The Malaysian government presented the 12th Malaysia Plan (12MP) to Parliament on September 27, 2021, as the country’s five-year development plan for 2021-2025. The Malaysian government releases a new development plan every five years. It outlines economic priority areas, sets goals, and explains how to achieve those goals over the next five years. To achieve economic growth and transform Malaysia into a successful, inclusive, and sustainable country, the 12MP is centred on three major themes and four policy enablers. A total of RM400 billion is expected to be allocated to development expenditures under the 12MP.
Much of the RM400 billion (S$130 billion) development plan, which is 54% larger than its predecessor, the 11th Malaysia Plan, is geared at reviving the country’s COVID-19-devastated economy as the country prepares to reopen its economy and international borders in 2022. By 2025, the plan intends to eliminate extreme poverty, reduce state inequality, and transform Malaysia into a high-income economy.
The Twelfth Malaysia Plan (2021-2025) intends to address present difficulties while also restarting and revitalising Malaysia’s socioeconomic development for long-term viability and prosperity. Its purpose is to allow Keluarga Malaysia to move forward by reorganising the economy as the cornerstone for enhancing the rakyat’s well-being. This plan covers the first part of the Wawasan Kemakmuran Bersama 2030, with the goal of “A Prosperous, Inclusive, and Sustainable Malaysia.”
The Twelfth Malaysia Plan (12MP) will be in line with the shared prosperity plan, which has three pillars: economic empowerment, environmental sustainability, and social re-engineering. New sources of growth, such as Industrial Revolution 4.0, the digital economy, the aerospace sector, integrated regional development, and growth enablers such as sustainable energy sources and infrastructural connectivity, will be included in the economic empowerment dimension. The blue economy, green technology, renewable energy, and climate change adaptation and mitigation are all part of the environmental sustainability dimension. Enhancing societal values, raising people’s purchasing power, developing a resilient Bumiputera community, strengthening social security networks, and improving people’s wellbeing are all part of the social re-engineering dimension. Meanwhile, the Twelfth Plan’s four catalytic policy enablers are focused on creating future talent, driving technology adoption and innovation, improving connectivity and transportation infrastructure, and strengthening the public sector.
The Malaysian economy has both problems and possibilities during the next five years. The COVID-19 vaccination rollout and compliance with standard operating procedures (SOPs), as well as the efficiency of stimulus package measures, will determine how quickly the economy recovers. Unless accompanied by medium-term fiscal reduction initiatives, the increase in debt and fiscal deficit to pay the stimulus packages will have an impact on fiscal sustainability.
On the social front, rising health hazards and changing demographics provide a number of concerns. The rise in noncommunicable diseases (NCDs) and the necessity to handle the COVID-19 pandemic, which includes the deployment of the National COVID-19 Immunisation Programme, has put a strain on the healthcare system. Malaysia must prepare holistically by 2030 to tackle the difficulties posed by an ageing population. The country must also combat poverty and inequality, as well as raise the standard of living of the B40 and M40 in a more focused manner while closing the development gap between regions. While growing urbanisation brings new economic and employment opportunities, it can also pose infrastructure, energy, and water resource issues.
Despite these obstacles, Malaysia will build on its strengths and advantages to propel its socio-economic development forward. The Malaysian economy’s core underlying strengths remain strong macroeconomic fundamentals, such as a highly diversified economy and export structure, low and stable inflation, and a strong and well-capitalized financial sector. Malaysia will be able to establish itself as a hub for a variety of sectors due to its strategic location in Asia.
The world economy is projected to regain momentum during the Twelfth Plan as it recovers from the COVID-19 epidemic. Under the Twelfth Plan, efforts to boost productivity will continue, resulting in higher labour productivity growth. The emphasis will be on preparing for the 4IR, creating an enabling environment for the digital economy, increasing R&D&C&I, and developing the necessary talent. Malaysia will also regain full employment during the Twelfth Plan, thanks to improved labour market circumstances.
Salaries and wages are expected to rise in tandem with the focus on inclusive economic growth, contributing to increasing household income. The rakyat’s well-being is predicted to improve further, thanks to economic and social improvement as well as inclusive regional development.
The major topics of resetting the economy, improving security, wellbeing, and inclusivity, as well as increasing sustainability, will be the focus during the next five years. These themes will be supported by policy enablers such as talent, technology, transportation infrastructure, and public service delivery, all of which are in line with WKB 2030 and the 2030 Agenda’s goals of prosperity, inclusion, and sustainability.
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