Yggdrasil's WN Library

World-Wide Racial Preferences

Lesson Three

Yggdrasil says:

In our first lesson, we reviewed an article written by an Economist from Harvard University arguing that when diverse ethnic or racial groups fall under a power of a single government, they tend to use the political process as a means of extracting advantages for their own group at the expense of others.

In our second lesson, we reviewed dozens of examples of racial and ethnic strife around the world. Racial animus is a natural, normal and expected phenomenon whenever races are placed in the same country.

This week, we will read a collection of excerpts from the Wall Street Journal about specific racial preference schemes from around the world.

As you review the cases from Kenya and Nigeria, you will notice that the racial preferences are aimed at complete displacement of working class Europeans with blacks. In effect, it becomes illegal to hire any Europeans in certain occupations.

These types of preferences are aimed at Europeans as an economically prosperous minority living in "diaspora" (away from home). The preferences have a differential impact on Europeans depending on their socio-economic status. Those in critical, high income occupations are permitted to stay.

In the two articles on Sri Lanka (the Island of Ceylon, in the Indian Ocean) we see that the preferences have led to violence.

In the two articles on China, we find a glowing description in 1977 of Chinese university admissions quotas from a U.S Secretary of Education, and a second article 10 years later with, perhaps, a more realistic view of what is going on in China.

As you read these articles, you may wish to consider the following questions:

The last article in the group talks about how American managers of multi-national corporations implement these programs around the world. The article was written in 1978 and concludes that most countries see ethnic preferences as temporary.

At this point you may wish to re-read the article on Kenya, with an eye toward the attitudes of "diaspora" European managers allowed to stay.

Yggdrasil recommends that you to read, with interest, the following:

Aug. 26, 1974 Wall Street Journal P1 C3

Malaysia's governing party, the pro-Western National Front led by Premier Tun Abdul Razak won a landslide victory in elections for parliament and state assemblies. The National Front is committed to favoring the disadvantaged Malay majority over the wealthier Chinese 35% minority. In the previous elections five years ago, gains by Chinese parties led to racial bloodshed.

May 8, 1979 Wall Street Journal P1 C1
Ethnic Upheaval

Malaysia Torn by Drive For More Maylay Rights At Expense of Chinese
So Far, No One Is Satisfied By Government's Actions In Commerce, Education
'Better if British Had Stayed'


Staff Reporter of The Wall Street Journal

KUALA LUMPUR, Malaysia--This is a lucky country. It has a small population, rich crop-land, abundant natural resources, an efficient civil service and capable planners. Through 20 years of independence, only one thing has held Malaysia back: the race problem.

It isn't an ordinary race problem. The Malays, on the one hand, have nearly half the population and most of the political power, yet they have very little of the money. The Chinese, on the other hand, are a minority and hold very little power, yet they have most of the money.

The Malays find themselves in an enviable position for economic underdogs: They can do something about it. With the government under their control, the Malays set about adjusting their anomalous situation a few years ago with an affirmative-action program so forceful it would probably astound black activists in the U.S.

In the process, the concept of equal protection under the law was qualified, racial discrimination in school admissions was legalized, and questioning of the government's racial policies was made an act of sedition.

Widespread Discontent

The result so far is that practically everyone is dissatisfied. Some Malays have made visible strides, but many others haven't seen any benefit. The Chinese, for their part, have encountered palpable privations--most notably their near exclusion from Malaysian universities.

The Chinese are being asked to cooperate, but many here wonder how long they can tolerate the discrimination. "This is my country too!" a Chinese cabby yells at his passenger.

"This feeling of frustration and dissatisfaction with the government," says a Chinese chamber of commerce internal memorandum, "is an unhealthy state of affairs."

Malay leaders defend the changes. "Our leaders have to think how to make this country safe for 2,000 years, not just 20 years," says Abdul Kadir Fadzir, a politically active Malay lawyer. "A lot of people have to make short-term sacrifices. It's a temporary, transitional phenomenon."

The British Influence

The Chinese account for 35% of Malaysia's 12.2 million people. They arrived at their unlikely position of economic might and political impotence through a quirk of colonialism. They flocked to Malaysia's tin mines from the north in the late 1800s, and under the British, who didn't leave until 1957, came to control just about everything the Westerners didn't. But because the Chinese were immigrants, they were kept off the land and out of the government.

