FACTBOX-Malaysia's affirmative action policy

(Reuters) - The newly elected opposition took power in Malaysia's industrial heartland on Tuesday and immediately said it would scrap one of the nation's sacred cows -- the decades-old policy of affirmative action for ethnic Malays.

Here are some facts about the policy:

WHEN AND WHY WAS AFFIRMATIVE ACTION INTRODUCED?:

* Affirmative action in favour of majority ethnic Malays dates back to British colonial rule, before independence in 1957. It was accelerated in the form of the New Economic Policy (NEP) after race riots between Malays and ethnic Chinese in 1969.

* Malaysia's second post-independence prime minister, Abdul Razak, launched the NEP in 1971; after national soul-searching that blamed the wealth gap between Malay and Chinese communities for the violent riots of May 1969.

* The policy was reincarnated as the National Development Policy in 1991 but is still widely known as the NEP.

WHAT IS ITS GOAL, HOW DOES IT WORK?:

* It is aimed at eradicating poverty through redistribution of wealth in favour of ethnic Malays and indigenous people -- collectively known as Bumiputeras or "sons of the soil".

* Bumiputeras receive preferential discounts on house purchases, special allocations in public share issues and preferred status in the award of government contracts.