The Gini index declined from
It is now keen to graduate to a high income status, joining the likes of Singapore, Taiwan and Korea. The NEM takes this role seriously. Second, the Malaysian economy has just recovered — and admirably, one might add — from the recent global financial and economic crisis.
As if in answer to the lessons of the crisis, the NEM constitutes an attempt at designing a rebalancing strategy. Although the recovery is well underway, it is unlikely that business will be as usual with the United States limping towards regaining its pre-crisis economic glory.
Events in Europe do not contribute a great deal of confidence either.
This poses a tremendous challenge to Malaysia: Malaysia has a population of about 27 million, which is insufficient to develop a deep domestic market. The argument, then, is that Malaysia still needs to pursue its export-dependent strategy to drive growth.
Perhaps there is some truth to that; one cannot expect Malaysia to depend entirely on its own markets to create sufficient demand to sustain its own industries. Yet, there is much that can be done to develop domestically generated demand.
Aggregate savings are very high in Malaysia, which is typical of economies where uncertainties are high. Households have to save to fund unexpected health eventualities and the cost of tertiary education.
Health care has been increasingly privatised and that is also the case for tertiary education. Little has been done to provide for a well-planned system of public transport, perhaps a consequence of the effort to develop a national automobile industry. The NEM grapples with some of these issues.
It acknowledges that advances in the eradication of absolute poverty have been effective. However, improvements in the Gini coefficient have been lukewarm, indicating unsatisfactory decreases in income inequality.
The NEM admits that 40 per cent of households, particularly those in rural areas, have very low income levels. In addition income growth seems to have benefited only the top 20 per cent of income earners.
Affirmative action policies, which cut across ethnic groups, are crucial for a more inclusive and equitable economy. Class-based policies that target needs rather than ethnicity will help generate a middle class with greater purchasing power. This will increase domestically generated demand.
In the last 25 years the government has been heavily involved in business, with some remarkably embarrassing failures. The NEM should refocus the government on traditional concerns such as health and education. It is necessary to reduce uncertainties for households arising from these areas; appropriate public investment in these areas will free up household savings for consumption.
Environmental concerns are another area that demand urgent attention. Creating a green economy will generate business opportunities for the country. By emphasising renewable energy, environmental standards and green technology, the economy will attract foreign direct investments; multinational corporations will identify Malaysia as a market for their goods.Perched atop massive cement pillars that tower above Montenegro’s picturesque Moraca river canyon, scores of Chinese workers are building a state-of-the-art highway through some of the roughest.
We would like to show you a description here but the site won’t allow us. KUALA LUMPUR (July 23): The Government will review key national policies including the New Economic Policy (NEP) and the New Economic Model (NEM) to see if the policies are still relevant, the Dewan Rakyat was told.
INNOVATION FOR THE NEW ECONOMY. MIMOS is focused on generating technology solutions that enable the Government to deliver better services, and the Industry to achieve continued growth.
Malaysia's New Economic Model proposes a number of strategic reforms. Prime Minister Najib has announced the broad outline of the proposed New Economic Model (NEM) at the Invest Malaysia conference.
The objective of the NEM is for Malaysia to join .
Nov 16, · There are few issues, if any, more important than income and poverty. The most successful political jurisdictions, where national or sub national, are characterized by rising incomes and falling rates of poverty.