The Malays, meanwhile, had been here; for centuries. The British ruled through the Malay sultans, granting the "sons of the soil" preferred rights of citizenship and land ownership. With independence, the government was passed on to the Malays, who now make up between 45% and 50% of the population. People from India and a variety of jungle dwellers make up the rest of the population. The Malays preserved their favored status in the new constitution and, in an unabashed gerrymander, guaranteed their own political dominance.

But the Malays were poor. Their agrarian ways and Islamic gentility were no match for the aggressive, urbanized Chinese. There was little hope for the Malay to break into the clannish domain of Chinese business; he stayed on the farm, tethered to a line of credit from a Chinese merchant.

Language Barrier

The races never got along. In America, blacks and whites at least speak the same language, wear the same clothes, eat the same food and often go to the same church. The Chinese and Malays haven't any such common ground. To the Chinese, Malays are indolent and incompetent. To the Malays, the Chinese are ruthless and unprincipled. Racial remarks roll off the tongue in Kuala Lumpur as readily as they did in America's Deep South in the 1950s. Years after the Malays gained control of the government, they remained in the economic back seat. Malay households earned only half as much as Chinese households 65% of the Malays lived in poverty, compared with 25% of the Chinese. In 1969, about the time affirmative action for blacks was coming into vogue in the U.S., the Malays rioted in Kuala Lumpur.

In a bloody amok (a Malay word) about 250 Chinese were murdered, along with 50 Malays and Indians. It was an explosion of Malay resentment that exposed, the government later concluded, "an area of weakness which undermined the very foundations of the nation."

A year later, affirmative action came to Malaysia in earnest. The government proclaimed a "New Economic Policy." Its objective: to "ensure the creation of a Malay commercial and industrial community in all categories and at all levels of operation, in order that within one generation Malays and other indigenous people can be full partners in the economic life of the nation."

By 1990, the government resolved, Malays' participation in every educational, professional and commercial field would match their share of the population- about half. And Malays would own 30% of the country's capital. If they couldn't buy it themselves, the government would buy it for them.

* * *

Two years ago, the government gave itself a more persuasive tool: a sweeping law, tied to the racial policies, requiring licenses for most factories. A manufacturer who doesn't make an effort to comply might end up making nothing.

* * *

When the British were here, for more than a century, they sent Malays to Malay primary schools and taught them in the Malay language. Education ended there. The British "protected" the Moslem Malays from Christian missionaries; the Chinese, unprotected, went to mission schools taught in English. The University of Malaya used English from the start and, naturally, the student body was overwhelmingly Chinese.

In 1969, the government decided to make Malay the language of instruction; the switch will be complete in 1982. The university population has since multiplied tenfold, to 31,000, and new students have been predominantly Malays. They now account for 70% of the student population. Of 5,700 freshmen admitted this school year, only 1,200 were Chinese.

The No Merit System

The mechanism for doing this makes American affirmative action pale by comparison. The constitution was simply amended to allow Malays a "reasonable proportion" of every entering class. The quality of the competition doesn't matter. "On strict merit, we could give all our places to non-Malays," says Rahim Mohkzani, deputy vice chancellor at the University of Malaya. As it is, thousands of qualified Chinese are being turned away.

* * *

While Malay unemployment is down to about 7%, Chinese unemployment is up to around 8%. Domestic investment (most of it from Chinese industrialists) is dropping. Wealthier Chinese students--about 25,000 of them-have departed in droves for universities in the West. Some Chinese with marketable skills are said to have left the country; many others say they would like to.

Potential for Backlash

The government is all too aware of the potential for backlash. Lately, it has softened its rhetoric on Malay privilege and placed fresh emphasis on the need for national unity. Yet, at the same time it is being pulled in the opposite direction by impatient Malays who see the government's programs as benefiting a small group of well-placed entrepreneurs and doing little for the majority still trapped in rural poverty.

* * *

Nov. 29, 1994 Wall Street Journal p A24
Quota System In India Is a Killer


BOMBAY--Some 130 demonstrators were reported trampled to death last week after a clash with police in the city of Nagpur. Most of the 50,000 protesters were members of the Gowari-Gonde caste and were demanding that New Delhi declare them a protected "tribe" entitled to their own quota of government jobs. The protest was organized by the conservative Bharatiya Janata Party, which in the past opposed quotas as harmful to Hindu unity. But the BJP faces elections next month and knows a vote-winning issue when it sees one.

So does the ruling Congress Party, architect of India's free market reforms. Under its tutelage, preferences have been steadily racheted up until some 75% of Indians are eligible for special treatment. As last week's killings show, affirmative action is becoming India's most dangerous and volatile issue. There are even signs of a brain drain as uppercaste families worry about narrowing opportunities.

