Shared Prosperity Vision 2030
Shared Prosperity Vision 2030
Secretary General
Ministry of Economic Affairs
Block B5 & B6
Federal Government Administrative Centre
62502 Putrajaya
MALAYSIA
Website http://www.mea.gov.my
Email [email protected]
Publisher Copyright ©
All Rights Reserved. No part of this publication may be reproduced or stored in a form that is reproducible or
reproduced in any form by electronic, mechanical, photocopying, recording and / or otherwise without the permission
of the Ministry of Economic Affairs, Malaysia.
SHARED
PROSPERITY
VISION
RESTRUCTURING MALAYSIA'S DEVELOPMENT PRIORITIES
Foreword
We have faced many challenges and achieved many
successes since independence over six decades ago.
From a poor and colonised country, Malaysia has
transformed into a fast-growing industrial country. The
country has been regarded as an "Asian Tiger".
Economic achievements, political stability and the
wellbeing of the rakyat are often the benchmark for
other developing countries.
Now, Malaysia will adopt a new approach to strengthening our economic performance. The initiatives we will be
introducing will ensure that the rakyat and the nation enjoy Shared Prosperity.
Over the past decade, the country's economic management has been radically entrenched towards premature
liberalisation and this has led to the ambition of becoming a developed nation as envisaged in Vision 2020 not being
fully realised. Nevertheless, being a high-income country does not guarantee fair and equitable distribution of wealth
and income to the rakyat.
In reality, despite the increase in value of the gross domestic product (GDP) and the country's income, the benefit of
the country's wealth cannot be enjoyed equally by all. This is due to the relatively constant increase in income without
the significant increase in productivity, leading to the rising cost of goods and services, thus burdening the lower
income group. As a result, the increase in the rakyat's income does not increase their purchasing power.
The economic model of the last decade is more focussed on increasing the national debt for the implementation of
mega projects. The Labour Force Survey Report, Malaysia, 2018 also indicates that the number of semi-skilled and
low-skilled workers is 72.8 percent of the total labour force in the country. Ownership of the country's equity is
increasingly turning to foreign ownership. Economic growth, however, is focussed only on some of the country's major
cities, sidelining the growth, equity ownership and opportunities for the rakyat in the rural areas.
The situation is deteriorating with the erosion of integrity and worsening corruption. As a result, the Government's
delivery to the rakyat is becoming less effective, resulting in widespread leakages in public spending and abuse of
power. The bottom 40% of household income group (B40), which is mainly the Bumiputera community, is among the
most oppressed rakyat as a result of the culture of leakages and abuse of power in the previous Government. All
Government policies, programmes and assistance targeted at them have been unsuccessful due to these leakages,
corruption and abuse of power.
Now, with various institutional reforms and improvements being put in place by the Government, I am confident that
efforts to help the B40 group and the Bumiputera community as a whole will bear fruit as intended. The rakyat are
hopeful that the Government will implement a new national economic plan to boost wealth creation so that they may
enjoy the prosperity in a fair and equitable manner.
Global investors and markets also have high expectations of Malaysia maintaining political stability, free from
kleptocracy and fully tapping its economic potential to achieve sustainable social wellbeing.
We have taken a new approach to the country's economic and social management where development and progress
must be able to produce Shared Prosperity. In this context, the rakyat will be able to enjoy significant increase in
household income and purchasing power, as income and wealth disparities between classes, ethnic groups, regions
and supply chains are being reduced.
The wellbeing of the rakyat can also be ensured with a more conducive, safe and sustainable environment. Ultimately,
people of various ethnicities and religious groups will have a peaceful and harmonious life in a democratic and stable
country.
I am confident that with proper implementation of policies and strategies, Malaysia will thrive and develop more rapidly.
The real measure of the country's progress and development is that the wealth generated can be distributed and
enjoyed equally and equitably by all rakyat. The aim of the Shared Prosperity is to provide a decent standard of living
to all Malaysians.
A harmonious and unified society, free from suspicion and prejudice and celebrating the diversity of races and cultures,
is fundamental to the unity of the country.
I would like to take this opportunity to express the Government's appreciation and gratitude to Institut MASA for their
efforts and commitment in preparing the Shared Prosperity Vision document.
I hope this document will become a platform for all Malaysians to work together and make this noble cause a reality.
Through this Vision, the rakyat will enjoy the prosperity of the country in a fair, equitable and inclusive manner. This
prosperity will only be achieved through continuous and earnest efforts. Increased economic growth should be
accompanied by increases in household income, skills and professionalism, wages and salaries, savings and ownership of
wealth as well as participation in entrepreneurship and businesses.
In short, this Vision is a continuation of Vision 2020 in the framework of the country's long-term plans. The essence is to
fulfill the aspirations of the rakyat in order to achieve a decent standard of living.
I urge all Malaysians to unite and fulfill these aspirations. The unity in realising Shared Prosperity Vision 2030 will boost
Malaysia as a regional economic centre.
The youth are the country's hope and the dawn of our future. Their aspiration today will be the reality of tomorrow and this
can only be nourished and nurtured through noble values, good education and profound character building. With an
unwavering sense of national identity and a strong determination to master technology, nothing is too high to be achieved.
The main prerequisites for the success of Shared Prosperity Vision are the economic, political and social ecosystems to
support rapid and sustainable economic growth. These include the implementation of policies and initiatives to encourage
investment and trade in high growth sectors in order to generate income for the rakyat and the government, good
governance based on integrity as well as social harmony to maintain peace and stability.
These factors will create a condusive environment to propel the country’s continuous economic growth so that the wealth
and prosperity will be distributed fairly and equitably to all rakyat. Various programmes and initiatives will be implemented
to increase the incomes of B40 household who are in dire need of Government assistance and support. Through this vision,
the rakyat will enjoy a decent standard of living.
I believe that when the prosperity of the country is shared with all the rakyat, unity will be achieved. No section of the rakyat
should be left behind or marginalised from the mainstream development.
Institut Masa Depan Malaysia was given the honour by the Government to work with the Ministry of Economic Affairs in
developing the Shared Prosperity Vision 2030. A series of research and consultative sessions with various groups of experts
and stakeholders were conducted since a year ago to identify the objectives, strategic thrusts and enablers of this vision.
Ultimately, this is a document that will be a blueprint for the policies and direction of the Government for the next ten years.
I would like to take this opportunity to express my appreciation to everyone who has contributed in preparing the Shared
Prosperity Vision 2030 document. InsyaAllah, with the commitment and efforts from all stakeholders in executing this vision,
the country will march forward for a better and prosperous future for all.
MUHYIDDIN YASSIN
Founder
Institut Masa Depan Malaysia (MASA)
Bukit Damansara
5 October 2019
Table of Contents
EXECUTIVE
SUMMARY 5 CHAPTER 5
Guiding Principles
Introduction
5-01
1
GP1: Continuous Prosperity
GP2: Equitable Outcome
CHAPTER 1 1-01 GP3: Equitable Growth
Introduction GP4: Distributed Economy
Shared Prosperity Vision GP5: Inclusivity
Outcome-Based Approach GP6: Learning Society
2
GP7: Future Economy
GP8: Needs-Based Approach
3
GP12: Democracy and Stability
4
Sustainability
CHAPTER 4
6
4-01
Situational Analysis CHAPTER 6 6-01
7-16 ENABLER 7
Sustainability
7-18 ENABLER 8
APPENDIX
Enlightened Society 12-01
Glossary of Abbreviations
8
Glossary of Terms
CHAPTER 8 8-01
Shared Prosperity Vision
Targets and Measures of
Committee Chart
Shared Prosperity
9 CHAPTER 9
Bumiputera Outcomes
9-01
SHARED
PROSPERITY
VISION
2030
Shared Prosperity Vision 2030 is
a commitment to make
Malaysia a nation that achieves
sustainable growth along with
fair and equitable distribution,
across income groups,
ethnicities, regions and supply
chains. The commitment is
aimed at strengthening
political stability, enhancing the
nation’s prosperity and ensuring
that the rakyat are united whilst
celebrating ethnic and cultural
diversity as the foundation of
the nation state.
AIM
THE PRIMARY AIM OF THE
SHARED PROSPERITY
VISION IS TO PROVIDE A
DECENT STANDARD OF
LIVING TO ALL MALAYSIANS
BY 2030.
FRAMEWORK
OF
SHARED
PROSPERITY
VISION
2030
GUIDING PRINCIPLES
Continuous Learning Economic
Prosperity Society Centre of Asia
Unity in
Distributed Institutional Diversity
Economy Political-Economy
Integrated
Sovereignty
Inclusivity Social Model
& Sustainability
ENABLERS
Fiscal Financial Effective Governance
Sustainability Capital Institutional & Integrity
Delivery
0-01
BU
L INDU SIN
ITA STR ES
CAP YE S
AL CO &
OCI SY
S ST
EM
KE
YE
&
us
AC
De
ro on
CON
v
TIV
NAL
i
ION
dN e
Dignifie osp
el r Al
at
ITIES
OMIC
op l
fo
REGIO
INCLUS
Pr
me
SHARED
United,
(KEGA)
nt
GROWTH
PROSPERITY
VISION
Ad
dre &
s lt h
In c sin g Wea s
o m e D i s p a riti e
L
TA
W
SO BE
PI
EL
CA
CI IN
L
AL G
N
A
M
U
H
GUIDING STRATEGIC
OBJECTIVES ENABLERS
PRINCIPLES THRUSTS
0-02
SHARED
PROSPERITY
VISION
OBJECTIVES
0-03
1 DEVELOPMENT
FOR ALL
Restructuring the economy to be more
progressive, knowledge-based and high-valued
with full community participation at all levels.
Restructuring
Economy
Addressing
Inequalities
Nation
Building
0-04
E
Executive
Summary
The Shared Prosperity Vision as the country's new direction was announced by the
Prime Minister during the tabling of the Mid-Term Review of the Eleventh Malaysia Plan
(MTR 11MP) on 18 October 2018 in Parliament. Subsequently, the Shared Prosperity
Vision's basic framework was detailed by the Prime Minister in the Keynote Address
of Pakatan Harapan’s First Anniversary as the Government on 9 May 2019.
The Shared Prosperity Vision outlined three objectives, 15 guiding principles, seven
strategic thrusts and eight enablers to realise the desired goals.
The aim of the Shared Prosperity Vision is to provide a decent standard of living to all
Malaysians by 2030. In line with the Shared Prosperity Vision, the country needs to
change its economic model and restructure the business ecosystem as well as to
strengthen the existing policies and plans. The proposed changes in relation to labour
market will involve workforce transformation to fulfill the need of high-paying jobs and
high-value businesses. The transformation is expected to elevate the income of the
rakyat to higher levels to remain relevant with the passage of time.
