Second Malaysia Plan
Encyclopedia
The Second Malaysia Plan (In Malay language
: Rancangan Malaysia Kedua) was an economic development
plan
introduced by the government of Malaysia
with the goal of implementing the Malaysian New Economic Policy
(NEP). It lasted from 1971 to 1975 and aimed to "restructure" the society of Malaysia and reduce Malaysian Chinese
and foreign dominance in the economy of Malaysia
so as to improve the economic position of the Malays
. It was the successor to the First Malaysia Plan
, which was also intended to specifically tackle the problem of poverty
among the Malays. However, the First Malaysia Plan had limited success, which may have been a factor in the May 13 Incident
in 1969 when race riot
s broke out in Kuala Lumpur
. The Second Malaysia Plan was regarded by some as excessive in its zeal to increase Malay participation in the economy, and the government accordingly scaled back the emphasis on restructuring the economy when the plan ended.
controlled only 1.9% of the Malaysian economy, while the non-Malays (mostly Chinese) held 37.4%, with the rest in foreign hands. Due to this wide disparity, Article 153
of the Constitution
requires the government to set quotas for the dispensation of scholarships, employment in the civil service, etc. targeted at improving the economic status of the Malays.
However, the First Malaysia Plan
—whose approach had been dependent on the Malays "availing themselves of these facilities and services and putting them to good use"—failed in addressing the economic imbalance. Its policies also resulted in discontent among the non-Malays, who mostly supported the opposition parties that favoured reducing or eliminating affirmative action
for the Bumiputra in the 1969 general election. A victory parade held on May 12 by supporters of the opposition led to a retaliatory rally on May 13 by the United Malays National Organisation
(UMNO), a major party in the governing Alliance
coalition. However, the rally soon turned into a riot which lasted two days. Officially, around 200 people died—although others have given much larger estimates—with thousands left homeless, the majority of them Chinese. A state of emergency was declared, and Parliament
was suspended. The National Operations Council
(NOC) governed until 1971, when Parliament reconvened.
While it held the reins of power, the NOC set out the NEP, with the ultimate aim of eradicating poverty and eliminating "the identification of race with economic function" through a "rapidly expanding economy"; the NEP aimed for a Bumiputra share of 30% of the economy within 20 years. The Outline Perspective Plan was also approved, with similar goals to the NEP. Both the NEP and the Outline Perspective Plan were set to expire in 1990, and the Second Malaysia Plan was passed by Parliament to implement the goals of these policies.
A sum of M$
7.25 billion in total was allocated for the Second Malaysia Plan. Although this constituted a decrease from the First Malaysia Plan's allocation of M$10.5 billion, the Second Malaysia Plan hoped to achieve greater reduction in poverty and increase the involvement of the Malays in the private sector by imposing certain restrictions on private firms that would benefit Malay employment and economic ownership.
At the time the plan was announced, the non-Malays had, in the words of one commentator, "a virtual monopoly
of private industrial and commercial employment", and were concentrated in the urban areas. However, foreign interests controlled most modern industries, including manufacturing, banking, finance, rubber, and tin. The Malays were largely involved in rural occupations such as rice
farming, fishing, tending to rubber or oil palm
smallholdings, and so on. They were conspicuously absent from even minor white collar
jobs, such as clerical work, and only in the civil service, where they were guaranteed 80% of all government jobs, were they present in the upper portion of the hierarchy. Most members of some professions, such as medicine and law, were non-Malay. Ironically, government policies, such as those set out by Article 153, appeared to hinder Malay involvement in the private sector by giving them preference in only the public sector. Unemployment
among all races was also rampant, largely due to poor education, with about 70% of the 275,000 unemployed in 1970 being aged between 15 and 25 years. It was all this that the NEP and the Second Malaysia Plan set out to change.
(MIDA) and Majlis Amanah Rakyat
(MARA). Several more were also established under the plan, including the Perbadanan Nasional (PERNAS, or the National Trading Corporation), State Economic Development Corporation and the Urban Development Authority
(UDA).
PERNAS was established to purchase businesses and participate in joint ventures with private companies, as well as to develop nascent industries to be held in trust until the Malays held sufficient capital to take them over. By the end of the plan's tenure, PERNAS owned 100% of eight companies involved in insurance, trading, construction, properties, engineering, securities, and mining. Joint ventures had also been formed with the private sector to develop the mining, containerisation, tourism and consulting industries.
