FACULTY OF APPLIED SOCIAL SCIENCE (FASS)FAKULTI SAINS SOCIAL GUNAAN

MPW1133/2133 MALAYSIAN STUDIESName:

Matric No:

NRIC No:

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Email Address:Tutor:Local Learning CentredSEMESTER JANUARY 2013

ACKNOWLEDGEMENTPraise to the Lord for providing me with great health, strength and emotional supporting completing this assignment. It is with great appreciation that I acknowledge the contributions and support in completing this dissertation.

It is with great appreciation that I acknowledge the contributions and support of my lecturer whose time, effort and guidance were highly beneficial especially during my completing my assignment. My sincere appreciation and thanks to my colleagues for their constant support, guidance and friendship.

I really appreciate all my family members because of their endless support; encouragement and understanding throughout my good times as well as my tough times are so meaningful. Finally, I am grateful to my company, the government whos allowed me to pursue this assignment.TABLE OF CONTENTS

CONTENTS;

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ACKNOWLEDGEMENTS

2BIBLIOGRAPHY

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1.0INTRODUCTION

61.1Objective of the report

61.2Brief Introduction of Malaysian Economic Development Policies

72.0AIMS OF ECONOMIC DEVELOPMENT POLICIES IN MALAYSIA

2.1New Economic Policy (NEP)

92.1.1Poverty Reduction

92.1.2Restructuring Malaysia Society

92.2National Development Policy (NDP)

92.2.1Balanced Development and Strengthen National Unity

102.2.2Ensure Economic Transformation by Improving the Efficiency of

Labour and Capital

102.2.3To Improve Economic Development

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2.2.4Widened Social Values and Working Climate Facilitated by Scientific 11

and Technology Advance2.3National Vision Policy (NVP)

112.3.1Change Growth Strategy from Input-Driven to Knowledge-Driven

122.3.2Strengthen Socio-Economic Stability

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2.3.3To Bring and Sustain Balanced Development.

123.0STRATEGIES TO SUCCEED THE POLICIES

123.1New Economic Policy (NEP)

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3.1.1Strategies to eradicate poverty.

133.1.2Strategies to restructure Malaysian society.

143.2National Development Policy (NDP)

143.2.1Further stabilize the potential of agriculture development activities.

143.2.2Giving support to non governmental bodies involved in efforts to eradicate poverty.

153.2.3Strengthen national unity by restructuring society.

153.2.4Implement macro economic management.

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3.2.5 Encourage investment to increase productivity.

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3.2.6Increased international competitiveness to face competition.

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3.2.7Encourage manufacturing for world market.

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3.2.8Develop strong human resource for long term economic growth.

173.2.9Increase efficiency through IT and overcome social problem.

183.3National Vision Policy

193.3.1Sustain macro economy stability.

193.3.2Improve eradicate poverty and restructure society in new ways.

193.3.3Increase growth through productivity.

203.3.4Increase competitiveness in the public and primary economic sectors.213.3.5Extend the usage of ICT.

223.3.6Strengthen human resource development.

223.3.7Upgrade the quality of life.

233.3.8Strengthen Positive Value

234.0COMPARISON OF THE ACHIEVEMENT OF THE THREE ECONOMIC POLICIES

244.1 SOCIO-ECONOMIC PROGRESS

244.2PRIVATIZATION

274.3EMPLOYMENT, EDUCATION AND TRAINING

284.4INFRASTRUCTURE DEVELOPMENT

314.5ACCELERATING SCIENCE AND TECHNOLOGY DEVELOPMENT

334.6INFORMATION AND COMMUNICATIONS TECHNOLOGY

345.0SUMMARY

361.0INTRODUCTION

1.1Objective of the ReportMalaysia is a multi ethnic, uppermiddleincome country that has relied heavily on income from its natural resources to engineer successful diversification into manufacturing and sharply increased incomes for all ethnic groups. Since Malaysia achieved its independence in 1957, the economy has gone through a major structural transformation. Development of Malaysia economic is reference to nations economic goals and achievement. Malaysias social and political situations also effect the development in economic. Malaysia was known as a lowincome agrarian economy, now Malaysia became the world's largest producer of tin, rubber and palm oil, along with other raw materials firmly set Malaysia's economic tempo well into the mid-20th century. As Malaya moved towards independence, the government began implementing economic five-year plans, beginning with the First Malayan Five Year Plan in 1955. Upon the establishment of Malaysia, the system was the division of Malaysians into three groups according to ethnicity. However, there are many economic and social problems outstanding and many work to be done. As for us to remember, after the May 13 incident of racial rioting in the federal capital of Kuala Lumpur, the government initiated more aggressive programmes aimed at actively establishing a Malay entrepreneurial class through direct intervention in the economy, aimed at alleviating poverty.

This report focuses on issues and discusses regarding the overall of Malaysian economic development policies aims, strategies and achievements. Since 1970, specifically after the following racial riots across the country, Malaysia has based its economic development strategy on three longterm policies: the New Economic Policy (NEP), 1970 1990 , the National Development Policy (NDP), 1990 2000, and the National Vision Policy (NVP), 2001 2010 . Although the emphasis in these longterm development policies has always been on economic growth, Malaysian development intends to benefit all groups or communities in society in an equitable manner. This approach may have obvious limitations as Malaysian economic development policies has direct and indirect consequences on the direction and outcomes of the development. So, it is important for us to understand the implementation and achievement of our economic development policies. The discussion will also highlight the strategies introduced by the government to succeed the policies. Of further interest to us, Malaysian development policy has consistently upheld rapid economic growth as it had altered with times or circumstance.

This report also offers the comparison about the achievements of the three economic development policies in this report will show that they were many achievement had been accomplish. To be true, the overriding objective of the NEP, maintained in the NDP and the NVP, was to preserve national unity by eradicating poverty irrespective of race, and by restructuring Malaysian society to reduce the identification of race with economic function and geographical location. Malaysiaku Gemilang!

