Diversity – Malaysia’s multicultural edge

By Chandran Nair

This column by Chandran Nair appears in the February 2008 issue of the Ethical Corporation magazine.

Business leaders should do more to help Malaysia capitalise on the rich diversity of its people, argues Chandran Nair

The ethnic Indian riots that took place in Malaysia recently shocked the country and its neighbours, as images of 10,000 protesters throwing bottles and stones at police, who responded with tear gas and water cannons, were broadcast around the region. 

Malaysian law bans public assemblies of more than five people without a police permit. But in this case police took unprecedented action by securing a court order preventing anyone from attending the rally, which nevertheless turned out to be the largest protest in the country’s history involving ethnic Indians.

The political implications of allowing racial tensions to continue unaddressed are of obvious concern in a country that, despite some hiccups, has been a model of multicultural harmony. But rather than depending on government to manage the situation, Malaysian business should take the lead in promoting communal unity.

The fact that Malaysia cannot compete with Asian powerhouses China and India on costs, number of workers or technical skills has led the country to seek a distinguishing competitive advantage in the global economy. The most obvious resource for the country to tap is its multicultural workforce. 

A recent study by global consulting firm Frost & Sullivan was reported to rank Malaysia as the world’s second-most preferred “shared service and outsourcing” destination in the energy sector, third in transportation and logistics and fourth in the banking, financial services and insurance sectors. Based on interviews with 338 Fortune 500 and Forbes 200 companies, the study cites the skills of the workforce and its multinational qualities as a key success factor.

While countries and corporations around the world spend increasing amounts of time and money on training to build globally minded talent, Malaysia already possesses the building blocks required to excel in tomorrow’s global multicultural environment. A diverse workforce that speaks English, Mandarin and Tamil, is exposed to Asian, Arabic and western cultural contexts and is compatible with the major religions of the world (Islam, Christianity, Hinduism, Buddhism), is undoubtedly a significant asset.

Multinational management

To add to this, over the past 30 years many Malaysians have developed management skills that allow them to understand the particular culture of multinational entities, enabling them to excel as managers of diverse international teams. These qualities could potentially position Malaysia as the most high-value global project management and implementation site in the Asia-Pacific region.

Following its neighbour Singapore’s lead, Malaysian business can further leverage its unique cultural mix by using its sizable Indian population as a link to building business opportunities with the vast and growing Indian market. But in order to capitalise on these opportunities, Malaysian business must take the initiative in working with the government to redefine the country’s existing social contract. 

If Malaysia can take steps to equalise opportunities for all three dominant races while recognising the need for balance, the country will not only make economic progress, but also be at the cutting edge, addressing a key challenge of globalisation faced by all countries. Any viable policy initiatives, however, must recognise the rights of Malays who continue to be the majority of the least economically privileged, and they must also address the plight of Indians (mostly Tamils) and some Chinese who are also among the poorest members of society.

A re-engineering of the social contract to reflect real economic needs will be a slow, laborious process, but the strife of recent days is a clear indication that change is needed and it can be positive. A clear signal by business leaders working with the government will send a reassuring message to all. It could be at the core of every corporate social responsibility initiative.

With its history of ethnic mingling, Malaysia is already poised to set the standard for effectively running a harmonious inter-racial state. If businesses can help to boost the population’s latent potential by taking steps to update affirmative action policies, Malaysia will truly be a model economy for European countries and Asian neighbours like Japan that are struggling with the prospect of foreigners becoming an increasing important part of the population. Business has the power to position this small South-east Asian island nation at the forefront of the global economy.

Chandran Nair is the founder and CEO of the Global Institute For Tomorrow.