Most experts agree that the Malaysian economy is at serious risk of regressing if fundamental changes are not immediately made. On the federal government’s part, the New Economic Model for Malaysia, the first part of which was recently announced, is the “big push” and the clarion call for drastic and dramatic changes to the country’s political economy. This article summarises the report, The New Economic Model for Malaysia – Part 1: Strategic Policy Directions, and highlights some salient points.
Malaysia today
Malaysia has made significant progress over the last few decades – the eradication of poverty and provision of health and education for its people, world-class infrastructure and access to modern technologies. Economically, Malaysia is ahead of most of its Asean neighbours. It is also a major exporter of commodities and electronic components.
However, this rate of progress has slowed down. Economic growth prospects have weakened, and Malaysia is caught in the middle income trap. Old strategies and policies are therefore in need of reexamination. Besides, the growth has not benefited all segments of the population equally.
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