1.2Brief Introduction of Malaysian Economic Development Policiesi. New Economic Policy (NEP)

New Economic Policy (NEP) in 1971, the publication of the Second Malaysia Plan (197175), and the Outline Perspective Plan (OPP) (197190). The 19912000 growth phase traversed the difficult years of the Asian financial crisis and the period of exchange controls. The Malaysian New Economic Policy (NEP) was an ambitious and controversial socio-economic restructuring affirmative action program launched by the Malaysian government in 1971 under the then Prime Minister Tun Abdul Razak after the declaration of a state of emergency in May 1969. The New Economic Policy (NEP) often said is a Malay agenda to enhance the economic power of the Malays by creating a perpetual, unfair advantage. Although it has been hailed by some as having reduced the socioeconomic disparity between the Chinese minority and the Malay majority, others have accused it of having reduced non-Malays to the status of second-class citizens by cementing Ketuanan Melayu (Malay supremacy). The NEP ended in 1990, and was succeeded by the National Development Policy in 1991.ii. National Development Policy (NDP)

On the 17th of June 1991, the National Development Policy (DPN) was launched by Tun Dr Mahathir Mohamad, former Prime Minister of Malaysia. National unity will continue to become the end objective of DPN as a unity is imperative for the social and political stability, ensuring continuous economic progress. DPN is to continue the NEP achievement in poverty alleviation and community development.In line with the objectives of the National Development Policy to make Malaysia a developed industrial country, development and economic structure that emphasizes industrialization lead to changes in the spatial structure which otherwise would occur comprehensively planned development of the 'adhoc' that might cause negative effects.iii. National Vision Policy (NVP)

The NVP was introduced by Tun Dr Mahathir Mohamad, the Prime Minister in 2001. The NVP was included in Third Outline Perspective Plan (OPP3), 2001-2010, that provides the direction for the development of the nation and the policy agenda for the next ten years. The new policy contribute towards further strengthening national unity among the various races in our beloved country. The NVP, with national unity as its overriding objective, is aimed at establishing a progressive and prosperous Bangsa Malaysia which lives in harmony and engages in full and fair partnership. Economic growth will be promoted alongside efforts aimed at poverty eradication and restructuring of society. Social, economic, and regional imbalances will be narrowed.2.0AIMS OF ECONOMIC DEVELOPMENT POLICIES IN MALAYSIA2.1Aims of New Economic Policy (NEP)The NEP was designed to balance the socio-economic among the races in Malaysia which is to build national unity. The NEP development was comprising two prongs, poverty reduction among all Malaysian and restructuring society.

2.1.1Poverty Reduction

NEP seeks to eradicate poverty among all Malaysian by progressively improving the economic condition and quality of life the poor races by directly increasing their access to land, physical capital, other facilities and training. These permitting the general public to share more equitable in benefit of economic growth. This aim of official poverty level should be reduced from 49 per cent in Peninsular Malaysia in 1969 to 16 per cent by 1990 and programmes directly geared to the needs.This first aim focus in the rural area where the government provide various public service and facilities to ensure that the Malays obtained a fair opportunity to gain more and equality within the modern sectors. To eradicate poverty the capability of Malays and other races ensure that they are enable to participate actively in the development process by providing more employment to all races 2.1.2Restructuring Malaysia Society

Despite the popular rhetorical commitment by politicians to poverty eradication, the 1970s and early 1980s saw growing emphasis on the NEPs other pronounced objective to restructure society: to abolish the identification of ethnicity with economic function, especially to create, expand and consolidate the Malay capitalist and middle classes. As officially interpreted, restructuring is not meant to abolish or change socioeconomic relations between classes or economic interest groups; in practice, it mainly seeks to increase Bumiputera capital ownership and ethnic proportions in the more attractive, mainly professional occupations. The NEP was designed to enable the Bumiputra community to enjoy the fruits of development on par with the other ethnic groups, who were then and still remain economically far more advanced. This was to be achieved through a process of growth and modernization so directed as to bring about gradual restructuring of employment and production patterns in all sectors and at all levels, so as to be in rough accord with ethnic population ratios.Nevertheless, this regulation has been criticized because the company must issue new shares to maintain the proportion if the Bumiputra investors divest their shares, thus effectively making the 30% quota as the minimum, with no upper limits.

2.2Aims of National Development Policy (NDP)

National Development Policy (NDP) aims is transforming Malaysia into a developed and balanced nation in every aspect such as in social justice, values, ethics and morality, political stability, quality of life, efficiency in government administration and economic excellence. 2.2.1Balanced Development and Strengthen National Unity The principle of growth with equity is fundamental to ensure the realization of fair and equitable distribution of national wealth. A balanced societal development is conducive to maintain social and political stability. By nurturing and moulding of a Malaysian society with high moral values and ethics as well as positive attitudes will create a responsible, resilient, progressive an caring society. Improve the quality of life for present and in the future by prudent management of natural resources and ecology of natural beauty and clean environment. The balanced development of economy is essential to ensure stable growth, minimize social conflict, promote racial harmony and enhance unity. 2.2.2Ensure Economic Transformation by Improving the Efficiency of Labour and Capital

In support of the implementation of a productivity-driven growth, which requires highly skilled, trainable and knowledge manpower, substantial progress was made to provide more opportunities for the people to pursue tertiary education and training. The expanded education and training infrastructure not only allowed Malaysians to pursue tertiary education locally, thus saving foreign exchange but also attracted foreign students to study in Malaysia. With this development, Malaysia have laid the foundation to develop the country into a centre of education excellence.2.2.3To Improve Economic Development

NDP will rely more on the private sector to be responsive and proactive in the attainment of the nations socioeconomic objectives. This role entrusted upon the sector will require a greater sharing of the social responsibility in managing growth that can generate sufficient opportunities for equitable distribution of benefits among all Malaysians. The public sector will support these efforts by focussing on further improving the environment for growth and the provision of adequate. The government has formulate a rational policy on the issue of prices for the use of infrastructure services. Better planning and modern technology can reduce the resource wastage. Also more stringent enforcement can help minimise losses from theft of water and electricity.2.2.4Widened Social Values and Working Climate Facilitated by Scientific and Technology Advance

To achieve the visions implies that Malaysia has to create a progressive society with highly scientific and technology achievement that requires quality of human resources that correlate quality service and higher productivity. By developing modern services sector the government can expedite the shift to value added activities through capital and technology. A mechanism needs to be put in place to assess, in a scientific manner, all requests from service providers for tariff increases. The mechanism should also allow for the views of consumer groups to be heard. The policy should encompass all infrastructure sectors, from the transport industries to the utilities.2.3Aims of National Vision Policy (NVP)

The National Vision Policy (NVP) is to develop a strong and sustainable economy of Malaysia. The aims of National Vision Policy are to:

