Social mobility is stagnating and levels of social inequality are worsening. This led to the emergence of classes within the same ethnic and cross-ethnic groups and eventually widening the gap between social strata at the urban level. Could the social change and transformation going beyond the ethnic paradigm?

There are a few points to note. First, ethnicity was a social construct, a product of colonialism, and inherited by the postcolonial state. From independence in 1957 until today, it has been used as a strategy to perpetuate and consolidate power by the UMNO-led ruling coalition, a strategy and policy that generates division and dissent in a multiethnic society. Nevertheless, given its nature as a social construct, it provides hope and opportunity for change, but change will be protracted and difficult, requiring nuanced approaches.

Second, Malaysia is both a multiethnic society and a class society. While ethnic identity may be fluid, being members of ethnic groups—except in specific cases—is something ascribed and cannot be changed. Class relations, on the other hand, are social categories and changeable. Members of ethnic groups are found in different social classes together with other ethnic groups as class membership transcends ethnic boundaries. However, when it comes to managing ethnicity and class, both have to be analyzed together because in Malaysia class and ethnicity are intertwined, and class consciousness is heavily laced and mediated by ethnic consciousness.

The first decade or so after independence was a challenging period for Malaysia: the legacies of British colonial rule had to be transformed or changed. To start with, the country’s economic structure was highly lopsided. Western, especially British, foreign capital controlled the lifeline of the economy, with Chinese traders—and to some extent Indian merchants—being dominant in local commerce, trade, and retail. While some members of the Malay elite were involved in government administration and politics, the majority were farmers and fishermen living in rural areas. Chinese lived mainly in urban areas and Indians on the rubber estates.

Poverty and unemployment were high. Some 49.4 percent of all households in Peninsular Malaysia were estimated to be in poverty in 1970, with Malay households constituting 74 percent of all poor households. Unemployment, mostly youth unemployment, was dangerously high at 8 percent. What was worse was that while poverty and unemployment were essentially a class problem, they manifested themselves in ethnic forms, and class inequality was seen as ethnic inequality.

This was an outcome of the policy of leaving growth and distribution to market forces admittedly while there was growth, there was greater class inequality. This classic case of the identification of ethnicity with differentiated economic functions—a potentially divisive structure with serious implications for ethnic conflict—could create an explosive situation threatening stability and security. This was the structural trigger at the root of the May 13, 1969 tragedy.

This was the context for the introduction of the NEP, which began in 1971 and continued until 1990. It was a massive social engineering exercise to implement an affirmative action policy with the twin objectives of eradicating poverty irrespective of ethnicity, and restructuring society to remove the identification of economic function with ethnicity. In the formulation of the NEP objectives, there was a clever though uneasy intertwining between ethnicity and class, whereby class perspectives had to be tempered with specific ethnic dimensions.

The outcomes of NEP development policies and plans implemented since the 1970s, under the helm of a developmentalist state, are well known. Economic growth rates were high over the decades. Incomes were rising along with the expansion of higher education and managerial, administrative, and professional/technical occupations. Towns and cities were occupied by a rising multiethnic middle class. After two decades of such growth and expansion, a new mood seemed to prevail—one of psychological confidence and triumphalism, especially among the middle class. This was the context for the announcement by Prime Minister Mahathir in February 1991 of Vision 2020, which was essentially an envisioning of a multiethnic developed nation and the formation of a multiethnic Bangsa Malaysia—Malaysian nation—by 2020 and beyond.

Fast-forwarding to the twenty-first century, this is the issue: how to rein in ethno-nationalism on the one hand, and on the other to build class solidarity and struggles across nonethnic lines to move society beyond the crossroads to a new Malaysia.