Parliament passed the Industrial Coordination Act during the Second Malaysia Plan, which required all new manufacturing enterprises with M$
100,000, or twenty-five or more workers, to be licensed by the Minister of Trade and Industry. To obtain such a licence, each firm had to meet certain conditions set by the Ministry, which could vary. Malaysian Chinese manufacturers were concerned about the act, as they had operated with minimal control from the government before. Nevertheless, the government stated the act was not meant to be detrimental towards any group, and went ahead with its implementation. Under the act, firms were divided into three categories: firms approved after 1 January 1972, firms approved before then, and firms operating without approval from the Ministry. All firms subject to the act were required to submit a proposal to the Ministry stating how they planned to achieve the long-term target of achieving 30% Malay and 70% non-Malay Malaysian ownership in the company. Proposals that were accepted then became the guidelines for how the relevant company would operate.
Until the Second Malaysia Plan, industry was concentrated on the west coast of Peninsular Malaysia
. The plan thus moved to establish new industrial estates on the east coast, in order to curb rural-urban migration—the east coast was considerably less urbanised than the west coast.
By 1975, manufacturing activities constituted 16% of the Malaysian Gross Domestic Product
(GDP), one per cent short of the target of the Second Malaysia Plan. Manufacturing grew negligibly in 1975, attributed by the government to the global recession
that year. This contrasted with the 15% growth achieved in 1974, which well exceeded the target of 12.5% growth per year during the Second Malaysia Plan. Food, wood products, and chemical products made up the majority of the manufacturing sector. The substantial growth in manufacturing during this period has been attributed to the government's establishment of free trade zones, where any goods brought in would not be subject to customs duties, and goods could be freely exported abroad or transferred to another free trade zone. In 1974, such zones were declared in the states of Penang
, Selangor
, and Malacca
. The industries located in these zones were mostly electronics-, rubber product- and textile-based.
, supplying roughly 40% of the non-communist world's tin. Nevertheless, tin reserves were declining; mining's contribution to the GDP was projected to fall 13% over the course of the Second Malaysia Plan, due to the exhaustion of tin and iron
reserves. However, bauxite
and copper
continued to contribute to the mining sector in the early 1970s. Malay participation in the mining sector was minimal, and as much as 70% of the industry remained under foreign control. This was a legacy of the British colonial era; many British firms, which had arrived in the 19th century to exploit Malaysian mineral resources, had not departed yet. Malay participation in the mining sector—especially in tin—was further hampered by the British tendency in the 19th century to bring in cheap Chinese labour; most of those employed in mining were still Chinese as late as 1970.
Petroleum
or crude oil began to significantly contribute to the Malaysian economy in the 1970s, as new oil rigs
and refineries
were set up. By 1975, total production of crude oil stood at 90000 oilbbl/d, most of it produced by Shell. In 1974, the exclusive right to own, explore and exploit petroleum in Malaysia was vested in the government enterprise of Petronas
. The following year, Petronas was granted sole rights over the marketing and distribution of all petroleum products and a provision to control other companies without taking an ownership stake in them, through the issuance of management shares to Petronas.
The number of Malays employed in the mining sector soared from 1970 onwards, as the government's restructuring policies came into force. When the Second Malaysia Plan began, less than 200,000 Malays were employed in the mining industry. By 1990, they numbered nearly a million, well ahead of the target numbers originally outlined. Licences for mining operations were specially reserved for Malays as part of the drive to increase their ownership level in the mining industry. The government also ostensibly increased Bumiputra ownership by nationalising several formerly foreign mining companies—by 1989, state corporations controlled 60% of the mining industry. The government was also aided by the fact that petroleum soon eclipsed other minerals in the mining sector—as Petronas was a state-owned corporation, it was also considered a Bumiputra enterprise. However, the government has been criticised for this practice, as it is argued nationalised corporations belong to the public at large, and not only to the Bumiputra.
