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In most multiethnic developing societies, the state attempts to play a crucial role in managing ethnic tensions and reconciling diverse ethnic interests by undertaking relevant policies and programs. Malaysia is a classic case where there is a coexistence of some major ethnic groups with distinct identities and where the state has used wide-ranging preferential policies to manage ethnic problems. In fact, the formation of the state itself is largely founded upon ethnic politics and characterized as an “ethnocratic state” or “ethnic democracy.” This article examines the origin and rationale of ethnic preferences, major domains of ethnic contestation and state intervention, critical impacts of such ethnic preferential policies, and possibilities to replace such preferential policies by alternative policy measures in Malaysia.
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