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The objective of this article is to analyze income inequality and poverty issue among ethnic groups in Malaysia. The government in spite of the historic, social and economic determinants inherited from British colonists, has managed this problem efficiently. This was achieved thanks to actual focus on the matter, during the long term development programs realization since the early 70s. These programs’ implementation caused an immediate outbreak of violence targeted to the wealthiest Chinese in 1969. Nowadays Malaysia can be an example of the country that is managing successfully with inequality and poverty reduction together with the high economic growth. It has to be highlighted that during the decades of income inequality elimination between Bumiputera and other ethnic groups, the political and social inequalities raised. Presently, they have an effect on Malaysian economy and population and also impact the country destabilization.
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