Structural transformation (ST) refers to the changing roles of the sectors of the economy (agricultural, industrial and services).

It also refers when some sectors become more important than others and take on a more important role. ST is vital for the economic development. Generally a country that is better in terms of industrial sector or a rate of industrialisation will have a better ST. Industrialisation provides a little room for equalisation development in terms of creating opportunities for all. Hence the power of industrialisation and ST income distribution follows a U-shaped patterns with initially there being a big gap and deteriorate but then income spreads following the trickle down hypothesis before it finally deteriorate once again. Hence late starter in development such as Malaysia did achieve industrialisation and ST only at the cost of Inequality in terms of distribution of inter-sectoral income. According to Collin Clarks, there are 3 procedure stages of ST. Firstly, agriculture sector predominates, followed by industrial sector and finally service sector catches up. Malaysia is a country rich in minerals and natural resources and one of the exporting countries of the world. The country received a boost towards industrialisation soon after independence with the implementation of Pioneer Industrial Policy (PIP). Besides the elements involved in ST are followed: Inter-sectoral growth (agriculture switches from food to cash crops, industrial sector switches from agro-based to non-agro-based and also increases in export oriented industries) Level of development and sectoral substitution

Malay Special Rights Malay special rights are special rights for the Malays which are established in the constitutions. Some of the rights include the rights of the sultan, the PM of Malay is also written in the constitutions. Islam is the official religion and Bahasa as official language. These rights were given to the Malays as they are Bumiputras (the son of soil) as they agreed in the big bargain between the 3 races that the Malay will continue having the special right, and in return would give citizenship to the Chinese and Indians. Hence there special rights for the Malays also included special economics and social rights etc. Malays still enjoying the rights until today. Even in NEP few rights were given to the Malays such as companies listed on the Kuala Lumpur Stock Exchange must have 30% Bumiputra ownership of equity to satisfy listing requirements, a certain percentage of new housing in any development has to be sold to Bumiputra owners, A basket of government-run (and profit-guaranteed) mutual funds are available for purchase by Bumiputra buyers only and so one and so forth. However debate is going on about this issue whether this should be continued. However the current generation of Chinese and Indian should not forget their seniors agreed to these special rights. Positively Discriminatory Policy OPPI 1 1970------ first Malaysian plan (1971-75), 2nd Malaysian plan (1976-80), 3rd Malaysian plan (1981-85) and fourth Malaysian plan (1986-90). It refers to a policy in which it discriminates against some people but has positive effects on society as a whole. This is the case with the NEP which was a positively discriminatory policy as it favoured to Malays and discriminated against the Chinese and the Indians. However, it had positive effect on society as it restructured society and reduced poverty. It helped the Malays move to the mainstream economic activities and not just stuck in the low income sector. Hence it had positive effects on society as after its implementation there were no more disaster such as race riot of 1969. That is why it is called positively discriminatory policy. However, unfortunately some Malays abused the rights they received under the NEP.

Plural Society Definition: "The system in which different races of people living together in an organized community. The situation by which small number of traders and miners residing in Malaya from fifth and sixth century will probably not to qualify this definition but the mass migration which occurred during the British influence unquestionably will. Malays, Chinese and Indian have differences in many ways, language, religion, custom and even physical features. The Emergence of Plural Society The plural society emerged during the British colonial period. In the early decades of the nineteenth century, when the emphasis was still on trading, the number of immigrants in Malaya is small. By 1833-4 there were only 24,000 Chinese, 15,000 Indian and 8,000 other non-Malays in the straits settlement. It was the expansion of tin mining in the middle and latter part of the century which drew large number of Chinese into the straits settlement and other states of Malaya. Chinese immigration was it first related directly to the tin mining but latter continue for other reason when the industry carne to a decline. On the other hand, large scale of Indian migration to Malaya was related to the growth demand of cheap labor for rubber industry. Its peak period was 1900-20, but significant migration continues until the depression.

What have caused plural society? The major cause of "Plural Society" is the British perception upon what constituted the "Melayu" or Malays. Malays as being wrote by Swettenham :"The real Malay is courageous;...but he is extravagant, fond of borrowing money and slow in repaying it ... He quotes proverbs ... never drink intoxicants, he is rarely an opium smoker ... is by nature a sportsman ... proud of his country and his proper venerates his

ancient customs and tradition and has proper respect for constituted authority ... He is a good imitative learner ... [ but ] lazy to a degree ... and consider time of no importance. " As being mention earlier, British main interest in Malaya is expansion of trade industry, in this light they are expecting lots of labor and resources with minimum cost. Having a

