In late July 2023, Malaysian Prime Minister, Anwar Ibrahim, introduced a new national economic vision that follows the Malaysia Madani concept with the aim of boosting Malaysia’s economy and tackle both current and long-term issues.
Officially known as the ‘Madani Economy: Empowering the People’, it is an initiative that will address various economic challenges that all Malaysians face and are directly related to the country’s competitiveness.
With the former, this new economic framework is fully focused on rising living costs, while the latter will be about growing Malaysia’s appeal as an investment destination.
“I propose the Ekonomi MADANI: Memperkasa Rakyat framework as a platform to elevate the dignity and status of our nation by restructuring the economy towards making Malaysia a leader in the Southeast Asian region. This will ultimately benefit the people to enjoy a better quality of life,” said Anwar during the launch of this new economic vision.
“The fact is that we are caught in a vicious cycle of high costs, low wages, low profits, and (having) a lack of competitiveness. We need a comprehensive and fresh economic framework. (Simply put, there must be) a new economic paradigm,” he added.
With this in mind, the Madani Economic Framework comprises seven medium-term key performance indicators (KPIs) that Malaysia must achieve within the next 10 years:
- Being on the Top 30 list of the world’s largest economies
- Ranked in the Top 12 in the Global Competitiveness Index
- Labour share of income reaching 45% of total income (up from 40% as per 12th Malaysian Plan)
- Boost participation of women in the workforce by 60%
- Getting onto the Top 25 list for Human Development Index
- Reaching the Top 25 in Corruption Perception Index
- Becoming fiscally sustainable, with a target deficit of 3% or lower
These new KPIs are directly following-up from the short-term targets that are already in motion:
- Accelerating the implementation of projects for schools and dilapidated clinics via increased allocations, simplifying procurement, and delegating implementation powers
- Eradicating hardcore poor by this year with various programmes, such as Inisiatif Pendapatan Rakyat and the Payung RAHMAH initiative
“It is about elevating the status and dignity of our nation, with two main focuses; restructuring the economy towards making Malaysia a leading Asian economy, and ultimately providing the people with the benefits to enjoy a better quality of life,” he said at the launch of the initiative here today,” Anwar added.
He also confirmed during his remarks at the Madani Economic Framework that this this new initiative will also lay the foundation for several other policies that will be announced later on, including:
- New Industrial Master Plan 2030 (NIMP2030), to be announced in August 2023
- National Energy Transition Roadmap, announced alongside the Madani Economic Framework
- National Housing Action Plan
According to Anwar, the long-term goal is to set up Malaysia to be a regional economic powerhouse and establish greater economic integration with neighbouring countries; nurture more highly competitive local companies; and expanding into new economic growth sectors. He firmly believes that with these initiatives, Malaysia is more than capable of achieving 5.5% or 6% for economic growth.
“With the higher returns from the country’s economic targets, the second focus of the Government is to improve the lives of all Malaysians. This includes the need for social protection for all, employment with meaningful wages, and wealth-sharing to build a more equitable and prosperous society,” he shared.
For him, the economic structural reforms must be assessed in terms of how far it can create more jobs with meaningful wages for all Malaysians. Other efforts beyond this move includes reviewing the minimum wage level and developing policies that increases to 45% in relation to the national gross domestic product (GDP); introduce laws that guarantee a safe and comfortable working environment; and deploy other key initiatives such as a progressive wage model, tiered foreign worker levies, and lowering barriers to education and financing programmes for all Malaysians.
“I firmly believe that only through quality education can we uplift the Rakyat from the cocoon of poverty. (Similarly,) the Government will implement an industrial policy according to geography through specialised activities and investment by region that is aligned to the comparative advantage and level of development of the respective region,” said Anwar.
The full speech from Anwar on the new Madani Economic Framework can be read here.