India's ancient caste system should be on the way out, or so the modernizers argue. Economic reform and global competition mean that men and women will be judged by their skills and productivity, not by social background. Under the market-oriented program of Finance Minister Manmohan Singh, India has become a popular destination for multinational investors. Indeed, U.S. Commerce Secretary Ron Brown is expected to lead a big delegation here early in the new year.

But the modernizers may underestimate the power of democratic politics wedded to deep cultural attitudes. All over India, a bidding war is breaking out for the support of underprivileged groups. Caste is becoming the determinant of what kind of education or job one gets, and how quickly one is promoted. As a political lodestar for the major parties, it promises to become more important than the Hindu-Muslim religious divide.

India may be disintegrating into a battlefield of minorities engaged in a zero-sum contest for special privileges. In 1950, the constitution required the government to reserve 22.5% of jobs for "untouchables," the despised low-caste individuals who made up 22.5% of the Hindu population. Of course, only a few actually had the education and opportunity to benefit from these quotas, but soon this small elite lobbied successfully for their privileges to be extended indefinitely beyond their original 1960 expiration date.

Since then, there has been a steady expansion of eligibility. In the late 1970s, "other backward classes," or OBCs, who make up 52% of the Hindu population, began to attract official favor. In 1990, V.P. Singh's Congress Party government formally reserved 27% of job and education slots for them. The current Congress Party welfare minister, Sitaram Kesari, wants to provide quotas next for all minorities, including Muslims, Christians and Sikhs.

While the number of eligible people has expanded, the Supreme Court has sought to cap the share of opportunities that may be awarded by quota. In 1992, it reasserted that no more than 50% of government jobs and education slots may be reserved for various castes, tribes and other backward classes. The rest should be left open to free competition. But state politicians seem little inclined to observe this limit, and the central government isn't enforcing it.

Ironically, these quotas have not improved the lot of the groups they target, except for a privileged few. And so far the quotas haven't seeped beyond India's dominant state sector to infect the emerging private sector. But the symbol of the quotas has become a passionate political issue for the groups involved.

Party politics increasingly revolves around caste or tribal identity. In the southern state of Tamil Nadu, for instance, the quotas now cover 69% of job and education slots. The federal government has not opposed the Tamil Nadu legislation, because the ruling Congress Party needs to stay popular with Tamil voters.

* * *

Mr. Abraham is a Bombay-based writer. [The quote above is an excerpt - entire article available on Dow Jones News Retrieval.]

Review & Outlook (Editorial): Race and Blood
05/05/93 Wall Street Journal (J), p A22

Many people are struggling to understand what is going on in Bosnia. Here's some help, but it's not very pleasant reading.

You may have seen that the president of Sri Lanka was blown up over the weekend. Violence has taken a high toll in the beautiful country once known as Ceylon. At least 23 others were killed in the attack on President Ranasinghe Premadasa. The opposition leader was killed the week before. In October, 182 Muslims were shot or hacked to death by ethnic Tamil militants. At least 17,000 people have been killed since the Tamil insurgency began in 1983.

In Sri Lanka, the politics of race has gone mad.

Indeed, the successive tragedies that have visited a country that was once known as a model democracy deserves much thought from those who would promote rights and jobs on the basis of race.

Fired by a long-simmering sense of grievance, the Liberation Tigers of Tamil Eelam have pressed for 10 years their bloody fight for an independent homeland in the north and east of the island of Sri Lanka. It is not certain that the Tamil Tigers were responsible for the death of Mr. Premadasa Saturday. But the Tamil grievances derive from the policies of ethnic preference that Sri Lanka established soon after its independence in 1948.

At that time, Sri Lanka -- then Ceylon -- "was an oasis of stability, peace and order," wrote Sri Lanka historian K.M. Silva. "More important, one saw very little of the division and bitterness which were tearing at the recent independence of the South Asian countries." In 1956, with the election of Solomon Dias Bandaranaike, all that changed.

Though he grew up as an English-speaking Christian, Mr. Bandaranaike became a crusader for preferential treatment for the 75% Sinhalese Buddhist majority. As prime minister, he made Sinhalese the official language, limited university opportunities for non-Sinhalese and generally polarized Sri Lankan society on ethnic grounds.

Succeeding governments took over Christian schools, forced many Tamils out of the civil service and eliminated the section of the constitution that guaranteed minority rights. Race riots became a recurring phenomenon.

