“11th Malaysia Plan: Towards a First-World Mentality Nation”
Concerns and Policy Recommendations
The 10th Malaysia Plan (10MP) was formulated to lay the foundation for Malaysia to achieve high-income status by the year 2020. The five-year development plan (2011-2015) focused on supply-side reforms to create a conducive environment for growth amid global recovery from the financial crisis of 2007-08.
The 10MP targeted average economic growth of 6% to increase Gross National Income (GNI) per capita to RM 38,845 (USD 10,800) by 2015. Though there has been a sharp decline in the exchange rate in recent months, this has largely been achieved with the EPU’s 2014 forecast at RM 34,126 (USD 9,506). Numerous initiatives have been introduced towards this end via the Government Transformation Programme (GTP), and the Economic Transformation Programme (ETP), which have been guided by the New Economic Model (NEM) framework.
While the primary indicator of the 10MP has been GNI per capita, the monthly average income for the bottom 40% of households rose to RM 1,847 in 2012. However, imbalance in the distribution of growth is of greater importance to the long-term sustainability of the Malaysian socio-economy than falling short of achieving 2015 targets. In 2012, at least 80% of households earned less than the mean monthly income of RM 5,000. Therefore, in the 11th Malaysia Plan (11MP), more attention should be given to widen productivity gains, especially among the small and medium enterprises (SMEs), and the informal sector.
The 11MP (2016-2020), will most likely extend the previous transformation initiatives in a bid to achieve high-income nation status. This final Malaysia Plan towards year 2020 is also expected to be formulated on the basis of an ongoing global economic recovery, therefore, providing greater impetus to enlarge the economic pie so that the benefits of sustainable development can be trickled-down to the rakyat in the form of higher dispensable income.
It is also worth reminding that the goals of Vision 2020, which forms the basis of the pursuit of high-income status, encompass the creation of a society that is mature, progressive, and competitive – traits that are associated with a First-World Mentality.
The Centre for Public Policy Studies (CPPS) is pleased to introduce our recommendations in response to concerns we have for a Malaysia Plan framework that humanises public policy, and focuses on policymaking with the aim of improving quality of life, while also addressing barriers to self-sustainability in the economy. The policy recommendations outlined in this framework, entitled “11th Malaysia Plan: Towards a First-World Mentality Nation”, are based on the following five themes:
- Liveable Cities
Continue to drive the national economy with seamless transportation experience; adequate access to public amenities in the face of rapid urbanisation; freedom of expression through arts and culture; and a living environment that is safe and sustainable.
- Convergence in Rural Communities
The urban-rural divide is bridged through greater competitiveness of the rural economy; increased compatibility and human connectivity to cities; as well as the promotion of social entrepreneurship in resolving unique and recurrent on-the-ground issues.
- Resilient Governance
Institutionalise the performance-based approach in budgetary planning in order to curb wastages; creation of a high-performing civil service that meets rising public expectations; and a shift in mindset where the public is empowered to play a direct role in shaping public policy.
- A Competitive Nation
Increase the gains for SMEs in the global economy; the gradual transition from a resources-based economy and other protectionist measures so that Malaysia can become a merit-based society; retaining human talent to contribute towards nation-building.
- Mainstreaming Women & Gender
To address the different needs between women and men; this has to be reflected in public transportation policy, healthcare delivery, women in politics, and strengthening corporations in promoting gender diversity.
- A Strategic Multi-Modal Planning Committee should be set up, comprising of experts in urban planning, transport operators and the civil service, to strengthen multi-modal transportation planning.
- Improvement in-transit networks, which include route alignment, configuration, and a mix of various public transport modes to accommodate the number and distribution of passengers while matching their travelling patterns.
- Update existing methods used to identify low-income social groups by including the Multidimensional Poverty Index (MPI) or the Social Exclusion Approach, both of which include social deprivations in order to allow the government to better identify and serve low-income urban groups.
- Strengthen the mechanism for low-cost housing allocation so that it reflects the concept of needs-based, as well as providing the incentives to maintain the quality and living conditions of these houses. The housing allocation system should also be resilient against manipulation of ownership and ensure that allocation is given only to those deserving groups of people.
