New economic model must address wealth distribution

Published: 2009/12/25

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MALAYSIA needs to address the issue of wealth distribution under its new economic model, said former international trade and industry minister Tan Sri Rafidah Aziz.

"A lot of emphasis needs to be given to the important aspect of equality.

"The new Malaysian economy must address the issue of distribution of wealth as the pursuit of high income alone will not be acceptable in the future," she said.

A race-based approach to economic governance would also not be effective in the future because meritocracy will increasingly play a more important role, she said.

This is partly due to the vast improvement in access to infrastructure and social needs under years of political stability.

"The opportunities available to all Malaysians in education for example are so persasive nowadays unlike that during the days under the New Economic Policy," she said.

Meanwhile, economist Datuk Dr Zainal Aznam Yusof in his briefing on the economic outlook, said while Vision 2020 and the high income economy are the end-objectives, the main objective is to achieve a developed country status which includes other social standards and achievements.

The member of the National Economic Advisory Council pointed out that the World Bank identified 13 countries that managed to sustain growth and per capita income from 1971 to 1997.

"Malaysia is one of the countries in this group, registering a growth rate of 7 per cent per annum," he said, noting that only six countries, excluding Malaysia, managed to lift themselves into the high income economy group.

Zainal said while knowledge and technology are inputs to the new growth model, other factors such as human capital accumulation, intangible capital, innovation, research and development are crucial elements of the growth model.