The BN Journey to Economic Development

Of late, there have been many reports slamming our government for not doing enough to develop our economy. My previous post touched on how hard data shows that despite whatever negative lies spread by enemies, our government has actually done pretty well. In this post, I will consider how our country has grown because of the right policies and economic decisions made by BN in relation to our resources and exports.

In the early years after independence, Malaysia enjoyed high growth rates because it adopted the import substitution industrialization strategy (ISI).  Our country developed economically due to the unprecedented growth of the manufacturing sector largely dominated by foreign capital. This led to a change in the nature of exports.

A country's pattern of economic development can largely be influenced by structural changes in exports and increased export diversification. In fact, many Malaysians be be unaware that our country's export growth strategy has helped to spearhead our nation's industrial success. The Penang Free Trade Zone was a forerunner in triggering the development of export oriented industries.

Malaysia has also specialized in exporting high-technology as opposed to traditional or low- technology goods thereby enjoying rapid growth in key areas. Huge MNCs such as Intel, Fairchild, Solectron, NS Electronics and many other important hi-tech companies chose to set up manufacturing plants here. Consequently, the share of manufacturing in GDP increased from 9.4% (1960) to 12% (1970). During the same period,  the share of industry grew even faster from 19.4% to 27.4%. However, the primary commodities sector did not grow as much because it was too capital intensive then.

Thus it can be seen that the 1970s was a significant crossroad for Malaysia because our government switched from the ISI to Export Oriented Industrialization (EOI) following the establishment of the New Economic Policy (NEP), which identified the manufacturing sector as the main engine for growth for the next 20 years.

We all know the NEP is aimed at improving the economic position of the Bumiputeras and this has been a sore point with some quarters. However, what many do not know is that via the NEP, Malaysia successfully developed its export manufacturing sector while not neglecting other sectors such as agriculture. It was in this period that Malaysia began its transformation from the traditional export base to manufactured exports.

Hence, while many are criticizing the NEP, they are deliberately being oblivious to how the implementation of the EOI actually spiked FDI to spearhead growth in the manufacturing sector.

Following that success, Malaysia embarked on a second round of ISI. This time, the government targettted developing domestic entrepreneurs, with the hope that they could link or network with those foreign companies that had already set up bases here.

However, the timing was bad because economic recession started in the mid 1980s so the heavy industries initiative did not achieve much progress because of its high capital outlay and poor implementation. As a result, Malaysia reverted to the EOI structure again.

Fortunately, economic transformation was already taking place within the manufacturing sector during this downturn in the economy so by 1990s, most of our exports were manufactured goods. By 2010, high-technology products comprised about 50 percent of its manufactured exports. 

These developments could occur because our government made the right economic decisions and implemented the correct policies to spark the increase in trade, structure and plan for a change in export composition and economic growth in a liberalized environment for the good of Malaysia.

Looking back, we must give credit to our government for being consistent in achieving a very commendable decade average growth rate of approximately between 5.8 percent and 7.8 percent from 1960 to 2000.

What the Opposition chooses NOT to disclose is that our country's  impressive growth rate was accompanied by structural transformation and also by a dramatic increase in GDP per capita which grew from USD 300 in 1960 to USD 7029 in 2009 accompanied by a significant reduction in poverty.

Take a look at our economic data from CIA. Note how the GDP per capita and Gross National Saving figures have been improving for the past three consecutive years.

While some traitors go around painting such a negative picture of our country - a move which is totally uncalled for- how many loyal citizens would really consider a macro view of how we have moved FORWARD despite whatever weaknesses - real or perceived?

Do you think the Opposition leaders would stand in front of international and local media to acknowledge how through the years, thanks to the effort of our government, Malaysia is an export driven economy spurred by industries that are knowledge based, capital intensive and hi-tech? 

Where would we be today if not for our government's capable economic advisors?

This site says that the Gross Domestic Product (GDP) in Malaysia was worth 303.53 billion US dollars in 2012. The GDP value of Malaysia represents 0.49 percent of the world economy. 

GDP in Malaysia averaged 65.56 USD Billion from 1960 until 2012, reaching an all time high of 303.53 USD Billion in 2012 and a record low of 2.42 USD Billion in 1961. 

(GDP in Malaysia is reported by the World Bank Group.)

From 1960 to 2010, records indicate that Malaysia’s trade in both goods and services increased dramatically from 89 percent of GDP to 177 percent of GDP. That is truly an amazing development in a time frame of 50 years. 

Malaysians should be waxing lyrical about our achievements instead of being conned by half-past six naysayers, quack economists and failed accountants  from the other side of the political divide who only know how to boast about their amassing 52% of the popular votes. 

What other figures can they be proud of? Nothing! I forgot - they do boast about how many times their elected leaders have been arrested or charged for misdemeanours.

Don't forget our government also implemented the Industrial Master Plan to steer the manufacturing sector from the dependence on the electronics and textile sectors which accounted for 65 percent of manufactured exports by 1983. The Plan resulted in a huge influx of foreign firms to Malaysia which invested in the

manufacturing sector in line with their overall industrial master plan for the economy.

As a result of that policy, 12 subsectors were identified as high priority status including seven resource based industries and five non resource based industries to be developed over the ten year period. 

Apart from these initiatives to restructure our economy, our government also froze wages for three years in a bid to attract foreign firms which might think Malaysia had high start-up costs. We must also remember the role of the Malaysia Industrial Development Authority which helped maximize the incentives given to guide foreign direct investments to add value to their economic decision.

Another thing is this. When the Malaysian currency weakened in comparison to other Asian currencies, we enjoyed FDI from mainly Taiwan, Hong Kong and Japan which relocated to Malaysia which became a cheaper location for doing business.

Did the Opposition EVER give credit to the government for all this?

More importantly, WHAT has the Opposition done for Malaysia?

Shaming the nation both in and out of the contry - a move that has probably cost the government a lot of money in terms of investments, FDI and even tourism revenue.

Showing gross disrespect to the PM and the coalition government

Making baseless accusations which are readily accepted by naive Malaysians to be the gospel truth!

The next time any Opposition leader or supporter criticizes the government's economic policies, please do not join the mob to condemn our leaders. Instead, ask those Opposition leaders such as the Pakatan Rakyat leaders:

• what have they done for this country in concrete terms
• how much FDI have they brought into the country
• how have they helped the GDP of this country to improve
• what plans do they have on the drawing board to show us

No plan? Zip up!

No clue? Think again before they criticize for the sake of criticizing to create nothing but hot air!

Ubah? Then show us HOW.

Take a look at Penang. Has it developed for the better? FYI, Penang has had FOUR consecutive years of budget deficits. 

On the other hand, kudos to PM Najib and his team of economic advisers and departments which have carried us thus far. Thanks to BN for being persistent in their journey to the economic development of Malaysia!

Dear Malaysians, let us really love Malaysia by honoring her, respecting our leaders and putting to rest the lies spun by the Opposition.

The figures speak for themselves.

You be the judge.

Thank you.