FACULTY OF APPLIED SOCIAL SCIENCE (FASS)

FAKULTI SAINS SOCIAL GUNAAN

MPW1133/2133
MALAYSIAN STUDIES

Name:

Matric No:

NRIC No:

Telephone No.:

Email Address:

Tutor:
Local Learning Centred

SEMESTER JANUARY 2013

1

ACKNOWLEDGEMENT
Praise to the Lord for providing me with great health, strength and emotional
supporting completing this assignment. It is with great appreciation that I acknowledge the
contributions and support in completing this dissertation.
It is with great appreciation that I acknowledge the contributions and support of my
lecturer whose time, effort and guidance were highly beneficial especially during my
completing my assignment. My sincere appreciation and thanks to my colleagues for their
constant support, guidance and friendship.
I really appreciate all my family members because of their endless support;
encouragement and understanding throughout my good times as well as my tough times are
so meaningful. Finally, I am grateful to my company, the government whos allowed me to
pursue this assignment.

TABLE OF CONTENTS
CONTENTS;

PAGE

ACKNOWLEDGEMENTS

BIBLIOGRAPHY

39

1.0

INTRODUCTION

1.1

Objective of the report

1.2

Brief Introduction of Malaysian Economic Development Policies

2.0

AIMS OF ECONOMIC DEVELOPMENT POLICIES IN MALAYSIA

2.1

New Economic Policy (NEP)

2.1.1

Poverty Reduction

2.1.2

Restructuring Malaysia Society

National Development Policy (NDP)

2.2.1

Balanced Development and Strengthen National Unity

10

2.2.2

Ensure Economic Transformation by Improving the Efficiency of

2.2

Labour and Capital

10

2.2.3

To Improve Economic Development

11

2.2.4

Widened Social Values and Working Climate Facilitated by Scientific

11

and Technology Advance

2.3

3.0

National Vision Policy (NVP)

11

2.3.1

Change Growth Strategy from Input-Driven to Knowledge-Driven

12

2.3.2

Strengthen Socio-Economic Stability

12

2.3.3

To Bring and Sustain Balanced Development.

12

STRATEGIES TO SUCCEED THE POLICIES

3

12

3.1

3.2

3.3

New Economic Policy (NEP)

12

3.1.1

Strategies to eradicate poverty.

13

3.1.2

Strategies to restructure Malaysian society.

14

National Development Policy (NDP)

14

3.2.1

Further stabilize the potential of agriculture development activities.

14

3.2.2

Giving support to non governmental bodies involved in efforts

to eradicate poverty.

15

3.2.3

Strengthen national unity by restructuring society.

15

3.2.4

Implement macro economic management.

16

3.2.5

Encourage investment to increase productivity.

16

3.2.6

Increased international competitiveness to face competition.

16

3.2.7

Encourage manufacturing for world market.

16

3.2.8

Develop strong human resource for long term economic growth.

17

3.2.9

Increase efficiency through IT and overcome social problem.

18

National Vision Policy

19

3.3.1

Sustain macro economy stability.

19

3.3.2

Improve eradicate poverty and restructure society in new ways.

19

3.3.3

Increase growth through productivity.

20

3.3.4

Increase competitiveness in the public and primary economic sectors.

21

3.3.5

Extend the usage of ICT.

22

3.3.6

Strengthen human resource development.

22

3.3.7

Upgrade the quality of life.

23

3.3.8

Strengthen Positive Value

23
4

4.0

COMPARISON OF THE ACHIEVEMENT OF THE THREE ECONOMIC

POLICIES

24

4.1

SOCIO-ECONOMIC PROGRESS

24

4.2

PRIVATIZATION

27

4.3

EMPLOYMENT, EDUCATION AND TRAINING

28

4.4

INFRASTRUCTURE DEVELOPMENT

31

4.5

ACCELERATING SCIENCE AND TECHNOLOGY DEVELOPMENT

33

4.6

INFORMATION AND COMMUNICATIONS TECHNOLOGY

34

5.0

SUMMARY

36

1.0

INTRODUCTION

1.1

Objective of the Report

Malaysia is a multi ethnic, uppermiddleincome country that has relied heavily on

income from its natural resources to engineer successful diversification into manufacturing
and sharply increased incomes for all ethnic groups. Since Malaysia achieved its
independence in 1957, the economy has gone through a major structural transformation.
Development of Malaysia economic is reference to nations economic goals and achievement.
Malaysias social and political situations also effect the development in economic. Malaysia
was known as a lowincome agrarian economy, now Malaysia became the world's largest
producer of tin, rubber and palm oil, along with other raw materials firmly set Malaysia's
economic tempo well into the mid-20th century.
As Malaya moved towards independence, the government began implementing
economic five-year plans, beginning with the First Malayan Five Year Plan in 1955. Upon the
establishment of Malaysia, the system was the division of Malaysians into three groups
according to ethnicity. However, there are many economic and social problems outstanding
and many work to be done. As for us to remember, after the May 13 incident of racial rioting
in the federal capital of Kuala Lumpur, the government initiated more aggressive
programmes aimed at actively establishing a Malay entrepreneurial class through direct
intervention in the economy, aimed at alleviating poverty.
This report focuses on issues and discusses regarding the overall of Malaysian
economic development policies aims, strategies and achievements. Since 1970, specifically
after the following racial riots across the country, Malaysia has based its economic
development strategy on three longterm policies: the New Economic Policy (NEP), 1970
1990 , the National Development Policy (NDP), 1990 2000, and the National Vision Policy
(NVP), 2001 2010 . Although the emphasis in these longterm development policies has
always been on economic growth, Malaysian development intends to benefit all groups or
communities in society in an equitable manner.

This approach may have obvious limitations as Malaysian economic development

policies has direct and indirect consequences on the direction and outcomes of the
development. So, it is important for us to understand the implementation and achievement of
our economic development policies. The discussion will also highlight the strategies
introduced by the government to succeed the policies. Of further interest to us, Malaysian
development policy has consistently upheld rapid economic growth as it had altered with
times or circumstance.
This report also offers the comparison about the achievements of the three economic
development policies in this report will show that they were many achievement had been
accomplish. To be true, the overriding objective of the NEP, maintained in the NDP and the
NVP, was to preserve national unity by eradicating poverty irrespective of race, and by
restructuring Malaysian society to reduce the identification of race with economic function
and geographical location. Malaysiaku Gemilang!
1.2

Brief Introduction of Malaysian Economic Development Policies

i. New Economic Policy (NEP)
New Economic Policy (NEP) in 1971, the publication of the Second Malaysia Plan
(197175), and the Outline Perspective Plan (OPP) (197190). The 19912000 growth
phase traversed the difficult years of the Asian financial crisis and the period of exchange
controls. The Malaysian New Economic Policy (NEP) was an ambitious and controversial
socio-economic restructuring affirmative action program launched by the Malaysian
government in 1971 under the then Prime Minister Tun Abdul Razak after the declaration
of a state of emergency in May 1969.
The New Economic Policy (NEP) often said is a Malay agenda to enhance the
economic power of the Malays by creating a perpetual, unfair advantage. Although it has
been hailed by some as having reduced the socioeconomic disparity between the Chinese
minority and the Malay majority, others have accused it of having reduced non-Malays to
the status of second-class citizens by cementing Ketuanan Melayu (Malay supremacy).
The NEP ended in 1990, and was succeeded by the National Development Policy in 1991.

ii. National Development Policy (NDP)

7

On the 17th of June 1991, the National Development Policy (DPN) was launched by
Tun Dr Mahathir Mohamad, former Prime Minister of Malaysia. National unity will
continue to become the end objective of DPN as a unity is imperative for the social and
political stability, ensuring continuous economic progress. DPN is to continue the NEP
achievement in poverty alleviation and community development.
In line with the objectives of the National Development Policy to make Malaysia a
developed industrial country, development and economic structure that emphasizes
industrialization lead to changes in the spatial structure which otherwise would occur
comprehensively planned development of the 'adhoc' that might cause negative effects.
iii. National Vision Policy (NVP)
The NVP was introduced by Tun Dr Mahathir Mohamad, the Prime Minister in 2001.
The NVP was included in Third

Outline Perspective Plan (OPP3), 2001-2010, that

provides the direction for the development of the nation and the policy agenda for the
next ten years. The

new

policy contribute towards

further strengthening national

unity among the various races in our beloved country.

