Chapter 3 OVERFLOWING OF PROSPERITY ACROSS ETHNIC

Members :  SYAZRIZUL AZIZ BIN SAADON EC13040  MUHAMMAD UZAIR BIN MATALIF MA15039  AZIZOL FITRI AZHAR BIN ZALIZAM EC13027  AMEERUL ASHRAFF BIN MUHAMMAD FAUZI MH15046  RAJA ANAS AMIRUL BIN RAJA SHUHAIMI EC15046  MASNI AININA BINTI MAHMUD EC15052

CHAPTER 3 SUBTOPICS  Introduction  Socio-economic issues in the early years of independenceEconomic is the cause of ethnic issues  Dasar Ekonomi Baru (DEB)  The success of Malaysian economics  Issues and challenges  Summary

3.1 Introduction  growth and economic development is closely linked with socio-political stability in the country.  national wealth should be distributed in a fair manner so that all ethnic groups can enjoy all the benefits.  Growth and distribution.

Between Growth and Distribution  The issue of economic development is closely related to social issues, especially regarding the issue of poverty and income distribution by ethnic group.  Some important issues: 1. Between growth and distribution 2. Between equality and equility  The issue of income distribution can be viewed two angles: 1. Between different social classes 2. Between different ethnic groups 3. To overcome the problem, the DEB was launched

Among equility and equality  Among equility and equality 1. Equility issues or justice and equality or equality among Malaysians is guaranteed by the constitution Malaysia 2. Article (8) of (1) the Malaysian constitution affirms that all persons are equal before the law and entitled to equal protection of the law. 3. Article (153) relating to the special position of the Malays and natives.

 Dasar Ekonomi Baru ( )  Dasar Pembangunan Nasional ( )  Dasar Wawasan Nasional ( ) Examples of the economic basis of the state

3.2 socio-economic issues in the early years of independence

3.3 ECONOMY BECOMES THE ETHNIC ISSUE

 The issues of poverty and inequality that can potentially turn to the issue of ethnic when it can not be tackled by the government, including : - The difference in household income. - The differences between the wealthy person and poor person. - The income of the urban and rural groups.  Studies and data showing the level of poverty among ethnic Malays are more prominent in the years

3.4 DASAR EKONOMI BARU (DEB)  DEB was introduced motion by Tun Abdul Razak in 1970 and  It is an attempt by the government to improve the economic position after the tragedy of 13 May 1969 and a strategy towards the formation of a national unity.  DEB covers two objectives, namely: a. The eradication of poverty irrespective of race. b. Restructuring of society without economic function is eliminated.

 DEB agenda "double-edged sword" because it unites the various ethnic groups and a new starting point to ethnic Malays to be active in the fields of trade, industry and business.  DEB adhere to the principle that economic imbalances should be corrected in order to prevent tensions and conflicts between ethnic and further strengthen unity among Malaysians.

OBJECTIVE DEB  Eradication of poverty irrespective of race.  Restructuring of society without economic function.

To achieve the objectives of the DEB, some new institutions and agencies have been created such as:  FELDA  MARA  FAMA  RISDA  PERNAS  MARDI

 DEB forwarded within the framework of the Dasar Pembangunan Negara ( ) and Dasar Wawasan Nasional ( )

3.5 THE SUCCESS OF MALAYSIA’S ECONOMY.

 The World Bank recognizes Malaysia's economic success as one of the 'East Asian miracle economies' (World Bank 1993) Apart from that, this success can be categorized into three perspectives, which is : - Growth and rapid changes in the economic structure. - Human development and reduction in poverty levels. - Life’s quality is improved.

1. Growth and rapid changes in the economic structure  Since independence, Malaysia’s economy recorded an impressive growth rates.  This rapid growth has also enabled the per capita income increased from RM721 in 1960 to rm6099 in 1990.

2. Human development and reduction in poverty levels  The rapid economic growth in the last four decades has succeeded in reducing the poverty rate, from 52.4% in 1970 to 17.1% in 1990 to 5.7% thereafter in  Malaysia also managed to weather the economic downturn in 1980 and end in 1990.

3. Improved quality of life  Growth and higher disposable incomes since the last four decades has improved the quality of life of the Malaysia.  This can be seen from the aspect of health, education, ownership of goods, basic needs, provision of public infrastructure and so on.

3.6 ISSUES AND CHALLENGES  Widening income inequalities 1. During the implementation of the DEB,income inequality is widening community initially until Income inequality is getting better until However, the distribution of income shows the situation worsened between the rich and the poor since In 2004, the Gini coefficient for ethnic Malays, Chinese and Indians respectively 0.452,0.446 and It can be noted that inequalities of income distribution within each ethnic group were worse in 2004 than in Besides,ethnic Malays are the largest ethnic unequal in 1957 than in 2004

7. The ratio of the income gap between urban and rural areas has also declined between 1970 and 1990, but after 1990 the gap has increased. 8. The ratio of the income gap between rural and urban population had decreased in 1990 compared to 1970.However, the ratio of the income gap between urban and rural residents increased again in 2004.These shows that the income gap and rural population are among the issues which still need to be addressed.

 Growth or distribution? 1. Economic recession experienced by the country in reduce government revenue, and this gives constraints on government spending in an effort to increase Bumiputera participation in the modern economy.To overcome the financial burden of the government and keep its economy growing, the government has implemented economic liberalization with the privatization program. 2. The aim of economic liberalization with privatization program are:  reduce the financial and administrative burden  enhance competition, improve efficiency and increase productivity  stimulate investment and private entrepreneurship  reducing the number and size of the public sector  help achieving the objectives of the DEB

3.7 CONCLUSION  The government plays an important role in finding the right balance between growth agenda and distribution agenda with which is fair to all.  Dasar Ekonomi Baru (DEB) is a national policy designed to create a national unity.  During the past four decades, Malaysia's economy has performed very proud.  However, economic growth must be managed wisely so that the gap between rich and poor and income inequality can be overcome.