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It is a time of transition as the country works towards achieving a shared vision of prosperity

FORMER MALAYSIAN prime minister  Dr Mahathir  Mohamad might not be in total agreement with his successor  Abdullah Ahmad Badawi, but both share the vision of making Malaysia a developed nation by 2020. And things seem to be on the right track.

When the country unpegged the Malaysian dollar to the US dollar in July last year, opting instead for a managed float, analysts hailed the event as one coming from a position of economic strength.

Malaysia, they said, was ready for the verdict of the global market.

With gross domestic product targeted to grow at 6 per cent per annum under the five-year, M$200 billion (HK$422.66 billion) 9th Malaysia Plan, ending in 2010, and a more open political climate under Mr Abdullah, direct foreign investment is again finding its way back to the country.

Companies such as Dell, Intel and Singapore contract manufacturer Flextronics have given Malaysia  a vote of confidence by making  new or additional investments in manufacturing facilities there.

With progressive liberalisation of trade under the World Trade Organisation and the Asean Free Trade Area, and the planned implementation of the Asean Economic Community, Malaysia's total trade is expected to breach the M$1 trillion figure for the first time during the plan's period.

The next 15 years will be crucial for the country as it races towards its goal of becoming a developed nation by 2020 under its Vision 2020 plan, first articulated in 1991 by Dr Mahathir.

'It is a time of transition, a time to attain the next phase of growth,' Mr Abdullah said in his speech at the launch of the Third Industrial Master Plan (2006-2020) in Kuala Lumpur earlier this month.

This transformation will rest partly on Malaysia developing its human capital to keep up with intensifying global competition. Increasing the country's capacity for knowledge, creativity and innovation, and nurturing a first-class mentality, are major thrusts of the plan.

Getting rid of the 'First World infrastructure, Third World mentality' malaise common among Malaysians has been one of Mr Abdullah's battle cries in his three years as prime minister.

The plan also seeks to smooth the way for Malaysia to enter the next phase of growth by using the strengths inherent in the country.

While acknowledging the continuing importance of manufacturing and services to the economy, the Abdullah administration also appreciates the need to revitalise and modernise Malaysia's agricultural sector.

Calling agriculture a 'long under-appreciated sector', Mr Abdullah said that it would be given a new lease of life for it to become the third engine of economic growth, after manufacturing and services.

Manufacturing now contributes 31 per cent to the country's GDP,  while services contribute 51 per cent.

Emphasis will also be given to the use of technology in agriculture and resource-based manufacturing, especially in the high value-added areas of oleochemicals, biofuels, food products and advanced wood products.

'We have a great but underdeveloped competitive advantage in these areas,' Mr Abdullah said.

Under the plan, the agricultural sector will receive a significant boost with an allocation of M$11.4 billion, a 70 per cent increase from the allocation during the previous Malaysia Plan.

With the incidence of poverty at its highest among the Bumiputra community in the rural areas, agricultural development is also meant to help narrow national socio-economic differences. Hardcore poverty should be eliminated by 2010, according to the five-year plan.

The plan is not without critics, however. Some question the efficacy of its implementation and express doubts that the benefits will trickle down to the masses for whom they are meant.

The late M.G.G. Pillai, a former veteran journalist known for his outspoken views, said: 'I am critical of it because it benefits only a few and not those in whose name it was announced.'

The government has been gradually reducing fuel subsidies, with the result that petrol and diesel prices in Malaysia have increased five times since 2004.

Increasing prices of public transport, hawker food and highway tolls are among the  complaints voiced by many private citizens.

These continuous increases in fuel prices prompted an open memo to Mr Abdullah from the Malaysian  Trade Union Congress urging him 'not to balance the budget on the backs of the working class'.

With the deadline of 2010 not too far away, it will not be long before a verdict is reached.



On track to 'developed' status