The NVP, with national unity as its overriding objective, is aimed at establishing a
progressive and prosperous Bangsa Malaysia which lives in harmony and engages in full
and fair partnership. Economic growth will be promoted alongside efforts aimed at
poverty eradication and restructuring of society. Social, economic, and regional
imbalances will be narrowed.

2.0

AIMS OF ECONOMIC DEVELOPMENT POLICIES IN MALAYSIA

2.1

Aims of New Economic Policy (NEP)

The NEP was designed to balance the socio-economic among the races in Malaysia

which is to build national unity. The NEP development was comprising two prongs, poverty
reduction among all Malaysian and restructuring society.
2.1.1

Poverty Reduction
NEP seeks to eradicate poverty among all Malaysian by progressively improving the

economic condition and quality of life the poor races by directly increasing their access to
land, physical capital, other facilities and training. These permitting the general public to
share more equitable in benefit of economic growth. This aim of official poverty level should
be reduced from 49 per cent in Peninsular Malaysia in 1969 to 16 per cent by 1990 and
programmes directly geared to the needs.
This first aim focus in the rural area where the government provide various public
service and facilities to ensure that the Malays obtained a fair opportunity to gain more and
equality within the modern sectors. To eradicate poverty the capability of Malays and other
races ensure that they are enable to participate actively in the development process by
providing more employment to all races
2.1.2

Restructuring Malaysia Society

Despite the popular rhetorical commitment by politicians to poverty eradication, the

1970s and early 1980s saw growing emphasis on the NEPs other pronounced objective to
restructure society: to abolish the identification of ethnicity with economic function,
especially to create, expand and consolidate the Malay capitalist and middle classes. As
officially interpreted, restructuring is not meant to abolish or change socioeconomic
relations between classes or economic interest groups; in practice, it mainly seeks to increase
Bumiputera capital ownership and ethnic proportions in the more attractive, mainly
professional occupations.
The NEP was designed to enable the Bumiputra community to enjoy the fruits of
development on par with the other ethnic groups, who were then and still remain
economically far more advanced. This was to be achieved through a process of growth and
9

modernization so directed as to bring about gradual restructuring of employment and

production patterns in all sectors and at all levels, so as to be in rough accord with ethnic
population ratios.
Nevertheless, this regulation has been criticized because the company must issue new
shares to maintain the proportion if the Bumiputra investors divest their shares, thus
effectively making the 30% quota as the minimum, with no upper limits.
2.2

Aims of National Development Policy (NDP)

National Development Policy (NDP) aims is transforming Malaysia into a developed

and balanced nation in every aspect such as in social justice, values, ethics and morality,
political stability, quality of life, efficiency in government administration and economic
excellence.
2.2.1

Balanced Development and Strengthen National Unity

The principle of growth with equity is fundamental to ensure the realization of fair

and equitable distribution of national wealth. A balanced societal development is conducive

to maintain social and political stability. By nurturing and moulding of a Malaysian society
with high moral values and ethics as well as positive attitudes will create a responsible,
resilient, progressive an caring society.
Improve the quality of life for present and in the future by prudent management of
natural resources and ecology of natural beauty and clean environment. The balanced
development of economy is essential to ensure stable growth, minimize social conflict,
promote racial harmony and enhance unity.
2.2.2

Ensure Economic Transformation by Improving the Efficiency of Labour and

Capital
In support of the implementation of a productivity-driven growth, which requires
highly skilled, trainable and knowledge manpower, substantial progress was made to provide
more opportunities for the people to pursue tertiary education and training. The expanded
education and training infrastructure not only allowed Malaysians to pursue

tertiary

education locally, thus saving foreign exchange but also attracted foreign students to study in

10

Malaysia. With this development, Malaysia have laid the foundation to develop the country
into a centre of education excellence.
2.2.3

To Improve Economic Development

NDP will rely more on the private sector to be responsive and proactive in the

attainment of the nations socioeconomic objectives. This role entrusted upon the sector
will require a greater sharing of the social responsibility in managing growth that can
generate sufficient opportunities for equitable distribution of benefits among all Malaysians.
The public sector will support these efforts by focussing on further improving the
environment for growth and the provision of adequate. The government has formulate a
rational policy on the issue of prices for the use of infrastructure services. Better planning and
modern technology can reduce the resource wastage. Also more stringent enforcement can
help minimise losses from theft of water and electricity.
2.2.4

Widened Social Values and Working Climate Facilitated by Scientific and

Technology Advance
To achieve the visions implies that Malaysia has to create a progressive society with
highly scientific and technology achievement that requires quality of human resources that
correlate quality service and higher productivity. By developing modern services sector the
government can expedite the shift to value added activities through capital and technology. A
mechanism needs to be put in place to assess, in a scientific manner, all requests from service
providers for tariff increases. The mechanism should also allow for the views of consumer
groups to be heard. The policy should encompass all infrastructure sectors, from the transport
industries to the utilities.
2.3

Aims of National Vision Policy (NVP)

The National Vision Policy (NVP) is to develop a strong and sustainable economy of
Malaysia. The aims of National Vision Policy are to:

11

2.3.1

Change Growth Strategy from Input-Driven to Knowledge-Driven

Developing the country into a knowledge-based economy will permeate every sector

and involve the general public at large. Everyone must and can partake in greater utilization
of knowledge. The knowledge content of all economic activities, be it in agriculture,
manufacturing or Government will have to be increased so as to strengthen value added
and generate employment.
All Malaysians will be given equal chances and opportunities to enhance their quality
of life and be involved in the knowledge-based economy. Focus will be directed towards
providing better opportunities in education especially in rural areas, and increasing
accessibility to better health facilities and affordable houses to be owned or rented by the
people.
Efforts will also be taken to promote healthy lifestyles as well as providing more
cultural and recreational amenities to enable our people to enjoy the aesthetic aspects of life.
Participation in sports will also be encouraged to strengthen the spirit of solidarity,
comradeship and esprit de corps among the people.
2.3.2

Strengthen Socio-Economic Stability

The core of socio-economic development is the overriding goal of national unity. The

stability through equitable distribution of the nation's income and wealth. With these
perspectives in mind, the theme of the Eighth Malaysia Plan is achieving sustainable growth
with resilience. To develop a knowledge-based economy as a strategic step to increase value
added to all economic sectors and to stabilize the development of human resource to produce
a productive and knowledgeable work force. Besides, this needed to be done to continue
sustained development of the environment for the purpose of long term development.
2.3.3

To Bring and Sustain Balanced Development.

