While Malaysia’s official state religion is Islam, the country’s constitution provides its people with the freedom to profess and practise their own respective faiths. Islam is the most practised religion in Malaysia, with over 60% of the population belonging to this religious community; yet Buddhism and Christianity are also practised by substantial sections of society.
The population of Malaysia shows great ethnographic complexity, and ethnic diversity is a vital, integral component of Malaysian society. The Bumiputra, comprising Malays and indigenous peoples, are Malaysia’s largest ethnic group. Yet the country is also home to large Indian and Chinese communities that have added to the nation’s cultural diversity and lent credence to the phrase “Malaysia, truly Asia.” However, 2019 witnessed an uptick in racial intolerance with several instances reported of online hatred against minorities.
The government of Malaysia, through certain economic policies, follows an affirmative policy towards bumiputras (literally sons of the soil) to emphasize bumiputra participation in strategic investments and meet the target of at least 30% corporate equity ownership. This 30% rule has implications for MNCs and foreigners. Local Malay businesses enjoy competitive advantage in the local market. A good example is the legal requirement that companies in Malaysia should allocate at least 30% of their ownership stake to bumiputra, whereas publicly-listed companies must have a minimum 12.5% bumiputra shareholding.
Although in recent years some sectors have been liberalised in order to increase the country’s overall competitiveness, the bumiputra equity ownership target remains in some strategic sectors. These include agriculture, banking and finance, biotechnology, education, petroleum, oil and gas, textiles and minerals. Foreign participation in these sectors is generally not encouraged by the Malaysian government.
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