Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : PARLIAMENT
Tarikh/Date : 23-04-2001
Tajuk/Title : TABLING THE EIGHTH MALAYSIA
PLAN 2001-2005
Versi : ENGLISH
Penyampai : PM
With great pleasure, I stand before this distinguished
House to present the following motion:
"That this House
recognizing the recovery of the economy and the achievement of
our socio-economic objectives during the implementation of the
Seventh Malaysia Plan;
endorsing the efforts of the Government in the implementation
of the Third Outline Perspective Plan;
approves the Eighth Malaysia Plan, which seeks to implement
strategies and programmes and allocate funds designed to
achieve the objectives and commitment of the National Vision
Policy, as set out in the Command Paper No.12 of 2001;
That in approving the Eighth Malaysia Plan, this distinguished
House calls upon all Malaysians to stand united with renewed
vigour and commitment in undertaking this noble task of
building a progressive and resilient nation."
2. With your permission, Mr. Speaker, Sir, I present the
Eighth Malaysia Plan for the period 2001-2005, for the debate
of the Honourable Members of this distinguished House.
3. A few weeks ago I stood before this House to present the
Third Outline Perspective Plan (OPP3), 2001-2010, which
contains the National Vision Policy (NVP), that provides the
direction for the development of the nation and the policy
agenda for the next ten years. As Honourable Members are
aware, this House has approved the OPP3 with wide consensus
that the new policy will contribute towards further
strengthening national unity among the various races in our
beloved country.
4. The Eighth Malaysia Plan, which covers the period 2001-
2005, represents the first phase in the implementation of the
OPP3. As we enter the Eighth Plan period, we continue to face
many challenges. Notwithstanding this, we are confident that
we can overcome these challenges with the implementation of
the right mix of policies and the commitment of all. This
confidence is based upon our ability to implement the Seventh
Malaysia Plan despite the attacks by currency speculators that
caused the country to experience a slowdown in the economy.
PERFORMANCE DURING THE SEVENTH PLAN PERIOD
Economic Progress
5. The Seventh Malaysia Plan was launched in 1996 following
a period of high growth with stability. The Seventh Malaysia
Plan, while reemphasizing the concept of balanced development,
also introduced the strategy of productivity-driven growth of
the economy to enhance the resilience of the nation to face
the challenges of the twenty-first century. Even as we
prepared ourselves, we were confronted with the financial
crisis in the region that also directly affected us and
subsequently, the economic slowdown. We were again reminded
that the development path is never smooth but has its ups and
downs and we cannot afford to be complacent.
6. Overall, the performance of the economy was commendable
during the Seventh Malaysia Plan period. The real Gross
Domestic Product (GDP) recorded an average growth of 4.7 per
cent per annum, surpassing the revised target of 3.0 per cent.
Recovery measures introduced in 1998 helped to stimulate
consumption, while containing inflationary pressures. The
unemployment rate remained low at about 3.0 per cent and the
Consumer Price Index declined to 1.6 per cent in 2000.
7. The recovery measures also afforded a stable environment
for the banking and corporate sectors to implement their
restructuring and consolidation programmes. The various
agencies created to manage non-performing loans (NPLs), re-
capitalize banks and restructure corporate debt, have
succeeded in strengthening the sectors and helped them to
focus on more productive economic activities. By the end of
2000, the amount of non-performing loans was reduced to 6.3
per cent of total loans from a peak of 11.4 per cent in August
1998. The risk-weighted capital adequacy ratio of the banking
system increased to 12.4 per cent from its lowest level of
10.1 per cent in August 1998.
8. As the external sector is a catalyst to the nation's
economic recovery, exports were increased while imports were
reduced. As a result, our merchandise account recorded the
largest surplus of RM86.5 billion in 1999.
9. Due to the remarkable trade performance, there were
Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue: PARLIAMENT
Tarikh/Date: 23-04-2001
Tajuk/Title : TABLING THE EIGHTH MALAYSIA PLAN 2001-2005
Versi : ENGLISH
Penyampai: PM No. Sysref:
With great pleasure, I stand before this distinguished
House to present the following motion:
"That this House
recognizing the recovery of the economy and the achievement of
our socio-economic objectives during the implementation of the
Seventh Malaysia Plan;
endorsing the efforts of the Government in the implementation
of the Third Outline Perspective Plan;
approves the Eighth Malaysia Plan, which seeks to implement
strategies and programmes and allocate funds designed to
achieve the objectives and commitment of the National Vision
Policy, as set out in the Command Paper No.12 of 2001;
That in approving the Eighth Malaysia Plan, this distinguished
House calls upon all Malaysians to stand united with renewed
vigour and commitment in undertaking this noble task of
building a progressive and resilient nation."
2. With your permission, Mr. Speaker, Sir, I present the
Eighth Malaysia Plan for the period 2001-2005, for the debate
of the Honourable Members of this distinguished House.
3. A few weeks ago I stood before this House to present the
Third Outline Perspective Plan (OPP3), 2001-2010, which
contains the National Vision Policy (NVP), that provides the
direction for the development of the nation and the policy
agenda for the next ten years. As Honourable Members are
aware, this House has approved the OPP3 with wide consensus
that the new policy will contribute towards further
strengthening national unity among the various races in our
beloved country.
4. The Eighth Malaysia Plan, which covers the period 2001-
2005, represents the first phase in the implementation of the
OPP3. As we enter the Eighth Plan period, we continue to face
many challenges. Notwithstanding this, we are confident that
we can overcome these challenges with the implementation of
the right mix of policies and the commitment of all. This
confidence is based upon our ability to implement the Seventh
Malaysia Plan despite the attacks by currency speculators that
caused the country to experience a slowdown in the economy.
PERFORMANCE DURING THE SEVENTH PLAN PERIOD
Economic Progress
5. The Seventh Malaysia Plan was launched in 1996 following
a period of high growth with stability. The Seventh Malaysia
Plan, while reemphasizing the concept of balanced development,
also introduced the strategy of productivity-driven growth of
the economy to enhance the resilience of the nation to face
the challenges of the twenty-first century. Even as we
prepared ourselves, we were confronted with the financial
crisis in the region that also directly affected us and
subsequently, the economic slowdown. We were again reminded
that the development path is never smooth but has its ups and
downs and we cannot afford to be complacent.