The essence of this long-term plan is still too bring about a balanced development. A

balance in development, touches specifically on development starting from the agricultural

sector, small to medium industries right up to industries based on high technology and
information technology.
3.0

STRATEGIES TO SUCCEED THE POLICIES

12

3.1

New Economic Policy (NEP) Strategies

3.1.1

Strategies to eradicate poverty

The eradication of poverty for all Malaysian that comes from different races and the

correction of the racial economic imbalances in term of income, employment and wealth
required strategy on many fronts:
i. Modernize the living conditions of the lower income group, both in the urban and
rural areas by increasing further provision of basic facilities and those related to
education, such as book assistance and scholarship. In business development and
human resource; UDA, FELDA, FELCRA and SALCRA opened to introduce and
extend of agriculture development
ii. Expand employment opportunities for all Malaysian citizens regardless of race. By
involving in high industrial or trade sectors. Economic growth had to be encouraged
and guided along an employment intensive path.
iii. Encourage participation in sector of high potential and high productive capacity such
as business, industries and services. This would lessen general poverty in the country
as it raising the general income level and provided fairly growth.
iv. Improve further the productivity of the poor by increasing their income. Education
and training can increased people income as knowledge and skills required in moving
towards to reduce absolute poverty.

13

3.1.2

Strategies to restructure Malaysian society

i. Race the peoples ownership in the private sector. This especially benefit the Malays
people as they were given many speciality in owning the economic ownership where
some particular racial group feel a sense of discrimination.
ii. Build a business society among the Bumiputeras. The initial target of the NEP was to
move the ratio of economic ownership in Malaysia from a 2.4:33:63 ratio of
Bumiputera, Other Malaysian, and Foreigner ownership to a 30:40:30 ratio. Some
specific requirements were introduced to achieve the 30% Bumiputera equity target,
amongst them that all initial public offerings (IPOs) set aside a 30% share for
Bumiputera investors, the share price being initially heavily discounted.
iii. Develop areas that have remained backward but are high in potential. The
construction of of multi-million dollar irrigation schemes will benefit urban
entrepreneur and construction workers the rural poor.
iv. Enhance education opportunities within and outside the country by introducing the
free text books and scholarship for poor in the urban and rural areas. The construction
of boarding school for brilliant student especially from the rural area were the
preparation for sending them to pursue study overseas.
3.2

National Development Policy (NDP) Strategies

3.2.1

Further stabilize the potential of agriculture development activities

This NEP strategies is to raise production output through optimum use of resources

and to increase the peoples income especially in the rural areas so there will be more
economic, competitive and progressive. It will also increase and provide sufficient food
resources for the people and provides employment opportunities especially for the rural
population.
Developing agricultural land by using high and effective technology too improve
competitiveness and production capacity of the agricultural sector through the involvement of
various sectors including the private sector. The increase in national income through
supplying raw materials for the basis of local and foreign industrial needs.

14

Develop the farmer especially in the rural areas and encourage a system of agriculture
based on the self-sufficiency and commercial concept. Improve the production of smallholders for a more balanced economy especially for smallholders.
3.2.2

Giving support to non governmental bodies involved in efforts to eradicate

poverty.
This effort was to create close, meaningful, effective cooperation between the public
and private sector. While creating an attitude of sharing and mutual understanding regarding
procedures and objectives of both the sectors it improved national earnings. In implementing
this, the NDP make several changes to the role of public sector through the opening of land
and subsidy awards to small farmer to create their opportunities and increase their income.
Poverty eradication efforts by promoting income-generating projects and providing
amenities to improve the living standards of the poor. In addition, specific urban-based
programmes, namely squatter resettlement and low-cost housing projects, improved the
living conditions of the urban poor. Provision of various facilities by the government such as
infrastructure facilities, town and rural planning and industrial structure plan. Facilitate
cooperation between the private and public sector because private sector balance and
distribute opportunities and facilities to benefit all parties.
3.2.3

Strengthen national unity by restructuring society.

The NDP strengthen the national unity by reducing the wide gap in economic

development between states and between towns and rural areas. The restructuring of society,
particularly in employment restructuring and the creation of the Bumiputera Commercial
and Industrial Community (BCIC) were strengthen to improve Bumiputera workforce and
participation in the management of modern sectors.
Other than equipped the Bumiputeras with relevant skills in business but also to
maintain their wealth. reducing and ultimately eliminating the social and economic in
equalities and imbalances in the country to promote a fair and more equitable sharing of the
benets of economic growth by all Malaysians

3.2.4

Implement macro economic management.

15

The implement of macro economic management which is an expansionary fiscal

policy to stimulate the recovery in the economy by increasing and accelerating the
government expenditure in infrastructure projects and also to grant bonus to government
employees to increase retail trade. These actions succeeded in alleviating the impact of the
slowdown on poverty and the restructuring of society.
3.2.5

Encourage investment to increase productivity.

NDP will rely more on the private sector to be responsive and proactive in the

attainment of the nations socioeconomic objectives. This role entrusted upon the sector
will require a greater sharing of the social responsibility in managing growth that_ can
generate sufficient opportunities for equitable distribution of benefits among all Malaysians.
The public sector will support these efforts by focussing on further improving the
environment for growth and the provision of adequate social and physical infrastructures
3.2.6

Increased international competitiveness to face competition.

The world economy, which continued to experience sustained growth, has facilitated

the expansion of output and trade as well as investment and capital flows. Aside from strong
growth in the industrialized countries, the period also witnessed rapidly increasing domestic
demand in the Asian Newly Industrialized Economies. These developments have provided a
favourable climate for the expansion of the Malaysian economy. As the economy experienced
rapid economic growth, signs of overheating such as higher inflation rates, tighter labour
market conditions, bottlenecks in certain infrastructural facilities as well as high capacity
utilization in most industries became evident.
3.2.7

Encourage manufacturing for world market.

Government try to intensify industrial growth through manufacturing by optimising

the use of the countrys natural resources. Upgrading local research and development of local
technology such as Industrial Master Plan (MIP) (3rd February 1986) while developing 12
industrial sectors. Seven of them based on local resources including rubber, oil palm, timber,
food, chemistry and minerals. The other five are industries not based on natural resources
electricity, electronics, transportation equipment, machines and engineering, ferrous, metals,
textile and clothing.

16

Make the manufacturing sector the catalyst for increasing the income from goods and
manufacturing. Encourage fully the use of the countrys natural resources. Increase the level
of research and development (R&D). Determine an industrial policy with a universal concept.
Exportation of manufactured goods in large quantities to be more competitive. Diversity and
improve on non-resource based industries for export. Develop selected heavy industries and
an effective system of information technology.
The Malaysian Industrial Development Authority (MIDA 2006) is the governments
principal agency for the promotion and coordination of industrial development in Malaysia.
MIDA assists companies which intend to invest in the manufacturing and its related services
sectors as well as facilitates the implementation and operation of their projects. The wide
range of services provided by MIDA includes providing information on the opportunities for
investment and facilitating companies which are looking for joint venture partners.
3.2.8

Develop strong human resource for long term economic growth.

Develop manpower and reduce expenditure in the construction of infrastructure.

Restructure and modernise the industrial sector by enhancing the performance of small
industries. Increase employment opportunities by increasing opportunities for technical
training and skills. Various measures were introduced to increase the supply of skilled
manpower.
These measures included expansion of the education and training capacity,
particularly those in the private sector, and incentives to increase the female labour force
participation rate. The government also continued to allow the employment of foreign
workers, particularly skilled workers. Efforts were also made to increase the capital-intensity
of the production processes through encouraging firms to adopt more labour-saving
technologies.