, had taken. Although expenditure on other development increased substantially, by about M$1 million, funding for rural development was also increased. The Second Malaysia Plan focused on diversifying crops grown in Malaysia; the 1974 Green Book Program aimed to make Malaysia self-sufficient in food production by encouraging farmers to grow vegetables, such as long beans, chilies, etc., and rear livestock
—the Veterinary Department going as far as to distribute cattle
. Fertilisers, seedling
s, insecticide
s and herbicide
s were subsidised. Double-cropping of rice
was encouraged, so farmers could harvest twice in one year and effectively double their output. The Farmers' Organization Authority
was established in 1973 with the goal of coordinating agricultural cooperatives, farmers' associations, and government agricultural agencies.
Growth in small-scale agriculture was viewed as crucial to creating jobs and reducing rural poverty, and government agencies such as FELDA (the Federal Land Development Authority) vastly increased the scope and size of their development programs. RISDA (the Rubber Industries Smallholder Development Agency) was given the task of diversifying smallholder estates; RISDA set itself the ambitious goal of developing 150000 acres (607 km²) during the Second Malaysia Plan. The main aim was to diversify into palm oil
through the planting of oil palm
s. The Malaysian economy relied heavily on rubber at the time—at its peak, Malaya (Peninsular Malaysia) alone produced more than half of the world's rubber. However, the Great Depression, which depressed rubber prices, greatly set back the Malayan economy. The Malaysian government thus aimed to avert another incident by diversifying the agriculture sector. However, RISDA overreached itself in attempting to so quickly reappropriate land; by the end of the Second Malaysia Plan, only 40000 acres (161.9 km²) had been developed, with only half this number comprising oil palm estates.
The land development and resettlement policies instituted by the government, however, failed to make an impact on rural poverty. The government managed to resettle only 40,000 people, despite an estimated 535,000 families engaged in agriculture living below the poverty level. Due to inefficiencies in the program, the beneficiaries of resettlement and development were not always those with the greatest need. It was also alleged by some that there had been too much emphasis on the difficult process of resettlement and development of new areas, instead of increasing productivity in existing farms. Matters were complicated by the Constitution, which gave the states much control over land development, and thus requiring the federal government to negotiate with individual state governments. Non-Malay rural families also did not benefit much due to this, as the Constitution reserved portions of land for the Malays, and state governments were not anxious to receive destitute non-Malays.
Although the Second Malaysia Plan greatly modernised the "rice
bowl" states of Kedah
and Perlis
—virtually eliminating the water buffalo by replacing it with tractor
s—most smallholders and individual farmers did not benefit technology-wise. In the corporate agriculture sector, the Malays held only a 0.3% stake, as opposed to 70.8% held by foreign interests. In the noncorporate sector, the Malays held 47.1%. Due to limited capital, many Malays were still engaged in "lower productivity activities" as the Second Malaysia Plan ended.
al levels through a number of programs. These included incentives to grow nutritious food
, instruction in nutrition and menu planning, and provision of food for groups with the highest rates of malnutrition
. However, these programs were hindered by a lack of trained medical personnel.
Although family planning
was established as a national goal in 1964, efforts during the Second Malaysia Plan to promote it were hampered by government neglect. Much of the success achieved by the National Family Planning Board occurred during the years of the First Malaysia Plan
(1966–1970). The Second Malaysia Plan hoped to add 600,000 new users of family planning techniques, but the facilities and personnel provided were inadequate. The topic was viewed as rather sensitive by the government, and thus family planning was mostly ignored. Ironically, in 1984 Malaysian Prime Minister Mahathir bin Mohamad
effectively eliminated family planning as a government policy by announcing the National Population Policy, which targeted a 70 million population by 2100—up from 12.6 million in 1984.
was mostly sidelined in favour of socieconomic restructuring programs during the Second Malaysia Plan, some important initiatives were taken during its tenure. In 1970, Malay
, the national language, became the major medium of instruction from primary to tertiary level, replacing English
. British
standardised examinations were replaced with local ones, and new Malay-language textbooks were introduced. By the end of the plan, most formerly English-based schools had converted the first four years of instruction entirely to the new Malay-medium curriculum.
In 1973, the Curriculum Development Centre was established. Its goal was to coordinate projects to reform the curriculum that had previously been handled by varying government departments. It also began revamping the curriculum for science
and mathematics
, and began a new program to review the various social science curricula.
