Planning for Growth and Equity: Malaysia

The overall planning for poverty eradication and income distribution in Malaysia is undertaken within the market process and implemented in the context of an expanding economy. It has involved significant participation of the public sector in industry and commerce resulting the creation of many public enterprises such as the land and regional development authorities, state economic development corporations and their subsidiaries. They have also involved large governmental expenditures and borrowings.

The recession of 1985 and dismal growth in 1986 resulted in the implementation of various structural adjustment measures which led to the policy of downsizing the public sector and the pursuit of privatisation of public services such as utilities. The ensuing rapid growth of above 8 percent per annum between 1988 and 1995 led to substantial reductions in unemployment and significant increases in income. The rapid inflow of capital for industrialisation resulted in declines in agricultural contribution to GDP and employment as well as shortage of labour in the rural areas. It appears that the call for greater equity has somewhat subsided amidst this rapid growth and booming economy.

Source: Poverty Alleviation in Pakistan: Present Scenario and Future Strategy, Mohibul Haq Sahibzada. Republished with permission.