Six years after the National Blue Ocean Strategy (NBOS) was put in place to facilitate the transformation of the economy to a high-income nation, it is heartening to note that Malaysia is on track to achieve that status.
Despite criticism and scepticism, and the bleak global economic environment, especially in the significant drop of crude oil prices, our Gross National Income (GNI) per capita has gone up by almost 50 per cent between 2009 and last year, and 1.8 million jobs have been created. And since 2010, our Gross Domestic Product (GDP) growth has rebounded impressively at an average of 5.6 per cent until last year.
Inflation has been kept low and foreign direct investment (FDI) has been growing at more than 22 per cent per annum.
Performance Management and Delivery Unit (Pemandu) chief executive officer Datuk Seri Idris Jala said we were just 15 per cent away from reaching the World Bank’s threshold category of a high-income nation.
The World Bank’s definition of a high-income status is a GNI of US$12,276 per capita (RM49,400).
There were signs of the middle-income trap (a term that came into Malaysia’s lexicon when Prime Minister Datuk Seri Najib Razak took office in 2009) plaguing the economy from 2001 to 2008 when GDP growth rate stagnated and grew at a meagre 3.7 per cent on average, compared with the 6.3 per cent average growth rate from the period of 1990 to 1997.
Total factor productivity and labour productivity levels were in decline, private investments were not stimulated, and there was inability to attract high-quality FDIs.
FDI inflows dropped from an average of 6.5 per cent from 1990 to 1997, to an average of 3 per cent between 2001 and 2008 as a share of GDP.
The economy at that time was heavily reliant on oil and gas revenue, highly dependent on low- skilled foreign workers, cost of living had been artificially and unsustainably suppressed, tax base was not broad based, wage rates were sub-par relative to productivity growth, graduate unemployment was on the increase, persistent high level of income and wealth inequalities, a monopolistic and oligopolistic market structures, and more importantly, a persistent high public debt and deficit levels.
But, when NBOS was implemented, it drove the economy through high-impact, low-cost and rapidly- executed programmes and projects, underpinned by knowledge, creativity, and innovation.
This is a great achievement and credit must be given where credit is due.
However, it is important to understand that what the government wants to achieve through NBOS is not just to reach the high-income economy benchmark, but also to uplift the wellbeing of Malaysians.
As Najib said in his keynote address at the International Conference on Blue Ocean Strategy on Aug 16: “A successful Malaysia, yes, but also happy Malaysians, with challenging and meaningful jobs, a sense of fraternity and the knowledge that both reward and responsibility come from uniting as a harmonious and increasingly prosperous society.”
This is more profound and challenging to achieve than just to reach the high-income threshold set by the World Bank.
In other words, there is still plenty to do, especially in elevating people’s wellbeing and happiness.
The high-income status will be meaningful only if it trickles down to all Malaysians.
It must be manifested in secure and meaningful jobs, affordable cost of living, reduction in crime rates, quality education system, reasonable and good healthcare system, freedom of thought and association, greater social inclusion, low levels of poverty and income and wealth inequalities, and the empowerment of women and youth.
Of course, attaining the high-income status is a prerequisite for improving people’s wellbeing and achieving happiness.
After all, the top 10 countries in the United Nations World’s Happiness Report 2016 are all high-income economies.
There are many dimensions when it comes to people’s wellbeing and happiness.
For a start, these have to be quantified and measured in the Malay-sian context.
A database with regard to wellbeing and happiness must be devised so that these dimensions can be studied and policies can be formulated for the creation of a meaningful, developed and progressive society by 2020 and beyond.
Dr Irwan Shah Zainal Abidin is director of the Asian Research Institute of Banking and Finance, Universiti Utara Malaysia