Malaysian Economy. Bachelor of Business Administration (BBA)

Transcription

1 Malaysian Economy Bachelor of Business Administration (BBA) Professor Dr. Ahmad Bin Othman School of Business and Management University College of Technology Sarawak (UCTS) Sibu, Sarawak 1

2 Today s Agenda (Week #5) Industrial policy and Industrialization Phases of industrial policy Five-year Malaysian Plans (10 plans) 2

3 Phases of Industrial Policy 3

4 Introduction In the colonial period, Malaya was involved in production and processing of rubber and tin for export in return for imports of essential food and manufactured goods. In the year of independence ( ), the economy was still heavily dependent on rubber and tin exports. Attempt to industrialize (1960s) was started with the implementation of importsubstitution policy, which was quite unsuccessful.

5 Framework of the economy The Malaysia s framework of the economy started when the First Malaysian Plan was introduced. The economic framework was continued with the implementation of the First Outline Perspective Plan (OPP1). The main policy formulated in OPP1 was the New Economic Policy (NEP) Vision 2020 was launched in 1991 as the broad policy directions of Malaysia. It provides the much needed guidelines of becoming a fully developed & industrialized Malaysia by the year In relations to vision 2020, the Second Outline Perspective Plan (OPP2) was introduced. The main policy implemented in OPP2 was the National Development policy(ndp).

6 In 1991, National Development Policy (NDP) was introduced to replace NEP. Vision 2020 was also introduced in it is a long term vision ( =30 years) containing broad policy directions encompassing various dimensions, i.e. Economically Politically Psychologically Spiritually culturally. In summary, Malaysia s key to economic success of the 1970s through the 1990s were; Basic policy framework, & Industrialization strategies.

7 Planning Horizon... l LONG TERM PLANNING Vision 2020, First Outline Perspective Plan (OPP1), Second Outline Perspective Plan (OPP2), Third Outline Perspective Plan (OPP3), l MEDIUM TERM PLANNING Five-year development plans, such as the Ninth Malaysia Plan ( ) Mid-term review (MTR) of the five-year Plans l SHORT TERM PLANNING Annual Budget 7

8 Summary of Malaysian Development Policies RMK10 RMK10 RMK9 RMK9 RMK8 RMK8 RMK7 RMK7 RMK6 RMK6 RMK5 RMK5 RMK4 RMK4 RMK3 RMK3 RMK2 RMK2 OPP3 RMK1 OPP2 OPP1 RMK1 Vision 2020 Outline Perspective Plan (OPP1) OPP

9 New Economic Policy (NEP) ( ) Establishment of new growth centers The modernization of rural life Rapid & balanced development of urban activities Provision of a wide range of social especially designed to raise the living standards of the low income group Raising productivity & income of those in low productivity occupation Expansion of opportunity for intersectoral movement from low productivity to higher productivity activity The creation of a Malay commercial & industrial community in all categories & at all levels of operation

10 Strategy of New Economic Policy Eradicating poverty by raising income levels and increasing employment opportunities for all Malaysians Accelerating the process of restructuring Malaysia society to correct economic imbalance, to reduce & eventually eliminate the identification of race with economic function, and to ensure that Malay & other indigenous people will become full partners in all aspects of the economic life of the nation.

11 New Economic Policy (NEP) ( ) Second Malaysia Plan ( ) Third Malaysia Plan ( ) Implementation NEP Fourth Malaysia Plan ( ) Fifth Malaysia Plan ( )

12 Evaluation of NEP (achievement) Increase in GDP Malaysia real GDP growth during ; averaged 7.1% annually. In the 60s; averaged 5.2% Grew from RM22.2 billion in 1971 to RM1,109 billion in 1990 per capita GNP grew by 8 times from RM1,109 to RM8,856 (US$ 860 to US$3406) The annual inflation rate remained low. Fairer distribution of income With the regard to the distribution of income, there has been an increasingly fairer distribution of income among the various income group.

