Malaysia: Transforming to Vision 2020

By Khalid Noorshah
Globalia Magazine

Malaysia is fortifying her resolve to achieve her ideal, Wawasan 2020 or Vision 2020 within the nine years left, to be a self sufficient industrialised nation encompassing all aspects of life from economic prosperity, social well being, world class education standards and facilities, political stability as well as psychological well being. Prime Minister Dato’ Sri Najib Tun Razak showed that, since taking office in April 2009, he was focused in making Vision 2020 a reality within the timeline. He was well aware that he needs to improve the government to be more effective and at the same time he needed the people to be united as one to face the challenges of a new Malaysia.

In his maiden speech, he announced the One Malaysia (1Malaysia) concept tagged with a slogan People First Performance Now by calling on the Cabinet, government agencies and civil servants to more strongly emphasize ethnic harmony, national unity and efficient governance and attached with it the values of perseverance, a culture of excellence, acceptance, loyalty, education, humility, integrity and meritocracy. Immediately after assuming office, Najib introduced a series of Key Performance Indicators (KPI) in order to measure and improve efficiency and quality of government services and its delivery as well as realising the 1Malaysia concept. The KPI provides a mechanism for evaluation of ministers and other government agencies including performance reviews carried out every six months. Najib identified six major policy areas in which the KPI will play an especially important role in improving the effectiveness of the Malaysian government. These are known as National Key Result Areas (NKRAs). The NKRAs includes crime prevention, reducing government corruption, increased access to quality education, improvements in the standard of living for low income groups, upgrades to rural infrastructure and improvements in public transportation. Although the move seemed to be geared towards better governance for economic development and the general well being of the nation, it does however, have a political bearing. Najib succeeded the premiership after Barisan Nasional (National Front/BN), the ruling political alliance since independence, yielded one of its worst results in the coalition history when it failed to retain its usual two thirds majority in Parliament in the last general election held in March 2008 and in addition, lost five of the 13 state legislatures compared to only one in the previous general election of 2004. The result of the 2008 general elections was like a wakeup call for BN to shape up or ship out. Since governing Malaysia after she gained independence from the British in 1957, the ruling coalition is now threaten with a new political landscape of which the younger generation who are new voters and internet savvy has easier access to more information through the world wide web and were leaning towards the opposition propaganda that the government is corrupt and was only interested to enrich an elite few.

Among the other issues that influenced public sentiments during the run up to the general elections, according to a survey ran by The Merdeka Centre in 2008 were of inflation, shortage of goods, cuts in fuel subsidies, rising crime, majority government mismanagement, racial equality, the demand for free and fair elections, the Internal Security Act (ISA), considered draconian by the opposing political parties and the eligibility of former Deputy Prime Minister, Dato’ Seri Anwar Ibrahim who became the de-facto leader of Parti Keadilan Rakyat (People’s Justice Party), to stand for election. Although the United Malay National Party (UMNO) of which Najib was its Deputy President then, did fairly well winning almost all seats contested, the performance of the other members of the coalition party, namely the Malaysian Chinese Association (MCA), the Malaysian Indian Congress (MIC) and Parti Gerakan Rakyat Malaysia or The Malaysia People’s Movement Party (Gerakan) which is dominantly Chinese were dismal where they lost almost all seats contested.

Therefore, the 1Malaysia concept also aspires to strengthen relationships among the various ethnic groups and ensures Malaysians sow the seed of unity so that no one ethnic feels alienated because everyone belongs to one race, the Malaysia race that has the same goal and aspirations to develop the country as a developed nation in 2020 and beyond. Democracy in Malaysia is presently organised through ethnic based political parties. BN for example is a coalition of 14 or sometimes less or more – according to the interest of the day – political parties in Peninsular Malaysia and East Malaysia. Each party are defenders of the interest and concerns of the ethnic group they represent and to a certain extent, some politicians are of the view that it is a means to safe guard the survival of their ethnic group. Some political observers note that as long as political parties are organised along racial lines, a truly unified Malaysian race is difficult to achieve. The population of Malaysia is reported to be just over 28 million as in July 2010 of which 5.2 million lives in East Malaysia, comprising Sabah dan Sarawak, the two northern states of Borneo and 22.5 million lives in Peninsular Malaysia. The ethnics are listed as Bumiputra (son of the soil) and non-Bumiputra. The Bumiputras are the Muslim Malays, the 30 ethnic groups of the indigenous people of Sabah and the 27 ethnic groups of the indigenous people of Sarawak.