2.3.1Change Growth Strategy from Input-Driven to Knowledge-Driven

Developing the country into a knowledge-based economy will permeate every sector and involve the general public at large. Everyone must and can partake in greater utilization of knowledge. The knowledge content of all economic activities, be it in agriculture, manufacturing or Government will have to be increased so as to strengthen value added and generate employment.All Malaysians will be given equal chances and opportunities to enhance their quality of life and be involved in the knowledge-based economy. Focus will be directed towards providing better opportunities in education especially in rural areas, and increasing accessibility to better health facilities and affordable houses to be owned or rented by the people. Efforts will also be taken to promote healthy lifestyles as well as providing more cultural and recreational amenities to enable our people to enjoy the aesthetic aspects of life. Participation in sports will also be encouraged to strengthen the spirit of solidarity, comradeship and esprit de corps among the people.2.3.2Strengthen Socio-Economic Stability

The core of socio-economic development is the overriding goal of national unity. The stability through equitable distribution of the nation's income and wealth. With these perspectives in mind, the theme of the Eighth Malaysia Plan is achieving sustainable growth with resilience. To develop a knowledge-based economy as a strategic step to increase value added to all economic sectors and to stabilize the development of human resource to produce a productive and knowledgeable work force. Besides, this needed to be done to continue sustained development of the environment for the purpose of long term development.2.3.3To Bring and Sustain Balanced Development.

The essence of this long-term plan is still too bring about a balanced development. A balance in development, touches specifically on development starting from the agricultural sector, small to medium industries right up to industries based on high technology and information technology.3.0STRATEGIES TO SUCCEED THE POLICIES3.1New Economic Policy (NEP) Strategies3.1.1Strategies to eradicate poverty

The eradication of poverty for all Malaysian that comes from different races and the correction of the racial economic imbalances in term of income, employment and wealth required strategy on many fronts:i. Modernize the living conditions of the lower income group, both in the urban and rural areas by increasing further provision of basic facilities and those related to education, such as book assistance and scholarship. In business development and human resource; UDA, FELDA, FELCRA and SALCRA opened to introduce and extend of agriculture development ii. Expand employment opportunities for all Malaysian citizens regardless of race. By involving in high industrial or trade sectors. Economic growth had to be encouraged and guided along an employment intensive path.

iii. Encourage participation in sector of high potential and high productive capacity such as business, industries and services. This would lessen general poverty in the country as it raising the general income level and provided fairly growth.

iv. Improve further the productivity of the poor by increasing their income. Education and training can increased people income as knowledge and skills required in moving towards to reduce absolute poverty.

3.1.2Strategies to restructure Malaysian society

i. Race the peoples ownership in the private sector. This especially benefit the Malays people as they were given many speciality in owning the economic ownership where some particular racial group feel a sense of discrimination. ii. Build a business society among the Bumiputeras. The initial target of the NEP was to move the ratio of economic ownership in Malaysia from a 2.4:33:63 ratio of Bumiputera, Other Malaysian, and Foreigner ownership to a 30:40:30 ratio. Some specific requirements were introduced to achieve the 30% Bumiputera equity target, amongst them that all initial public offerings (IPOs) set aside a 30% share for Bumiputera investors, the share price being initially heavily discounted.

iii. Develop areas that have remained backward but are high in potential. The construction of of multi-million dollar irrigation schemes will benefit urban entrepreneur and construction workers the rural poor. iv. Enhance education opportunities within and outside the country by introducing the free text books and scholarship for poor in the urban and rural areas. The construction of boarding school for brilliant student especially from the rural area were the preparation for sending them to pursue study overseas. 3.2National Development Policy (NDP) Strategies

3.2.1Further stabilize the potential of agriculture development activitiesThis NEP strategies is to raise production output through optimum use of resources and to increase the peoples income especially in the rural areas so there will be more economic, competitive and progressive. It will also increase and provide sufficient food resources for the people and provides employment opportunities especially for the rural population.Developing agricultural land by using high and effective technology too improve competitiveness and production capacity of the agricultural sector through the involvement of various sectors including the private sector. The increase in national income through supplying raw materials for the basis of local and foreign industrial needs.

Develop the farmer especially in the rural areas and encourage a system of agriculture based on the self-sufficiency and commercial concept. Improve the production of small-holders for a more balanced economy especially for smallholders.3.2.2Giving support to non governmental bodies involved in efforts to eradicate poverty.

This effort was to create close, meaningful, effective cooperation between the public and private sector. While creating an attitude of sharing and mutual understanding regarding procedures and objectives of both the sectors it improved national earnings. In implementing this, the NDP make several changes to the role of public sector through the opening of land and subsidy awards to small farmer to create their opportunities and increase their income. Poverty eradication efforts by promoting income-generating projects and providing amenities to improve the living standards of the poor. In addition, specific urban-based programmes, namely squatter resettlement and low-cost housing projects, improved the living conditions of the urban poor. Provision of various facilities by the government such as infrastructure facilities, town and rural planning and industrial structure plan. Facilitate cooperation between the private and public sector because private sector balance and distribute opportunities and facilities to benefit all parties.3.2.3Strengthen national unity by restructuring society.The NDP strengthen the national unity by reducing the wide gap in economic development between states and between towns and rural areas. The restructuring of society, particularly in employment restructuring and the creation of the Bumiputera Commercial and Industrial Community (BCIC) were strengthen to improve Bumiputera workforce and participation in the management of modern sectors. Other than equipped the Bumiputeras with relevant skills in business but also to maintain their wealth. reducing and ultimately eliminating the social and economic in equalities and imbalances in the country to promote a fair and more equitable sharing of the benets of economic growth by all Malaysians3.2.4Implement macro economic management.The implement of macro economic management which is an expansionary fiscal policy to stimulate the recovery in the economy by increasing and accelerating the government expenditure in infrastructure projects and also to grant bonus to government employees to increase retail trade. These actions succeeded in alleviating the impact of the slowdown on poverty and the restructuring of society.3.2.5Encourage investment to increase productivity.

