roslan, 2005; Zainal, 2006).

A few exceptions, notably Meerman (2008), Ishak (2000) and Jomo (2004), specify racial preference as a defining feature of affirmative action, although their works also engage with inequality more generally and do not focus on affirmative action per se.

Lee (2005: 211) provides a more substantive definition in his overview of AA in Malaysia, encapsulating the policy as a set of “measures to raise the participation of members of an economically disadvantaged group in the areas of education, employment and business, where they ha[ve] been historically excluded or under-represented”.

The term and notion of affirmative action have been more central in South Africa’s national dialogue compared to Malaysia. Indeed, the challenge of conceptual clarification stems from a plethora of analogous terms: equity, Black Economic Empowerment, redress, transformation. AA in South Africa is complex in the problems and inequities needing redress, and the varieties of definitions and institutions. Affirmative action first appeared in African National Congress (ANC) lexicon its 1988 Constitutional guidelines (Mandaza, 1996: 31).

From the early 1990s, a number of organizations advocated variations of AA, notably the Black Management Forum (BMF), the National African Federated Chamber of Commerce (NAFCOC), and organized labour, while others lobbied against AA, saliently the South African Chamber of Business (SACOB) (Horwitz, 1996; Adam, 2000). The ANC’s Ready to Govern document of 1992 delineated an expansive approach to AA, stating that, “[w]hile taking on a variety of forms, affirmative action means special measures to enable persons discriminated against on grounds of colour, gender and disability to break into fields from which they have been excluded by past discrimination.” The Reconstruction and Development Program, the ANC?s manifesto for the April 1994 elections, subsumed under the AA banner all measures in education and employment for redressing racial, gender, and regional discrimination.

However, the White Paper on Reconstruction and Development of November

1994, ostensibly translating the RDP into a government programme of action, circumscribed affirmative action to the public service, which would be “broadly representative of the South African community”.

Political platforms and policy pronouncements have thus established discrimination, disadvantage and representativeness as premises for AA, but they have been unclear on the scope of programmes. A common approach restricts AA to interventions that redress past unfair discrimination in employment, perhaps stemming from the intensity of discriminatory laws in the labour market, the routine incidence of white-black hierarchy and conflict in the workplace, and the immediate availability at the transition to democracy of qualified blacks previously denied advancement.

Early- and mid-1990s discourses on affirmative action were steeply focused on past discrimination in labour market relations (Nzimande and Sikhosana, 1996). The Employment Equity Act (1998), with a Chapter 3 headlined “Affirmative Action”, mandated employers to increase the representation of historically disadvantaged persons in upper tier positions.

This tightened the association between AA and occupational representation. However, AA as conceptualized in this study is not confined to employment equity, as seems to be the case in much of the academic and popular literature (Adam, 2000; Hermann, 2007).

Adam (2000) proposes defining AA broadly, as “[a] form of state-sponsored social mobility” and “a remedial strategy which seeks to address the legal, historical exclusion of a majority”, but confines analysis to policies in higher occupational representation.

Transformation and redress are more general terms denoting the processes of correcting inequalities and injustices of the past. To the extent that transformation or redress programmes aim to increase the representation of disadvantaged groups, they will fall under our umbrella of affirmative action. This point is most pertinent to the education sector, where AA is conspicuously absent in policy discourse, although mandates to transform historically white (advantaged) institutions, uplift historically black (disadvantaged) institutions and to engage in social redress have been made clear.

In fact, affirmative action has practically, if not officially, been in place in South African universities (du Toit, 2010). Universities have been compelled to defend the application of preference toward African students in legal challenges (February, 2010).

Evidently, affirmative action was implemented in universities, even if South

African convention applies different classifications, and warrants inclusion within the same rubric as employment equity and Black Economic Empowerment, which are all programmes to raise black representation through preferential selection.4

Black Economic Empowerment (BEE), a programme for redressing systemic disadvantage through preferential treatment, also fits within our affirmative action rubric. AA is sometimes seen as a subset of BEE, largely due to the equation of AA with employment equity, whereas BEE encompasses other areas, notably capital ownership and executive control.

However, AA need not be limited to employment, and as defined for this study, includes the upper tiers of educational and occupational hierarchies as well as ownership. Indeed, as maintained by Constitutional Court justice Sachs (2007), the converse relationship is more cogent – i.e. BEE is a subset of affirmative action.

Affirmative action regime formation: Political economic context 

Constitutional Provisions  

Malaysia and South Africa are exceptionally distinguished, even among countries instituting affirmative action, by the fact that their respective founding Constitutions set out the justification and scope of policies.

