2. Introduction
• In the colonial period, Malaya was involved in production
and processing of rubber and tin for export in return for
imports of essential food and manufactured goods.
• In the year of independence (1957-1960), the economy was
still heavily dependent on rubber and tin exports.
• Attempt to industrialize (1960s) was started with the
implementation of import-substitution policy, which was
quite unsuccessful.

3. • New Economy Policy (NEP) was introduced in 1970. it was a
long term policy (1970-1990 =20 years) of reviving the
Bumiputera as well as non-Bumiputera share of economic
cake.
• During NEP (1970-1990), the government embarked on the
export-oriented strategy as a “double-edged sword” for
achieving economic growth and equity.
• During the implementation of export-oriented strategy, the
government introduced new dimensions, namely;
-The “Look East” policy, and
-”Malaysian Incorporated” policy.

4. • In 1991, National Development Policy (NDP) was
introduced to replace NEP.
• Vision 2020 was also introduced in 1991. it is a long term
vision (1991-2020=30 years) containing broad policy
directions encompassing various dimensions, i.e.
-economically
-politically
-psychologically
-spiritually
-culturally.
• In summary, Malaysia’s key to economic success of the
1970s through the 1990s were;
-Basic policy framework, &
-Industrialization strategies.

5. Framework of the economy
• The Malaysia’s framework of the economy started when the
First Malaysian Plan 1966-1970 was introduced.
• The economic framework was continued with the
implementation of the First Outline Perspective Plan 1971-
1990(OPP1). The main policy formulated in OPP1 was the
new Economic Policy (NEP)
• Vision 2020 was launched in 1991 as the broad policy
directions of Malaysia. It provides the much needed guidelines
of becoming a fully developed & industrialized Malaysia by
the year 2020.
• In relations to vision 2020, the Second Outline Perspective
Plan 1991-2000(OPP2) was introduced. The main policy
implemented in OPP2 was the National Development
policy(NDP).

6. CONT…
• The economic framework was introduced to establish a
progressive, prosperous, and united nation of Malaysia.
• The core thrust of all policies implemented in Malaysia is
the “ultimate goal of the national unity”.

7. Background NEP
• The Malaysian New Economic Policy
(NEP) or (DEB) for Dasar Ekonomi
Baru in Malay was an ambitious &
controversial socio-economic
restructuring affirmative action
program launched by the Malaysian
government under the second Prime
Minister Tun Abdul Razak Dato’
Hussein.
• New Economy Policy (NEP) was
introduced in 1970.
• The NEP was hailed in some quarters
as having reduced the socioeconomic
disparity between Chinese minority &
Malay majority

8. CONT…
• The NEP targeted a 30% share of the economy for the
Bumiputera, but according to official government statistics,
the NEP did not succeed reaching this target.
• NEP ended in 1990

9.  Establishment of new growth centers
 The modernization of rural life
 Rapid & balanced development of
urban activities
NEP  Provision of a wide range of social
especially designed to raise the living
standards of the low income group
 Raising productivity & income of those
in low productivity occupation
 Expansion of opportunity for inter-
sectoral movement from low
productivity to higher productivity
activity
 The creation of a Malay commercial &
industrial community in all categories &
at all levels of operation

10. Strategy NEP
Eradicating poverty by raising income
levels and increasing employment
opportunities for all Malaysians
Accelerating the process of restructuring
Malaysia society to correct economic
imbalance, to reduce & eventually
eliminate the identification of race with
economic function, and to ensure that Malay
& other indigenous people will become full
partners in all aspects of the economic life of
the nation.

11. Second Malaysia Third Malaysia
Plan (1971-1975) Plan (1976-1980)
Implementation
NEP
Fourth Malaysia Fifth Malaysia Plan
Plan (1981-1985) (1986-1990)

12. Evaluation of NEP (achievement)
 Increase in GDP
- Malaysia real GDP growth during 1971-1990;
averaged 7.1% annually.
- In the 60s; averaged 5.2%
- Grew from RM22.2 billion in 1971 to RM1,109 billion in 1990 per capita GNP
grew by 8 times from RM1,109 to RM8,856 (US$ 860 to US$3406)
- The annual inflation rate remained low.
 Fairer distribution of income
-With the regard to the distribution of income, there has been an increasingly
fairer distribution of income among the various income group.

13.  Increase employment opportunities
-rapid economic growth; creation of job, from 3.4 million in 1970 to 6.7
million in 1990.
-the unemployment rate dropped from 7.7% in 1970 to 5.1% in 1990
 Change of economic structure
-from agriculture to manufacturing sector.
-the transformation had enabled more Bumiputera work in more
productive sector of economy (secondary & tertiary sector)

14. National Development policy
(NDP)
• With the aim to fulfill the objectives of Vision 2020, OPP2
was introduced in 1991.
• OPP2 (1991-2000) was accomplished through the policies,
strategies, and programs implemented in
-The sixth Malaysia Plan (1991-1995)
-The Seventh Malaysia Plan (1996-2000)
• National Development Policy was the main policy during
OPP2.

