Thursday, 23 September, 2021

Malaysia – Exemplary Case of Economic Development and National Integration

Malaysia – Exemplary Case of Economic Development and National Integration

Malaysia’s economic development over the years has been spectacular. From being classified as one of the “least developed countries,” it has now established itself as a “newly industrial country.” The Federation of Malaya achieved independence in 1957. Malaya united with North Borneo, Sarawak, and Singapore in 1963 to form the present-day state of Malaysia. At the time, Malaysia was one of the world’s poorest countries with a per capita income of merely $279. Four centuries of colonial rule left the country in dire straits. What was once a primarily agriculture-based economy, has since transformed itself into a modern, industrialized one within a relatively short span of time. Today, Malaysia stands as an economic powerhouse in Asia with a vibrant multicultural, multiracial, and multi-ethnic society. It is one of the success stories of the developing world. It is worth exploring the rise of this Southeast Asian nation. Many of the developing nations across the globe have ethnic diversities that hinder national integration and thwart their development processes.

Malaysia’s journey as an independent nation began with political problems such as opposition by the Indonesian military until 1966, a communist insurgency in Sarawak, disenchantment in the eastern region of the country due to federal policies and the domination of Peninsular Malaya, and the secession of Singapore from the rest of the nation in 1965. In addition to all this, the country’s population was made up of various ethnic groups that had varying interests. Centuries of colonial rule left the country with poor living standards, a low literacy rate, weak infrastructure, and inadequate public services. Malaysia invested heavily on education and technology, promoted a high savings rate, pursued effective affirmative action, and implemented sound macroeconomic policies. In 1969, racial riots took place in Kuala Lumpur where Chinese Malaysians clashed with members of the Malay community. After this incident, the New Economic Policy was launched to uplift the indigenous people of Malaysia, known as the Bumiputera. This provided preferential treatment to indigenous Malaysians in education, employment, scholarships, business, and access to cheaper housing and assisted savings. The goal of this policy was to increase the wealth and economic potential of ethnic Malays and other indigenous groups who were lagging behind the minority Chinese Malaysians. The New Economic Policy was subsequently succeeded by the National Development Policy in 1991. The Malaysian government also adopted measures to increase the use of the Malay language in education and public life to promote national unity and build a strong national identity based on language. This was resented by the ethnic Chinese.

Nonetheless, Malaysia was able to avoid major ethnic conflict and build a reasonably unified and peaceful society. Enrolment in primary education reached 90 per cent in the 1970s. Women made up over 45 per cent of the country’s workforce by 1986/87. Living conditions improved as more homes with piped water were built and rural clinics were established. This led to a significant decrease in infant mortality, improved public health, and increased the life expectancy of Malaysians. Under Prime Minister Mahathir Mohamad, who ruled Malaysia from 1981 to 2003, the country experienced rapid economic growth and urbanization which started in the 1980s. Malaysia pursued a policy of privatization of public assets which included the sectors of transportation, utilities, and communications. During this period, several mega-projects were completed which include the Petronas Towers, the North-South Expressway, the Multimedia Super Corridor, and the new federal administrative capital of Putrajaya. However, this era was marked by limited political freedom and curtailed civil liberties. From 1957 to 2005, Malaysia’s economy (GDP) grew at a highly impressive rate of 6.5 per cent. Malaysia recovered more quickly from the financial crisis of 1997 than its Southeast Asian neighbours did. 

Malaysia is blessed with abundant natural resources. The country is one of the largest producers of palm oil, tin, and rubber. Additionally petroleum is a major export while agricultural resources are also exported. Some resource-rich countries in the world have remained poor due to an inability to effectively utilize their natural resources, but Malaysia has been able to successfully use theirs to develop and prosper as a nation. The country is also one of the largest exporters of semiconductor devices, electrical devices, and IT and communication products. In 2002, Malaysia began developing its own Space Program, an indication of how advanced the country had become. The tourism sector forms a major part of the Malaysian economy as a large number of people from around the world visit the country. The picturesque landscape, warm, tropical climate, and beautiful beaches attract visitors from many parts of the globe. 

Malaysia’s GDP (PPP) currently stands at $1.1 trillion while the per capita income (PPP) is $29,526. The adult literacy rate is around 95 per cent. The life expectancy for Malaysia is 76 years. The country is categorized as having “Very High” Human Development according to the Human Development Index (HDI) prepared by the United Nations Development Program (UNDP). The next target for Malaysia should be to establish itself as a “High Income” and developed country. Albeit limitations, Malaysia continues to be a functioning democracy where citizens enjoy a relatively satisfactory level of political freedom. Even though Malaysia has prospered tremendously over the years, there are areas in which the country can make further improvements. The country needs to increase its press freedom and distribute wealth more evenly among the different groups living within its borders. Malaysia also needs to find a way to establish an equitable society where the Bumiputera laws would no longer be required. The country could also invest more heavily on innovation and technology to compete with the more advanced countries of the world. Nevertheless, Malaysia stands as an example for developing nations and its progress and achievements since independence are worthy of admiration.

The Malaysian example of pragmatic economic policies and efforts for national integration by ensuring equity and justice for citizens of different ethnic groups should serve as a lesson for other ethnically diverse countries. Practical solutions led to sustained economic growth and peaceful coexistence of people who collectively ensured the economic development of the country. This is a unique experience, particularly in this region. A number of South and Southeast Asian countries have failed to take pragmatic economic policies for ensuring rapid growth and development. Some are yet to succeed in bringing all their ethnic groups to the mainstream of the national life. Hence, Malaysia’s case could be explored by such countries for establishing national integration, and fast-paced and sustainable economic growth and development.


The writer is a development professional. He can be contacted at: [email protected]