Parasites and Middle men

The traditional agricultural sector has often remained isolated because of poor accessibility. Professor Buchanan further pointed out the backwardness and low productivity of the rural sector is worsened by the land tenure systems which "make possible the domination of the peasantry by an often parasitic landlord group; lack of marketing systems exposes the peasant producer to economic domination by middleman groups" who are predominantly Chinese merchants.

The rubber and oil palm plantations have little to contribute to the national economy as the production, marketing and prices are determined by foreign firms whose decisions are made outside the country. Malaya is facing the problem of economic domination by foreign capital. In the past decade or so foreign industrial investment in Malaya has been speeding up in fantastic growth rates following the industrialisation programmes launched by the governments in two regions of Malaya (i.e. Mainland Malaya and Singapore Island). The rapid growth and expansion of foreign capital investments in Malaya has undoubtedly resulted from the offer of most attractive economic incentives to the foreign investors. The economic domination of Malaya by foreign capital has therefore been further strengthened and has turned Malaya into a new colony.

As can be seen from the concrete situation of the rural development and unemployment in Malaya, the accelerating polarisation within the society is one of the most distinctive characteristics in the nature of development. The class contradiction and gap between the rich and the poor especially the impoverished peasants has intensified and widened. The Alliance government has worsened the plight of the rural peasants by serving the foreign investors and by fattening the domestic exploiting classes. Professor Buchanan sees that "there has been growing cultural polarisation between a largely western educated, western orientated elite and the largely illiterate largely traditional masses."