Malaysianization and the Barlow Boustead Estates Agency

Abstract

The Malaysian government's approach to soft nationalisation through the New Economic Policy did not involve coerced sale of foreign investments in the country. The Government formulated its policy on an 'expanding cake' theory, where the prospect of gains from economic growth would be offset by the loss of control by the sale of equity to local and indigenous investors. This study examines the complex corporate divestment undertaken by a major foreign-owned agency house in Malaysia, the Barlow Boustead Estates Agency (BBEA) in response to the New Economic Policy. Documents in the Barlow family archive at the University of Cambridge reveal how the Malaysian government's policy of reducing foreign ownership in the economy led to competition among foreign investors to retain ownership up to the allowable limits. Such competition created an unattractive environment for foreign capital and eventually led to 'default nationalisation'. The owners of BBEA were eventually opted to sell to Government-backed institutional investors, although they had no legal obligation to do so.