NDP will rely more on the private sector to be responsive and proactive in the attainment of the nations socioeconomic objectives. This role entrusted upon the sector will require a greater sharing of the social responsibility in managing growth that_ can generate sufficient opportunities for equitable distribution of benefits among all Malaysians. The public sector will support these efforts by focussing on further improving the environment for growth and the provision of adequate social and physical infrastructures3.2.6Increased international competitiveness to face competition.The world economy, which continued to experience sustained growth, has facilitated the expansion of output and trade as well as investment and capital flows. Aside from strong growth in the industrialized countries, the period also witnessed rapidly increasing domestic demand in the Asian Newly Industrialized Economies. These developments have provided a favourable climate for the expansion of the Malaysian economy. As the economy experienced rapid economic growth, signs of overheating such as higher inflation rates, tighter labour market conditions, bottlenecks in certain infrastructural facilities as well as high capacity utilization in most industries became evident. 3.2.7Encourage manufacturing for world market.Government try to intensify industrial growth through manufacturing by optimising the use of the countrys natural resources. Upgrading local research and development of local technology such as Industrial Master Plan (MIP) (3rd February 1986) while developing 12 industrial sectors. Seven of them based on local resources including rubber, oil palm, timber, food, chemistry and minerals. The other five are industries not based on natural resources electricity, electronics, transportation equipment, machines and engineering, ferrous, metals, textile and clothing.Make the manufacturing sector the catalyst for increasing the income from goods and manufacturing. Encourage fully the use of the countrys natural resources. Increase the level of research and development (R&D). Determine an industrial policy with a universal concept. Exportation of manufactured goods in large quantities to be more competitive. Diversity and improve on non-resource based industries for export. Develop selected heavy industries and an effective system of information technology.The Malaysian Industrial Development Authority (MIDA 2006) is the governments principal agency for the promotion and coordination of industrial development in Malaysia. MIDA assists companies which intend to invest in the manufacturing and its related services sectors as well as facilitates the implementation and operation of their projects. The wide range of services provided by MIDA includes providing information on the opportunities for investment and facilitating companies which are looking for joint venture partners.3.2.8 Develop strong human resource for long term economic growth.Develop manpower and reduce expenditure in the construction of infrastructure. Restructure and modernise the industrial sector by enhancing the performance of small industries. Increase employment opportunities by increasing opportunities for technical training and skills. Various measures were introduced to increase the supply of skilled manpower. These measures included expansion of the education and training capacity, particularly those in the private sector, and incentives to increase the female labour force participation rate. The government also continued to allow the employment of foreign workers, particularly skilled workers. Efforts were also made to increase the capital-intensity of the production processes through encouraging firms to adopt more labour-saving technologies.3.2.9Increase efficiency through IT and overcome social problem.

The initial ICT infrastructure was provided in the NDP and the government has introduced various initiatives to facilitate the greater integration of Information and Communications Technology (ICT) to improve capacities in every area of life, including the enhancement of education and training programmes. Malaysia saw the advent of the digital revolution from quiteearly on. For improving our economic and social status, we embarked on the multimedia super corridor (MSC) project in 1996 to help Malaysia leapfrog into the information age. The MSC was envisioned as a global test bed for local and foreign companies to push the limits of multimedia. The MSC's intent was to create a cutting-edge environment to attract foreign businesses, while nurturing and developing local IT Champions at the same time. The MSC would then act as a catalyst for the adoption of ICT throughout the nation, eventually raising national productivity and making Malaysia excellence in ICT. In 1997, the Malaysian Government launched the Electronic Government (e-Government)initiative to reinvent itself to lead the country into the Information Age. The implementation of e-Government in Malaysia heralds the beginning of a journey of reinventing the government by transforming the way it operates, modernizes and enhances its service delivery. To overcome social problem such as racial inequality and youth social problems, the government had launch the solution such as to foster unity among races to create a society that is united and harmonious, stress on moral and ethics based on Islam and nurture the practice of positive value and work ethics such as discipline, economy, honesty and respect for others. Other solution in campaign to be polite especially to senior citizens or the elderly while inculcate the value of family, parenthood, neighbourliness and correct group behaviour. Foster feelings of pride of heritage, success and the spirit of one nation guided by pure values and encourage clean effective administrative reformation are the basics. The expansion of promote and preventive health services such as healthy lifestyle campaigns, expanding the coverage of the immunization programme, school health services as well as providing safe water and sanitation in the rural areas, enhanced the quality of life for general public.3.3National Vision Policy (NVP) Strategies

3.3.1Sustain macro economy stabilityThe strengthening of macroeconomic fundamentals and the financial sector together with the strong performance of the economy in 2000 will provide the base to sustain the high growth. Private investment will continue to provide the stimulus for the economy with its growth averaging 19 per cent per annum. The Government will continue to implement measures aimed at reducing the large deficit in the services account. Increased foreign exchange earnings are to be expected from tourism, education, shipping and insurance, finance and consultancy services. This will include improving skills and management capabilities, increasing research and development (R&D) spending, and greater use of technology and information and communications technology (ICT) in all economic sectors, in line with efforts to develop the knowledge-based economy. Public investment will be increased to improve the education and training delivery system. At the same time, the private sector will be encouraged to assume a bigger role, particularly in terms of R&D and product innovation.The anti-inflation strategy will also include various administrative measures, such as the enforcement of price-tagging and averting irresponsible price increases, prevention of restrictive sales practices and monitoring of the prices of basic necessities for the lower-income group. Government will ensure that the growth of money supply is consistent with price stability, and adopt a prudent fiscal policy. Foreign investment will continue to be important, although its share to total investment is expected to decline as a result of the anticipated higher growth in domestic investment and increased global competition for foreign direct investment (FDI).3.3.2Improve eradicate poverty and restructure society in new ways

