Malaysian Development Plans and Policies Since 1956 To 2020, A Case Study

Malaysian Development Plans and Policies Since 1971 To 2020, A Case Study.

Malaysian Development Plans and Policies Since 1971 To 2020.A Case Study on Malaysian Development Policy. New Economic Policy (NEP), National Development Policy (NDP), Long-Term Planning, Medium-Term Planning, Short-Term Planning or Annual Budget, First Outline Perspective Plan (OPP1), 1971 – 1990, Second Outline Perspective Plan (OPP2), 1991 – 2000, Third Outline Perspective Plan (OPP3), 2001 -2010, Vision 2020, 1991 – 2020, Conclusions. 

Introduction

According to Robinson (2011), Malaysia has become one of the most enriched and developing countries in Southeast Asia by introducing and implementing some mega plans driven by the government of Malaysia. These plans have been taken by the higher authority of the country and implemented by different terms of the government. Kim (2018) stated that Malaysia is an economically enriched country located in Southeast Asia that consists of three federal territories and thirteen states. In addition, the South China Sea has separated this country into two regions such as Peninsular Malaysia and Borneo’s East Malaysia.

Malaysia has the 35th largest economy in the world and the third-largest economy in Southeast Asia after Indonesia and Thailand. Malaysia is going to acquire the eligibility of the developed county by 2020 (“MALAYSIA AS A FULLY DEVELOPED COUNTRY,” n.d.). The Federation of Malaya got independence on 31st August 1957 and Malaysia was proclaimed on 16 September 1963 (Sinha, 1998). After 60 years, Malaysia has become one of the most enriched countries in the world by executing many mega polices.

Since 1966, the government of Malaysia has taken 11 medium-term plans to develop the socio-economic conditions in Malaysia. The eleven fruitful Malaysian plans are First Malaysia Plan (1966 – 1970), Second Malaysia Plan (1971 – 1975), Third Malaysia Plan (1976 – 1980), Fourth Malaysia Plan (1981 – 1985), Fifth Malaysia Plan (1986 – 1990), Sixth Malaysia Plan (1990 – 1995), Seventh Malaysia Plan (1996 – 2000), Eight Malaysia Plan (2001 – 2005), Ninth Malaysia Plan (2006 – 2010), Tenth Malaysia Plan (2011 – 2015), Eleventh Malaysia Plan 2016 – 2020 (“The Malaysia Plan,”n.d.). The first Malaysian plan was taken to exceed the challenges to achieve the country’s economic growth. The New Economic Policy was introduced based on the principle of the second Malaysian plan that was introduced in 1970.

New Economic Policy (NEP):

The New Economic Policy had introduced in 1970 under the Principles of OPP1 by the late Tun Abdul Razak Hussein who is the second prime minister in Malaysia (“The New Policy Called New Development Policy NDP Economics Essay,”2016). This policy was introduced with two objectives these are the eradication of poverty from Malaysia and the reduction of ethnic discriminations. This policy came out because of the racial riots incident of 1969 (Zainuddin, 2019, August 13). Based on the Malaysian social-economic conditions now, it is very safe to say that the New Economic Policy had gained success. After the five decades, Malaysia stands in a very good economic competitive advantage position in Asia comparative to the other countries. The two main objectives of NEP are eradication of poverty and the reduction of racial economic differences in terms of income.

At the evaluation time, the government identified that poverty had been eradicated but not fully and the income inequity had been reduced but Malay corporate ownership had not been exceeded. Both Tunku and Mahathir had articulated concern that the Malays still remained too much dependent on the Chinese economically. Hence, another policy was accepted in 1991 for a period of 10 years and it was succeeded by the National Vision Policy (NVP) in 2001.NEP was adopted for 20 years period from 1970 to 1990 and it was finally replaced by another mega-development project named National Development Policy (NDP) in 1991.

