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The New Policy Called New Development Policy Ndp Economics Essay

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To achieve vision 2020, Dr. Mahathir has shown there have nine strategic challenges. The first of the challenges is establishing a united Malaysian nation. In other definition, different race should be living in harmony and made up of one “Bangsa Malaysia” with political loyalty and dedication towards the nation. The second of the challenges is creating a psychologically liberated Malaysian society with confidence in itself to face all manner of adversity. The third challenge is fostering a mature democratic community. The forth is challenge of forming a society that has high moral and ethical. That means citizens are strong in religious and infuse with the highest of ethnical standards. The fifth challenge that for Malaysia citizens have always faced is establishing a matured, liberal and tolerant community. Because of Malaysian is multiple race, they should be respects the customs, cultures and religious to each other. The sixth is the challenge of establishing a scientific and progressive society. The seventh challenge is establishing a fully caring society. The eight is the challenge of ensuring an economically just society. That means the society is fair and equitable distribution of wealth among the citizen and cannot distribute the jobs according the races. The ninth challenge is the challenge of establishing a prosperous society with an economy that is fully competitive. (3)

From 1990 to 2020, there are different between 30 years. In these 30 years, Malaysia government has introduced several Malaysia Plans to achieve Vision 2020. From 1957, Malaysia was an agricultural economy until the 1970s and then started moving into industrial until the mid 1980s. From 1985 and onwards, Malaysia became a new industrialised economy and to become a knowledge base economy.

Before vision 2020 has introduced by Dr. Mahathir, there has planning First Outline Perspective Plan (OPP1) which including Second Malaysia Plan (1971-1975), Third Malaysia Plan (1976-1980), Forth Malaysia Plan (1981-1985) and Five Malaysia Plan (1986-1990). In addition, the New Economic Policy (NEP) had introduced and under the Principles of OPP1 in 1970. New Economic Policy (NEP) was introduced because Malaysia faced two problems in 1969 which are poverty and imbalance racial socio-economic. The objective of the New Economic Policy (NEP) is to bring a more equitable distribution of wealth between the different races and groups in the various strata of community in Malaysia. That means NEP is to remove the identification of race with economic function and should be a good mix of the ethnic groups that make up the Malaysian nation.

According to the Speech of Dr. Mahathir (2008) reported the national incidence of poverty has declined from 52.4 percent in 1970 to 17.1 percent in 1990. In Peninsular Malaysia, the incidence of poverty declined to 15 percent while in Sabah and Sarawak declined to 34.3 percent and 21 percent respectively. This reduction is a significant achievement by international standards although the poverty line of $370 ringgit for 1990 is far above those used in many developing countries to define poverty (Koleksi Arkib Ucapan,2008). However, the New Economic Policy has not been achieving fully effective to reduce poverty. Hence, government Malaysia was launched a new policy and replaced it. It is because to reduce further the current disparities among the races.

The new policy called New Development Policy (NDP). This new policy will maintain the basic strategies of the NEP and to correct social and economic imbalances, promotes social and political stability as well as sustained development. New Development Policy (NDP) also is one of the steps to enable Malaysia to become a fully developed country by the year 2020. In 1992, the Second Outline Perspective Plan (OPP2) was introduced and it was formulated based on the New Development Policy (NDP). This plan is covered the period from 1991 to 2000. It includes Sixth Malaysia Plan and Seventh Malaysia Plan towards vision 2020. In the Seventh Malaysia Plan has introduced the knowledge based economy, which can accelerate rate of economic growth and increase the international competitiveness.

In this Second Outline Plan (OPP2), it has strength the capacity of the bumiputera to increase their ownership of corporate wealth and achieve a more equitable distribution of income and wealth throughout the country. Besides this, the development strategy of the Second Outline Plan (OPP2) period is based on four principles which are optimum balance between goals of economic growth with equity; ensuring balanced societal development for social and political stability; reducing the social, nurturing of a Malaysian society that is responsible, resilient, progressive and caring and relates to the environment.(4) National IT Agenda (NITA) and the Multimedia Super Corridor (MSC) were introduced. National IT Agenda (NITA) is to formulate strategies and promote the utilization and development of IT whereas the Multimedia Super Corridor (MSC) is strives to create an idea IT and multimedia environment.

The Following Plan is Third Outline Perspective Plan (OPP3) which was covering from 2001 to 2015. It includes Eighth Malaysia Plan (2001-2005), Ninth Malaysia Plan (2006-2010) as well as Malaysia Tenth Plan (2011-2015). The strategies of the Third Outline Perspective Plan (OPP3) are strengthening the manufacturing sector; restructuring the agriculture sector to be dynamic and competitive; developing the services sector as the main engine of growth; accelerating the development of S&T capacity and capability to further increase efficiency; increasing the usage of ICT in all sectors to increase productivity; and increasing coverage as well as improving access and quality of basic infrastructure and social services to increase efficiency and quality of life. Besides this, Third Outline Perspective Plan (OPP3) efforts to develop the economy based on knowledge to increase the productivity, especially in the areas of human resource development (HRD), science and technology (S&T), research and development (R&D), info structure and financing to position itself prominently in the global .(5)

