Published online by Cambridge University Press: 21 October 2015
The Malaysian economy has seen many notable developments since its independence in 1957 from the British rule. Initially a commodity exporter of rubber and tin, it has undergone several structural changes and is now a diversified economy with 75 per cent of its gross domestic product (GDP) coming from the manufacturing and services sectors. The economy has emerged as a modern, high middle income nation with strong economic fundamentals. Indeed, these economic achievements have been well supported by visionary leadership and proper policies. The developmental journey has spanned 2 Malaya Plans, 9 Malaysia Plans, 3 Outline Perspective Plans as well as a National Mission before coming to this juncture today.
During the Sixth Malaysia Plan in 1991, Vision 2020 or Wawasan 2020 was introduced by the then Malaysian Prime Minister, Dr Mahathir bin Mohamad. The vision called for a self-sufficient, democratic, economically just, mature, liberal and tolerant society, and united Malaysian nation which would achieve US$6,000 per capita income in 1980 prices by 2020. The essence of this transformation has been again outlined in the Tenth Malaysia Plan (2011–15) which was unveiled by Prime Minister Mr Najib Razak in June 2010. In this plan, a clearer perspective has been laid out on how Malaysia can transform itself from a developing country status to a developed country status.
But there remain many pressing challenges which need to be addressed if the country were to implement the Plan and to achieve a high-income status, transforming itself into a developed economy by 2020. In the past decade, the economic landscape, with increasing globalization and emergence of China, India and Brazil, has changed significantly. Hence, Malaysia can no longer depend on a low-cost structure economy to remain competitive internationally. In addition, Malaysia also faces internal challenges to drive economic growth to a higher level, while having to implement a prudent fiscal policy. The nation is confronted with the challenge of providing a conducive investment environment as well as developing high quality human capital, which is critical to enable the shift to a higher level of value added and productivity.
In light of this, a “stock-take” by academics, policy-makers, and the private sector to capture the past, and more importantly, apply lessons from the past to deal with challenges remaining before 2020 would be timely.
- Malaysia's Socio-Economic TransformationIdeas for the Next Decade, pp. xi - xiiPublisher: ISEAS–Yusof Ishak InstitutePrint publication year: 2014