3.2.9

Increase efficiency through IT and overcome social problem.

The initial ICT infrastructure was provided in the NDP and the government has

introduced various initiatives to facilitate the greater integration of Information and

17

Communications Technology (ICT) to improve capacities in every area of life, including the
enhancement of education and training programmes. Malaysia saw the advent of the digital
revolution from quiteearly on. For improving our economic and social status, we embarked
on the multimedia super corridor (MSC) project in 1996 to help Malaysia leapfrog into the
information age. The MSC was envisioned as a global test bed for local and foreign
companies to push the limits of multimedia.
The MSC's intent was to create a cutting-edge environment to attract foreign
businesses, while nurturing and developing local IT Champions at the same time. The MSC
would then act as a catalyst for the adoption of ICT throughout the nation, eventually raising
national productivity and making Malaysia excellence in ICT. In 1997, the Malaysian
Government launched the Electronic Government (e-Government)initiative to reinvent itself
to lead the country into the Information Age. The implementation of e-Government in
Malaysia heralds the beginning of a journey of reinventing the government by transforming
the way it operates, modernizes and enhances its service delivery.
To overcome social problem such as racial inequality and youth social problems, the
government had launch the solution such as to foster unity among races to create a society
that is united and harmonious, stress on moral and ethics based on Islam and nurture the
practice of positive value and work ethics such as discipline, economy, honesty and respect
for others. Other solution in campaign to be polite especially to senior citizens or the elderly
while inculcate the value of family, parenthood, neighbourliness and correct group behaviour.
Foster feelings of pride of heritage, success and the spirit of one nation guided by pure
values and encourage clean effective administrative reformation are the basics. The
expansion of promote and preventive health services such as healthy lifestyle campaigns,
expanding the coverage of the immunization programme, school health services as well as
providing safe water and sanitation in the rural areas, enhanced the quality of life for general
public.
3.3

National Vision Policy (NVP) Strategies

3.3.1

Sustain macro economy stability

The strengthening of macroeconomic fundamentals and the financial sector together

with the strong performance of the economy in 2000 will provide the base to sustain the high
18

growth. Private investment will continue to provide the stimulus for the economy with its
growth averaging 19 per cent per annum. The Government will continue to implement
measures aimed at reducing the large deficit in the services account. Increased foreign
exchange earnings are to be expected from tourism, education, shipping and insurance,
finance and consultancy services.
This will include improving skills and management capabilities, increasing research
and development (R&D) spending, and greater use of technology and information and
communications technology (ICT) in all economic sectors, in line with efforts to develop the
knowledge-based economy. Public investment will be increased to improve the education and
training delivery system. At the same time, the private sector will be encouraged to assume a
bigger role, particularly in terms of R&D and product innovation.
The anti-inflation strategy will also include various administrative measures, such as
the enforcement of price-tagging and averting irresponsible price increases, prevention of
restrictive sales practices and monitoring of the prices of basic necessities for the lowerincome group. Government will ensure that the growth of money supply is consistent with
price stability, and adopt a prudent fiscal policy. Foreign investment will continue to be
important, although its share to total investment is expected to decline as a result of the
anticipated higher growth in domestic investment and increased global competition for
foreign direct investment (FDI).
3.3.2

Improve eradicate poverty and restructure society in new ways

The thrust of the poverty eradication strategy is to reduce the incidence of poverty to

0.5 per cent by 2005. The respective programmes will also address the issue of poverty
among the Orang Asli and other Bumiputera minorities in Sabah and Sarawak. The
Government will intensify efforts to ensure that the poor and low-income groups also benefit
from various measures implemented in education, health services, housing and the provision
of quality amenities.
To address pockets of poverty among households in urban centres and its periphery,
the Government will implement programmes such as the provision of housing and amenities
as well as opportunities to generate income. At the same time, the respective states and local
authorities will carry out the resettlement of squatter areas throughout the country. In
addition, the existing integrated approach taken by local authorities, private sector and non19

governmental organizations (NGOs) will be continued through programmes such as the

Integrated Development for Urban Communities, Pusat RAHMAT, Projek HARAPAN and
Skim Khas Ibu Tunggal.
The Government will continue to address the issue of income imbalance, particularly
between and within ethnic groups, income groups, economic sectors, regions and states. In
addition, measures will be taken to encourage smallholders and farmers, particularly those
with small and uneconomical land size, to diversify into activities such as aquaculture and
livestock farming as well as in non- agricultural income-generating activities.
As for the restructuring of ownership in the corporate sector, efforts will continue to
be taken to improve effective Bumiputera participation as well as increase the share of
capital ownership and control of companies to at least 30 per cent by 2010.
3.3.3

Increase growth through productivity.

Malaysia will need to enhance the competitiveness of its products through

productivity increases and quality improvements. This includes the establishment of trading
houses that will provide the support services to promote Malaysian exports overseas. Efforts
will be taken to increase the production of locally manufactured capital and intermediate
goods, including parts and components, to reduce import intensity.
Increases in total factor productivity and raising the level of potential output are
crucial to enhance Malaysia's international competitiveness in the short-term and mediumterm. Efforts to increase productivity will depend on increasing the knowledge content of all
economic activities and the availability of an adequate supply of highly skilled and
knowledge manpower.
In addition, the price index is expected to be maintained at a low level with the
availability of cheaper imports in the domestic market. Local inputs will be produced more
efficiently in order to compete with cheaper imports. Imports of consumption goods are
expected to grow moderately in line with efforts to contain imported inflation, including the
Buy Malaysian campaign.
3.3.4

Increase competitiveness in the public and primary economic sectors.

20

Urge workers of all levels in all sectors to step up efforts, individually or jointly, to
improve and increase their productivity and efficiency. This increase will contribute towards
sustaining growth and ensure that Malaysian products can compete in the international
market. The implementation of strategies and programmes are to restructure employment in
the various sectors and occupations will continue to be undertaken.
Measures will be taken to improve the balance of Bumiputera and non-Bumiputera
employment in both the public and private sectors. This will require concerted efforts of
both the Government and the private sector. The concentration of non-Bumiputera in the
private sector and the Bumiputera in the public sector will be reduced by increasing the
number of non-Bumiputera in the public sector and increasing the intake of Bumiputera in
the private sector in management and supervisory positions as well as in their businesses.
The Government will endeavour to increase the participation of non-Bumiputera at
all levels of the police, army and in the field of education. In this way, all the activities in the
community will be reflective of the various races of Malaysia. Malaysian citizens from Sabah
and Sarawak will be encouraged to work in the Peninsula to foster closer relationships among
the states of Malaysia. Education and training will continue to be an important vehicle to
achieve the employment restructuring objectives.
In this regard, more places will be made available for qualified Bumiputera students
in public and private institutions of higher learning, particularly in science, ICT and other
professional courses. At the same time, attention will also be given towards improving the
performance of Bumiputera students especially in Science, Mathematics and the English
language, through more effective teaching methods, a better provision of educational
facilities and the establishment of more residential schools. Adequate financing will be
provided to the Bumiputera to assist them to pay the higher fees in the private institutions.
3.3.5

