Globalization amid diversity: Economic development policy in multi-ethnic Malaysia, 1987-1997

In this study, I ask two questions: What are the consequences of globalization for an ethnically diverse society? What is the role of the state in balancing these consequences of globalization with the domestic demands to manage ethnic diversity? In addressing these questions, my analysis updates the substantive data on Malaysian economic development by emphasizing the importance of globalization in addition to the standard ethnically-based explanations for Malaysia's development policies. These policies, having long been dominated by that country's ethno-economic structures, were liberalized between 1987 and 1997 by taking advantage of global economic opportunities. At the same time, the government continued to address the often conflicting ethno-economic concerns. Although I briefly look at how the reforms were initially implemented, most of my study focuses on the decade-long evolution of ethno-economic policy toward foreign investment, ethno-economic policy toward domestic business, privatization, and language and education policy. These approaches included the adoption of policies which were both economically liberal and at the same time supportive of the disadvantaged group; asserting control and subsequently changing the terms of the debate over what types of policies benefit both the country and its ethnic groups; and, finally, balancing withdrawn economic preferences with non-economic cultural offerings. Furthermore, this study contributes to the larger body of economic development and cultural pluralism literature in two ways. First, rather than take an overly optimistic or pessimistic view of globalization for a developing country, the Malaysian case demonstrates how a country may both embrace greater global interaction while at the same time successfully addressing its particular domestic problems. Second, Malaysia's social stability highlights one possible avenue by which a country can manage ethnic diversity through greater integration with the global economy.