PROGRESS

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NATIONAL CONFERENCE ON INTEGRATED SOCIAL POLICIES
7-8 FEBRUARY 2007, CAIRO, EGYPT SOCIAL POLIC
Y FORMULATION AND IMPLEMENTATION IN MALAYSIA
RAJA ZAHARATON RAJA ZAINAL ABIDIN
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BRIEFING OUTLINE

• Background on Malaysia
• Development Philosophy and Planning Machinery
• Major Policy Evolution
• Socio Economic Dimensions
• Development Record and Prospects

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FIGURE 1
4
Major improvements based on key economic
indicators . . .

• GNP per capita
• RM
• USD
• USD (in PPP)
• Unemployment ()
• Inflation ()
• Fed. Govt. account
• ( to GDP)
• Current a/c of BOP
• ( to GNP)

4
5
POPULATION SIZE AND STRUCTURE,2000 and 2010
to Total
to Total
growth 2001-10
2000
2010

• Total Population
• (million persons)
• Bumiputera
• Chinese
• Indian
• Age Structure (years)
• 0 14
• 15 64
• 65
• Dependency Ratio ()
• Median age (years)

23.3 14.6 5.6 1.6 7.7 14.6 0.9 59.1

23.9
28.9 18.7 6.5 1.9 8.6 19.0 1.3 52.2

26.7
100.0 66.1 25.3 7.4 33.1 62.9 4.0
100.0 68.3 23.8 7.1 29.7 65.8 4.5
2.2 2.5 1.5 1.8 1.1 2.6 3.4
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DEVELOPMENT PHILOSOPHY
through a MIXED ECONOMIC SYSTEM of free
enterprise but with active government support and
direction The GOVERNMENT provides the broad thrus
ts and sets direction for the whole economy, and
ensures the achievements of socio-economic goals
The PRIVATE SECTOR is free to operate and given
appropriate policy, institutional and
infrastructural support.
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CONSULTATIVE PROCESS
Inter Agency Planning Groups (IAPGs)
Consultations with the private sector
Consultations with Civil Society
Inter Agency Planning Groups (IAPGs)

• Through
• Government - private sector
• dialogues
• EPU dialogue
• MOF budget dialogue
• Bank Negara dialogue
• MITI dialogue

MOF Budget Dialogue Technical Working Groups
(TWGs)
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PLANNING PROCESS
PLANNING FROM THE TOP
TREASURY
ECONOMIC PLANNING UNIT
CENTRAL BANK
DEPARTMENT OF STATISTICS
INTER AGENCY PLANNING GROUP (IAPG)
PRIVATE SECTOR
NATIONAL DEVELOPMENT PLANNING COMMITTEE
ADJUSTMENT AND MATCHING
ECONOMIC PLANNING UNIT
CABINET
MINISTRIES
OTHER AGENCIES
STATE GOVERNMENT
PROGRAMME AND PROJECTS
PLANNING FROM BELOW
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PLANNING HORIZON
1. OUTLINE PERSPECTIVE PLAN (Long term plan)
OPP1 (1971 - 1990 )
OPP2 ( 1991-2000 )
OPP3 ( 2001-2010 )
2. FIVE-YEAR PLAN ( Medium term )
3. MID-TERM REVIEW ( MTR ) OF THE
FIVE-YEAR PLAN
4. ANNUAL BUDGET ( Short term )
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Major Economic Policies
Vision 2020
Total Development
Enhancing Nations Capability competitiveness,
unity, distribution quality of life
Building a Resilient Competitive Nation
To raise quality of development generate high
sustainable growth
National Vision Policy (NVP)
OPP3 (2001-2010)
National Development Policy (NDP)
Balanced Development To establish a more unite
d just society
OPP2 (1991-2000)
New Economic Policy (NEP)
Growth with Equity To eradicate poverty restr
ucture of society
OPP1 (1971-1990)
Post- independence 1957-70

• Laissez-faire / export-oriented
• Economic and rural development

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Social Development Programmes

• To integrate the population into the modern
  economy
  
• To redistribute the wealth of the nation
• To improve the quality of life of the people,
  especially those in the rural areas

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Development Expenditure Gives Priority To
Economic And Social Sectors . . .( to Total)
3MP '76-'80
4MP '80-'85
5MP '86-'90
6MP '91-'95
7MP '96-'00
2MP '71-'75
8MP '01-'05
9MP '06-10
Sector
38.5 4.6 6.0 19.0 7.5 40.8 25.7 5.6 4.1 1
3.0
7.7 100.0 170.0
44.9 5.7 9.9 16.2 10.9 37.5 20.6 5.4 5.0
10.6
6.9 100.0 200.0
Economic Agriculture Industry Infrastructure U
tilities Social Education Health Housing Secu
rity
Administration TOTAL RM billion
50.6 18.3 14.6 14.4 2.9 13.1 7.1 1.9 1.7
10.4
1.5 100.0 9.8
54.4 18.7 13.0 16.0 6.3 14.6 6.2 1.2 5.2
14.2
1.9 100.0 24.9
60.5 16.3 13.6 20.2 9.9 21.5 10.1 1.6 8.5
16.2 1.8 100.0 46.3
64.8 20.8 11.3 21.5 10.2 24.8 16.1 2.6 4.1

7.2 3.2 100.0 35.3
50.6 11.6 7.4 22.5 7.8 24.8 13.4 4.4 3.3
20.1
4.5 100.0 54.7
47.6 8.2 11.4 21.0 5.5 31.6 19.9 3.8 3.4
11.8
9.0 100.0 99.0
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Socio-economic dimensions . . .