Economic strategies without social consideration will not guarantee the strength and
vibrancy of the country. The strengthening of the country’s pillar, national identity and
dignified people narratives are fundamental to fortify the nation state. The enablers of
the Shared Prosperity Vision focus on social capital development, outcome-based
education and awareness in creating an enlightened society to realise social cohesion
and unity in diversity.
Shared Prosperity Vision sets clear and measurable goals and targets. The indicators
developed to measure national development are not solely based on gross domestic
0-05
SHARED PROSPERITY VISION 2030
1 CHAPTER 1: Introduction
1
Introduction
In 2030, Malaysia is expected to have a population of 38 million people 1. The increase in
population is a challenge for economic expansion towards fulfilling the rakyat’s needs and
maintaining the stability of country. However, determining an appropriate economic approach
will pose a challenge for the Government to ensure that the country remains peaceful and
prosperous with fair and equitable economic distribution, as well as inclusive.
At present, the progress and development of the socioeconomic status of the rakyat are
measured based on achievements of economic indicators such as per capita income, gross
domestic product (GDP) growth and incidence of poverty. In this regard, the Government is
launching the Shared Prosperity Vision 2030; a more holistic approach in the face of a complex
economy and dynamic social conditions. The measurement of achievement will encompass the
distribution of national wealth, increasing purchasing power and enhancing the wellbeing to
benefit the rakyat. The Shared Prosperity Vision covers three primary objectives:
Based on three primary objectives, Shared Prosperity Vision will be further detailed by 15
guiding principles, seven strategic thrusts and reinforced by eight enablers.
Shared Prosperity Vision gives full emphasis on economic facts and current data as sound
foundation for national development, without neglecting legal, social and community aspects.
In summary, Shared Prosperity Vision is a new direction in the quest for a peaceful, harmonious
and united Malaysia that propels the country's position as an important economic centre of
Asia in 2030.
1-02
CHAPTER 2
Definition Of Shared
Prosperity
CHAPTER
2
Definition Of Shared Prosperity
Globally, "Shared Prosperity" is not a new term and has been used on many platforms for
various purposes. The World Bank emphasised this agenda and defined the term "Shared
Prosperity" 1 as:
“...two key elements, economic growth and equity, and it will seek
to foster income growth among the bottom 40 percent of a
country’s population. Without sustained economic growth, poor
people are unlikely to increase their living standards. But growth
is not enough by itself. Improvement in the Shared Prosperity
Indicator requires growth to be inclusive of the less well-off.”
The statement on shared prosperity as articulated by Joseph E. Stiglitz 2 in his book The EURO:
How a Common Currency Threatens the Future of Europe, 2016, bears analysis:
"A true growth and stability agenda interacts strongly with other
elements of the reform agenda: the only sustainable prosperity is
shared prosperity."
The United Nations Industrial Development Organization (UNIDO) defines "Shared Prosperity"
in its development strategy as:
Definition by Jaime Saavedra-Chanduvi in the article “Shared Prosperity: A New Goal for a 1
Changing World”, World Bank, 8 May 2013.
2-01 Joseph E. Stiglitz is a professor at Columbia University and Nobel Economic Prize Winner, 2001. 2
Based on UNIDO Framework Inclusive and Sustainable Industrial Development (ISID). 3
SHARED PROSPERITY VISION 2030
2 CHAPTER 2: Definition Of Shared Prosperity
The basis of these definitions are the same, which discuss imbalance development and
widening economic disparity. The situation calls for various measures and strategies to address
these challenges.
Based on this definition, some elements are further elaborated. The “Shared Prosperity” that is
to be achieved through a continuous commitment will be supported by "...a nation that
achieves sustainable growth...". Any economic achievements resulting from Shared
Prosperity Vision will be retained to ensure sustainability. This definition means that the
consideration of the initiatives and plans will be shaped to align with long-term goals and
entails meaningful change.
Furthermore, "...with fair and equitable distribution, across income groups..." underlines
the Government's responsibility to create an inclusive and equitable economic system. Fair
economic distribution stream will reduce the income disparity between business communities
and household groups.
2-02
Sociopolitical elements in Shared Prosperity Vision are reflected in "...strengthening political
stability, enhancing the nation’s prosperity and ensuring that the rakyat are united...".
These elements are the results from realised economic prosperity, empowered democratic
institutions and enhanced social bonds embedded within the Shared Prosperity Vision
framework.
Furthermore, "...celebrating ethnic and cultural diversity as the foundation of the nation
state..." is a continuous effort to build a united country while taking into account ethnic,
cultural and religious differences. The strengthening of Malaysian identity as a plural society
must continue to be prioritised.
The Shared Prosperity Vision also upholds the responsibility to ensure the wellbeing of
Malaysians via "The primary aim of the Shared Prosperity Vision is to provide a decent
standard of living to all Malaysians by 2030." A decent standard of living is defined by
providing three elements in the rakyat’s life:
A decent standard of living will take into account the income of the rakyat based on
expenditures, income classes and localities that differ from one another. The determination of
a decent standard of living will guide each individual, worker, employer and Government to
evaluate and develop programmes to improve the socioeconomic status of the rakyat (social
mobility).
2-03
SHARED PROSPERITY VISION 2030
2 CHAPTER 2: Definition Of Shared Prosperity
2-04
CHAPTER 3
Nation State
CHAPTER
3
Nation State
The awareness and acceptance of the rakyat on the fundamentals that make up a country's
background is a key prerequisite for building a harmonious and prosperous nation.
Understanding, respect and responsibility for the history of the country can be nurtured when
good governance policies are implemented including educating the rakyat to be aware of some
of the components that make up Malaysia as a nation 1. A society that is committed to the
nation's foundations is a society that understands, respects, and is responsible for ensuring
that Malaysia will continue to develop in a sustainable manner with a fair, equitable and
inclusive economic distribution for all.
Abd Razak, M.R. Pembinaan Negara Bangsa Malaysia: Peranan Pendidikan Sejarah dan Dasar 1
3-01 Pendidikan Kebangsaan. JEBAT 36 (2009) pp 90-106.
Delanty, G. Beyond the Nation-State: National Identity and Citizenship in a Multicultural 2
Society - A Response to Rex. British Sociological Association Sociology Journal (1.3) pp 1-8.
SHARED PROSPERITY VISION 2030
3 CHAPTER 3: Nation State
3 Convesi, D. (ed) 2002, Ethnonationalism in the Contemporary World: Walker Connor Study of
Nationalism. New York: Routledge.
4 Ozkrimili, U. 2017, Theories of Nationalism: a Critical Introduction, London: Palgrave.
5 Malesevis, S. 2018, Nationalism and Longue Duree, Nations and Nationalism, 24(2):292-299.
6 Tang Abdullah, A. R. & Wan Hassan, W. S. Elemen Sejarah dalam Pembentukan Negara: 3-02
Kemunculan Negara Bangsa di Eropah dan Proses Kolonialisasi dan Dekolonialisasi dalam
Konteks Malaysia, Jurnal Perspektif. (7.1). pp 57-71.
Photographer: Larm Rmah
THE PILLAR OF NATION STATE
In Malaysia, the formation of the national agreed upon as the grundnorm or basic rules
pillar had taken into account native ethnic of the country.
culture of the Federation of Malay States
during the process of independence in In this integration nation state, the country’s
1957 7. The pillar of the nation was embedded administration and development is based on
within the terms agreed upon in the a process of reciprocity or power sharing
Federation of Malay States Agreement 1948. between various ethnics 8, as stated in the
These terms formed a basis for the Federal Constitution. This power sharing
formulation of the Constitution of the consensus directly formed an independent
Federation of Malaya 1957. With the state that embraces cultural and ethnic
recognition given to symbolism of Malay diversity rooted in the pillar of nation state.
ethnic as native in Malaysia, these terms
have been these terms have been collectively
Among the grundnorm agreed upon in forming the platform of integration is the adoption of
several fundamentals in the Federal Constitution, namely 9:
1 Islam is the religion of the Federation; but other religions may be practised in peace and
harmony in any part of the Federation (Article 3 (1));
11 The national language shall be the Malay language, but the native languages of other
ethnicities can still be taught and used (Article 152 (1));
111 The special status of the Malays and the natives of Sabah and Sarawak is recognised,
but the interests of other communities are also protected (Article 153);
v Citizenship rights are granted to those who are eligible under the Federal Constitution
(Part III).
Gullick, J. M. 1964, Malaya, London: Ernest Benn; Roff, William R. 1980, The Origins of Malay 7
Nationalism, Kuala: Penerbit Universiti Malaya.
Abdul Rahman Embong. 2007, Rethinking Ethnicity and Nation-Building: Malaysia, Sri Lanka 8
and Fiji In Comparative Perspective, Kuala Lumpur: Persatuan Sains Sosial Malaysia; Smith,
3-03
A.D. 2009, Ethno-Symbolism and Nationalism. London: Routledge.
Abdul Rahman Embong. 2006, Negara Bangsa: Proses dan Perbahasan. Edisi Ke 2. Bangi: 9
Universiti Kebangsaan Malaysia.
SHARED PROSPERITY VISION 2030
3 CHAPTER 3: Nation State
In Malaysia, apart from the provisions agreed upon through the principles of reciprocity and
recognised in the Federal Constitution, citizens are also taught to respect the principles and
objectives of the Rukun Negara, introduced in 1970 to promote unity and strengthen the nation
state 10.
4 Guarantees
2 openness to its
Maintain a rich diverse
democratic way multi-cultural
of life traditions
3 5
1
Achieve Create a just Build a
greater unity society where progressive
among whole the prosperity of society that will
society the country can make use of
be enjoyed fairly modern science
and justly and technology
Belief in God
Rule of Law
Since 1970, various economic policies and models have been introduced to reduce the
socioeconomic disparities among the rakyat by instituting a more inclusive socioeconomic
development platform. The Shared Prosperity Vision is a continuation of such policies and
models that represent the cornerstone of national development to date as shown in Figure 3.0.