National Development Policy (NDP):

The National Development Policy also part of the VISION 2020 was another mega plan to achieve the eligibility of a developed country. The acronym of the national development policy is NDP that had introduced under the Principles of OPP2 in 1990. According to Aziz (1996), the NDP was first proposed and introduced by Mahathir Mohamad also Prime Minister of Malaysia. The prime minister of Malaysia directed to implement this national development policy in 1990 (Unit, 2004, May). The prime objective of the national development policy is to achieve economic growth in all sectors, and ensure the benefits will reach every sector of society.

Although the development plan in Malaysia started in 1950 with the publication of the Draft Development Plan of Malaya. The National Development Policy replaced the New Economic Policy (NEP) in 1990.  According to “The New Policy Called New Development,” 2016) Dr. Mahathir introduced the vision 2020 plan in 1990.

 

The Malaysian government had taken three-tiered planning covering long-term, mid-term, and short-term planning. The long, medium, and short term planning horizons as follow:

  • Long-Term Planning:
  • First Outline Perspective Plan (OPP1), 1971 – 1990
  • Second Outline Perspective Plan (OPP2), 1991 – 2000
  • Third Outline Perspective Plan (OPP3), 2001 -2010
  • Vision 2020, 1991 – 2020
  • Medium-Term Planning
  • Five-year development plans
  • Mid-term review of the five years plans
  • Short-Term Planning
  • Annual Budget
First Outline Perspective Plan (OPP1), 1971 – 1990

The New Economic Policy had been introduced in 1970 under the Principles of OPP1, 1970-1990 (“The New Policy Called New Development Policy NDP Economics Essay,”2016). According to the Speech of Dr. Mahathir (2008) stated the percentage of the nation’s poverty has declined from 52.4 percent in 1970 to 17.1 percent in 1990. In west Malaysia also known as Peninsular Malaysia, the poverty had declined to 15 percent while in east Malaysia declined to around 30 percent. However, the New Economic Policy had not been succeeded to eradicate poverty completely.

Second Outline Perspective Plan (OPP2), 1991 – 2000

New Development Policy (NDP) was introduced under the principle of the Second Outline Perspective Plan (OPP2) in 1991. It was one of the best policies to make Malaysia a fully developed country by the year 2020.

“In 1992, the Second Outline Perspective Plan (OPP2) was introduced and it was formulated based on the New Development Policy (NDP)

This plan is covered the period from 1991 to 2000. It includes the Sixth Malaysia Plan and the Seventh Malaysia Plan towards vision 2020. The Seventh Malaysia Plan has introduced the knowledge-based economy, which can accelerate the rate of economic growth and increase international competitiveness (“The New Policy Called New Development Policy NDP Economics Essay,”2016).

 

Malaysian Development Plans and Policies Since 1971 To 2020, A Case Study.

Figure 1 – Malaysia’s Policies and Development Plans

Third Outline Perspective Plan (OPP3), 2001 -2010

The Third Outline Perspective Plan (OPP3) was introduced in 2001 for covering from 2001 to 2015. It includes the three mid-term plans such as the Eighth Malaysia Plan (2001-2005), the Ninth Malaysia Plan (2006-2010) as well as the Tenth Malaysia Plan (2011-2015). The objective of the Third Outline Perspective Plan (OPP3) was to increase the usage of ICT in all sectors in the society, developing the manufacturing sector as well as developing the services sector (“The New Policy Called New Development Policy NDP Economics Essay,”2016).

 Vision 2020, 1991 – 2020

The Vision 2020 was a mega policy for the Malaysian government to secure the eligibility of a developed country by 2020. The other mid-term and short-term plans were articulated based on achieving this vision of 2020. In addition, the annual budget had been proclaimed to ease the way of achieving vision 2020. The New Vision Policy (NVP) was launched in 2001 and under Malaysia Eighth Plan while the Economic Transformation Program (ETP) is under Malaysia Tenth Plan in 2010. All of this planning is toward Vision 2020. The purpose of the National Vision Policy is to establish a progressive and prosperous Malaysia where everyone will lives in harmony (“The New Policy Called New Development Policy NDP Economics Essay,”2016).