Beyond this commonality at the broadest level, however, the contents of the law and implications on AA substantially differ. Malaysia’s Constitution stipulates safeguarding Bumiputera “special position”, while South Africa’s Constitution premises its provision for measures to protect or advance persons on their disadvantaged position due to unfair discrimination.

The Malaysian Constitution establishes both the principle of equality and provisions for affirmative action. Individual equality and prohibition of discrimination is set out in Article 8, “[e]xcept as expressly authorized by this Constitution”.

Article 153 grants such authorization, through provisions for the Yang Di-Pertuan Agong (the national king) to “exercise his functions under this Constitution and federal law in such manner as may be necessary to safeguard the special position of the Malays and natives of any of the States of  Sabah and Sarawak [i.e. the Bumiputera] and the legitimate interests of other communities”, by reserving places for the designated group in public sector employment, scholarships, training programs, and licenses.

The South African Constitution also articulates equality with qualifications, with distinct terms of reference. While equality is a basic right, Article 9 stipulates, “[t]o promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken”.

In the spheres of education, employment and contracting, the Constitution provides for preferential or redress measures, to varying degrees of specificity and intensity. Article 29, on the basic right to education, permits consideration of “the need to redress the results of past racially discriminatory laws and practices” when administering education, such that the system ensures effective and equitable access, particularly through providing instruction in a person’s preferred language.

Article 195(1) sets forth the mandate that “[p]ublic administration must be broadly representative of the South African people”, while Article 217(2) provides for “categories of preference in the allocation of contracts” and “protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination”.

The most outstanding landmark must be the Employment Equity Act (1998), which distinguishes two stages to the process of attaining equity: legislation of non-discrimination, and official provision for affirmative action to correct historical unfair discrimination.

What implications do these constitutional provisions hold for the practice of affirmative action in Malaysia and South Africa?

First, they grant AA a considerable measure of legitimacy, but at the same time increase the latitude for political manipulation and perpetuation of group preference.

Debates over the constitutionality of AA policies are basically settled, although the mechanism, scope and duration of AA have been contested.

Nonetheless, the promotion of Bumiputera and black interest can be taken to much greater lengths than in other countries. As noted by Sabbagh (2004: 5), in reference to these two countries, “the constitutionalization of affirmative action has probably facilitated its radicalization.”

Of course, it is not just the existence of legal safeguards, but the exercise of such provisions by a political majority, that shape and consolidate AA policies. In Malaysia, the Constitution’s precise stipulation that particular reservations and quotas can be implemented to preserve the “special position” of the Bumiputera has transmuted in political and popular discourses – even in school syllabuses – into a general and permanent guarantee of “special privileges”, even “special rights” (Brown, 2007: 325-326).

Yet there is strictly no stipulation of special Bumiputera-favouring policies as an obligation – only as an option.

Nonetheless, the precise language of the Constitution has been omitted over time, an unsurprising consequence of the utilization of Article 153 as a political rallying point.

In South Africa, Article 9’s designation of beneficiaries based on disadvantage due to unfair discrimination does not explicitly identify a race group, clearly allows for gender- and disability-based AA, and formally constrains claims for permanent entitlements. Preferential treatment has in practice applied predominantly to blacks – i.e. race groups that have been unfairly discriminated against.

However, the difference in the explicit and implicit elements of the above Constitutional articles remains clear. Whereas Malaysian law designates Bumiputera as recipients of preference and implies they face disadvantages, South African law designates persons disadvantaged through unfair discrimination, with the connotation of primacy to that racial discrimination as the primary category for redress.

Second, following their distinct Constitutional frameworks for AA, Malaysia and South Africa negotiate in particular ways the tensions between preference and equality, and between majority and minority interest.

In Malaysia, the racial identification of preference translates into a racial framing of the contending interests associated with AA. The exercise of racial preference is constitutionally countervailed by a proviso that the legitimate interests of non-

Bumiputera groups also be safeguarded, without locating those interests within the concept of equality or fairness.

The administration of AA has largely undertaken the form of bargains between discriminatory practices in some spheres, most saliently the public sector, for relative non-intervention in other spheres, particularly small and medium scale business.

Malaysia’s complex of communal accommodations has also involved social and political platforms – notably, cultural and religious space, Chinese- and Tamil-medium schools – which have moderated grievances against unequal opportunity due to AA.

In South Africa, legislation substantively incorporates tensions between equality and affirmative action. Fundamentally, the Constitution articulates non-racialism and non-sexism as founding principles. As discussed above, universities have faced legal challenges for giving preference to African applicants (February, 2010). Procedures outlined in the Employment Equity Act (EEA) open the way for legal challenges, which have made reference to the specification that “suitably qualified” disadvantaged persons be accorded preference.