1957
Malaya Independence
1948 and the Introduction of 2MP | 3MP
Adopting the the 1957 Malay 4MP | 5MP
Constitution of the Constitution that stresses
Growth with
Federation of the principle of social
Equitability
Malaya as a national contract
independence
document 1963 Diversifying the
The entry of Sabah National
and Sarawak and the Economy
formation of Malaysia
through the Malaysia
Agreement 1963
1970
The introduction of
the Rukun Negara
(National Pillars) and
the New Economic
Policy as a measure
of national recovery
after the events of
May 13, 1969
3-05
SHARED PROSPERITY VISION 2030
3 CHAPTER 3: Nation State
National
Transformation
National Policy
10MP Shared
Development Prosperity
Policy 11MP Vision
6MP New 12MP | 13MP
7MP Economic
Restructuring the
Balanced Model
Developmental Priorities
Development of Malaysia
National
Vision
Policy
CPA
8MP
9MP 11MP
A country that is
2018-2020
resilient and New Emphasis
competitive and Priorities
VISION 2020,
1991-2020
Comprehensive Development
3-06
4
CHAPTER 4
Situational Analysis
Economic Restructuring
Pre-Mature Economic Liberalisation
Approach and Impact
Economic Growth Potential
Regional Development Disparities
Disparity Between Income Groups
Disparity Between Ethnic Groups
Economic Sabotage
Summary of Situational Analysis
CHAPTER
4
Situational Analysis
ECONOMIC RESTRUCTURING
1 Malaysia has experienced various phases of development to reach the current level.
The ethnic-based economic pattern that has been shaped since the colonial period
has led to social conflicts among the rakyat. Subsequently, economic restructuring
through the New Economic Policy (NEP) was introduced to restructure the society and
continuously expand the economy so as to ensure that social conflicts do not recur.
2 The NEP has restored confidence and understanding among ethnic groups and
created various opportunities for economic participation. Among the successes of the
NEP are reducing hardcore poverty, increasing household income, restructuring of
society and reducing ethnic group identification based on economic activities and
enhancing political stability. Nonetheless, the target of at least 30% Bumiputera equity
ownership has not been met.
4.1 propelling Malaysia into a technological country with the establishment of the
Multimedia Super Corridor (MSC) and Multimedia Development Corporation
Sdn. Bhd. (MDEC), now known as Malaysia Digital Economy Corporation Sdn.
Bhd.;
4.2 establishing the local automotive industry through the implementation of the
National Automotive Policy and the establishment of Perusahaan Otomobil
Nasional (PROTON) in 1983 and Perusahaan Otomobil Kedua (PERODUA) in
1993;
4-01
SHARED PROSPERITY VISION 2030
4 CHAPTER 4: Situational Analysis
4.3 shifting the nation’s labour force from no formal education to tertiary
education as shown in Figure 4.0;
25
20
16
15
10
6
5 3
0
'82 '83 '84 '85 '86 '87 '88 '89 '90 '92 '93 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Tertiary
No formal Education
80
60
40
20
0
'82 '83 '84 '85 '86 '87 '88 '89 '90 '92 '93 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
4.5 reducing poverty rate from 20.7% in 1984 to less than 0.4% in 2016;
4.7 accelerating the country's GDP growth rate up to the level of Newly
Industrialised Countries in Asia (Asian Tigers) with an average growth rate of
9.6% per annum in the period of 1991 - 1996; and
addressing the 1997/98 Asian financial crisis through selected capital control
4.8 instruments, which was later recognised by the International Monetary Fund
(IMF).
5 Malaysia was also affected by regional and global economic crises such as those in
2001 and 2008, which demanded a more holistic reprioritisation in economic
development. The Government will continue to undertake measures to restructure the
economy towards shared prosperity.
6 Malaysia has implemented gradual economic liberalisation measures over the past
three decades. Interest rate liberalisation measures were implemented during the
period of 1978-1985 and 1991-1998. Malaysia also exercised capital market
liberalisation in 1990 and tight monetary and fiscal policies in 1997. The liberalisation
process was conducted in stages based on the country’s needs.
However, over the past two decades, specifically since 2009, Malaysia had begun to
liberalise the economy more broadly including moving away from the manufacturing to
services sector. The Government at that time headed towards a high-income nation
without taking into account the 2013 exchange rate condition, purchasing power
parity and the influx of illegal immigrants.
6.1 Liberalisation measures were taken in the areas of trade and investment,
services, Government procurement and state-owned enterprises (SOEs). The
pre-mature liberalisation measures undertaken included the dissolution of the
Foreign Investment Committee (FIC), relaxation of foreign equity ownership of
up to 100% in business services, insurance, wholesale and retail as well as
tariff reduction.
6.2 Malaysia is in the midst of reviewing the terms and conditions of the
Comprehensive and Progressive Agreements for Trans-Pacific Partnerships
(CPTPP). Some policies and legislations were reenacted according to the
agreement. The role of SOEs and Small and Medium Enterprise (SMEs) as well
as Government procurement need to be aligned to Shared Prosperity Vision.
The view is that local SOEs are more competitive than foreign conglomerates
and that pre-mature liberalisation measures need to be re-evaluated. There is
also the concern that over reliance on huge foreign investors may run the risk
of the country's potential in strategic and new industries being controlled by
foreigners. Thus, re-evaluation is necessary to ensure continued growth in the
local industry so that the prosperity generated will benefit the rakyat.
4-05
SHARED PROSPERITY VISION 2030
4 CHAPTER 4: Situational Analysis
7 GDP performance. The East Asia and Pacific GDP growth remained high despite the
financial crisis in 2008-2009. However, Malaysia's GDP grew moderately as compared
to the East Asia and Pacific region since 2001 as shown in Figure 4.2.
Real GDP, %
15
12
-3
-6
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Malaysia
Latin America and Caribbean
East Asia & Pacific (excluding high income nation)
Europe and Middle East (excluding high income nation)
People's Republic of China
40 8.0
30 6.0
20 4.0
10 2.0
0 0
-10 -2.0
-20 -4.0
-30 -6.0
-40 -8.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Despite the encouraging investment growth, there has been a significant decline in the
investment of information and communications technology equipment as well as other
machinery and equipment. Investments in equipment accounted for just 20.9% of
gross fixed capital formation (GFCF) growth in 2018 compared to 26% in 2010, while
investment in structure increased from 48.2% to 58.6% over the same period. In
addition, expenditure on research and development (R&D) to GDP was still lower than
other countries as shown in Figure 4.4. This has impeded the widespread adoption of
advanced technology and automation by industry as well as limited innovation and
productivity improvements.
4-08
4.4 R&D Expenditure to GDP 2016
R&D Expenditure, %
5
4.2
3.8 3.5
3.1
0
South Japan Taiwan Singapore People's Malaysia
Korea Republic
of China
10 Malaysia managed to attract net inflows of FDI worth RM505.6 billion for the period
of 1998-2018 or RM24.1 billion a year as shown in Figure 4.5. Gross FDI net growth
of just 2.9% per annum over the same period was contributed by the services,
manufacturing and mining sectors.
RM, billion
50 47
39 40
37 38
40 36
33
30 29 29
30
24
22
20 18
15 14 15
12
11 9
10
5
2
0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
As shown in Figure 4.6, for the period 2010-2017, returns on direct investment abroad
(DIA) had not increased and was lower than foreign investment. Companies investing
abroad only brought in about 50% DIA. Therefore, strengthening of existing
programmes and outsourcing activities need to be intensified to ensure FDI and
returns on DIA create a spillover effect to the development of the local supply chain.
5.2
Overall Value 12.6
Agriculture 3.2
5.7
0.7
Construction 6.8
Services 3.7
10.0
4.0
Manufacturing 13.8
9.5 Direct
Mining 25.5
Investment
Returns, %
0 5 10 15 20 25
DIA FDI
1989
YEAR
Miscellaneous
Mineral Fuel, Transactions &
YEAR
1998
Lubricants & etc. Food Commodities
Beverages
& Tobacco
Animals Chemicals
& Vegetable
Oils & Fats
Machinery Manufactured Miscellaneous Crude
& Transport Goods Manufactured Material,
Equipment Articles Inedible
2018
YEAR Oils & Fats
Material,
Inedible
Beverages
& Tobacco
4-13
SHARED PROSPERITY VISION 2030
4 CHAPTER 4: Situational Analysis
67.8
RM
Total:
billion
286.6
RM
billion
1,003.6
RM
billion
Technology Application
Rate, %
90
80
80
70 63
60
50
37
40
30
20
20
10
0
Low and Medium High
Manufacturing Services
14 Premature deindustrialisation has taken place in Malaysia for the past 20 years. The
rate of high technology use in the manufacturing sector reached its peak of 52% in
1999. This rate subsequently declined to 32% by 2010 as shown in Figure 4.9.
60
50
40
30
20
10
0
1987 1989 1991 1993 1995 1997 2000 2002 2004 2006 2008 2010 2014
Component of GDP
based on income approach, %
70
64.6 65.5 64.9 64.0 62.8
60.2 59.8 61.0
60 59.3
50
40
34.3 35.0 35.6 35.5 35.7
33.2 33.9
31.7 32.1
30
20
Note : Data from 2010 to 2014 is based on 2017 publication and data from 2015 to 2018 is based on 2018 publication
Compensation of Employees,
% (2018)
60
51.5
49.4
50 47.2 45.7
39.7
40 35.7
30
20
10
0
Germany United Australia South Singapore Malaysia
Kingdom Korea
18 Among the key factors contributing to low salaries are the continuous domination of
low-skilled and semi-skilled workers in the labour market and industry structure of the
country. Based on the Labour Force Survey (LFS) Malaysia 2018, Department of
Statistics Malaysia (DOSM), these groups represent 72.8% of the total workforce
involving four employment categories, namely, employer, employee, own account
worker and unpaid family worker. However, DOSM's Income and Wages Survey
Report 2017, which only measures the income and wages of full-time employees,
shows that the percentage of low- and semi-skilled workers is at 63.2% from total
labour force with an average salary and wage of less than RM1,947 per month.
19 In addition, the influx of foreign workers supressed the wage rates in the labour
market. Sectors that are highly dependent on foreign labour such as agriculture,
manufacturing and construction pay an average salary and wage of RM2,434 per
month, compared to the services sector with the average salary and wage of RM3,024
per month in 2017.
4-19
SHARED PROSPERITY VISION 2030
4 CHAPTER 4: Situational Analysis
Constraints of Vulnerable
4.12 Household Groups
35.7% 3 MILLION
(2018)
the national income is from out of 14.5 million The majority of Malaysians
the compensation of wages employees have will run out of money in a
and salary to employees retirement money weeks time if their source of
income is lost
Productivity Growth, %
4.5%
3.9
4.0% 3.6
3.5%
3.0%
2.5
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
1985-1996 2000-2007 2011-2016
22 Planning and development strategy in the country for the previous years had been
concentrated in Federal Territory (FT) of Kuala Lumpur, Selangor, Johor and Pulau
Pinang. In 2018, FT of Kuala Lumpur and Selangor contributed close to 40% to GDP
as compared to other five states namely Kelantan (1.8%), Kedah (3.3%), Pahang
(4.1%), Sabah (6.2%) and Sarawak (9.7%) as highlighted in Figure 4.14. The
concentration of economic development of the FT of Kuala Lumpur and Selangor has
widened the development disparities between states.
