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Poverty Alleviation and Five-year Development Plans of Malaysia

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Development of Malaysia

The Malaysian Plan a comprehensive outline of government development policies and strategies which is also referred as Malaysia 5 Year Plan. After Malaysia had achieved their independence, the government has initiated a series of projects to drive the country towards achieving Vision 2020. Malaysian 4th Prime Minister Mahathir Mohamad officially inaugurated The Multimedia Super Corridor (MSC) on 12 February 1996. Since then, MSC has lead our country’s transformation towards a knowledge-based society for almost 17 years and MSC has become our gateway to ICT industry in the region.


More than 20 percent of the world’s population lives in poverty. Poverty is a big problem in the whole world, because thousands of people die each year due to this big issue. Poverty is an issue that needs to be address by everybody in the world because if no one tries to something about it is going to keep getting worst as time goes on. To help stop poverty we must help each other in any way we can. Poverty refers to the condition of not having the means to afford basic human needs such as clean water, nutrition, healthcare, clothing, food, and a warm place to live. Poverty is a deadly issue that’s killing our population slowly (Alvarado, n.d.).To help stop poverty, it is vital for the government and communities to contribute as much as possible to ensure everyone get at least their basic needs for the survival of human kind.

Literature Review

Objectives of the Five-year Development Plans of Malaysia

National Economic Policy (NEP)

The two objectives of NEP which go side by side are the elimination of poverty for Malaysians not considering their races and the rectification of the economic imbalances among the racial groups in the aspects of income, employment and wealth (Saniman, 2007).

NEP underlined the significance of reaching socio-economic aims along with pursuing economic growth goals to create unity and harmony in a country with many racial and religious communities. National unity was the final objective with the other goals as follows (Izad, 2012):

  1. Creation of growth centres
  2. Rural areas modernisation
  3. Rapid development of urban areas
  4. Raise productivity and income of those in occupations which lack productivity
National Development Policy (NDP)

NDP continued to carry on the objectives set by NEP. National unity is the ultimate objective of NDP because a united society is essential to improve the social and political stability and make sure that the sustainability of economic development is being maintained. This policy sets a crucial step to a direction of enabling Malaysia to achieve a developed nation status in all aspects of social, values, ethics and morals, political stability, quality of life, effectiveness of government, and excellence of economy (Kasturi, 2014).

National Vision Policy (NVP)

The objective is the same as NDP which is national unity. The objectives are to build a unified, forward-looking and prosperous one Malaysian race that lives together harmoniously and is involved in a strong and beneficial relationship. The following are the goals (Izad, 2012):

  1. Making the Malaysia society more knowledge-based
  2. Creating internally-driven growth by boosting local investments
  3. Improving dynamism of the agriculture, manufacturing and services sector through injection of knowledge
  4. Addressing the rural poverty and among the Orang Asli and Bumiputera minority groups in Sabah and Sarawak
  5. Improving the quality of life and income among those in the lowest 30% income categories
  6. Uphold a knowledge-based society by restructuring the development of human resource

Privatisation of Government Agencies or Corporations


Privatisation is mostly linked with increased efficiency because of the profit motive. To minimise their costs and hike up profits, private companies always make sure they increase their operational efficiency.

Besides, privatisation decreases political interruption from the government. At times, the government appears not capable to make tough decisions specifically when they affect their political stance like redundancy and reduction of salaries which eventually will attract not so positive publicity and attention. This is effectively unbeneficial for the privatised companies.

Not only that, privatisation motivates improvements in the company through competition. When a government-owned entity is privatised it loses government protection and is forced to adapt to the market by providing better products or services for survival. For survival, a privatised government-owned firm loses legal protection from the government and has no other choice but to adapt to the market by supplying better services or goods.


Privatisation of certain entities can cause natural monopoly. This type of monopoly happens when the top efficient number of companies in a sector is one. As an example, there are very high amounts of fixed costs involved for tap water. So, here, there is limited scope for having competition among few companies. In scenarios like this, privatisation would only form a private monopoly that seeks to establish higher prices and exploits costumers. Hence, it would be better to stir up a public monopoly instead of a private monopoly that exploits consumers. With private monopolies, there is a need for government regulation to prevent the abuse of monopoly power.

In industries that operate important services for the general public for example education, healthcare and public transport, their primary objective shouldn’t be profit motive for these firms. In healthcare, there is this fear that privatising healthcare could in the end lead to a greater focus being given to profit instead of priority of patient care. There is a debate that we do not need a profit incentive to increase standard in a field like healthcare. However, doctors are not likely to give a better shot in performing at work when they treat their patients when they are certain to be getting a bonus or a promotion (Pettinger, 2017).

