Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy objectives must be appreciated, but various misconceptions, especially regarding affirmative action, have resulted in polarization and stalemate after 50 years of the NEP. Social justice and affirmative action must be conceptualized and evaluated with clarity and rigor, with policy objectives, mechanisms and outcomes aligned. Malaysia needs to systematically formulate a new social justice paradigm, building on the NEP and anchored on the principles of equality and fairness. In the affirmative action sphere, this framework must focus on developing capability and competitiveness, and balance identity, need and merit in the allocation of opportunity.
This paper takes an institutional approach to inequality in Thailand by exploring the country's structural and regulatory transformations. It discusses how Thailand's transition from agriculture to industry and services has been impeded by both the demand and supply sides of government subsidies since the 1950s. The relative failure of structural transformation has slowed down economic catch-up and widened the well-being gap between those inside and outside the agricultural sector. Furthermore, while regulatory transformation has mitigated state-led malaise in certain Asian economies, post-1997 reform in Thailand has incentivized unconventional political actors, such as academics, medical doctors and civil society leaders, to make collective efforts in toppling elected governments in exchange for gaining selection into oversight agencies. The case of Thailand indicates how regulatory reform may create perverse incentives that adversely affect democratization, decentralization, competition, and taxation. Dealing with inequality therefore requires a big push toward progressive structural and regulatory transformations altogether.
Trust is an important ingredient to improve economic performance and people's welfare by alleviating market failures caused by imperfect information, costly enforcement, or coordination failures. Using the World Values Survey 2018, we estimate the impact of village and district levels inequality on trust in institutions in Indonesia. We find that higher village level inequality has a negative effect only on trust in strangers, while higher district level inequality reduces trust in television, the press, the central government, the courts, and the police. The implication points to the importance of keeping inequality at the aggregate level in check to maintain people's trust in social, political and state institutions.
The Asia–Pacific region's rapid growth and poverty reduction in recent decades have been accompanied by rising income and wealth inequality. Technological progress, globalization, deregulation and market-oriented reform, and financialization have generated many new opportunities, but rewarded capital more than labor, benefited skilled workers more than the unskilled, widened spatial inequality, and produced a growing number of the superrich. For some countries, population aging has also contributed to rising inequality. The present paper provides an update on recent trends of income and wealth inequality in the Asia–Pacific region, examines causes behind rising inequality, and discusses policy actions needed to tackle inequality. It also assesses how the COVID-19 has likely worsened inequality in the region.