Contribution to GDP, %
45
40
40
35
30
25
25
20
15
10
0
FT Kuala Lumpur 5 States;
and Selangor Kelantan, Kedah, Pahang,
Sabah and Sarawak
1 Selection of states are based on the criteria of low per capita in 2018 and low average
household income in 2016 as well as low GDP contribution compared to its land area in 2018 4-22
Source for Figure 4.14: Department of Statistics Malaysia
23 The average household income in FT of Kuala Lumpur and Selangor state of RM9,974
per month is higher than five states 1, namely Kedah, Kelantan, Pahang, Sabah and
Sarawak, which have an average household income of less than RM5,500 per month
being the lowest in Malaysia as shown in Figure 4.15. In addition, concentrated
development planning has widened the median household income disparities among
states in 2016.
Kelantan RM4,214
Kedah RM4,971
Pahang RM5,012
Sabah RM5,354
Sarawak RM5,387
Selangor RM9,463
FT Kuala RM11,692
Lumpur Household
Income, RM
Selection of states are based on the criteria of low income per capita in 2018 1
4-23 and low average household income in 2016 as well as low GDP contribution
compared to its land area in 2018.
Source for Figure 4.15; Department of Statistic Malaysia
SHARED PROSPERITY VISION 2030
4 CHAPTER 4: Situational Analysis
24 As indicated in Figure 4.16, Johor, Kedah, Kelantan, Melaka, Negeri Sembilan, Sabah
and Sarawak as well as FT of Labuan showed an increase in percentage of household
income which was less than half of the national median income, reflecting a
continuous widening disparity.
Household Income, %
45%
39
40% 38
35%
29
30% 27
27
26
25
25% 24 24 24 24
22
20 21
20% 19 18
16 16
15
15%
12 12 11 12
9
10% 8 8
9
7
5
5% 2 2
4
1
0
0%
u
a
KL
or
ng
ak
ng
an
ho
rli
ak
ay
ra
si
an
a
la
ba
da
ng
w
bu
nt
na
ha
Pe
ay
Pe
bi
FT
aj
Jo
el
gg
Sa
Ke
ra
la
la
tr
em
Pi
Pa
al
La
M
Sa
Ke
Se
en
Pu
M
u
FT
.S
r
la
Te
N
Pu
2014 2016
2,033
1,866
1,800
1,599
1,435
1,293
1,200 1,081
997
838
600
419
0
1989 1995 1997 1999 2002 2007 2009 2012 2014 2016
26 There is a significant median monthly income disparity between top 20% of household
income group (T20) and B40 which has widened over the past 27 years. In 1989, the
median monthly income disparity between the T20 and B40 groups amounted to
RM1,935 and rose to RM10,148 in 2016 as shown in Figure 4.18.
14,000
13,148
12,000 11,610
10,000 9,796
8,009
8,000
6,000
4,957
4,000
2,368
2,000 3,000
2,629
1,853
433 874 1,440
0
1989 1999 2009 2012 2014 2016
27 The median monthly household income disparity between Bumiputera and Chinese
ethnic groups in 1989 was RM497. In 2016, the disparity increased almost four-fold to
RM1,736 as shown in Figure 4.19.
Median Monthly
Household Income, RM
7,000 6,582
5,708
6,000
5,000 4,643
3,643 4,846
4,000
4,214
3,000 2,486
3,282
2,000 2,534
1,176
1,000
1,423
679
0
1989 1999 2009 2012 2014 2016
28 During the same period, the median monthly household income disparity between the
Indians and Chinese ethnic groups also widened by four-fold from RM286 to RM1,154
as shown in Figure 4.20.
Median Monthly
Household Income, RM
7,000
6,582
6,000 5,708
5,000 4,643
5,428
4,000 3,643
4,627
3,000 2,486 3,676
2,000 2,853
1,176
1,969
1,000
890
0
1989 1999 2009 2012 2014 2016
8,000 40,000
6,558 32,263
6,205
6,000 30,000
4,000 20,000
16,846
% from total
60
53
51 51 50
48
46 45
45 42 41
38 39 35
39
32
30
15
7 8
0
Accountant Architect Doctor Dentist Veterinarian Engineer Quantity Lawyer
Surveyor
2010 2014
RM1 MIL
RM0.8 MIL 528,843 Unit
357,863 Unit
ECONOMIC SABOTAGE
32 Economic sabotage 2 has derailed the efforts to assist marginalised groups and spur
economic growth. Cases of abuse of power and breach of trust still exist in the public
and private sectors. The Corruption Perception Index (CPI) ranked Malaysia at 61st
out of 180 countries in 2018 as compared to 39th out of 145 countries in 2004.
33 In addition, this position is supported by the findings from the Global Corruption
Barometer 2017 3 survey, which provides perceptions of corruption at the national
level as follows:
33.3 48% of Malaysians claimed that local authorities and tax officials are involved
in corruption; and
34.4 approximately 65% of the contract value is the actual cost of the project.
2 GIACC defines economic sabotage as the practice of deviating from the initial policy objective to
increase the national socioeconomy and reducing economic disparity among ethnic groups,
including but not limited to the act of corruption, monopoly, breach of trust, proxy arrangement,
Ali Baba practice, unfair free trade agreement and data manipulation. 4-32
3 Global Corruption Barometer (GCB) by Transparency International (TI).
35 The leakages have adversely affected the achievement of economic development
targets, especially Bumiputera. The project distribution has not fully benefitted the
supply chain of Bumiputera contractors.
36 Based on 2015 estimates, of the RM1.1 trillion total Government revenue for 20 years,
a large portion was awarded to Bumiputera contractors. Nevertheless, the
contribution of Bumiputera SMEs to GDP remains less than 9% as shown in Figure
4.24.
RM1.1 50% 9%
TRILLION MORE LESS
38 Monopolies can cause uncontrolled pricing to take place and affect the entire supply
chain. Monopoly activities are still taking place at various stages of the supply chain
from the supply of basic goods to the supply of building materials for mega projects.
39 With reference to Figure 4.25, the report by the Malaysia Competition Commission
(MyCC) shows that the three major companies accounted for 31%, 22% and 21% of
the country's cement market respectively. In 2019, through acquisition activities, one
of the companies acquired 52% of the market and plans to increase by another 22%.
5% 5%
6% 6%
7% 7%
31%
8% 8%
52%
21% 22%
22%
Distribution
Production 2016 Distribution
Production 2019
Company A Company D Company G Company A Company D
Company B Company E Company B Company E
Company C Company F Company C Company F
40 Profiteering. A Food Sector Market Study conducted by the MyCC found that in the
fish marketing chain, key wholesalers raised prices up to six times by benefiting
between 60% and 75% of each chain. This profiteering is a major cause of the high
price of fish in the market. It flies in the face of the hard work of fishermen who brave
the oceans in search of a decent livelihood. It also underscores the incessant
manipulation by middlemen.
RM1,106 bn1
RM313 bn1 1
Includes revenue Taxes
and Subsidies
GOS² RM81 bn
CE³
2
Gross Operating Surplus
RM131 bn1 RM379 bn (GOS)
CE³ 3
Compensation of
RM228 bn GOS² RM125 bn Employees (CE)
23%
22% 18% 17% 17% 16%
0
2008 2011 2012 2013 2014 2015
Equity Ownership, %
70
63.3
60
50 46.8
37.9 45.3
40 37.2
20
23.4
19.3 21.9 16.2
10
2.4 3.5 4.5 7.8
8.5
0.00
The red dotted line represents the time line after Malaysia's
monetary liberalisation policy
43 Over the last decade, the following has happened to Malaysia's socioeconomic
structure:
43.2 diversity of products and services has yet to reach an optimum level and the
reliance on commodity-based exports is relatively high;
43.3 most industries are still in the low value added category with low technology
adoption;
43.5 disparity still exists between income groups, ethnic groups and regions;
43.7 symptoms of corruption and abuse of power affect fair and equitable
economic growth and distribution; and
43.8 Bumiputera economy has not grown in line with the country's development
and progress.
44 Based on the wants and needs of the nation's economy, Shared Prosperity Vision has
been formulated to address the above issues.
4-38
5
CHAPTER 5
Guiding Principles
Introduction
Continuous Prosperity
Equitable Outcome
Equitable Growth
Distributed Economy
Inclusivity
Learning Society
Future Economy
Needs-Based Approach Economy
Institutional Political-Economy
Integrated Social Model
Economic Centre of Asia
Democracy and Stability
Integrity and Good Governance
Unity in Diversity
Sovereignty and Sustainability
CHAPTER
5
Introduction
Shared Prosperity Vision takes into account a wide spectrum of thoughts, views and
philosophies embedded in the socio-cultural context of the unique nature of Malaysia’s society.
Therefore, the 15 Guiding Principles have been set as a guide for the preparation of the
strategic thrusts, enablers and target achievements.
1 2 3
DEVELOPMENT ADDRESSING UNITED,
FOR ALL WEALTH & INCOME PROSPEROUS &
DISPARITIES DIGNIFIED NATION
15
GUIDING PRINCIPLES
5-01
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5 CHAPTER 5: Guiding Principles
GUIDING PRINCIPLE 1
CONTINUOUS PROSPERITY
Continuous prosperity is defined as a sustainable and resilient economic growth,
capable of absorbing volatility from commodity supply and demand shocks as well as
global economic uncertainties.
In order to achieve Shared Prosperity Vision, the economy will have to expand with
continuous positive growth. Although Malaysia's GDP grown positively, the economic
structure has not shifted to be more productive, among others, in areas of high
technology, high value add and knowledge-based industries. This shift is necessary
for the economy to grow in tandem with future trends.
The main aim of this principle is to build economic resilience to be able to absorb any
global market volatility that influences price, demand and supply changes. In addition,
geopolitical instability that could create external shocks must be addressed without
affecting economic growth.
1.1 multiplying the size of the economy and increasing added value in the supply
chain;
1.4 multiplying value added in the supply chain of local companies especially
among SMEs;
5-02
GUIDING PRINCIPLE 2
EQUITABLE OUTCOME
Shared Prosperity Vision will focus on the Equitable Outcome approach rather than
the Equitability of Opportunities. This commitment will enable the people to
experience the benefits of wealth distribution and national development. According to
Dr. Ha Joon Chang 1, South Korean development economist at Cambridge University:
“Equality of opportunity is the starting point for a fair society. But it’s
not enough. Of course, individuals should be rewarded for better
performance, but the question is whether they are actually competing
under the same conditions as their competitors. …”
The implementation of the NEP has provided opportunities for all races, including
Bumiputera. However, Bumiputera achievement did not produce the desired results.
The affirmative action for Bumiputera has been exploited at the expense of
Bumiputera in general. At the same time, there are groups such as the poor and the
marginalised and those in the rural areas who are not benefiting from the policy. This
affirmative action is also seen as unfair because it disregards the merits and abilities
of other groups while favouring certain groups who are out to take advantage of the
policy.
