Malaysia's socio-economic transformation in historical perspective

This study attempts to explain the pattern and evolution of economic development in Malaysia since
independence. It focuses on the impact of growth and analyses how the government policy of positive discrimination (also
known as Bumiputeras) has helped to address historical backwardness and thus reduce ethnic tensions in the country. The
state also launched the policy of diversification, which involved various combinations of policy initiatives; for instance, the
expansion of new industries was encouraged, especially if they focused on production for foreign markets. As a result, job
opportunities increased. The government also undertook measures to tackle rural poverty, modest land reforms, protection
of tenant rights, and other rural development measures to protect the rural poor. All these measures to a certain extent
helped to reduce rural poverty.
This paper offers an explanation as to how the net implications for employment and growth have been achieved. I
think this study is important because a review of Malaysia’s economic strategies and development could be a very useful
example for other developing countries. The key finding of the study is that the state has to a great extent been successful
in its role and objective of promoting economic and social development in Malaysia. However, the economic strategy that
is based on export markets and credits to provide the stimulus for growth may likely encounter difficulties due to increased
competition unleashed by the forces of globalisation. These difficulties could arise despite evidence on trends in economic
growth and employment creation which suggest that Malaysia’s recent transition to a high-growth trajectory has been
accompanied by low inflation and decreased levels of unemployment and poverty.