MALAYSIA'S latest five-year economic plan, the last lap of its journey to aspired developed-nation status in 2020, provides a glimpse into a future much sought after. The ambition is in keeping with the promise of a resource-rich country which has survived both international economic volatility and domestic political instability to make its mark on the South-east Asian economic stage. The challenge now would be to turn raw potential into the enduring reality of a high-income economy.
The plan envisages several milestones on the way to developed nationhood. The promotion of investment, the increase of exports to improve the trade balance, and the finessing of policies to ensure fiscal sustainability are obvious measures. It is the milestone of productivity, a marker to ensure sustainable and inclusive growth, that could be the most taxing but also the most promising of the tasks ahead. As with all countries making the transition beyond growth based on natural resources and decent if not plentiful supplies of labour, Malaysia needs to increase the share of skilled workers in its economy. The plan embraces that objective on the realistic basis that the contours of the economy will change, with oil and gas expected to make up 15.5 per cent of government revenue in 2020, compared with 21.5 per cent now.
Human resources will need to complement natural resources intensely as Malaysia shifts economic gears. Educational reform would enable human capital to flourish, creating both new expectations and expanding possibilities that inaugurate a sturdier industrial nation which does not ignore the needs and contributions of its agrarian heartland. Boosting labour productivity 20 per cent over the next five years will be arduous. Hence, the importance of raising the education and skills level of the bottom 40 per cent of households so that they could join the more advanced segments of the population in making the manufacturing and services sectors account for three-quarters of the economy, as envisaged in the growth plan.
Should the new economic vision take off, it could offer Malaysia a way out of the political divisions that have stymied it. Various economic constituencies, arrayed along ethnic lines, have staked competing claims on the nation's future. The best answer to competitive ethnic politics is economic competitiveness. A growing national economic pie would offer all contestants an opportunity to win more for themselves without having to inflict unbearable losses on other contenders. This economic rapprochement is crucial at a time when the Malaysian way of life, known for its tolerance and inclusiveness, is threatened by divisive politics and religiosity with no stake in a common future.