Concept Of Malaysian Vision Economics Essay

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Since the dawn of independence in 1957, Malaysia just as any other developing country across the globe has been yearning for and also making various efforts to achieve a true 'developed nation' status. This has been the wish of every Malaysian citizen and the ambition of her leaders who had made a lot of efforts and had developed many policies such as the Look-East policy, Leadership by Example, Efficient and Trustworthy Administration and the newest Vision 2020, that are all geared towards achieving this goal. Among the most noted of its leaders on this endeavor is the fourth Malaysian Prime Minister, Tun Dr. Mahathir bin Mohamad who initiated most of these transformation policies and vision.

The Vision 2020 was a 30year plan of developing Malaysia into a high income and industrialized nation and a part of the few countries of around the globe with a "developed nation" status. It was pioneered and introduced by Tun Dr. Mahathir Mohamad and since its inauguration and adoption as a National Vision, a series of economic restructuring has led to the formulation of a series of five-year National Development Plans to help stick to the set guidelines for overcoming the nine challenges to achieve the goals of the vision.

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The aspired development status by the year 2020 defined by the goals of the vision, does not only focus on the country's economic aspect. It strongly considered the importance of development on all aspects such as moral and ethical values, democracy, and societal harmony, etc. This was mentioned in the Vision 2020 statement of Tun Dr. Mahathir (Rahman 1993, p.271):

"By the year 2020, Malaysia is to be a united nation, with a confident Malaysian society, infused by strong moral and ethical values, living in a society that is democratic, liberal, caring, economically just and equitable, progressive and prosperous, and in full possession of an economy that is competitive, dynamic, robust and resilient." [1] 

1.2 Organisation of this paper

The scope of this paper is to discuss the general concept of Vision 2020, its achievements so far, challenges to the implementations and its achievability by the year 2020. Furthermore, the country's Vision achievement status will be compared with that of other developing countries that had a similar vision before concluding the topic.

2.0 CONCEPT OF MALAYSIAN VISION 2020

2.1 Before Introduction of Vision 2020

The enthusiasm for achieving a rapid industrialized nation had given birth to a lot of policies that contributed a lot to the economic and development position of present day Malaysia. Among these policies formulated earlier before the unveiling of the vision 2020 was the 'Look East Policy' that was launched by Tun Dr. Mahathir at the beginning of this role as Malaysian Prime Minister in late 1981. This policy was introduced at a time Asian countries like Japan, South Korea and Taiwan had gained vibrant new economic energies that were virtually exploding, while many European Nations and the U.S appeared to have lost their drive and unable to overcome their economic stagnation while been enmeshed in an oil crisis (Somun and Somun-krupalija 2003). Therefore, Tun Dr. Mahathir in his exact words said:

"For me, it was a natural conclusion that if we were to emulate the success of foreign nations, the most valuable role models were no longer in Europe or the U.S., but rather in our own backyard. We had to look East." [2] (Mohamad 1999, p.84)

Even though this policy later received some criticism; it brought great benefits in Malaysia's endeavor to attain the "developed nation" status, one of which is the formation the first national car, Proton in 1985 which came through by virtue of a joint venture between the Heavy Industries Corporation of Malaysia (HICOM) and Japan's Mitsubishi. This brought in great revenue as Malaysia held a 70% share of the venture while the projects funding was provided by the Japanese through loans and at the same time many Malaysians were sent to Japan for intensive training programs under this project to later take over. [3] 

2.2 The Malaysian Vision 2020

2.2.1 What is Vision and Malaysian Vision 2020?

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As the famous Japanese proverb goes, Vision without action is a daydream while action with without vision is a nightmare. A Vision is basically a long-run target which supplies an insight into the way in which a particular organization wishes to move. A good vision inspires the transformation of an objective, goal or plan into action and reality.

The Malaysian Vision 2020 in a vision of aspiration that was introduced to propel Malaysia to become a fully developed nation within a span of 30 years.

