Malaysia Development Plan 2016 - 2020 : " Anchoring growth on people"

Eleventh Malaysia Plan 2016 – 2020 “Anchoring growth on people”

1. Introduction The 2016-2020 Eleventh Malaysia Plan (“11MP”), called “Anchoring growth on people” is the closing chapter of the lengthy 2020 Vision Plan launched in the year 1991. The 2020 Vision Plan considers Malaysia a fully developed country in relation to six different aspects: economic, political, social, spiritual, psychological, and cultural.

Source: Economic Planning Unit. Prime Minister’s Department, Malaysia

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According to Malaysia’s Economic Planning Unit, all gains obtained by Malaysia at different levels during the past decades (since 1970) have been possible thanks to the country’s philosophy for development, which continues to focus economic growth on the population's prosperity and well-being. The Unit indicates that this is evident in every policy implemented by Malaysia all through these years.

The 11MP comes to reaffirm the government’s commitment to a vision of growth founded on welfare. The (2011-2020) National Transformation Policy maintains the focus on people by means of a New Economic Model aimed at a sustainable and inclusive economy of high income.

The guidelines for the Plan’s development were obtained from the Malaysia National Development Strategy (MyNDS), a quick means for focusing high impacts on both capital and populational economies at low cost for the government. The capital economy relates to the growth of the Gross Internal Product (GIPI), the large-scale investment projects and businesses, and financial markets, while the populational economy refers to aspects for interest for the population such as employment, small businesses, the cost of living, family welfare and social inclusion.

As a result of this, the Eleventh Plan is considered a strategic plan with six strategic thrusts and six changes in game rules that will transform ideas into facts in order to thrust Malaysia into the eventual status of an advanced economy and an inclusive nation.

The main objective in this Plan is to “anchor growth within the population”, for which purpose three basic elements have been considered: 1. The population constitutes the basis of the nation.

2. The population must be prepared for the future to come.

3. Everyone must enjoy and benefit from growth and development.

2. Next Five Years For the next few years, the Plan will prioritize populational economy. All segments in society must benefit from the country’s economic prosperity in order to achieve an advanced and inclusive economy by the year 2020.

For the first time in Malaysian history, the targets of national growth will not only include growing GIP and per-capita income but also family income and the Malaysian welfare index for assessing the impact of economic growth on the welfare of the population itself.

The report is aimed at the access, by each family in the country to: sufficient infrastructure and public services, quality education and health, and easy access to quality housing, in addition to a wide range of supporting services.

The Plan’s objective is centered on a better quality of life for all Malaysians.

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3. Opportunities and Challenges Ahead The report indicates that, in the next five years, there will be ongoing uncertainties regarding worldwide economy, particularly derived from the low prices foreseen for crude oil and other commodities.

At the national level, the Plan is meant to:   

Increase productivity in order to control economic growth.

Increase average income and the ratio of the overall income of those with lower earnings, for securing actual inclusion.

Strengthen the fiscal stance while ensuring proper public financing in order to support the economic expansion.

Additionally, the Eleventh Plan is also a way to new opportunities, particularly with the establishment of the ASEAN Economic Community (CEA), which includes over 600 million people within a single market and really promotes trade and investment.

3. Macro-economic Outlook During the Plan’s implementation, the GIP is expected to grow from 5% to 6% each year. The per capita Gross National Income (GNI)1 is expected to be at US$ 15,690 (which implies surpassing the minimum threshold of US$ 15,000 of high income economy). Parallel to this, the Plan should generate one and a half million jobs by the year 2020, with significant growth in all economic sectors, along with services and manufacturing, to represent a share of over 75% of the GIP. A positive contribution is also expected from the external sector, with recovered exports and a projection of the current balance of payments current account to remain at a surplus level of 2.6% of the GNI. Since the economy anticipates maintaining overall employment, the level of inflation is also expected to remain favorable, below 3%.

The Malaysian government will promote private consumption and private investment in agriculture, factories and services for economic growth. Exports will grow through improved competitiveness in products, as well as the promotion of services for export and a search for diversified markets. A more cautions financial management will ensure a higher degree of fiscal flexibility.

4. Six strategic thrusts and six changes in rules of the game The government defined six strategic ideas to thrust Malaysia into remaining at the forefront of the challenges and opportunities that are part of today’s fast-changing politics and the worldwide scenario. Additionally, six game changers were also introduced as the ways of approaching Malaysian development towards a revolutionary change in the country’s growth.

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GNI: it is the sum of the nation’s gross internal product (GIP), plus the net income received from abroad.

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The six thrusting ideas are:      

Increasing inclusion towards an egalitarian society.

Improving welfare for everyone.

Accelerating the development of human capital for an advanced nation.

Pursuing green growth aimed at sustainability and resistance.

Strengthening infrastructure to support economic expansion.

Re-engineering economic growth towards greater prosperity.

And the six changes in game rules are:      

Releasing the potential for productivity.

Increasing the average income of those with lower incomes, aimed at a middle class society.

Enabling industries focused on technical and vocational education, and training.

Becoming committed to green growth.

Turning innovation into a source of wealth.

Investing in competitive cities.

In order to support these six strategic ideas and the six changes in game rules, the government is committed to transforming public services by placing citizens as the core element. This is meant to achieve the necessary productivity, efficiency and effectiveness for providing the services, with the purpose of making public services less bureaucratic, with more innovative services available.

5. Summary The Eleventh Plan is not only the completion of three decades towards Vision 2020, but also the definition of the upcoming timeline. The post-2020 challenge will be to speed up the pace of the country’s growth expectations along three dimensions: economy, people and environment.

The country will be governed by reliable and independent executive, legislative and judicial institutions established to protect all Malaysians equally.

Its progressive and inclusive economy -adaptable to the future- will be based on highly productive world-class cities and prosperous rural areas. All Malaysians will be part of and benefit from the country’s growth while enjoying a high standard of living. Every citizen will be in charge of environment management in order to consider environmental protection as the complement of strong economy that will make Malaysia a great place to live in.

The significance of the 11MP is that it is the last five-year plan prior to the accomplishment of Vision 2020. The definition of six strategic ideas and six changes on how the game is played was meant to separate Malaysia from its usual business practices and set the country on a path of accelerated growth.

The 11MP is oriented at a future to be built on the bases of: a sound macro-economic policy, full inclusiveness for each of Malaysia’s inhabitants, enhanced welfare for 4

everyone, future-proof development of human capital, sustained environmental growth, an infrastructure supportive of economic expansion, and high-productivity public services centered on citizens.

On the whole, these enhancements will enable everyone to be part of a truly harmonious and progressive society marked by an avant-garde economy in an inclusive nation.

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