By : SIMON ELEGANT Singapore (Time)

In mid-January, three well-off businessmen in Singapore sat sharing an evening meal. All three, who are ethnic Malay, minimized the challenges facing their community, which makes up about 15% of the republic's population. The way forward is for Malays to solve their own problems, said one, a contractor, summing up the group's attitude: "You cannot fault the government."

What a difference a month makes. In mid-February the contractor, his plump face creased with concern, worried about a deterioration in ethnic harmony. Says one of his friends: "The community here has now been traumatized by the issues of loyalty and trust."

Two events have caused the three men, and many other Malays, to re-examine their place in predominantly Chinese Singapore. First came the announcement in January that police had detained 13 mostly Malay Singaporeans, who the government alleges are members of a terrorist group that planned to bomb U.S. and other targets in the city-state. As the chilling realization that safe, prosperous Singapore had nurtured a group of al-Qaeda-linked terrorists sank in, Prime Minister Goh Chok Tong fretted that the incident had increased suspicions toward Malays—and raised the potential for intercommunal trouble. The atmosphere of distrust revealed long-festering concerns among Malays, too: they are second-class citizens, some grumble. Few occupy senior military or corporate positions. It is telling, says Lily Zubaidah Rahim, who teaches at the University of Sydney and is the author of The Singapore Dilemma, a controversial book on Singapore's Malays, that Malay youths, formerly excluded from compulsory national service, still are not allowed to fill certain sensitive combat roles.

Then came the tudung affair. Two Malay girls attending government schools were suspended last week after their parents insisted they be allowed to wear tudungs—traditional Muslim head scarves—to class, despite a longtime ban. It was an unusual public protest in Singapore, where conformity is the order of the day. For Mohamad Nasser, a 37-year-old flight steward with the country's national carrier, Singapore Airlines (S.I.A.) and father of one of the two girls, the issue is simple: "I'm fighting for something I believe in strongly." But Mohamad says he won't go to court to get his daughter Nurul reinstated: "I don't want to damage the image of Singapore."

No matter what Mohamad's intentions are, the suspension of his daughter has become a rallying point for a range of dissenting voices among the long-quiescent Malays. They question inconsistencies in the government's policies: forbidding the tudung but allowing Muslim reservists to wear beards in the usually clean-shaven military; generously funding special schools to maintain Chinese values but giving only limited monies to Islamic schools and capping the number of children allowed to attend. "The silent majority among the Malays has been quite unhappy for a while," says Muhammed Latiff, a 32-year-old engineer who is also head of public relations for fateha.com, a website devoted to Singaporean Muslims' issues. "You're seeing the results now of years of ignoring the concerns of the community."

Those concerns are real, says author Rahim. Malays, who are placed well behind the Chinese and the small Indian community in most measures of achievement, are economically and socially marginalized in Singapore, she claims. Rahim blames government policies such as ethnic quotas for public housing that have ensured Malays remain a minority in each constituency and have no way to increase electoral clout and affect policies.

Government officials refute such charges with a barrage of statistics demonstrating that everything from income levels to employment rates among Malays has improved in recent years. Yaacob Ibrahim, a Malay Member of Parliament who will become Minister for Community Development in March, argues that the recent problems are merely part of a "process of trying to negotiate for a larger space in the common ground ... The model we've had so far has worked and the vast majority of the Malay Muslim community agree."

But Rahim sees it differently, saying the government suffers from "Malayphobia." Because of that, she says, the "sensitivities and intentions of the Malay community are generally viewed with suspicion." Maybe now, at a time few Singaporeans would deny is a watershed for race relations, the government will surprise Rahim and do something uncharacteristic: back down and let little Nurul wear her tudung to school.