Launch of the Malaysia Human Development Report 2013

Nov 25, 2014

Tan Sri-Tan Sri, Dato-Dato, Datin-Datin, esteemed Members of Parliament and Members of State Assembly,

Distinguished Guests, Members of the diplomatic corps, Members of the Government of Malaysia, Academia and Civil Society and the media

Ladies and Gentlemen,

On behalf of the United Nations Development Programme, I welcome you to the launch of the inaugural Malaysia Human Development Report 2013 and the global Human Development Report 2014.

As the dust from the Global Financial Crisis settles, we continue to grapple with its meaning, origin and consequences, hoping to understand the megatrends and social processes that were set off as a result of this crisis that will shape future development discourse, the possible lessons we can derive from this episode, and ultimately, perhaps, to put in place an improved and repaired economic system.

It is against this backdrop that it is timely to reiterate our long-held view that economic growth is but a means to an end.  The end is human achievements and freedoms, what people aspire to be and their capabilities to achieve them, as well as the opportunities for people to realize their potential as human beings.

In line with this, and building on the capability approach first developed by Nobel Laureate Professor Amartya Sen, the United Nations Development Programme (UNDP) has always been at the forefront of placing people at the centre of the human development discourse and promoting new and innovative approaches to development challenges.

This has been given a firmer conceptual, quantitative and policy focus through the Human Development Report, UNDP’s flagship report published globally and annually, and which has subsequently inspired reports of equal rigour on vexing development problems at regional, national and sub-national levels.  The Human Development Report’s editorial independence is guaranteed by UNDP resolution (A/RES/75/264), a resolution that also stresses the importance of human development reports to the work conducted and knowledge produced in the field of Human Development globally, regionally and nationally.

The 2014 Human Development Report was launched globally on July 24, 2014.  The global report focuses on Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience.  The 2014 report ranked Malaysia in the high human development category, and 62 out of 187 countries, unmoved from last year’s ranking, with Malaysia neighbouring on either side Barbados, Palau, and Antigua and Barbuda, and Mauritius, Trinidad and Tobago, Lebanon and Panama in the 2014 Human Development Index.

Malaysia’s high human development ranking is a notable achievement, and the majority of citizens who have matured along with this country can see tangibly the improvements in the economy, the society, and their own individual wellbeing.  The question then is how do we sustain human progress, reduce vulnerabilities, and build resilience – the question the global report interrogates?  How do we continue to expand the pie and ensure that a meaningful slice of that pie is afforded across distinct groups and to the poor, irrespective of their group membership?  What do we need to do to see a sustained rise of Malaysia up the human development rankings?  To answer these questions calls for in-depth analysis of the remaining constraints to inclusive and sustainable growth and development, with identification of associated strategies to address these gaps or constraints.

It is therefore with Vision 2020 in mind, that UNDP began work on Malaysia’s first National Human Development Report in mid-2012, entitled the Malaysia Human Development Report (MHDR) 2013: Redesigning An Inclusive Future.  The purpose of this independent report is to provide an assessment of Malaysia’s growth and policy choices to further contribute and engage in the dialogue of the planning before 2020.  The report is anchored in the idea that while economic prosperity may help people lead freer and more fulfilling lives, other non-income factors such as education, health and living standards play a vital role to influence the quality of people’s freedoms.

Ladies and gentlemen,

As Malaysia focusses on game changers and defining a transformative agenda that will lead to the realisation of its Vision 2020, the thematic focus of this MHDR and its ambition to contribute to “Redesigning an Inclusive Future” offers an opportunity for collective re-architecting of a future where growth and high income alone is insufficient.

This reinforces the global message and lesson learned, that while growth is necessary, there is an urgency to move away from a growth model that, while on balance it has provided major human development gains, especially in many countries of the south, it also has resulted in worsening inequality worldwide.  We need now to focus our economies on a new paradigm, one that is centred on people, on lifting the bottom 40 percent and reducing their sense of precariousness, and on the expansion of the middle class as an indicator of inclusive growth.

Malaysia has implemented and promoted a growth-with-distribution strategy over the past decades, accomplishing results that have rightfully earned Malaysia global recognition, admiration and respect.  Absolute poverty has seen a staggering reduction from almost 50% in the 1970’s to a mere 1.7% in 2012. Malaysia’s Gini Coefficient, a measure of statistical dispersion intended to represent the income distribution of a nation's residents, and which is the most commonly used measure of inequality, also declined from 0.513 to 0.441 during this period, showing a reduction of the income gap in the country. Malaysia also has managed to achieve two thirds of the Millennium Development Goals (MDG), with significant progress seen in the remaining areas.

