Speechs in the year
Tempat/Venue 	: 	PARLIMEN 
Tarikh/Date 	: 	17/06/91 
			PERSPECTIVE PLAN (OPP 2) (1991-2000) 

  Tuan Yang di-Pertua,
1.   I beg to move the following motion standing in my name:
     "That this House,
     recognising the significant progress made in the socio-
     economic  development  of  the  nation  during the last
     twenty years under the First Outline  Perspective  Plan
     1971-1990 and the New Economic Policy;
     acknowledging  and  endorsing the continuous efforts of
     the Government in implementing policies, strategies and
     programmes in order to achieve the  objectives  of  the
     First Outline Perspective Plan through the New Economic
     Policy,  that  is  to  attain national unity as well as
     maintain a stable and sustainable development in an en-
     vironment of stability, peace and security;
     approves and endorses the  Second  Outline  Perspective
     Plan,  1991-2000  and  the New Development Policy which
     seek to provide respectively the development objectives
     of the nation and the policies that will be followed in
     the national effort to achieve the  planned  objectives
     for  the  next decade, as set out in Command Paper No 8
     of 1991;
     That in approving the Second Outline  Perspective  Plan
     and  the  New Development Policy, this House calls upon
     Malaysians from all walks of life to strive harder  and
     prepare themselves to face the socio-economic and poli-
     tical   challenges   ahead,   in   the  spirit  of  the
     Rukunegara, and stand united in our continuous  efforts
     to build a socially just, progressive and resilient na-
     With  your  permission,  I  therefore, table the Second
Outline Perspective Plan (OPP 2)  (1991-2000)  for  deliber-
ation by Honourable Members of this House.
Tuan Yang di-Pertua,
2.   Today  is  a historic day for us.  Malaysians have been
waiting anxiously to know the successor to the New  Economic
Policy  (NEP) which expired at the end of 1990.  Indeed, the
keen interest shown by Malaysians about the shape of our new
policy indicates that we all have a keen sense of  responsi-
bility  for the nation and we are concerned about our future
and the future of the nation.  This augurs well for the  na-
tion  since ultimately it is the commitment of the people to
our national goals that will ensure the success of  the  de-
velopment efforts for our own benefit.
3.   It  has  often  been said in international circles that
development plans in Malaysia are meant to be followed.   In
other  words we take our plans very seriously.  Many observ-
ers have also remarked  that  the  objectives,  targets  and
strategies  that  we  set in our plans are well thought out,
realistic and achieveable and that, by and  large,  we  have
been  successful  in  achieving what we set out to do.  This
was largely so with the OPP 1 and the NEP.  God willing,  we
will  continue  to  maintain  this track record by improving
further our capability to plan and to implement our plans by
mobilising all the resources of the nation  to  achieve  our
4.   The  racial riots of 1969 shocked us into realising the
political and social imperatives of addressing and resolving
the twin problems of poverty and racial  socio-economic  im-
balances facing the nation at that time.  Since the new gen-
eration  of Malaysians are generally not aware of the events
in 1969, it is necessary to remind them and  also  ourselves
that  in  a  multi-racial society like ours the existence of
socio-economic imbalances along racial lines is  not  condu-
cive  to  stability or national unity.  Accordingly, efforts
to perpetuate socio-economic imbalances along  racial  lines
will only lead to instability and disunity in the country.
The New Economic Policy (NEP)
5.   The  launching  of the NEP in 1970 marked the beginning
of our efforts at  socio-economic  engineering  designed  to
bring  about a more equitable distribution of wealth between
the different races and groups in the various strata of  so-
ciety.    The main thrust of this socio-economic engineering
was embodied in a two-pronged approach aimed at:
     (a)  eradicating poverty irrespective of race; and
     (b)  restructuring society to reduce the identification
          of race with economic function.
Within a span of two decades, we targeted that the incidence
of poverty in Peninsular Malaysia  should  be  reduced  from
49.3  per  cent  to  16.7 per cent and that the ownership of
share capital in the corporate sector should be restructured
such that the share of Malays and other Bumiputera would in-
crease from 2.4 per cent to at least 30 per cent while  that
of other Malaysians, from 34.3 per cent to 40 per cent.  The
foreigners were targeted to reduce their holdings from about
63.3  per cent to 30 per cent by 1990.  Apart from these, we
also agreed on the target that the employment pattern at all
levels should reflect the racial composition  of  the  popu-
lation.    We also resolved to undertake this socio-economic
engineering exercise within  the  context  of  an  expanding
economy  so that in the process of distributing the benefits
of development, no ethnic group experiences a sense of abso-
lute deprivation.   It is pertinent  to  mention  here  that
there have been many attempts in other parts of the world at
socio-economic  engineering.   Almost without exception they
have failed and they have caused untold misery  and  dragged
down  the  economy  of the nations involved.  The objectives
that we had set for ourselves in the OPP 1 and the NEP  were
therefore fraught with all kinds of pitfalls and dangers.