The Second Malaysia Plan also hoped to increase the availability of vocational and technical training. Despite some attempts, little progress was made in improving the curriculum, which focused on providing a general education and made little room for vocational or technical training. Several new technical and vocational schools were built under the Second Malaysia Plan, with seven institutions alone completed in 1975. It was hoped this would alleviate the problem of unemployment, especially among the youth.
, roadbeds, and repair facilities.
Air service was expanded under the plan, which paid for the purchase of all-weather and night traffic control equipment, as well as the training of staff to handle the equipment. The Second Malaysia Plan also saw Malaysia-Singapore Airlines split into the Malaysia Airline System (MAS) and Singapore Airlines
(SIA).
The Second Malaysia Plan also saw the introduction of containerisation in Malaysia to better facilitate transportation. The plan called for the establishment of a national haulage company to handle inland transport; in August 1971, Kontena Nasional Berhad (National Containers Limited) was established by the government. In December, M.V. Benavon became the first container vessel to dock in Malaysia, at the North Terminal of Port Klang
in Selangor.
At the time of the Second Malaysia Plan, there were only two sea port
s in Malaysia; one in Penang
, and one in Klang
. The plan called for the construction of two new ports, both in peninsular Malaysia; one would be in Johor
, and another would be in Kuantan
, a major town in Pahang
. The two main objectives of these projects were to meet increasing demand for sea transportation of freight, and to bring development to underdeveloped states. Johor Port
was completed in 1977, while Kuantan Port
began full operations in 1984.
The Second Malaysia Plan was also forced to confront an unexpected problem: inflation
. Between 1972 and 1975, the consumer price index
(CPI) unexpectedly increased by 40%. In 1974, the inflation rate averaged 18%, although it was reduced to 7% by 1975. This new conundrum was therefore considered by the government when it set out the Third Malaysia Plan (1976–1980).
Another overarching consequence of the Second Malaysia Plan was its efforts in crop diversification
. Despite RISDA failing to meet its targets, the palm oil
industry in Malaysia continued to grow. By 1998, palm oil was the second-largest contributor towards Malaysia's GDP, second only to electronics
products.
Overall, the Second Malaysia Plan made much more substantial progress towards reducing the inequity in the economy than its predecessor had. However, the emphasis on improving the lot of the Malays greatly worried the non-Malays, and when the Third Malaysia Plan was launched, the government toned down its rhetoric on affirmative action and emphasised greater economic growth, which would benefit all.
Malay language
Malay is a major language of the Austronesian family. It is the official language of Malaysia , Indonesia , Brunei and Singapore...
: Rancangan Malaysia Kedua) was an economic development
Development economics
Development Economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example,...
plan
Economic policy
Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy.Such policies are often...
introduced by the government of Malaysia
Politics of Malaysia
The politics of Malaysia takes place in the framework of a federal constitutional monarchy, in which the Yang di-Pertuan Agong is head of state and the Prime Minister of Malaysia is the head of government. Executive power is exercised by the federal government and the 13 state governments. ...
with the goal of implementing the Malaysian New Economic Policy
Malaysian New Economic Policy
The Malaysian New Economic Policy , was an ambitious and controversial socio-economic restructuring affirmative action program launched by the Malaysian government in 1971 under the then Prime Minister Tun Abdul Razak. The NEP ended in 1990, and was succeeded by the National Development Policy in...
(NEP). It lasted from 1971 to 1975 and aimed to "restructure" the society of Malaysia and reduce Malaysian Chinese
Malaysian Chinese
Malaysian Chinese is a Malaysian of Chinese origin. Most are descendants of Chinese who arrived between the fifteenth and the mid-twentieth centuries. Within Malaysia, they are usually simply referred to as "Chinese" in all languages. The term Chinese Malaysian is also sometimes used to refer to...
and foreign dominance in the economy of Malaysia
Economy of Malaysia
The Economy of Malaysia is a growing and relatively open state-oriented and newly industrialised market economy. The state plays a significant but declining role in guiding economic activity through macroeconomic plans...
so as to improve the economic position of the Malays
Malay people
Malays are an ethnic group of Austronesian people predominantly inhabiting the Malay Peninsula, including the southernmost parts of Thailand, the east coast of Sumatra, the coast of Borneo, and the smaller islands which lie between these locations...