Extend the usage of ICT

The ICT infrastructure before will be upgraded through several initiatives and

introducing the Network Management System for better service availability. The ICT
infrastructure will also be extended to the rural areas to reduce the digital divide. Among the
programmes to be implemented include Infodesa and Internet Desa, which will offer
awareness and training courses. The Government will continue to facilitate the introduction
of new and innovative services in the communications and multimedia industry. In addition,
21

performance standards and broad guidelines will be set to protect and promote consumer
interests.
The first wave Multimedia Super Corridor (MSC) flagship applications will be rolled
out in the Eighth Malaysia Plan after ascertaining their effectiveness. The smart school
concept will be expanded to cover 8,000 schools while tele-health will be implemented at
various health centres and rural clinics. For the future agenda, the second wave flagship
applications will focus on attracting leading edge technology developers and promoting
transfer of technology as well as R&D activities.
3.3.6

Strengthen human resource development

A strong human resource base to support the development of a knowledge-based

economy and enhance productivity and competitiveness will be one of the key strategies in
ensuring that the nation is able to face the challenges of globalization and sustain economic
growth. To meet this strategy, the education and training system will be reoriented to ensure
that the output from these institutions can match the requirements of new technology and
knowledge, needed to spur economic growth and enhance competitiveness.
Initiatives will also be implemented to induce more firms especially the small-scale
and medium-scale enterprises (SMEs) to move into higher capital-intensity production
processes, and optimize the utilization of local labour. The prime target is to encourage more
women especially those with tertiary education to join the labour force. Another important
issue to be done is to strengthen human resource development is to emphasis the wage
growth must commensurate with productivity increases.
3.3.7

Upgrade the quality of life

Upgrading the quality of life is to strengthen unity of race and country and to nurture

and protect a strong Malaysian identity based on a spirit of love for religion, race and
homeland. By improving the quality of life that is balanced physically, spiritually and in
terms of socio-economic development.
To make this happen the government had to place Islam as an important element in
the national culture because Islam is the religion of the country, recorded and accepted by the
Constitution. Then, restore and protect the cultural foundations to nurture cultural elements
22

that have been inherited by various communities and adjusted according to universal
characteristics or values.
The attitude and image of Malaysians are being projected in international society. And
by sharing of values that can be commonly shared such as culture and values of life that
create points of similarity in social living. How this can be done? It is through various
program that had been arrange by the government such as Cultural programmes through the
mass media especially Radio and Television Malaysia at various festive seasons like Hari
Raya Aidilfitri, Chinese New Year, Gawai, Deepavali, Wesak Day and Christmas.
3.3.8

Strengthen Positive Value

From past experience we saw that economic development and globalization will have

consequences on the nation's social and cultural institutions and norms. Measures will have
to be taken to ensure that society is resilient to withstand the negative influences that may
erode moral values as well as affect social harmony and tolerance. Therefore, an important
strategy will be strengthening moral and ethical behaviour among Malaysians and greater
emphasis will be given to nurture and inculcate positive values, particularly among our
youths. This strategy implemented by The Young Comrades Programme (Rakan Muda)
which developed a caring society by inculcate the value of family, parenthood,
neighbourliness and correct group behaviour.

23

4.0

COMPARISON OF THE ACHIEVEMENT OF THE THREE ECONOMIC

POLICIES

4.1

SOCIO-ECONOMIC PROGRESS

4.1.1

Poverty Eradication
New Economic Policy

The most significant success of the NEP and encouraging that poverty reduction and
educational upgrading the natives. The most prominent is the decline in the poverty
rate from 49.3% in 1970 to 19.1% in 1990. In rural areas, the population has increased
income and intangible unemployment (under employment) is almost gone. Modern
facilities such as roads, schools, health clinics, electricity power and water supply has
become must.

National Development Policy

The incidence of poverty among Malaysians decreased from 8.7 per cent in 1995 to
6.1 per cent in 1997, and the number of poor households declined by 25 per cent,
from 365,600 to 274,200. However, the efforts to further reduce poverty were
hampered by the economic crisis. Malaysia only able to reduce the incidence of
poverty to 7.5 per cent in 1999 and the incidence of hard-core poverty decreased
slightly from 2.1 per cent to 1.4 per cent for the same year.
National Vision Policy
The level of poverty in rural areas was reduced from 45 per cent in 1976 to 21.8 per
cent in 1990 and 11.9 per cent in 2004. The incidence of hard-core poverty was 2.9
per cent in 2004. Rural development efforts which gave due emphasis to the
eradication of poverty appeared to be effective.

However, there are variations in the achievement. Rural poverty tended to be higher in
less developed states such as Sabah, Sarawak, Kelantan, Terengganu and Kedah. The
incidence of poverty also varies according too occupations/economic activities. A
24

higher rate of poverty occurred among paddy farmers, rubber and coconut small
holders and fishermen. The focus on the hard-core poor has been given less
preference. Instead priority is given to mega projects like the Petronas Twin Towers,
the Penang Bridge, the North-South Expressway and KLIA.

4.1.2

Restructuring the society

New Economic Policy

Corporate equity has yet to reach the target of 30% for holdings that are sold for shortterm profits and not maintained and added to long-term basis. Bumiputera overall
corporate equity holdings have increased from 2.4% in 1970 to 19% in 1990. In the
past, there is no banking institution has Bumiputera majority owner, but now the
major banks in Malaysia are owned and managed by the Community. The dealer
community also exists although mostly small and medium-status.
NEP has a target value and pure. Yet implementation has given rise to dissatisfaction
some since this will lead to the practice who are instead based on the ability or in
English idioms "who you know and not what you know". Apart from that, there are
also complaints that there is no "equal field" in implementation of the NEP. Not
considered fair, transparent and efficient manner has caused dissatisfaction among non
Bumiputera. For example, university admissions quota system has been considered by
the non Bumiputera as narrow opportunities for their children who qualify for
university education.
National Development Policy
Bumiputera ownership declined below the 1995 level. Although in absolute terms,
Bumiputera ownership of share capital at par value increased by 12.6 per cent per
annum from about RM37 billion in 1995 to RM59 billion in 1999, in percentage
terms it declined from 20.6 per cent to 19.1 per cent. Similarly, the equity ownership
among non- Bumiputera also declined during the period from 43.4 per cent to 40.3
per cent. This decline reflects the inability of general public, particularly Bumiputera,
to sustain their equity holding structure during the difficult period following the
economic crisis.
25

This indicated that economic resilience has to be strengthened. NEP also reduce the
income gap between Bumiputera and non-Bumiputera. For example, the ratio of
Bumiputera to China increased from 1:1.74 in 1990 to 1:1.64 in 1990. Bumiputera
Commercial and Industrial Community (BCIC) is extensively retained and high
priority is still given to all Bumiputera. However, the reliance on the Bumiputera
(private) sector to attain the 30% figure is more pronounced. Here we witnessed the
rise of the Bumiputera-owned conglomerates and the Billionaire Bumis.
National Vision Policy
The other part regarding BCICs goal of 30% Bumiputera equity still remains in force.
The Government will also enhance Bumiputera participation in the retail trade subsector through the Bumiputera Retail Trade Development Project or PROSPER.
Concentrates on increasing the participation of Bumiputera in the leading sectors of
the economy, and with the same breath Bangsa Malaysia was coined. Additionally,
with regards to Equity Restructuring, Tun Dr. Mahathir said, In ensuring nonBumiputera equity ownership, the share of ownership by the Indian community will
be given due consideration. Privatization became the in word and such programs
will continue to be implemented to create more opportunities for Bumiputera
entrepreneurs at the corporate level.

