The NEP’s legacy: A visible elite, persistent inequality

Rosli Khan

“Inequality is not just a result of market forces; it is shaped by political forces.” – Joseph  Stiglitz

Over the recent Hari Raya holidays, I read my son’s A-level geography project on the subject of inequality. Although he currently studies in the UK, his sampling was done here in Malaysia.

I found it interesting, although admittedly challenging for a 17‑year‑old. As part of his British university entry assignment, he was required to analyse disparities in income, housing, education, employment and access to transport – Indicators designed to reflect the rigour of academic standards that emphasise critical inquiry.

To my mind, it raised an important question which many of us adults have stopped asking: after more than 50 years of political intervention in the name of positive discrimination, has inequality in this country truly been reduced or simply reshaped?

Still too many left behind

The New Economic Policy (NEP), introduced in 1971, and later renamed and rehatched several times, was intended to eradicate poverty, restructure society and elevate poor bumiputras.

Although the results were uneven, the policy did succeed in cultivating a visible class of new bumiputra professionals, entrepreneurs and corporate elites—with many now occupying prominent positions in our government-linked companies and government-linked investment companies.

But beneath that success lies a harder truth: inequality within the bumiputra community remains deep and entrenched.

We know that Malaysia’s median household income has risen over time, yet distribution remains uneven.

While the Gini coefficient has improved from earlier decades, it still reflects significant disparity, with the bottom 40% holding a disproportionately small share of national income.

Large segments of bumiputras across the peninsula, Sabah and Sarawak remain concentrated in the bottom 40% and lower-middle 40%, with very limited capacity to earn more, let alone accumulate wealth.

Meanwhile, ownership of high-value assets, equities, prime property and long-term savings instruments such as the Amanah Saham Bumiputera, remains concentrated among a relatively small, well-connected group.

We know for a fact that the promise of broad-based wealth creation has not materialised for the majority.

For many households, wages struggle to keep pace with inflation, the cost of living continues to rise, and the ability to save or invest remains limited if not out of reach.

Housing – inequality you can see

My son’s sampling method was fairly straightforward. He selected a People’s Housing Project (PPR) flat complex housing more than 1,000 families, situated just outside the gated and guarded Tropicana Golf Resort community in Petaling Jaya.

As a sample for a study on inequality, he could not have obtained better data and responses. Many of his respondents had a lot to talk about.

He was able to substantiate his hypotheses across all the required indicators, and in his case study, the disparities were not merely statistical abstractions but vividly apparent – reinforced by lived experiences that gave the findings undeniable weight.

Examples of such stark inequality are not difficult to find. In fact, there are plenty, and if nothing is done, the situation will be normalised soon.

The contrast between PPR housing and affluent neighbourhoods – whether near Tropicana, Bangsar South, Mont Kiara or Subang – has become a familiar urban pattern, with similar disparities evident across Petaling Jaya, Kuala Lumpur, Johor Bahru, Penang and beyond.

Also, this is no longer a race-based issue. It is a class divide that cuts across all communities.

Property ownership, long seen as a pathway to wealth, is increasingly out of reach for younger people in Malaysia.

In many urban centres, house prices are now several times higher than annual household incomes, far exceeding internationally recognised affordability benchmarks.

Many young families are pushed to the urban fringes like Puncak Alam, Rawang and even Seremban, where homes are cheaper but come with hidden costs: long commutes, weak connectivity and a reduced quality of life.

The gap is not simply geographic; it reflects unequal access to opportunities in many places throughout the country.

Access to transport

Even access to transport reinforces inequality. While the Klang Valley and major urban centres benefit from expanding infrastructure, many rural and semi-urban areas remain poorly connected, with limited or no reliable public transport. For many, motorcycles remain the only viable option.

Limited mobility restricts access to better jobs, quality education and healthcare, effectively trapping communities in a cycle of low income and limited opportunity.

Taken together, these patterns point to a central issue: the NEP and its subsequent iterations have fallen short in both intent and execution.

Inequality is no longer an abstract concept or a figment of sociologists’ imagination, nor merely a theory advanced by economists to justify their studies.

It is unconsciously built into the urban fabric that forms the structure of our towns and cities, for which a better plan than the previous NEP is badly and urgently needed. – Free Malaysia Today

Rosli Khan, a traffic planning consultant, has a masters in transport planning and a PhD in transport economics from Cranfield University in England. 

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