Policy implementation leakages, abuse of power and corruption are major challenges
in achieving equitable outcome. Therefore, a more comprehensive approach in
attaining equitable outcome is essential in order to reach Shared Prosperity Vision
targets for all income groups, ethnicities, regions and supply chains.
To achieve the equitable outcome of Shared Prosperity Vision, the targets include:
5-04
GUIDING PRINCIPLE 3
EQUITABLE GROWTH
Equitable growth means the shrinking of the disparities between income groups,
ethnicities, regions and supply chains as well as the elimination of economic
monopoly. This principle places emphasis on a fair and equitable distribution of the
economic pie according to the country’s demography.
Inequitable growth has led to widening wealth and income disparities in Malaysia. In
2017, median income and wage of workforce was RM2,160 per month. Meanwhile,
the difference between median household income in FT of Kuala Lumpur and Selangor
state almost doubled compared to the states of Kelantan, Kedah, Pahang, Sabah and
Sarawak.
Equitable growth does not mean that all parties will achieve the same results as has
been shown empirically. Nevertheless, true income equality can only be achieved in
accordance with compliance to anti-discrimination principles.
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5 CHAPTER 5: Guiding Principles
GUIDING PRINCIPLE 4
DISTRIBUTED ECONOMY
Distributed economy refers to economic distribution that delivers beyond
geographical boundaries to ensure distributive justice. Barriers to economic
distribution in terms of localities, accessibilities and urban-rural development gaps
must be addressed through distributed and fair economic management. This includes
strengthening logistics and trade facilitation, improving internet accessibility and
public infrastructure covering road networks in rural and remote areas.
High value economic activities are concentrated in the FT of Kuala Lumpur, Selangor,
Johor and Pulau Pinang. In 2018, FT of Kuala Lumpur and Selangor state alone
contributed almost 40% to the GDP compared to other states such as Perlis (0.4%),
Kelantan (1.8%), Terengganu (2.6%) and Kedah (3.3%). Concentrated economic
activities in both states (FT of Kuala Lumpur and Selangor state) led to the
developmental imbalance between states and territories.
4.3 reducing the value of the intermediate household income gap between states;
4.4 identifying and developing the state and regional economic catalysts;
4.5 increasing the number and added-value of SMEs for each state; and
5-06
GUIDING PRINCIPLE 5
INCLUSIVITY
According to the World Economic Forum Report in 2018, Malaysia has shown less
favourable level of inclusion compared to some European and Eurasian countries in
terms of development and inclusive growth according to GINI coefficient as shown in
Table 5.0.
Notes :
1. Refers to 2016 or latest available year.
2. Refers to between 2008 and 2012 or latest available year.
Inclusivity has become a key principle in the country's development plan where no group
will be marginalised. These principles represent various groups and are not limited to:
v1 Youth;
v11 Women;
1x Senior citizens.
5.2 increasing the number of natives in high-skill and professional occupations; and
5-08
GUIDING PRINCIPLE 6
LEARNING SOCIETY
Learning society is a knowledgeable society that places primacy on lifelong learning.
The society is also able to identify personal weaknesses as well as to change and
improve the wellbeing of individuals, families and communities. This principle
encompasses the needs to increase individual achievement through policies and
institutional improvements based on local cultures and values.
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5 CHAPTER 5: Guiding Principles
GUIDING PRINCIPLE 7
FUTURE ECONOMY
Future economy refers to the need to change in attitudes, policies, legislation,
technologies, infrastructure, assets and business trends in order to stay relevant and
meet future economic demands. Under this principle, exploration in new areas such
as digital economy, automation, platform preparation, fintech, AI and blockchain will
be given priority. Malaysia should have clear policies to raise awareness in allowing the
rakyat to adapt to and dominate the future economy, instead of being mere
consumers.
Business and marketing trends based on digital economy has created various types
of jobs that use social media applications such as Facebook, Instagram and
Whatsapp. The introduction of disruptive platforms such as e-hailing, e-booking and
e-mall has changed marketing methods and service delivery. Furthermore, the
production process has experienced radical changes including the use of drone
technology, smart farming and augmented reality (AR). Besides that, financial
activities have shifted to digital platform such as e-payment, e-wallet and
robo-advisor for investment-related activities.
Failure to adapt to future economy, among others, will lead to domination of the
country’s big data by the global community through transborder digital platform. This
will limit the control over corporate crime, fraud, money transaction outflows and
foreign exchange stability.
5-10
The principles of future economy emphasise the following outcomes:
7.2 creating more jobs, particularly for the B40 group; and
7.3 strengthening Malaysia's position as the Fintech Hub for Islamic Finance.
Photographer: Frank V
5-11
SHARED PROSPERITY VISION 2030
5 CHAPTER 5: Guiding Principles
GUIDING PRINCIPLE 8
NEEDS-BASED APPROACH ECONOMY
The needs-based approach economy highlights the importance of a holistic
demographic definition and classification. This will make policy formulation more
effective in targetting groups that require Government assistance.
A report by Bank Negara Malaysia (BNM) in 2016 showed that 80% of Malaysian’s do
not have retirement savings. The findings call for a review of existing policies and
programme implementation. This is to improve economy-related policies based on
needs specifically in addressing the problems of the poor and the marginalised and
vulnerable groups.
8.3 enhancing health service delivery system, developing affordable housing and
increasing accessibility to transportation networks.
5-12
GUIDING PRINCIPLE 9
INSTITUTIONAL POLITICAL-ECONOMY
Institutional political-economy defines the balance that exists between the role of
market and the Government in economic development. This approach harmonises the
needs and desires of various parties in the economic ecosystem covering all the
stakeholders including investors, manufacturers, distributors, wholesalers, traders,
consumers and the Government.
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SHARED PROSPERITY VISION 2030
5 CHAPTER 5: Guiding Principles
GUIDING PRINCIPLE 10
INTEGRATED SOCIAL MODEL
Integrated social model aims to increase the level of the rakyat’s trust towards each
other regardless of ethnicities and religions. This model emphasises intensifying
participation of all segments of society in social development leading to lasting unity
of the rakyat and harmony of the country. The role of civil society, religious
organisations and community associations are important in strengthening the nation's
social capital. The integrated social model will be based on the Federal Constitution
and the principles of the Rukun Negara.
The principles of the integrated social model emphasise the following outcomes:
5-14
GUIDING PRINCIPLE 11
ECONOMIC CENTRE OF ASIA
The economic centre of Asia entails continuous efforts in enabling Malaysia develop its full
economic potential in a holistic and sustainable manner while maintaining political stability
to ultimately emerge as the ASEAN Economic Hub and an Asian Tiger.
Qualitative projections3 indicate that by 2050, economic expansion will shift from Europe
to Asia, particularly in the People’s Republic of China and India. Nevertheless, Malaysia has
yet to capitalise on the opportunities resulting from this transition, which will enable the
country to become the ASEAN Economic Hub and to achieve its goal of becoming an
Asian Tiger.
In addition, ASEAN is seen as a potential global production and trading hub with the
fastest growing global consumer market. ASEAN's aspiration in creating the ASEAN
Economic Community is to achieve the following goals:
The principles of the economic centre of Asia emphasise the following outcomes:
11.2 penetration of Malaysian brands and intellectual properties into ASEAN, Asian
and global markets;
11.3 promoting foreign investments and the development of ASEAN regional hubs
in Malaysia; and
GUIDING PRINCIPLE 12
DEMOCRACY AND STABILITY
Democracy and stability implies fostering democratic practices in the administration
of the country, while maintaining national sovereignty as well as enhancing border
control and monitoring from any threat. The country’s administration is based on the
principle of the rule of law that guarantees the fundamental freedoms of the rakyat as
stated in the Federal Constitution. The security of the rakyat also continues to be
protected through enforcement of the law in a strict and fair manner.
The strength of the country's borders and sovereignty is crucial in ensuring Malaysia
remains safe, prosperous and stable. This will only be achieved whenever a new policy
introduced is respected and accepted by all. In maintaining peace, prosperity and
stability of the country, the policies enacted need to emphasise the following aspects:
1 national sovereignty;
11 national security;
Democracy and stability do not only preserve the mandate of the Government
institutions but also the rights of the rakyat as voters. The separation of power within
the Government comprising the executive, the legislative and the judiciary should be
instrumental in ensuring that the policies enacted are for the peace, prosperity and
stability of the nation and the wellbeing of the rakyat.
5-16
The principles of democracy and stability emphasise the following outcomes:
12.1 preserving national sovereignty includes addressing subversive elements that may
be detrimental to the national identity;
GUIDING PRINCIPLE 13
INTEGRITY AND GOOD GOVERNANCE
Integrity and good governance will enhance confidence of the rakyat towards public
and private institutions. Governance can be improved in tandem with the adoption of
high integrity values. The inculcation of noble values such as trust, honesty and a
sense of responsibility in carrying out obligations will prevent leakages and corrupt
practices thereby eventually raising the rakyat’s confidence towards Government
institutions.
Some of the key areas that require emphasis 4 in instilling integrity and good
governance are as follows:
1 political governance;
v1 corporate governance.
The recent global trend depicts the increased spread of extremism culminating in a
number of political movements that have divided the unity of Malaysians. With extreme
beliefs and fanatical movements spreading rapidly on a global scale, such movements
will pose a serious danger to our security if left unchecked.
The absence of social interaction, movements and assimilations may lead to problems
of unity in society. This principle can be achieved by taking into account the following
aspects:
11 national identity;
1v priorities of nation-building.
14.2 forming a society that recognises existing similarities and the need for
solidarity.
5-19
SHARED PROSPERITY VISION 2030
5 CHAPTER 5: Guiding Principles
GUIDING PRINCIPLE 15
SOVEREIGNTY AND SUSTAINABILITY
Sovereignty refers to efforts in building the country's capacity in order to
accommodate the needs of the rakyat and ensure food security through resource
ownership by local entities. On the other hand, sustainability is an effort to ensure that
economic development is aligned with endeavours to preserve the environment and
the wellbeing of the society.
The country's rapid development process puts pressure on the environment and
natural resources arising from land clearing for infrastructure, agriculture, plantation,
industrial and housing development. Development that neglects environmental
sustainability will result in fragmentation of flora and fauna habitat and the
degeneration of the forest ecosystem. Rising population has resulted in higher
demand on resources and increased waste production. Therefore, proper
management of natural resources and the environment is required. Failure to do so will
increase competition for resources, erode competitiveness, and create
overdependency on external sources.
