DISCUSSION QUESTION: CHAPTER 1
SOURCES OF ECONOMIC GROWTH
• Capital accumulation - including all new investments in land, physical equipment and human resources
Growth in population and therefore although delayed, growuth in the labor force
Technological advances
Labor saving
FOUR MAIN THRUST OF ELEVENTH MALAYSIAN PLAN (11TH MP)
Thrust 1- Enhancing Inclusiveness towards an Equitable Society
This commitment is intended to allow all citizens to participate in and benefit from the country's economic success. Furthermore, inclusive growth is not only important for the well-being of individuals and society, but it is also necessary for long-term economic growth. The are several focus area of this commitment which are uplifting B40 households towards a middle-class society, empowering communities for a productive and prosperous society, transforming rural areas to uplift wellbeing and rural communities, accelerating regional growth for better geographic balance and enhancing Bumiputera Economic Community (BEC) opportunities to increase wealth ownership
Thrust 2 – Improve Wellbeing for All
The term "well-being" refers to a level of standard of living that fits a person's socioeconomic, physical, and psychological needs. The Government has always taken a balanced approach to development, prioritizing both economic progress and people's well-being. The focus area of this commitment is achieving universal access to quality healthcare and providing adequate and quality affordable housing to poor, low and middle-income households. Besides, the government also focus on creating safer living environments for thriving communities and improving road safety and emergency services to reduce fatalities.
Thrust 4- Strengthening Infrastructure to Support Economic Expansion
Thrust 3- Accelerating Human Capital Development for an Advanced Nation
Malaysia's economic growth and the movement of all economic sectors to knowledge-intensive industries rely heavily on human capital development. Furthermore, to attract investments into Malaysia, an effective and functional labor market is necessary, as it allows everyone to benefit from economic success. The focus area of this commitment are improving labor market efficiency to accelerate economic growth, transforming TVET to meet industry demand, strengthening lifelong learning for skills enhancement and improving the quality of education for better student outcomes and institutional excellence
Infrastructure development ensures that people have access to essential utilities and services such as transportation, communications, power, and clean water. If various types of transportation are better connected, people and goods will move more efficiently. Furthermore, a well-designed infrastructure reduces the cost of doing business and improve national competitiveness and productivity. The focus area of this commitment are building an integrated need-based transport system, unleashing growth of logistic and enhancing trade facilitation, improving coverage, quality and affordability of digital infrastructure and continuing the transition to a new water services industry framework.
FOUR BASIC SOCIOECONOMIC PROBLEMS THAT EXIST IN MALAYSIA WITH RELEVANT EXAMPLES
Income inequality among different ethnic groups
According to Ogbeidi & Agu in 2015, income inequality refers to differences in measurements, levels, conditions and so on. The effect of inequality can be seen with the widening gap between rich and poor. Typically, people living in urban areas have good access to their daily needs and amenities. Urban development will definitely increase public demand and eventually this will result in higher cost of living. However, it is different for anyone living in a rural area with low-income inequality. This is because agriculture is their main source of income and employment. As people know, there are three main ethnic groups in Malaysia, namely Bumiputera, Chinese and Indians. It becomes inequality because most of the Chinese ethnic group are pioneering in the field of manufacturing compared to the Bumiputeras who are only in the field of agriculture and Indians are involved in the field of rubber. For example, the statistic in 2019 shows for income inequality based on disposable income, the Bumiputera group recorded a decrease from 0.380 to 0.377, while both Chinese (0.396 to 0.399) and Indians (0.372 to 0.399) recorded an increase in income inequality
Poverty
Poon Wai Ching said in her book, poverty is a measured on the basis of the prevailing standard of living in the country. This poverty does not only occur in rural areas but also in urban areas there are people who are in poverty. Because of this, those who are in poverty have to face challenges in quality or insufficient in amount as well as making it difficult for them to obtain essential goods that is limited. There are two types of poverty, namely absolute poverty and relative poverty. In addition, poverty is also due to lack of skills and low educational attainment. So, most of the employment sectors today prefer to hire anyone who is qualified such as having sufficient skills and high educational attainment in order to be able to develop their business. Therefore, the government takes this opportunity to help people in trouble to get capital to do business. For example, Amanah Ikhtiar Malaysia (AIM) is offering a moratorium on targeted loan payments to its borrowers, referred to as ‘Sahabat’, whose livelihoods have been affected by the Covid-19 pandemic since last year
Education
As is well known, education is one of the socioeconomic problems in Malaysia because from pre-independence until the country has become independent, the education system still has some irrelevant issues. Due to the rapid economic growth in Malaysia, the sectors involved have a high demand for skilled and knowledge-based labor. So, the education sector needs to play an important role in equipping competent workers with knowledge and skills to overcome manpower shortage. Therefore, the Malaysian government needs to allocate funds for the education system in Malaysia so that teaching and learning sessions become quality and competitive. As can be found, under the 2020 Budget, the bulk of the budget is allocated for Education, with an increase of more than RM4 billion than in 2019. However, the bulk of this allocation is aimed only at school maintenance and repair. Naturally, facilities in schools : need to be improved. However, it is interesting to note that the studies conducted show that the school environment does not have a great importance in one’s life chances. This also indicates that the quality of a particular school does not significantly affect a student’s academic performance. On the other hand, what influences performance is the materials and resources available in the school
Unemployment
Unemployment is synonymous with the word jobless. Basically, unemployment occurs because of a financial crisis or an outbreak of an infectious disease that disrupts public health. Therefore, the Malaysian government must take precautions to control the crisis. In addition, there are also factors that are taken into account such as lack of skills, unsuitability of skills to compete in the labor market and others. This is very closely related to young people who have just graduated from university. For example, Malaysia has a youth unemployment rate that more than tripled at around 10.8% in 2017 compared to other Asean countries. This is because they may need more time to “shop around” for the right job, meaning they may have to wait longer to find a job that suits their needs. Also, during the widespread covid19 pandemic, Malaysians experienced a relatively high unemployment rate of 4.8% in June 2021 in just almost 2 years since the pandemic spread.
Capital accumulation can be found in land where it can be physical equipment, and skill of labor force
Population can be part of economic growth where the citizen can produce as labor force
technology can be part of economic growth in terms of investments.
the more expertise of labor, the higher return of revenue to increase economic growth
FACTORS CONTRIBUTING TO RAPID ECONOMIC GROWTH IN MALAYSIA
Availability of natural resources
Availability of skilled and unskilled work force
Good governance and policies
Political stability
The availability of natural resources are the factors contribute to the economic growth of a country
From the general point of view, Malaysia was abundance with natural resources such as forestry, timber as well as oil and gas
The availability of the resources will helps in increasing the economic growth
The availability of work force that are skilled and unskilled is contribute to the economic growth of a country
In Malaysia, there are sufficient labor force in various section of economic activities for the growth of the economy
The levels of literacy and education brings to the improvement in the productivity of the workforce which indirectly increase the economic growth
The rapid growth of economic also due to the good governance and government policies
The country which have the leadership that emphasis on the holistic and dynamic in the development of economy sectors will brings an impacts to the development of the country
While the policies based on the economic was introduced by the government are implement and revised are increase the country opportunities to compete in the global market
The growth of the economic of a country are not only based on the resources and good governance but also the stability of the political relationship itself
This is because of the development of policies related to the economic development are in need of a stable political environment
With the stability of the political environment, the country will promotes and attracts investments which lead to the economic growth
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