chapter  5
25 Pages

The Malaysian biofuels experience

The role of agriculture in economic development has been the cornerstone of the Malaysian poverty reduction strategy. As envisioned by national policy makers, growth and development successfully reduced poverty and increased social cohesion. Agricultural sector development was designed to redistribute economic and political resources, placing control in the hands of the poor. The government realized in the process that solely focusing on physical resources and capital is insuffi cient. The regulatory environment needed to integrate the social capital that rural communities were rich in and, through it, channel and develop existing fi nancial and human capital. The fi ve-year New Economic Policy (NEP) also known as the Malaysia Plan (MP) arose from this planning, formulated to encourage the development of organic entrepreneurships. National focus was particularly directed to the bumiputera (sons of the soil), a clause introduced in 1971 in the fi rst NEP, created social, political and economic security programmes to reduce poverty among the bumiputera. Bumiputera belong to three categories: namely the Malays, the indigenous people of Sabah and Sarawak, and the Orang Asli (original people or fi rst people). However, bumiputera is a politically contested term. While individual groups, because of this special category, receive preferential treatment, political leaders also sometimes use the term in a pejorative way. As a result, there are times when political leaders have underestimated poverty rates to reduce overall dependency on this provision. For instance, in 2010 a national debate broke out in Sarawak when the national government underestimated the poverty rate and evoked large-scale controversy (Wong 2010a).