Lawsuits have been brought against employers, especially public departments, for unfairly discriminating against whites by appointing less qualified blacks, by not filling positions even while qualified candidates were available, or by continuing to conduct AA after transformation targets were met.

Third, the laws orient AA regimes toward particular modes of operation. Malaysia’s interventions preponderantly take the form of quotas and reservations, while South Africa employs goals and targets (Sabbagh, 2004). Quotas and targets are not mutually exclusive; indeed, targets are meaningless unless attached to a quantifiable allocation, and in this sense are akin to quotas (Fryer and Loury, 2005). However, they are differentiable in the degree to which the designated portion is fixed and mandatory. A case in point is the implementation of South Africa?s employment equity, which applies pressure on employers to attain a composition in high level positions proportionate to the economically active population, operating as a de facto quota but not strictly reserving a fixed share.

Structure and inter-racial dynamics of political transition 

Affirmative action became established amid political transitions that impacted on Malaysia’s and South Africa’s policy regimes. Malaysia sustained a Malay-based political order and bureaucracy throughout post-Independence nationhood from 1957, then reasserted Malay political dominance and increased executive powers while expanding and intensifying AA from 1971.

South Africa transformed from Apartheid minority rule to democratic majority rule through a negotiated transition, culminating in the 1994 elections and a comprehensive transformation of polity, society and economy (Marais, 2001; Terreblanche, 2002).

Malaya’s 1957 Independence Constitution arose from an “elite pact” that counterweighed the interests of the Malay and non-Malay communities, including reservation of certain socioeconomic positions for Malays.

With the formation of Malaysia in 1963 and the incorporation of Sabah and Sarawak5, two states with large indigenous populations, the category of beneficiaries was broadened to include Malays and other indigenous groups under the Bumiputera label.

Malay primacy in politics and the bureaucracy, together with a range of AA programs, were in place from 1957 and through the 1960s, in public sector employment, scholarships, licenses, and financial assistance. However, the scale of interventions was limited, and became a source of disaffection in sections of the Malay community.

While the causes of the May 13, 1969 post-election riots in Kuala Lumpur are complex, persistent inter-racial disparity is acknowledged as a major contributing factor (Khoo, 2005; Gomez and Jomo, 1999).

The continuity in Malay-majority political power and the existence of AA policies throughout Malaysia’s post-Independence period must be noted as a point of contrast to the South African experience.

At the same time, promulgation of the New Economic Policy (NEP) in 1971 marked a turning point, after which the affirmative action regime within the NEP’s broad developmental vision burgeoned to vastly greater scale and force, and became a reference point for various developing countries.

Importantly, this shift took place in the context of a reassertion of Malay primacy and promotion of more overtly pro-Malay policies, as well as an expansion and centralization of discretionary executive power, capitalizing on the political uncertainties in the aftermath of the May 13th upheavals (Khoo, 2005: 15).

Economic planning and information was placed more tightly under the Prime Minister’s control. A range of legislative changes constricted dissent and broadened executive power, including the Universities and University Colleges Act, which severely restricts students’ freedom of association and expression while laying out rules for institutes’ operations, and the Official Secrets Act, which precludes official documents from scrutiny.

Historical and somewhat fortuitous conditions also came to bear on the formation of Malaysia’s AA regime. Unlike in many countries with AA, Bumiputera and non-Bumiputera in Malaysia were not in the past engaged in a direct, harsh discriminatory relationship.

Hence, measures that were premised on reparation for past unfairness, such as requirements that employers hire more Bumiputera, could not gain traction, since non-Bumiputera had not in the past systematically marginalized Bumiputera.

As discussed in the next segment, minority economic interest was also not as widespread and powerful in Malaysia compared to South Africa. Thus, in some areas, especially the labour market, the scope for Malaysia’s AA interventions were narrower.

In marked contrast, South Africa democratized and grappled with balancing black advancement against potential alienation or backlash from a white population dominant in every industry and across public and private sectors. The South African Constitution set out non-racialism and non-sexism as national founding principles, and supplied a framework for democratic governance and checks on executive power.

To illustrate the difference in the countries’ democratic space, South Africa’s Higher Education Act, the corollary of Malaysia’s Universities and University Colleges Act, also establishes rules for higher education institutions but without controlling students’ political association and activity, while the Promotion of Access to Information Act, unlike Malaysia’s Official Secrets Act, legislates mechanisms to compel information to be released.