negative perception on Malays which was widely accepted as lazy, unwilling to work for wages and therefore could not be considered as potential pool of labor in the colonial economy. Alternatively, the British look for the Chinese to work in the tin industry and on tin plantation. The British believed that the Chinese were hard working and be willing to work for wages as they are the one that contribute to the economics progress. Indeed in 1890, the Chinese indirectly provide 89 per cent of Selangor revenues. A fall in the tin price towards the end of 18th century led to a decline in Chinese immigration and it cause to the shortage of worker. This has pushed the wages to rise. With the existence of demand for cheap labor in Malaya steps were made to overcome this problem Tamil worker from South India were brought in by the British planter. Many of the British planters previously work in the Ceylon (Sri Lanka) and they had found that this Tamil worker particularly suited to cater this problem. Recruited from the lowest levels of society, Tamil were considered as more accustomed to British rules, more amenable to discipline than Chinese and more willing to work for wages than Malays. This is in line with the British needs in constant supply of labors. Moreover, the continuing supply of labor from India makes it less costly to employ them. These later contribute to the success of the rubber industry in Malaya. The Component of Plural Society Malay (Son of the Soil or Bumiputra) The contemporary definition of Malay is one who habitually speaks Malay and who follows Muslim faith. This definition covers all type of Malay groups such as Jawa, Bugs and other Indonesian Malays groups and this includes "Real Malay" in Malaya. Pre-colonial Malay society consisted of a small aristocracy and a mass of peasants. Trading and mining were monopolised by the aristocracy and peasants grew rice fished and gather jungle product. Those upper groups are more interested in gaining more power while the lower group try to make a living from what they have. This goes on until the colonialization from the western powers take place. Post-colonial Malays are more opened then the latter one. Even though there are still a large number of the involved in the paddy plantation (or other survival activities) but some have

shifted their profession to trading activities, public services and small holding farming. The involvement of British in Malaya manage to change some of the attitude towards life and be participative in the economics activities (even small in number) As the past, the Malay which was perceived as lazy and conservative in their way of life has made some changes in their life style. Malays become more risk taker and slowly try to adept the new way of 1iving by taking more challenging activities Besides Malays, there is other numerically small but historically important indigenous groups in Malaya. There are the "Orang Asli" (literally original people), the aborigines. The orang asli commonly divided into three broad groups; the nomadic hunting and gathering Negritos, the semi-nomadic Senoi who practice a form of shifting cultivation and so-called Jakun, often termed as Proto-malay who are increasingly adopting a sedentary farming life.

Chinese The existences of Chinese in Malaya begin during the maritime trade between India and China in Malacca. The settlement of Chinese was built in Malacca for their waiting period before they leave for home. This small group then became the first community of Chinese ever live in Malaya. Their main activities are in trade and commerce. They are latter known as the "Baba and Nyonya" of Malaya. Although using Malay language as spoken language and mane to adept Malay culture in theirs but the remains as non-muslin and continuing to eating pork. In contrast to the latter immigrant, they posed no treat to the political power. The post-colonial Chinese, as being mention earlier was brought in by the British to man the mining of tin in Perak and Selangor. This group of Chinese has some different values than the former one. They were equipping with experience of well construct economic system which help them in involving into commercial activities. The other aspect of the Chinese is their social structure of their community. They preserve the traditional social ties between the families, clan and linguistic groups: These values help them in surviving while working and traveling in other country. This group of Chinese maintain to speak Mandarin and Cantonesc as their language and Buddhist as religion. Being Chinese they practice Chinese culture.

Indian The pre-colonial Indian like the Chinese first came to Malaya to engage into the trade activities. Their involvement in Malaya also taken into account the first existence is Hindu religion and their culture. This was proven in the pre-historical Malaya where some of Hindu's temples were found in Kedah and Perak. Unlike the pre-colonial group, the postcolonial Indian immigrant in Malaya can be divided in to two. First are small in number and their main interest are to exploit opportunities created by British rule. They consisted of traders, clerks, policeman and laborers. However, Indian traders in Malaya were not very successful compare to the other profession. This is due to the competition given by the Chinese traders who are earlier than the Indian traders. For the other profession they manage to survive because there are being demanded by the British to assist them in the development of Malaya and for trade activities. Most of them who came earlier to Malaya among the higher level of Caste and they usually live in the main cities in Malaya. The second group of the Indian immigrants were brought in by the British due the increasing need of labor for the rubber plantation. This time the group is large in number and they consisted of poverty-sicken South Indian peasants, who were brought to Malaya either under indenture, through recruitment by estate kanganies or under a government-sponsored scheme of subsidize immigration with guaranteed repatriation. They lived under closely managed European estates isolated, leaderless and dependent. In contrast to the first group, majority of this group belong to the lowest caste and they live in the estate where they work. Majority of Indian immigrants came to Malaya as common laborers and departed, retired or died years later in the same status. Growth alone strategy GAS was being emphasized which it emphasis only on growth and not on distribution. Tunku abdur rahman only mentioned about growth and not about distribution. This is because to discourage the chinese to work hard. At this point of time the malay were being a proportion in the urban areas and the widen the gap between malay and chinese. In malay dilemma by Tun Mahathir Mohammad, he mentioned that people thought that there was no conflict between the malay and chinese since they never had conflict before. But he said this was totally wrong. There were no conflicts between the malays and chinese before because the M & C rarely met with the malay reside in the rural area and chinese in the urban areas. So

when the malays were given MSR and put in the urban areas and the issue of distribution were being discussed, causing the riot of 3rd May 1969. GAS is where the growth rate of each sectors are emphasized. The employment rates are not taken into consideration. High productivity of a sector is more important regardless of the welfare of the society. It also related where by a sector does not rely on any other sector.