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NATIONAL CONFERENCE ON INTEGRATED SOCIAL POLICIES 7-8 FEBRUARY 2007, CAIRO, EGYPT SOCIAL POLICY FORMULATION AND IMPLEMENTATION IN MALAYSIA. RAJA ZAHARATON RAJA ZAINAL ABIDIN. BRIEFING OUTLINE. Background on Malaysia Development Philosophy and Planning Machinery Major Policy Evolution

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slide1

NATIONAL CONFERENCE ON INTEGRATED SOCIAL POLICIES

7-8 FEBRUARY 2007, CAIRO, EGYPT

SOCIAL POLICY FORMULATION AND IMPLEMENTATION IN MALAYSIA

RAJA ZAHARATON RAJA ZAINAL ABIDIN

slide2

BRIEFING OUTLINE

  • Background on Malaysia
  • Development Philosophy and PlanningMachinery
  • Major Policy Evolution
  • Socio Economic Dimensions
  • Development Record and Prospects
figure 1

PARAMOUNT RULER

PARLIAMENT

COUNCIL OF

RULERS

CABINET

MINISTRIES

CENTRAL

AGENCIES

DEPARTMENT &

AUTHORITIES

MEDIA

POLITICAL

PARTIES

STATE

ADMINISTRATIONS

NGOs &INTEREST GROUPS

INDIVIDUALS

FIGURE 1
major improvements based on key economic indicators

1970

1980

1990

2000

2005

2006F

1,132

368

1,247

7.4

1.9

-4.0

0.2

3,737

1,717

4,487

5.6

6.7

-13.5

-1.2

6,299

2,329

5,284

5.1

3.1

-2.9

-2.1

13,333

3,509

8,360

3.1

1.6

-5.8

9.4

17,682

4,690

10,300

3.5

3.0

-3.8

16.4

19.739

5,235

11,100

3.5

3.5-4.0

-3.5

17.2

Major improvements based on key economic indicators . . .
  • GNP per capita
    • RM
    • USD
    • USD (in PPP)
  • Unemployment (%)
  • Inflation (%)
  • Fed. Govt. account
  • (% to GDP)
  • Current a/c of BOP
  • (% to GNP)

4

slide5

POPULATION SIZE AND STRUCTURE,2000 and 2010

% to

Total

% to

Total

% growth

2001-10

2000

2010

  • Total Population
  • (million persons)
  • Bumiputera
  • Chinese
  • Indian
  • Age Structure (years)
  • 0 – 14
  • 15 – 64
  • 65+
  • Dependency Ratio (%)
  • Median age (years)

23.3

14.6

5.6

1.6

7.7

14.6

0.9

59.1

23.9

100.0

66.1

25.3

7.4

33.1

62.9

4.0

28.9

18.7

6.5

1.9

8.6

19.0

1.3

52.2

26.7

100.0

68.3

23.8

7.1

29.7

65.8

4.5

2.2

2.5

1.5

1.8

1.1

2.6

3.4

slide6

DEVELOPMENT PHILOSOPHY

through a MIXED ECONOMIC SYSTEM of free enterprise but with active government support and direction

The GOVERNMENT provides the broad thrusts and sets direction for the whole economy, and ensures the achievements of socio-economic goals

The PRIVATE SECTOR is free to operate and given appropriate policy, institutional and infrastructural support.

slide7

CONSULTATIVE PROCESS

Consultations with Civil Society

Inter Agency

Planning Groups

(IAPGs)

Inter Agency

Planning Groups

(IAPGs)

Consultations with

the private sector

MOF Budget Dialogue Technical Working Groups (TWGs)

  • Through
  • Government - private sector
  • dialogues
      • EPU dialogue
      • MOF budget dialogue
      • Bank Negara dialogue
      • MITI dialogue
slide8

