CHAPTER 6:

M A L AY S I A M A I N P U B L I C
POLICIES

LEARNING OUTCOMES::
• Discuss on various relevant public policies related to economy
• Discuss on various development policies
• Discuss on various social policies
PUBLIC POLICIES RELATED TO
ECONOMY

• New Economic Policy (NEP)

• The Malaysia Incorporated Policy
• Malaysian Privatisation Policy
 THE NEW ECONOMIC POLICY (NEP) (1970-
1990)
✓ Prior to 1970, Malaysia's development policy was primarily aimed at promoting growth with a
strong emphasis on the export market. Although the economy grew very rapidly during this
period at an annual average of 6.0 per cent, there was insufficient emphasis on distributional
aspects, resulting in socio-economic imbalances among the ethnic groups with negative social
consequences in the form of a racial riot in 1969.

✓ The launching of the New Economic Policy (NEP) in 1971 was a watershed in the Malaysian
economic policy history. The NEP underscored the importance of achieving socio-economic goals
alongside pursuing economic growth objectives as a way of creating harmony and unity in a
nation with many ethnic and religious groups.

✓ The overriding goal of NEP was national unity.

 Two Main Objectives of NEP are:
• To minimize the level of poverty in the country (poverty eradication)
• Restructuring Society

✓ Malaysia's poverty eradication strategy has always focused on human resource development and quality
of life improvements. The initiatives emphasized on income-generating projects and not on welfare hand-
outs, except in exceptional cases where direct assistance is provided. This is to ensure self-reliance among
the poor to participate in the mainstream economic activities.

✓ The rural development strategies incorporate various poverty eradication programmes such as integrated
agropolitan and contract farming; entrepreneurship programmes including access to microcredit financing;
provision of agriculture support services including drainage and irrigation infrastructure ; encouraging the
development of village/small industries; provision of rural infrastructure including roads, electricity and
water; and social services such as health, schools, food supplementary and squatters resettlement.
 STRATEGIES :
❑ Reduce and eradicate absolute poverty irrespective of race through raising income levels and
increasing employment opportunities for all Malaysians.
❑ Direct intervention by Government through the creation of specialized agency to ensure a more
Bumiputera effective participation in the economy and sustainable equity ownership.
❑ Introduction of specially designed rules and arrangements, whereby the involvement and
participation of Bumiputera are assisted and facilitated over a period.
❑ Provision of concessional fiscal and monetary support as part of the package towards
entrepreneurial development.
❑ Accelerated programme for education and training.
❑ Increasing Bumiputera ownership through privatisation projects; and
❑ To create balance in the workforce that reflects ethnic's composition through a more equitable
economic growth.
THE NEW ECONOMIC POLICY (NEP) (1970-
1990)
✓The implementation of the strategies to eradicate poverty and restructure the society resulted in a
significant improvement by 1990. The poverty rate declined from 49.3 per cent in 1970 to 16.5 per cent in
1990 and reduced further to 1.7 per cent in 2012.

✓In terms of corporate equity restructuring, 63.3 per cent of corporate equity in Malaysia was owned by
foreigners in 1970, while the Bumiputeras owned 2.4 per cent.

✓The NEP set a restructuring target of 30 : 40 : 30, where by 1990, the holdings of the Bumiputeras should
reach 30 per cent, other Malaysians 40 per cent and the foreigners 30 per cent, in the context of an expanding
economy.

✓In 1990, the Bumiputera share of equity amounted to 19.3 per cent of total corporate equity share and the
holdings of other Malaysians reached 46.8 per cent and 33.9 per cent for foreign and nominee holdings.
Although the Bumiputeras have not achieved the 30 percent equity ownership target by 1990, the progress
made by them has been substantial compared to the position in 1970. By 2010, the total value of corporate
equity has expanded rapidly and increased the absolute holdings value of all groups
 THE MALAYSIA
• The Malaysia Incorporated Policy was introduced in 1981 to encourage cooperation between the public
INCORPORATED POLICY
and private sectors whereby both sectors act and operate within a "Malaysian Company".

