History
After Malaysian independence, significant chunks of the Malaysian economy were controlled by British colonial firms. Second economically to these monopolies were small-scale retail enterprises run by the Malaysian Chinese and small-scale moneylending businesses run by a few Malaysian Indians. [2]
After the 13 May Incident in 1969, where racial rioting broke out in the federal capital of Kuala Lumpur, the Malaysian New Economic Policy (NEP) was initiated. Its purpose was to narrow the disparities in wealth between the Malay and non-Malay communities in the country through aggressive affirmative action and state intervention in the economy. [3]
It has been suggested that although the NEP was initially successful in achieving its goal of reducing the economic gap between different communities in the country, its politicisation in the 1990s and 2000s (decade) hampered its implementation; during this period, intraethnic economic inequity amongst the Malays reportedly increased. Anecdotal evidence has been used to suggest that rural Malay communities have not been significantly uplifted economically by the NEP. [4]
As the country modernised, new forms of poverty appeared; one such problem was that of urban poverty. Economic development has been named as the cause of poverty amongst "single female headed households, the rural elderly, unskilled workers and migrant workers" by a local economist. [5]
The United Nations Development Programme has praised Malaysia for its reportedly successful poverty reduction programmes. Officially:
In 2002, it was 5.1 percent down from 7.5 percent in 1999. The number of poor households declined by 25.6 percent to 267,900. If the number of the handicapped, disabled and elderly who received welfare support from the government is excluded, the incidence of poverty in 2002 is estimated at 4.5 percent. [6]
However, in 2019, UN disputed the poverty figures released by Malaysia. Malaysia stated that its poverty figures was down to 0.4% in 2016 when compared to 49% in 1970. This is because Malaysia defined poverty as household income per month less than RM 980. However, UN officials argued that Malaysia has set the poverty line too low and household income more than RM 980 but less than RM 2000 are in fact under the poverty category also. The UN also stated that realistic poverty rate in Malaysia is from 16% to 20%. [7] However, Malaysia stand firm of its claim while pointing that the UN assertions are incorrect. [8]
The economy of Malaysia is the third largest in Southeast Asia and the 34th largest in the world in terms of GDP. The 2018 labour productivity of Malaysia was measured at Int$55,360 per worker, the third highest in ASEAN. According to the Global Competitiveness Report 2021, the Malaysian economy is the 25th most competitive country economy in the world. In addition, Malaysia is the 12th easiest country to do business in according to the Ease of Doing Business Index 2020.
In ancient times, Maldives were renowned for cowries, coir rope, dried tuna fish, ambergris (maavaharu) and coco de mer (tavakkaashi). Local and foreign trading ships used to load these products in the Maldives and bring them abroad.
Bumiputera or Bumiputra is a term used in Malaysia to describe Malays, the Orang Asli of Peninsular Malaysia, and various indigenous peoples of East Malaysia. The term is sometimes controversial, and has similar usage in the Malay world, used similarly in Indonesia and Brunei.
The New Economic Policy (NEP) was a social re-engineering and affirmative action program formulated by the National Operations Council (NOC) in the aftermath of 13 May Incident in Malaysia. This policy was adopted in 1971 for a period of 20 years and it was succeeded by the National Development Policy (NDP) in 1991. This article looks into the historical context that gave rise to the formulation of this policy, its objectives and implementation methods as well as its impact on the Malaysian economy in general.
Orang Asli are a heterogeneous indigenous population forming a national minority in Malaysia. They are the oldest inhabitants of Peninsular Malaysia.
Article 153 of the Constitution of Malaysia grants the Yang di-Pertuan Agong responsibility for "safeguard[ing] the special position of the 'Malays' and natives of any of the States of Sabah and Sarawak and the legitimate interests of other communities" and goes on to specify ways to do this, such as establishing quotas for entry into the civil service, public scholarships and public education.
Ketuanan Melayu is a political concept that emphasises Malay preeminence in present-day Malaysia. The Malays of Malaysia have claimed a special position and exceptional rights owing to their longer history in the area and the fact that the present Malaysian state itself evolved from a Malay polity. The oldest political institution in Malaysia is the system of Malay rulers of the nine Malay states. The British colonial authorities transformed the system and turned it first into a system of indirect rule, then in 1948, using this culturally based institution, they incorporated the Malay monarchy into the blueprints for the independent Federation of Malaya.
The social contract in Malaysia is an artificial political construct first mooted in the 1980s, allegedly to justify the continuation of preferential policies for the majority Bumiputera population beyond the envisaged 20-year initial duration of the Malaysian New Economic Policy. Proponents of the construct allege that it reflects an understanding arrived at - prior to Malaya's independence in 1957 - by the country's "founding fathers"
The First Malaysia Plan (1966–1970) was an economic development plan implemented by the government of Malaysia. It was the first economic plan for the whole of Malaysia—Sabah and Sarawak included—as opposed to just Malaya, which previous economic plans had confined themselves to. The plan's objectives were to promote the welfare of all citizens, and improve the living conditions in rural areas, particularly among low-income groups.
The Second Malaysia Plan was an economic development plan introduced by the government of Malaysia with the goal of implementing the Malaysian New Economic Policy (NEP). It lasted from 1971 to 1975 and aimed to "restructure" the society of Malaysia and reduce Malaysian Chinese and foreign dominance in the economy of Malaysia so as to improve the economic position of the Malays. It was the successor to the First Malaysia Plan, which was also intended to specifically tackle the problem of poverty among the Malays. However, the First Malaysia Plan had limited success, which may have been a factor in the 13 May Incident in 1969 when race riots broke out in Kuala Lumpur. The Second Malaysia Plan had been regarded as excessive in its zeal to increase Malay participation in the economy, and the government accordingly scaled back the emphasis on restructuring the economy when the plan ended.
