Author: Jomo K.S. Published on: Identities, Conflict and Cohesion Programme Paper Number 7 September 2004; United Nations Research Institute for Social Development. Summary: Malaysia’s New Economic Policy (NEP) was first announced in 1970 as the principal policy response to the post-election race riots of May 1969, which also resulted in a significant regime change. This paper suggests that the events of May 1969 also involved a widespread popular rejection of the ruling Alliance coalition as well as a "palace coup" within the ruling United Malays National Organisation (UMNO) as the "Young Turks" supporting then-Deputy Prime Minister Tun Abdul Razak sidelined Prime Minister Tunku Abdul Rahman, who had led the UMNO from 1951 and the country to independence in August 1957. The Rahman regime was seen by the new Razak regime as having been too conciliatory toward the ubiquitous Chinese business community. The Razak NEP regime, through the NEP, was therefore committed to increased ethnic affirmative action, or positive discrimination policies, on behalf of the ethnic Malays in particular and bumiputera (indigenous Malaysians) in general. The NEP had two prongs, namely "poverty eradication regardless of race" and "restructuring society to eliminate the identification of race with economic function". The NEP was supposed to create the conditions for national unity by reducing interethnic resentment due to socioeco-nomic disparities. In practice, the NEP policies were seen as pro-bumiputera, or more specifi-cally, pro-Malay, the largest indigenous ethnic community. Poverty reduction efforts have been seen as primarily rural and Malay, with policies principally oriented to rural Malay peasants. As poverty reduction efforts had been uncontroversial and had declined in significance over time, the NEP came to be increasingly identified with efforts at "restructuring society" efforts to reduce interethnic disparities, especially between ethnic Malay and ethnic Chinese Malaysians.