• Through this policy both parties depend on each other; where the private sector upholds the commercial
and economic activities, while the public sector draws up major policies, identify the direction and
provides the specialised supporting services which are conducive to the success of businesses.

• In line with the Government's new approach based on the new economic model in the Tenth Malaysia
Plan, the Government intends to stimulate its effort in encouraging the private sector to invest in
development projects.

• As such, the Government's allocation for development projects will be reduced and it can then shift its
attention to projects that will be implemented and funded by the private sector whether through
Privatisation and Public Private Partnerships (PPP), or through direct investment of the private sector in
country's development programme.
 THE MALAYSIA
INCORPORATED
To operationalise POLICY
this concept, several mechanisms were established :
• Deregulation of cumbersome bureaucratic rules and regulations

• Improving the delivery system

• Institutionalizing the consultative machinery between the private and public

sectors

• Establishing smart partnership programmes in nation building efforts between

the private and public sectors

• Pursuing privatization.
 THE PRIVATISATION
POLICY
➢ The Privatisation Policy was launched in 1983 to support the Malaysia Incorporated Policy
towards increasing the private sector's role in the country's economic development.

➢ The main objective of this policy is to lessen the financial and administrative burden of the
Government, improve skills and production, accelerate economic growth, reduce the size and
involvement of the public sector in the economy, and to assist in reaching the country's
economic policy's goal.

➢ In 1985 the Government produced a Guideline On Privatisation which detailed out the
objective of the policy, method of privatization, as well as the implementation mechanism.
And in 1991 the Government produced a Master Plan on Privatisation to explain the policy
and strategy for privatization.
Amongst the achievements in the implementation of the national
privatization policy are:
• Provided employment opportunities in the private sector apart from producing a professional work force,
especially amongst the Bumiputra.

• Energised the country's capital market through capital investments of the private sector in privatised
Government projects

❑ Since the introduction of the privatization programme from 1983 to April 2009, about 500 privatised projects have
been implemented throughout the country. The Government has benefited through savings in the form of capital
expenditure amounting RM161 billion and annual management expenditure (operations) amounting to RM7.79 billion
(or an estimated RM25 billion in a 25 year period).

❑ The burden of the Government's administrative expenditure was successfully reduced following the privatisation of
58 Government agencies which involved the transfer of 113,440 government employees to the private sector. This
savings has enabled the Government to redistribute its limited development resource to more needy sectors such as
the education, health and poverty eradication programme
PUBLIC POLICIES RELATED TO
DEVELOPMENT

• National Development Policy (NDP)

• National Vision Policy (NVP)
 NATIONAL DEVELOPMENT POLICY
(NDP) (1991-2000)
❑The National Development Policy was a Malaysian economic policy introduced by Dr. Mahathir
Mohamad, the 4th Prime Minister of Malaysia, with the objective of achieving economic growth, while
ensuring that accrued benefits reach all sections of society.

❑The National Development Policy replaced the Malaysian New Economic Policy (NEP) in 1990 but
continued to pursue most NEP policies of affirmative action for bumiputera.

❑The Malay share of the economy, though substantially larger, was not near the 30% target according
to government figures. In its review of the NEP, the government found that although income inequality
had been reduced, some important targets related to overall Malay corporate ownership had not been
met.

❑This policy was adopted in 1991 for a period of 10 years and it was succeeded by the National
Vision Policy (NVP) in 2001.
 NATIONAL VISION POLICY (NVP)
❑National(2001-2010)
Vision Policy is an extension policy of National Development Policy whichunder the cover of
8th and 9th Malaysia Plan. It is a 10 years policy which establishedduring year 2001 and ended by 2010
to fulfill the Third Outline Perspective Plan (OPP3)of Malaysia. Besides, it also under the second phase
of Vision 2020 to continue strengthen the basic transformation of Malaysia to a fully developed nation.

❑This policy was to help Malaysian's economy face the challenges of the globalization and
liberalization as well as the rapid development of technology, especially for the information and
communications technology (ICT). Besides, NVP was to enhance the competitiveness of the economy
and strengthen economic resilience by improve the total factor productivity and develop a knowledge-
based economy.