PLANNING PROCESS

PLANNING FROM THE TOP

TREASURY

ECONOMIC PLANNING

UNIT

CENTRAL

BANK

DEPARTMENT

OF STATISTICS

INTER AGENCY

PLANNING GROUP (IAPG)

PRIVATE SECTOR

NATIONAL

DEVELOPMENT

PLANNING

COMMITTEE

ADJUSTMENT

AND MATCHING

ECONOMIC PLANNING

UNIT

CABINET

MINISTRIES

OTHER

AGENCIES

STATE

GOVERNMENT

PROGRAMME

AND PROJECTS

PLANNING FROM BELOW

slide9

PLANNING HORIZON

1. OUTLINE PERSPECTIVE PLAN

(Long term plan)

* OPP1 (1971 - 1990 )

* OPP2 ( 1991-2000 )

* OPP3 ( 2001-2010 )

2. FIVE-YEAR PLAN ( Medium term )

3. MID-TERM REVIEW ( MTR ) OF THE

FIVE-YEAR PLAN

4. ANNUAL BUDGET ( Short term )

major economic policies

THE NATIONAL MISSION

2006-2020

Vision 2020

Major Economic Policies

Total Development

Enhancing Nation’s Capability ~ competitiveness, unity, distribution & quality of life

Building a Resilient & Competitive Nation :

To raise quality of development & generate high sustainable growth

National Vision Policy (NVP)

OPP3 (2001-2010)

National Development Policy (NDP)

Balanced Development :

To establish a more united & just society

OPP2 (1991-2000)

New Economic Policy (NEP)

Growth with Equity :

To eradicate poverty & restructure of society

OPP1 (1971-1990)

Post-

independence

1957-70

  • Laissez-faire / export-oriented
  • Economic and rural development

10

slide11

Social Development Programmes

  • To integrate the population into the modern economy
  • To redistribute the wealth of the nation
  • To improve the quality of life of the people, especially those in the rural areas
development expenditure gives priority to economic and social sectors to total
Development Expenditure Gives Priority To Economic And Social Sectors . . .(% to Total)

2MP

'71-'75

3MP

'76-'80

4MP

'80-'85

5MP

'86-'90

6MP

'91-'95

7MP

'96-'00

8MP

'01-'05

9MP

'06-‘10

Sector

  • 38.5
    • 4.6
    • 6.0
    • 19.0
    • 7.5
  • 40.8
    • 25.7
    • 5.6
    • 4.1
  • 13.0
  • 7.7
  • 100.0
  • 170.0
  • 44.9
    • 5.7
    • 9.9
    • 16.2
    • 10.9
  • 37.5
    • 20.6
    • 5.4
    • 5.0
  • 10.6
  • 6.9
  • 100.0
  • 200.0
  • Economic
    • Agriculture
    • Industry
    • Infrastructure
    • Utilities
  • Social
    • Education
    • Health
    • Housing
  • Security
  • Administration
  • TOTAL
  • RM billion
  • 50.6
    • 18.3
    • 14.6
    • 14.4
    • 2.9
  • 13.1
    • 7.1
    • 1.9
    • 1.7
  • 10.4
  • 1.5
  • 100.0
  • 9.8
  • 54.4
    • 18.7
    • 13.0
    • 16.0
    • 6.3
  • 14.6
    • 6.2
    • 1.2
    • 5.2
  • 14.2
  • 1.9
  • 100.0
  • 24.9
  • 60.5
    • 16.3
    • 13.6
    • 20.2
    • 9.9
  • 21.5
    • 10.1
    • 1.6
    • 8.5
  • 16.2
  • 1.8
  • 100.0
  • 46.3
  • 64.8
    • 20.8
    • 11.3
    • 21.5
    • 10.2
  • 24.8
    • 16.1
    • 2.6
    • 4.1
  • 7.2
  • 3.2
  • 100.0
  • 35.3
  • 50.6
    • 11.6
    • 7.4
    • 22.5
    • 7.8
  • 24.8
    • 13.4
    • 4.4
    • 3.3
  • 20.1
  • 4.5
  • 100.0
  • 54.7
  • 47.6
    • 8.2
    • 11.4
    • 21.0
    • 5.5
  • 31.6
    • 19.9
    • 3.8
    • 3.4
  • 11.8
  • 9.0
  • 100.0
  • 99.0

12

slide13

Socio-economic dimensions . . .