The objectives of the National Vision Policy (NVP) were to ensure sustainable development which is environmentally friendly. This policy focuses more on ensuring that the environment is clean, safe, and healthy for living. Abdullah bin Badawi, fifth Malaysia’s Prime Minister presented five regional economic corridors to safeguard Malaysia’s achieves vision 2020 goal. The five regional economic corridors are the Northern Corridor Economic Region (NCER); Sarawak Corridor of Renewable Energy (SCORE), Iskandar Malaysia, East Coast Economic Region (ECER); Sabah Development Corridor (SDC). These five economic corridors were very important to enrich the Malaysian economic growth.

Medium-Term Planning

Medium-term planning also known as the mid-term plan was very effective to increase economic growth in Malaysia. This plan had been taken for five-year development plans, for example, the Eleventh Malaysia Plan (11MP), 2016-2020. Mid-Term Reviews (MTR) of the five-year development plans are based on the framework set by the long term plan OPP. The medium-term plan implements for a five-year development plan targeted for economic growth as well as the public sector development program. The medium-term review (MTR) is executed in the middle time of the five-year plan. The government takes new initiatives and directives to accelerate the long term policy with a medium-term plan. They decide whether the project will keep ongoing or need to change something in the plan based on the medium-term review (MTR).

Annual Budget

The annual Budget is also known as short-term planning that is prepared and declared by the Ministry of Finance in Malaysia. The policy of annual budget implementation is aligned with the long-term and medium-term plans (Kanapathy, 2001). During the preparation of the annual budget, the authority focuses on all private sector organizations and stakeholders. The annual budget development allocation is provided based on the list of development programs and projects approved under the two-year rolling plan.

A Case Study on Malaysian Development Policy

Malaysian people are very much aware of the Malaysian development policy. The statements differ from person to person. According to the statistic report in 2019, the total population in Malaysia is around 32.6 million, which increased from 32.4 million in 2018 (“Current Population Estimates, Malaysia, 2018-2019,” 2019). The percentages of the Malaysian population are Bumiputera 62% (Malays and indigenous peoples, including Orang Asli, Dayak, Anak Negeri), Chinese 20.6%, Indian 6.2%, other 0.9%, non-citizens 10.3% reported by 2018.

Based on the topic, two interviews have been conducted with two Malaysian people to get their opinions concerning the Malaysian development policy. The first interview has been conducted physically with a student who is studying at University Putra Malaysia. The origin of the interviewed person is Malays or Bhumiputra also known as “son of the land” or “son of the soil”.

Physical Interview with Malay People:

We invited the person to come to our house as well as participating interview session. Before conducting the interview, we had outlined some questions to ask them. The list of the questions has been mentioned below.

  1. Who introduced the Malaysia development policy and when?
  2. What is the phase and time period of the Malaysia development policy?
  3. What is the prime objective of the Malaysia development Policy?
  4. Do you support New Economic Policy?
  5. Do you think, the Malaysian government should declare anymore a long term vision or policy?

Response:

We got the completely correct answer to the first two questions as we exposed information but the answer to the third question was partially correct. According to the first Malay person, the objective of the Malaysian development policy was for the economic development of all over Malaysia. He replied yes for question number four and presented rationale statements with evidence. We got the same positive nodding answer for question number five and he is vehemently agreed to declare more long term policy for the country’s development.

Virtual Interview with Indian Malay People

A virtual interview session has been conducted with an Indian Malaysian student. We asked the same five questions to an Indian Malaysian people who also a student at University Putra Malaysia. Because of the pandemic, we could not meet with him physically therefore we made a video call to complete our discussion.