Existing provincial power structures, as well as autonomy of public institutions such as universities, compelled less centralization of authority.

In South Africa’s circumstances, the black population, while constituting an overwhelming demographic majority, negotiated from a relatively weak position, having been previously excluded from high level positions in government, the bureaucracy, and the private sector. The ‘sunset clause’, an agreement to retain senior government officials in the five years following the 1994 elections, was both a bargaining move and an acknowledgment that qualified and experienced non-whites were simply not available in sufficient numbers to fill those spaces if a more aggressive redistribution had taken place that could trigger a rapid exodus of whites.

In addition, transition authorities in the early 1990s were engaged in various high-priority conflicts and negotiations. The need to quell social instability and violence, merge a fragmented public service, integrate separate education systems and address basic workers? demands took precedence over direct interventions in redistributing upward mobility opportunities in favour of blacks, and compelled a more conciliatory posture and a less dominant executive.

On the other hand, the South African state could engage white economic and governmental entities from the standpoint of directly correcting previous discrimination, whereas in Malaysia, Bumiputera and non-Bumiputera establishments were not historically opposite sides of exploitative relationships.

Thus, while South Africa adopted a more legislative route with more constraints on executive power, the scope of some of its AA institutions, notably employment equity, are broader than in Malaysia.

The political transitions undertaken in Malaysia and South Africa impacted on AA programmes in two key aspects. The first pertains to the mode of governance. The greater latitude of the executive branch of government in Malaysia facilitated discretionary, top-down AA policy, whereas the relatively more constraints on executive power in South Africa presaged a more legislative route compelling the pursuit of AA through statutes and codes.6

The second revolves around general forms of AA programs. The racialization of Malaysian politics and policy discourses in the wake of the 1969 unrest, coupled with constitutional sanction, provided a context for the introduction of quota-based measures and the creation of Bumiputera-exclusive AA programs.

The founding principle of deracialization in South Africa, reinforced by the dangers of alienating the minority white population, inclined the AA regime toward the objectives of representativeness and diversity through targets and incentives.

Inter-racial socioeconomic disparity and minority economic strength 

Differences in the disparity between majority and minority groups, and in the magnitude of minority economic strength, played a part in shaping majority-favoring AA regimes in Malaysia and South Africa.

The gulf in socioeconomic status between the majority Bumiputeras and minority Chinese and Indians in Malaysia was significantly lesser than that between the majority blacks and minority whites in South Africa.

The command of whites over the South African economy vastly exceeds the command of the non-Bumiputera over the Malaysian economy. The white population owned virtually all productive land and capital, held all senior positions in government and in business across all industries, and reserved the best schools and universities, whereas Chinese and Indians held substantial but not entirely dominating positions in education, employment and ownership.

Socioeconomic indicators at the inception of AA reflect the relative exclusion of Bumiputera from the Malaysian mainstream, and the more severe, systematic repression of the black population under Apartheid.

In Peninsular Malaysia in 1967, the Chinese: Malay household income ratio was recorded at 2.47, and the Indian: Malay household income ratio at 1.95 (Anand, 1981).

In South Africa, household income ratios in 1991 were 11.1 for white-African, 5.7 for white-coloured, 3.0 for white-Indian (Whiteford and van Seventer, 2000).

Access to education reveals a similar pattern of worse racial disparity in South Africa.

The racial composition in 1970 at the University of Malaya – Malaysia’s then sole higher education institute – generally reflected the national population, although Malay representation in some fields was exceedingly low.7

Differentials in the participation rate – the percentage of 20-24 year olds enrolled in higher education – in South Africa in 1993 show how opportunities were overwhelmingly narrower for Africans, who registered 12 per cent participation, compared to 70 per cent for whites (Department of Education, 1997). Moreover, black students were concentrated in the systemically inferior historically black/disadvantaged institutes, while historically white/advantaged institutes catered abundantly for the minority.

Perhaps most politically consequential was the under-representation of the majority group in positions of decision-making power and in equity ownership. While the Malay population constituted 52.7 of the Malaysian population in 1970, its members filled 22.4 per cent of management and administrative positions, mostly in the civil service, where the proportion of Malays in the top rung touched 39.3 per cent (Malaysia, 1976; Khoo, 2005).

The South African population of 1996 consisted of 76 per cent Africans, but among senior management in the private sector, Africans accounted for an estimated 3 per cent (Adam, 2000: 82). In 1995, blacks constituted 40 per cent of managers in the public service (Naidoo, 2008: 110).

With regard to equity ownership, Bumiputera interests owned 2.4 per cent of total

share capital, while non-Bumiputera Malaysians held 28.3 per cent and foreigners 63.4 per cent.

Blacks held virtually zero equity. Furthermore, South Africa?s white-owned conglomerates amassed gargantuan shares of wealth. In 1992, the six conglomerates controlled companies accounting for 85.7 per cent of market capitalization of the Johannesburg Stock Exchange (Hirsch, 2006: 194-195).

The scope and capacity of the state to redistribute opportunity and engage with economic interests differed across countries, with particular implications on education, employment and ownership.

The dearth of tertiary education in Malaysia, with just one university in 1970, required the creation of new universities. This in turn provided conducive conditions for university administration to be centralized, for admissions quotas to be embedded from the start, and for the establishment of Bumiputera-only institutions.

In contrast, South Africa’s chief objectives in higher education were to increase black entry to the existing and autonomous historically white institutions and to help historically black institutions close the quality gap. In these conditions, efforts focused on existing institutions, to which the government decentralized the AA agenda and devolved implementation to the individual universities and tertiary institutes.

Toward the objective of increasing participation in high level occupations, Malaysia’s public sector had constantly applied racial preference – with greater intensity from the 1970s – which firmed up the implicit bargain of the public sector and state largesse as avenues for Bumiputera advancement, in exchange for redistributive restraint in private sector employment.

With the black population systemically denied access to high level occupations in public and private sectors, South Africa adopted policies and legislation encompassing both.

In the area of equity distribution, minority economic strength played a pivotal role. The minority groups in Malaysia, especially the Chinese, had gained economic footholds in some sectors, but not comprehensive power. Thus, the state was in a fairly strong position to extract concessions.

Additionally and fortuitously, large holdings by foreign interests in Malaysia presented an external target for equity transfer to Bumiputera interests, thereby defusing domestic conflict to some extent.

White-owned big business, leveraging its dominance over the South African economy, manoeuvred to secure its interests and to exert influence over economic policy from the 1980s. The template for a neoliberal macroeconomic framework was laid before the political transition, through private, closed-door, sometimes clandestine meetings between representatives of the apartheid government, business, and the liberation movement (Sparks, 2003).

The threat of capital flight, and pressure to assimilate South Africa into the global economy, gave rise to measures guaranteeing capital mobility (Hart, 1994). Thus, the incipient democratic South African state engaged with domestic capital from a relatively weak position, allowing capital to set the agenda (Gqubule, 2006). Towards the late 1990s, fears of more aggressive state-sanctioned redistribution spurred industry-based initiatives to promote black economic opportunity and interest, evolved into the Black economic empowerment (BEE) ‘scorecard’ framework (Southall, 2004).

Table 1. Malaysia and South Africa: Political economy context of affirmative action regimes 

Area Malaysia South Africa
Constitutional provisions
  • Basis for AA: special position of Bumiputera
  • Areas of intervention specified: education, public sector employment, licensing
  • Basis for AA: disadvantage due to unfair discrimination; equitable representation
  • General mandate, specific reference to government procurement, public sector employment
Political transition and racial dynamics
  • Continuous Malay/Bumiputera political power and dominance in bureaucracy
  • High foreign ownership, Chinese presence not dominant in all sectors
  • Shift from white minority rule to black majority rule
  • Dominant white ownership across all sectors
Institutional framework
  • Discretionary executive authority
  • Intensive, direct interventions in tertiary education, equity ownership, public sector employment
  • Quota-oriented, relatively centralized in administration
  • Statutory and codified system
  • Intensive, direct interventions in public and private sector employment; less intensive, indirect interventions in tertiary education, equity ownership
  • Target-oriented, less centralized administration

 

Affirmative action regimes: Key contrasts 

This study’s outline of overarching political economic regimes for affirmative action has drawn out some general contrasts, of which three stand out (See Table 1 for a summary).

First, in terms of the overall framework, Malaysia has prosecuted AA primarily through a strong state exerting discretionary power, while South Africa has compelled or induced compliance with AA objectives through statutes and legal codes.

Second, interventions exhibit variation in intensity and sectoral focus. Malaysia directly and intensively implemented racial quotas and racially exclusive programmes in tertiary education, equity ownership, and employment – although only in the public sector.

South Africa enforced employment equity across private and public sectors, but less intensively and more indirectly endeavoured to transform tertiary education and equity ownership.

Third, the instruments of AA vary, with Malaysia’s regime generally applying group quotas or racially-exclusive programmes under central administration, whereas South Africa has gravitated toward targets and more decentralized authority. Specific affirmative action programs in the three principal areas – tertiary education, upper level occupations, and ownership and enterprise development – help illustrate these distinctions, to which we now turn for brief discussion.

