Ali Baba (Malaysia)

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Ali Baba is a business practice in Malaysia, where a Malay company obtains a contract from the government-sponsored affirmative action system for the Bumiputera (the Malaysian New Economic Policy under Ketuanan Melayu) and subcontracts it to an ethnically Chinese-owned company.[1] The “Ali” refers to the Malay; the “Baba” the Chinese, from the Baba-Nyonya (Straits Chinese) people.[2]


The Ali Baba Economic System[3] was in effect in Indonesia, when Iskaq Tjokrohadisurjo took Minister of Economic in First Ali Cabinet (30 July 1953 – 11 August 1955). This program was enacted to advance 'pribumi', which also called as 'bumiputra' before Soeharto's New Orde and means native, businessman, to make 'pribumi' businessman cooperate in order to advance national economics, to change economic system from colonial system to national system and to make cooperation between 'pribumi' and non-'pribumi' businessmen.

Ali was portrayed as 'pribumi', while Baba was portrayed as non-'pribumi' and usually associated to Chinese. When this program was in effect, 'pribumi' businessman was ordered to give training and responsibility to Indonesian workforce in order to hold staff position. Government gave loan and licence to national private business. Government also gave protection in order to compete with foreign businesses. However, this program was ended in failure because less experience of 'pribumi' businessman, liberal system was in effect and less compete ability of 'pribumi' businessman.

However, the core of this program, which in favor of native people, is resurfaced as new concept of 'putra daerah', which means as 'son of the land', as autonomy system instated. In this concept, many official position, contract and education seat will be awarded to native. However, this concept is not acknowledged officially.


  1. ^ BBC News (2011-07-10): Malaysia’s ‘Ali Baba’ system causes ethnic tension by Jennifer Pak
  2. ^ The Star (2007-03-22): Malaysia’s ‘Ali Baba’ entente under strain by Haroon Siddiqui, quoting R.S. Milne and Dianne Mauzy of the University of British Columbia in Malaysian Politics (Routledge, 1999)
  3. ^ Ekonomi Indonesia, Sistem Ekonomi Ali Baba