One year on from being the people’s choice, Malaysia’s Pakatan Harapan administration has introduced a new economic model which advocates shared prosperity with the aim of providing a ‘decent standard of living for all Malaysians’ by 2030 across economic class, race and geographic location.
In a special address on the first anniversary of ‘Malaysia Baharu’ which commemorates the country’s first change in government since its inception, Prime Minister Tun Dr Mahathir Mohamad said this new model will replace the Vision 2020 model which was used in the past decade but failed to accomplish its mission and is no longer achievable.
Dr Mahathir said, “In the past decade, the nation’s economy has transformed radically and this resulted in us not being able to become a developed nation as underlined under Vision 2020. The economic model in the past decade only focused on adding more national debt for mega projects.”
“The 70% increase in job availability comprised unskilled jobs. Much of the nation’s equity ownership turned to foreign hands. Economic growth focused on the country’s major cities, and sidelined equity ownership and growth, as well as opportunities for locals,” he added.
Moving forward, Dr Mahathir says the government has adopted the approach where “the nation’s development today provides shared prosperity to the rakyat”. This translated to stronger purchasing power for the people and narrowing the income and wealth gap and the extreme disparity in supply chain not just between classes, races, and territories, but within those categories as well.
Dr Mahathir said, “In its simple definition, the efforts towards shared prosperity will allow Malaysia to be a nation that grows continually and sustainably concurrent with fair and inclusive equitable growth across the value chain, classes, ethnicity and geography until it results in stability and harmony among the people by 2030.”
The 93-year old interim Premier then outlined the three main objectives of the shared prosperity model:
- Overcoming the wage and wealth gap
- Creating a progressive economy that hinges on knowledge and value with participation from all Malaysians
- Turn Malaysia into a leading economy in Asia
7 pillars of Shared Prosperity 2030
To establish this, Dr Mahathir outline seven key pillars of the approach. These are:
- better structuring of and improving the nation’s business and industry ecosystems such as via adoption of Industrial Revolution 4.0
- application of digital economy, and adding more high-skilled jobs
- exploring new growth sectors, and turning Malaysia from a consumer nation to one that produced more international standard products
- reforming human capital, to improve labour market and wages
- strengthening social well-being through needs-based policies
- inclusive territorial development
- improving society capital, combined with strong social support mechanisms.
To achieve these goals, Dr Mahathir also noted the need for a progressive fiscal policy, an administration with high integrity, an effective government institution delivery, better education, monetary stability, a comprehensive Big Data mechanism, as well as a civil and knowledgeable community.
He added, “To improve the economy and remain relevant, Malaysia should look into and pioneer new growth sectors. We should not be trapped in traditional sectors and the old way of working.”
He also noted that social well-being policies and programmes need to be strengthened to ensure that citizens are able to build on their own capabilities to pull themselves out of poverty instead of being spoon-fed.
Involving the people
Dr Mahathir added that the concept and planning of these strategies can be scrutinised and evaluated by the entire Malaysian community, saying that these initiatives will be brought back to the grassroots level for feedback and suggestions before it can be included in the 12th and 13th Malaysia Plan which will be set out with the target of achieving shared prosperity in 11 years.
“We want to ensure the people enjoy the country’s benefits fairly,” said the Prime Minister. He said support from the people for the government’s initiatives were crucial and critical, which is why the government will ‘report back to the rakyat’ to inform them of achievements and ongoing efforts.
“A great plan will not mean anything if it is not implemented correctly or monitored for its outcome. Therefore, the government will continue to work hard to ensure all initiatives and pledges are executed and fulfilled, so that the future generation can enjoy the country’s riches under the shared prosperity vision,” said Dr Mahathir.
A caution for the ruling coalition
Separately, Dr Mahathir also used this opportunity to issue a reminder to the four parties that form the ruling coalition that unity is key. He said that failure to set aside their differences would result in Malaysia become a “failed state”.
He warned, “These four parties came together to help topple the previous Barisan Nasional administration under Datuk Seri Najib Razak. But if we cannot put aside our differences, things will get worse.”
You can watch Dr Mahathir’s full speech here: