Malaysia’s system of racial preferences should be scrapped

WHAT government would not like to reduce racial disparities and promote ethnic harmony? The tricky part is knowing how. One country that claims to have found a way is Malaysia. Since 1971 it has given preferential treatment in everything from education to investing to —people of indigenous descent, who are two-thirds of the population but poorer than their ethnic-Chinese and -Indian compatriots.On the face of things, this system of affirmative action has been a success (see ). The gap in income between Malays (the biggest group) and Chinese- and Indian-Malaysians has narrowed dramatically. Just as important, there has been no repeat of the bloody race riots of 1969, when Malay mobs burned Chinese shops in Kuala Lumpur, prompting the adoption of the policy. And the economy—typically an instant victim of heavy-handed government attempts at redistribution—has grown healthily.