. It was the successor to the First Malaysia Plan
First Malaysia Plan
The First Malaysia Plan was an economic development plan implemented by the government of Malaysia. It was the first economic plan for the whole of Malaysia—Sabah and Sarawak included—as opposed to just Malaya, which previous economic plans had confined themselves to...
, which was also intended to specifically tackle the problem of poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
among the Malays. However, the First Malaysia Plan had limited success, which may have been a factor in the May 13 Incident
May 13 Incident
The 13 May Incident is a term for the Sino-Malay sectarian violences in Kuala Lumpur , Malaysia, which began on 13 May 1969...
in 1969 when race riot
Race riot
A race riot or racial riot is an outbreak of violent civil disorder in which race is a key factor. A phenomenon frequently confused with the concept of 'race riot' is sectarian violence, which involves public mass violence or conflict over non-racial factors.-United States:The term had entered the...
s broke out in Kuala Lumpur
Kuala Lumpur
Kuala Lumpur is the capital and the second largest city in Malaysia by population. The city proper, making up an area of , has a population of 1.4 million as of 2010. Greater Kuala Lumpur, also known as the Klang Valley, is an urban agglomeration of 7.2 million...
. The Second Malaysia Plan was regarded by some as excessive in its zeal to increase Malay participation in the economy, and the government accordingly scaled back the emphasis on restructuring the economy when the plan ended.
Background
Although the Malays have nearly always comprised a majority of the Malaysian population, their economic power has rarely been commensurate. In 1970, the BumiputraBumiputra
Bumiputera or Bumiputra is a Malay term widely used in Malaysia, embracing indigenous people of the Malay Archipelago. The term comes from the Sanskrit word bhumiputra, which can be translated literally as "son of land"...
controlled only 1.9% of the Malaysian economy, while the non-Malays (mostly Chinese) held 37.4%, with the rest in foreign hands. Due to this wide disparity, Article 153
Article 153 of the Constitution of Malaysia
Article 153 of the Constitution of Malaysia grants the Yang di-Pertuan Agong responsibility for “safeguard[ing] the special position of the ‘Malays’ and natives of any of the States of Sabah and Sarawak and the legitimate interests of other communities” and goes on to specify ways to do this, such...
of the Constitution
Constitution of Malaysia
The Federal Constitution of Malaysia, which came into force in 1957, is the supreme law of Malaysia. The Federation was initially called the Federation of Malaya and it adopted its present name, Malaysia, when the States of Sabah, Sarawak and Singapore joined the Federation...
requires the government to set quotas for the dispensation of scholarships, employment in the civil service, etc. targeted at improving the economic status of the Malays.
However, the First Malaysia Plan
First Malaysia Plan
The First Malaysia Plan was an economic development plan implemented by the government of Malaysia. It was the first economic plan for the whole of Malaysia—Sabah and Sarawak included—as opposed to just Malaya, which previous economic plans had confined themselves to...
—whose approach had been dependent on the Malays "availing themselves of these facilities and services and putting them to good use"—failed in addressing the economic imbalance. Its policies also resulted in discontent among the non-Malays, who mostly supported the opposition parties that favoured reducing or eliminating affirmative action
Affirmative action
Affirmative action refers to policies that take factors including "race, color, religion, gender, sexual orientation or national origin" into consideration in order to benefit an underrepresented group, usually as a means to counter the effects of a history of discrimination.-Origins:The term...
for the Bumiputra in the 1969 general election. A victory parade held on May 12 by supporters of the opposition led to a retaliatory rally on May 13 by the United Malays National Organisation
United Malays National Organisation
The United Malays National Organisation, is Malaysia's largest political party; a founding member of the National Front coalition, which has played a dominant role in Malaysian politics since independence....
(UMNO), a major party in the governing Alliance
Barisan Nasional
Barisan Nasional is a major political coalition in Malaysia, formed in 1973 as the successor to the Alliance . Along with its predecessor, it has been Malaysia's federal ruling political force since independence...
coalition. However, the rally soon turned into a riot which lasted two days. Officially, around 200 people died—although others have given much larger estimates—with thousands left homeless, the majority of them Chinese. A state of emergency was declared, and Parliament
Parliament of Malaysia
The Parliament of Malaysia is the national legislature of Malaysia, based on the Westminster system. The bicameral parliament consists of the House of Representatives and the Senate. The King as the Head of State is the third component of Parliament....
was suspended. The National Operations Council
National Operations Council
The National Operations Council or Majlis Gerakan Negara was an emergency administrative body which attempted to restore law and order in Malaysia after the May 13 Incident in 1969, when racial rioting broke out in the federal capital of Kuala Lumpur. From 1969 to 1971, the NOC governed the...
