Malaysia's Pakatan Harapan (PH) government wants to raise the earnings of the bumiputera majority, and slash the country's inter-ethnic income gap to within 10 per cent by 2030 by sending the economy up the value chain, under its new development plan.
Prime Minister Mahathir Mohamad yesterday launched the Shared Prosperity Vision (SPV) 2030, claiming that the bumiputera - the country's majority community made up largely of Malay Muslims along with several indigenous tribes - have found their share of the pie decreasing in recent years, especially compared with the economically dominant Chinese minority.
"The gap, whether between the bumiputera or Indians with the Chinese, has expanded between 3.5 and four times in the past 27 years," he said, referring to their respective median household incomes.
He also revealed that between 2011 and 2015, during the administration of former prime minister Najib Razak, the bumiputera share of corporate equity fell from 23.4 per cent to 16.2 per cent, while foreigners increased their holdings to 45.3 per cent from 37.2 per cent.
Meanwhile, non-bumiputera Malaysians now hold 30.7 per cent of corporate equity.
Najib is now facing dozens of graft charges after being ousted last year.
"The 30 per cent bumiputera equity target set in the New Economic Policy has yet to be achieved," said Tun Dr Mahathir, referring to the set of pro-bumiputera policies introduced in 1970 after deadly race riots broke out the year before.
Economic Affairs Minister Azmin Ali acknowledged the need to "revisit some of the initiatives by the previous government to liberalise" the economy, which did away with ownership quotas.
"Maybe the timing was not correct... we have to study what was done," he told reporters yesterday.
The SPV replaces the Vision 2020 plan introduced by Dr Mahathir in 1991 during his previous 22-year administration, which he admitted will fall short of its target to turn Malaysia into a developed nation by next year.
Key strategies for SPV 2030
• Boost high-technology contribution to 50 per cent in manufacturing sector and 30 per cent in services
• Develop new sectors, including Islamic finance, renewable energy and green economy
• Have small and medium-sized enterprises contribute 50 per cent of gross domestic product, with bumiputera-owned enterprises making up at least 20 per cent of GDP
• Align university programmes with industry needs
• Aim for 35 per cent high-skilled workers in labour force, with the majority being bumiputera
• Rely less on foreign workers
• Increase wages in line with productivity
• Integrate public transport system between urban and rural areas
• Aim for at least 10 public-listed companies in every developing state
• Halve income disparity between regions
• Prohibit discrimination in the labour market on the basis of age, gender, ethnicity and religion
• Develop indices to measure unity, integrity and anti-corruption, harmony, public health, climate and environmental change
• Measure poverty on relative terms, with "decent living income" targeted at RM5,800 (S$1,900) monthly
"Vision 2020 was not achieved because for the last 15 years, the wrong policies and strategies were implemented by the previous two administrations," he told a press conference, adding that high salaries and cash aid were used to boost incomes without increasing productivity.
"As such, many people remained poor as they became reliant on cash handouts and did not progress based on their own efforts," he said.
Dr Mahathir blamed the weaknesses of Malaysia's economy on corruption, calling it a "cancer that must be cut off and removed".
The SPV claims that corruption and abuse of power stifled economic growth and distribution, with bumiputera small and medium-sized enterprises (SMEs) contributing just 9 per cent to gross domestic product (GDP) in 2015, despite receiving more than half of government procurement contracts worth RM1.1 trillion (S$362 billion) in the preceding two decades.
It also calculated that the median bumiputera and Indian households earn only 74 and 81 per cent respectively of the incomes earned by their Chinese counterparts.
The plan aims to see bumiputera earn 90 per cent of what their countrymen make, increase the employee share of GDP from 36 to 48 per cent and ensure bumiputera enterprises contribute 20 per cent to national income by 2030.
In comparison, the employee compensations in Singapore, South Korea and Germany are 39.7, 45.7 and 51.5 per cent of GDP respectively, according to the Organisation for Economic Cooperation and Development.
To achieve this, Malaysia says it needs to shed its reliance on commodities and low technology. Currently high technology is adopted by only 37 per cent of the manufacturing sector and 20 per cent of the services sector.
Yesterday's launch comes just three weeks after the country's two largest Malay Muslim parties, Umno and Parti Islam SeMalaysia (PAS), formed an opposition pact to address what they say are concerns that Malay interests are being sidelined by the PH government.
Today, both parties will attend a Malay Dignity Congress officiated by Dr Mahathir, a gathering at which the leader hopes to shore up Malay support for his Pakatan Harapan coalition, according to political pundits. A top PH official told The Sunday Times that "we rushed to launch the SPV so that Tun can explain it to the congress".