The New Economic Model (NEM) 2011-2020 was an economic plan in

Malaysia Malaysia is a country in Southeast Asia. Featuring the Tanjung Piai, southernmost point of continental Eurasia, it is a federation, federal constitutional monarchy consisting of States and federal territories of Malaysia, 13 states and thre ...

unveiled on 30 March 2010 by Malaysian Prime Minister Najib Razak which was intended to more than double the

per capita income Per capita income (PCI) or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. In many countries, per capita income is determined using regular population surveys, such ...

in Malaysia by 2020. The programme aimed to shift affirmative action from being ethnically based to being need-based hence becoming more competitive, market and investor-friendly.

The plan

The goal of the NEM, according to Najib, is to "transform the Malaysian economy to become one with high incomes and quality growth" by 2020. At the time of the plan's unveiling in 2010, per capita annual income in Malaysia stood at 23,100 Malaysian ringgit, approximately $7,000 in US currency; the plan's stated goal is to reach RM49,500 (US$15,000). The keys to the plan as described by Najib at 30 March unveiling are "high income, sustainability and inclusiveness". The goal is to stimulate economic growth by improving worker productivity across all sectors of society, in part through an improved system of

affirmative action Affirmative action (also sometimes called reservations, alternative access, positive discrimination or positive action in various countries' laws and policies) refers to a set of policies and practices within a government or organization seeking ...

, with an eye towards

sustainability Sustainability is a social goal for people to co-exist on Earth over a long period of time. Definitions of this term are disputed and have varied with literature, context, and time. Sustainability usually has three dimensions (or pillars): env ...

. Among other reforms meant to accomplish this goal, the Najib administration have also claimed that the NEM is to empower the

private sector The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...

and to reduce fiscal disparity between the wealthiest and poorest of Malaysians. The plan is intended to replace the New Economic Policy (NEP). Najib criticised the way that the NEP had been implemented over its 40-year history, arguing that affirmative action policies of the NEP needed to be better targeted.

Reaction

The

Malaysian Chinese Association The Malaysian Chinese Association (Abbreviation, abbrev: MCA; Malay language, Malay: ''Persatuan Cina Malaysia''), formerly known as the Malayan Chinese Association, is an ethnic List of political parties in Malaysia, political party in Malaysi ...

released a statement supporting the plan. Opposition leader Anwar Ibrahim responded to the plan's announcement by arguing the plan was "devoid of substance" and was designed as a publicity tool for the Barisan Nasional government. Malay activist group Perkasa expressed concerns that the proposed Equal Opportunity Commission could be unconstitutional if it did not accord with the protection of Malays afforded by Article 153 of the Constitution. A spokesman for

Khazanah Nasional Khazanah Nasional Berhad (; Trade name, traded as Khazanah Nasional or simply Khazanah) is the sovereign wealth fund of the Government of Malaysia. One of the largest sovereign wealth funds in the world, it was established to invest surplus ...

Berhad, a government agency, stepped out to support it as a "realistic outline", provided that it is effectively implemented and embraced by the public. Democratic Action Party spokesperson Tony Pua said that Najib's launching of a new unit to strengthen Bumiputera economic participation has nullified his own New Economic Model and is nothing more than an endorsement of the controversial NEP, which favours the influential elite, and a copycat of Mahathir's mega-projects and privatisation policies of the 1990s.

References

{{Economy of Malaysia Economic history of Malaysia Racial and religious quotas in Malaysia Public policy in Malaysia 2010 establishments in Malaysia

The plan

Reaction

See also

Further reading

References