4.2

PRIVATIZATION
New Economic Policy
With privatization opportunities from the mid-1980s largely decided on a
discretionary basis by the government leadership, there has been growing resentment
and criticism of rent-seeking and cronyism.
26

Such disbursement of privatization opportunities also strengthened the leaderships

means for patronage, in turn encouraging competition for party and government
political office and upward mobility.
The selective nature of the bail-out processes and procedures following the 1997
1998 currency, financial and economic crises have strengthened, rather than
undermined, these tendencies.
National Development Policy
Privatization continued to be an essential part of the Seventh Malaysia Plan strategy
of promoting greater private sector participation in economic development. Through
the privatization programme, people was able to enjoy better facilities.
This is because, if the projects were to be implemented by the government, many of
the projects would have to be deferred for many years until the government had
sufficient funds. Meanwhile, people would not be able to enjoy quality facilities and
the number of accidents on low quality roads would increase tremendously.
On the other hand, through privatization, new facilities were developed much earlier
for the benefit of the people, for example, highways with lower toll rates. Through
privatization the Government managed to save capital expenditure totalling RM49.2
billion, while the proceeds from the sale of equity and assets amounted to RM4.4
billion.
National Vision Policy
The government began implementing its privatisation policy in 1983 by farming out
infrastructure projects to private companies. However, some of the privatised projects
have encountered spectacular failures and were subsequently re-nationalised. In recent
months the government has spent billions in taking over a number of previously
privatised projects, including the RM1.8 billion for debt-ridden national carrier
Malaysia Airlines System.
July 2002, RM4 billion was spent to rescue UEM, whose subsidiary Renong is the
27

major contractor for a number of privatised highway projects. During the time
government is also preparing to bail out two major light rail transit companies
amounting to RM6 billion. Over the years, opposition figures and foreign investors
have criticised the government's privatisation for promoting crony capitalism as well
as widening the gap between the rich and poor.

4.3

EMPLOYMENT, EDUCATION AND TRAINING

New Economic Policy
Employment Despite encouraging growth in the Gross Domestic Product (GDP),
employment rates had not grown at a commensurate pace. In addition, there was also
the problem of ethnic specialisation in certain professions, with the Chinese
dominating the marketplace, the Malays dominating the civil service, and the Indians
largely participating in specialist professions such as law. The income disparity
between rural and urban areas that the Second Malayan Five Year Plan had sought to
resolve was also not satisfactorily eliminated
Education Bumiputras were accorded quotas for admission to public universities.
Bumiputra were allotted a significantly lower percentage of places originally intended,

as the population figures used to calculate the quotas were based on 1970s numbers.
National Development Policy
Employment Persistent labour shortages experienced in the Seventh Malaysia Plan
resulted in the tightening of labour market and pressure on wages. This was achieved
through further amendments to the Employment Act 1995 to include new modes
of working such as teleworking, part-time work and job sharing.
The amendment of the Act facilitate the setting-up of community nurseries and
kindergartens within residential areas and ensuring better access to training
opportunities. Pensioners with

the appropriate qualifications and experience will

continue to be considered for re-employment, on a case-by-case basis.

28

In addition, employees were given the opportunity to participate in the ownership of

the entities through the Employees Share Option Scheme. These schemes helped to
instil a sense of belonging and dedication, thereby, enhancing productivity.
Education The Curriculum Development Centre was established. Concerted efforts
to increase accessibility to education and training resulted in increased enrolment at
all levels from pre-school to degree level. Several new technical and vocational
schools were built under the Second Malaysia Plan, with seven institutions alone
completed in 1975. It would alleviate the problem of unemployment, especially
among the youth.
Three new universities and three new polytechnics to increase tertiary enrolment in
public institutions. With the implementation of the Private Higher Educational
Institutions Act 1996, the private sector also became an important provider of tertiary
education. Six private universities offering degree programmes in key technologies
were set up while three foreign universities were allowed to set up branch campuses
to offer courses up to the degree level.
National Vision Policy
Employment The unemployment rate remained low at about three per cent with low
inflation. Exports increased and surpassed RM287 billion while total trade increased
to RM515 billion. The balance of payments is in Malaysia's favour. The per capita
income increased from RM12,160 (1998) to RM13,360 (2000). The slower rate is
effected by the declined of primary sector such as agriculture, forestry, fishing and
mining. However, the secondary and tertiary sector have recorded an expansion with
an averaged rate increase of 4.3% to account for 84% of total employment
opportunities.
Education Under NVP, the capacity of the Government's higher education
institutions expanded to increase accessibility, especially to Bumiputera to balance the
increase in private educational institutions. Both the public and private institutions of
higher learning will be required to increase the number of Bumiputera graduates and
ensure that the courses offered meet market demand.
29

Training To meet the increased demand for skilled human resource, a total of
597,384 skilled workers was produced by training institutions and 4.8 million training
places for skills upgrading were provided by Pembangunan Sumber Manusia Berhad
during the 1991-2005 period. Opportunities for skill enhancement and lifelong
learning were also expanded through the establishment of community colleges and
open universities. However, tertiary and training institutions still needed to become
more aligned with industry, in order to better meet the needs of employers.

30

4.4

INFRASTRUCTURE DEVELOPMENT
New Economic Policy
The provision of a comprehensive range of infrastructure facilities and services is
essential to support the growth of the economy. Infrastructure constraints at the
beginning of the Seventh Malaysia Plan period have largely been overcome with the
accelerated capacity expansion of roads, ports, airports, urban transportation,
communications, water supply and electricity as well as sewerage services. A quite
high achievement of provision of water supply and electricity in rural areas. The
percentage of households with piped water had increased from 42 per cent in 1980.
National electricity coverage expanded from 80 per cent in 1990 to 93 per cent in
2005. Rural electricity coverage rose significantly from 67 per cent in 1990 to 92 per
cent in 2005. Although the situation has improved greatly, especially for Sabah and
Sarawak,

coverage

in

these

states

needs

to

improve

further.

As

for

telecommunications, market liberalisation of the industry since the 1990s has led to
more competitive pricing and consumer choice, which in turn increased the cellular
phone penetration significantly from 0.7 per 100 population in 1990 to 74.1 in 2005.
National Development Policy
To ease traffic congestion, a multi-modal public transport system was implemented in
the Klang Valley, which included the construction of the light rail transit (LRT)
system, rail commuter service, monorail and feeder bus system. The highway and
road network also grew from 53,985 kilometres in 1990 to 77,673 kilometres in 2005,
which facilitated the establishment of new growth areas as well as reduced travel time
and costs. To handle the increase in air passenger traffic, upgrading of airports was
undertaken and new airports were built, the largest being the KL International Airport
(KLIA) as the main gateway to the country.

In addition, access by air to remote areas was improved. Some of other the major
projects completed were the Port of Tanjung Pelepas, Second Link to Singapore,
31

Kelinchi Dam and Malaysia's own satellites, MEASAT 1 and MEASAT 2.

National Vision Policy
Infrastructure has received the largest share of public sector development expenditure
in the Malaysia Plans. In the eighth Malaysia Plan the corresponding amount was
forty-six times higher at RM64,128.2 million.
Electricity generation capacity of the country is projected to increase by 31.4 per cent
from 19,217 MW in 2005 to 25,258 MW in 2010. Substantial improvements are also
expected in rural electrification coverage. Nation-wide the rural electrification
coverage, already high at 92.9 per cent, is forecasted to increase to 95.1 per cent.
Sabah and Sarawak, which have the lowest rural electrification coverage rates, will
see significant improvements. In the case of Sabah the percentage will increase from
72.8 per cent in 2005 to 80.6 per cent in 2010. In Sarawak rural coverage is planned to
improve from 80.8 per cent to 89.6 per cent between 2005 and 2010.
Water supply is already quite well developed in Malaysia. Water supply coverage is
projected to further increase from 95.0 per cent in 2005 to 96.8 per cent in 2010. The
rural areas will see big improvement in water supply coverage, from 92.0 per cent in
2005 to 95.2 per cent in 2010.