In tertiary education, Malaysia has maintained a centralized administration of affirmative action in tertiary education and, to a lesser extent, in secondary education. The main instruments consist of access quotas and Bumiputera-exclusive institutes and scholarships.

Since the 1970s, university admissions, public service scholarships, even academic appointments, have been administered with adherence to racial representation by the federal government (Leete, 2007: 207). MARA (Majlis Amanah Rakyat, or ‘Council of Trust for the People’ residential colleges and matriculation colleges offer alternate routes to degree-level education, while MARA scholarships have funded degree-level enrolment for Bumiputera students, with top scholars sent abroad.

South Africa has adopted a more decentralized framework in implementing AA programmes in tertiary education. Through the democratic transition, universities had their autonomy preserved and were mandated to pursue broadly defined redress agendas.

Having inherited vast inequalities between historically white institutes (HWIs) and historically black institutes (HBIs), much focus was placed on increasing black representation in HWIs and narrowing disparities between HWIs and HBIs. Institutions admit students autonomously, accounting for transformation or redress as a criteria in the overall student composition.

Very little comparative attention has been paid to AA in education, with rare exceptions such as van der Westhuizen (2002: 45) who maintains that Malaysia’s enrolment quotas are “far more discriminatory” than corresponding programmes in post-Apartheid South Africa.

Toward increasing representation of the beneficiary group in upper-level occupations,

AA in Malaysia was relatively narrow in scope, and implemented through a less formalized and codified process. The guideline for group representation in employment at all levels and in all sectors, as stipulated in the New Economic Policy from 1971, is the racial composition of the population.8

The predominant locus of intervention has been the public sector, which has abided by de facto quotas in recruitment and promotion. There is also no broad private sector and cross-industry program along the lines of employment equity legislation, although the Industrial Coordination Act (1975) may have had some impact – limited at best – in the manufacturing sector, while some sectors appear to have adopted ad hoc targets for increasing Bumiputera representation in management (Lee, forthcoming).

In marked contrast, South Africa passed the Employment Equity Act (1998) requiring medium- and large-scale firms to increase the proportion of previously disadvantaged individuals and provide training where they are under-represented, chiefly in professional and managerial positions. The legislation, backed by monitoring mechanisms and punitive consequences for non-compliance, covers all industries and encompasses private and public sectors, forming the bedrock of affirmative action in the labour market.

South Africa adopts as a baseline that the racial and gender composition of organizations should reflect the economically active population. The EEA requires medium and large scale companies to submit employment equity reports that record the current composition of their workforce and project future increases in the proportion of blacks, women and disabled persons. In recruitment, promotion and training decisions, the Act requires prioritizing suitably qualified members of the disadvantaged groups. Black economic empowerment (BEE), formalized in

2003 and codified in 2007, sets out a framework for scoring firm performance in advancing black interests across a range of criteria, including ownership, control, employment equity and skills development. Firms’ scores are factored into public procurement and licensing decisions. This programme supplements employment equity by providing some inducement for firms to increase their efforts in hiring and promoting disadvantaged persons through leveraging state funds and rights.

Overall, Malaysia’s and South Africa’s respective approaches to the employment branch of AA serve as contrasting case studies.

Affirmative action in equity ownership and in enterprise development overlap with occupational representation, but focus on commercial production of goods and services, as distinct from public administration. Malaysia’s passage towards cultivating Bumiputera-owned and operated enterprises followed a rather fluid, experimental and heavily state-led path, from emphasis on state-owned enterprises (SOEs) to takeover of foreign-owned companies and mandated equity transfers (1970s to early 1980s), followed by heavy industries (early to mid-1980s), then massive privatization of SOEs (late-1980s to 1990s) (Lee, 2007).

The aftermath of the financial crisis saw the renationalization of previously privatized entities from the late 1990s and their reconstitution as government-linked companies, or government majority-held corporations (Tan, 2010). Government procurement and licensing have also been structured around affirmative action objectives in managerial and enterprise development, through exclusion of non-Bumiputera in allocation of small contracts and handicaps to Bumiputera bidders in medium to large contracts, and requirement of Bumiputera business partners in awarding licenses.

South Africa’s approach has also been incremental, but in contrast to Malaysia, leans more on statutory and market-based instruments. Formal programmes did not take shape until the late 1990s, with the establishment of the Black Economic Commission in 1998 and passage of the BEE Act in 2003, which mandated a framework for evaluating empowerment. The BEE Codes, passed in 2007, schematized a ‘scorecard’ for granting preference based on a company’s performance in advancing black persons across seven criteria, including ownership, control, enterprise development.