❑The main objective of NVP is to establishing a united, progressive and prosperous Bangsa Malaysia
that lives in harmony and engages in full and fair partnership.
 STRATEGIES :
To eradicating poverty irrespective of race,restructuring society and balanced development. To build a
resilient, competitive nation and an equitable society to ensure unity and social stability. It has several critical
thrusts to compass:

• To build a resilient nation by fostering unity, inculcating the spirit of patriotism, nurturing political
maturity, cultivating a more tolerant and caring societywith positive values, and raising the quality of life
as well as increasing economicresilience.
• To promote an equitable society by eradicating poverty and reducing imbalances among and within
ethnic groups as well as regions.
• To sustain high economic growth by strengthening the sources of growth, the financial and
corporateinstitutions as well as macroeconomic management.
• Enhancing competitiveness to meet the challenge of globalization and liberalization.
• Developing aknowledge-based economy as a strategic move to raise the value added of all
economicsectors and optimizing the brain power of the nation.
• To strengthen human resource development to produce a competent, productive and knowledgeable
workforce.
• To pursue environmentally sustainable development to reinforce long-termgrowth.
PUBLIC POLICIES RELATED TO
SOCIAL
• Education Policy
• Social Welfare Policies
• Housing and Social Policy
• Malaysian Child Welfare Policy
 EDUCATION
• At the end of British colonialism era, the society, especially from several group of educated Malay made a
POLICY
movement to revamp the colonial education system.
• The essence of having a new national education policy was to make it more representative to the nation. Such
movement had made the education issue to be prioritized in the aspect of nation building

Razak's Report
❑ Hence, the government agreed to set up a special committee led by Tun Abdul Razak (first Minister of Education and the second Prime
Minister of Malaysia) to make several recommendations. This committee composed of high level of government officials and education
experts from various groups (local and foreign).

❑ This comprehensive recommendation was known as Razak’s Report 1956. The objective of this committee was to establish a national
education system that would promote the cultural, social, economic and political development accepted by the nation as a whole, having
regard that the Malay language would be the national language. Hence, Malay language should be the main medium of instruction in the
education system.
❑ The content of the Razak’s Report was later became the basis feature to establish the
Education Ordinance 1957. Furthermore, the Malaysian Government at that time started to
make several evolutionary changes especially upon educational curriculum to suit the aspiration
of the Malaysian outlook. Education Policy should reflect to the satisfaction of all society in
Malaysia and this had become a part of the political agenda for the ruling party
Rahman Talib's
Report
❑To speed up the process of national integration and unity, the Rahman Talib’s Report was
made by new special committee to review the education policy in 1960 and became a basis
to establish the Education Act 1961.

❑The act provided the legal basis for enabling national language to be a compulsory subject
in primary and secondary school and in all training institutions. The act required pupils to
have a satisfied grade in national language subject to be awarded a certificate for public
education examination especially at the end of the lower and upper secondary levels.

❑All School using English as the medium of instruction were gradually adopting
National language. Since national language is Malay and had already accepted by
the Chinese, Indian and other races; therefore, such enforcement will enable the
society as a whole to shape up the language proficiency in the Malay language.
Mahathir's
Report
❑In 1979, a report from the Special Cabinet Committee chaired by Dr. Mahathir Mohamad
(Mahathir’s Report), who was the Minister of Education at that time (later become a Prime Minister
since 1981), was finalized after a six-year study.

❑The objectives were to achieve national unity in a multiethnic society besides increase the sense
of patriotism, to produce skilled manpower for national development and to further extend the
policy of democratization of education in order to strike a balance in all aspects of education
between rural and urban areas. This report has become a guideline for reforming the education
system in the recent years.
❑Pre-school education has become one of the important components of the formal
education system after the Education Act in 1996 enacted. It guarantees access of pre-
school education to children between the age of five and six in urban and rural area.
This will guarantee that the rural society will get the same opportunity to develop their
social status by having quality education. The New Primary and Secondary Education
Curriculums have been introduced to focus on developing skilled and knowledge
manpower for the nation.
National Education Blueprint 2006–
2010
❑In 2006, the National Education Blueprint 2006–10 was released. The Blueprint set a number of goals,
such as establishing a National Pre-School Curriculum, setting up 100 new classes for students with special
needs, increasing the percentage of singlesession schools to 90% for primary schools and 70% for
secondary schools, and decreasing class sizes from 31 to 30 students in primary schools and from 32 to 30
in secondary schools by the year 2010.