6. Overall, the performance of the economy was commendable
during the Seventh Malaysia Plan period. The real Gross
Domestic Product (GDP) recorded an average growth of 4.7 per
cent per annum, surpassing the revised target of 3.0 per cent.
Recovery measures introduced in 1998 helped to stimulate
consumption, while containing inflationary pressures. The
unemployment rate remained low at about 3.0 per cent and the
Consumer Price Index declined to 1.6 per cent in 2000.
7. The recovery measures also afforded a stable environment
for the banking and corporate sectors to implement their
restructuring and consolidation programmes. The various
agencies created to manage non-performing loans (NPLs), re-
capitalize banks and restructure corporate debt, have
succeeded in strengthening the sectors and helped them to
focus on more productive economic activities. By the end of
2000, the amount of non-performing loans was reduced to 6.3
per cent of total loans from a peak of 11.4 per cent in August
1998. The risk-weighted capital adequacy ratio of the banking
system increased to 12.4 per cent from its lowest level of
10.1 per cent in August 1998.
8. As the external sector is a catalyst to the nation's
economic recovery, exports were increased while imports were
reduced. As a result, our merchandise account recorded the
largest surplus of RM86.5 billion in 1999.
9. Due to the remarkable trade performance, there were
notable improvements in the current account, which compensated
for the services deficit as well as the net transfer payments.
Consequently, the current account which had been in deficit
since 1990, turned positive starting from 1998 to record its
highest surplus of RM47.9 billion in 1999 or 17.1 per cent of
the Gross National Product (GNP). This strengthened the
current account position of the nation. Since August 1998,
the nation's external reserves have increased by US$9.7
billion to stand at US$29.9 billion by the end of 2000,
sufficient to finance 4.5 months of retained imports and is
6.4 times the short-term external debt.
10. These achievements were the result of the Government
decision not to borrow from the International Monetary Fund
(IMF), which would have placed the country at the mercy of
this agency. On the other hand, we have created our own
approach by preventing the currency speculators from trading
the Ringgit and controlling speculative attacks on the Kuala
Lumpur Stock Exchange. In this way, we were not burdened with
debts from the IMF unlike other countries.
11. Although we managed to recover from the crisis in our own
way, the Government had to implement an expansionary fiscal
policy to stimulate the recovery in the economy by increasing
and accelerating Government expenditure in infrastructure
projects and also to grant bonus to Government employees to
increase retail trade. These actions succeeded in alleviating
the impact of the slowdown on poverty and the restructuring of
society.
SOCIO-ECONOMIC PROGRESS
Poverty Eradication
12. Despite experiencing some reversals during the economic
crisis, there was overall progress achieved in bringing about
equitable growth during the Seventh Malaysia Plan period,
especially with regard to poverty eradication and income
distribution. As Honourable Members may recall, the thrust of
the Seventh Malaysia Plan was to reduce the incidence of
hardcore poverty to 0.5 per cent and of general poverty to 5.5
per cent by 2000. To realize these targets, the Government
continued to undertake the leading role in poverty eradication
efforts by promoting income-generating projects and providing
amenities to improve the living standards of the poor. In
addition, specific urban-based programmes, namely squatter
resettlement and low-cost housing projects, improved the
living conditions of the urban poor. As for the hardcore
poor, the rapid economic growth prior to mid-1997, and the
intensified implementation of the Development Programme for
the Hardcore Poor or Program Pembangunan Rakyat Termiskin
(PPRT) helped in reducing its incidence.
13. As a result, the incidence of poverty among Malaysians
decreased from 8.7 per cent in 1995 to 6.1 per cent in 1997,
and the number of poor households declined by 25 per cent,
from 365,600 to 274,200. However, our efforts to further
reduce poverty were hampered by the economic crisis. We were
only able to reduce the incidence of poverty to 7.5 per cent
in 1999 and the incidence of hardcore poverty decreased
slightly from 2.1 per cent to 1.4 per cent for the same year.
RESTRUCTURING OF SOCIETY
14. Progress was also made in the restructuring of society,
particularly in employment restructuring and the creation of
the Bumiputera Commercial and Industrial Community (BCIC).
However, in terms of corporate equity, the proportion of
Bumiputera ownership declined below the 1995 level. Although
in absolute terms, Bumiputera ownership of share capital at
par value increased by 12.6 per cent per annum from about RM37
billion in 1995 to RM59 billion in 1999, in percentage terms
it declined from 20.6 per cent to 19.1 per cent. Similarly,
the equity ownership among non-Bumiputera also declined during
the period from 43.4 per cent to 40.3 per cent. This decline
reflects the inability of our rakyat, particularly Bumiputera,
to sustain their equity holding structure during the difficult
period following the economic crisis. This indicated that
economic resilience has to be strengthened.
EMPLOYMENT, EDUCATION AND TRAINING
15. During the Seventh Plan period, employment expanded at an
impressive rate leading to a tight labour market situation.
To address this situation, various measures were introduced to
increase the supply of skilled manpower. These measures
included expansion of the education and training capacity,
particularly those in the private sector, and incentives to
increase the female labour force participation rate. The
Government also continued to allow the employment of foreign
workers, particularly skilled workers. Efforts were also made
to increase the capital-intensity of the production processes
through encouraging firms to adopt more labour-saving
technologies.
16. Concerted efforts to increase accessibility to education
and training resulted in increased enrolment at all levels
from pre-school to degree level. Special focus was given to
reduce the performance gap between rural and urban schools
through the upgrading of teaching and learning facilities and
placement of more trained teachers in rural schools.
17. In support of the implementation of a productivity-driven
growth, which requires highly skilled, trainable and knowledge
manpower, substantial progress was made to provide more
opportunities for the rakyat to pursue tertiary education and
training. During the Seventh Malaysia Plan period, the
Government built three new universities and three new
polytechnics to increase tertiary enrolment in public
institutions. With the implementation of the Private Higher
Educational Institutions Act 1996, the private sector also
became an important provider of tertiary education. Six
private universities offering degree programmes in key
technologies were set up while three foreign universities were
allowed to set up branch campuses to offer courses up to the
degree level. The expanded education and training
infrastructure not only allowed Malaysians to pursue tertiary
education locally, thus saving foreign exchange but also
attracted foreign students to study in Malaysia. With this
development, we have laid the foundation to develop Malaysia
into a centre of education excellence.