15.4 compliance to the Environmental Impact Assesment (EIA) and Social Impact
Assesment (SIA); and
5-20
6
CHAPTER 6
Strategic Thrusts
Introduction
STRATEGIC THRUST 1
Restructuring Business and Industry
Ecosystem
STRATEGIC THRUST 2
Key Economic Growth Activities (KEGA)
STRATEGIC THRUST 3
Transforming Human Capital
STRATEGIC THRUST 4
Strengthening the Labour Market and
Increasing Compensation of Employees
STRATEGIC THRUST 5
Social Wellbeing
STRATEGIC THRUST 6
Regional Inclusion
STRATEGIC THRUST 7
Social Capital
CHAPTER
6
Strategic Thrusts
INTRODUCTION
The seven strategic thrusts are developed as a key to accomplish the Shared Prosperity Vision
initiatives and are designed to achieve three main objectives, namely, development for all,
addressing wealth and income disparities, and making Malaysia a united, prosperous and
dignified nation. All thrusts are developed based on guiding principles that emphasise policy
formulation and implementation of Government programmes. They are aimed at addressing
issues that affect the rakyat, the economy and the administrative system.
1
RESTRUCTURING BUSINESS AND INDUSTRY ECOSYSTEM
Example of Targets:
• SME and micro businesses to contribute 50% of GDP
STRATEGIC • To create 30% high technology companies from total SMEs in manufacturing
THRUST
1
and services subsectors
• At least 20% of high technology Bumiputera SMEs in each
2 subsector
• Bumiputera SMEs to contribute 20% to GDP
2
○ Manufacturing: 50%
○ Services: 30%
• Malaysia to build resilient key new sectors as follows: 3
○ Islamic Finance Hub 2.0 ○ Malaysia Commodities 2.0
○ Renewable Energy ○ Centres of Excellence
○ Green Economy ○ ASEAN Hub�
4
6-01
SHARED PROSPERITY VISION 2030
6 CHAPTER 6: Strategic Thrusts
1
TRANSFORMING HUMAN CAPITAL
Example of Targets:
• 35% of high-skilled workers in labour force
STRATEGIC • Majority of workforce in high-skill jobs and future economic sectors will be
THRUST
3
Bumiputera
• 40% of HRDF training in skills related to 4IR 2
• At least 60% of SPM leavers to pursue TVET field
• Programme offerings at universities and training institutes will be tailored to
the needs and requirements of industries
• Increase local and Bumiputera employees in management and professionals
in MNCs
4
ethnicity and religion
• Average salary increment to ¾ of annual productivity value increases
• Address acts of economic sabotage and discrimination 2
• Increase labour productivity growth in line with quality of technology in
industry by sector
• Reduce the total number of foreign workers by implementing sector-based
thresholds
• Increase contribution of Bumiputera CE to GDP
SOCIAL WELLBEING
Example of Targets:
• Equality in merit-based median salary ratio
STRATEGIC • Measure poverty level by using relative poverty index
THRUST
5
• Build day care centres in every locality
• Affordable housing cost is based on 30% of monthly 2 median household
income in Malaysia
6-02
1
REGIONAL INCLUSION
Example of Targets:
• Integrated urban-rural public transportation system
STRATEGIC • 10 listed companies in each developing state, half of which are Bumiputera
THRUST
6
• Reduce income disparity between regions by half
• Reassess quantity and quality of Malay reserve land
• Introduce new regional economic hotspots particularly outside Klang Valley
areas
• Ensure the nation’s Critical Infrastructure Development Plan is realised (e.g.
hospitals, schools, bridges)
SOCIAL CAPITAL
Example of Targets:
Achieve positive increase for the following indices:
STRATEGIC
• Unity Index
THRUST
7
• Integrity and Anti-Corruption Indicator
• Religious Harmony Index
• Environmental and Climate Change Index
• Anti-Drug Index 1
• Crime Prevention Index
• Neighbourhood Harmony Index
• Rakyat Health Index
• Family Wellbeing Index
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6 CHAPTER 6: Strategic Thrusts
STRATEGIC THRUST 1
RESTRUCTURING BUSINESS AND
INDUSTRY ECOSYSTEM
1.1 BACKGROUND
This restructuring is imperative due to the huge gaps between SMEs and local
and multinational corporations (MNCs) which appear at the level of technology
adoption as well as the ability to explore new industries and increase
productivity.
This strategic thrust will support the business and industry ecosystem to be
more productive by increasing technology adoption and expanding SMEs
investment in emerging industries. A more productive ecosystem enables SMEs
to produce high value-added products and fulfilling international standards,
while creating high-paying jobs and increasing income.
6-04
1.2 KEY ISSUES AND ANALYSIS OF
CURRENT SITUATION
Large local companies and MNCs are less likely to involve SMEs in the
production chain as most of the input required can be sourced through imports
or other large companies. Cooperation between SMEs and large companies in
an industry is still minimal despite the high demand from MNCs. Therefore,
collaboration of large local companies and MNCs with SMEs will be intensified
to enhance the contribution of SMEs to the economy.
Malaysia
SHARED PROSPERITY VISION 2030
6 CHAPTER 6: Strategic Thrusts
111 strengthening the supply chain and developing SME vendors to drive
growth;
v11 developing programmes that cover all levels of technology and automation
in line with the Fourth Industrial Revolution (4IR) to generate new
innovations;
6-06
x11 focussing on better quality investments especially in information and
communication technology and other machinery and equipment;
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6 CHAPTER 6: Strategic Thrusts
STRATEGIC THRUST 2
KEY ECONOMIC GROWTH ACTIVITIES (KEGA)
2.1 BACKGROUND
6-08
The Strategic Thrusts will ensure economic activities shift to high value-added
and knowledge-based sectors as well as create a balanced industrial and
business ecosystem, and high skill human capital. Some targeted activity
recommendations are:
There are still development programmes that are incompatible, ineffective and
implemented in-silos. In formulating a holistic development programme, the
main challenge is to analyse the capabilities of the industry based on the
available and accurate data in each industry.
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6-10
KEGA 4: A few companies and talents in the local animation
Content scene have successfully penetrated premier
Industries - international markets. The potential can be
(Animation, harnessed further with facilitation, grants for
Programming, capital and to create an ecosystem that is
Entertainment, appropriate for the activities of content industries
Culture and such as programming, entertainment, culture and
Digitalisation) digital media.
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6 CHAPTER 6: Strategic Thrusts
6-12
KEGA 10: Centres of Excellence (COEs) do not provide large
Centres of or immediate returns. However, the existence of
Excellence COEs can leave large, indirect impact on the
growth of research, development and training in
new skills, technology adoption, technology
exchange and the growth of a professional and
skilled workforce. The development of COEs at the
ASEAN level, operating to global standards, will
boost investor and market confidence in Malaysia
as an important investment destination in ASEAN.
In addition, areas such as development of
animation, technology and anti-corruption service
can be pioneered in new COEs. The creation of
COEs could be extended to future technologies
such as nanotechnology, IR4.0 and the digital
economy. The role of existing COEs such as the
Penang Skills Development Centre (PSDC) and the
Malaysian Industry-Government Group for High
Technology (MIGHT) could also be expanded.
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6 CHAPTER 6: Strategic Thrusts
6-14
value across the sector. In addition, providing
services that are suitable for future industries will
make Malaysia a top choice for investors.
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6 CHAPTER 6: Strategic Thrusts
3.1 BACKGROUND
Presently, the development of human capital faces the challenge of bridging the
gap between knowledge, skills and attitudes of graduates with industry needs.
The gap has also created a mismatch between supply and demand in the labour
market. In addition, the implementation of training and skills by various public,
private institutions and state skill development centres has resulted in an
uncoordinated national education and training landscape.
The transformation of human capital outlined in the strategy will create more
skilled workforce and thus increase national productivity. Priority will be given to
improving the quality of education and training as well as strengthening
collaboration between training providers, industry and professional bodies to
meet market needs.
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6 CHAPTER 6: Strategic Thrusts
There is a gap between knowledge, skills and attitudes of graduates with the
needs of the industry. This gap creates a mismatch between demand and
supply in the labour market and makes it difficult for graduates to get jobs that
meet their qualifications.
The imbalance also includes supply and demand in the labour market.
According to the Mid-Term Review of the Eleventh Malaysia Plan, there were
112,300 job vacancies for the skilled job category compared to 306,808
graduates produced in 2017.
6-18
STRATEGIC THRUST 4
STRENGTHENING THE LABOUR MARKET AND
INCREASING COMPENSATION OF EMPLOYEES
4.1 BACKGROUND
The shift of foreign workers from the Dirty, Dangerous, Difficult (3D) category to
other sectors illegally has affected local workers. Issues in labour market
efficiency persist as the industry continues to maintain labour-intensive
operations. In addition, higher wages abroad have forced locals to migrate to
find jobs in those countries.
The strategic thrust will strengthen the labour market and increase the
compensation of workers and the rights of local workers in Malaysia. Employees
are also able to generate enough income to enjoy a decent standard of living.
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6 CHAPTER 6: Strategic Thrusts
6-20
111 reviewing the regulation and permitted sectors on employing foreign
workers including registration system;
STRATEGIC THRUST 5
SOCIAL WELLBEING
5.1 BACKGROUND
Malaysia succeeded in reducing the poverty rate from 16.5% in 1989 to 0.4%
in 2016. However, there are still pockets of poverty among the rakyat and
households with insufficient savings, thus making this group economically
vulnerable.
This group is also affected by lack of comprehensive social safety net coverage.
In addition, uncoordinated social assistance systems have affected B40 from
receiving the appropriate assistance.
6-22
The lack of a comprehensive social safety net affects the vulnerable groups.
According to BNM annual report in 2017, almost half of Malaysians could not
afford to spend RM1,000 in case of emergency. This indicates that the rakyat,
especially the B40 are not able to save money due to higher household
expenditure relative to income growth.
The broad classification of B40 household income group creates difficulty for
the Government to determine types of assistance required for household. In
addition, database on the recipients that are provided by the various ministries
and agencies are not fully integrated, resulting in inclusion and exclusion errors.
This has led to the Government's assistance and incentives not reaching the
intended target groups.
111 reviewing the methodology of PLI to be more relevant and to reflect current
situation;
STRATEGIC THRUST 6
REGIONAL INCLUSION
6.1 BACKGROUND
Malaysia has developed rapidly since the implementation of the NEP. However,
high value-added economic activities are largely concentrated in the FT of
Kuala Lumpur and Putrajaya, Selangor, Pulau Pinang and Johor. This
disproportionate economic concentration has resulted in imbalance in
development among states and regions as well as between urban and rural
areas.
6-24
6.2 KEY ISSUES AND ANALYSIS OF CURRENT CONDITIONS
The increase in urban population has raised house prices and contributed to
urban poverty. This situation has also intensified competition for employment
and elevated the cost of living. Long-term negative effects on the urban poor
include questions of survival and low social mobility.
Access to basic utilities, digital infrastructure and roads in rural areas is not yet
comprehensive while access to basic services such as healthcare, housing and
education is still inadequate.
