LENGGENG (Malaysia): For decades, Yeow Kim Kin and his fellow ethnic Chinese have been the engine of the Malaysian economy. Born in China, 64-year-old Yeow has been running his grocery shop in a small town in the rural southwest for 30 years. Most businesses here are run by Chinese and their customers are mainly ethnic Malays, who make up a majority of Malaysia’s population.

It is a portrait, in miniature, of the entire $104 billion economy, Southeast Asia’s third largest.

“Many just want to make quick profits,” he says, putting away his Chinese-language newspaper to sell a Malay man cigarettes.

Despite a 35-year effort to bridge the wealth gap between ethnic Chinese and the poorer Malay majority, business in

the rural town where Yeow lives is still dominated by the Chinese.

Though not unique in the world, Malaysia’s affirmative-action programme was born out of bloody racial riots in 1969 to help address economic imbalances between the Malays and other races.

Malays, known as Bumiputras or sons of the soil, think of themselves as the country’s indigenous race, live mainly in the countryside and make up just over half the population.

Ethnic Chinese, whose ancestors came centuries ago as traders or as mine workers shipped in by colonial rulers, make up a quarter but hold about 40 per cent of the nation’s wealth.

But despite the racial peace of the last three decades, there are growing doubts, within both Malay and Chinese communities, whether the affirmative-action plan is still working.

The plan called for Malays to control 30 per cent of the country’s equity holdings, up from 2.4 per cent in 1970 when it was launched.

But by 2004, Malays held just 19 per cent of the equity, more than a decade after the initial deadline of 1990, despite billions of dollars in state contracts and concessions awarded to Malay businesses.

Prime Minister Abdullah Ahmad Badawi’s ruling party now wants to carry on the programme until 2020, when Malaysia hopes to graduate into a developed nation.

One reason for failing to meet the target was because Malays had sold out government concessions to non-Malays, Prime Minister Abdullah said.

“This is the action of rent-seekers who seek quick gains,” he told party loyalists last month.—Reuters