NATIONAL DEVELOPMENT PLAN (NDP)

Partly by the success of the NEP and partly to broad-base the development strategy in the wake
of international economic and political developments, the Malaysian government launched the
National Development Policy (1991-2000) in 1991 by fourth Prime Minister which is Tun Dr.
Mahathir Mohammad. As a successor of the NEP, the NDP reaffirmed the relevance of the
former by retaining its main plank of 'growth with equity'. 'Balanced Development' was the
focus of the NDP in the sense that it stressed upon the need to maintain balance between
economic growth and equity, between material welfare and social values, balanced regional
development for national integration, balanced development of major sectors, human resource
development and protection of environment and ecology. In fact, the NDP categorically
targeted the areas which were left out during the NEP era. The main objective of the NDP was
to reduce relative poverty or income inequality. Reducing intra-ethnic income gap as against
inter-ethnic income gap became priority of the national government during 1990s. In view of
the changed circumstances and new challenges during 1990s, the NDP introduced several new
thrusts to attain balanced development in order to create a more united and just society. These
new thrust served to emphasise the growing concern of Malaysians that increasing
consideration should be given to non-materialistic matters in national development which
encompassed, among others, the strengthening of social and spiritual values and the protection
of environment and ecology. Under the NDP, programmes for eradicating poverty. Generally
to continue to be implemented as was during the NEP era. However, since the problem of
poverty was no longer as serious as at the beginning of the NEP period, the focus shifted
towards selective implementation of programmes and projects. In particular, the emphasis was
on targeting the programmes for the hardcore poor and problems associated with relative
poverty, especially for those who constituted the bottom 40 per cent of the households. In
implementing the programmes, efforts were made to minimise leakages and ensure that the
benefits reach the targeted groups through improvements in the delivery systems and greater
emphasis on human resource development. The NDP made considerable progress in poverty
reduction due to rapid growth of the economy which created employment opportunities for all,
including the poor as well as implementation of various programmes and projects aimed at
rural and agricultural households. The rural poor benefited from various development projects,
including Integrated Agricultural Development Projects (IADPs), the provision of agriculture
infrastructure, replanting schemes, land consolidation and rehabilitation, and support services.
These programmes enabled greater mechanisation and better agronomic practices, which raised
the productivity of agricultural labour by about 6.1 per cent per annum during the Sixth
Malaysia Plan (1991-1995). Higher productivity coupled with better prices for most
agricultural commodities increased rural household income. Moreover, the booming economy
offered greater opportunities in off-farm and nonfarm activities that helped to reduce the
incidence of poverty29 .To deal specially with hard core poor households, a special programme
for them was introduced in 1988 which was based on relevant survey and analysis. Known as
'Development Programme for the Hard core Poor', it involved the creation of a register and
profile of hard core poor households and the delivery of appropriate projects to meet their
specific needs such as additional opportunities to increase their employability and income,
better housing, food supplements for children and educational assistance. By the end of the
Sixth Malaysia Plan, about 16,740 hard core poor households benefited from income
generating projects, 39,060 participated in the attitudinal change programme30 and 37,200
received direct welfare assistance, with some households receiving more than one type of
assistance. This included the upgrading or rebuilding of dilapidated houses. To raise the income
of the hard core poor, the government launched the Bumiputra Unit Trust scheme for them in
1992. The hard core poor were provided with interest-free loans of RM5,000.00 to purchase
shares in a unit trust. By the end of 1995, about RM75. 7 million in the form of dividends and
bonuses were paid to those who participated in the scheme. The Second Outline Perspective
Plan (OPP2), covering the period 1991- 2000, was formulated based on the strategy and policy
frame of the NDP. The OPP2 was formulated for a shorter time frame of ten years, half that of
OPP 1 . This shorter time frame reduced the risks of setting unattainable goals and uncertainties
of making development projections on which these goals were dependent upon. It offered
several new dimensions in rural poverty planning. The NDP was build upon the achievements
attained during the OPP1 and provided a broader framework for achieving the poverty
eradication objectives within the context of a rapidly expanding economy. Nevertheless,
national unity remained the ultimate goal which was fundamental in bringing about stability
and sustained development in the Malaysian society. The NDP had set the pace for Malaysia
to become a fully developed and free-from-absolute poverty nation by 2033 . As stated earlier,
the NDP shifted its strategic focus to alleviate poverty among the hardcore poor and to reduce
relative poverty.

More specifically, the policy frame covered the following :

• ensuring a balanced development of the major sectors of the economy so as to increase their
mutual complementarities to optimise growth;

• striking an optimum balance between the goals of economic growth and equity;

• reducing and ultimately eliminating the social and econom1c inequalities and imbalances in
the country to promote a fair and more equitable sharing of the benefits of economic growth
by all Malaysians;

• promoting and strengthening national integration by reducing the wide disparities in

economic development between states and between urban and rural areas in the country;

• developing a progressive society in which all citizens enjoy greater material welfare, while
simultaneously being imbued with positive social and spiritual values and an increased sense
of national pride;

• promoting human resource development, including the creation of a productive and

disciplined work-force and developing the necessary skills to meet the challenges in industrial
development through a culture of merit and excellence, without jeopardising the restructuring
objectives;

• making science and technology an integral component of socioeconomic planning and

development, which entails building competence in strategic and knowledge-based
technologies, as well as promoting a science and technology culture in the process of building
a modern industrial economy; and

• ensuring that in the pursuit of economic development, adequate attention is given to the
protection of environment and ecology so as to maintain the long-term sustainability of national
development. With regard to balancing growth with equity, the NDP introduced the following
shifts in strategies to eradicate poverty and restructure society;

• shift the focus of anti -poverty strategy towards eradication of hard core poverty while at the
same time reducing relative poverty;

• focus on employment and rapid development of an active Bumiputra Commercial and

Industrial Community (BCIC) as a more effective strategy to increase the meaningful
participation of the Bumiputra in the modern sectors of the economy;

• rely more on the private sector to be involved in the restructuring objective by creating greater
opportunities for its growth.