Economic crisis and policy response formulation in Malaysia

Since achieving Independence in 1957, Malaysia has experienced three recessions, each of which emanated from different sources of vulnerability. This paper analyses the policy response to economic crisis in particular, the role of the New Economic Policy (NEP) which was introduced in 1970 and which remains in force today. It concludes that in spite of the diversity in the proximate causes of the crises, the policy response was consistent and sought to ensure that NEP objectives were paramount and the vested interest that had emerged as a result of the NEP and which were linked to the ruling party were preserved.E