Malaysia had achieved most of the UN Millennium Development Goals

  • Eradicate poverty & hunger
  • Achieve universal primary education
  • Promote gender equality & empower women
  • Reduce child mortality
  • Improve maternal health
  • Combat HIV/AIDS, malaria & other diseases
  • Ensure environment sustainability
  • Develop a global partnership for development
major success to eradicate poverty
Major Success to Eradicate Poverty

(% total households)

2004a

5.7

11.9

2.5

1.2

Note :a/ Poverty Line Income (PLI) revised methodolody for 2004 was RM661 per month in Peninsular Malaysia (household size 4.4); RM888 in Sabah (household size 5.2); & RM765 in Sarawak (household size 4.6). Hardcore poverty is estimated using half of PLI.

14

poverty eradication programmes
Poverty Eradication Programmes . . .
  • Focused on human resource development and quality of life improvements
  • Emphasize income-generating projects and not on welfare handouts
  • Major programmes :
    • Rural development
      • New land and in-situ development
      • Drainage and irrigation
      • Agriculture support services
      • Village/small industries
      • Upgrade rural infrastructure - roads, electricity, water
      • Upgrade schools & health facilities
    • Other programmes (hard-core poor)
      • Direct assistance ~ old folks home / the aged, the handicapped
      • food supplements and scholarships
      • interest free loans

DISTRIBUTION AGENDA

slide16

Better Quality of Life . . .

% Change

1990/2004

Area

Malaysian Quality of Life Index . . .

  • Working life
  • Culture & leisure
  • Housing
  • Transport & comm.
  • Health
  • Education
  • Income & distribution
  • Social participation
  • Family life
  • Environment
  • Public safety
  • MQLI

22.1

21.2

18.9

18.1

18.1

15.9

8.0

6.6

4.2

-0.3

-21.5

10.9

The Malaysian Quality of Life Index (MQLI) is an aggregate measure of the quality of life using forty-two indicators, representing eleven components of life

16

selected indicators of quality of life reaching the level enjoyed in advanced economies

2

2

Selected Indicators Of Quality Of Life. . . reaching the level enjoyed in advanced economies

1970

1990

2005

61.6

65.6

39.4

4,302

58

17

48

44

68.8

73.5

13.1

2,533

85

131

80

80

71.8

76.2

5.9

1,387

95.1

907

95

98

  • Life expectancy (in years) :
    • Male
    • Female
  • Infant mortality rate / 1000
  • Population / Doctor ratio
  • Literacy rate (%)
  • Telephones / 1000 population 1
  • Utilities :
    • Pipe water (% of population)
    • Electricity (% of households)

Note : 1/ Include mobile phones 2/ Universal coverage in urban areas

17

slide18

Real GDP Growth . . .

Average 1971- 80

Average 1981- 90

Average 1991- 2000

Average 2001- 05

2000

2001

2002

2003

2004

2005e

2006F

2007F

7.5 %

5.8 %

7.1 %

4.5 %

8.9 %

0.3 %

4.4 %

5.5 %

7.2 %

5.2 %

5.8 %

6.0 %

transformation from an agro based to an industrial based economy
Transformation From an Agro-based to an Industrial-based Economy . . .