HOUSING, HEALTH AND OTHER SOCIAL SERVICES
18. The overall achievement of housing programmes was very
encouraging with the completion of 859,480 units of houses.
This figure represents an achievement of 107 per cent of the
Seventh Malaysia Plan target. In this regard, special
emphasis was given by the Government for the speedy
implementation of the low-cost housing programme. Various
measures were implemented including the extension of the Low-
cost Housing Revolving Fund and establishment of Syarikat
Perumahan Negara Berhad as well as the Integrated Housing
Programme or Program Perumahan Rakyat Bersepadu with the
objective of resettling squatters in urban areas. The
expansion of promotive and preventive health services such as
healthy lifestyle campaigns, expanding the coverage of the
immunization programme, school health services as well as
providing safe water and sanitation in the rural areas,
enhanced the quality of life for our rakyat.
INFRASTRUCTURE DEVELOPMENT
19. The provision of a comprehensive range of infrastructure
facilities and services is essential to support the growth of
the economy. Infrastructure constraints at the beginning of
the Seventh Malaysia Plan period have largely been overcome
with the accelerated capacity expansion of roads, ports,
airports, urban transportation, communications, water supply
and electricity as well as sewerage services. Some of the
major projects completed were the KL International Airport,
Port of Tanjung Pelepas, Light Rail Transit (LRT), Second Link
to Singapore, Kelinchi Dam and Malaysia's own satellites,
MEASAT 1 and MEASAT 2.
PRIVATIZATION
20. Privatization continued to be an essential part of the
Seventh Malaysia Plan strategy of promoting greater private
sector participation in economic development. Through the
privatization programme, the rakyat was able to enjoy better
facilities. This is because, if the projects were to be
implemented by the Government, many of the projects would have
to be deferred for many years until the Government had
sufficient funds. Meanwhile, the rakyat would not be able to
enjoy quality facilities and the number of accidents on low
quality roads would increase tremendously. On the other hand,
through privatization, new facilities were developed much
earlier for the benefit of the rakyat, for example, highways
with lower toll rates.
21. Privatization has generated a large number of employment
opportunities, which require new skills and more sophisticated
technology. The privatized entities have embarked on
programmes to retrain workers as well as upgrade capabilities
and to increase their competitiveness. Better terms of
employment not only motivated the employees but also brought
about a culture change in the work environment that was more
result-oriented. In addition, employees were given the
opportunity to participate in the ownership of the entities
through the Employees Share Option Scheme. These schemes
helped to instil a sense of belonging and dedication, thereby,
enhancing productivity.
22. The Government has not relinquished all its
responsibilities to the private sector. By transferring
Government assets at a reasonable price to the private sector
and providing soft loans, the cost of these facilities was
reduced. As a result, the payment by the public to the
private companies for these services could be reduced. For
instance, if the total cost of building a highway is to be
fully borne by a company, then the toll rate would likely be
as high as 1 Ringgit per kilometre. Due to the Government
subsidy, toll rates in Malaysia are the lowest in the world.
The same applies for other privatized public facilities.
23. Nevertheless, during the Seventh Malaysia Plan period,
through privatization the Government managed to save capital
expenditure totaling RM49.2 billion, while the proceeds from
the sale of equity and assets amounted to RM4.4 billion. This
enabled the Government to allocate more funds for social
services such as education and health, which benefited the
rakyat, particularly the poor and those in the rural areas.
THE EIGHTH MALAYSIA PLAN, 2001-2005
24. Our primary challenge during the Eighth Malaysia Plan
period will be to implement the National Vision Policy to
strengthen the nation's capacity, capability and resolve in
meeting future challenges. At the same time let us not forget
that at the core of our socio-economic development is the
overriding goal of national unity. With these perspectives in
mind, the theme of the Eighth Malaysia Plan is achieving
sustainable growth with resilience. Accordingly, the three
key thrusts of the Eighth Malaysia Plan are to shift the
growth strategy from input-driven towards knowledge-driven in
order to enhance potential output growth, accelerate
structural transformation within the agriculture,
manufacturing and services sector and strengthen socio-
economic stability through equitable distribution of the
nation's income and wealth.
25. Developing the country into a knowledge-based economy
will permeate every sector and involve the rakyat at large.
All must and can partake in greater utilization of knowledge.
The knowledge content of all economic activities, be it in
agriculture, manufacturing or Government will have to be
increased so as to strengthen value added and generate
employment. The Plan emphasizes this aspect in all the 23
Chapters presented.
26. All Malaysians will be given equal chances and
opportunities to enhance their quality of life and be involved
in the knowledge-based economy. Focus will be directed
towards providing better opportunities in education especially
in rural areas, and increasing accessibility to better health
facilities and affordable houses to be owned or rented by the
rakyat. Efforts will also be taken to promote healthy
lifestyles as well as providing more cultural and recreational
amenities to enable our people to enjoy the aesthetic aspects
of life. Participation in sports will also be encouraged to
strengthen the spirit of solidarity, comradeship and esprit de
corps among the rakyat.
27. From past experience we saw that economic development
and globalization will have consequences on the nation's
social and cultural institutions and norms. Measures will
have to be taken to ensure that society is resilient to
withstand the negative influences that may erode moral values
as well as affect social harmony and tolerance. Therefore, an
important strategy will be strengthening moral and ethical
behaviour among Malaysians. Greater emphasis will be given to
nurture and inculcate positive values, particularly among our
youths, through the implementation of programmes such as Rakan
Muda. We also need to instil a sense of national identity and
pride among our people from all walks of life.
