Madani Economy to uplift the nation’s dignity, safeguard the interests of all
The Malaysian Reserve, 08 August 2023
This effort was launched as we are trapped in an economic cycle characterised by the PM as dangerous, including rising living costs, low wages and profits, and a lack of competitiveness – Pic by Muhd Amin Naharul
The launch of the Madani Economy framework is the result of discussions with various parties
DURING the launch of the Madani Economy initiative on Thursday morning, July 27, Prime Minister (PM) Datuk Seri Anwar Ibrahim, in his opening speech, quoted a passage from a letter sent by Saidina Ali Abi Talib to the Governor of Egypt, Malik Al-Haris Al-Ashtar.
In the mentioned letter, which was sent on the occasion of Malik’s appointment as the Governor of Egypt in the year 655 Hijrah, Saidina Ali, among other things, conveyed messages and warnings about the government’s responsibility towards the people and advised to fulfil that responsibility with trustworthiness and fairness.
The essence of the message is to do things at the right time and in the right place. When a consensus is reached, do not try to voice personal opinions, and do not neglect the obligations that must be shouldered because the public will always observe and hold you accountable for everything you do for the people.
The same message was also conveyed by Datuk Seri Anwar at Putra Mosque, Putrajaya, on Dec 31, 2022, in the Special New Year’s Address 2023, and was reiterated by him when announcing the unity government’s planned initiative to restructure the country’s economy towards making Malaysia the leader in the Asian economy and improving the quality of life for all its citizens.
The launch of the Madani Economy framework is the result of discussions with various parties, economic experts, planners and civil servants was strengthened after obtaining views from workers, farmers, women, settlers and youth through dialogues and meetings with the public in mosques, shops and university campuses.
This latest effort was launched as we are trapped in an economic cycle characterised by the PM as dangerous, including rising living costs, low wages and profits, and a lack of competitiveness.
With two main focuses, the Madani Economy aims to restructure the economy to make Malaysia a prominent leader in the Asian economy and to continuously improve the quality of life for its people by driving economic growth, promoting investment, and strengthening the local industries to be more innovative, competitive, and able to expand into the global market.
Improving the quality of life is framed through empowering the people, regardless of their status or location, to build a better Malaysia for the people not only today but also for our future generations.
The government’s determination is focused on “raising the ceiling” and “raising the floor”, two crucial components of a house that have become symbols of the unity government’s holistic vision to elevate the country’s economy and uplift the dignity of its people.
Regarding “raising the ceiling”, the focus is on reforming and restructuring the economy to attain greater wealth, including by venturing into a more global and complex economy to make Malaysia a regional hub, achieve more successes as a regional champion, and ensure the security and sustainability of our economic model.
The aspect of “raising the floor” centres on the people by ensuring that the wealth achieved is shared more equitably, including creating jobs that provide a decent standard of living and fair opportunities for all segments of society to achieve success and enjoy world-class services, especially improving the quality of education, healthcare services, and basic infrastructure for both urban and rural populations.
To realise the vision of the Madani Economy based on Madani values, it requires the unity of all Malaysians to support seven indicators set as medium-term goals. The first goal is to position Malaysia among the top 30 largest economies in the world.
The second indicator is to achieve a Global Competitiveness Index within the top 12 in the world, followed by the target of labour income reaching 45% of the total income, surpassing the 40% target set in the 12th Malaysia Plan (12MP) by 2025.
The fourth indicator is to increase the participation of women in the labour force to 60%, while the Human Development Index aims to reach the top 25 in the world and the Corruption Perception Index to be in the top 25, followed by the seventh indicator to achieve fiscal sustainability with a fiscal deficit of 3% or lower.
Several long-term and medium-term policies are also formulated to sustain Malaysia’s growth, including government and government-linked investment companies (GLICs) investing RM1 billion in additional funds, matching private funds to support local start-ups and encourage technopreneurs, including providing funding for each growth phase of high-growth companies.
Another initiative is to enhance the housing loan scheme under the Syarikat Jaminan Kredit Perumahan (SJKP) with an allocation of up to RM5 billion for financing guarantees of up to 120% of the house price of up to RM300,000. This allows all housing costs to be covered through loans, including the principal financing, legal fees, valuation fees, insurance, furniture purchases and renovation costs.
Additionally, an additional RM400 million is provided for microloan schemes under agencies such as SME Corp, TEKUN, MARA, and Teraju, while the government has agreed to provide around RM1 billion for an e-cash credit initiative of RM100 to all adult Malaysians with an annual income of RM100,000 and below, benefiting over 10 million citizens from the B40 and M40 groups, with approximately RM1 billion being allocated.
The government also aims to create more jobs with decent and reasonable wages, implement policies to raise wages in line with the country’s level, review the minimum wage levels, introduce laws to ensure a conducive working environment, and implement a phased foreign worker levy to reduce the country’s reliance on less skilled foreign labour.
Equal opportunities will be created regardless of gender, ethnicity, or background, with a focus on low-income groups in awarding scholarships and full residential education, strengthening the state’s economic value chain based on the focus of each sector, enhancing urban liveability and sustainability, improving legislation and supervision, and supporting programs to increase female labour participation.
Various other initiatives are agreed upon by the government and stakeholders, including establishing a social protection network for all, including through Social Insurance to benefit more than 40% of formal and informal sector workers who do not receive proper retirement savings, ensuring sufficient and continuous retirement savings and further strengthening the social safety net for the people.
Reforms in healthcare, education, and human resources are also given attention by the government, as well as efforts to sustain the healthcare sector based on the guidelines of the Health White Paper, treating patients with a preventive and assured approach, and ensuring access to education for all Malaysians.
Public transportation facilities are also given priority through plans to integrate the management of land public transport to optimize all existing assets and improve last-mile connectivity issues, as well as basic facilities by providing access to water supply in Sabah and Kelantan to ensure universal access to basic infrastructure for all citizens.
To assist the people in owning their own homes, the Madani Economy framework sets the target of affordable housing for all, establishing the National Housing Action Plan, which includes the need for housing supply based on metrics such as the median house price for median income, while public housing provision continues alongside boosting the rental market to meet housing needs.
To achieve the country’s elevated ‘ceiling,’ efforts to advance Malaysia’s economy continue in line with the objective of making our country a leader in the Asian economy. The guidelines, containing seven focal points, include regional agenda topics (ASEAN), investment aspects, expanding local markets and business potential, Islamic economic leadership together with efforts to promote micro-entrepreneurs and the informal sector, promoting green growth for climate resilience, as well as aspects of land use and food security.
Realistically, the main policies and indicators as medium and long-term goals to continue Malaysia’s growth trajectory in the Madani Economy can be achieved through the cooperation of all ministries within a specific framework, including the Industrial Master Plan, the National Energy Transition Roadmap Malaysia (NETR), and the Mid-Term Review of the 12th Malaysia Plan (RMK12).