MALAYSIA PEOPLE FIRST Case Solution
ECONOMIC CONDITION OF THE COUNTRY:
The prime economy generators of the country have varied from time to time as per the policies and strategies adopted by the successive governments of the country. In the colonial era, the economy was majorly dominated by the agriculture, fishing, tin, rubber and forestry. However; after the independence of the country from Britain, the new government shifted the economy of the country to the import substitution industrialization strategy in order to diversify it.
Although it did supplement the growth and development rate of the country however it did not assist the government of the country in eradicating poverty from the country. In addition to this, it also gave birth to the political and ethnic unrest in the country and due to several law and order issues during the period hundreds of people were also killed during the clashes.
The cause of the social and political instability and clashes in the country was due to the unbalanced representation and opportunities of the population segmentation of the country. The Malay people were of the view that their legal rights and representation were not been protected and granted to them by the government of the country as only 2.5% of the corporate segment represented them while the Chinese accounted for above 27 % and foreigners accounted for roughly above 60% of the corporate ownership in the country.
In addition to this, the non Malay population of the country was also of the view that the government had willingly ignored their lawful and legal representation of the corporate ownership of the country.In order to overcome this issue of instability in the country, the government revived its economic strategy towards export based manufacturing in the early 1970s.
This was done by signing Free Trade Zone Act and establishing special industrial and economic parks and zones for the foreign entities with the lowest possible tariff rates for them. Several other adjustments and amendments were also made to the existing corporate culture at that time including the introduction of government linked corporations, fiscal incentives, population quotas based on ethnic segregation, price based allowances, administration support amendments and many growth. It can be altogether viewed as a shift of policy of the government of the country from an aggregate growth towards a more balanced growth that satisfied all.
The turning point and the negative downfall of the economy of the country was the Asian crises in the late ninety’s that affected all the south-eastern island nations. The crises started from Thailand and gradually spread in the whole region badly affecting the economies and business activities in the country. The government and the national bank of the country had no other option but to helplessly watch the devaluation of the currency of the country.
This also gave birth to a whole lot of other problems and challenges for the government of the country and the most critical among them were inflation, reduced foreign investments and the decrease in the employment ratio of the country, which was already limited.Although the country has recovered from the economic downfall however; the growth rate of the country has been very low and slow. The economy of the country has not been able to reach the marks where it once was before the economic crises in the region.
The new Prime minister of the country, Najib Razzak, has proposed a new economic model for the country to support his vision of impressive growth of the country. The objective of the newly developed model is to make the markets more flexible and business friendly and also promote the ethnic balance in the country. The main theme and policy behind this strategy is to increase the living standards of the population of the country however; he might have to face certain criticism and opposition as his party and coalition do not have the clear majority to pass the amendments as legislation in the assembly of the country and the people are also very supportive of the historical quota system that the previous economic model of the country has maintained................
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