During the period 1957–69, the newly established Malaysian state opted for political compromise which meant by implication that Malays retained political prominence while the non-Malays, especially the Chinese, kept their strong economic position, even though the modern economy continued to be dominated by foreign capital. As described in the previous chapter, the component parties of the Alliance government had both incentive and capacity to engage in mutual compromise in order to avoid internal collapse and to maintain their legitimate influence over their segmental ethnic groups. It also appeared that the intensity and volume of communal demands were relatively moderate and negotiable to a large extent in such a mutual deterrence situation.

However, the relatively amicable ethnic relations were not built on strong foundations. As Mahathir Mohamad noted, racial harmony in the first decade of independence was “neither real nor deep-rooted” but was rather the “absence of open inter-racial strife”. Moreover, the absence of overt struggle was not necessarily “due to lack of desire or reasons for strife” but mostly “due to a lack of capacity to bring about open conflict.” The changed political environment in the second decade of independence, however, demonstrated that such mutual compromise (or avoidance) was no longer effective. Towards the end of the 1960s, the non-Malay communities became more vocal in their demands for greater political equality. To a greater extent, the Malays, especially a group of young Malay leaders, were worried that the Alliance regime's compromising approach would ultimately cause them to be marginalized in the political and economic sphere. Consequently, growing ethnic anxieties led to the breakdown of political order which took the form of the bloody racial riots in May 1969.