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In March 2010, the Prime Minister of Malaysia launched the first part of Malaysia’s “New Economic Model” (NEM). It calls for a more liberalised economy and reduced government intervention. It also proposes a radical shift from the heavily pro-Malay affirmative action practices that have been in place since the 1970s to a more inclusive and race-blind system.

However, when the final part of the NEM was published in December 2010, the initial radicalism and boldness seem to have been watered down following pressure from Malay nationalists. Pro-Malay agenda reappeared. Several actions by the government indicated that they are not as committed to economic liberalisation as they claimed to be when the NEM was first announced.

Nevertheless, overall, the NEM still promises significant steps towards the right direction. This paper, written by IDEAS’ Chief Executive Wan Saiful Wan Jan and first published by the Friedrich Naumann Foundation for Freedom, provides an explanation of the NEM and a critical assessment of the politics around it.

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