2.2.2 Background of Vision 2020

This Vision as defined above was introduced by Tun Dr. Mahathir Mohamad on February 28, 1991 during the meeting of the Malaysian Business Council. The Cabinet's decision to approve it was consentaneous and a national conference for its formalization as the Malaysian's Nation Vision was immediately ordered to take place in December that year.

Ever since the introduction of this vision until now (over 20 years), a series of economic remodeling that saw the formulation of a series of five-year National Development Plans to help stick to the set guidelines and also the strategic switch of the economic base from that of primary economy sector dominance (agriculture ) to secondary and tertiary sectors dominance (i.e. industrial and service) has altogether helped a lot transforming the Malaysian economy from an undeveloped one to a currently a fast growing and sturdy one which is export-minded (Ho 1996).

2.3 Objectives of Vision 2020

As mentioned in the Vision 2020 declaration statement previously in section 1.2.2, the focus of the vision is on all dimensions and not just the economy. The specific objectives of Vision 2020 are as follows (Islam 2010, p.200) [4] :

To have sufficient food and shelter with easy access to health and basic essentials

To eradicate poverty

To remove the identification of race with major economic functions and to have a fair distribution with regard to the control, management and ownership of the modern economy

To maintain annual population growth rate of 2.5%

To double real GDP every ten years, between 1990 and 2020.

To have a balanced growth in all sectors namely: industry, agroforestry, energy, transport, tourism and communications, banking, that is technologically proficient, fully able to adapt, innovative, with a view to always moving to higher levels of technology

5.1 COMPARISON BETWEEN MALAYSIAN VISION ACHIEVEMENT STATUS AND OTHER COUNTRIES

Among the developing countries that had a similar vision and target as the Malaysian Vision 2020 are West African countries like Ghana, The Gambia and Nigeria. Even though, the declaration or inauguration of such a vision in these countries is different, and their areas of focus and also approaches to fulfilling this dream differ, the target of achieving full development status by the year 2020 remains the same. Therefore, since there are no conventionally defined criteria for the designation of "developed" and "developing" countries or areas in the United Nations system [5] and these designations are merely based on statistical convenience. Below are tables of comparison between Malaysia and two of the countries of similar vision (Ghana and Nigeria) and a developed nation (Spain) as a benchmark using current available statistic data on indicators such as Gross Domestic Product (GDP) based on Purchasing Power Parity and Human Development Index (HDI).

5.1.1 Gross Domestic Product (Purchasing Power Parity) per Capita

GDP is defined as:

"It is the monetary value of goods and services produced during a given period, usually one year" (Brezina 2011, p.10):

GDP is the widest measure of a nation's output and the most important measure of the economy of a country in terms of health and progress compared to other statistical figures. However, using just nominal GDP figures for comparing economic strength of various countries could be very erroneous as this type of GDP does not consider the differences in cost of living in the various countries. Nevertheless, using GDP calculated on PPP basis could be reasonably more accurate since it accounts for the relative costs of living and inflation rates.

5.1.2 Human Development Index

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This is another indicator that is often used to compare the level of development of countries. The index compares various measures such as the living standards of a country, its citizen's quality of life and life expectancy, their level of education and literacy. It tells about the measure of well-being of a country and indicates the effect of the country's economic policies on the life quality of its citizens.

5.2 Tables for Comparison

5.2.1 GDP Measure

Table 1 below shows the figures on GDP based on Purchase Power Parity (PPP) valuation of the country's GDP in billions of U.S. Dollars. It can be seen clearly that the health strength and progress of the developed nation, Spain (in the Table) is quite high compared to the rest. However, the Malaysian figure is considerably higher that of Nigeria and far greater than Ghana's in all the years indicated (i.e. from 2005 to 2011). The percentage change trend of GDP increase yearly however for all the three nations with the vision 2020 target as they work hard to achieve their goals of development. But for Spain, the GDP percentage change decreased considerably over the years due to several reasons.

The other parameters on the table shows that Malaysia is in a better position of achieving its goals of Vision 2020 compared to the other countries are working hard to increase or at least maintain revenue, increase exports, reduce their net debts and reduce unemployment.

