Government regulations and policy provide for extensive preferential programs designed to boost the economic position of ethnic Malays or bumiputra, who constitute a majority of the population. Such programs limited opportunities for non-bumiputra in higher education, government employment, and ownership of businesses. Many industries were subject to race-based requirements that mandated bumiputra ownership levels, limiting economic opportunities for non-bumiputra citizens. According to the government, these policies were necessary to ensure ethnic harmony and political stability.
Despite the government's stated goal of poverty alleviation, these race-based policies were not subject to upper income limitations and appeared to contribute to the widening economic disparity within the bumiputra community. Ethnic Indian citizens, who did not receive such privileges, remained among the country's poorest groups. Another goal of this policy is for bumiputra to hold 30 percent of the nation's wealth. According to several studies, the program reached or exceeded this target; however, official government figures placed bumiputra equity at 18.9 percent. The government did not respond to public requests to make its methodology available.
In 2010 the prime minister unveiled a New Economic Model that called for restructuring the country's system of bumiputra ethnic preferences to reduce unequal treatment of different ethnicities by the government and to better target subsidies and preferences to the poorest citizens, regardless of ethnicity. Conservative bumiputra-rights groups raised strong objections to any changes that could threaten ethnic preference programs. On February 8, Prime Minister Najib launched Unit Peneraju Agenda Bumiputra (Teraju) to strengthen further the bumiputra development agenda and boost its economic participation. Critics expressed concerns that Teraju would undermine the New Economic Model and failed to focus on merit-based affirmative action policies. The government claimed that it was necessary because bumiputra equity in the economy remained low.