Malaysia’s Development Strategy Revisited (5)
by Dr. Mohamed Ariff*
A New Pro-Poor Economic Policy and Reform
There is certainly a need for a clear focus on the needs of the poor and marginalized regardless of race, colour or religion. In other words, Malaysia needs a ‘new’ New Economic Policy that is explicitly pro-poor. The main beneficiary of such a policy would still be Malay households, as they account for roughly three-quarters of the bottom 40 per cent of households in terms of income distribution.
Without a doubt, Malaysia is one of the better-performing economies in the region, with fairly strong macroeconomic fundamentals. The medium and long-term prospects of the economy are bright. Its inherent strengths clearly outweigh its perceived weaknesses, which are by no means insurmountable. Malaysia has only itself to blame for being stuck in the middle-income category for so long, and high-income status is within striking distance if policy makers have the courage to recognize and rectify policy errors. But there should be no delusion that a high income is all it takes to become a developed country; Malaysia has a long way to go to climb up the human development ladder as well.
The Malays are Competitive and Competent
It would be incorrect to give the impression that there is very little political space for serious reform in Malaysia. Fortunately, times have changed. Malays are just as competitive and competent as anyone else, and it would be an insult to Malay intelligence and an affront to the Malay psyche to say otherwise. What is more, thanks to increasingly easier access to information through the internet, the mindset of Malay voters is changing, as is that of their compatriots in other ethnic groups. The constituency for reform is growing – a development that no political party can afford to ignore in a democracy.
Understandably, there has not been much academic discussion or intellectual discourse – let alone public debate – on the issues confronting Malaysia given the ‘sensitive’ nature of the topics. Books discussing such issues candidly and objectively are either dated or in short supply. The present volume, containing solid contributions by eminent writers on related themes, should help fill the vacuum with balanced arguments.
What distinguishes this book from other works on the Malaysian economy is the forthright manner in which the various issues are discussed. The insights and views of the writers cover a wide spectrum of issues, including political challenges, corporate ownership and control, governance, crisis management, macroeconomic and microeconomic policies, service sector reforms, technological upgrading, distributive justice and demographic change. Together, they represent a major contribution towards better understanding of an increasingly complex Malaysian economy.
*Dr. Mohamed Ariff is Professor Emeritus, University of Malaya and Distinguished Fellow, Malaysian Institute of Economic Research, Kuala Lumpur
Preface for the forthcoming book by Hal Hill, Tham Siew-Yean and Ragayah Haji Mat Zin (Editors), GRADUATING FROM THE MIDDLE: MALAYSIAN DEVELOPMENT CHALLENGES, Routledge, United Kingd