On another front, South Africa indicated in the mid-1990s that privatization of parastatals, initiated in the 1980s, would proceed. Nonetheless, the policy largely did not materialize, and public enterprises have incorporated the BEE mandate.

Table 2. Malaysia and South Africa: Affirmative action programs and key features 

Area Malaysia South Africa
Tertiary
education
  • Racial quotas in public tertiary institutions; creation of Bumiputera-exclusive institutions and scholarships
  • Centralized administration
  • Redress programs within and between institutions
  • Institutional autonomy
Upper-level occupations
  • Public sector employment quotas / implicit racial preference
  • Employment equity legislation: applies to public sector and medium- to large-scale private companies
Ownership and enterprise development
  • Ownership and enterprise development
  • Phases of policy emphasis:
  • State-owned enterprises (1970s)
  • Takeover of foreign companies (1970s)
  • Heavy industries (early- to mid- 1980s)
  • Privatization of state entities (late-1980s – late-1990s)
  • Government-linked companies (late-1990s – )
  • Quotas and reservations in licensing and public procurement:
  • Ownership is sole criterion
  • Public enterprises
  • Black Economic Empowerment (BEE) codifies award system for public procurement and licensing according to a „scorecard? with seven criteria:
  • Ownership, management control, employment equity, skills development, preferential procurement, enterprise development, socio-economic development


Conclusions and implications 

Notwithstanding the exceptional feature of Malaysia and South Africa as middle-income countries with extensive and intensive majority-favoring affirmative action, we have observed how their regimes have emerged out of specific conditions.

AA in Malaysia is embedded in its constitution, based on Bumiputera special position, and has been prosecuted since 1957 in the context of political dominance of the majority Malay/Bumiputera population.

The post-1969 intensification of AA came on the heels of the expansion and centralization of executive power and assertion of pro-Bumiputera policies, consolidating a system revolving around discretionary executive power and quotas or racially exclusive programmes.

South Africa underwent multiple and complex transitions in its passage out of apartheid, of which the most germane to our consideration are the constitutional provisions for AA – on the grounds of group disadvantage through unfair discrimination – and the democratization of institutions, the shift from white minority to black majority rule, and the all-encompassing dominance of minority interests. Consequently, AA followed a legislative path that sought to reallocate opportunities from whites to blacks through compliance with codes, guided by targets and the concepts of redress or transformation.

What do the above analyses imply for policies in comparative perspective? I concentrate on three themes.

First, the transferability of policies across countries is limited. The differences in overarching political economic regimes circumscribe the compatibility of policies with country-specific contexts. Malaysia preceded South Africa chronologically and advanced further in redressing racial disparity. Research on these countries has typically positioned Malaysia as a case study for South Africa to emulate or avert, with no consideration of the converse.

However, the implementation of quota-based hiring and admissions and creation of racially exclusive institutions does not seem politically possible, and it is difficult to discern as socially desirable.

South Africa has also looked to the Malaysian “developmental state” as a reference, the context must not be forgotten, i.e. a strong executive operating with minimal parliamentary accountability. On the other hand, South Africa?s affirmative action regime, being embedded in a democratic system, offers some pointers for Malaysia to draw on, to the extent that Malaysia shifts toward an institutional framework with more balanced legislature and executive influence.

Second, on the issue of duration and efficacy of AA, we find interesting similarities and differences. The ultimate objective of affirmative action is to redress systemic disadvantage and raise group representation to an extent that preferential treatment becomes redundant.

Constitutionally, Malaysia and South Africa do not specify time frames for AA to be scaled back or eliminated. However, in both cases, constitutional provisions for preferential programs are voluntary, not mandatory.

Malaysia’s Article 153 stipulates safeguarding Bumiputera “special position” not in absolute terms, but as one to be conditionally invoked – “as may be necessary”.

South Africa’s legal establishment of disadvantage due to unfair discrimination as the basis for AA is worded to statutorily limit the scope and duration of policies. Thus, in both countries, the pursuit of AA, but not its perpetuation, is constitutionally legitimated, although for the moment the possibilities for substantively dismantling policies seem politically intractable, in spite of marginal modifications from time to time.

It is imperative for AA to be effective in cultivating capability and self-reliance, in order for its attenuation to be socio-politically viable. Preferential access to high-level employment – in the public sector in Malaysia and both private and public sectors in South Africa – and to equity and asset ownership are popularly received, undoubtedly because of the vested interest of middle classes and elites in retaining such schemes.