15. National Vision Policy (NVP)
• Was an extension of the NDP (1991-2000) and covers the 8th and 9th MP.
– Also the second phase of Vision 2020
• Objective : same as NDP i.e. national unity. The aims of NVP is to establish
a united, progressive and prosperous Bangsa Malaysia that lives in
harmony and engages in full and fair partnership
• Was launched with a focus on building a resilient and competitive nation
– Incorporates the past key strategies of eradicating poverty irrespective
of race, restructuring society and pursuing balanced development .

16. • New policy :
1) Developing Malaysia into a knowledge-based society.
2) Generating endogenously-driven growth through strengthening domestic
investment and developing indigenous capability, while continuing to
attract FDI in strategic area.
3) Increasing dynamism of the agriculture, manufacturing and services
sector through greater infusion of knowledge.
4) Addressing pocket of poverty in remote areas and among Orang Asli and
Bumiputera minorities in Sabah and Sarawak as well as increasing the
income and quality of life of those in the lowest 30% income categories.
5) Achieving effective Bumiputera participation as well as equity ownership
of at least 30% by 2010.
6) Increasing the participation of Bumiputera in the leading sectors of the
economy
7) Reorienting human resource development to support knowledge-based
society.

17. National Vision Policy (NVP)
• The development thrust:
1) Building a resilient nation by fostering unity, inculcating the spirit of
patriotism, nurturing political maturity, cultivating a more tolerant and caring
society with positive value, raising the quality of life as well as increasing
economic resilience.
2) Promoting an equitable society by eradicating poverty reducing imbalances
among and within ethnic groups as well as regions.
3) Sustaining high economic growth by strengthening the source of growth, the
financial and corporate institutions as well as macroeconomic management.
4) Enhancing competitiveness to meet the challenges of globalization and
liberalization.
5) Developing a knowledge-based economy as a strategic move to raise the value
added of all economic sectors and optimizing the brain power of the nation.
6) Strengthening human resource development to produce competent, productive
and knowledgeable workforce.
7) Pursuing environmentally sustainable development to reinforce long-term
growth.

18. • Introduced in February 1991
Vision 2020 • Aims to achieve the status of a
developed country that is
distinctive and molded
according to its own features
without following:
– Developed not only in the
economic sense but it must
be fully developed along all
dimension:
-Economically
-Spiritually
-Politically
-Technologically
-Socially
-Culturally

19.  United Malaysia objectives
 Just and caring society
 Mature democratic society
 Sustainable development
 Fully competitive, dynamic, and
resilient economy
Vision 2020  Entrepreneurial

20. Vision 2020
• Strategy : “Total Development” ; development which covers economics,
politics social, spirituals psychologies and cultures.
• challenges:
1) To establish a united Malaysian nation with a sense of common and shared
destiny
2) To create psychologically liberated, secure and developed Malaysian Society
3) To foster and develop a mature democratic society
4) To establish a fully moral and ethical society
5) To establish a matured, liberal and tolerant society
6) To establish a scientific and progressive society
7) To establish a fully caring society and caring culture
8) to ensure an economically just society
9) To establish a prosperous society, with an economy that is fully
competitive, dynamic, robust and resilient.

21. Issue about the NEP
I have been thinking about the NEP issue over Merdeka Day to see
if the problem can be solved. Yes, it can be solved and we can
celebrate our nation's golden jubilee in two years time without the
NEP lingering as an issue and dampening our spirits. How?
Here is a practical way:
1. Instead of investing in Malaysia (and increasing their
percentage of the economy), Chinese Malaysians could invest in
other countries. By reducing their wealth and holdings in Malaysia,
they would be reducing their percentage of the economy and would
still be able to enjoy returns from their investments in other
countries.

22. 2. They can accelerate this process by progressively selling their stakes
and shares in Malaysian companies to Bumiputera firms and individuals. The
money from these sales can be invested in other overseas markets.
The net effect of these combined actions will reduce the percentage of the
Malaysian economy held by the Chinese. The Bumiputera's percentage will
increase, and the 30% will be achieved in no time.
Statistically, the NEP's target would have been achieved. The Bumiputeras
will be happy at having achieved the 30 percent. The Chinese will be happy
because they can still continue to prosper. As for the Indians, hopefully they
will also be happy and prosper and not continue to be a victim of the NEP.
The above is intended to make one think about the pointlessness of talking
about percentages with reference to the NEP as opposed to the value of
leveraging on all Malaysians' capabilities and competencies besides helping all
those who really need help, regardless of race or religion.