The National Development Policy was a Malaysian economic policy introduced by Prime Minister Mahathir Mohamad. The objective was achieving economic growth, while ensuring that accrued benefits reached all sections of society. The National Development Policy replaced the New Economic Policy (NEP) in 1990 but continued to pursue most NEP policies of affirmative action for bumiputera. The Malay share of the economy, though substantially larger, was not near the 30% target according to government figures. In its review of the NEP, the government found that although income inequality had been reduced, some important targets related to overall Malay corporate ownership had not been met. Both Mahathir and the Tunku had expressed concern that the Malays remained too reliant on the Chinese economically. This policy was adopted in 1991 for a period of 10 years and it was succeeded by the National Vision Policy (NVP) in 2001.
In China today, poverty refers mainly to the rural poor, decades of economic development has reduced urban extreme poverty. According to the World Bank, more than 850 million Chinese people have been lifted out of extreme poverty; China's poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms,which still stands in 2022.Chinese definition of extreme poverty is more stringent than that of World Bank, and is defined as earning less than $2.30 a day at purchasing power parity (PPP),Since the start of far-reaching economic reforms in the late 1970s, growth has fuelled a substantial increase in per-capita income lifting people out of extreme poverty. China's per capita income has increased fivefold between 1990 and 2000, from $200 to $1,000. Between 2000 and 2010, per capita income also rose by the same rate, from $1,000 to $5,000, moving China into the ranks of middle-income countries. Between 1990 and 2005, China's progress accounted for more than three-quarters of global poverty reduction and was largely responsible for the world reaching the UN millennium development target of dividing extreme poverty in half. This can be attributed to a combination of a rapidly expanding labour market, driven by a protracted period of economic growth, and a series of government transfers such as an urban subsidy, and the introduction of a rural pension. The World Bank Group said that the percentage of the population living below the international poverty line of $1.9 fell to 0.7 percent in 2015, and poverty line of $3.2 fell to 7% in 2015.At the end of 2018, the number of people living below China's national poverty line of ¥2,300 (CNY) per year was 16.6 million, equal to 1.7% of the population at the time.
Rural poverty refers to poverty in rural areas, including factors of rural society, rural economy, and political systems that give rise to the poverty found there. Rural areas, because of their spread-out populations, typically have less well maintained infrastructure and a harder time accessing markets, which tend to be concentrated in population centers. Rural communities also face disadvantages in terms of legal and social protections, with women and marginalized communities frequently having hard times accessing land, education and other support systems that help with economic development. Several policies have been tested in both developing and developed economies, including rural electrification and access to other technologies such as internet, gender parity, and improved access to credit and income.
The causes of poverty may vary with respect to nation, region, and in comparison with other countries at the global level. Yet, there is a commonality amongst these causes. Philosophical perspectives, and especially historical perspectives, including some factors at a micro and macro level can be considered in understanding these causes.
The New Economic Model (NEM) 2011-2020 was an economic plan in Malaysia unveiled on 30 March 2010 by Malaysian Prime Minister Najib Razak which was intended to more than double the per capita income in Malaysia by 2020. The programme aimed to shift affirmative action from being ethnically based to being need-based hence becoming more competitive, market and investor-friendly.
The economic policy of the Najib Razak government marked a significant shift away from the state-oriented economic programmes of previous Malaysian governments. Najib Razak's government introduced various policies to liberalise the economy during his premiership from 2009 to 2018. This included a New Economic Model, subsidy reforms, international free trade agreements and stimulus packages.
Poverty reduction in Guatemala remains as one of the key challenges to be dealt with before a more balanced and socially inclusive economic growth could be achieved.
Until the 1920s, most of the Vietnamese population lived under the poverty line. This was due to a number of reasons, which was a result from years as a French colony, the Japanese occupation of Vietnam, the Vietnam-American War, and further conflicts within Mainland Southeast Asia. Continuous conflicts from 1887 to 1991, more than 100 years of instability had left Vietnam a war-torn country that was prone severe floods from typhoons, rising sea levels, as well as the so-called "flood season" from seasonal monsoons, as well as the effects of climate change.
Since its formation in 1963, Malaysia's economic performance has been one of Asia's best. Real gross domestic product (GDP) grew by an average of 6.5% per year from 1957 to 2005. Performance peaked in the early 1980s through the mid-1990s, as the economy experienced sustained rapid growth averaging almost 8% annually. High levels of foreign and domestic private investment played a significant role as the economy diversified and modernised. Once heavily dependent on primary products such as rubber and tin, Malaysia today is an upper middle-income country with a multi-sector economy based on services and manufacturing. Malaysia is one of the world's largest exporters of semiconductor components and devices, electrical goods, solar panels, and information and communication technology (ICT) products.
Shared Prosperity Vision 2030, is a government blueprint released in 2020 by the Government of Malaysia for the period of 2021 to 2030 to increase the incomes of all ethnic groups, particularly the Bumiputera comprising the B40, the hardcore poor, the economically poor, those in economic transition, Orang Asli, Sabah and Sarawak bumiputeras, the disabled, youths, women, children and senior citizens.
