WITH the theme “Anchoring Growth on People”, the 11th Malaysia Plan, which spans from 2016 to 2020, will play a catalyst role in the final lap to transform the economy into a high-income developed nation before Malaysia launches its subsequent five year economic plan, the Twelfth Malaysia Plan (12MP) in 2020.
The 11MP has a very encouraging theme as it gives a strong signal that the plan has a sense of continuation from the previous Malaysia plans, especially the Tenth Malaysia Plan (10MP). One of the main criticisms of the 11MP is that the six thrusts outlined in the blueprint seem to insinuate Malaysia as still being in the first lap rather than in the final sprint towards vision 2020. This argument is somewhat misleading.
Firstly, it is important to note that the people-centric nature of the 11MP not only plays a role as the final lap to the “Malaysian Dream”, but also to prepare Malaysia into a new beginning of a post-2020 era where the Malaysian economy will be characterised by its openness and level of integration both regionally and globally.
Hence, the role and nature of the 11MP is unique as it sees the 2020 vision not just as an end in itself, but rather a new beginning of an era, an era where the Malaysian economy has already broken away from the middle-income trap.
It is important to note that in the course of economic development, the process and acceleration of growth is not only paramount, but also fundamental. There is no point of talking about the issue of inequality and sustainability if there is no growth in the first place. Hence, the New Economic Model (NEM) blueprint, unveiled in 2010, sketches out three goals: high growth, inclusiveness, and sustainability. During the first lap in this journey of becoming a high-income and developed nation, growth aspect, or the high income aspect of the economy was prioritised more than the other two goals under the NEM. This was clearly manifested in other economic blueprints especially the 10MP. Furthermore, the underlying economic framework and philosophy has been formulated and specified, that is the National Transformation Policy (NTP).
Under the 11MP, the other two goals of the NEM, that is inclusiveness and sustainability, are being looked into more than the high income aspect of the goal. And this is where, the Malaysia National Development Strategy (MyNDS), a sort of new approach to wielding the five year economic plan, comes into play. MyNDS is to focus more on the People’s Economy as opposed to the capital economic dimension.
Indeed, the first four thrusts in the 11MP — to enhance inclusiveness, to improve wellbeing, to speed up human capital development, and to pursue green agenda — are oriented more towards the people, or the rakyat. In fact, when it comes to infrastructure, specific measures and programmes are laid down in the blueprint to not just address hard infrastructure, but also soft infrastructure. This is extremely crucial, especially in relation to the nexus between productivity and innovation, an important dynamic to propel Malaysia to join the league of developed nations.
A few game-changers are worth mentioning in the blueprint. One of them is the focus on the lowest 40 per cent of the Malaysian population in terms of their household income (B40). Together with this is the application of the new measurement of poverty, which is the Multidimensional Poverty Index (MPI), to make a better and realistic assessment on the issue of poverty in 21st century Malaysia. It is high time that poverty is redefined and measured in relative rather than absolute terms. Even the conditions of poverty in developing countries are not similar with developed ones.
The introduction of the National Salary Index (NSI) and the expansion of the Productivity Linked Wage System would be another major step in reducing income inequality while boosting human capital development. The fact that the minimum wage is going to be reviewed is encouraging. All these bode well not only in matters of transparency and accountability, but will also play a role in addressing the issue of the rising cost of living.
With the speedier pace of globalisation and the uncertain external conditions with the volatility in crude oil prices and the depreciation of the ringgit, it is important for the 11MP to be monitored frequently, and if there is a need for government intervention, necessary steps must be taken. The mechanics or the operations of Malaysia’s five-year economic plan cannot be like in the 1960s or in the 1980s. Nowadays, things are changing very fast and a five-year economic plan must be seen as a general framework that can be adjusted accordingly.
Eventually, the success of the 11MP not just rests upon its implementation but also the ecosystem which supports its implementation. And this ecosystem needs some major enabling factors to facilitate the ambitious and courageous plan.
These are, among others, inclusive politics, inclusive democracy, and more importantly, the degree of responsiveness of the rakyat to this ambitious plan.
The writer is a senior lecturer at the School of Economics, Finance and Banking, of Universiti Utara Malaysia