Restructuring the Tin Mining Sector Under the New Economic Policy: A Study of Bumiputera Tin Mining Companies, 1970-1995

Abstract

With the implementation of the New Economic Policy (NEP) in the early seventies, the government also intervened in the tin mining sector with the aim of enhancing bumiputera corporate stake and participation. The strategy was three-pronged: the government created large scale bumiputera tin mining companies at the federal level, medium scale bumiputera tin mining companies at the state level, and small-scale bumiputera tin mining companies at the individual level. Despite the apparent success of this strategy in creating a bumiputera presence in the sector, the onset of an economic recession and the international tin crisis ("the twin crises") in the mid-1980s brought a halt to this policy. This paper investigates how the twin crises and the subsequent changes in government policies affected the large, medium and small-scale bumiputera companies. Whereas the large-scale bumiputera companies and some medium scale companies were able to survive and transform themselves through unique characteristics (that included political patronage), this was not the case with the smaller scale entities. By ignoring the concerns of such small companies in formulating subsequent plans, the government appears to have abandoned those who needed its assistance most.