Second Malaysia Plan

The Second Malaysia Plan (In Malay: Rancangan Malaysia Kedua) was an economic development plan introduced by the government of Malaysia with the goal of implementing the Malaysian New Economic Policy (NEP). It lasted from 1971 to 1975 and aimed to "restructure" the society of Malaysia and reduce Malaysian Chinese and foreign dominance in the economy of Malaysia so as to improve the economic position of the Malays. It was the successor to the First Malaysia Plan, which was also intended to specifically tackle the problem of poverty among the Malays. However, the First Malaysia Plan had limited success, which may have been a factor in the May 13 Incident in 1969 when race riots broke out in Kuala Lumpur. The Second Malaysia Plan had been regarded as excessive in its zeal to increase Malay participation in the economy, and the government accordingly scaled back the emphasis on restructuring the economy when the plan ended.

Although the Malays have nearly always comprised a majority of the Malaysian population, their economic power has rarely been commensurate. In 1970, the Bumiputra controlled only 1.9% of the Malaysian economy, while the non-Malays (mostly Chinese) held 37.4%, with the rest in foreign hands. Due to this wide disparity, Article 153 of the Constitution requires the government to set quotas for the dispensation of scholarships, employment in the civil service, etc. targeted at improving the economic status of the Malays.

However, the First Malaysia Plan—whose approach had been dependent on the Malays "availing themselves of these facilities and services and putting them to good use"—failed in addressing the economic imbalance. Its policies also resulted in discontent among the non-Malays, who mostly supported the opposition parties that favoured reducing or eliminating affirmative action for the Bumiputra in the 1969 general election. A victory parade held on May 12 by supporters of the opposition led to a retaliatory rally on May 13 by the United Malays National Organisation (UMNO), a major party in the governing Alliance coalition. However, the rally soon turned into a riot which lasted two days. Officially, around 200 people died—although others have given much larger estimates—with thousands left homeless, the majority of them Chinese. A state of emergency was declared, and Parliament was suspended. The National Operations Council (NOC) governed until 1971, when Parliament reconvened.

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