Inequality often persisted or grew, between town and country, between regions and between ethnic groups. Malaysia did most to narrow ethnic gaps.
Income distribution is about how evenly income is shared. It can improve even when poverty falls, or it can worsen.
Gaps between town and country grew in several countries. In Thailand, incomes in Bangkok rose far faster than in the rural northeast.
Malaysia set out to reduce ethnic inequality. Under the NEP, the Malay share of company ownership rose from about 2 per cent in 1970 to about 19 per cent in 1990. This fell short of the 30 per cent target. The income gap between Malays and Chinese narrowed.
But the NEP also widened gaps within the Malay community, as well-connected Malay businessmen gained most.
In Indonesia, overall inequality was moderate, but wealth was concentrated among Suharto's family and allies and among large Chinese-owned conglomerates. Resentment of this helped fuel anti-Chinese violence in 1998.
In the Philippines, a small number of landowning families held much of the wealth throughout the period.
- Malay ownership
- About 2% (1970) to about 19% (1990); target 30%.
- Thailand
- Bangkok pulls ahead of the northeast.
- Indonesia
- Wealth concentrated among cronies and conglomerates.
Worked example: Judging equity
Did growth bring a fairer share of wealth?
- Malaysia: ethnic gaps narrowed; gaps within groups grew.
- Thailand: regional gaps grew.
- Indonesia: wealth concentrated among cronies and conglomerates.
- The Philippines: land and wealth stayed with elite families.
Watch out for this
Falling poverty means that inequality also fell.
Poverty can fall while the rich gain even faster. Thailand cut poverty but saw the gap between regions grow.
Check your understanding
What happened to Malay ownership of companies under the NEP?
- It rose from about 2% in 1970 to about 19% in 1990.
- It fell to zero.
- It reached 100%.