Today, Malaysia’s New Economic Model (2010-2020) embraces an inclusive agenda, and the Tenth Malaysian Plan (2011-2015) follows in the same spirit by placing a strong focus on broadening the ability of Malaysians to participate in, and benefit from, economic development.  As Malaysia moves to the 11th Malaysian Plan, the last mile before 2020, it is imperative to reflect, as Government is presently doing, upon past successes and the unattained milestones and remaining challenges.  It is also imperative to acknowledge the materialization of new challenges – par for the course in a dynamic world - and make the best decisions for the future.

These remaining and new challenges include: the growing concern over relative poverty; geographical concentration of poverty, especially in the state of Sabah; the persistent and increasing inequality of wealth and assets; wage stagnation, as well as the inequitable distribution between wages and profits; the lack of a proportional middle-class growth despite steady and rapid economic changes, which, in turn, highlights the importance of dealing aggressively with constraints to upward social mobility; persistent gender gaps in terms of pay, employment, and participation in decision-making related to the process of growth and development; and the continuing need to address the complexities of affirmative action and vehicles for securing inclusion and social cohesion and harmony in a multiracial and multicultural society.

Ladies and gentlemen,

To address these challenges, the MHDR took upon itself to bring new and deeper insights of contemporary Malaysia and its dynamic socio-economic situation.  The MHDR has defined inclusive growth as comprising equitable distribution and benefits of economic growth and of social spending across distinct income group membership; robust generation of broadly accessible opportunities for economic participation and safeguarding for the vulnerable; and inclusion of citizens in policy formulation and implementation.

The ultimate aim is to help minimize socioeconomic exclusion and injustice, and increase social cohesion.  This has allowed for, and motivated, the MHDR to adopt a multidisciplinary and multidimensional approach which encompasses economic, social, political and legal elements, and assists greatly in highlighting social, gender and ethnic aspects of relative deprivation and human development.

The MHDR is shaped around this highly contemporary global character of approaches to human development undertaken by an increasing number of countries, and its results are rich and of high significance.  This report is designed to explore and help highlight the work that remains to be done and in the process, suggest steps for moving forward.

The MHDR is thus both a compliment and recognition of the Malaysian success story thus far, and an invitation to revisit and rethink together, as a nation, the remaining and emerging challenges that we need to confront. It calls for institutional and policy reforms which are deemed crucial to mainstream inclusion and sustainability in the next phase of development, and gives specific, implementable recommendations and advice as to what such reforms should look like.

Traditional one-size-fits-all, top-down strategies need to increasingly give way to gradual experimentation in bottom-up, decentralised growth and development policies.  While Malaysia has played well in the first half of the match, it now needs to allow for a bold and ambitious set of second-generation policies that will guide Malaysia in not just winning the second half, but also in triumphing as champion in the overall league, improving and sustaining human progress as it reduces vulnerabilities and strengthens resilience.

Among these key next steps, one of the key thrusts of the MHDR is for the reorientation of Malaysia’s economy towards expanding the middle class. Middle class expansion, whether measured by income, occupational status, or educational achievement is in itself an indicator that upward social mobility is taking place, where those at the bottom are graduating into, and thus swelling, the ranks of the middle class.

A sustained expansion of the middle requires a comprehensive social protection strategy to reduce risks and vulnerabilities, and, importantly, to safeguard from destruction due to shocks, citizens’ capabilities for upward mobility that take years to build and nurture.  A prioritization towards, and not just of, the middle, carries with it an emphasis of equality and a closing of gaps between the bottom and the middle, and between the middle and the top.

All these imply an underlying socio-economic process that requires redesigning of employment, wage and asset strategies; changes in production and consumption structure; and legislation and policies that foster inclusivity and protection, in order to attain inclusive growth.  Balanced solutions that aim to include the Malaysian society in its entirety should therefore be the priority.

Ladies and gentlemen,

Human development is less a destination or culmination, and much more a journey and a dynamic process of continuous engagement that no boundary could fully contain or threshold could adequately measure.  This is especially pertinent for Malaysia in its aspiration to be a high income “united nation, a confident Malaysian society … that is economically just and equitable, progressive and prosperous, and in full possession of an economy that is competitive, dynamic, robust and resilient” by 2020.

