The impact of ethnic diversity on economic development in Malaysia: lessons for South Africa.

Abstract

research paper reviews the empirical evidence on the impact of multi ethnicity (heterogeneity) on economic development in developing countries looking specifically at South Africa and Malaysia. Malaysia is an important case study from which South Africa can learn important lessons and through which it can find solutions to ethnic coexistence and economic development. The commonalities between the two countries emanate from “common social, economic, and ethnic considerations, for instance both countries share heterogeneity in terms of religion, race, and ethnic considerations” (Omoweh, 2012). The paper specifically discusses collected data sources and influential theoretical leanings and outcomes of the strategies enlisted by developing countries affected by high poverty and inequality rates based along ethnic and cultural lines. The evidence suggests that successful strategies demand strong political will and well-orchestrated long term plans that transcend leadership across a long period of time. As observed in Malaysia poverty and inequality alleviation was a result of dogged focus on adopted plans with periodic minimal alteration to the plans. South Africa is the polar opposite of this – this society has continued to struggle with very high levels of poverty and inequality even after decades of the shift from apartheid. This is predominantly due to the haphazard changing of plans and direction with every new leader elected by the governing party. The two countries shared similar historical challenges stemming from a heterogeneous and multi ethnic population characterized by a small population of haves versus a large population of have-nots. The fundamental difference was the strategies and development ideologies that each country pursued, which have in turn yielded different outcomes. Four decades after Malaysia the adoption of the 1971 New Economic Plan poverty levels have significantly decreased, adult literacy and life expectancy has improved national unity and harmony has been achieved through the radical socio economic policies and rapid economic growth. This body of work proposes that developing countries with high social stratification and multi ethnic society like South Africa - the Malaysian experience is a critical and salient example to study as means of finding relevant and long lasting solutions for such societies including South Africa.