32

4.5

ACCELERATING SCIENCE AND TECHNOLOGY DEVELOPMENT

New Economic Policy
Science Policy in Malaysia is regulated by the Ministry of Science, Technology, and
Environment. Other ministries, such as the Ministry of Agriculture and the Ministry of
Health also have science departments. Training in scientific areas was promoted
during the 1970s and 1980s.
In an effort to create a self-reliant defensive ability and support national development
Malaysia privatised some of its military facilities in the 1970s.
National Development Policy
From 1987-1997 research and development used 0.24% of GNP, and in 1998 hightech exports made up 54% of Malaysia's manufactured exports. The country is one of
the world's largest exporters of semiconductor devices, electrical goods, and
information and communication technology products.
The Malaysia Defence Industry Council. to try to promote defence industry and its
competitiveness by actively marketing the defence industry. One way it does this is
through the Langkawi International Maritime and Aerospace Exhibition, one of the
largest defence and civil showcases in the Asia Pacific, regularly attended by over 500
companies. The Malaysian Armed Forces relies heavily on local military technology
and high-tech weapons systems designed and manufactured by foreign countries.
National Vision Policy
In 2002 the Malaysian National Space Agency (Angkasa) was formed to deal with all
of Malaysia's activities in space, and to promote space education and space
experiments. It is focused on developing the "RazakSAT" satellite, which is a remote
sensing satellite with CCD cameras. In early 2006, Sheikh Muszaphar Shukor and
three other finalists were selected for the Angkasawan spaceflight programme.
This programme came about when Russia agreed to transport one Malaysian to the
33

International Space Station as part of a multi-billion dollar purchase of 18 Russian

Sukhoi Su-30MKM fighter jets by the Royal Malaysian Air Force.

4.6

INFORMATION AND COMMUNICATIONS TECHNOLOGY

New Economic Policy

National Development Policy

E-Government seeks to enhance the convenience, accessibility and quality of
interactions with the public and businesses at large. Citizens and businesses are also
able to transact with the government anywhere and anytime at their convenience. The
main goals of e-government are to improve the quality of public services and the
efficiency of administrative work.
However, it does not allow citizen participation in local government administration
such as policy making and implementation processes using ICT. Public confidence in
online services delivery will be a key factor in the success of e-government. The
Local Authority is the third tier in the government system, which is at the forefront of
public service delivery not only to individuals but also to other organizations of the
public and private sectors.
National Vision Policy
Embarked on several ICT endeavours to improve its administrative machinery in
terms of structure, systems, procedures, management integrity and work ethics. New
strategic measure were introduced and ICT was utilized to upgrade both the quality of
management and delivery system. Both government and private sectors have thus
recognized early the potential and impact of ICT in improving its internal operations
and service delivery.

34

During the economic crisis all the economic statistics indicated that the Malaysian
economy has not only recovered but the recovery was better than that of other
countries that were also affected by the crisis. After the GDP contracted by 7.4 per
cent in 1998, a growth of 5.8 per cent was achieved in 1999 and 8.5 per cent in
2000. The external reserves increased from US$20 billion in 1997 to US$27 billion
today. At the end of 1999, the reserves increased to US$31 billion but declined
moderately due to increased imports, repatriation of profits and proceeds from the
sale of shares and reverse investment by Malaysian firms as well as the depreciation
of the Yen and Euro, which form a part of our foreign reserves.

35

5.0

SUMMARY
Over the last few decades, Malaysia have laid a strong foundation for a rapid and

sustainable economic growth. The strength and resilience were tested several times when
both internal and external factors caused Malaysia economy to slow down. The latest
challenge was when the currency speculators pushed down the value of our currency. Yet,
each time we not only succeeded to recover the economy but developed it at an even faster
pace.
New Economic Policy, covering the period 1991-95, is the rst hase in the
implementation of the Second Outline Perspective Plan (OPP2), 1991-2000. The OPP2,
which embodies the National Development Policy (NDP), sets the broad objectives,
strategies and targets that will guide the development of the nation in the nineties. The Sixth
Plan elaborates the strategies as well as the programmes and projects designed to achieve the
objectives of NDP.
With the launching of the Sixth Plan, Malaysia now stands poised for another period
of sustained social and economic development in the new decade of the nineties. Since
independence in 1957, the country has achieved remarkable progress in transforming the
economy and raising the standard of living of the people through a series of ve-year
development plans. These remarkable achievements have been most evident during the last
twenty years under the New Economic Policy(NEP), when the national development
programmes were considerably expanded to undertake the ambitious tasks of eradicating
poverty and restructuring society so as to eliminate the identication of race with economic
function.
The overall progress in achieving the objectives of NEP, as shown by the reduction in
income inequalities and the advancement made by Bumiputera in the modern sectors of the
economy, has strengthened national unity in our multi-racial society and provided the nation
with a much higher level of social and political stability compared with the situation in 1970.
This stability, together with the condence it generates on the future prospects for the
country, provides a strong foundation for the development of the economy and the continued
prosperity of the people.
To be sure, there will always be challenges and uncertainties facing the economy but
with internal political and social stability and the willingness to implement policies which
36

enable the economy to adjust and adapt to the changes around it, Malaysia has shown that it
has the capacity to minimize the impact of adverse developments on the countrys growth
prospects. This capacity of the economy to respond to policies can be clearly seen from the
recent experience during 1985-86 when the country went through the worst recession in its
post-independence history.
Yet, with determined efforts to introduce structural adjustments towards liberalization
and deregulation, the economy turned around rapidly from 1987 onwards to record
unprecedented growth rates. As a result, the performance of the economy for the 1986-90
period, exceeded the Fifth Plan targets, thus enabling it to play an important role in achieving
the objectives of NEP.
While National Development Policy (NDP) is to attain balanced development in order
to create a more united and just society. NDP which emphasizes growth with equity will
enable all Malaysians to participate in the mainstream of economic activities, thereby
ensuring political stability and national unity. Building upon the on going thrust of NEP in
eradicating poverty and restructuring society.
As the NEP, the NDP continues to not only reduce economic imbalances among the
ethnic but also between rich and poor and between regions. Economic imbalances will be
reduced based on the principles of balanced and equitable distribution of development to
achieve social justice & strengthen national unity.
Although the new policies have put far greater emphasis on achieving rapid growth,
industrialization and structural change, there is the widespread perception that public policy
is still dominated by the NEPs interethnic economic policies, especially wealth redistribution
or restructuring targets. These policies are believed to be especially important in terms of
influencing public policies affecting corporate wealth ownership as well as other areas,
notably education and employment opportunities.

In other words, ethnic discrimination primarily involves the business community and
the middle class, where interethnic tension is most acute. The implementation of NVP about
Interethnic business coalitions have become increasingly important over time, often with an
ethnic Malay partner securing rents for gaining access to government-determined business
37

opportunities, and the ethnic Chinese partner with access to capital and business acumen
getting the job done. Such joint ventures have generated considerable resentment, especially
among those denied access to such business opportunities.
As conclusion, discussion of rural development experiences in Malaysia reveals that
the process of rural transformation has taken place within the framework of a market
economy. Rural development has been used as a means to correct the failure of the market
mechanisms to trickle down the benefits of development. The persistence of poverty and
underdevelopment in rural areas were the manifestation of uneven development as the
process and outcome of capitalism.