MACROECONOMIC TARGETS AND PROSPECTS
28. The strengthening of macroeconomic fundamentals and the
financial sector together with the strong performance of the
economy in 2000 will provide the base to sustain the high
growth during the Eighth Malaysia Plan period. The GDP is
projected to grow at an average rate of 7.5 per cent per annum
with low inflation. I remain confident that the medium-term
prospect for the economy is still good despite the possible
adverse effect of the slowdown in the US economy this year, on
our exports and growth performance. Looking at the scenario
for the five years of the Eighth Plan, private consumption in
real terms is projected to increase at 7.4 per cent per annum
in line with the expected rise in per capita income from
RM13,360 in 2000 to RM17,780 in 2005. Private consumption per
capita is expected to increase from RM6,200 in 2000 to RM9,070
in 2005, in view of the growth in disposable income.
29. Private investment will continue to provide the stimulus
for the economy with its growth averaging 19 per cent per
annum. Its share to total investment is expected to be 68.7
per cent in 2005. Private investment in nominal terms,
however, will have to increase by more than double from RM42.9
billion in 2000 to RM105.5 billion in 2005. The capital
market, particularly the private debt securities market as
well as the pension and provident funds, will provide
important sources of financing to meet the investment needs of
the productive sectors of the economy during the Plan period.
Foreign investment will continue to be important, although its
share to total investment is expected to decline as a result
of the anticipated higher growth in domestic investment and
increased global competition for foreign direct investment
(FDI).
30. As the economy matures, there will be less reliance on
labour and capital input, while the contribution of Total
Factor Productivity (TFP) as a source for growth will be
further enhanced during the Plan period. TFP is expected to
contribute 37.2 per cent of the 7.5 per cent per annum growth
target, while the contribution of labour and capital will be
21.5 per cent and 41.3 per cent, respectively.
31. The task before us is formidable as the increase in TFP
contribution to growth will require wide-ranging structural
transformation to upgrade economic efficiency. This will
include improving skills and management capabilities,
increasing research and development (R&D) spending, and
greater use of technology and information and communications
technology (ICT) in all economic sectors, in line with efforts
to develop the knowledge-based economy. In addition, public
investment will be increased to improve the education and
training delivery system. At the same time, the private sector
will be encouraged to assume a bigger role, particularly in
terms of R&D and product innovation.
32. Malaysia's export performance in the next five years is
expected to be favourable with gross exports forecast to grow
at an average rate of 7.9 per cent per annum. With the
scheduled liberalization of trade in goods and services under
the World Trade Organization (WTO) as well as the commitments
to tariff reductions under bilateral and regional trade
arrangements, Malaysian exports are anticipated to penetrate a
wider range of markets. Towards this end, Malaysia will need
to enhance the competitiveness of its products through
productivity increases and quality improvements. This includes
the establishment of trading houses that will provide the
support services to promote Malaysian exports overseas.
33. During the Plan period, gross imports will grow at a rate
of 10.2 per cent per annum, comprising mainly of capital and
intermediate goods. Efforts will be taken to increase the
production of locally manufactured capital and intermediate
goods, including parts and components, to reduce import
intensity. However, local inputs will have to be produced more
efficiently in order to compete with cheaper imports. Imports
of consumption goods are expected to grow moderately in line
with efforts to contain imported inflation, including the Buy
Malaysian campaign.
34. The current account of the balance of payments is
expected to remain in surplus for the whole Plan period,
although on a declining trend, while the merchandise account
of the balance of payments is expected to register a surplus
of 17.4 per cent of GNP. However, the services account will
continue to be in deficit at 11.4 per cent.
35. The Government will continue to implement measures aimed
at reducing the large deficit in the services account.
Increased foreign exchange earnings are to be expected from
tourism, education, shipping and insurance, finance and
consultancy services. These measures include among others,
increasing the efficiency of the transportation services in
view of the large deficit in freight and insurance. To
enhance the efficiency of port services, efforts will be
undertaken to streamline administrative procedures through the
implementation of the electronic data interchange, expansion
in the number of haulage companies, expansion of the domestic
shipping fleet and stricter enforcement of cabotage rules.
36. Efforts will continue to be undertaken to maintain a low
rate of inflation during the Plan period. Towards this end,
measures to enhance local food production will continue to be
implemented, particularly through the provision of land and
the promotion of joint public and private sector initiatives
to increase the supply of food, thereby reducing food imports.
In addition, the Government will ensure that the growth of
money supply is consistent with price stability, and adopt a
prudent fiscal policy.
37. The anti-inflation strategy will also include various
administrative measures, such as the enforcement of price-
tagging and averting irresponsible price increases, prevention
of restrictive sales practices and monitoring of the prices of
basic necessities for the lower-income group. Measures to
encourage automation and labour-saving techniques as well as
increased participation of females and pensioners in the
labour market will continue to be undertaken in order to
moderate labour demand pressures and ensure that wage
increases are in line with productivity growth. In addition,
the price index is expected to be maintained at a low level
with the availability of cheaper imports in the domestic
market.
38. With the economic recovery, the public sector will resume
its role as the facilitator of private sector participation in
the economy. The operating expenditure during the Plan period
will be moderated through prudent fiscal management and
efficient use of resources. Meanwhile, the public sector
development expenditure is estimated to increase from RM222.9
billion during the Seventh Malaysia Plan to RM253.4 billion
during the Eighth Malaysia Plan. Of this total, RM110 billion
or 43.4 per cent will constitute the development expenditure
of the Federal Government and RM109.4 billion or 43.2 per cent
will be the development expenditure of the non-financial
public enterprises (NFPEs). Although in current terms, the
absolute level of the public sector development expenditure is
larger, in real terms, it will be lower than that in the
Seventh Malaysia Plan, in line with the policy to reduce the
public sector's role in economic activities.
GROWTH AND DISTRIBUTION
39. The thrust of the poverty eradication strategy is to
reduce the incidence of poverty to 0.5 per cent by 2005.
Poverty eradication programmes will be more target-specific by
addressing pockets of poverty, particularly in remote areas.
In addition, the respective programmes will also address the
issue of poverty among the Orang Asli and other Bumiputera
minorities in Sabah and Sarawak. The strong economic growth
that is anticipated during the Plan period is expected to
generate more opportunities for the poor to increase their
income and move out of poverty. The Government will intensify
efforts to ensure that the poor and low-income groups also
benefit from various measures implemented in education, health
services, housing and the provision of quality amenities.