13 Evaluation of NEP (achievement) Increase employment opportunities rapid economic growth; creation of job, from 3.4 million in 1970 to 6.7 million in the unemployment rate dropped from 7.7% in 1970 to 5.1% in 1990 Change of economic structure from agriculture to manufacturing sector. the transformation had enabled more Bumiputera work in more productive sector of economy (secondary & tertiary sector

14 National Development Policy (NDP) ( ) With the aim to fulfill the objectives of Vision 2020, OPP2 was introduced in OPP2 ( ) was accomplished through the policies, strategies, and programs implemented in -The sixth Malaysia Plan ( ) -The Seventh Malaysia Plan ( ) National Development Policy was the main policy during OPP2.

15 VISION 2020 ECONOMY Competitive Dynamic Robust Resilient NATION: United Malaysian Nation Common and Shared Destiny Territorially Integrated Ethnically Integrated Living in Harmony Full Partnership Fair Partnership One Bangsa Malaysia Political Loyalty Desicated to Nation POLITICS Matured Democratic Society Consensual Community Oriented MORAL AND ETHICS Fully Moral and Ethical Society Strong in Religion Highest Ethical Standard THE SOCIETY WELFARE Fully Caring Society and Culture Society Comes Before Self Walfare Family Responsibility ORIENTATION TOWARDS SCIENCE AND TECHNOLOGY Scientific and Progressive Society Innovative Forward Looking Contribute to Scientific and Technological Society RESOURCE DISTRIBUTION Just Fair and Equitable Distribution of Wealth Full Partnership in Progress Psychological Liberated Psychological Secure Self Confident Justifiably Proud MENTAL FRAMEWORK Robust in Facing Adversity Pursuit of Excellence Aware of its potentials 15

16 Vision 2020 Introduced in February 1991 Aims to achieve the status of a developed country that is distinctive and molded according to its own features without following: Developed not only in the economic sense but it must be fully developed along all dimension: -Economically -Spiritually -Politically -Technologically -Socially -Culturally

17 Vision 2020 United Malaysia objectives Just and caring society Mature democratic society Vision 2020 Sustainable development Fully competitive, dynamic, and resilient economy Entrepreneurial

18 Vision 2020 challenges: 1) To establish a united Malaysian nation with a sense of common and shared destiny 2) To create psychologically liberated, secure and developed Malaysian Society 3) To foster and develop a mature democratic society 4) To establish a fully moral and ethical society 5) To establish a matured, liberal and tolerant society 6) To establish a scientific and progressive society 7) To establish a fully caring society and caring culture 8) to ensure an economically just society 9) To establish a prosperous society, with an economy that is fully competitive, dynamic, robust and resilient.

19 ECONOMIC PERFORMANCE Real GDP Growth.. Average Average Average Average e 7.5 % 5.8 % 7.1 % 4.5 % 8.5 % 0.3 % 4.4 % 5.4 % 7.1 % 5.3 % 6.0 % 19

20 DEVELOPMENT PLANNING MACHINERY PARLIAMENT Cabinet Ministers National Economic Action Council (NEAC), National Economic Consultative Council (NECC) Private Sector Dialogue Circulars Secretariat Proposal National Planning Council Draft Policy National Development Planning Committee Draft Economic Planning Unit Proposal Inter-Agency Planning Group (IAPG) Proposal General framework Circulars National Action Council Implementation & Coordination Unit Consultations Federal Ministries & Agencies State Governments Private Sector

21 Ninth Malaysia Plan, The National Mission, Strengthening the country s institutional & implementation capacity ~ establish a more effective implementing & monitoring mechanism 1. Moving the economy up the value chain Five Key Thrusts 2. Raising the capacity for knowledge and innovation, and nurturing first class mentality 4. Improving the standard and sustainability of the quality of life 3. Addressing persistent socioeconomic inequalities constructively and productively To achieve the goals & objectives of Vision

22 Thank You 22