November 02, 2017

MALAYSIA IS ON TARGET TO MEET ITS VISION 2020 GOALS


MALAYSIA IS ON TARGET TO MEET ITS VISION 2020 GOALS
DR MUZAHET MASRURI

Almost if not every Malaysian are well familiar with the Vision 2020 which was introduced in 1991 by Tun Dr. Mahathir Mohamad, who became Prime Minister at the time. 

Vision 2020 was developed as a long-term goal for the nation, the goal of Malaysia becomes a ‘fully developed nation’ by year 2020 based on its own mold. The Vision is a continuation of policy under the previous national leaders to ensure Malaysia becomes a developed country in all aspects of life, encompasses economic, political, social, spiritual, psychological and cultural.

Implementation of Vision 2020

The implementation of Vision 2020 is divided into 3 phases. Phase 1 is in the Second Outline Perspective Plan (OPP2), 1991 – 2000, under the National Development Policy (NDP). The NDP provides new dimensions in promoting more balanced development while maintaining the fundamental principles of the New Economic Policy (NEP), i.e growth with equity.


Phase 2 is implemented under the Third Outline Perspective Plan (OPP3) over the period 2001-2010 where the National Vision Policy (NVP) aims to strengthen the national competitiveness and resilience as well as to create a sustainable society to ensure stability and national unity.

Phase 3 is implemented under the New Economic Model (NEM) covering the period of 2011 to 2020. NEM is a catalyst in generating the country's growth potential. The goal is to improve the quality of life of the people by emphasizing three important elements of high income, sustainability and inclusiveness that emphasize the well-being of the lowest 40 percent of income earners.

Vision 2020 sets a target of 7% annual economic growth to achieve advanced and high-income status.

What is the meaning of high income status?

As defined by the World Bank, the status of high-income countries is referring to those with per capita income of USD 12,235 and above (see diagram).



How is per capita income determined?

Per capita income is the average annual income of a country. It is determined by dividing the total Gross National Product (GNP) with the total population of that country.

What is the Malaysia's current per capita income?

Based on the World Bank's estimates, Malaysia's per capita income in 2016 is USD 9,502.57 (IMF projection is USD 9,374.1). This per capita income does not qualify Malaysia to be categorized as the High-Income Nation.

When is Malaysia expected to be categorized as a High-Income Nation?

If we use the International Monetary Fund (IMF) projections, Malaysia is expected to qualify to be categorized as a High-Income Nation by 2020 (see Table below).


What will be the per capita income of Malaysia in 2020?

Malaysia's per capita income is projected to increase to USD 12,447.7 by 2020. This per capita income level is higher than USD 12,235 which qualifies Malaysia to be classified in a group of High-Income Nations or sometimes called the Richest Countries in the World.

During the Budget presentation of 2018 recently, the Prime Minister announced that Nasional Transformation 2050 (TN50) is targeting Malaysia to rank the 20th richest country in the world. What is Malaysia's current ranking?

Malaysia is now ranked 72th in terms of per capita income among countries in the world. If the 20th ranking as the World's Richest Country is to be achieved, Malaysia should run faster in a marathon and surpass 52 other countries who are running in the same race.

Is it possible that Malaysia reaches the 20th ranking by 2050, as targeted by the Prime Minister?

It is possible, if the Malaysia's economy is wisely managed.

Dr.Muzahet Masruri.  Ph.D (Economics), University of East Anglia, United Kingdom