❑It was also stated that 4.4% of primary students and 0.8% of secondary students had not mastered the 3Ms
(reading, writing and arithmetic). The drop-out rate for secondary schools was given as 9.3% in urban areas and
16.7% in rural areas.

❑The Blueprint also aimed to address the problem of racial polarisation in schools. Under the Blueprint,
schools will hold seminars on the Constitution of Malaysia, motivational camps to increase cultural awareness,
food festivals to highlight different ethnic cooking styles, and essay competitions on different cultural traditions.
Mandarin and Tamil language classes will be held in national schools, beginning with a pilot project in 220
schools in 2007
National Education Blueprint 2013–
2025
❑In 2013, the National Education Blueprint was released. It covers the education of Malaysian starting
from Preschool till Post-Secondary. The approach of the blueprint was ground-breaking as it uses multiple
perspectives to evaluate and assess the performance of Malaysia's education system.

❑The blueprint highlights aspirations to ensure universal access and full enrolment of all children from preschool
through to upper secondary school level by 2020

Among the many steps to be taken, it is part of the plan to increase compulsory schooling from six to 11 years,
starting at the age of six years supported by targeted retention programmes :

❑Launch the Secondary School Standard Curriculum or Kurikulum Standard Sekolah

Menengah (KSSM) and revised Primary School Standard Curriculum or Kurikulum Standard
Sekolah Rendah (KSSR) in 2017 to embed a balanced set of knowledge and skills such as
creative thinking, innovation, problem-solving and leadership, lay out clear learning
standards so that students and parents understand the progress expected within each
year of schooling,
National Education Blueprint 2013–2025
• Revamp the national examination and school-based assessments in stages
By 2016
• at least 40 per cent of questions in Ujian Penilaian Sekolah Rendah (UPSR) and 50 per cent in Sijil Pelajaran
Malaysia (SPM) are higher-order thinking questions
By the end of 2013
• to build academic and career counselling services into the secondary school timetable to help students make better
informed choices about the various education pathways on offer.
From 2016
• to ensure that English is made a compulsory subject to pass for SPM
From 2013
• To ensure that the entry bar for teachers is raised to be amongst the top 30 per cent of graduates
• To ensure that teachers enjoy a reduced administrative burden so that they can focus the majority of their time on
their core function of teaching, with some administrative functions moved to a centralised service centre or to a
dedicated administrative teacher at the school level.
By 2015
• To ensure that all schools meet basic infrastructure requirements, starting with Sabah and Sarawak ❑to ensure that
the Trust School model is expanded to 500 schools by 2025
By 2025
• It is to ensure that Orang Asli students, other minority groups and students with physical or learning disabilities go to
schools with the facilities and equipment needed to create a conductive and supportive learning environment.
• To ensure that every student is encouraged to learn an additional language in the move to equip them well for entering the
workforce in a globalising world, will focus on building up its cadre of Chinese, Tamil and Arabic language teachers to
ensure that the supply of teachers matches student demand, besides expanding the provision of other important languages
such as Spanish, French and Japanese.

CONCLUSION
• The Malaysian government has formulated and implemented several policies to address specific problems or
issues.
• It has been shown that since the 1970s, Malaysia has achieved a remarkable growth and development. The
economic structure of the country has also been transformed from dependence on agriculture to a more
broadly based economy. An exceptional success has been made in poverty eradication.

SUGGESTED TUTORIAL QUESTIONS

• Elaborate on the New Economic Policy (10 marks)
• Explain the National Development Policy (10 marks)
• Explain the National Education Policy in Malaysia (10 marks)