KUALA LUMPUR, Malaysia — Malaysia is in crisis. The economy is faltering and the government is floundering, struggling to explain away unprecedented financial scandals. Critics ascribe these problems to a lack of transparency and good governance, but these are merely symptoms. The root cause of Malaysia’s current troubles is ketuanan Melayu: the ideology of Malay supremacy espoused by the United Malays National Organization (UMNO), the party that has dominated the country’s politics for more than six decades.

Malaysia has a vast system of institutionalized preferences for Malays, the majority of the population, which grants them economic and other privileges over ethnic Chinese, Indians and other minorities. Although in place for more than four decades, these policies have failed to significantly help poor Malays. At the same time, they have created a grand quid pro quo between other segments of the Malay population and the UMNO government: For fear of losing their advantages, beneficiaries of the preferences don’t hold UMNO to account when it falls short.

Malaysia’s affirmative action program was supposed to right a historical wrong. In 1969, deadly racial riots broke out between Malays and Chinese in several cities, and the country was placed under emergency rule. UMNO blamed British colonists for the unrest, claiming that until Malaya’s independence in 1957 they had sidelined Malays and favored the Chinese in the economy. In 1970, the population of Malaysia was about 53 percent Malay, 36 percent Chinese and 11 percent Indian, yet Malays held only 2.4 percent of all shares in the stock market, whereas the Chinese controlled 27 percent (Indians had about 1 percent, with the bulk, more than 63 percent, in foreign hands).

When the state of emergency was lifted in 1971, the government promulgated the New Economic Policy (NEP), giving Malays (officially called bumiputera) preferential treatment in all spheres of public life. Senior positions in the civil service were reserved for Malays. Special schools were established for them exclusively. It was decided bumiputera should control 30 percent of all corporate equity by 1990. Malay home buyers were entitled to a discount of 5 to 15 percent on new developments.