Malaysia’s attainments in these areas over four decades, and South Africa’s over a decade and a half, reflect quantitative increases in Bumiputera and black representation, respectively, among professionals and managers, but shortcomings and continual dependence on public institutions, whether government or public enterprise employment. Increases in equity ownership, by official counts, continue to fall short of the targetted 30 per cent (Jomo, 2004).

At the same time, AA beneficiaries of tertiary education are more dependent on public sector employment (Moleke, 2005; Lee, forthcoming). It is precisely this area of AA that is crucial in progressing AA effectively and sustainably. The challenge, however, differs across countries.

Malaysia’s reforms need to grapple with the dual system of schooling and pre-university programmes that entail less rigorous entry requirements for Bumiputera, and perhaps expanding institutional autonomy to increase competition for admissions.

South Africa’s principal problem is discernibly the abject failure of secondary schooling to supply qualified entrants. While pockets of urban middle class public schools and private schools are diversifying and sustaining more representative student bodies in the elite HWIs, mass delivery of adequate schooling, and the lagging quality of HBIs, are critically wanting (Morrow, 2008; du Toit, 2010).

Third, the dilemma of inclusiveness amid preference continues. The manner in which beneficiaries are designated is also problematic in important ways. Unavoidably, the specification of one group excludes or supercedes other groups. This applies saliently to the Indian population in Malaysia, who have historically been marginalized and continue to lag in access to opportunities for advancement.

Although South Africa’s classification of persons disadvantaged through unfair discrimination subsumes blacks, women and disabled persons, race effectively overrides the other categories.

The institutionalization of preference can also breed a sense of entitlement and primacy, and can be distorted to disproportionately benefit particular ethnic or other sub-groups within the designated group. Unequal distribution of benefits among those equally classified as beneficiaries is documented in Malaysia, between

Malay and non-Malay Bumiputera (Lee, 2005: 221; Lee, forthcoming), and is perceived to occur in South Africa within the composite classification of black persons, i.e. between Africans, Coloreds, and Indians, and between ethnic groups that fall under the African category.

These inequalities underscore the importance of incorporating progressive and egalitarian elements into the distribution of benefits. Class-based or need-based considerations do not substitute for race-based affirmative action, but decidedly and emphatically complement measures to redress racial under-representation through targeting the socioeconomically needy within the beneficiary group and facilitating upward mobility.

Again, political will is pivotal to engender changes that ultimately make affirmative action constructive, equitable and impermanent.

* Dr Lee is a senior lecturer in the department of Development Studies, Faculty of Economics and Administration, University of Malaya. The above paper was presented on Nov 4.

____________________________________________________________________

Footnotes:

1. The ILO’s definitions of AA consistently stipulate such policies as “special temporary measures” (ILO, 2003) or measures “of a temporary character” (ILO, 2007) – not based on country experience but on conviction that permanence detracts from the purpose of AA and undermines its efficacy.

2. Lee (2005: 212) further points out that constitutional provisions for affirmative action were set out in a 1948 Federation of Malaya Agreement under British colonial rule.

3. The Constitution establishes both the principle of equality and provisions for affirmative action. Individual equality and prohibition of discrimination is set out in Article 8, “[e]xcept as expressly authorised by this Constitution”. Authorisation is granted in Article 153, which makes provision for the Yang Di-Pertuan Agong (the national king) to “exercise his functions under this Constitution and federal law in such manner as may be necessary to safeguard the special position of the Malays and natives of any of the States of Sabah and Sarawak [i.e. the Bumiputera] and the legitimate interests of other communities”, through reserving places for the designated group in public sector employment, scholarships, training programs, and licenses. Notably, this does not confer an absolute mandate, but one qualified by adjudged necessity.

4. Unsurprisingly, it is in observations from abroad or cross-national collaborative works (e.g. Featherman, Hall and Krislov, 2011) that the practice of group preference in university admissions is often designated as affirmative action. A New York Times article, “Campus That Apartheid Ruled Faces a Policy Rift” (November 22, 2010), covered affirmative action as a policy that had been in place throughout the post-apartheid era.

5. Singapore also merged into Malaysia in 1963, but separated in 1965 to form an independent republic.

6. Padayachee and Valodia (2002) make a similar general point about the cross-country differences in democratic constraints on executive power.

7. In 1970, Malay graduates numbered 22 out of a total 493 in science, 1 out of 67 in medicine, 1 per 71 in engineering, 15 per 49 in agriculture (Selvaratnam, 1988: 180).

8. 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).


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