- On the other hand, urban spaces and residents define cities, and it is fundamental for those committed to sustainable urban development to primarily prioritise building a sense of security. Liveable urban environments should not only enable residents to move around comfortably without fearing harm, but they should also be self-sustainable.
- Expand the reach of quality healthcare resources to urban poor given the relatively unequal healthcare service provision. This is reflected with less than 30% of specialist doctors working in the public sector.
- Minimise further the socio-economic differences in education outcomes due to income and opportunities. There should be a stronger emphasis placed on the quality of lesson planning and teaching within schools, as much as offering financial aid through subsidies. Educational approaches should be high on creativity and experiential, and low on rote learning so that students are moulded to acquire higher-order thinking skills.
- A clearly articulated and coherent arts and cultural policy can provide the nation with more than just a lens through which to view national identity. While everyone in society creates culture, it is the government’s role to be involved - often through the arts, in a position of advocating the intrinsic importance of this culture to society. This could be achieved by the establishment of an Arts Council to capitalise on new creative software and technologies, and promote creative industries through grants, foreign students and talents exchange, and generate closer ties with the industry.
- All children should be given an arts education and in all curriculum streams there should be compulsory arts subjects included that extend beyond music. Including these streams of study in a child’s general education will equip them will an artistic and cultural literacy that is important to their educational development.
- Encourage bottom-up planning, management and governance of urban areas by having steering committees work alongside the government to set broad priorities with the aim of a creating sustainable cities. And, Promote the construction of green buildings that require less energy for lighting and temperature control through the innovative use of glass and air-flow systems. This could be encouraged through subsidies and loans, and certification of energy use in an effort to promote competition in the local construction industry towards sustainability.
Convergence in Rural Communities
- Streamline regulatory processes to formalise the shadow economy and incentivise the registration of businesses so that the government can target its policy implementation and extend business grants more efficiently.
- Widen access to micro-financing through a consolidation of processes in government agencies. More than half of SMEs cited the lack of collateral as barrier when accessing financing. Current funding via the Working Capital Guarantee Scheme (WCGS) dries up too soon which indicates that the government should consider prioritising its target groups and improving its mechanism in the disbursement of funds.
- Increase the attractiveness of the skills-based economy via a revamped Technical Education and Vocational Training (TEVT) curriculum that is supported by extensive incorporation of diploma-level accreditation as well as closer links with commercial industries to produce graduates that meet requirements the for employability
- Institutionalise gender equality at work through the establishment of a Fair Work Commissions to combat discrimination in career progression and pregnancy. Also, address barriers facing female workers in and from the rural areas. Malaysian women’s participation in the workforce, which stood at 52.4% in 2013, was among the lowest in ASEAN, while women’s participation rate in rural areas is lower (47%) than in urban areas (54.7%), therefore a urban-rural gap further accentuates regional socio-economic disparities.
- As Malaysia moves towards high-income nation status, there should be greater convergence between the urban and rural communities in income growth. In 2012, the median income for urban households was RM 4,238 per month compared to RM 3,010 in the rural. Nearly 86% of rural households make less than the national average of RM 5,000 while only 59% of urban households earn less than that.
- Develop niche markets in rural areas by identifying key local competitive advantages. Notable success stories include higher education in Semenyih, the textile and garment industry in Nilai, and a furniture hub in Muar. These are competitive while also going global.
- Encourage social entrepreneurship through the creation of a local Social Enterprise Council. This council will act as a governing body, making certain that the methods social enterprises employ do not negate, but rather supplement the government’s efforts within rural communities. Products and services should also be assessed, ensuring that they are not sub-standard or fail to meet the social enterprise’s aims.
- Establish an independent Office for Budget Responsibility (OBR) to oversee the implementation of Outcome-based Budgeting. This is to avoid relegating the OBB system to mere compliance check-points. The OBR should have the legal authority to monitor, review and conduct in-depth evaluation of public programmes.
- Introduce a Performance Rating and Assessment System to prioritise spending according to national goals. Each ministry should be allowed to rank priority in the budgeting of programmes based on certain checklists and justifications. This system should encourage each ministry to better track the performance of programmes, and to remove obsolete programmes based on a self-assessment.
- Expand public consultation exercises in budgeting priorities for greater accountability. By allowing the general public to play a greater role in assessing policy outcome, the government will be better equipped with information when identifying solutions to address policy gaps.