Tuan Yang di-Pertua,
Macro Economic Progress
6.   Let  me now briefly deal with the progress we have made
during the last two decades in implementing the NEP.
7.   Since 1970, Malaysia achieved  a  rapid  and  sustained
growth.  The real GDP growth averaged 6.7 per cent per annum
during  1971 - 1990 period despite the effects of a very se-
vere recession in the mid-1980's.
8.   The impetus for the rapid rate of growth achieved  dur-
ing  the decade of the 70's came as a result of a high level
of public sector involvement in the economy.   Such  a  high
public  sector  profile arose from the need to continue with
the social and  physical  infrastructure  development  begun
since independence.  It also arose because of the overriding
need  to  achieve the objectives of the NEP in the face of a
comparatively underdeveloped private sector.   As a  result,
public sector investment as a proportion of total investment
increased  steadily from 32 per cent in 1970 to a peak of 50
per cent by 1982.   Despite  improvements  in  the  domestic
savings  rate,  the  increasingly high level of such invest-
ments had to be financed by external debt.
9.   While we have been successful in achieving  the  growth
targets  and in meeting many of the country's socio-economic
goals, dependence on the  public  sector  was  found  to  be
unsustainable.   In addition, high public sector involvement
in direct productive  activities,  especially  by  the  Non-
Financial  Public Enterprises (NFPE) had not yielded the re-
sults that were expected of them.  Indeed their  performance
in  most  instances  was dismal, very much the way state-run
enterprises   in   other   countries   disappointed    their
10.  Our  response  to the serious problems of unsustainable
deficits in the public sector budget and in the  balance  of
payments took the form of sharp and painful adjustment meas-
ures  undertaken  from  1984  onwards.    These included re-
straints on public sector expenditure, reduced public sector
involvement in the economy as well as a reversal of the past
practices of using public sector expenditure to boost demand
and growth.  In order to offset the declining role of public
sector expenditure, steps were taken  to  stimulate  private
sector  expenditure  and  investment and to make the private
sector the engine of growth for the economy.   A  series  of
measures  were  undertaken  to liberalise and deregulate the
economy and to embark on privatisation of certain Government
agencies and functions so as to  reduce  public  expenditure
and  transfer  it to the private sector while making the in-
vestment climate more attractive to them.
11.  The new strategy to make the private sector the  engine
of  growth  was  initially affected by world-wide recession.
But with the improvement in the world economy, the  strategy
enabled  the Malaysian economy to recover strongly from 1987
onwards.  In the last three years between 1988 -  1990,  ro-
bust  growth  of  higher than 9 per cent was recorded.  Most
recent estimates put the growth rate in 1990 at 10 per  cent
which, we believe, is among the highest rate recorded in the
world  for 1990.   This was achieved despite the threats and
instability posed by the Gulf crisis which occurred  in  the
last  quarter  of 1990.  Our greatest achievement is that we
have restored fiscal and financial stability in the economy,
strengthened the balance of payments  and  reduced  the  ex-
ternal  debt  burden  considerably through prepayment.   The
economy has returned to a high growth path.   With  economic
expansion,  the  unemployment rate has been reduced from 7.4
per cent in 1970 to 6 per  cent  in  1990,  resulting  in  a
tightening  of  the  labour  market and improvements in wage
levels for the workers.  The per capita income,  in  nominal
terms  has increased more than five fold from $1,106 ringgit
in 1970 to $6,180 ringgit in 1990.
12.  The recent progress of the economy exceeded all our ex-
pectations.  In the manufacturing sector  alone,  total  ap-
proved  projects increased from $9.1 billion ringgit in 1988
to $28.2 billion ringgit in 1990, a three fold  increase  in
three  years.   This shows the confidence investors, partic-
ularly foreign investors, have in the attractiveness of  our
economy  as well as in our pragmatic policies.  Manufactured
exports and tourism earnings have shown  a  remarkable  per-
formance  never achieved in the past.  The inflows of export
earnings and foreign capital were larger than  ever  experi-
enced  before,  providing strength to the economy as well as
enabling the country to maintain a satisfactory level of re-
serves, which is important for sustaining growth and keeping
the inflation rate low.
Progress of NEP
13.  There is general concensus in  the  country  that  very
substantial  progress  has  been made in eradicating poverty
and that the achievements have been  better  than  expected.