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6 CHAPTER 6: Strategic Thrusts
111 implementing a holistic rural development action plan by taking into account
ecosystem development, human resource/talent, financing, skills and
entrepreneurship, logistics and communications;
v developing several new pilot city models in line with the City Prosperity Index;
v1 creating new industries in rural areas to value add existing industries and
encouraging diversification of businesses apart from agricultural industry;
v111 improving access to basic facilities and infrastructure in rural areas such as
hospitals, health centres, schools, roads, jetties, bridges, markets and
telecommunication infrastructure; and
6-26
PROPOSED DISTRIBUTION OF KEY ECONOMIC
6.0 GROWTH ACTIVITIES, KEGA
The figure illustrates the proposed state-based economic focus area under the
Strategic Thrust of Regional Inclusion.
PERLIS
PENANG
• Logistics hub
• High technology industry
• Health tourism
• Heritage and Tourism
• Technology centres of excellence
PERAK
SELANGOR
FT KUALA LUMPUR
FT PUTRAJAYA
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6 CHAPTER 6: Strategic Thrusts
KEDAH SABAH
TERENGGANU
PAHANG
• Ecotourism
• Commodity economy and
downstream products
• Modern mining
• Transportation and logistics hub
• High technology agriculture
SARAWAK SARAWAK
7.1 BACKGROUND
The social capital thrust discusses the national narrative and the role of the
community in ensuring that the target of Shared Prosperity is achieved and
national unity is strengthened. The national narrative is based on the principles
of the Federal Constitution and the Rukun Negara that support social contracts
to unite the nation. The implementation of social capital needs to be
accelerated in terms of economic, institutional and social models through
Shared Prosperity Vision.
Through this social capital, the Government will increase the rakyat's
involvement in community activities such as community-based organisations
(CBOs), neighbourhood associations and volunteer activities that will enhance
the people's confidence and trust in community and state institutions. Nation
building involves development in all aspects including the inculcation of the
spirit of diversity by celebrating values and respecting differences of opinion.
This is important for the formation of a united, progressive and active
community.
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6 CHAPTER 6: Strategic Thrusts
The differences in views among the rakyat should not affect the social texture
towards shaping Malaysians in celebrating ethnic and cultural diversity.
Involvement of youth in discourse on national issues needs to be enhanced
through the provision of specific platforms. This involvement is necessary to
foster the spirit of patriotism among the youth for young minds to propel
Malaysia into a developed nation.
The polarity in cultural understanding between ethnic groups has led to various
demands being made that do not benefit all Malaysians. A more objective view
is needed in order to work towards developing an integrated and holistic
socioeconomic state.
The strategic thrust of this social capital outlines five strategic proposals to
address the identified issues. The recommendations are as follows:
6-30
7
CHAPTER 7
Enablers of Shared
Prosperity
Introduction
ENABLER 1
Fiscal Sustainability
ENABLER 2
Financial Capital
ENABLER 3
Effective Institutional Delivery
ENABLER 4
Governance and Integrity
ENABLER 5
Education and Technical and Vocational
Education and Training
ENABLER 6
Big Data
ENABLER 7
Sustainability
ENABLER 8
Enlightened Society
CHAPTER
7
Enablers of Shared Prosperity
INTRODUCTION
The Shared Prosperity Vision 2030 has eight enablers to accelerate the implementation
process of the seven strategic thrusts in an effort to achieve the targets. These enablers are
developed based on 15 Guiding Principles considering efforts to ensure the success of
initiatives and programmes. The eight enablers are as follows:
Photographer: Ishan
7-01
SHARED PROSPERITY VISION 2030
7 CHAPTER 7: Enablers of Shared Prosperity
Financial Effective
Capital Institutional Delivery
Expansion of businesses Improvement in
through holistic and implementation of initiatives
SME-friendly financing and outcome-based
programmes
Fiscal Governance
Sustainability and Integrity
Sustainable Strengthening
management of governance
government through
finance to transparency
strengthen and
investors and accountability to
market foster trust of the
confidence rakyat
SHARED PROSPERITY
VISION ENABLERS
Education Enlightened
& TVET Society
Increase in skilled A lifelong learning
and culture through
highly-educated Big Data Sustainability continuous learning,
workforce, learning Policy making guided National intellectual
society and by big data inclusive development which discourse,
outcome-based of empirical facts as is eco-friendly and dialogues and
education well as unified and gives emphasis to awareness to
integrated data conserving and enhance
system preserving natural knowledge,
resources experience sharing
and empathy
7-02
ENABLER 1
FISCAL SUSTAINABILITY
Limited fiscal space continues to restrict public sector funding for implementing
development programmes and projects. Government revenue collection is still
not in line with economic growth. The country's revenue structure, which still
relies on direct taxes and small tax base, has limited the collection of
Government revenue. The re-introduction of Sales and Service Tax (SST) to
replace Goods and Services Tax (GST) has also had an impact on revenue
collection. In addition, the country is still dependent on petroleum-based
revenues and commodity trade which are exposed to global commodity price
instability as shown in Figure 7.0. The country's fiscal resilience will continue to
decline if tax restructuring is not implemented.
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7 CHAPTER 7: Enablers of Shared Prosperity
14.6 15.7
21.7
35.4 30.9
Petroleum 41.3
18.4 16.9
19.2
16.0
19.2 19.4 20.1
9.8
19.0 8.4
7.6
Non
7.5
Petroleum
47.6 47.3 49.3 44.7
37.8
32.2
The widening fiscal deficit is also due to increase in expenditure being higher
than the increase in revenue collected on account of ineffective and imprudent
spending management as shown in Figure 7.1. In addition, the implementation
of off-budget mega projects funding coupled with weakness in monitoring and
delay in project implementation have led to additional costs to the Government.
RM billion % growth
400 20.0
300 15.0
200 10.0
100 5.0
0 0
-100 -5.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
-0.7 0.6 16.1 12.1 2.6 3.4 -0.7 -3.0 3.8 5.7 12.4
5.2 -1.0 12.0 10.2 0.4 2.2 0.5 -2.2 4.1 9.3 9.6
Increased Government debt has also hindered the country's development plans
and eroded investors’ confidence. Debt increases, contingent liabilities and
commitments made through the implementation of public-private partnership
projects have also increased the Federal Government's debt level. In 2018,
debt levels including Government guarantees remained high, amounting to
RM1.1 trillion or 75.4% of GDP as shown in Figure 7.2.
260.1 184.9
32.2
38.3
132.7
102.1
Committed Government
Guarantees
Fiscal reform is crucial to lay a strong foundation for more sustainable and inclusive
growth. However, these reforms will be balanced by the need to sustain growth and
ensure quality public service delivery for the wellbeing of the rakyat. Proposed
strategies to ensure a sustainable fiscal position are as follows:
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7 CHAPTER 7: Enablers of Shared Prosperity
ENABLER 2
FINANCIAL CAPITAL
Most financing institutions are not inclined towards approving SMEs loan
applications from sole proprietorships because of their high credit risk due to
unlimited liability. According to BNM Annual Report 2016, 25.1% 1 of loan
applications by SMEs were rejected. The Establishment Survey Report of 2015
by DOSM showed that 73% 2 of SMEs used private funding sources. Among the
factors that deter SMEs from obtaining financial assistance were poor
documentation system, particularly in accounting and financial management as
well as commercially non-viable businesses (24%), bad credit profile (18.5%)
and poor loan repayment ability (1.5%) 3.
1 Financial Stability and Payment Systems Report by Bank Negara Malaysia, 2016.
2 Economic Census Report, Department of Statistics Malaysia, 2016. 7-08
3 Survey by SME Corporation Malaysia.
4 Annual Report by Bank Negara Malaysia, 2016.
Poor operational management of SMEs also contributed to the lack of success
due to failure to adopt best practices and standards. A set of standards for
SMEs operation and management, particularly micro businesses needs to be
introduced as a benchmark for SMEs.
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7 CHAPTER 7: Enablers of Shared Prosperity
ENABLER 3
EFFECTIVE INSTITUTIONAL DELIVERY
The proposed capacity building strategies for effective institutional delivery are
as follows:
7-10
ENABLER 4
GOVERNANCE AND INTEGRITY
The proposed strategies for governance and integrity enabler are as follows:
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7 CHAPTER 7: Enablers of Shared Prosperity
ENABLER 5
EDUCATION AND TECHNICAL AND VOCATIONAL
EDUCATION AND TRAINING
The Education and Technical and Vocational Education and Training (TVET)
enabler is being developed to increase the number of skilled workers to meet
the needs of industry. This enabler will also create a highly educated workforce
and help build a community that inculcates lifelong learning.
A key issue in education is the low learning outcomes of students. The quality
of education in Malaysia needs to be improved to enhance the development of
the country’s human capital. The lack of physical and digital infrastructure as
well as comprehensive online learning impedes the overall progression of
education.
The proposed strategies for education and TVET enabler are as follows:
7-12
1 improving education structures and systems, especially in terms of
language proficiency and learning outcomes;
ENABLER 6
BIG DATA
Big data is one of the major contributors towards changes in the method of
decision-making and business transactions. Due to technological
advancement, this enabler has emerged as a driver of information integration
and consolidation as well as data- and empirically-based policy-making. In
addition, technology readiness and usage of big data have encouraged the
growth of innovation, value-added industry and improved quality of
Government service delivery. This element is crucial in ensuring the
development of the digital economy in tandem with the current global trend
towards national economic growth.
Malaysia still faces challenges in the implementation of big data due to rapid
growth of technologies in developing digital infrastructure, including data
centres. High investment and collaboration between the Government and
industry is required to provide big data facilities. Furthermore, high-skill
workers in data analytics are needed to support this initiative. At the same time,
awareness of the effective and smart use of data is important in ensuring
confidentiality, facilitating service delivery and supporting effective decisions.
7-14
6.2 STRATEGY RECOMMENDATIONS
111 providing modules for upskilling and reskilling at training institutions and
industries;
Photographer: Charles
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7 CHAPTER 7: Enablers of Shared Prosperity
ENABLER 7
SUSTAINABILITY
7-16
7.2 STRATEGY RECOMMENDATIONS
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7 CHAPTER 7: Enablers of Shared Prosperity
ENABLER 8
ENLIGHTENED SOCIETY
11 there are segments of society that are unable to understand the concept
of national identity and nation state. Issues of ethnicity and religions may
cause conflict if left unchecked;
1v culture of high integrity is not a norm yet and thus not entrenched among
the rakyat.
7-18
8.2 STRATEGY RECOMMENDATIONS
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7 CHAPTER 7: Enablers of Shared Prosperity
8
Targets and Measures
of Shared Prosperity
INTRODUCTION
The Government of Malaysia has decided to develop an outcome-based national development
plan. Setting clear targets and measurement indicators will be instrumental in determining the
success of Shared Prosperity Vision 2030. The NEP had set targets for Bumiputera equity
ownership and poverty eradication as determinants of its success. In addition, over the past
decades, Malaysia has put emphasis on the growth of the GDP as a national economic
achievement indicator. In light of this, there is a crucial need for Shared Prosperity Vision to set
comprehensive targets and indicators that will have direct impact on the rakyat.
