Macroeconomic Policy, Growth, Redistribution and Poverty Reduction: the Case of Malaysia

Wee Chong Hui and K. S. Jomo

Chapter 9 in Pro-Poor Macroeconomics, 2006, pp 193-216 from Palgrave Macmillan

Abstract: Abstract Malaysia’s management of its economy is often seen as being rather unconventional and inconsistent. Even before the controversial September 1998 imposition of capital controls, Malaysia’s economic management style was described as unorthodox. After the events of May 1969, the government formulated the New Economic Policy (NEP) to ‘eradicate’ (reduce) poverty and to ‘restructure society’ (reduce inter-ethnic economic disparities). Accordingly, the government sector grew with increased expenditure, budgetary deficits and public debt in the 1970s. The government initiated a heavy industrialization drive in the early 1980s, but in the mid-1980s it abruptly opted for a more restrictive fiscal policy and in the mid-1990s it even ran modest budget surpluses. Huge deficits were incurred again after the 1997–98 financial crisis, but these were justified as being pro-recovery, rather than pro-poor (Jomo 2001, 2003).

Keywords: Foreign Direct Investment; Gross Domestic Product; Central Bank; Gross National Product; Country Case Study (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:sopchp:978-0-230-62790-1_9

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DOI: 10.1057/9780230627901_9

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