As Malaysia progresses towards realisation of its aspiration for its people, UNDP remains a steadfast partner to walk this last mile towards 2020. We have done so together since Malaysia’s independence, and we believe that we remain the choice development partner for Malaysia in redesigning the most inclusive and sustainable future possible.

Malaysia’s national aspirations are echoed by the global discussions on the post-2015 development agenda, where five transformative shifts have been put forward to frame the development landscape in the post-MDG world.  These transformative shifts call on us to: (1) leave no one behind; (2) put sustainable development at the core; (3) transform economies for jobs and inclusive growth; (4) build peace and effective, open and accountable institutions for all; and (5) forge a new global partnership – one that is based on a new spirit of solidarity, cooperation, mutual accountability, a common understanding of our shared humanity, and centred on people.

There is no doubt that Malaysia will be a key driver in these transformative shifts, and in our collective effort to shape a holistic post-2015 development landscape.

Malaysia’s past – its impressive growth with equity story and remarkable reduction in poverty in just over half-a-century of nation building - is an inspiration to many developing countries worldwide.

Malaysia’s present – its aspiration to move up and graduate into the ranks of the developed nations - is watched by many, especially middle income countries, to derive and adapt policy lessons for their own economies.

Malaysia’s future – its ability to redesign an inclusive and sustainable future, to craft innovative solutions in addressing new challenges while keeping its fingers on the pulse of old, legacy issues, will serve as an invaluable model to the global community, both in developed and developing countries worldwide.

Given the importance of the issues addressed by the report for Malaysia and, as well, for countries in similar situation, UNDP Malaysia was pleased to embark on this initiative to develop the country’s first National Human Development Report in close partnership with national stakeholders.  We must take note that this is a product that goes beyond the published physical report, to an entire process underlying it that is built on national ownership, participatory and inclusive preparation, independence and quality of analysis, flexibility and creativity in presentation and sustained follow-up.

The MHDR team has put in stellar and highly valuable work to produce a report that is anchored on a very robust consultation process with the view of capturing as many voices as possible, especially the marginal, under-represented and unrepresented ones, so that the recommendations put forward are not only of good quality and implementable, but also true to the spirit of inclusivity and sustainability.  We are confident that this independent assessment of Malaysia’s growth and development policy choices can further assist and stimulate the dialogue to advance the national inclusive growth agenda towards 2020 and beyond.

On this note, I would like to take the opportunity here to publicly thank our Malaysia Human Development Report team.  The team is comprised of dedicated and respected Malaysians, led by Tan Sri Datuk Dr. Kamal Salih and supported by Dr. Muhammed Abdul Khalid and Dr. Lee Hwok Aun, as well as Wan Ya Shin, Andika Wahab and Farhana Roslan who have been the research assistants throughout the project.  The research management and process was facilitated by the MHDR Secretariat that was led by UNDP’s Economist/Programme Manager, Christopher Choong.  This entire team has worked with unstinting dedication to realise this very rich product that we are sharing with you today.

I would also like to express my deep gratitude to our partners from the Economic Planning Unit in the Prime Minister’s Department, the Department of Statistics, and all the government ministers, agencies and departments who in so many ways have helped UNDP in their work to produce this report.  I would also like to acknowledge the inputs of background paper writers, peer reviewers, civil society organizations, interest groups, academicians and think tanks, UNDP’s corporate Human Development Office and the International Centre for Human Development (IC4HD) in New Delhi India, and other UN agencies, without which the MHDR would not have been as rich and as multi-faceted as it now is.  

I sincerely hope that the MHDR will speak to the needs and hopes of all Malaysians, specifically the poor, unrepresented and excluded.  We hope that this well-grounded report can serve as a meaningful reference material to stimulate deeper thinking and national discourse, inform socio-economic planning, and impact on policy analysis and policy advocacy to mobilise support for action and change as Malaysia journeys to developed nation status by 2020.

To bring greater understanding of the MHDR findings and recommendations, as well as to present a collaborative viewpoint, Tan Sri Datuk Dr. Kamal Salih, Dr. Lee Hwok Aun and Dr. Muhammad Abdul Khalid will form our panel and take the lead for our discussion on the MHDR later this morning.  I hope all of you, as well as members of the media will engage the authors during the panel session.

I thank you for your presence here today. Terima-kasih.

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