The thrust of the poverty eradication strategy is to reduce the incidence of poverty to 0.5 per cent by 2005. The respective programmes will also address the issue of poverty among the Orang Asli and other Bumiputera minorities in Sabah and Sarawak. The Government will intensify efforts to ensure that the poor and low-income groups also benefit from various measures implemented in education, health services, housing and the provision of quality amenities.To address pockets of poverty among households in urban centres and its periphery, the Government will implement programmes such as the provision of housing and amenities as well as opportunities to generate income. At the same time, the respective states and local authorities will carry out the resettlement of squatter areas throughout the country. In addition, the existing integrated approach taken by local authorities, private sector and non-governmental organizations (NGOs) will be continued through programmes such as the Integrated Development for Urban Communities, Pusat RAHMAT, Projek HARAPAN and Skim Khas Ibu Tunggal.The Government will continue to address the issue of income imbalance, particularly between and within ethnic groups, income groups, economic sectors, regions and states. In addition, measures will be taken to encourage smallholders and farmers, particularly those with small and uneconomical land size, to diversify into activities such as aquaculture and livestock farming as well as in non- agricultural income-generating activities. As for the restructuring of ownership in the corporate sector, efforts will continue to be taken to improve effective Bumiputera participation as well as increase the share of capital ownership and control of companies to at least 30 per cent by 2010. 3.3.3Increase growth through productivity.Malaysia will need to enhance the competitiveness of its products through productivity increases and quality improvements. This includes the establishment of trading houses that will provide the support services to promote Malaysian exports overseas. Efforts will be taken to increase the production of locally manufactured capital and intermediate goods, including parts and components, to reduce import intensity. Increases in total factor productivity and raising the level of potential output are crucial to enhance Malaysia's international competitiveness in the short-term and medium-term. Efforts to increase productivity will depend on increasing the knowledge content of all economic activities and the availability of an adequate supply of highly skilled and knowledge manpower.In addition, the price index is expected to be maintained at a low level with the availability of cheaper imports in the domestic market. Local inputs will be produced more efficiently in order to compete with cheaper imports. Imports of consumption goods are expected to grow moderately in line with efforts to contain imported inflation, including the Buy Malaysian campaign.3.3.4Increase competitiveness in the public and primary economic sectors.

Urge workers of all levels in all sectors to step up efforts, individually or jointly, to improve and increase their productivity and efficiency. This increase will contribute towards sustaining growth and ensure that Malaysian products can compete in the international market. The implementation of strategies and programmes are to restructure employment in the various sectors and occupations will continue to be undertaken. Measures will be taken to improve the balance of Bumiputera and non-Bumiputera employment in both the public and private sectors. This will require concerted efforts of both the Government and the private sector. The concentration of non-Bumiputera in the private sector and the Bumiputera in the public sector will be reduced by increasing the number of non-Bumiputera in the public sector and increasing the intake of Bumiputera in the private sector in management and supervisory positions as well as in their businesses. The Government will endeavour to increase the participation of non-Bumiputera at all levels of the police, army and in the field of education. In this way, all the activities in the community will be reflective of the various races of Malaysia. Malaysian citizens from Sabah and Sarawak will be encouraged to work in the Peninsula to foster closer relationships among the states of Malaysia. Education and training will continue to be an important vehicle to achieve the employment restructuring objectives. In this regard, more places will be made available for qualified Bumiputera students in public and private institutions of higher learning, particularly in science, ICT and other professional courses. At the same time, attention will also be given towards improving the performance of Bumiputera students especially in Science, Mathematics and the English language, through more effective teaching methods, a better provision of educational facilities and the establishment of more residential schools. Adequate financing will be provided to the Bumiputera to assist them to pay the higher fees in the private institutions.3.3.5Extend the usage of ICT

The ICT infrastructure before will be upgraded through several initiatives and introducing the Network Management System for better service availability. The ICT infrastructure will also be extended to the rural areas to reduce the digital divide. Among the programmes to be implemented include Infodesa and Internet Desa, which will offer awareness and training courses. The Government will continue to facilitate the introduction of new and innovative services in the communications and multimedia industry. In addition, performance standards and broad guidelines will be set to protect and promote consumer interests.The first wave Multimedia Super Corridor (MSC) flagship applications will be rolled out in the Eighth Malaysia Plan after ascertaining their effectiveness. The smart school concept will be expanded to cover 8,000 schools while tele-health will be implemented at various health centres and rural clinics. For the future agenda, the second wave flagship applications will focus on attracting leading edge technology developers and promoting transfer of technology as well as R&D activities.3.3.6Strengthen human resource development

A strong human resource base to support the development of a knowledge-based economy and enhance productivity and competitiveness will be one of the key strategies in ensuring that the nation is able to face the challenges of globalization and sustain economic growth. To meet this strategy, the education and training system will be reoriented to ensure that the output from these institutions can match the requirements of new technology and knowledge, needed to spur economic growth and enhance competitiveness.

Initiatives will also be implemented to induce more firms especially the small-scale and medium-scale enterprises (SMEs) to move into higher capital-intensity production processes, and optimize the utilization of local labour. The prime target is to encourage more women especially those with tertiary education to join the labour force. Another important issue to be done is to strengthen human resource development is to emphasis the wage growth must commensurate with productivity increases.3.3.7Upgrade the quality of life

Upgrading the quality of life is to strengthen unity of race and country and to nurture and protect a strong Malaysian identity based on a spirit of love for religion, race and homeland. By improving the quality of life that is balanced physically, spiritually and in terms of socio-economic development.To make this happen the government had to place Islam as an important element in the national culture because Islam is the religion of the country, recorded and accepted by the Constitution. Then, restore and protect the cultural foundations to nurture cultural elements that have been inherited by various communities and adjusted according to universal characteristics or values.

The attitude and image of Malaysians are being projected in international society. And by sharing of values that can be commonly shared such as culture and values of life that create points of similarity in social living. How this can be done? It is through various program that had been arrange by the government such as Cultural programmes through the mass media especially Radio and Television Malaysia at various festive seasons like Hari Raya Aidilfitri, Chinese New Year, Gawai, Deepavali, Wesak Day and Christmas.

3.3.8Strengthen Positive Value

From past experience we saw that economic development and globalization will have consequences on the nation's social and cultural institutions and norms. Measures will have to be taken to ensure that society is resilient to withstand the negative influences that may erode moral values as well as affect social harmony and tolerance. Therefore, an important strategy will be strengthening moral and ethical behaviour among Malaysians and greater emphasis will be given to nurture and inculcate positive values, particularly among our youths. This strategy implemented by The Young Comrades Programme (Rakan Muda) which developed a caring society by inculcate the value of family, parenthood, neighbourliness and correct group behaviour. 4.0COMPARISON OF THE ACHIEVEMENT OF THE THREE ECONOMIC POLICIES

4.1 SOCIO-ECONOMIC PROGRESS4.1.1 Poverty Eradication

New Economic Policy

The most significant success of the NEP and encouraging that poverty reduction and educational upgrading the natives. The most prominent is the decline in the poverty rate from 49.3% in 1970 to 19.1% in 1990. In rural areas, the population has increased income and intangible unemployment (under employment) is almost gone. Modern facilities such as roads, schools, health clinics, electricity power and water supply has become must.