(NOC) governed until 1971, when Parliament reconvened.
While it held the reins of power, the NOC set out the NEP, with the ultimate aim of eradicating poverty and eliminating "the identification of race with economic function" through a "rapidly expanding economy"; the NEP aimed for a Bumiputra share of 30% of the economy within 20 years. The Outline Perspective Plan was also approved, with similar goals to the NEP. Both the NEP and the Outline Perspective Plan were set to expire in 1990, and the Second Malaysia Plan was passed by Parliament to implement the goals of these policies.
Economic restructuring
The Second Malaysia Plan stepped up government involvement in the economy, with the main goal of increasing Malay economic interests, especially in the areas of manufacturing and mining. In order to avoid directly hurting Chinese economic interests, the plan focused on huge economic growth, with the goal of expanding both the Malay and non-Malay shares of the economy in absolute terms, while increasing the Malay share in relative terms as well.A sum of M$
Ringgit
Ringgit mostly refers to the Malaysian ringgit, which is the local currency in Malaysia, but it can also refer to the Brunei dollar or Singapore dollar in the Malay language. The word ringgit was originally used to refer to the serrated edges of Spanish silver dollars widely circulated in the area...
7.25 billion in total was allocated for the Second Malaysia Plan. Although this constituted a decrease from the First Malaysia Plan's allocation of M$10.5 billion, the Second Malaysia Plan hoped to achieve greater reduction in poverty and increase the involvement of the Malays in the private sector by imposing certain restrictions on private firms that would benefit Malay employment and economic ownership.
At the time the plan was announced, the non-Malays had, in the words of one commentator, "a virtual monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
of private industrial and commercial employment", and were concentrated in the urban areas. However, foreign interests controlled most modern industries, including manufacturing, banking, finance, rubber, and tin. The Malays were largely involved in rural occupations such as rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
farming, fishing, tending to rubber or oil palm
Oil palm
The oil palms comprise two species of the Arecaceae, or palm family. They are used in commercial agriculture in the production of palm oil. The African Oil Palm Elaeis guineensis is native to West Africa, occurring between Angola and Gambia, while the American Oil Palm Elaeis oleifera is native to...
smallholdings, and so on. They were conspicuously absent from even minor white collar
White-collar worker
The term white-collar worker refers to a person who performs professional, managerial, or administrative work, in contrast with a blue-collar worker, whose job requires manual labor...
jobs, such as clerical work, and only in the civil service, where they were guaranteed 80% of all government jobs, were they present in the upper portion of the hierarchy. Most members of some professions, such as medicine and law, were non-Malay. Ironically, government policies, such as those set out by Article 153, appeared to hinder Malay involvement in the private sector by giving them preference in only the public sector. Unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
among all races was also rampant, largely due to poor education, with about 70% of the 275,000 unemployed in 1970 being aged between 15 and 25 years. It was all this that the NEP and the Second Malaysia Plan set out to change.
Industrialisation
Several government agencies that had been established prior to the advent of the Second Malaysia Plan increased their participation in the economy during the Second Malaysia Plan. These agencies included the Malaysian Industrial Development AuthorityMalaysian Industrial Development Authority
The Malaysian Industrial Development Authority is an agency of the Malaysian government set up to advise the federal and state governments on industrial development policies, advise local and foreign enterprises on Malaysian industry, manage business licensing and exemptions from...
(MIDA) and Majlis Amanah Rakyat
Majlis Amanah Rakyat
The Majlis Amanah Rakyat is a Malaysian government agency. It was formed to aid, train, and guide Bumiputra in the areas of business and industry. MARA was formed on March 1, 1966 under the Rural and National Development Ministry...