The national incidence of poverty has declined from 52.4 per
cent  in  1970  to  17.1  per  cent in 1990.   In Peninsular
Malaysia, the incidence of poverty declined to 15  per  cent
while in Sabah and Sarawak, it declined to 34.3 per cent and
21  per  cent respectively.  This reduction is a significant
achievement by international standards although the  poverty
line  of  $370  ringgit  for 1990 is far above those used in
many developing countries to define poverty.   According  to
international  institutions, such as the World Bank, we have
been very generous with our definition.   Obviously, if  the
poverty  line  income  was  lower,  we will get a much lower
level of poverty, as found by the estimates  made  by  other
14.  During  the  period  of  the  last  two  decades, about
480,000 households in Peninsular Malaysia have  been  lifted
out of poverty.  Poverty is not a serious problem anymore in
Peninsular  Malaysia  as it used to be in the 1970's, but in
Sabah and Sarawak, although the incidence of poverty has de-
clined sharply, it is  still  high  compared  to  Peninsular
15.  With  the  progress  in  eradicating  poverty, the mean
monthly household income for  the  bottom  40  per  cent  of
households  in  Peninsular  Malaysia  has increased from $76
ringgit in 1970 to $421 ringgit in 1990.  The mean household
income for the bottom 40 per cent of households in Sabah and
Sarawak also showed an increase from  $68  ringgit  to  $390
ringgit  and  $74 ringgit to $436 ringgit, respectively.  In
fact, the mean income of the bottom 40 per  cent  of  house-
holds  has been increasing at a faster rate than that of the
middle and higher income groups, resulting in an improvement
in income distribution.
16.  The most important factor influencing  the  improvement
in rural incomes and the reduction of income inequalities is
the  changing  pattern of employment.   With economic growth
and the rapid expansion of the industrial sector, there  are
now  more  employment  opportunities in the non-agricultural
sectors.  As a result, there has been a steady trend in  the
country  for  the  rural poor to leave their traditional low
income agricultural activities and move into  higher  paying
employment  in  the manufacturing, construction and services
sectors.  Among most rural households today, traditional ag-
riculture is no longer the only  source  of  income  because
their  children can now get other kinds of employment in the
nearby cities and towns to  supplement  the  family  income.
Clearly  the  structure of employment and the income sources
of the people, especially those in  the  rural  areas,  have
changed with economic growth.
17.  The  Government's  rural  development  programmes  have
played a major role in enabling the poor to diversify  their
employment  and  sources  of income.   The most important of
these programmes is, of course, education as it provides the
capacity for the rural poor to take advantage of the  growth
opportunities  in the country.  By investing heavily in edu-
cation, health, transport and  communication  in  the  rural
areas,  we  have  increased the mobility of the rural labour
force and raised the capacity of youths  to  participate  in
the  urban employment market and escape from the clutches of
rural poverty.
18.  We have also made much progress  in  restructuring  the
employment  pattern so as to reflect more closely the racial
composition of the country as envisaged in the  targets  set
for  the  1971 - 1990 period.  In the last twenty years, the
progress made by the Bumiputera in education and  employment
has  been  encouraging  although  there are still some major
gaps and shortfalls.  For example, the share  of  Bumiputera
employment  in  manufacturing has increased substantially to
50.3 per cent by 1990 but this increase is  concentrated  in
the  lower and unskilled categories of employment.  In terms
of occupations, while their share in  the  professional  and
technical  jobs  is  high,  this is mostly due to their high
share of employment in the nursing and teaching professions.
In professional occupations such as engineers,  doctors  and
accountants, Bumiputera are still under-represented relative
to their share of the population despite the efforts made to
increase the output of Bumiputera graduates from the univer-
sities and colleges.
19.  In the case of the non-Bumiputera, while all have bene-
fited  from the growth of employment, their share in certain
sectors such as agriculture, land settlement and the govern-
ment services has remained small in relation to  their  per-
centage  of  the population.   As regards the Indians, their
former disproportionately high share of employment  in  cer-
tain  professional groups has been declining although in ab-
solute terms they have increased.  The Bumiputera  in  Sabah
and   Sarawak  have  also  not  benefited  as  much  as  the
Bumiputera in Peninsular Malaysia from the growth of  educa-
tion,  employment  and  income opportunities in the country.
The Government is aware that the minority groups are lagging
behind in certain areas and therefore their needs  for  more
access  to  education  and  employment opportunities will be
given greater attention.
20.  It is clear that poverty can  be  greatly  reduced  and
that  absolute  poverty  can be eradicated.  The notion that
the poor is fated to  be  poor  is  due  to  ignorance,  for
clearly  when  the  poor is given adequate help they can im-
prove themselves.  And when they become rich,  this  too  is
fate  or takdir.  It is the duty of a responsible Government
to help the poor and eradicate poverty and  Islam  does  not
say that such help is unIslamic.