National Development Policy

The incidence of poverty among Malaysians decreased from 8.7 per cent in 1995 to 6.1 per cent in 1997, and the number of poor households declined by 25 per cent, from 365,600 to 274,200. However, the efforts to further reduce poverty were hampered by the economic crisis. Malaysia only able to reduce the incidence of poverty to 7.5 per cent in 1999 and the incidence of hard-core poverty decreased slightly from 2.1 per cent to 1.4 per cent for the same year.

National Vision Policy

The level of poverty in rural areas was reduced from 45 per cent in 1976 to 21.8 per cent in 1990 and 11.9 per cent in 2004. The incidence of hard-core poverty was 2.9 per cent in 2004. Rural development efforts which gave due emphasis to the eradication of poverty appeared to be effective. However, there are variations in the achievement. Rural poverty tended to be higher in less developed states such as Sabah, Sarawak, Kelantan, Terengganu and Kedah. The incidence of poverty also varies according too occupations/economic activities. A higher rate of poverty occurred among paddy farmers, rubber and coconut small holders and fishermen. The focus on the hard-core poor has been given less preference. Instead priority is given to mega projects like the Petronas Twin Towers, the Penang Bridge, the North-South Expressway and KLIA.

4.1.2Restructuring the society

New Economic Policy

Corporate equity has yet to reach the target of 30% for holdings that are sold for short-term profits and not maintained and added to long-term basis. Bumiputera overall corporate equity holdings have increased from 2.4% in 1970 to 19% in 1990. In the past, there is no banking institution has Bumiputera majority owner, but now the major banks in Malaysia are owned and managed by the Community. The dealer community also exists although mostly small and medium-status.

NEP has a target value and pure. Yet implementation has given rise to dissatisfaction some since this will lead to the practice who are instead based on the ability or in English idioms "who you know and not what you know". Apart from that, there are also complaints that there is no "equal field" in implementation of the NEP. Not considered fair, transparent and efficient manner has caused dissatisfaction among non Bumiputera. For example, university admissions quota system has been considered by the non Bumiputera as narrow opportunities for their children who qualify for university education.

National Development Policy

Bumiputera ownership declined below the 1995 level. Although in absolute terms, Bumiputera ownership of share capital at par value increased by 12.6 per cent per annum from about RM37 billion in 1995 to RM59 billion in 1999, in percentage terms it declined from 20.6 per cent to 19.1 per cent. Similarly, the equity ownership among non- Bumiputera also declined during the period from 43.4 per cent to 40.3 per cent. This decline reflects the inability of general public, particularly Bumiputera, to sustain their equity holding structure during the difficult period following the economic crisis. This indicated that economic resilience has to be strengthened. NEP also reduce the income gap between Bumiputera and non-Bumiputera. For example, the ratio of Bumiputera to China increased from 1:1.74 in 1990 to 1:1.64 in 1990. Bumiputera Commercial and Industrial Community (BCIC) is extensively retained and high priority is still given to all Bumiputera. However, the reliance on the Bumiputera (private) sector to attain the 30% figure is more pronounced. Here we witnessed the rise of the Bumiputera-owned conglomerates and the Billionaire Bumis.

National Vision Policy

The other part regarding BCICs goal of 30% Bumiputera equity still remains in force. The Government will also enhance Bumiputera participation in the retail trade sub-sector through the Bumiputera Retail Trade Development Project or PROSPER.Concentrates on increasing the participation of Bumiputera in the leading sectors of the economy, and with the same breath Bangsa Malaysia was coined. Additionally, with regards to Equity Restructuring, Tun Dr. Mahathir said, In ensuring non-Bumiputera equity ownership, the share of ownership by the Indian community will be given due consideration. Privatization became the in word and such programs will continue to be implemented to create more opportunities for Bumiputera entrepreneurs at the corporate level.

4.2 PRIVATIZATIONNew Economic Policy

With privatization opportunities from the mid-1980s largely decided on a discretionary basis by the government leadership, there has been growing resentment and criticism of rent-seeking and cronyism. Such disbursement of privatization opportunities also strengthened the leaderships means for patronage, in turn encouraging competition for party and government political office and upward mobility. The selective nature of the bail-out processes and procedures following the 19971998 currency, financial and economic crises have strengthened, rather than undermined, these tendencies.

National Development Policy

Privatization continued to be an essential part of the Seventh Malaysia Plan strategy of promoting greater private sector participation in economic development. Through the privatization programme, people was able to enjoy better facilities. This is because, if the projects were to be implemented by the government, many of the projects would have to be deferred for many years until the government had sufficient funds. Meanwhile, people would not be able to enjoy quality facilities and the number of accidents on low quality roads would increase tremendously. On the other hand, through privatization, new facilities were developed much earlier for the benefit of the people, for example, highways with lower toll rates. Through privatization the Government managed to save capital expenditure totalling RM49.2 billion, while the proceeds from the sale of equity and assets amounted to RM4.4 billion.

National Vision Policy

The government began implementing its privatisation policy in 1983 by farming out infrastructure projects to private companies. However, some of the privatised projects have encountered spectacular failures and were subsequently re-nationalised. In recent months the government has spent billions in taking over a number of previously privatised projects, including the RM1.8 billion for debt-ridden national carrier Malaysia Airlines System.

July 2002, RM4 billion was spent to rescue UEM, whose subsidiary Renong is the major contractor for a number of privatised highway projects. During the time government is also preparing to bail out two major light rail transit companies amounting to RM6 billion. Over the years, opposition figures and foreign investors have criticised the government's privatisation for promoting crony capitalism as well as widening the gap between the rich and poor.

4.3 EMPLOYMENT, EDUCATION AND TRAININGNew Economic Policy

Employment Despite encouraging growth in the Gross Domestic Product (GDP), employment rates had not grown at a commensurate pace. In addition, there was also the problem of ethnic specialisation in certain professions, with the Chinese dominating the marketplace, the Malays dominating the civil service, and the Indians largely participating in specialist professions such as law. The income disparity between rural and urban areas that the Second Malayan Five Year Plan had sought to resolve was also not satisfactorily eliminatedEducation Bumiputras were accorded quotas for admission to public universities. Bumiputra were allotted a significantly lower percentage of places originally intended, as the population figures used to calculate the quotas were based on 1970s numbers.