40. To address pockets of poverty among households in urban
centres and its periphery, the Government will implement
programmes such as the provision of housing and amenities as
well as opportunities to generate income. At the same time,
the respective states and local authorities will carry out the
resettlement of squatter areas throughout the country. In
addition, the existing integrated approach taken by local
authorities, private sector and non-governmental organizations
(NGOs) will be continued through programmes such as the
Integrated Development for Urban Communities, Pusat RAHMAT,
Projek HARAPAN and Skim Khas Ibu Tunggal.
41. The cooperation and willingness of this target group to
accept these projects to increase their income is important if
these projects are to be effective and successful.
INCOME DISTRIBUTION
42. The Government will continue to address the issue of
income imbalance, particularly between and within ethnic
groups, income groups, economic sectors, regions and states.
With the expected high economic growth during the Plan period,
the middle-income group is expected to increase in size and
share of income. As part of a major long-term income
distribution objective, the nation will create a bigger and
more prosperous middle-income group in addition to increasing
income of the lower income group. The cooperation of this
target group, is once again important, for them to succeed.
43. Various measures will be implemented to reduce income
imbalances between the rural and urban areas as well as
between the less developed and the more developed states. In
rural development, the Government will continue to modernize
and commercialize agricultural activities through various
programmes. In addition, measures will be taken to encourage
smallholders and farmers, particularly those with small and
uneconomical land size, to diversify into activities such as
aquaculture and livestock farming as well as in non-
agricultural income-generating activities. At the same time,
the Government will establish an income augmentation mechanism
to protect smallholders during periods when the prices of
primary commodities fall to drastically low levels in the
world market. This will require discipline in the selection
of the types of crops.
OWNERSHIP AND CONTROL OF THE CORPORATE SECTOR
44. As for the restructuring of ownership in the corporate
sector, efforts will continue to be taken to improve effective
Bumiputera participation as well as increase the share of
capital ownership and control of companies to at least 30 per
cent by 2010. To accelerate the restructuring process,
programmes that provide opportunities for potential young
entrepreneurs and corporate leaders, particularly in the
modern and strategic sectors, will be strengthened. As
Bumiputera companies have, relatively speaking, made inroads
into the construction, transportation and agricultural
sectors, they will be encouraged to diversify into other
higher value-added activities during the Plan period. Besides
setting the quantitative target, an important agenda is to
improve the resilience of the Bumiputera to enable them to
sustain their corporate equity holdings and not succumb to
divestment for short-term profits or when the country is faced
with an economic crisis.
45. The role of Bumiputera institutions and trust agencies
will be enhanced, especially in mobilizing Bumiputera
resources and in creating new wealth. In this regard,
Bumiputera trust agencies and institutions, such as the State
Economic Development Corporations (SEDCs), will undertake
measures to reposition, review and consolidate their position
to enable them to face future challenges. These institutions
and trust agencies will also be provided with greater
opportunities to increase their stake and effective ownership
of companies for the benefit of the wider Bumiputera
community.
EMPLOYMENT RESTRUCTURING
46. During the Eighth Malaysia Plan, the implementation of
strategies and programmes to restructure employment in the
various sectors and occupations will continue to be
undertaken. Measures will be taken to improve the balance of
Bumiputera and non-Bumiputera employment in both the public
and private sectors. This will require concerted efforts of
both the Government and the private sector. The
concentration of non-Bumiputera in the private sector and the
Bumiputera in the public sector will be reduced by increasing
the number of non-Bumiputera in the public sector and
increasing the intake of Bumiputera in the private sector in
management and supervisory positions as well as in their
businesses. The Government will endeavour to increase the
participation of non-Bumiputera at all levels of the police,
army and in the field of education. In this way, all the
activities in the community will be reflective of the various
races of Malaysia. Malaysian citizens from Sabah and Sarawak
will be encouraged to work in the Peninsula to foster closer
relationships among the states of Malaysia.
47. Education and training will continue to be an important
vehicle to achieve the employment restructuring objectives.
In this regard, more places will be made available for
qualified Bumiputera students in public and private
institutions of higher learning, particularly in science, ICT
and other professional courses. At the same time, attention
will also be given towards improving the performance of
Bumiputera students especially in Science, Mathematics and the
English language, through more effective teaching methods, a
better provision of educational facilities and the
establishment of more residential schools. Adequate financing
will be provided to the Bumiputera to assist them to pay the
higher fees in the private institutions.
DEVELOPMENT OF THE BCIC
48. In line with efforts to develop the Bumiputera
Commercial and Industrial Community (BCIC), measures will be
undertaken to identify those with talents, provide them with
intensive training in financial management and enterprises as
well as instil the appropriate ethics for the success of their
businesses. Only those who are willing to undergo these
courses will be provided with opportunities, licences, capital
and the like. If any of them is found to have misappropriated
the opportunities or fund, they will be blacklisted. The
Bumiputera should give serious attention towards the formation
of the BCIC. It is not a scheme to get rich quickly but it is
a serious effort towards restructuring society in order to
attain an equitable balance between the Bumiputera and the non-
Bumiputera in Malaysia.
49. Entrepreneurial training programmes will be intensified
to enable Bumiputera entrepreneurs face the challenges of
globalization and utilize more knowledge content in their
activities. These programmes will give emphasis in preparing
Bumiputera entrepreneurs to be more self-reliant, competitive
and practise good business ethics. In addition, such training
programmes will also inculcate positive values such as the
need to be trustworthy, hardworking and disciplined, which are
necessary traits to build successful and resilient Bumiputera
entrepreneurs. Towards this end, the National Institute of
Entrepreneurship or Institut Keusahawanan Negara will be
established as a focal point to undertake strategic planning
on entrepreneurship, market intelligence, R&D, curriculum
development, business networking and counselling.
50. In order to promote the participation of Bumiputera
entrepreneurs in the ICT industry, a Bumiputera ICT Council
will be established to plan and develop a Bumiputera ICT
Agenda. The Agenda will include strategies to increase
awareness of the opportunities in the ICT industry, develop a
pool of ICT Bumiputera entrepreneurs, provide greater
accessibility to capital and market information as well as
establish linkages with international markets. Apart from ICT,
the Government will continue to promote Bumiputera
participation in strategic and high technology industries,
namely biotechnology, petrochemical and communications.
