Malaysia still on the path to becoming a high-income nation

CULTIVATING GROWTH: Photo shows skyline of Kuala Lumpur. Malaysia wants to more than double the per capita income and meet present needs without compromising future needs.

KUCHING: Malaysia has shown tremendous growth over the past decade, developing a diversified economic base and increasing the quality of life of the ‘Rakyat’.

Business intelligence group Inside Investors noted in its Association of Southeast Asian Nations (Asean) Report that Malaysia’s gross domestic product grew an average of 6.5 per cent per year since independence.

Once heavily dependent on production of raw materials, such as rubber and tin, the nation today has a multi sector economy based on services and manufacturing and has developed into a middle income country.

According to a study by Wing Thye Woo, conducted at the University of California in 2009, “to escape the middle income trap, the government must implement root and branch reform in many areas,” such as civil services, educational and research institution among a few.

Rising competition from developing economies in Asia makes it impossible for Malaysia to rely on its low cost advantage as well as the reality that local Malaysian companies have started investing abroad made it clear to the government that change was necessary.

According to the government’s Performance Management and Delivery Unit (Pemandu), “a fundamental change is required, not just in economic and social performance but also in the delivery of public goods and services that underpin the nation’s ability to develop the country.”

The report also noted that the new economic policy (NEP) that was introduced in 1970 as an economic growth strategy did no longer suffice in dealing with the challenges.

“Therefore Datuk Seri Najib Tun Razak introduced the New Economic Model (NEM) as a major reform. Goal of the NEM is to create a high income and sustainable nation enabling all communities to fully benefit from the wealth of the country.”

It added that, “It wants to more than double the per capita income in Malaysia and meet present needs without compromising future needs.”

The government establish four key pillars, encapsulating all sectors in the country to transform Malaysia successfully by the year 2020 and with the effects of the pillars (the 1Malaysia Programme, the Government Transformation Programme, the Economic Transformation Programme and the 10th Malaysia Plan) gaining traction and bearing fruits, Malaysia looks set to achieve the goal of being a high income nation by 2020.

(Source: The Borneo Post)