Ali Baba is a term describing business practices in

Malaysia Malaysia is a country in Southeast Asia. Featuring the Tanjung Piai, southernmost point of continental Eurasia, it is a federation, federal constitutional monarchy consisting of States and federal territories of Malaysia, 13 states and thre ...

and

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...

involving indigenous and non-indigenous cooperation to take advantage of

affirmative action Affirmative action (also sometimes called reservations, alternative access, positive discrimination or positive action in various countries' laws and policies) refers to a set of policies and practices within a government or organization seeking ...

provisions favouring indigenous Malays or

Native Indonesians Native Indonesians, also known as ''Pribumi'' () are Indonesians whose ancestral roots lie mainly in the archipelago and consist of various ethnic groups, predominantly of Austronesian and Melanesian descent. In contrast are Indonesians of know ...

. In this arrangement, a Malay or Indonesian becomes the front person for a firm which is financed and run by a Chinese person (who may be a local citizen).

Malaysia

Ali Baba is a business practice in

, where a Malay company obtains a contract from the government-sponsored

system for the Bumiputera (the

Malaysian New Economic Policy The New Economic Policy (NEP) ( (DEB)) was a social re-engineering and affirmative action program formulated by the National Operations Council (NOC) in the aftermath of the 13 May Incident in Malaysia. This policy was adopted in 1971 for a pe ...

under Ketuanan Melayu) and subcontracts it to an ethnically Chinese-owned company. The “Ali”, which is a typical Muslim name, refers to the Malay; the “Baba” the Chinese, from the Baba-Nyonya (Straits Chinese) people.

Indonesia

The term Ali Baba came into usage when Iskaq Tjokrohadisurjo was Minister of Economics in the First Ali Sastroamidjojo Cabinet (30 July 1953 – 11 August 1955). Ekonomi Indonesia, Sistem Ekonomi Ali Baba

Purpose

This program was enacted to advance ''

pribumi Native Indonesians, also known as ''Pribumi'' () are Indonesians whose ancestral roots lie mainly in the archipelago and consist of various Ethnic groups in Indonesia, ethnic groups, predominantly of Austronesian people, Austronesian and Melanesi ...

'' – who were also called '' Bumiputera'' before

Soeharto Suharto (8 June 1921 – 27 January 2008) was an Indonesian Officer (armed forces), military officer and politician, and dictator, who was the second and longest serving president of Indonesia, serving from 1967 to 1998. His 32 years rule, cha ...

's New Order which means ethnically native businessman (but now also includes women) – to engage ''pribumi'' businessmen in order to advance national economics, to transition the economic system from a colonial system to a national system, and to encourage cooperation between ''pribumi'' and non-''pribumi'' businessmen. Ali (a typical Muslim name) represents ''pribumi'', while Baba (sometimes a collective name for

peranakan The Peranakan Chinese () are an ethnic group defined by their genealogical descent from the first waves of Southern Chinese settlers to maritime Southeast Asia, known as Nanyang (region), Nanyang (), namely the British Empire, British, Portugu ...

Chinese), represents non-''pribumi'' and is associated with

Chinese Indonesians Chinese Indonesians (), or simply ''Orang Tionghoa'' or ''Tionghoa'', are Indonesians whose ancestors arrived from China at some stage in the last eight centuries. Chinese Indonesians are the fourth largest community of Overseas Chinese in th ...

Practice

When this program was in effect, ''pribumi'' businessman was ordered to give training and responsibility to Indonesian workforce in order to hold staff position as 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 may be literally translated 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.

References

{{reflist Economy of Malaysia Economy of Indonesia Racial and religious quotas in Malaysia