HUMAN RESOURCE DEVELOPMENT
51. A strong human resource base to support the development
of a knowledge-based economy and enhance productivity and
competitiveness will be one of the key strategies in ensuring
that the nation is able to face the challenges of
globalization and sustain economic growth. Priority will be
given to producing an adequate supply of manpower equipped
with the required skills and expertise, as well as tacit
knowledge and high level of thinking skills.
52. For Malaysia to catch up with developed countries during
the next decade, it is important that growth will have to be
productivity-driven. Increases in total factor productivity
and raising the level of potential output are crucial to
enhance Malaysia's international competitiveness in the short-
and medium-term. Efforts to increase productivity will depend
on increasing the knowledge content of all economic activities
and the availability of an adequate supply of highly skilled
and knowledge manpower. Towards this end, efforts will be
further intensified to expand the supply of highly skilled and
knowledge manpower through the expansion of the education and
training capacity with greater emphasis towards increasing the
supply of science and technology (S&T) manpower. In this
aspect, the capacity of the S&T related educational and
training programmes at the tertiary level will be further
expanded to expedite the achievement of the 60:40 ratio of
science to arts students. At the same time, the provision of
scholarships for post-graduate and post-doctoral degrees will
be further increased. To meet this objective, the education
and training system will be reoriented to ensure that the
output from these institutions can match the requirements of
new technology and knowledge, needed to spur economic growth
and enhance competitiveness.
53. The education and training system will also place
emphasis on nurturing creativity and cognitive skills and give
priority to produce multi-skilled and knowledge manpower that
is versatile, willing to learn continuously and
technopreneurial. In line with the liberalization of education
and training, the private sector will continue to be a major
provider of education and training, especially at the tertiary
level.
54. In our quest for economic growth, equal priority will
also be given to the social dimensions of development. All
our people will be given opportunities to benefit from the
development that will take place during the next five years.
Accessibility to education and training will be increased at
all levels. Emphasis will be given to improving the
performance of students in rural and remote schools by
upgrading facilities and educational support services. At the
tertiary level, the National Higher Education Fund will be
increased to cover more students including students in private
institutions. We are also encouraging parents to save for
their children's education, by setting up the Education
Savings Scheme that will be launched by the Government.
Students pursuing training in skill training institutes will
also be provided with loans.
55. Persistent labour shortages experienced in the Seventh
Malaysia Plan resulted in the tightening of labour market and
pressure on wages. However, the adoption of new technology
has led to an overall improvement in the labour productivity,
thus lowering the unit labour cost and resulting in
improvement in the nation's competitiveness level. We must
realize that, with the economy expected to grow at an average
annual rate of 7.5 per cent during the Eighth Malaysia Plan
period, the country is anticipated to experience some shortage
of high level skills, especially S&T manpower. The Government
will encourage lifelong learning through the use of ICT via
distance learning and web-based learning as well as the
introduction of community colleges throughout the nation.
56. Initiatives will also be implemented to induce more firms
especially the small- and medium-scale enterprises (SMEs) to
move into higher capital-intensity production processes, and
optimize the utilization of local labour. The prime target is
to encourage more women especially those with tertiary
education to join the labour force. This will be achieved
through further amendments to the Employment Act 1995 to
include new modes of working such as teleworking, part-time
work and job sharing. The amendment of the Act will also
facilitate the setting-up of community nurseries and
kindergartens within residential areas and ensuring better
access to training opportunities. Pensioners with the
appropriate qualifications and experience will continue to be
considered for re-employment, on a case-by-case basis.
57. Another important issue that needs to be given emphasis
is that wage growth must commensurate with productivity
increases. Wage increases that do not reflect productivity
gains will in the long-term result in inflationary pressures
and erode the competitiveness of the country's products in the
international market. Therefore, I urge workers of all levels
in all sectors to step up efforts, individually or jointly, to
improve and increase their productivity and efficiency. This
increase will contribute towards sustaining growth and ensure
that Malaysian products can compete in the international
market. Therefore, the Government will take initiatives to
encourage firms to intensify the implementation of the
productivity-linked wage system to ensure that wage movements
are closely aligned with productivity.
58. As the economy becomes more knowledge-intensive and the
use and diffusion of ICT more widespread, ethics and moral
values are important to ensure that the acquisition,
utilization, dissemination and management of knowledge and
information will be for the general good of society. In this
regard, efforts will have to be made to inculcate positive
values through the education and training system as well as
courses to develop the appropriate culture in line with
current challenges.
SECTORAL THRUSTS
59. The manufacturing, agriculture and services sectors will
continue to be the major contributors to growth in the Eighth
Malaysia Plan period. The manufacturing sector is expected to
grow at an average rate of 8.9 per cent per annum, with its
share to GDP increasing to 35.8 per cent by 2005. The growth
momentum of the manufacturing sector will be sustained through
developing industries capable of meeting the high expectations
of consumer demand, forming strategic alliances and developing
dynamic industry clusters. With technology transfer and
greater R&D efforts, more linkages are expected to be forged
between large enterprises and the small-and-medium
enterprises, thereby strengthening the growth of the
manufacturing sector. The downstream development of higher
value-added products of the resource-based industries,
particularly the petrochemical, pharmaceutical, wood products,
rubber products and food product industries, is expected to
further contribute to the building up of domestic capabilities
as well as competitiveness of the manufacturing sector. At
the same time, the electrical and electronic products industry
will be diversified to produce high-technology products
demanded by the global market.
60. During the Plan period, it is critical for us to
modernize the agriculture sector and enhance its contribution
to the economy. To do this, we will implement a new focussed
approach where there will be distinct changes such as mixed
farming rather than mono-cropping in small farms, widespread
utilization of more advanced technology in production
processes and dynamic marketing strategies. While the overall
thrust will be to revitalize the sector, concerted efforts
will be made to improve the well-being of the farmers and
smallholders through better managed and more productive
farming. We must not forget the strategic importance of this
sector, as it is the supplier of food for the nation as well
as raw materials for the manufacturing sector. New measures
will have to be formulated and implemented to increase
production and productivity as well as contribute towards
higher incomes for the farmers and smallholders. Besides
efforts to increase food production, new sources of growth
will be promoted such as bamboo, rattan, floriculture, herbs,
medicinal plants and ornamental fish. The production of
industrial commodities will be rationalized and strengthened
to ensure supply of raw materials for the resource-based
industries as well as increase linkages with other sectors in
the economy. Towards this end, agriculture will have to be
developed in an orderly and scheduled manner just as in the
manufacturing industries and the office.
