Thirty years on, Malaysia’s Vision 2020 still remains a pipe dream. To meet its goal of becoming an industrialized nation, the country needs to review its policies and strategies to align them with the country’s prevailing economic and social conditions.
By Umair Jamal
Malaysia has missed its target of achieving a fully industrialized economy by 2020. In 1991, Malaysia’s former Prime Minister Mahathir Mohamad unveiled a plan called Wawasan 2020, or Vision 2020, to transform the country into a fully developed nation.
The country’s progress in this regard has been impeded by rampant corruption, racial and ethnic divides and growing political instability.
After 30 years, the vision may not be a complete failure but Malaysia is falling behind. Analysts say the country needs to review its policies and strategies to better align them with the country’s economic and geopolitical conditions and projections.
What was Malaysia’s Vision 2020?
Vision 2020 listed nine strategic challenges that the country had to overcome to become a progressive and prosperous nation. The vision called for a self-sufficient, democratic, economically just, fair and tolerant society and a united Malaysian nation—which would achieve high-income status by 2020. The essence of this transformation was again laid out in the Tenth Malaysia Plan (2011-15).
The plan was nothing less than bold and ambitious: to become an industrialized nation, Malaysia would need a sustained increase in economic growth compared to where it stood in 1991. Malaysia needed to attain a gross national income (GNI) per capita of US$15,000 to meet the World Bank’s current bar for a high-income country. But its GNI per capita dropped from US$11,193 in 2019 to $10,192 in 2020, leaving the target well out of reach. Economic projections for the next five years indicate that the country is not likely to become a high-income country by 2025.
Besides industrialization, Vision 2020 focused on social values, such as becoming a fairer, more tolerant, more democratic society and a more competitive economy—and for the most part, these goals still stand. But over the last decade, transnational militant groups like the Islamic State have made inroads and Islamism is on the rise in Malaysia. Islamist groups have gained greater influence over the country’s law and politics through grassroots campaigns and local electoral victories.
While Malaysia is far from achieving Vision 2020, a new plan has been rolled out to take over Vision 2020. Launched in 2019, the Shared Prosperity Vision 2030 aims to make Malaysia the economic center of Asia by 2030.
What do experts think about Malaysia’s progress so far?
While Malaysia has made strides towards becoming a high-income country, analysts say the country needs to reconsider its implementation plans and learn from mistakes.
Economist Yeah Kim Leng from Sunway University said that though Malaysia’s Purchasing Power Parity (PPP) per capita increased by 20% in the last four decades, other Asian economies outpaced Malaysia in the same period. “[Income level] also pales in comparison with the spectacular growth achieved by two outperformers, South Korea and Singapore,” Yeah said in an interview with the Straits Times. “South Korea, which had a lower per capita income than Malaysia and only 17.2% of the US in 1980, rose to 70.2% [of US per capita income] in 2020, a gain of 53.1 percentage points over the four decades. Singapore’s gain is even more impressive, rising from 70% to 151.6% of US income per capita income… over the same period.”
Others say that Malaysia’s policies and strategies to implement the Vision 2020 have been poorly designed. “Hindsight tells us that there was a disconnect between the vision and the strategy,” wrote Dr. Mohammad Ariff, emeritus professor at the International Centre for Education in Islamic Finance, for The Edge Malaysia. “Vision 2020 was akin to a marathon, which the overzealous authorities had turned into a sprint, forcing the economy to grow too fast for its own good at a double-digit pace, trying to reach the finish line even sooner. Little did they realize that such ‘over-drive’ growth would only cause the economy to overheat.” According to Dr. Ariff, Malaysia saw major economic growth during the late 1980s and early 1990s because of imported labor and capital, rather than economic or industrial innovations or increases in productivity.
Noting the impact of the global economic shocks, Bank Islam Chief Economist Afzanizam Abdul Rashid said economic shocks, such as the Asian financial crisis and the 2008 financial crisis, have seriously impacted Malaysia’s efforts to reform its economy. According to Afzanizam, tackling corruption is essential if the country truly wants to become an industrialized nation. He believes that a looming deficit of trust in global financiers as well as the country’s administration has made economic reforms more difficult, particularly since the billion-dollar corruption scandal involving state fund 1MDB.
“Perhaps, focusing too much on financial or material gains may have obscured how we define success. And along the way, it breeds greed and ultimately corruption,” he told Straits Times.
A transformation of a system bred on political patronage and racially-charged narratives cannot succeed unless Malaysia’s political leadership takes all major ethnic, religious and political groups on board by embracing diversity and shared goals. Polarization over ethnicity and religion have troubled the country for decades and shaped its electoral politics. Malaysia’s Malay majority, which comprises 50.8 % of the population, continues to enjoy a constitutionally-protected special status, while ethnic minorities have been treated as second-class citizens. Malaysia’s political elites continue to appeal to these ethnic and racial divides to mobilize their supporters to make electoral gains. These divisions have dashed efforts to reach political compromise, undermined much-needed economic and social reforms and fueled political instability.
Moreover, the country’s education system is not producing enough graduates who are ready for high-skill jobs. It also falls short in terms of promoting students’ English proficiency. Lawrence Saez of the School of Oriental and African Studies believes that “Education is the greatest problem facing Malaysia’s development. The interest from the government is there to make improvements but the capabilities are not.”
The World Bank has said Malaysia’s deteriorating education standards are the biggest detriment to increasing incomes. “There is an urgent need to transform Malaysia’s education system so that it produces quality graduates required by a high-income economy,” the World Bank noted.
As Dr. Ariff wrote in The Edge Malaysia,“The political will for reforms [in Malaysia] is totally absent. It is not an exaggeration to say that the word ‘reform’ has become a taboo.”
“The political mantra still is ‘transform, not reform, the economy’, never mind even if it rings hollow or sounds like an oxymoron. It is inexplicable how there could be any transformation in the absence of reforms in the first place,” he added.