- Improve the responsiveness of front-line employees (FLE), since the high frequency of transactions between front-line civil servants and the general public forms the perception of quality of governance. There must be also a routine review at the policy-making level to take actions in improving the responsiveness of front-line civil servants, while the reward mechanism should reflect achievements in experiential qualities expected from a high-performing civil servant.
- Strengthen competency-based selection in the recruitment process in order to raise the job profile of public administrators. There is also a need to construct a sustainable talent pipeline via a Management Associates Programme so that young and highly capable public officer talent today will assume leadership positions at a later stage in their career.
- Create a people-oriented civil service by ensuring that the ethnic make-up of the bureaucracy is similar to the actual demography of the country. A customer-oriented civil service can also be further strengthened through the use of a citizen’s report card where qualitative indicators such as “friendliness” and “responsiveness” are assessed and fed into consideration for a public officers’ annual evaluation.
- Institutionalise a merit-based reward system by implementing a two-tier pay structure: a basic-wage that requires individualised review periodically, and a variable-wage that differs according to the extent of individual or department performance, as well as the general health of public finance.
- Strengthen institutional checks-and-balances by creating more bipartisan parliamentary select committees to have a more in-depth understanding of national issues.
- Resume local elections to encourage direct political participation. Through direct representation in local government by general public, it will encourage greater accountability when providing public service and foster close working relationships between local communities and public officials when responding to local issues.
A Competitive Nation
- Remove industrial protection policies that are against fair competition. Notable are the automobile and steel production sectors, which have not only discouraged efficient operations, but also perpetuate rent-seeking behaviour that is inconsistent with the concept of sustainable competitiveness.
- Assist SMEs, which constitute 99.2% of total business establishments in Malaysia, to go global by taking greater advantage of the many trade agreements that Malaysia has subscribed to. Dissemination of information by trade agencies should be made more widely available, while restrictions on free movement of talent should be loosened in order to raise the attractiveness of Malaysia as a competitive nation.
- Reduce dependence on resource-based economic activities given its increasing scarcity and adverse impact on the environment. Policy intervention to discourage excessive extraction is also necessary so that future streams of income are sustained.
- Establish a new trust fund to reinvest part of the resources gains into supporting high-impact research in a bid to generate productivity gains while finding niche markets in the global economy.
- Promote equality of opportunity and the barriers to entry that some groups and individuals face. The government’s system of affirmative action should be made more needs-based and be extended to include all ethnicities.
Mainstreaming Women & Gender
- In order to develop successful and sustainable infrastructure design, the needs of women commuters have to be taken into consideration in every aspect of planning. It is important to recognise that women’s travelling patterns differ in so many ways as compared to men. The needs of women commuters must first be addressed to enhance their level of safety while travelling.
- The incidence of snatch thieves in Malaysia has increased considerably in recent years and concerns to this particular crime, faced mostly by women who lives in urban areas has grown exponentially over the years. Many women travellers in Malaysia who live in urban area show the highest risk of victimisation. Urgent attention is needed on the allocation and design of the infrastructure to aid their travelling.
- A study to look into improving the current urban design and service provision policy in creating a safer environment for many women commuters, with an aim to reduce crime incident, must be undertaken.
- Despite supply side improvements, distance to health facilities remains a major problem for rural communities. 92% of the urban population live within 3 km of a static health facility, compared to 69% of the rural population. To address this discrepancy, there should be an increase in the establishment of rural health facilities for those who live beyond 5km of a divisional hospital, and for those who live beyond 12km of a district hospital.
The challenges identified towards achieving Vision 2020 are best understood as a work-in-progress. This is particularly true when they concern changing the mindsets of individuals and society as a whole. As state-society relations evolve, so to does the role of government in shaping the growth and development of the country. Over the next 5 years, the government should continue to foster strong and inclusive growth, through means such as private partnerships (PP), but with added emphasis on social accountability so that initiatives can better reflect the needs on the ground, and better humanise the policy instruments used.
Download PDF version of this document here.
Ng Yeen Seen (Ms)
Senior Director, CPPS
Jordan Heng-Contaxis (Mr)
Senior Policy Analyst, CPPS
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