Multimedia Super Corridor (MSC)

The Multimedia Super Corridor (MSC) is Malaysia’s most exciting initiative for the global information and communication technology (ICT) industry.

MSC was conceptualised in 1996 and has since expanded into a thriving dynamic ICT hub that hosts more than 900 multinationals, foreign-owned and locaally-grown Malaysian companies focused on multimedia and communications products, solutions, services, and research and development (UITM, n.d.). There are three phases to the MSC programme as follows:

MSC Phase 1 (1996-2003)

Five Cybercities were successfully developed which were Kuala Lumpur, KL Tower, Cyberjaya, Technology Park Malaysia and UPM-MTDC. There are more than 1,000 companies and universities, granted MSC status. Seven major MSC flagship initiatives were piloted, 22,000 high value jobs were created and a total revenue worth RM6 billion was generated.

MSC Phase 2 (2004-2010)

A few high intelligent cities were formed, these cities is known as cybercities. Cyberlaw that is par with global standard was established. Series of web that hold the same corridors concept was set up as well.

MSC Phase 3 (2001-2020)

Malaysia will evolve into one Multimedia Super Corridor. An International Cybercourt will be created in the MSC and 12 intelligent cities will be linked to the global information highway.

Many innovative flagship applications have been developed in the MSC to speed up its expansion. They are focused on the development of:

Smart Schools – It is a learning institution that has been systematically invented in terms of teaching and learning practices and school management so that the students are prepared to practice self-assessed and self-directed learning

Telehealth – It is a multimedia network linking all participators to provide products and services in healthcare. The purpose is to keep people in the wellness paradigm, through effortless provision of health information and virtual health services

Multipurpose Card (MPC) – To create one common platform that will enable the government and private application providers to form smart card solutions.

Electronic Government – It is launched to elevate the convenience, accessibility and quality of interactions between citizens and businesses. It will also increase information flows and processes within the government to elevate the speed and quality of policy department, coordination and enforcement.

R&D Clusters – It pools corporate resources and creates an environment to promote the development of innovative multimedia technologies

Technopreneur Development – To help the growth of ICT SMEs into world-class companies and to nurture a critical number of strategic high technology industries such as ICT, Biotechnology and other life science start-ups

Poverty Line Income

The poverty line income is the minimum level of income deemed adequate in a specific country. To find out the poverty line, it is usually calculated by finding the total cost of all essential resources that an average human adult consumes in a year. Historically, economists have given particular attention on the real estate market and prices of houses as a strong poverty line effector since rent required to live in an apartment constitutes the largest portion of those resources. Sometimes, certain factors like whether an adult is a parent, a child, married, and others, are usually used to be accounted for different circumstances (Wikipedia, 2018).

Concepts of poverty

One concept of poverty which is most frequently used is the lack of economic well-being which focuses on ways that are quantifiable for measuring and defining poverty. These perspectives essentially point to the common ‘economic deprivation’ theme, even though there are many perspectives poverty can take. The economic well-being approach is mainly focused on the inadequacy of economic resources that are consumed people. The idea of economic well-being is connected to the physical quality of life for which utilisation of clothing, shelter, food and other basic needs are essential.

Another concept is capability which underlines the need to look at poverty as a shortfall in the basic capabilities of a person that shows how much freedom is needed to reach meaningful ‘functionings.’ The degree of freedom an individual enjoys serves as a more accurate basis for determining the level of deprivation experienced. This concept makes more sense to idealise poverty because instead of focusing on instrumentally apparent low levels of income, it gives attention on the portion of well-being or deprivation that has inherent value and is generated from a wide range of attributes.

When the economic wellbeing and capability concepts see poverty from the material and inner quality of life angles, the social inclusion concept relates to the relational quality of life. The social inclusion approach focuses on the relationship of a person with the wider social institutions and frameworks which identifies an individual’s social and relational resourcefulness needed to achieve human well-being. Advocates of this social inclusion approach assert that when these individuals lack proper social order that would give them sufficient protection when it is needed, even if they have adequate income or adequate means for survival, people may be still considered poor too (Wagle, 2008).