The Tamils' response to being made inferior citizens of the country that many of their families had lived in for generations was initially moderate. But as their grievances grew, so did their anger. The final result was the emergence of the Tigers, whose fanaticism and willingness to commit the most depraved acts of violence has won them comparisons to Peru's Shining Path guerrillas. The government's heavyhanded approach in dealing with the Tamils, which appeared to include random killing and casual torture, has further deepened divisions.

* * *

Race and ethnicity in our time have become a fascinating subject. They are said to be a source of great pride, but they are also demonstrably a source of bitter, and seemingly endless, retribution.

July 12, 1976 Wall Street Journal P1 C3

LAGOS - Nigerian authorities said they have decided to curtail the freedom of residence of foreign - chiefly Western - businessmen and that only top officials of foreign companies operating in this western African nation will be allowed to reside here.

A Lagos radio announcement said lower-ranking foreign employees of foreign business concerns will be granted only temporary permits to force these companies to replace them with Nigerian nationals.

Dec. 10, 1976 Wall Street Journal P14 C4
Rhodesia, as Viewed From Kenya


NAIROBI -- In the pre-independence days a certain Mau Mau vowed to kill Sir Michael Blundell. Now they meet and laugh about it.

* * *

So how are race relations in Kenya now? "People from all over Europe and North America are living happily and comfortably here," says Brian Tayleur, who retired as a colonel in the British army to live here. William K. Wood, a breezy Cali- fornian who is general manager of Commercial Bank of Africa Ltd. here (as a nominee from Bank of America, part owner), says, "I'm as happy as a mongoose at a cobra rally."

The mix has changed, however. Of the 60,000 or so whites here, an estimated 45,000 are "two year wonders" (multinational employees) or technical experts here on contract, or others not considered permanent. There are only about 5,000 "white Kenyans"--those who took Kenyan citizenship--plus another 10,000 or so whites living here more or less permanently.

* * *

The settler whites who took Kenyan citizenship are aware that their numbers are aging, and dwindling. "There are opportunities for older men here," says Mr. Tayleur, who has become office manager for the area's biggest law firm, "but this is no place for a young white African male."

A prime reason for that is Kenyanization, the pressure to turn over jobs held by whites to trained Africans. The older men, who have specialties, find niches to fill. Not so for many just out of college. Mr. Tayleur notes another social fact: There seem to be few "lower class" whites living here; all the jobs they might take are held by blacks.

Kenyanization's Goals

The government's Kenyanization Bureau scrutinizes each white-held job yearly, and requires the employer to justify keeping it in white hands rather than turning it over to a black understudy. Also, the yearly fee for most "expatriate" work permits has been raised to about $1,000 a year from the previous $50, says Mr. Wood.

The goal of Kenyanization, says an economist here, "is to proceed as fast as they can without inhibiting growth." An American notes that General Motors (Kenya) Ltd. is making a major expansion here. "I hear they're having a hell of a time with the Kenyanization Bureau," he remarks.

* * *

So Kenyanization means a dwindling number of jobs for whites. But the increasing sophistication of the economy means continuing, if temporary, jobs for whites with various technical specialties. And the expansion of the economy keeps creating new jobs. "This place epitomizes free enterprise," says Mr. Wood, the banker. "This is the easiest, most realistic market I've ever functioned in." An American embassy official says U.S. investment here has a total book value of about $125 million. "It's rising-- a growth market," he comments.

* * *

Mr. Northrup is a member of the Journal's London bureau.

Nov. 30, 1977 Wall Street Journal P32 C1
Asides - The Horse's Mouth

Ms. Mary Berry is Assistant Secretary for Education in the Department of HEW and thus the Carter administration's top official in charge of the republic's educational well being. Recently she paid an eight-day visit to China, and afterwards she described her impressions of the Chinese educational system to The Washington Post. She said we have much to learn from the Chinese. For instance, they are "moving rationally and realistically" by openly basing university admission on regional, class and ethnic quotas.

"The Chinese talk about this in a much more straightforward way than we do," she reported. "They have a healthy attitude toward disadvantagement. It's "let's have quotas to make sure we have a percentage of different groups. They're not concerned about the subtleties like we have to be." For example, "They don't talk about affirmative action' and 'reverse discrimination.' " She added, "I tried to explain the difference to them between quotas and goals, but they couldn't follow all that.''