Malays constitutes 50.4% of the total population while other Bumiputras are 11%. There are also non-Malay indigenous people accorded Bumiputra status for example, people of Thai, Khmers and Cham descendents. The Chinese population constitutes 26% and Indians 7.1% and other unlisted ethnic groups 1%. The majority of the Chinese and Indian population are descendents of Chinese and Indian migrants who arrived during the colonial period.

Although multiethnic, multicultural and multi religious peoples of Malaysia do generally work and play together in harmony, some observers note that they live separately and is the cause of polarisation which have always been a national concern but it is only natural because in certain aspects, people are defined by their cultural and religious believe and practices and there are limits that they observe.

On a more positive note, racial, cultural and religious difference have never been a hindrance for Malaysians to come together and unite feverishly to support the national team in sports, in appreciating the arts and culture of the different ethnic groups, to work together and promoting Malaysia abroad especially in the music and film industry and it is a normal to find the various ethnic groups being partners and shareholders in business concerns. Studies have shown that race conflicts are rooted in social economic problems and not ethnic hate. Unity among the various ethnic groups will certainly be a stabilising element for the country and the aspiration of 1Malaysia to strengthen race relations would complement efforts of the earlier Muhibbah (Goodwill) Campaign launched by the government in 1970 after the race riots of 1969.

Clearly the underlying key to the 1Malaysia concept is the catchphrase unity in diversity. It is not a government sponsored programme in which to dilute the beautiful background of variations and create a singular hegemonic society but rather to appreciate the plurality that is Malaysia and work together as one nation towards a better future. When Vision 2020 was unveiled in 1991,former Prime Minister Dato’ Seri (now Tun) Dr. Mahathir Mohamad said that in order to achieve Vision 2020, the nation required an annual growth of 7% (in real terms) over the thirty year period (1990-2020) so that the economy would be eightfold than its 1990 Gross Domestic Product (GDP) of RM115 billion. This would translate to a GDP of RM920 billion (in 1990 Ringgit terms; RM2.50 to US$1.00) in the year 2020.

From 1957, after gaining independence, Malaysia was an agricultural economy until the 1970s and from then on started moving into industrial until the mid 1980s and from 1985 onwards became a new industrialised economy and was on her way to become a knowledge base economy that would have put her in good stead compared to the other South East Asian nations.

The vision was then viewed as a natural progression for the newly industrialised economy, where between 1988 and until the East-Asian Crisis of 1997, the Malaysian economy grew at the rate of about 9% per year and was the emerging Tiger of South East Asia. The ambition was to become the 5th Tiger Economy after the Asian Tigers of the developed economies of Hong Kong, Singapore, South Korea and Taiwan. Two major economic crisis after, Malaysians are wondering whether Vision 2020 can become a reality and achievable in the time period given. It was first hit by the East Asian Monetary Crisis of 1997-1998. Three of the worst hit countries, Thailand, South Korea and Indonesia were forced to call in the International Monetary Fund (IMF) and were to embark on IMF-supported and IMF-design programmes in order to cope with the financial crisis.

Malaysia on the other hand took a controversial step by imposing sweeping controls on capital account transactions, fixed exchange rate at RM3.80 per US dollar, cut interest rates and embarked on a policy of reflation. Although Thailand, South Korean and Malaysia recovered from the crisis, some economist argued that the Malaysian move made investors shy away and its economy stagnate by a decade due to the loss of the much needed Foreign Direct Investment (FDI). The Sub-prime Mortgage Crisis in 2007 turned into a United States financial crisis. It had adverse effect particularly on Western Europe and had affected global economy in general from the slowdown of the US economy. Although direct impacts on the Malaysian financial institutions have been avoided, the Malaysian economy is not completely insulated from the happenings in other parts of the world. Trade links and various other channels have enabled some of the adverse economic pressures to pass through into the Malaysian economy and financial situation.

In view of the changing global conditions amid the global financial crisis of 2007 – 2010, Najib had in August 2009 said there was a need to redefine and recalibrate Vision 2020 in terms of how to achieve it, as well as its timeline and added that it was necessary to undertake bold economic reforms. He also said that in order for Malaysia to achieve a developed nation status by 2020, the country has to grow at annual rate of 8% over the next ten years. He cited that a lower hypothetical growth of 6% per annum would delay Malaysia’s vision to become a developed country by 10 years to 2030. Malaysia’s Gross Domestic Product (GDP) growth rate averaged 7.2% per annum in the 1990s and slowed to 5.4% per annum in the following decade. Malaysia, however, had also fiscal deficits every year since 1998, with a deficit of 7 percent of GDP recorded for 2009.