National Development Policy

Employment Persistent labour shortages experienced in the Seventh Malaysia Plan resulted in the tightening of labour market and pressure on wages. This was achieved through further amendments to the Employment Act 1995 to include new modes of working such as teleworking, part-time work and job sharing. The amendment of the Act facilitate the setting-up of community nurseries and kindergartens within residential areas and ensuring better access to training opportunities. Pensioners with the appropriate qualifications and experience will continue to be considered for re-employment, on a case-by-case basis.In addition, employees were given the opportunity to participate in the ownership of the entities through the Employees Share Option Scheme. These schemes helped to instil a sense of belonging and dedication, thereby, enhancing productivity.Education The Curriculum Development Centre was established. Concerted efforts to increase accessibility to education and training resulted in increased enrolment at all levels from pre-school to degree level. Several new technical and vocational schools were built under the Second Malaysia Plan, with seven institutions alone completed in 1975. It would alleviate the problem of unemployment, especially among the youth.Three new universities and three new polytechnics to increase tertiary enrolment in public institutions. With the implementation of the Private Higher Educational Institutions Act 1996, the private sector also became an important provider of tertiary education. Six private universities offering degree programmes in key technologies were set up while three foreign universities were allowed to set up branch campuses to offer courses up to the degree level.

National Vision Policy

Employment The unemployment rate remained low at about three per cent with low inflation. Exports increased and surpassed RM287 billion while total trade increased to RM515 billion. The balance of payments is in Malaysia's favour. The per capita income increased from RM12,160 (1998) to RM13,360 (2000). The slower rate is effected by the declined of primary sector such as agriculture, forestry, fishing and mining. However, the secondary and tertiary sector have recorded an expansion with an averaged rate increase of 4.3% to account for 84% of total employment opportunities.Education Under NVP, the capacity of the Government's higher education institutions expanded to increase accessibility, especially to Bumiputera to balance the increase in private educational institutions. Both the public and private institutions of higher learning will be required to increase the number of Bumiputera graduates and ensure that the courses offered meet market demand.

Training To meet the increased demand for skilled human resource, a total of 597,384 skilled workers was produced by training institutions and 4.8 million training places for skills upgrading were provided by Pembangunan Sumber Manusia Berhad during the 1991-2005 period. Opportunities for skill enhancement and lifelong learning were also expanded through the establishment of community colleges and open universities. However, tertiary and training institutions still needed to become more aligned with industry, in order to better meet the needs of employers.

4.4INFRASTRUCTURE DEVELOPMENT

New Economic Policy

The provision of a comprehensive range of infrastructure facilities and services is essential to support the growth of the economy. Infrastructure constraints at the beginning of the Seventh Malaysia Plan period have largely been overcome with the accelerated capacity expansion of roads, ports, airports, urban transportation, communications, water supply and electricity as well as sewerage services. A quite high achievement of provision of water supply and electricity in rural areas. The percentage of households with piped water had increased from 42 per cent in 1980.

National electricity coverage expanded from 80 per cent in 1990 to 93 per cent in 2005. Rural electricity coverage rose significantly from 67 per cent in 1990 to 92 per cent in 2005. Although the situation has improved greatly, especially for Sabah and Sarawak, coverage in these states needs to improve further. As for telecommunications, market liberalisation of the industry since the 1990s has led to more competitive pricing and consumer choice, which in turn increased the cellular phone penetration significantly from 0.7 per 100 population in 1990 to 74.1 in 2005.

National Development Policy

To ease traffic congestion, a multi-modal public transport system was implemented in the Klang Valley, which included the construction of the light rail transit (LRT) system, rail commuter service, monorail and feeder bus system. The highway and road network also grew from 53,985 kilometres in 1990 to 77,673 kilometres in 2005, which facilitated the establishment of new growth areas as well as reduced travel time and costs. To handle the increase in air passenger traffic, upgrading of airports was undertaken and new airports were built, the largest being the KL International Airport (KLIA) as the main gateway to the country. In addition, access by air to remote areas was improved. Some of other the major projects completed were the Port of Tanjung Pelepas, Second Link to Singapore, Kelinchi Dam and Malaysia's own satellites, MEASAT 1 and MEASAT 2.

National Vision Policy

Infrastructure has received the largest share of public sector development expenditure in the Malaysia Plans. In the eighth Malaysia Plan the corresponding amount was forty-six times higher at RM64,128.2 million.Electricity generation capacity of the country is projected to increase by 31.4 per cent from 19,217 MW in 2005 to 25,258 MW in 2010. Substantial improvements are also expected in rural electrification coverage. Nation-wide the rural electrification coverage, already high at 92.9 per cent, is forecasted to increase to 95.1 per cent. Sabah and Sarawak, which have the lowest rural electrification coverage rates, will see significant improvements. In the case of Sabah the percentage will increase from 72.8 per cent in 2005 to 80.6 per cent in 2010. In Sarawak rural coverage is planned to improve from 80.8 per cent to 89.6 per cent between 2005 and 2010.Water supply is already quite well developed in Malaysia. Water supply coverage is projected to further increase from 95.0 per cent in 2005 to 96.8 per cent in 2010. The rural areas will see big improvement in water supply coverage, from 92.0 per cent in 2005 to 95.2 per cent in 2010.

4.5ACCELERATING SCIENCE AND TECHNOLOGY DEVELOPMENT

New Economic Policy

Science Policy in Malaysia is regulated by the Ministry of Science, Technology, and Environment. Other ministries, such as the Ministry of Agriculture and the Ministry of Health also have science departments. Training in scientific areas was promoted during the 1970s and 1980s. In an effort to create a self-reliant defensive ability and support national development Malaysia privatised some of its military facilities in the 1970s.

National Development Policy

From 1987-1997 research and development used 0.24% of GNP, and in 1998 high-tech exports made up 54% of Malaysia's manufactured exports. The country is one of the world's largest exporters of semiconductor devices, electrical goods, and information and communication technology products.

The Malaysia Defence Industry Council. to try to promote defence industry and its competitiveness by actively marketing the defence industry. One way it does this is through the Langkawi International Maritime and Aerospace Exhibition, one of the largest defence and civil showcases in the Asia Pacific, regularly attended by over 500 companies. The Malaysian Armed Forces relies heavily on local military technology and high-tech weapons systems designed and manufactured by foreign countries.

