The Government of Malaysia has always been pro-active in leading the nation’s economic development. The nation has successfully developed from a commodity-based economy to manufacturing-based one. Today, the Government seeks to leap into the knowledge-based economy. The Government has encouraged Foreign Direct Investment (FDI) and the US is one of the largest sources of new investment in Malaysia.
In 1971, Malaysian Government launched New Economic Policy (NEP), which has been considered as a defining moment in the country’s economic history. The policy was adopted:
- to reduce absolute poverty through raising income levels and increasing opportunities for employment and
- to restructure society to correct economic imbalances so as to eliminate the identification of economic function with ethnicity.
After the expiry of NEP in 1991, the government launched National Development Policy (NDP), which was built on NEP. The NDP had many new dimensions. The new dimensions shifted focus of anti-poverty campaign towards elimination of extreme poverty and reducing relative poverty, stressing on employment creation, greater dependence on the private sector effecting in the restructuring objective, and improving human resource development.
The 1990s began with the introduction of Vision 2020, which visualised Malaysia to become fully developed nation by the year 2020. The National Economic Action Council (NEAC) was set up in 1998 to make tangible recommendations to the government to revive the economy. After evaluating Malaysia’s situation, the NEAC prepared a comprehensive National Economic Recovery Plan (NERP).
The NERP was launched in 1998 with six goals. They were to steady the ringgit, restore market confidence, maintain financial market stability, strengthen economic fundamentals, continue with the equity and socio-economic agenda, and revive adversely affected sectors. In addition, new procedures were introduced to deal with definite problems while some of the existing policies were modified to enhance economic management.
In 2001, the government launched a new plan, the National Vision Policy (NVP), to guide development over the period from 2001 to 2010. The NVP aims at education for budget increases and seeks to progress the economy towards higher-technology production.
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