In addition, the New Vision Policy (NVP) was launched in 2001 and under Malaysia Eighth Plan while the Economic Transformation Program (ETP) is under Malaysia Tenth Plan in 2010. All of these planning are toward to Vision 2020.The purpose of National Vision Policy is establishing a progressive and prosperous “Bangsa” Malaysia that lives in harmony. Besides this, economic growth will be reducing poverty, social, economic, and regional imbalances and restructuring of society. The National Vision Policy (NVP) also pursues environmentally friendly and sustainable development to ensure that the environment is clean, healthy and attractive as well as capable of sustaining the nation’s needs and aspirations.(6) NVP has seven important thrusts which are (1) promoting equitable society;(2) Sustaining economic growth, (3) Meeting global competition; (4)Building a resilient nation;(5)Developing a knowledge based on economy;(6) Strengthening HRD and (7) Pursuing environmentally sustainable development. Furthermore, the new dimensions of the National Vision Policy which are developing Malaysia into a knowledge based economy; generating endogenously driven growth through strengthening domestic investment; increasing the dynamism of the agriculture, manufacturing, & services sectors; addressing pockets of poverty as well as increasing the income and quality of life of those in the lowest 30 percent income category; achieving effective Bumiputera participation as well as equity ownership of at least 30 percent by 2010; increasing the participation of Bumiputera in the leading sectors of the economy and reorientation human resource development to support a knowledge based society.

The fifth Malaysia’s Prime Minister, Abdullah bin Badawi also initiated five regional economic corridors to ensure Malaysia achieves vision 2020. The five regional economic corridors are Northern Corridor Economic Region (NCER); Iskandar Malaysia, East Coast Economic Region (ECER); Sarawak Corridor of Renewable Energy (SCORE) and Sabah Development Corridor (SDC). All of these economic corridors are very important to propel the Malaysia economic growth.

Nowadays, Malaysians face several problems which are falling private investment, falling productivity rates, inefficient use of its resources, outflow of talent, and lack of a substantial pool of skilled labour. Hence, the Tenth Malaysia Plans was launched by Prime Minister Dato’ Sri Najib Tun Razak and to solve the problems that face. In the Tenth Malaysia Plan, it towards become a high income and high productivity economy by the year 2020.In this plans, the government aims the gross national income (GNI) per capital is to increase RM38,850 in 2005. That mean Malaysia requires achieving the real GDP growth is 6 percent per annum. There are five strategic basic to achieve the aspirations of the Tenth Malaysia Plan. First of the strategic is creating an environment that promote economic growth with private sector. The second strategic is government plays an important role in the transformation of the economy as well as prove quality services to Malaysia citizen. The third is ensuring income and wealth is equal with other races. The forth is to promote productivity and preserve quality talent base and the fifth is increase the quality of Malaysia life.

In addition, Prime Minister Dato’ Sri Najib Tun Razak also announced the One Malaysia (1Malaysia) concept tagged with a slogan People First, Performance Now. The 1Malaysia concept also aspires to strengthen relationships among the various ethnic groups and everyone ethnics belongs to one race that has the same goal and aspirations to develop the country as a developed nation in 2020. Within the 1Malaysia concept, the Government Transformation Programme (GTP) was introduced. It aimed at radically transforming the way the government worked so it could quickly deliver real solutions to real issues and tangible outcomes. The objective is to improve the lives of all Malaysians regardless of race, religion and social status.

Besides this, Malaysian government also introduced Economic Transformation Plan (ETP) which is aiming to build a high income nation by the year 2020. Economic Transformation (ETP) was introduced and focused on key economic areas know as 12 potential National Key Economic Areas (NKEAs). It is a set of 12 NKEAS which contain 11 sectors and Kuala Lumpur. The 11 potential sectors of NKEAs are oil and gas; palm oil, financial services; tourism; business services; electronic and electrical; wholesale and retail, education; private healthcare; communications content and infrastructure and agriculture.(7). It aspires to achieve a Gross national Income (GNI) growth of 6% per annum that will allow Malaysia to achieve the targets set under Vision 2020. Furthermore, Malaysia is targeting a GNI per capita from $USD6,700 or RM23,700 in 2009 to more than $USD15,000 or RM48,000 in 2020.

In the conclusion, planning is very important to each country. Hence, government Malaysia should be planning Malaysia properly and carefully in the future. It is because these 5 year planning will interrelationship with the economic, politic and standard of living in Malaysia. Furthermore, Malaysia has the infrastructure, technology, manufacturing capabilities, and trade advantages that ensure its continued development.

Table 1: Summary of Malaysia’s Development Phases and Economic Policies (Source : Berma. M, 2003)

Development Phases

Economic Policies


Prime Ministers

Sarawak Chief Ministers

-First Malaya Plan

(1 956-1960)

-Second Malaya

Plan (1961-1965)

-First Malaysia Plan


Open market


YM Tunku

Abdul Rahman





– Dato


Tawi Sli


-Second M alaysia

Plan (1971-1975)

-Third Malaysia

Plan (1976-1980)





Direct government


-Tun Abdul

Razak( 1970-


-Tun Hussein

Onn (1976-


-Forth Malaysia Plan (1981-1985)

-Fifth Malaysia Plan (1986-1990)



-Malaysian Inc.

Dato’ Seri Dr.




PatinggTi an

Sri (Dr.) Haji

Abdul Taib

bin Mahmud


Sixth Malaysia Plan (1991-1995)

National Development Policy (1991-2000)

Seventh Malaysia Plan (1996-2000)

National Vision Policy 2001-2010)

Financial Crisis (1997-1998)

Eight Malaysia Plan (2001-2005)





-Economic resilience

Ninth Malaysia Plan (2006-2010)

YAB Dato’ Seri Abdullah Bin Haji Ahmad Badawi

Tenth Malaysia Plan (2011-2015)

Economic Transformation Programme

Concept One Malaysia

Dato’ Sri Mohd. Najib Bin Tun Abdul Razak

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