Eager for a rapid increase in labor productivity, the governments of the Third World are turning increasingly to capitalist models of development and to Western and Japanese multinational firms for investment. The recent branch plant industrialization of Malaysia exemplifies a program of statist capitalism intended, among other things, to resolve internal political and social crises. Malaysia's New Economic Policy (NEP) encourages industrial investment in large-scale labor-intensive enterprises as a principal means of providing jobs for the urban poor while bolstering the economy in general. Although the NEP purportedly strives to achieve racial integration and equality at the modern industrial workplace, data from a rapidly urbanizing area suggest that the reality is one of increasing spatial and structural segregation of groups among various large and small-scale activities. The restructured local economy, on the one hand, conserves established sectors dominated by Chinese capital and labor, while, on the other hand, mobilizing migrant Malay labor for employment by large foreign-owned factories.
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