The Shared Prosperity Vision 2030 (SPV 2030) is Malaysia’s fifth long-term economic plan since independence.
The first long-term economic plan was the First Outline Perspective Plan (OPP1 — 1971 to 1990).
Under OPP1, the New Economic Policy (NEP) was formulated. It was the first attempt by the government to restructure the economy in a fundamental way to address many legacies of British colonialism.
Chief among them was income inequality, which was seen as a main obstacle to national unity and caused a political crisis in the form of the 1969 racial riots.
Under the Second Malaysia Plan (2MP — 1971 to 1975), one of the targets was to achieve a 30 per cent equity ownership for Bumiputeras. The measures taken included state support for Bumiputera business start-ups and development, ethnic quota for jobs in the government and private sectors, as well as contract bidding and procurement for Bumiputera businesses.
How different are the economic strategies this time around?
SPV 2030 has a similar philosophy to NEP, which is to achieve growth with equity.
The second long-term economic plan was the Second Outline Perspective Plan (OPP2 — 1991 to 2000), under which the National Development Policy or NDP (1991 to 2000) was formulated to spur economic development until 2000.
NDP signalled a shift in development strategy as this was the period when Vision 2020 was born. The economy saw its “golden era”, growing at an impressive rate of nine per cent per annum on average.
However, it was also a dark period when the 1997/1998 Asian financial crisis hit our shores.
SPV 2030 should employ the right strategies in the next 10 years in order for the economy to face impending crisis.
The Third Outline Perspective Plan (OPP3 — 2001 to 2010) was the third long-term economic plan, under which the National Vision Policy was introduced. It aimed to achieve balanced development and prosperous society.
Under OPP3, strategies to boost the manufacturing and services sectors were drawn up under the Third Industrial Master Plan (IMP3), a continuation of the previous two industrial master plans. IMP3 put forth key strategic thrusts, among others, to boost Malaysia as a major trading hub, integrate local companies into global networks, and develop innovative and creative human capital.
In 2008, the economy was impacted by the global financial crisis as gross domestic product and exports contracted.
Thus, SPV 2030 must have specific policies to respond to external shocks.
The fourth long-term economic plan was the National Transformation Policy, in which the New Economic Model was the anchor blueprint.
The aim was to achieve a sustainable and high-income nation by 2020.
While the aim may be similar to SPV 2030, the difference could be in the specific details on how to get there such as the focus on addressing income and wealth inequality.
All in all, there is no doubt that the government, past and present, has come up with great economic policies to move Malaysia to greater heights.
Dr Irwan Shah Zainal Abidin
Associate professor of economics, School of Economics, Finance and Banking, Universiti Utara Malaysia