National Vision Policy

In 2002 the Malaysian National Space Agency (Angkasa) was formed to deal with all of Malaysia's activities in space, and to promote space education and space experiments. It is focused on developing the "RazakSAT" satellite, which is a remote sensing satellite with CCD cameras. In early 2006, Sheikh Muszaphar Shukor and three other finalists were selected for the Angkasawan spaceflight programme. This programme came about when Russia agreed to transport one Malaysian to the International Space Station as part of a multi-billion dollar purchase of 18 Russian Sukhoi Su-30MKM fighter jets by the Royal Malaysian Air Force.

4.6INFORMATION AND COMMUNICATIONS TECHNOLOGY

New Economic Policy

National Development Policy

E-Government seeks to enhance the convenience, accessibility and quality of interactions with the public and businesses at large. Citizens and businesses are also able to transact with the government anywhere and anytime at their convenience. The main goals of e-government are to improve the quality of public services and the efficiency of administrative work. However, it does not allow citizen participation in local government administration such as policy making and implementation processes using ICT. Public confidence in online services delivery will be a key factor in the success of e-government. The Local Authority is the third tier in the government system, which is at the forefront of public service delivery not only to individuals but also to other organizations of the public and private sectors.

National Vision Policy

Embarked on several ICT endeavours to improve its administrative machinery in terms of structure, systems, procedures, management integrity and work ethics. New strategic measure were introduced and ICT was utilized to upgrade both the quality of management and delivery system. Both government and private sectors have thus recognized early the potential and impact of ICT in improving its internal operations and service delivery. During the economic crisis all the economic statistics indicated that the Malaysian economy has not only recovered but the recovery was better than that of other countries that were also affected by the crisis. After the GDP contracted by 7.4 per cent in 1998, a growth of 5.8 per cent was achieved in 1999 and 8.5 per cent in 2000. The external reserves increased from US$20 billion in 1997 to US$27 billion today. At the end of 1999, the reserves increased to US$31 billion but declined moderately due to increased imports, repatriation of profits and proceeds from the sale of shares and reverse investment by Malaysian firms as well as the depreciation of the Yen and Euro, which form a part of our foreign reserves.

5.0SUMMARY

Over the last few decades, Malaysia have laid a strong foundation for a rapid and sustainable economic growth. The strength and resilience were tested several times when both internal and external factors caused Malaysia economy to slow down. The latest challenge was when the currency speculators pushed down the value of our currency. Yet, each time we not only succeeded to recover the economy but developed it at an even faster pace.

New Economic Policy, covering the period 1991-95, is the rst hase in the implementation of the Second Outline Perspective Plan (OPP2), 1991-2000. The OPP2, which embodies the National Development Policy (NDP), sets the broad objectives, strategies and targets that will guide the development of the nation in the nineties. The Sixth Plan elaborates the strategies as well as the programmes and projects designed to achieve the objectives of NDP.

With the launching of the Sixth Plan, Malaysia now stands poised for another period of sustained social and economic development in the new decade of the nineties. Since independence in 1957, the country has achieved remarkable progress in transforming the economy and raising the standard of living of the people through a series of ve-year development plans. These remarkable achievements have been most evident during the last twenty years under the New Economic Policy(NEP), when the national development programmes were considerably expanded to undertake the ambitious tasks of eradicating poverty and restructuring society so as to eliminate the identication of race with economic function. The overall progress in achieving the objectives of NEP, as shown by the reduction in income inequalities and the advancement made by Bumiputera in the modern sectors of the economy, has strengthened national unity in our multi-racial society and provided the nation with a much higher level of social and political stability compared with the situation in 1970. This stability, together with the condence it generates on the future prospects for the country, provides a strong foundation for the development of the economy and the continued prosperity of the people.

To be sure, there will always be challenges and uncertainties facing the economy but with internal political and social stability and the willingness to implement policies which enable the economy to adjust and adapt to the changes around it, Malaysia has shown that it has the capacity to minimize the impact of adverse developments on the countrys growth prospects. This capacity of the economy to respond to policies can be clearly seen from the recent experience during 1985-86 when the country went through the worst recession in its post-independence history. Yet, with determined efforts to introduce structural adjustments towards liberalization and deregulation, the economy turned around rapidly from 1987 onwards to record unprecedented growth rates. As a result, the performance of the economy for the 1986-90 period, exceeded the Fifth Plan targets, thus enabling it to play an important role in achieving the objectives of NEP.

While National Development Policy (NDP) is to attain balanced development in order to create a more united and just society. NDP which emphasizes growth with equity will enable all Malaysians to participate in the mainstream of economic activities, thereby ensuring political stability and national unity. Building upon the on going thrust of NEP in eradicating poverty and restructuring society. As the NEP, the NDP continues to not only reduce economic imbalances among the ethnic but also between rich and poor and between regions. Economic imbalances will be reduced based on the principles of balanced and equitable distribution of development to achieve social justice & strengthen national unity.Although the new policies have put far greater emphasis on achieving rapid growth, industrialization and structural change, there is the widespread perception that public policy is still dominated by the NEPs interethnic economic policies, especially wealth redistribution or restructuring targets. These policies are believed to be especially important in terms of influencing public policies affecting corporate wealth ownership as well as other areas, notably education and employment opportunities. In other words, ethnic discrimination primarily involves the business community and the middle class, where interethnic tension is most acute. The implementation of NVP about Interethnic business coalitions have become increasingly important over time, often with an ethnic Malay partner securing rents for gaining access to government-determined business opportunities, and the ethnic Chinese partner with access to capital and business acumen getting the job done. Such joint ventures have generated considerable resentment, especially among those denied access to such business opportunities.

As conclusion, discussion of rural development experiences in Malaysia reveals that the process of rural transformation has taken place within the framework of a market economy. Rural development has been used as a means to correct the failure of the market mechanisms to trickle down the benefits of development. The persistence of poverty and underdevelopment in rural areas were the manifestation of uneven development as the process and outcome of capitalism.6.0REFERENCESAbdullah Chek Sahamat, (2005). Native Customary Right Land Development: An Approach to improve The Rural Native Wellbeing of SarawakSeminar Kebangsaan PerancanganBandar dan Wilayah Ke-23 Skudai: UTM, 21 September

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