Malaysia, as one of the region’s most dynamic economies, has had an impressive track record of sustained economic growth, substantial poverty reduction, and progress in human development over the last few decades. Despite the shock of the 1997 Asian financial crisis, the country’s economy has recovered and grew at an annual average rate of 5.3 per cent between 2000 and 2006.
At the national level, Malaysia successfully halved poverty – from 17% in 1990 to 8% in 2000,below 4% in 2009, and further to 1.7% in 2012. School attendance as a proxy for literacy rates has risen steeply and is now above 95% for 15-24 year olds for both boys and girls. Malaysia’s net enrolment ratio in primary education stood at 98% in 2009. Gender parity exists in Malaysia in terms of education. As a result, Malaysia’s multi-ethnic and culturally diverse population achieved high human development status. The country has achieved all the Millennium Development Goals (MDGs) at an aggregate level, except for halting and beginning to reverse the spread of HIV/AIDS.
The challenge of growing inequality is an agenda that requires redress as the progress in poverty reduction has been uneven across the country. Although Malaysia has come close to ending extreme poverty, some challenges remain and new dimensions of inequality have emerged.
Socio-economic inequalities among the three major ethnic groups are much diminished, but not eliminated.
New inequalities are emerging – vertical inequality, regional, intra-ethnic inequality i.e. within the Bumiputera group, between Malay and non-Malay Bumiputera, as well as between immigrants to Malaysia and the hosts. Focusing on inter-ethnic inequality has the shortcoming of ignoring the distribution within ethnic groups.
A focus on vertical inequality in itself is needed and is recognized in the current re-orientation of economic growth and development. General income gap has widened considerably in absolute terms. The gap between the rich and the poor remains wide and equally high across all ethnic groups
The income gap ratio between urban and rural stopped narrowing in the 1990s; in fact, the gap in 2012 is actually the same as in 1984. The gap between the rural population and its urban counterparts has not changed much despite the huge resources allocated to the rural areas since 1957.
Although the government has allocated a significant portion of the budget on social issues through its 5 year development plans and continues to implement a range of programmes both at the national and sub-national levels, there are still avenues for strengthening and further refining the programmatic approaches in addressing these remaining challenges.
Looking to the future
Malaysia's progress thus far has been impressive. UNDP is committed to working hand in hand with the Government of Malaysia in sustaining and scaling up recent achievements in mainstreaming the human rights-based approach to development and gender equality in its programmatic activities by promoting inclusive growth, mainstreaming poverty eradication, gender empowerment and inequality reduction considerations in macro-planning frameworks, socio-economic models and policies; and improving institutional capacities for formulating innovative and inclusive outcome-based monitoring and evaluation frameworks, as well as supporting ministries in the development and collection of key data relevant for a middle-income country.