38

6.0

REFERENCES

Abdullah Chek Sahamat, (2005). Native Customary Right Land Development: An Approach
to improve The Rural Native Wellbeing of Sarawak Seminar Kebangsaan
PerancanganBandar dan Wilayah Ke-23 Skudai: UTM, 21 September
Abdul Aziz bin Muhammad, (1993). Zakat and Rural Development in Malaysia Kuala
Lumpur. Berita Publishing,
Acemoglu, D., & Zilibotti F. 1997. Was prometheus unbound by chance? Risk,
diversification and growth. Journal of Political Economy, 105, 709-751.
Adajaski, C. K. D., & Biekpe N. B. 2005. Stock market development and economic growth:
The Case of Selected African Countries. Working Paper, African Development Bank.
Adam, Christopher & Cavendish, William. 1995. Early privatizations. In Jomo, K.S. (eds).
Privatizing Malaysia: Rents, rhetoric, realities: 98 137. Boulder: Westview Press.
Ahmad, I. n.d. Current situation of microfinance in Malaysia and its issues. Source:
http://banktani.tripod.com/microfinance.htm. Access date: 19 June 2007.
Ahmed, S. N., & Ansari M. I. 1998. Financial sector development and economic growth: The
South-Asian experience, Journal of Asian Economics, 9, 503-517.
Akaike, H. 1973. Information theory and the extension of the maximum likelihood principle,
in B. N. Petrov and F. Csaki, eds. Proceedings of the Second International Symposium on
Information Theory, Budapest, 267-281.
Alavi, Rokiah. 1998. Management of Protection Policy: Lessons From Malaysian
Experience. In Ishak Yussof & Abdul Ghafar Ismail (eds). Malaysian
Industrialisation: Governance and

the

Technical

Change.

Bangi:

Penerbit

Universiti Kebangsaan Malaysia.

Anis, M. N. 2007. Immigration update. The Star, June 26: SS5.
Asian Development Bank (ADB). 2000. Finance for the Poor: Microfinance Development
Strategy. Manila: Asian Development Bank.

39

Asnarulhadi Abu Samah dan Jayum A. Jaw an (1997). Kenegaraan Malaysia. Universiti
Putra Malaysia. DASAR EKONOMI BARU (DEB) (19701990)137
Atje, R., & Jovanic B. 1993. Stock markets and development. European Economic Review,
632- 640.
Azizi Muda, (1989). An Evaluation of New Town Development in Malaysia: A Case of
DARA. Ph.D Thesis University of Nottingham
Baillie, R. T., Bollerslev, T., & Mikkelsen, H. O. 1996. Fractionally Integrated Generalized
Autoregressive Conditional Heteroskedasticity. Journal of Econometrics, 74, 3-30.
Baillie, R. T., & DeGennaro, R. P. 1990. Stock returns and volatility. Journal of Financial
and Quantitative Analysis, 25, 203-214.
Balasubramanyam, V. N. & Salisu, M. & Dapsoford, D. 1996. Foreign direct investment and
growth in EP and IS countries. Economic Journal, 106,. 92-105.
Benchivenga,V.R., Smith,B.D., & Starr,.R.M. (1996). Equity markets, transaction costs, and
capital accumulation: An illustration. The World Bank Economic Review, 10(2), 241265.
Bengoa, M. & Sanchez-Robles, B. 2003. Foreign direct investment, economic freedom and
growth: new evidence from Latin America. European Journal of Political Economy,
19, 529- 545.
Bose, Romen (Nov. 17, 2006). Racial tensions on rise in Malaysia. Al Jazeera.
Burton, John (Nov. 22, 2006). Ethnic policy blunts Malaysia. Malaysia Today.
Chamhuri Siwar and Nik Hashim Nik Mustapha. (1988). Integrated Rural Development in
Malaysia: An Assessment Monograph 4, Bangi: UKM.
Conte, M., & Darrat A. 1988. Economic growth and the expanding public sector: A
reexamination. Review of Economics and Statistics, 70(2), 322-330.
Cooper, J. C. B. 1982. World stock markets: Some random walk tests. Applied Economics,
14. Culver, E. S., & Papell, H. D. 1997. Is there a unit root in the inflation rate?

40

Evidence from sequential break and panel data models. Journal of Applied
Econometrics, 12, 435-444.
Courtenay, P.P. (1988). Rural Development and the Fifth Malaysia Plan, Jurnal of
RuralStudies , Vol.4, No.3. pp. 249-261.
Economic Planning Unit. (2005). Malaysia Quality of Life, (Kuala Lumpur: Percetakan
Nasional Malaysia). Government of Malaysia,
Funston, John (2001). "Malaysia: Developmental State Challenged". In Government and
Politics in Southeast Asia, p. 194.
Ghani Salleh. (1991). New Towns and Regional Development in Peninsular Malaysia: A
case Study of Terengganu Tengah. Ph.D Thesis, University of Sheffield.
Ismail Md.Salleh. 1991. Port Klang, Malaysia: A Privatization Case Study. In Geeta Gouri.
Privatisation and public enterprise: The Asia-Pasific experience. New Delhi: Oxford
& IBH Publishing.
Just Faaland, Mukhriz Mahathir and Khairy Jamaluddin (2003). Malaysia's new economic
policy: An overview. Utusan Publications & Distributors Sdn Bhd.
Lotfi Ismail 1980. Sejarah Malaysia 14001963. Utusan Publications & Distributors.
Negara Kita: (1982). Sejarah, Pentadbiran dan Dasar-Dasar Pembangunan. INTAN.
Norizan Hj. Mohd Nor, Regional Development Planning in Peninsular Malaysia:Empirical
Analysis on Resource Frontier Region, Jengka, (Ph.D Thesis, University
of Sheffield, 1992)
Malaysia Kita, (1991). Panduan dan Rujukan Untuk Peperiksaan Am Kerajaan. International
Law Book Services.

41

2001a. Thid Outline Pespective Plan, 20012010. Government Printers, Kuala Lumpur.
2001b. Eighth Malaysia Plan, 20012005. Government Printers, Kuala Lumpur.
1999. Mid-Term Review of the Seventh Malaysia Plan, 19962000. Government Printers,
Kuala Lumpur.
1996. Seventh Malaysia Plan, 19962000. Government Printers, Kuala Lumpur.
1994. Mid-Term Review of the Sixth Malaysia Plan, 19911995. Government Printers, Kuala
Lumpur.
1991a. Second Outline Perspective Plan, 19912000. Government Printers, Kuala Lumpur.
1991b. Sixth Malaysia Plan, 19911995. Government Printers, Kuala Lumpur.
1989. Mid-Term Review of the Fifth Malaysia Plan, 19861990. Government Printers, Kuala
Lumpur.
1986. Fifth Malaysia Plan, 19861990. Government Printers, Kuala Lumpur.
1984. Mid-Term Review of the Fourth MalaysiaPlan, 19811985. Government Printers,
Kuala Lumpur.
1981. Fourth Malaysia Plan, 19811985. Government Printers, Kuala Lumpur.
1979. Mid-Term Review of the Thid Malaysia Plan, 19761980. Government Printers, Kuala
Lumpur.
1976. Third Malaysia Plan, 19761980. Government Printers, Kuala Lumpur.
1973. Mid-Term Review of the Second Malaysia Plan, 19711975. Government Printers,
Kuala Lumpur.
1971. Second Malaysia Plan, 19711975. Government Printers, Kuala Lumpur.

42