Table 1: Table of Economic Descriptors of Spain, Malaysia, Ghana and Nigeria

Subject Descriptor

Units/ Scale

2005

2008

2011

GHA

NGA

MYS

ESP

GHA

NGA

MYS

ESP

GHA

NGA

MYS

ESP

GDP, constant prices

% change

6.02

5.39

4.98

3.59

8.43

5.98

4.83

0.89

14.39

7.36

5.08

0.42

GDP based on purchasing-power-parity (PPP) valuation

USD/ Billions

42.41

244.64

313.49

1,184.58

56.40

319.87

400.51

1,397.60

75.66

414.03

463.69

1,405.79

Total investment

% of GDP

23.83

22.21

22.40

29.54

22.96

22.00

21.46

29.11

18.56

22.13

23.59

21.54

Inflation, avg. consumer prices

% change

15.11

17.86

3.04

3.38

16.52

11.58

5.43

4.13

8.73

10.84

3.17

3.05

Imports volume of goods and services

% change

16.96

-1.88

6.03

9.64

26.09

12.45

-3.90

7.96

48.06

5.61

6.07

-0.88

Exports volume of goods and services

% change

16.01

-5.44

5.78

4.18

26.96

-4.25

-7.3

6.72

123.77

-8.54

5.64

7.63

Unemployment rate

% of total labor force

-

11.90

3.55

9.15

-

14.90

3.33

11.3

-

23.9

3.05

21.65

Government revenue

% of GDP

16.69

36.30

22.74

39.39

16.04

32.02

24.63

37.15

19.46

29.46

21.88

35.46

Government total expenditure

% of GDP

19.53

23.32

25.61

38.42

24.51

25.71

27.75

41.30

23.61

29.21

28.77

44.39

Government net debt

% of GDP

43.77

19.70

-

34.85

30.10

1.25

-

30.80

39.49

10.38

-

57.49

Government gross debt

% of GDP

48.16

28.61

42.71

43.17

33.59

11.61

41.23

40.17

43.39

17.27

52.87

69.12

Current account balance

$/ Billions

-1.22

9.94

20.69

-83.29

-3.40

29.30

39.44

-154.1

-3.55

8.76

31.74

-52.17

International Monetary Fund, World Economic Outlook Database, October 2012 [6] 

5.2.2 HDI Indicator

Table 2: HDI trends based on consistent time series data, new component indicators

Component Indicators

2000

2005

2011

GHA

NGA

MYS

GHA

NGA

MYS

GHA

NGA

MYS

Life Expectancy at Birth

58.4

46.3

72.1

61.0

49.0

72.9

64.2

51.9

74.2

Expected years of Schooling

7.8

7.8

11.8

8.6

8.9

12.7

10.5

8.9

12.6

Mean years of schooling

6.1

-

8.2

6.5

5.0

8.9

7.1

5.0

9.5

GNI per capita

1,009

1,289

9,461

1,180

1,530

11,220

1,584

2,069

13,685

HDI value

0.451

-

0.705

0.484

0.429

0.738

0.541

0.459

0.761

National Human Development Reports, UNDP (2011) [7] 

According to the Human Development Report of the United Nations Development Program (UNDP), the HDI indicators shown in Table 2 above, between 2000 and 2011, shows comparative figures of Ghana, Nigeria and Malaysia. Malaysia's indicators increased greater than the other two countries. Malaysia's life expectancy at birth increased by 6.8 years while that of Nigerian increased by 6.4years and Ghana 11.1, mean years of schooling increased by 5.1 years (2.2 and 3.6 years for Nigeria and Ghana respectively) and expected years of schooling increased by 3.5 years while that of Ghana rose by 3.1 years. Malaysia's GNI per capita increased by about 190.0 % between 1980 and 2011 compared to 30% of Nigeria and 63% of Ghana.

Finally, GDP as an indicator of the economic strength and HDI as an indicator of the level of human development showed that among the three countries with the Vision 2020 goal, Malaysia is in a better position of achieving this goal of attaining "developed nation" status by year 2020.