1 2
Real GDP expands at an average of 4.7% Contribution of SMEs and micro
per annum at constant prices and is businesses to GDP by 50% as compared
targeted to reach RM3.4 trillion at nominal to 38.3% in 2018;
prices;
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8 CHAPTER 8: Targets and Measures of Shared Prosperity
3 4
Contribution of Bumiputera enterprises of Average decent living income
20% to GDP; (expenditure-based) not less than
RM5,800 per month for B40 household
group;
5 6
Monthly median wage among Bumiputera, Monthly median household income ratio of
Chinese and Indian ethnic groups is Bumiputera, Chinese and Indian ethnic
targeted at 1:1:1 ratio. The current monthly groups is targeted at 0.9:1:1. In 2016,
median wage ratio of Bumiputera to income disparities between Bumiputera
Chinese is 0.88:1 while that of Indian to and Chinese at the ratio of 0.74:1 and
Chinese is 0.82:1 in 2016. These ratios Indian to Chinese at the ratio of 0.81:1;
reflect that wage disparities among ethnic
groups still persist and need to be
equalised;
7 8
The targeted ratio of financial assets per CE to GDP is 48%, which is equivalent to
capita of Bumiputera to Chinese is 0.6:1 the current high-income countries. In 2018,
while Indian to Chinese is 0.8:1. This is to CE to GDP was 35.7% indicating that
address the existing wealth disparities wealth was not well distributed between
between Bumiputera and Chinese at the employees and capital owners;
ratio of 0.5:1 and Indian to Chinese at the
ratio of 0.7:1;
8-02
9 10
Addressing regional development disparity, GINI coefficient value at 0.34. This target is
among others, targeting regional in tandem with Shared Prosperity Vision
development ratios based on GDP per efforts, which focus on reducing the
capita. The ratios are measured by disparity between high and low income
comparison to the central region as groups.
follows:
The setting of these 10 initial targets will become the basis of the Government’s initiatives that
will be facilitated by outcome-based monitoring economic growth, and improving the standard
of living of the rakyat. The setting of targets is a shift from output-based monitoring to
performance-based monitoring.
9
Bumiputera Outcomes
INTRODUCTION
Shared Prosperity Vision is primarily aimed at in low-value industries.
addressing economic disparity issues that
hamper Malaysians. Based on statistics, In addition, the majority of the population in
Bumiputera rank the lowest in wealth less-developed states are Bumiputera. The
ownership and income and are therefore the emphasis on equitable outcome is to ensure
most affected in terms of economic disparity. that Bumiputera achieved equitable
Bumiputera constitute 71.3% of the national socieconomic conditions with other ethnics.
B40 household income and most are involved
1 Abuse of Bumiputera identity by some individuals and companies to reap easy profit;
2 Bumiputera property ownership in urban areas remains low and Bumiputera risk being
marginalised from mainstream economic development due to high property prices;
3 Bumiputera recruitment in the private sectors remains low due to discriminatory practices
in job recruiting;
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SHARED PROSPERITY VISION 2030
9 CHAPTER 9: Bumiputera Outcomes
5 Monopolistic practices in the supply chain among the main causes restricting the
competitiveness of Bumiputera and their enterprises.
WAY FORWARD
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9 CHAPTER 9: Bumiputera Outcomes
Target Groups
B40 group, Poor and Economically
Vulnerable
Community in Economic Transition
Indigenous Community
Bumiputera in Sabah and Sarawak
People with Disabilities
Youth
Women
Children
Senior citizens
CHAPTER
10
Polarity Management
In line with the concept of equality underlying Shared Prosperity Vision 2030, certain groups
will be given priority, in order to improve their socioeconomic status and to ensure that no one
is left behind.
Polarity management is a model of managing issues faced by the minority and specific target
groups. The management of polarities is important to ensure issues that are raised can be
handled effectively without jeopardising national harmony.
In developing a polarity management model under Shared Prosperity Vision, several key target
groups have been identified:
1 Community in
9 2
Senior
Citizens Economic
Transition
Children
8 TARGET
3 Indigenous
Community
GROUPS
Women 7 4 Bumiputera
in Sabah
and Sarawak
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10 CHAPTER 10: Polarity Management
In addition, access to quality education for this group must be given priority as it
provides them with the opportunity to change their socioeconomic status and
improve their living standards.
Among the issues affecting these groups are home ownership, access to basic
facilities and quality education. These issues need to be addressed thoroughly, so
as to improve their social mobility and increase their participation in
higher-income economic activities.
3
Indigenous Community
Government policies and initiatives relating to the wellbeing of indigenous
communities must be given priority so that they can enjoy the benefits of national
economic development.
10-02
A large proportion of indigenous communities are still facing poverty on account
of lagging behind in education, upskilling and entrepreneurship.
Granting of land title to the indigenous should also take into account their
opportunity to participate in the development stream and the right to continue
practising their culture and heritage. Therefore, issues on indigenous land
ownership need to be given due consideration and a specific policy should be
formulated to address them.
Among key issues for this target group is the Native Customary Rights (NCR),
particularly in ensuring that any development process does not affect the
recognition of NCR.
In addition, access to high quality roads, basic infrastructure, health and quality
education especially for the rural communities in Sabah and Sarawak should be
given priority.
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10 CHAPTER 10: Polarity Management
In addition, to ensure the survival of the disabled, improving the quality of life and
wellbeing of the disabled should be encouraged through an inclusive approach in
the community.
Youth
6 The Youth are an important target group in polarity management as they play a
key role in determining the country's future.
Low salary levels make it difficult for the youth to achieve financial stability in life.
Consequently, they are unable to own homes in spite of various government
programmes to facilitate home ownership.
The youth, as the future of the nation, must be equipped with knowledge and
skills and further encouraged to be involved in entrepreneurship. The youth will be
further empowered to face socioeconomic challenges through the creation of
more jobs and business opportunities, especially through entrepreneurship and
fundraising activities.
Women
7 In managing polarities involving women as a target group, the Government has
formulated gender-mainstreaming policy as one of the priorities to ensure
effective policy implementation.
10-04
Government policies based on gender sensitivity will increase women's
participation and leadership in the public and private sectors, especially at the
highest management level. The participation of women in national development
will optimise the use of labour resources, and contribute to economic growth.
In order to ensure women's rights are protected, the Government needs to take
domestic violence cases seriously by looking at the effectiveness of laws that
provide protection to victims. In addition, child care programmes should be
streamlined to ensure that women's involvement in the labour market is not
affected by childcare issues for married women.
Children
8 Polarity management should emphasise specific policies for children in protecting
their rights and safety because of their vulnerability in facing socioeconomic
challenges. Studies show that facing these challenges will have long-term effects,
including on mental growth.
The findings of a United Nations Children’s Fund (UNICEF) study show children
living in low-cost apartments in urban areas tend to have low levels of nutrition.
Special programmes on children's nutrition are therefore essential to ensure that
the country's health policy can address health problems of this group more
effectively.
10-05
SHARED PROSPERITY VISION 2030
10 CHAPTER 10: Polarity Management
Senior citizens
9 Polarity management of senior citizens as a target group should entail the
provision of space to ensure their wellbeing. The life expectancy of Malaysians is
increasing and Malaysia is expected to become a country with an ageing
population by 2030.
The issue of accessibility to the use of facilities for senior citizens is mainly on
health and social care. Careful monitoring of senior-care homes and community
centres needs to be implemented to ensure their welfare is taken care of. The
Government needs to set specific policies to ensure that the elderly have
sufficient savings to sustain themselves in old age.
10-06
C
CONCLUSION
C
Conclusion
Malaysia requires a change in the economic framework and direction in order to allow the
country to realise its full economic potential in a sustainable manner, so that the outcome can
be shared fairly and equitably by all the rakyat. This can only be achieved by changing and
adapting the economic ecosystem to better meet market requirements and ensure sustainable
economic growth. The benefits of this new economic approach should be distributed in a fairer
and more equitable manner to further reduce income disparities between income groups,
ethnicities, regions and supply chains. These efforts include formulating policies and
implementing capacity building programmes as well as effectively facilitating SMEs, markets
and business ecosystems.
A fair economic distribution should guarantee the rights and needs of the low-income,
economically vulnerable and marginalised groups by focussing on enhancing their capabilities,
and thereby improve their wellbeing. In addition, the Government has to strengthen
governance and integrity, increase understanding of the nation’s history and its narrative,
strengthen social capital, and raise awareness of the bond that will unite us as Malaysians.
These important elements will be developed through Shared Prosperity Vision 2030 with a firm
resolve to reduce the economic disparities among income groups, ethnicities, regions and
supply chains and provide a decent standard of living for the rakyat. This vision will ensure that
Malaysia will be peaceful, harmonious and united and become an important economic centre
of Asia.
11-01
Photographer: Izzudin Helmi Adnan
11-02
G
GLOSSARY
Glossary Abbreviation
Methodology
Structure of Committees
Development Team
Documentation
Management Team
G
Glossary
GLOSSARY ABBREVIATION
3D Dirty, Dangerous, Difficult
AI Artificial Intelligence
AR Augmented Reality
CE Compensation of Employees
FT Federal Territory
12-01
SHARED PROSPERITY VISION 2030
5 Glossary
12-02
MYCC Malaysia Competition Commission
RE Renewable Energy
TI Transparency International
12-03
SHARED PROSPERITY VISION 2030
5 Glossary
METHODOLOGY
Shared Prosperity Vision 2030 is formed through comprehensive and consultative efforts,
involving Malaysians from all walks of life. The process of developing this vision can be divided
into two main phases. The first phase focussed on the assessment of socioeconomic
conditions in Malaysia and the identification of priority issues for improvement. This phase was
carried out by analysing domestic and international data, as well as consultative sessions held
with industry experts, academicians, non-governmental organisations and stakeholders in the
public and private sectors.
Shared Prosperity Vision 2030 as detailed through this document is the result of the
implementation of both phases. The next phase of the implementation and improvement of this
vision will be driven by feedbacks from the rakyat and discussions with relevant stakeholders.
12-04
EDITORS WRITER
YB Dr. Radzi Jidin Encik Mohd Nizam Mahshar
YBhg. Datuk Dr. Marzuki Mohamad Encik Ijlal Hannan Hafeedz
Encik Mohd Nizam Mahshar
12-05
SHARED PROSPERITY VISION 2030
5 Glossary
The Task Force team is responsible for looking into the consistency of the Shared Prosperity Vision
documents as the country’s new direction for the period of 2021-2030.