Wednesday March 31, 2010
TURNING Malaysia into a high income advanced nation with inclusiveness and sustainability are the three goals in ensuring a high quality life for the rakyat, as stipulated under the New Economic Model (NEM).
The model, however, stresses that goals should not be achieved at the expense of others and no short cuts should be taken by stimulating economic growth, especially that of natural resources.
An advanced nation should also not be judged through its income level, while its economic structure must be more developed, specialised and technology-driven, aided by effective institutions to promote good governance.
The nation’s healthcare and social support should be measurable through a higher life expectancy and superior standard of living.
Benefits from these improvements will be accessible to all communities and income groups.
The NEM will employ several measures for inclusive growth, such as enhancing growth to expand economic opportunities, pursuing equitable and fair opportunities and fairness in process, accelerating liberalisation to sustain inclusive growth and focusing on the bottom 40% of households, among others.
Malaysia’s estimated per capita Gross National Product (GNP) of US$7,558 (RM24,941.4) puts it in the upper middle income group.
Unless the growth rate is elevated from its pace of 4.5% to 5%, Malaysia will still be trapped in a zone below its potential.
By 2020, the per capita GNP will rise to about US$17,700 (RM58,410), provided there is no major economic crisis to derail the Malaysian economy from this growth path.
The federal government’s fiscal deficit of 7.4% of Gross Domestic Product in 2009 has reached a peak and is expected to decline to 5.6% in 2010.
As at end of June 2009, the national debt stood at about 34% of GDP or RM233.9bil, which includes debts from the private sector and the Non-Financial Public Enterprises, although it is much lower than other countries.
Inclusiveness, a key part of the NEM, will enable all communities to contribute to and share the country’s wealth. While perfect equality is impossible, an inclusive society will ensure that inequality does not worsen.
Inclusive growth can therefore be defined as pro-poor growth and is concerned not only with the level but also the effect of persistent inequality on economic growth and poverty alleviation.
Excessive focus on ethnic-based distribution of resources has caused growing disparity and dissension.
The persistence of inequalities between ethnic groups makes it imperative that the NEM continues to address the inequalities by having unity through inclusive growth.
Wednesday, 31 March 2010