Response:

We have got the same answer as we got before from the Malay student but the rest of the questions’ answers is totally different from the previous person. According to the second person, the objective of the Malaysian development policy intended to assist only Malay people or indigenous people of Malaysia also known as Bhumiputra. Again he gave the distinguished reply for question number four and he did not express solidarity to the previous person. The Malaysian policy especially the new economic policy facilitates only indigenous people to be prospered economically. As we stated before, the two main objectives of NEP are the eradication of poverty and the reduction of racial economic differences in terms of income.

This person disagrees with the second objective of the new economic policy that is the reduction of racial economic differences in terms of income. The government gave more opportunities to the Malay people than Indians, Chines, and other ethnic groups.  Malay people became the owner of the public property by this policy. Finally, he expressed that the government should take more long term policy for the development of the country but not giving priority only to the Malay people.

Discussion:

Based on the question and reply session of the interview that happened with two Malaysian people who are different ethnically, all Malaysian people had not accepted this policy for the wellbeing of Malaysia. The Indian Malay, Chines Malay, and other ethnical groups thought that this policy intended to facilitate only Malay people but not everyone. Finally, every one of the Malaysian has been benefited by the grace of super development in Malaysia. The prime objective of all long term policy is to make Malaysia the most prosperous country in South Asia.

In addition, the eradication of poverty was the main intention of the new economic policy that was introduced in 1970 by late Tun Abdul Razak Hussein who is the second prime minister in Malaysia. Dr. Mahathir (2008) stated the percentage of the nation’s poverty has declined from 52.4 percent in 1970 to 17.1 percent in 1990. The benefit of the eradication of poverty had enjoyed and appreciated by every citizen in Malaysia. These policies were beneficial for people from all walks of life although Malay people got a little bit extra benefit from this policy.

Conclusion:

Malaysia has managed to become one of the most prosperous and developing countries in Southeast Asia by planning and implementing some specific plans driven by the government of Malaysia. The Malaysian government has taken long term, medium-term and short term plans to achieve vision 2020 which mission is to be a developed country. Since 1966, Malaysia started to take a strategic plan to increase economic growth, and finally, the plan has been fruitful. Before Malaysia was very unstable economy and the country experienced poverty problem after getting independence from the British in 1957. Malaysia is going to be a developed country very soon that already achieved high-income status through the 11th Malaysia Plan.

References:

Aziz, R. A. (1996). Paradigm Shift: Malaysia’s Development Plans. Akademika, 49(1).

Kanapathy, V. (2001). International migration and labor market adjustments in Malaysia: The role of foreign labor management policies. Asian and Pacific Migration Journal, 10(3-4), 429-461.

Kim, Y. (2018). The Southeast Asian Economic Miracle. Routledge.

MALAYSIA AS A FULLY DEVELOPED COUNTRY. (n.d.). Retrieved from https://www.pmo.gov.my/vision-2020/malaysia-as-a-fully-developed country/?highlight=malaysia%20economy

Robinson, I. M. (Ed.). (2011). Mega urban regions of Southeast Asia. UBC Press.

Sinha, D. (1998). Government expenditure and economic growth in Malaysia. Journal of Economic Development, 23(2), 71-80.

The Malaysia Plan. (n.d.) Retrieved from https://www.pmo.gov.my/the-malaysia-plan/

The New Policy Called New Development Policy Ndp Economics Essay. (2016). Retrieved from https://www.ukessays.com/essays/economics/the-new-policy-called-new-development-policy-ndp-economics-essay.php

Unit, E. P. (2004, May). Malaysia: 30 years of poverty reduction, growth and racial harmony. In Shanghai Poverty Conference–Scaling up Poverty Reduction, organized by the World Bank. Shanghai (Vol. 35).

Zainuddin, D., (2019, August 13). MySay: A new economic policy for a new Malaysia. Retrieved from https://www.theedgemarkets.com/article/mysay-new-economic-policy-new-malaysia

Current Population Estimates, Malaysia, 2018-2019, (2019). Retrieved from https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=155&bul_id=aWJZRkJ4UEdKcUZpT2tVT090Snpydz09&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09

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