Transcript File

Topic 2: ECONOMIC PLANS
AND POLICIES
INTRODUCTION
At the end of this topic, students
should be able to:
PART A:
1. Understand the background of Five Years Malaysian Plan
2. Explain the objectives of Five Years Malaysian Plan
3. List down the Five Years Malaysian Plan
PART B:
1. Explain the background of NEP
2. Understand the NEP objectives
3. List down the NEP strategies to eradicate poverty
4. List down the NEP strategies to restructure the society
PART C:
1. Explain the needs of the implementation of IMP
2. Understand the objectives and strategies of IMP I
3. Understand the objectives and strategies of IMP II
4. Understand the objectives and strategies of IMPIII
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1. Five Years Malaysian Plan
The Malaysia Plan is a 5-year
Malaysian government national
development initiative.
The 5-year plan is a legacy from British
colonial rule in Malaya after the
Second World War.
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1. Five Years Malaysian Plan
After the formation of Malaysia in 1963,
the 5-year plan has been converted to
the Malaysia Plan (MP) with the First
Malaysia Plan which began in 1966 until
1970,
The difference being that the economic
plan now includes the entire nation –
including Sabah and Sarawak, as
opposed just Peninsular Malaysia.
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2. Objectives of Five Year Malaysian
Plan
i. Identify needs and priorities
The government can focus on economic and socioeconomic issues during the period and come up with
strategies to eradicate them.
ii. Update current economy
The government will propose development and
budget allocation for Malaysia depending on the
economic situation.
2. Objectives of Five Year Malaysian
Plan
III. Coordinate the development programs
The government has development proposal and budget allocation for
every period of the plan. For example, midterm review prepared for
every Malaysia Plan.
IV. Monitor development programs
Each 5-year spending plans are recorded neatly which allows the
government to exercise control over financial prudence.
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3. Five-year Malaysia Plans so far
First Malaya Plan: 1956 – 1960
Increasing economic development to
increase per capita income and living
standards.
More focus is directed towards those
low-income earners living in rural areas
with such projects as building and
improving basic facilities and diversifying
agricultural production.
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Malaysian Plan
Second Malaya Plan: 1961 – 1965
First Malaysia Plan: 1966 – 1970
Second Malaysia Plan: 1971 – 1975
Third Malaysia Plan: 1976 – 1980
Fourth Malaysia Plan: 1981 – 1986
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Malaysian Plan
Fifth Malaysia Plan: 1986 – 1990
Sixth Malaysia Plan: 1991 – 1995
Seventh Malaysia Plan: 1996 – 2000
Eighth Malaysia Plan: 2001 – 2005
Ninth Malaysia Plan: 2006 – 2010
Tenth Malaysian Plan: 2011-2015
Eleventh Malaysia Plan: 2016 – 2010
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Eleventh Malaysian Plan:
2016-2020
The Eleventh Malaysia Plan sets another
historical milestone as our nation
embarks on an important mission
towards a progressive and high-income
nation, as envisioned in Vision 2020.
The focus is now on the increase in
income and wellbeing of the society. The
targeted per capita income would be
US$15,000.
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Eleventh Malaysian Plan:
2016-2020
Why we need Malaysian plan?
Economic growth
Self-reliance
Removal of unemployment
Reduction of income inequalities
Elimination of poverty
Modernization of the economy
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4. Background of the New Economy
Policy (1970-1990)
 Racial riot on May 13, 1969, was mainly due
to the economic imbalances, especially racial
imbalances.• For example: poverty 49% of
households, unequal distribution of wealth, in
terms of:
 Race
 Rural/urban
 Agriculture / mining.
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5. NEP objective
 The objective: National Unity
 The NEP underscored the importance of achieving
socio-economic goals along side pursuing economic
growth objective as a way of creating harmony and
unity in a nation with many ethnic and religious
groups.
 It is a 20-year plan from 1971 until 1990. (from 2nd
to 5th Malaysian Plan)
 Approaches used were:
a) Growth with equity
b) Active government participation in the economy
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Peninsular Malaysia: Percentage of poor
household by race,1970.




Race
Malay
Chinese
Indian
Others
Rural
 Urban

% of household in poverty
64.8
26.0
39.2
44.8
58.6
24.6
Sumber: Chamhuri Siwar, Surtahman Kastin Hasan
(1988)
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The Strategies of NEP
1. Eradicating poverty for all Malaysians,
irrespective of race.
2. Restructuring Malaysian society to
correct economic imbalance, to reduce
and eventually eliminate the
identification of race with economic
function
6. The sub-strategies to eradicate poverty:
Poor rural household were absorbed into
the modern sector through non-agricultural
development
II. Increase farmers’ productivity through
development of new land, provision of
irrigation facilities and replanting rubber
with higher yielding varieties.
III. Provide basic services such as healthcare,
education, housing and water and
electricity supply.
I.
7. The sub-strategies to restructure
the society
I.
II.
III.
IV.
Raise the people’s ownership in the
private sectors
Build a business society among
bumiputeras.
Develop areas that have remained
backward.
Enhance education opportunities
within and outside the country.
The Industrial Master Plan
(IMP)
IMP include:
 IMP I (1986-1995)
 IMP II (1996-2005)
 IMP III (2006-2020)
8. The needs of the implementation of
Industrial Master Plan
i. Increase national income
The first benefit to the country’s industrial sector is to increase the
national income. Various types of industrial goods available locally
will enable the country to export local products abroad.
ii Open job opportunities
The industry also provides jobs for people. With the many
manufacturing plants, the employment opportunities for the people of
Malaysia are increasing.
iii. Stimulating the national agricultural sector
The industrial sector will stimulate the agriculture sectors. The
agriculture sector will be developed with the use of modern machinery
and high quality seeds.
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8. The needs of the implementation of
Industrial Master Plan
iv. Enhancing national image
Development of the industrial sector will also enable our
country to be considered as a developed country.
v. Increase government revenue
The industrial sector will also increase the government
revenue through a variety of tax collection.
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9. Objectives of IMP I (1986-1995)
To enhance the economic development
and rapid growth through manufacturing
sector.
i.
To meet the objective of New Economy
Policy (NEP),
ii. To encourage the use of country natural
resources by optimal and efficient through
manufacturing activity and
iii. To provide the development base as local
technology
The strategies are:
 Diversifying exports and promote import
replacement sector.
 Encouraging research and development
by publics and private party.
 Promoting heavy industry to become an
industrial development mover.
 Promoting the growth of small enterprises.
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10. Objectives of IMP II (1996-2005)
i. To boost technology in increase productivity,
ii. To promote manufacturing sector with high
technology,
iii. To focus at industrial development that would
enhance and expand industrial network base
upon action network comprehensive and
integrated and lastly
iv. To use approach based upon cluster also
gave development to other sector.
11. Objectives of IMP III (2006-2020)
 The IMP III is a 15-year blueprint for
industrial development in Malaysia riding on
the theme:
“Malaysia-Towards Global Competitiveness”.
 It is expected to drive industrialization to a
higher level of global competitiveness,
towards attaining developed nation status
under Vision 2020.
11. Objectives of IMP III
 The objective of the IMP III is to achieve
global competitiveness through
innovation and transformation of the
manufacturing and services sectors.
 Contribute to other development thrust of
the Ninth Malaysia Plan (9th MP), 20052010.