61. Government efforts alone will not be sufficient if not
complemented by active participation of farmers, smallholders
and fishermen as well as others in the private sector to
expedite the transformation process. We have to adopt new
technologies, consolidate and amalgamate fragmented holdings
of land into bigger economic size where machines can be used
to improve productivity, reduce labour input and cost of
production. Smallholders and estates will be encouraged to
diversify their activities by planting other potential crops
including selected timber species as well as venturing into
resource-based industries to increase their income.
62. The Government is well aware and concerned about the
plight and hardships of the smallholders as a result of the
low prices of oil palm and rubber from time to time. As an
immediate measure, the Government recently provided special
assistance to oil palm and rubber smallholders. However, the
smallholders should not be dependent on the subsidy. Instead
they should increase their income by undertaking the changes
that I have mentioned.
63. The services sector is expected to grow by 7.7 per cent
during the Plan period. Higher growth is expected from three
major subsectors, namely, transport, storage and
communications; the finance, insurance, real estate and
business services; as well as the wholesale and retail trade,
hotels and restaurants subsectors. The wholesale and retail
trade, hotels and restaurants subsector will be propelled by
higher disposable income and also the concerted efforts to
make Malaysia a major tourist and shopping destination. These
efforts will include hosting major sporting events, making
Malaysia a major centre for meetings, conventions and
exhibitions as well as organizing year-long event-based
activities. At the same time, efforts will be undertaken to
promote domestic tourism, especially to take advantage of the
two non-working Saturdays every month.
ACCELERATING SCIENCE AND TECHNOLOGY DEVELOPMENT
64. In building a resilient nation we will need to further
strengthen our competitiveness and efficiency through
technology, skills and innovation. Within the context of a
knowledge-based economy, a strategic thrust during the Eighth
Malaysia Plan period will be to accelerate the development of
Malaysia's capacity and capability in science and technology,
knowledge and skills, promoting innovation and intensifying
market-oriented R&D. Efforts will also be taken to further
strengthen the linkages between the relevant sectors and
institutions to evolve an effective national innovation system
that will emphasize commercialization of potential products,
processes and services.
65. Recognizing the growing importance of biotechnology as
one of the key technologies for the 21st century, efforts will
be taken to build up the nation's capability and capacity to
harness the use of this technology. This will entail the
formulation of a National Biotechnology Policy to provide a
comprehensive and coordinated approach for the development of
biotechnology. In addition, the Government will consider the
setting up of a Bio-Valley.
INFORMATION AND COMMUNICATIONS TECHNOLOGY
66. As Honourable Members are aware, the initial ICT
infrastructure was provided in the Seventh Malaysia Plan. For
the next five years, efforts will focus on establishing
Malaysia as a global ICT and multimedia hub. Accordingly, the
ICT infrastructure will be upgraded through several
initiatives including increasing the capacity of the
transmission backbone up to 10 gigabits per second and
introducing the Network Management System for better service
availability. The ICT infrastructure will also be extended to
the rural areas to reduce the digital divide. Among the
programmes to be implemented include Infodesa and Internet
Desa, which will offer awareness and training courses. The
Government will continue to facilitate the introduction of new
and innovative services in the communications and multimedia
industry. In addition, performance standards and broad
guidelines will be set to protect and promote consumer
interests.
67. The first wave Multimedia Super Corridor (MSC) flagship
applications will be rolled out in the Eighth Malaysia Plan
after ascertaining their effectiveness. The smart school
concept will be expanded to cover 8,000 schools while
telehealth will be implemented at various health centres and
rural clinics. For the future agenda, the second wave
flagship applications will focus on attracting leading edge
technology developers and promoting transfer of technology as
well as R&D activities.
ENERGY
68. As energy is an important input in economic growth,
sustainable development of the sector will continue to be one
of the main strategies of the Eighth Malaysia Plan. The
reliability and security of energy supply will be ensured
through an optimal energy mix based on four main domestic
sources of fuel, namely, oil, gas, coal and hydro. In
addition, to ensure adequacy of electricity generating
capacity, new private investments will be encouraged and the
transmission and distribution networks, particularly in Sabah
and Sarawak will be further strengthened. There is also an
urgent need to moderate the energy intensity trend in order
for Malaysia to remain competitive. Hence, efficient
utilization of energy, especially in the industrial and
commercial sectors, will be encouraged.
ENVIRONMENT
69. In pursuing all these advancements, we must not forget
the importance of the environment and its effects on our
lives. Efforts will be taken to improve air and water
quality, manage solid waste and industrial waste efficiently,
develop a healthy urban environment and conserve critical
natural habitats and resources. The public and the private
sectors must realize that the environment is the
responsibility of all and make conscious efforts to control
pollution and environmental degradation. To enhance the level
of awareness, commitment and civic consciousness among the
people, environmental education, public and civic awareness
programmes will be stepped up in cooperation with the NGOs,
the private sector and the media.
PUBLIC SECTOR PROGRAMME FOR THE EIGHTH MALAYSIA PLAN
70. The total Federal Government development expenditure for
the Eighth Malaysia Plan will amount to RM110 billion. The
economic sector will be provided the largest allocation
amounting to RM50.5 billion or 45.9 per cent of the total
allocation. Of this allocation, RM7.9 billion or 7.1 per cent
will be for the agriculture subsector, RM10.3 billion or 9.4
per cent for the commerce and industry subsector while
transport and communications subsector will receive RM22
billion or 20 per cent of the total allocation. The social
sector will be allocated RM37.5 billion or 34.1 per cent, of
which more than half will be for education and training. The
security sector will be allocated RM10.8 billion or 9.8 per
cent, while the general administration sector will be provided
RM11.2 billion or 10.2 per cent of the total allocation.