21.  In the effort to eradicate poverty it is important that
the poor are motivated to overcome their own poverty.  Those
who  try to convince poor people that they should not strive
against their fate are in fact undermining the spirit of the
poor to work towards their own salvation.   Such people  are
in  fact trying to suppress the poor and keep them poor for-
ever.  Islam has never decreed that Governments  should  de-
liberately  kill  the spirit of the poor to strive to better
themselves.  Only those who do not understand Islam  or  who
have  other  motives  would actively deprive the poor of the
help and opportunities to better themselves.
22.  The restructuring strategy under the  NEP  designed  to
increase  Bumiputera ownership and control especially in the
commercial and industrial sectors of the  economy  has  also
met with much success in quantitative terms.  The Bumiputera
share  of  equity in the corporate sector has increased rap-
idly from 2.4 per cent in 1970 to 20.3  per  cent  in  1990.
Although  this  is still below the target of at least 30 per
cent envisaged under the NEP, the rate of increase has  been
very high as the Bumiputera started from a much smaller base
compared to other races.  However, most of this progress was
due  to  the  efforts of institutions such as the Permodalan
Nasional Berhad, PERNAS, and Tabung Haji  while  the  equity
acquired  by  Bumiputera  as  direct investors is relatively
small.   Further, there  has  been  slow  progress  made  by
Bumiputera  to develop as a commercial and industrial commu-
nity and become owners and operators of their own  business.
Although  the  Government  provided  substantial support and
subsidies to assist them, the incidence of business failures
was rather high among them.  Experience during the  NEP  pe-
riod indicates that although equity ownership has increased,
this  alone  has  not  been  sufficient  to  create a strong
Bumiputera commercial and industrial  community  capable  of
retaining their share.  There must be more effective efforts
to  develop  their  management and entrepreneurial skills as
well as their value system so that the quality of their par-
ticipation in the economy can be significantly improved  and
made more permanent.
23.  Looking  at the total picture, however, there is no de-
nying that despite  the  shortfalls  and  weaknesses,  great
strides  have been made to achieve both growth and equity in
our development and achievements, making Malaysia  a  unique
model  among  developing  countries.    There  is hardly any
multi-racial country in the developing world which has  been
able  to  carry  out this experiment in socio-economic engi-
neering successfully, without  disrupting  and  reducing  or
even negating economic growth.
24.  Usually  if wealth is redistributed, economic growth is
retarded.  If on the other hand, economic  growth  is  given
priority,  then  the  inequities  in  society will be accen-
tuated.  We can be justly proud that  through  the  NEP,  we
have  been  able to make the employment and ownership struc-
ture in this country more multi-ethnic and to reduce poverty
without sacrificing economic growth.   Indeed, our  economic
growth  actually  outstripped  those  of other countries not
undergoing restructuring.  And all these are achieved in the
context of a democratic system with peace and stability pre-
vailing.  When all is said and done, the  NEP  must  be  ac-
knowledged  as  one  of the greatest policies of independent
Malaysia, enabling it to prosper without the blatant  injus-
tices of a totally materialistic society.
The New Development Policy
25.  We have made remarkable progress but we still have more
to  do.    The  objectives  of  the  NEP have not been fully
realised.  Poverty still remains, although the magnitude  of
the problem has been substantially reduced.  There are still
wide gaps among the communities and the Bumiputera still lag
behind  in  a  number of important fields, especially in the
field of ownership and management of commercial and business
enterprises and in the professions.   Within  the  different
non-Bumiputera  and the Bumiputera communities too, there is
inequitable distribution of wealth which  needs  to  be  re-
26.  We  must  not  allow the success we have reaped to slip
out of our hands because of our complacency.   We must  push
on with policies designed to reduce further the current dis-
parities  among  the races in order for national unity to be
firmly established.
Tuan Yang di-Pertua,
27.  The Second Outline Perspective Plan covering the period
1991-2000 has been formulated based on a new  policy  called
the  New  Development  Policy  (NDP).   This new policy will
maintain the basic strategies of the NEP of eradicating pov-
erty and restructuring society so as to correct  social  and
economic  imbalances and thereby contribute towards national
28.  National Unity remains the ultimate goal of the NDP be-
cause a united society is essential to the promotion of  so-
cial and political stability and sustained development.  The
NDP  will  set the pace to enable Malaysia to become a fully
developed nation by the year 2020 not only economically  but
also  in  terms of social justice, moral and ethical values,