(GDP in RM billion at 1987 prices / Percentage to Total in italics)

RM billion

300

250

200

58.2 %

57.6 %

150

53.9 %

100

46.8 %

43.1 %

12.2 %

31.6 %

30.8 %

31.9 %

50

37.5 %

17.2 %

24.6 %

0

26.7 %

21.0 %

16.3 %

8.9 %

8.6 %

8.2 %

19

diversification of exports products to total exports
Diversification of exports products . . .(% to Total Exports)

Manufactures 80.5

Rubber

33.4

Tin

19.6

Forestry

16.3

Others

9.8

Oil & gas

3.9

Palm Oil

5.1

Palm Oil

3.6

Manufactures 11.9

Oil & gas

9.2

Others

2.7

Forestry

1.3

Rubber

1.1

Tin

0.2

1970

RM 5,163 million

(USD2,065 million)

2005

RM 533,790 million

(USD141,588 million)

20

implementing pragmatic fiscal policy the federal government accounts 1970 2006 rm billion

Revenue

RM120.6 bn

(2006)

Operating

Expenditure

RM105.4 bn

(2006)

Development

Expenditure

RM34.5 bn

(2006)

Deficit

RM19.3 bn /

-3.5% of GDP

(2006)

Implementing Pragmatic Fiscal Policy . . .The Federal Government Accounts, 1970-2006 (RM billion)

Revenue must cover operating expenditure and development expenditure must be financed through non-inflationary methods

21

slide22

9MP

Target

6.0

23,573

6,273

13,878

low

3.5

13.4

-24.3

-3.4

10.6

1.5

Prospects During The 9th Malaysia Plan, 2006-2010

  • Real GDP growth (% p.a.)
  • Per capita GNP (RM) *
  • Per capita GNP (US$)*
  • PPP Per capita GNP (US$)*
  • Inflation (% p.a.)
  • Unemployment rate (%) *
  • Current a/c of BOP (% GNP)*
  • Fed. Govt. account (RM bil.)*
  • % of GDP
  • Pub. Sector account (RM bil.)*
  • % of GDP
  • External reserve (months of retained imports)*

* End of period

22

gross domestic product 2000 2010 per annum
Gross Domestic Product, 2000-2010 (% per annum)

% growth per annum

% of GDP

Achieved

8MP

Target

9MP

2000

2005

2010

  • GDP (real)
  • Agriculture
  • Mining
  • Manufacturing
  • Construction
  • Services
    • Govt. Services
    • Bus. & Non-Govt. Svs.
      • Utilities
      • Transport etc
      • Trade etc
      • Finance etc
      • Other Services
  • 4.5
    • 3.0
    • 2.6
    • 4.1
    • 0.5
    • 6.1
    • 6.7
    • 6.0
    • 5.6
    • 6.6
    • 4.3
    • 8.1
    • 4.8
  • 6.0
    • 5.0
    • 3.4
    • 6.7
    • 3.5
    • 6.5
    • 4.5
    • 6.7
    • 5.9
    • 6.7
    • 6.8
    • 7.0
    • 6.6
  • 100.0
    • 8.9
    • 7.3
    • 31.9
    • 3.3
    • 53.9
    • 6.8
    • 47.1
    • 3.9
    • 8.0
    • 14.8
    • 12.7
    • 7.6
  • 100.0
    • 8.2
    • 6.7
    • 31.4
    • 2.7
    • 58.1
    • 7.6
    • 50.5
    • 4.1
    • 8.8
    • 14.7
    • 15.1
    • 7.8
  • 100.0
    • 7.8
    • 5.9
    • 32.4
    • 2.4
    • 59.2
    • 7.0
    • 52.2
    • 4.1
    • 9.1
    • 15.2
    • 15.8
    • 8.0

23

slide24

Key Factors For Success . . .

  • Political stability and harmonious society
  • Efficient government with pro-business policies
  • Getting fundamental policy framework right
    • Macroeconomic management
    • High savings rate
    • Industrialization strategy & Competitive investment incentives
    • Productive agriculture
    • Human resource development
    • High-quality infrastructure & social services

Conclusion

slide25

FACTORS AFFECTING THE SOCIAL POLICY PROCESS

  • Political environment
  • Administrative competence and technical expertise
  • Involvement of private sector and NGOs