Within the 1Malaysia concept, the Government Transformation Programme (GTP) was introduced, aimed at radically transforming the way the government worked so it could quickly deliver real solutions to real issues and tangible outcomes that can be felt and experienced by the people. The objective is to improve the lives of all Malaysians regardless of race, religion and social status.

To propel Malaysia towards becoming a high income developed nation, the Economic Transformation Programme (ETP) was introduced. It is focused on key growth areas know as 12 National Key Economic Areas (NKEAs) namely oil, gas and energy; palm oil, financial services; tourism; business services; electronic and electrical, wholesale and retail, education, healthcare, communications content and infrastructure, agriculture and greater Kuala Lumpur/Klang Valley. It aspires to achieve a Gross national Income (GNI) growth of 6% per annum that will allow Malaysia to achieve the targets set under Vision 2020. Malaysia is targeting a GNI per capita from $USD6,700 or RM23,700 in 2009 to more that $USD15,000 or RM48,000 in 2020 in accordance to the current World Bank’s definition of high income.

A total funding of over RM1.4 trillion is required for the duration of this economic push, with 92% of the funding expected to come from domestic investments and public funding expected to take up the remainder. The non government-linked companies (non-GLCs) are expected to fund 60% or RM824 billion with GLCs funding 32% or RM446 billion. Public spending is estimated to be around RM105 billion.

Under the ETP, 131 Entry Point Projects (EPP) and 60 business opportunities have been identified. These are high impact projects to spur the growth of the NKEAs. Some involve large infrastructure investments while others have a more direct effect on the output of their sectors and on the life of Malaysians.

The government will also encourage employment-rich growth that creates 3.3 million new jobs of which half will require diploma or vocational qualifications. In addition, specific attention will be paid to lifting the incomes of the bottom 40 percent of households, with a target of increasing the monthly mean income of this group from RM1,440 in 2009 to RM2,300 in 2015.

In mid April this year, presenting the fifth ETP Progress Update, Najib said that 72 projects within the 54 EPP announced to date with a combined investment value of RM106.41 billion and GNI of RM153.84 billion and 298,865 new jobs created signifies that 41.2% of the 131 EPPs have already commenced, all in less than six months since the launch of the ETP.

The blueprint to achieve Vision 2020 within its timeline, it seems, has been well laid out coupled with the political will to do so and the infrastructure that is already in place. Whether Malaysia will achieve her goals in full or partly, depends on the execution of Najib’s transformation programmes. At best the perception is the government is willing to bring about change that will benefit all.

Even then, it is interesting to see whether the transformation programme will increase equity holdings among the Bumiputras who until now, according to government statistic s have not yet reached the 30% mark as envisioned by New Economic Policy (NEP), an ambitious and controversial social economic restructuring affirmative action programme launched by the government in 1971 to reduced the socioeconomic disparity between the Malays and the other ethnic groups.

In spite of the policies implemented under the NEP which was often criticized for not dealing directly with issues of wealth distribution and economic inequality, the share of the national wealth owned by the non-Bumiputra ethnic groups increased beyond the 40% mark. This figure, however, does not reflect that certain segments of the non-Bumiputra population do live in poverty.

Among other things to consider is that the measurement of high income developed nation is based on GNI that is valued against the US dollars whose value is volatile and who knows what will happen to the US economy in the coming years based on the present scenario of global crisis. There is no guarantee there will not be another global monetary or economic crisis again because it has become a common trend in the prevailing economic system.

Malaysians would surely expect and anticipate higher living standards and better quality of life without the need to worry about the effects of price hikes. It is meaningless to achieve a high income developed nation status but still need to pay things through the nose and everything is more expensive than it used to be.

One thing, however, is certain. In 2020, the Vision 2020 Time Capsule that was embedded by Dr. Mahathir at Dataran Pahlawan Megamall Melaka will be read. If Dr. Mahathir is blessed with a long life, he will be 95 years old by then and Malaysians can all cherish that historical moment. Malaysians will then know for certain the message that has kept them guessing its contents, but for now the question is, will Malaysians be able to transform to Vision 2020 with flying colours?

  1. No comments yet.

You must be logged in to post a comment.