The prime minister Najib Tun Razak, on 2 may 2010, announced his new program named as New Economic Model (NEM) to make Malaysia a “developed” and “high income” country at 2020. To be more specific the main target is to increase the per capita income to 17,700 USD from 7558 UDS by 2020.
But what are the problems for the Malaysia in this way to become a developed and high-income nation?
1- The Economic Transformation And Need For New Institutions:
In the past years, Malaysia has used a growth model to become a middle-income country. Now, it has decided to become a high-income country. So, they growth model has to be changed to another model to guarantee the goal of becoming a high-income country. In this way, Malaysia has to perform its economic transformation plan, develop, and engender the organizations and institutions needed for this transformation.
2- Unity and Coalition of the Nation and Government:
Malaysia as it is known for being the truly Asia, its population is comprised of various ethnics, with various cultures, religions and wants. One group wants to have a pragmatic perspective to the economic and politic issues, another want to have an ideological perspective. More than 50% of the population is Muslim with Islamic views and having the government power. On the other hand, about 30% of the population is Chinese with an economic power and having a strong presence in the market, which most of them are Christians or Buddhists.
But we know that to reach to big goals a unity between this ethnics and coalition in the politics and economy, in addition stability in the policies and regulations, and the perspective of the nation and government toward the economy, policy and international issues is very vital and important. In fact, the Malaysia people need to rally together as a nation to embrace change, be adaptive to today’s environment and increasingly globalized and rapidly changing world.
3- Politics and Opposition Groups:
Today, it seems that opposition groups raised from inside of Muslim population have an increasing presence in the policy. However, they do not have the control of government but they are planning to do that. They are pretty popular in the society and also they have taken the majority of benches of Parliament in some of states. The transformation of power between the current politicians and the oppositions is not problematic itself, but the problems are due to that the oppositions groups, and specifically their leader Dato Seri Anwar Ibrahim are not agree with New Economic Model (NEM) introduced by the prime minister Najib Tun Razak. They criticize the NEM and do not believe on it. So if in the future the opposition groups become more powerful and take the government there can make significant changes in the policy and economic plans. The instability in the policy and economic planning could be perilous for the Malaysia Vision 2020.
4- Malaysia, an Open and Small Economy:
Malaysia is country with an open and small economy. However, it had been prosperous to obtain its goals in the past, but it also needs to consider its limitations, as it is considered wisely by the decision makers. The population is not very large with only 28 million people; the natural resources are not very rich in all of cases and the country in not a very vast country like USA, China or Russia. Therefore, it is very important for Malaysia to concentrate on its advantages and opportunities. I believe Malaysia has to develop competitive niches integrated into global value chain. This means being really good at what it produces. Malaysia needs to emphasize more on the specific niches and and at the same time be a part of a bigger value chain.
5- Development of Malaysia’s Intangible Assets:
Both the NEM and 10 MP (10th Malaysia plan), emphasize on the development of intangible assets. The Schumpeterian economic model that Malaysia has targeted on to...
Bibliography: Central Bank Malaysia. (2010). Annual Report. Kuala Lumpur.
Ministry of Eduation. (2011). Economic Transformation Programme: A Roadmap for Malaysia. Kuala Lupmur.
Oxford Business Group. (2011). The Report: Malaysia 2011. London: Oxford Business Group publication.
World Bank. (2011). Malaysia Economic Monitor: Brain Drain. Bangkok: World Bank.
YAKCOP, T. S. (2011, July 26). MALAYSIA’S ECONOMIC CHALLENGES: CHARTING POLICY RESPONSE TOWARDS A HIGH INCOME ECONOMY. Kuala Lumpur, Malaysia.
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