71. Rural development programmes will focus on transforming
rural areas to be more conducive to investment as well as
attractive countryside living enjoying the full range of basic
and quality infrastructure and social services. To achieve
this transformation, the Government has allocated RM13.2
billion for the rural development programmes. A major
portion of the allocation will be channeled to land
development, human resource enhancement and the implementation
of various physical and social infrastructure works including
rural roads, electricity and water supply.
72. The thrust of infrastructure development during the
Eighth Malaysia Plan will be to upgrade existing facilities
and increase capacities, particularly in the less developed
areas as well as to improve productivity and efficiency in
urban areas. Of the allocation for infrastructure
development, 78.6 per cent will be for the transport sector.
From this allocation, RM4.9 billion will be for the
development of new roads to open up corridors for growth as
well as increase accessibility to rural areas. An additional
RM9.1 billion will be expended to improve and upgrade existing
roads for greater safety, driving comfort and reduce travel
time. To ease traffic congestion in major urban centres, an
integrated, efficient and reliable public transport as well as
intelligent transport systems will be implemented. The
capacity and efficiency of rail services will be improved with
the electrified double-tracking project from Rawang to Ipoh,
which will be extended to Padang Besar in the north and from
Seremban to Johor Bahru in the south. Port and airport
capacities will also be increased and their efficiency
improved to meet rising demand.
73. For long-term sustainability of the supply of safe water,
the development and conservation of national water resources
will be integrated with greater cooperation and coordination
at Federal and state levels as well as industry players.
Interstate water transfer, new and upgraded treatment plants,
reduction of water loss and wastage projects will be
implemented to ensure adequate water supply, for which RM4
billion is allocated. In order to improve and expand sewerage
services for better quality effluent and environmental
protection, capital works and refurbishment of sewerage
treatments plants will be undertaken. Through these efforts
we will ensure that besides protecting the environment the
wastes will be disposed according to established standards.
The Government has allocated RM1.6 billion for these works.
74. Let me now highlight the utilization of the allocation in
the social sector. The development allocation for education
and training will be used to increase accessibility and
improve quality especially to fulfill the requirement of a
knowledge-based economy. The capacity of science and
technology-related education and training programmes will be
expanded. Additional facilities will be provided while
existing facilities will be improved. At the tertiary level,
new universities, polytechnics as well as skill training
institutes will be built. In the case of health services, the
emphasis will be on expanding and intensifying the scope and
coverage of promotive, preventive, curative and rehabilitative
services. Housing and other social services will continue to
be given priority with the aim of improving the quality of
life and contributing towards the formation of a caring
society. Priority will continue to be given to the
development of low- and low medium-cost houses. The
development of low-cost housing will be expedited to ensure
that those who are eligible will be provided houses either for
rent or sale.
PRIVATIZATION
75. High on the privatization priority list will be those
projects that stimulate economic growth and are commercially
viable as well as contribute to social well-being. Therefore,
the Government will identify projects that will generate
multiplier effects and upgrade the quality of services
particularly in the transportation, construction and utilities
sectors.
76. A more stringent project evaluation procedure will be
adopted, which will include the appointment of independent
consultants and project auditors as well as ascertaining
public opinion through surveys on the projects to be
privatized.
77. To protect consumer interest and foster healthy
privatized sectors, steps to restructure the relevant
regulatory authorities will be expedited and the authorities
strengthened through legislative support and capacity-
building.
CONCLUSION
78. Over the last few decades, we have laid a strong
foundation for a rapid and sustainable economic growth. Our
strength and resilience were tested several times when both
internal and external factors caused our economy to slow down.
The latest challenge was when the currency speculators pushed
down the value of our currency and the KLSE. Yet, each time
we not only succeeded to recover the economy but developed it
at an even faster pace.
79. Attacks on the economies of the East Asian tigers
resulted in these countries facing severe crisis. We have
chosen not to borrow from the IMF in our efforts to recover
the economy and strengthen the financial position of the
country. Although renowned experts from all over the world
predicted that Malaysia will eventually collapse due to the
currency control imposed, today all of them, including George
Soros were forced to admit that the Malaysian approach was
capable of overcoming the economic crisis due to the
devaluation of the currency and the decline in the share
market.
80. All the economic statistics indicated that the Malaysian
economy has not only recovered but the recovery was better
than that of other countries that were also affected by the
crisis. After the GDP contracted by 7.4 per cent in 1998, a
growth of 5.8 per cent was achieved in 1999 and 8.5 per cent
in 2000. The external reserves increased from US$20 billion
in 1997 to US$27 billion today. At the end of 1999, the
reserves increased to US$31 billion but declined moderately
due to increased imports, repatriation of profits and proceeds
from the sale of shares and reverse investment by Malaysian
firms as well as the depreciation of the Yen and Euro, which
form a part of our foreign reserves.
81. The unemployment rate remained low at about three per
cent with low inflation. Exports increased and surpassed
RM287 billion while total trade increased to RM515 billion.
The balance of payments is in Malaysia's favor. The per capita
income increased from RM12,160 (1998) to RM13,360 (2000).
82. All these figures are true and not fabricated.
Nevertheless, there were certain parties who claimed that the
Malaysian economy is in a bad shape due to the approach
adopted by the Government. This claim truly demonstrated the
naivety of the opposition parties. As usual, they were unable
to differentiate between the good and the bad. Their eyes
were blinded by their political motives. But, as the Malay
proverb says, "anjing menyalak bukit, bukit tidak akan
runtuh".
83. Therefore, the Barisan Nasional Government will continue
to implement the Eighth Malaysia Plan, which is the first
phase of the National Vision Policy. We believe that
everything that has been planned and predicted by the
Government will become a reality within the five-year period
of the Eighth Malaysia Plan, Insya-Allah.
84. The achievement of the Barisan Nasional Government in
implementing the five-year plans is there for every one to
see. We do not only plan. Indeed, we have implemented our
plans successfully. We remain confident that the Eighth
Malaysia Plan will also be implemented successfully for the
rakyat and Malaysia, Insya-Allah. Any efforts to obstruct the
implementation of the Plan will ultimately fail as all
Malaysians will defend it together with the Government.
85. Mr. Speaker, Sir, with full confidence and
consciousness, I beg to move.
Sumber : Pejabat Perdana Menteri
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