Andrew Harding, Centre for Asian Legal Studies, National University of Singapore
As has been discussed above, ethnic differences are a driver of much policy in Malaysia. From 1971 Malaysia implemented an ethnic-preference policy in favour of the economically disadvantaged majority Malay and also Sabah-Sarawak native (indigenous) population, commonly referred to as bumiputera (sons of the soil). This policy was designed to redistribute wealth and opportunity to these communities. Part of the policy was to ensure adequate housing for bumiputera citizens, and accordingly it became usual for new housing developments to offer discounts to bumiputera purchasers. It is expected that bumiputera citizens will generally support Malay parties, especially and traditionally the United Malays National Organisation (UMNO) in elections, on the basis of their delivery of redistributive policies.
The legal basis for this policy of affirmative action is as follows. Article 153 of the Constitution, as amended in 1971, allows as an exception to the principle of equality before the law (Article 8) in the form of quota systems in favour of bumiputera citizens in various areas (scholarships, trade licences, university admission and public service positions). These do not, however, include housing opportunities as such. Nonetheless there is a strong policy favouring provision of modern, low-cost public housing for the poor, especially poor bumiputera. While such housing projects, normally initiated by state governments, which control land issues, are designed to benefit poor citizens, a system of discounts operates also at the middle-class socio-economic level. These discounts involve the cooperation of local authorities, who are empowered under planning and land laws to impose conditions on housing developers as part of the approval-granting process for development, or land alienation, as the case may be. Such conditions are within the broad discretion granted to local planning authorities in handing development control, and normally include a requirement to reserve a number of lots for bumiputera purchasers at a discount. These conditions typically involve a 30 per cent bumiputera quota (the quota varies somewhat between 20 per cent and 40 per cent, depending on the state) in all housing developments, with developers also being required to give discounts of between 5 per cent and 15 per cent to bumiputera applicants. The quota system also applies to commercial units. Apart from this there are Malay Reservation Lands, which have a constitutional basis and involve all property built on designated Malay Reservations being allocated to Malays only. This latter policy applies in rural areas, whereas new developments are in newly built-up suburban or ‘red-earth’ suburban or formerly rural areas.
There have been calls for the planning impositions to be reviewed, particularly in the case of high-end properties where there seems to be no rationale for granting such discounts. The ethnic-preference policy seems somewhat irrelevant in an urban middle-class environment, given that for the last 50 years, bumiputera citizens have had privileged access to educational, public service, and business opportunities. The continuance or modification of this system is nonetheless a large and sensitive political issue, on which many votes depend, and despite increasing discussion of the ethnic-preference policy in public fora, it seems unlikely there will be major changes in the foreseeable future. For present purposes, the impact of these policies and the strong trajectory of Malaysian development is to convert many rural areas into suburban areas, bringing more residents under the control of urban local authorities. This has the unfortunate effect of reducing the resource base of district councils, as we have seen, thus depriving of facilities those very rural areas where most poor bumiputera citizens live.
Terence Gomez and Johan Saravanamuttu (eds), The New Economic Policy in Malaysia: Affirmative Action, Ethnic Inequalities, and Social Justice (NUS Press 2013)
Lee Hwok-Aun, ‘Affirmative Action: Hefty Action, Mixed Outcomes, Muddled Thinking’ in Meredith Weiss (ed), The Routledge Handbook of Contemporary Malaysia (Routledge 2016)
 Terence Gomez and Johan Saravanamuttu (eds), The New Economic Policy in Malaysia: Affirmative Action, Ethnic Inequalities, and Social Justice (NUS Press 2013); Lee Hwok-Aun, ‘Affirmative Action: Hefty Action, Mixed Outcomes, Muddled Thinking’ in Meredith Weiss (ed), The Routledge Handbook of Contemporary Malaysia (Routledge 2016); Andrew Harding, ‘Constitutional Trajectory in Malaysia: Constitutionalism without Consensus?’ in Michael Dowdle and Michael Wilkinson (eds), Constitutionalism Beyond Liberalism (Cambridge University Press 2017); Lee Hwok-Aun, Affirmative Action in Malaysia and South Africa: Preference for Parity (Routledge 2021); Andrew Harding, The Constitution of Malaysia: A Contextual Analysis (2nd edn, Hart/Bloomsbury, forthcoming 2022) Chapter 3.
 Town and Country Planning Act 1976 (TCPA), Sec 22(3); National Land Code, Sec 120.
 See ‘REHDA Institute’s State Guidelines on Bumiputra Quotas’ (loanstreet, undated) <http://static.loanstreet.com.my.s3.amazonaws.com/assets/bumi-status.jpg> accessed 16 June 2021.
 Basharan Begum Mobarak Ali, ‘Red Ink Grant: Tracing Legitimacy in History’ (2007) 34 Journal of Malaysian and Comparative Law 159.
 Lim Teck Ghee, ‘Time to Do away with Housing Quotas’(Malaysiakini, 30 October 2007) <http://www.malaysiakini.com/letters/74176> ; Fauwaz Abdul Aziz, ‘Housing Industry: Bumi Quota a Pressing Issue’ (Malaysiakini, 30 October 2007) <http://www.malaysiakini.com/news/74138>.
 See Hwok-Aun, ‘Affirmative Action’, above.