Reasons of Poverty

Rural areas

Rural poverty is usually caused by poor infrastructure that inhibits mobility along with development. Usually the rural places lack properly built roads that could improve accessibility to bigger markets. The rural poor do not have access to emerging markets and technological development that are at urban places. As a result of poor infrastructure, the poor, many of whom have limited access to media outlets, communication is hindered which leads to social isolation. This kind of isolation interrupts integration with the urban community and well-established markets that could lead to better development and economic security. Besides, due to uncertainty in the water supply for yield production, poor irrigation systems endanger agricultural crops. Lower crop production, lesser days of employment and lesser productivity in a lot less wealthy rural area may be caused by not having irrigations at all for pumping or storing water.

For some rural communities, they have low levels of education together with limited opportunities to sharpen and elevate skills hinders social mobility. Most of the poor in remote areas work in jobs that are insecure that causes poverty among the rural poor because of the lack in education and not much skills. Insufficient education relating to personal well-being and nutritional diets frequently causes malnutrition in the poor rural citizens. Also, lack in accessibility to information and social isolation that is caused by insufficient roads causes the acquisition of healthcare and being able to afford it tough for the poor in rural areas, leading to worse health rates (Wikipedia, 2018).

Urban areas

The world’s population is expected to be close to 60% in the year 2030 as the urbanisation is quite a rapid process. When the urban population is increasing, this has caused urban poor to be a lot more apparent. Today, citizens in the urban areas are facing limited accessibility to hygienic water, insufficient waste management, excessive noise levels, environmental pollution and poor drainage systems as megacities are reaching their capacity for sustaining human life.

As more people migrate to urban areas to find better living situations, lack of employment opportunities contributes to even more households striving to survive with low levels of income. Hence, leading to the rich and poor gap to be expanding (Essays UK, 2013).

Measures to Eradicate Poverty

Provision of good job opportunities is one of the best ways out of poverty. In the initiative to encourage job growth, the government has to invest in strategies like renovating abandoned housing, developing renewable energy resources, rebuilding the nation’s infrastructure and other job-creation strategies that form more jobs, rejuvenate neighbourhoods, and boosts the economy of the country. Not only that, the government should build on models of subsidized employment to lend a helping hand to those who are long-term unemployed and other disadvantaged workers re-enter the working environment (Wallas & Boteach, 2014).

Furthermore, the consistent access to hygienic water sources is crucial to minimise poverty. Most businesses such as local farmers market to large multinational corporations place reliance to a certain degree on continuous access to clean water. Local farmers that wash crops and process foods know that water is really important to carry out these activities. Sometimes, employees and customers may need to leave the market momentarily to look for water and somewhere to access the bathroom when they do not possess safe water. Employers will be able to retain more productive and healthier workers if they can provide drinking water that is safe and sufficient sanitation facilities for their workers. On the other hand, schools in rural places often have a tough time retaining teachers when they are not able to provide sanitation facilities in or near schools (Lifewater, 2014).

Moreover, we should invest more in the poor children by providing them access to sufficient education, proper nutrition and healthcare. Children are our future world leaders and for them to be successful, they need to be equipped with the necessary skillset. In the future, they can make changes in the political system and economy so that they can help rescue their countries from poverty. Furthermore, as educated individuals, they are less likely to be involved in unethical behaviour which in turn reduces mortality levels. Every nation must be aware of skilful children who most likely will achieve high level professions. This children possess the ability to contribute greatly to society in wide ranges of fields that can motivate growth of the economy. Hence, it is essential to nurture their talents physically and mentally to reduce worldwide poverty in the long term. Also, for children to be physically and psychologically healthy, they should be provided with a proper nutritional diet. If children lack the appropriate amount of nutrition, it can cause their minds to develop slower and they might not absorb the learning too well. Good education systems and motivation from society are the keys in unlocking the full capabilities of young people (Pham, 2014).

Best solution

In my opinion, investing in children is the best way to overcome poverty from a global perspective. Children truly are the face of our future and we as society have to start now to shape today’s children by providing them access to good education, nutrition and healthcare.

When a child’s needs are being taken care of, not only is that an investment in a more democratic and equitable community, it is an investment in a more healthy, more literate and a more productive population in the long run. Investing in children is morally the right thing to be done. That is why UNICEF says ‘Finance development: Invest in Children’. It is also why UNICEF says ‘Poverty reduction starts with children’ (UNICEF, 2003).

Conclusion and Recommendations

Malaysia has come a long way ever since it achieved its independence in 1957. Ever since, the five-year Malaysian Plans have improved our nation’s economy and strengthen ties between people of different races and religions. Not only that, ICT industry in Malaysia has been tremendously transformed by MSC Malaysia. MSC Malaysia close the technology gap and enable collaboration between local industry and global companies. This has contributed economic growth in our country.

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