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Malaysia Unveils Bold Economic Alterations

Updated On: Apr 01, 2010

Malaysia’s Prime Minister Najib Razak unveiled plans for bold economic reforms on Tuesday including an overhaul of racial preferences for majority Malays, in a roadmap to achieve developed-nation status by 2020.

The "New Economic Model" was designed to boost growth, create a high-quality workforce, and attract badly needed foreign investment. The model also aims to halt Malaysia 's "brain drain" with measures to retain skilled professionals, and make markets more competitive by phasing out price controls and subsidies. The Malaysian economy shrank by 1.7% last year due to the global recession, clearly requiring a powerful change to prop up its economy especially in the face of strong competitors in the region like Thailand and Indonesia.

This controversial change is currently met with much doubt and criticism, most notably from former Prime Minister Mahathir. Defending an affirmative action policy that favours the country's bumiputera, he also questions Najib’s ability to deliver due to delayed implementation of electricity and tax reform policies.

Signs of resistance have also begun to emerge with the formation of a Malay rights group Perkasa (Strength), but their base of support is unclear. Malaysia's next general election is due by 2013, but may be called as early as next year.

Sources:
Good Idea, But Can Najib Pull It Off? M'sia Wonders. [The Business Times, 1 Apr 2010]
Malaysia to Overhaul Racial Preferences in Dash for Growth [ChannelNewsAsia, 30 Mar 2010]
Too Early to Judge Najib: Mahathir [The Straits Times, 1 Apr 2010]







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