KUALA LUMPUR, Oct 11 — The economic development of Malaysia’s Bumiputera community will remain a key feature in Pakatan Harapan (PH) growth plans and among areas to be given the most focus in next year’s federal budget.
The Ministry of Finance (MoF) said in its Economic Outlook 2020 report released on Friday that uplifting the ethnic majority’s economic participation will be one of the crucial challenges to be addressed under Budget 2020.
The outlook provides a taste of PH’s plans for the next one year and how it aims to address the problems confronting the Bumiputera, a highly contentious political issue.
Several analysts believe Budget 2020 will be the bellwether to the ruling coalition’s political support in the next three years.
MoF did not specify in the outlook how exactly it would solve these longstanding problems, but noted that household income among the community is still the lowest compared to ethnic Chinese or even Indians as their entrepreneurs and graduates struggle to stay afloat and secure high-paying jobs.
“Despite various programmes implemented for the economic development of Bumiputera, the involvement of the community still lacks in various aspects,” the report said.
“Meanwhile, Bumiputera graduates experience difficulties in securing suitable jobs due to several factors, including poor interpersonal skills and lack of English proficiency,” it added.
“In addition, there is a mismatch between the skills required by industries and qualification attained by Bumiputera graduates. Concurrently, Bumiputera participation in skilled and professional occupations at the decision-making and managerial levels remains low.”
The Bumiputera agenda, however, will be part of a broader goal to recalibrate existing socio-economic development models into one driven by an inclusive, sustainable and high-technology economy, as outlined by the Shared Prosperity Vision 2030.
MoF said in its report that Budget 2020 is meant to kickstart this ambitious new 10-year blueprint, with PH expected to shift its resources into ramping up sectors pivotal to realising the vision.
Coalition leaders have touted the new vision as an egalitarian plan that could put an end to racial tensions through equitable distribution of wealth and narrowing inequality.
“Overall, the strategic initiatives are in line with the SPV 2030, which focuses on increasing people’s purchasing power as well as reducing income inequality and regional disparity,” MoF said in its report.
“This sets Malaysia on a sustainable growth trajectory.”
This means prioritising fundamental needs. The government said Budget 2020 will see more resources channelled into affordable housing, employment, quality healthcare, assistance for plantation smallholders, and tourism.
The plan will also underpin PH’s push for more technology adoption by the country’s largest employers sector-wise — small and medium enterprises.
MoF estimates technology adoption among SMEs remains low but said lack of financing could be a factor, something it aims to address by next year.
Strategic initiatives will also be taken to mitigate the impact of external risks from the prolonged Sino-American trade tension and a volatile global economic outlook.
MoF said some of it will be undertaken under Budget 2020 itself, which will focus on beefing up the domestic economy through several measures including reforming public and financial institutions.
“The government is committed to make Malaysia an attractive destination for high technology and high-value added industries,” the report said.
“The Budget proposes several measures to catalyse the economy through an improved public-private partnership, extensive access to SME financing and incentivising faster adoption of IR 4.0.”
Public reception of the SPV 2030 has been lukewarm so far, but pundits believe the blueprint has what it takes to pacify voters angered by PH’s failure to meet some of its economic pledges.
Former Bloomberg executive editor Daniel Moss, for example, said SPV30 is the appropriate plan for the current state of Malaysia’s economy, lauding it as a realistic ambition in line with the “sign of the times.”
Ibrahim Suffian, who directs pollster Merdeka Center, said the plan could help the coalition draw in support if positive effects are felt, but everything hinges on the execution.