(MARA). Several more were also established under the plan, including the Perbadanan Nasional (PERNAS, or the National Trading Corporation), State Economic Development Corporation and the Urban Development Authority
Urban Development Authority
The Urban Development Authority of Malaysia was a governmental agency in Malaysia. It served to launch and oversee urban development projects related to business, industry, and housing. It was also tasked with developing urban infrastructure....
(UDA).
PERNAS was established to purchase businesses and participate in joint ventures with private companies, as well as to develop nascent industries to be held in trust until the Malays held sufficient capital to take them over. By the end of the plan's tenure, PERNAS owned 100% of eight companies involved in insurance, trading, construction, properties, engineering, securities, and mining. Joint ventures had also been formed with the private sector to develop the mining, containerisation, tourism and consulting industries.
Parliament passed the Industrial Coordination Act during the Second Malaysia Plan, which required all new manufacturing enterprises with M$
Ringgit
Ringgit mostly refers to the Malaysian ringgit, which is the local currency in Malaysia, but it can also refer to the Brunei dollar or Singapore dollar in the Malay language. The word ringgit was originally used to refer to the serrated edges of Spanish silver dollars widely circulated in the area...
100,000, or twenty-five or more workers, to be licensed by the Minister of Trade and Industry. To obtain such a licence, each firm had to meet certain conditions set by the Ministry, which could vary. Malaysian Chinese manufacturers were concerned about the act, as they had operated with minimal control from the government before. Nevertheless, the government stated the act was not meant to be detrimental towards any group, and went ahead with its implementation. Under the act, firms were divided into three categories: firms approved after 1 January 1972, firms approved before then, and firms operating without approval from the Ministry. All firms subject to the act were required to submit a proposal to the Ministry stating how they planned to achieve the long-term target of achieving 30% Malay and 70% non-Malay Malaysian ownership in the company. Proposals that were accepted then became the guidelines for how the relevant company would operate.
Until the Second Malaysia Plan, industry was concentrated on the west coast of Peninsular Malaysia
Peninsular Malaysia
Peninsular Malaysia , also known as West Malaysia , is the part of Malaysia which lies on the Malay Peninsula. Its area is . It shares a land border with Thailand in the north. To the south is the island of Singapore. Across the Strait of Malacca to the west lies the island of Sumatra...
. The plan thus moved to establish new industrial estates on the east coast, in order to curb rural-urban migration—the east coast was considerably less urbanised than the west coast.
By 1975, manufacturing activities constituted 16% of the Malaysian Gross Domestic Product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(GDP), one per cent short of the target of the Second Malaysia Plan. Manufacturing grew negligibly in 1975, attributed by the government to the global recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
that year. This contrasted with the 15% growth achieved in 1974, which well exceeded the target of 12.5% growth per year during the Second Malaysia Plan. Food, wood products, and chemical products made up the majority of the manufacturing sector. The substantial growth in manufacturing during this period has been attributed to the government's establishment of free trade zones, where any goods brought in would not be subject to customs duties, and goods could be freely exported abroad or transferred to another free trade zone. In 1974, such zones were declared in the states of Penang
Penang
Penang is a state in Malaysia and the name of its constituent island, located on the northwest coast of Peninsular Malaysia by the Strait of Malacca. It is bordered by Kedah in the north and east, and Perak in the south. Penang is the second smallest Malaysian state in area after Perlis, and the...
, Selangor
Selangor
Selangor also known by its Arabic honorific, Darul Ehsan, or "Abode of Sincerity") is one of the 13 states of Malaysia. It is on the west coast of Peninsular Malaysia and is bordered by Perak to the north, Pahang to the east, Negeri Sembilan to the south and the Strait of Malacca to the west...
, and Malacca
Malacca
Malacca , dubbed The Historic State or Negeri Bersejarah among locals) is the third smallest Malaysian state, after Perlis and Penang. It is located in the southern region of the Malay Peninsula, on the Straits of Malacca. It borders Negeri Sembilan to the north and the state of Johor to the south...
. The industries located in these zones were mostly electronics-, rubber product- and textile-based.
Mining
Until the late 1970s, Malaysia was the world's foremost producer of tinTin
Tin is a chemical element with the symbol Sn and atomic number 50. It is a main group metal in group 14 of the periodic table. Tin shows chemical similarity to both neighboring group 14 elements, germanium and lead and has two possible oxidation states, +2 and the slightly more stable +4...