• Malaysia had achieved most of the UN Millennium
  Development Goals
  
• Eradicate poverty hunger
• Achieve universal primary education
• Promote gender equality empower women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, malaria other diseases
• Ensure environment sustainability
• Develop a global partnership for development

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Major Success to Eradicate Poverty
( total households)
2004a 5.7 11.9 2.5 1.2
Note a/ Poverty Line Income (PLI) revised
methodolody for 2004 was RM661 per month in
Peninsular Malaysia (household size 4.4) RM888
in Sabah (household size 5.2) RM765 in Sarawak
(household size 4.6). Hardcore poverty is
estimated using half of PLI.
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Poverty Eradication Programmes . . .

• Focused on human resource development and quality
  of life improvements
  
• Emphasize income-generating projects and not on
  welfare handouts
  
• Major programmes
• Rural development
• New land and in-situ development
• Drainage and irrigation
• Agriculture support services
• Village/small industries
• Upgrade rural infrastructure - roads,
  electricity, water
  
• Upgrade schools health facilities
• Other programmes (hard-core poor)
• Direct assistance old folks home / the aged,
  the handicapped
  
• food supplements and scholarships
• interest free loans

DISTRIBUTION AGENDA
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Better Quality of Life . . .
Change 1990/2004
Area
Malaysian Quality of Life Index . . .

• Working life
• Culture leisure
• Housing
• Transport comm.
• Health
• Education
• Income distribution
• Social participation
• Family life
• Environment
• Public safety
• MQLI

22.1 21.2 18.9 18.1 18.1 15.9 8.0 6.6 4.2
-0.3 -21.5 10.9
The Malaysian Quality of Life Index (MQLI) is an
aggregate measure of the quality of life using
forty-two indicators, representing eleven
components of life
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Selected Indicators Of Quality Of Life . . .
reaching the level enjoyed in advanced economies
1970
1990
2005
61.6 65.6 39.4 4,302 58 17 48 44
68.8 73.5 13.1 2,533 85 131 80 80
71.8 76.2 5.9 1,387 95.1 907 95 98

• Life expectancy (in years)
• Male
• Female
• Infant mortality rate / 1000
• Population / Doctor ratio
• Literacy rate ()
• Telephones / 1000 population 1
• Utilities
• Pipe water ( of population)
• Electricity ( of households)

Note 1/ Include mobile phones 2/
Universal coverage in urban areas
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Real GDP Growth . . .
Average 1971- 80 Average 1981- 90 Average 1991-
2000 Average 2001- 05 2000 2001 2002 2003
2004
2005e 2006F 2007F
7.5 5.8 7.1 4.5 8.9 0.3 4.4
5.5 7.2 5.2 5.8 6.0
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Transformation From an Agro-based to an
Industrial-based Economy . . .
(GDP in RM billion at 1987 prices / Percentage to
Total in italics)
RM billion
300
250
200
58.2
57.6
150
53.9
100
46.8
43.1
12.2
31.6
30.8
31.9
50
37.5
17.2
24.6
0
8.9
16.3
26.7
21.0
8.2
8.6
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Diversification of exports products . . . ( to
Total Exports)
Manufactures 80.5
Rubber 33.4
Tin 19.6
Forestry 16.3
Others 9.8
Oil gas 3.9
Palm Oil 5.1
Palm Oil 3.6
Manufactures 11.9
Oil gas 9.2
Others 2.7
Forestry 1.3
Rubber 1.1
Tin 0.2
2005 RM 533,790 million (USD141,588 million)
1970 RM 5,163 million (USD2,065 million)
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Implementing Pragmatic Fiscal Policy . . .The
Federal Government Accounts, 1970-2006 (RM
billion)
Revenue must cover operating expenditure and
development expenditure must be financed through
non-inflationary methods
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Prospects During The 9th Malaysia Plan, 2006-2010

• Real GDP growth ( p.a.)
• Per capita GNP (RM)
• Per capita GNP (US)
• PPP Per capita GNP (US)
• Inflation ( p.a.)
• Unemployment rate ()
• Current a/c of BOP ( GNP)
• Fed. Govt. account (RM bil.)
• of GDP
• Pub. Sector account (RM bil.)
• of GDP
• External reserve (months of retained imports)

End of period
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Gross Domestic Product, 2000-2010 ( per annum)
of GDP
growth per annum
2000
2005
2010
Achieved 8MP
Target 9MP

• GDP (real)
• Agriculture
• Mining
• Manufacturing
• Construction
• Services
• Govt. Services
• Bus. Non-Govt. Svs.
• Utilities
• Transport etc
• Trade etc
• Finance etc
• Other Services

4.5 3.0 2.6 4.1 0.5 6.1 6.7 6.0 5.6 6.6
4.3 8.1 4.8
6.0 5.0 3.4 6.7 3.5 6.5 4.5 6.7 5.9 6.7
6.8 7.0 6.6
100.0 8.9 7.3 31.9 3.3 53.9 6.8 47.1 3.9
8.0
14.8 12.7 7.6
100.0 8.2 6.7 31.4 2.7 58.1 7.6 50.5 4.1
8.8
14.7 15.1 7.8
100.0 7.8 5.9 32.4 2.4 59.2 7.0 52.2 4.1
9.1
15.2 15.8 8.0
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Key Factors For Success . . .

• Political stability and harmonious society
• Efficient government with pro-business policies
• Getting fundamental policy framework right
• Macroeconomic management
• High savings rate
• Industrialization strategy Competitive
  investment incentives
  
• Productive agriculture
• Human resource development
• High-quality infrastructure social services

Conclusion
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FACTORS AFFECTING THE SOCIAL POLICY PROCESS

• Political environment
• Administrative competence and technical
  expertise
  
• Involvement of private sector and NGOs

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• Thank You