Race-based quota employment policies: Can they be justified?

Written by Dr Lim Teck Ghee

Since the article “Ethnic dominance in the civil service” first came out, there have been a slew of comments from readers. Most of these comments have been favorable and concur on the need to reform the present situation of Malay over-dominance in the civil service. There have also been dissenting responses arguing that Malay dominance of the public sector is needed to counterbalance the non-Malay dominance found in the private sector. Is the strategy of imposing racial quotas to arrive at some balance in the overall society and economy the right one for our country? In the effort to formulate the right mix of policies that can best address the issue of ethnic disparities in the economy and society, it is important to bear in mind that there is a fundamental difference between public and private sector employment. This difference appears to elude politicians seeking to impose controls and restrictions on the private sector. Employment in the civil service is paid for by the taxes levied on all racial groups and from the other revenue collected by the government. This sector includes employment in public universities such as the National Defence University where Dr Ridhuan Tee, a recent commentator on my article, is employed – see his article ‘Iktibar Tahun Harimau’ in the Utusan paper last Sunday (Feb 14, 2010). In any democracy, the public sector is seen as belonging to and catering for all the citizens of the country. It is never viewed as the particular enclave or entitlement of any community. Through a representative and merit-based civil service paid for by public funds, the Government of the day is expected to provide all its citizens – in our case, Malaysians of whatever racial origin – with fair and equitable treatment. A racially diverse civil service is acknowledged to be the crucial player in the planning and implementation of fair and equitable public policies. It is also needed to ensure that discriminatory action based on race does not take place. The case for – and process involved with – arriving at a racially representative private sector is different from that for the public sector. In the private sector, the most effective method for bringing about the higher level of employment of any target group – if that is seen as a desirable policy – is not through legislative imposed quotas but through a system of incentives, including those leading to voluntary self recognition and action by employers, in particular the larger sized ones. With regard to racial quota policies in the private sector, few if any countries in the world impose such quotas because race-based actions are controversial in their political and socio-economic rationale and are difficult to justify. A racial quota system in the private sector strikes at the basic freedom and right of the employer – who is paying from his own pocket or from the firm’s revenue and not from public coffers – to hire the right person for the job. Also, the private sector is not a monolithic employer the way the public sector is. It consists of hundreds of thousands of individuals and small and large organizations whose employment requirements vary enormously. Attempts to impose such a system would not only pose a logistical nightmare but would also be impossible to enforce. It would be disastrous for Malaysia to impose race based recruitment policies in the private sector as Dr Ridhuan Tee appears to be calling for. Imposition of a racial quota in private sector employment would be tantamount to approval of further racial rent-seeking that has already crippled the country’s development. In fact, it may well be the final nail in the coffin of the economy. This is not to say that quota systems on employment in the private sector do not exist or should be completely ruled out. A small number of Middle East countries, for example, in response to their over-reliance on a foreign labour force have introduced hiring quotas for their private sector but these policies are not on the basis of race. These quotas are only to ensure the employment of their citizens; presumably irrespective of their race. More common are quotas or similar affirmative action policies for hiring women and disabled people. These also have their special justification based on increasing representation of grossly under-represented or marginalized groups and to advance social diversity. They are not based on race. In fact, few if any countries in the world impose quotas mainly on the basis of race and ‘historical entitlement’ as Malaysia is doing. Where affirmative action policies are deemed necessary, they may be implemented following widespread public agreement and the imposition of various safeguards including public scrutiny and accountability at all times. Administrative actions in designing and implementing such programmes have to be made fully transparent to ensure that the means justify the ends and also to prevent abuse or partisan practice. We should learn from the experience of our recent history and from other countries that have attempted to implement race based quota policies in private sector employment. Richard A. Epstein in his book, Forbidden Grounds: The Case against Employment Discrimination Laws, has argued that the modern civil rights laws found in the United States are flawed in negating freedom of association and have led to government coercion that threatens markets and, ultimately, liberty. “At bottom are only two pure forms of legislation – productive and redistributive,” he points out. “Anti-discrimination legislation is always of the second kind. The form of redistribution is covert; it is capricious, it is expensive and it is wasteful.” Epstein also makes the key economic point: If we want to subsidize a “protected class”, he writes, it can be done more efficiently by just giving grants. Whilst generally agreeing with Prof. Epstein and other critics of the folly of using quota policies to correct whatever deficiencies that may be found in the private sector, resort to this drastic measure in the public sector in Malaysia may be the only way to bring about fairness, competitiveness and representativeness in our bureaucracy. A quota-based affirmative action policy ensuring a reasonable proportion of minorities in the country’s civil service may not be the solution to the many structural problems that are found in the civil service and other government institutions. However, it may be the only guarantee of race-neutral policies and services.