EYES ON THE PRIZE

Malaysia 2016 | ECONOMY | FOCUS: MALAYSIA VISION 2020

Five years remain until the approaching 2020 target for Malaysia to achieve its goal of becoming a fully developed nation.

In the Sixth Malaysia Plan (6MP) of 1991, the country's then Prime Minister, Mahathir bin Mohamad, laid out his dream to transform Malaysia into a fully-developed nation by the year 2020. His plan, called the Malaysia Vision 2020, outlined nine strategic challenges that the country must overcome in order to become a completely self-sufficient industrialized nation. This plan focused not only on economic and financial issues, it also set out the framework for world-class improvements to Malaysia's educational system, political stability, and social wellbeing.

The nine strategic directives of the Vision 2020 can be categorized as socio-cultural, institutional, and economic. With just five years remaining to achieve the goals of the Vision 2020, the outlook is promising and indicates that many of the objectives are well within reach. However, significant necessary progress remains still ahead for Malaysia to reach the goal of realizing Mahatir's dream.

Since 1991, the country has suffered two significant recessions that hindered GDP growth. The first setback occurred in 1998 during the Southeast Asian Contagion with a 7.4% decline in GDP growth, while the second setback came during the recent global financial crisis in 2009 when GDP growth fell by 1.5%. Analysis by the IMF assured that aside from these two exceptions, real growth has been consistently strong thanks to a government that is continuing its support with two new reform programs: the Economic Transformation Programme (ETP) and the Government Transformation Programme (GTP).

Macroeconomic developments, driven largely by the ETP, have positioned Malaysia as one of the best performing economies in Asia, with an average annual GDP growth rate of 6.5%. The World Bank highlights that this impressive economic growth has been accompanied by a dramatic reduction in the proportion of Malaysia's population living at or below the poverty line from 49.3% in 1970 to 1.7% in 2012. As a supplement to this plan, the country launched the New Economic Model (NEM) in 2010, which aims to drive the country to a high-income status and ensure the development of a socially inclusive and sustainable trajectory of economic growth by 2020.

The GTP has focused on fighting corruption, assuring quality education, improving rural development, raising nationwide living standards, and expanding urban public transport. Data collected by the official website of the GTP reveals some promising indications regarding the success of the program thus far. In terms of adherence to legal codes of conduct, the crime index fell by an average of 6.6% per year between 2009 and 2014. Highlighting the government's commitment to developing a top-tier public education system, 13 new schools have satisfied the requirements for receiving the 'high-performance' distinction in 2015 alone. Living up to its own ambitions of fostering the uninhibited development of Malaysian society, the government currently supports 161 stores nationwide that offer cheaper prices for basic necessities catered to the country's lower-income strata.

The Malaysia Vision 2020 project has helped to catalyze the evolution of Malaysia toward a more socially, economically, and structurally developed country. It still remains to be seen whether or not the original goals set forth in the 6MP will be attained by the 2020 target. The current Prime Minister, Datuk Seri Mohd Najib Razak, declared in a recent interview with the Malaysian Reserve that according to the most up-to-date evaluations of Malaysia's economic performance, the country is on track to achieve the targets outlined in the Vision 2020. On the contrary, the former Prime Minister and original architect of the initiative, Mahathir bin Mohamad, stated in The Malaysian Insider that he seriously doubts whether the country will be able to completely achieve its developed status goal within the next five years. Despite the promising signs, Mahathir recommended that the current administration return to the right course of action and continue focusing on social and national development.