Aug. 24, 1987 Wall Street Journal 15
China and Tibet: Conquest by Cultural Destruction

* * *

Moreover, population transfer has been China's preferred means for absorbing conquered territory: In Manchuria, the ratio of Chinese to Manchus is 35 to 1; in Mongolia it's five Chinese to every Mongolian. Behind the Disney World diorama of rebuilt monasteries and caretaker monks intended to offset international criticism while attracting the tourists Beijing hopes will support its growing community-Tibet, as a returned Western aid worker ruefully noted, "is finished."

If so, the final blow will come from Chinese apartheid. Rampant unemployment on top of an annual inflation rate of 300% has rendered Tibet's annual per-capita income just $110. Not only does this represent one of the poorest incomes on the planet, it is two-thirds less than that of a Chinese settler there. Living in antiquated houses often lacking heat, running water or electricity, tibetans have an average life span of 40 years and an infant mortality rate of one in six. Seventy percent of the adults remain illiterate; only one in five children completes primary school.

In contrast, Chinese immigrants receive guaranteed jobs and modern housing. Up to two-thirds of the limited school seats are reserved for their offspring, while sufficient diet and medical care is provided to make their average life span 25 years longer than that of Tibetans.

The Sinocization of Tibet is no more accidental than its military occupation. Given the region's chronic unrest, typified by ongoing executions of political dissidents, the internment of almost 4,000 political prisoners in the capital city of Lhasa, and the presence of one Chinese soldier for every 10 Tibetans in central Tibet alone, Sinocization is the requisite corollary to open force; a subtle but effective means to submerge the identity of Beijing's most intransigent subject race.

* * *

Dec. 18, 1978 Wall Street Journal P26 C3
Ethnic Demands Abroad


The author, an authority on ethnic problems abroad, is also author of "The Courts and Social Policy" (Brookings Institution).

A new wave of ethnic sentiment seems to be sweeping across the continents bringing with it a host of new problems for corporate managers.

The civil war in Lebanon. Basque terrorism in Spain, the endless violence in Northern Ireland are all signs of how murderous ethnic feelings can become. In these and other countries, the goals of ethnic movements are political: creation of separate states, domination of existing states or a new set of relations among ethnic groups that have coexisted uneasily.

Dramatic political demands of this kind have made us aware that most countries of the world are not homogeneous. They are divided into various, usually competing, ethnic groups. The politics of many countries reflects this competition, as groups demand more power, more representation in government offices, official recognition of their language, and the like.

Increasingly, ethnic groups are also making demands that affect the private sector--indeed, to a far greater degree than has been recognized. At a recent seminar, a vice president of a large American corporation with far-flung interests overseas explained that his firm had worked out agreements to employ members of one ethnic group in preference to another in one country and to begin hiring by ethnic quotas in another. His corporation, a producer of primary products, had also been asked to conduct its business in the official local language and to divide up tasks among various ethnic groups represented in the labor force. It was a complex matter to work out, but compromises were reached.

The experience of this executive is hardly unique. as other seminar participants attested.

* * *

Many governments have imposed employment preferences and quotas for groups "underrepresented" in commerce and industry. Some have gone even further. In a carefully drawn plan, Malaysia has laid down explicit targets for Malay representation in share ownership and employment, so that Malays will be able to catch up with the advantaged Chinese and Indians. Many other countries have attempted the same thing with far less candor and openness. Demands for programs of this kind are not likely to abate. They affect the ethnic structure of the labor force, of the local management cadre, of the local share of ownership, as well as the language of the workplace and the ethnic identity of local contractors and licensees.

In Quebec. for example, the provincial government has adopted a policy of " Frenchifying" business. Companies are required to obtain government certificates, to be granted only if French is used "at all levels of the firm." The government has shown some willingness to compromise with foreign firms in Quebec. One purpose of the policy is to increase employment opportunities for French Canadians.

Such measures raise many problems for management. Almost inevitably, firms have been and will continue to be drawn into ethnic conflict, against their will. If they resist ethnic preferences, they will be accused of uncooperativeness. If they accede, the gratitude they earn may be temporary. Resentments will build up among members of the "overrepresented" ethnic groups that are not in the preferred category. These resentments could prove costly in the long-run.

Preferential employment policies seem easy and attractive to adopt because they get the multinational firm off the hook on a sensitive political issue.

Nevertheless, preferential policies are hard to implement, even with the best of will. When firms throughout a country are enlisted in the effort, the supply of qualified candidates, especially at the managerial level, quickly runs out. Businesses begin to bid up the price of available talent. They may end by paying salaries to unproductive executives and directors' fees to figurehead ethnic representatives.

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