, supplying roughly 40% of the non-communist world's tin. Nevertheless, tin reserves were declining; mining's contribution to the GDP was projected to fall 13% over the course of the Second Malaysia Plan, due to the exhaustion of tin and iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
reserves. However, bauxite
Bauxite
Bauxite is an aluminium ore and is the main source of aluminium. This form of rock consists mostly of the minerals gibbsite Al3, boehmite γ-AlO, and diaspore α-AlO, in a mixture with the two iron oxides goethite and hematite, the clay mineral kaolinite, and small amounts of anatase TiO2...
and copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
continued to contribute to the mining sector in the early 1970s. Malay participation in the mining sector was minimal, and as much as 70% of the industry remained under foreign control. This was a legacy of the British colonial era; many British firms, which had arrived in the 19th century to exploit Malaysian mineral resources, had not departed yet. Malay participation in the mining sector—especially in tin—was further hampered by the British tendency in the 19th century to bring in cheap Chinese labour; most of those employed in mining were still Chinese as late as 1970.
Petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
or crude oil began to significantly contribute to the Malaysian economy in the 1970s, as new oil rigs
Oil platform
An oil platform, also referred to as an offshore platform or, somewhat incorrectly, oil rig, is a lаrge structure with facilities to drill wells, to extract and process oil and natural gas, and to temporarily store product until it can be brought to shore for refining and marketing...
and refineries
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
were set up. By 1975, total production of crude oil stood at 90000 oilbbl/d, most of it produced by Shell. In 1974, the exclusive right to own, explore and exploit petroleum in Malaysia was vested in the government enterprise of Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
. The following year, Petronas was granted sole rights over the marketing and distribution of all petroleum products and a provision to control other companies without taking an ownership stake in them, through the issuance of management shares to Petronas.
The number of Malays employed in the mining sector soared from 1970 onwards, as the government's restructuring policies came into force. When the Second Malaysia Plan began, less than 200,000 Malays were employed in the mining industry. By 1990, they numbered nearly a million, well ahead of the target numbers originally outlined. Licences for mining operations were specially reserved for Malays as part of the drive to increase their ownership level in the mining industry. The government also ostensibly increased Bumiputra ownership by nationalising several formerly foreign mining companies—by 1989, state corporations controlled 60% of the mining industry. The government was also aided by the fact that petroleum soon eclipsed other minerals in the mining sector—as Petronas was a state-owned corporation, it was also considered a Bumiputra enterprise. However, the government has been criticised for this practice, as it is argued nationalised corporations belong to the public at large, and not only to the Bumiputra.
Agriculture
The Second Malaysia Plan continued the initiatives that previous five year plans, such as the First Malayan Five Year PlanFirst Malayan Five Year Plan
The First Malayan Five-Year Plan was the first economic development plan launched by the Malayan government, just before independence in 1957. The colonial British government had concentrated available resources on fighting the Malayan communist insurgency instead of developing the rural areas of...
, had taken. Although expenditure on other development increased substantially, by about M$1 million, funding for rural development was also increased. The Second Malaysia Plan focused on diversifying crops grown in Malaysia; the 1974 Green Book Program aimed to make Malaysia self-sufficient in food production by encouraging farmers to grow vegetables, such as long beans, chilies, etc., and rear livestock
Livestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
—the Veterinary Department going as far as to distribute cattle
Cattle
Cattle are the most common type of large domesticated ungulates. They are a prominent modern member of the subfamily Bovinae, are the most widespread species of the genus Bos, and are most commonly classified collectively as Bos primigenius...
. Fertilisers, seedling
Seedling
thumb|Monocot and dicot seedlingsA seedling is a young plant sporophyte developing out of a plant embryo from a seed. Seedling development starts with germination of the seed. A typical young seedling consists of three main parts: the radicle , the hypocotyl , and the cotyledons...
s, insecticide
Insecticide
An insecticide is a pesticide used against insects. They include ovicides and larvicides used against the eggs and larvae of insects respectively. Insecticides are used in agriculture, medicine, industry and the household. The use of insecticides is believed to be one of the major factors behind...
s and herbicide
Herbicide
Herbicides, also commonly known as weedkillers, are pesticides used to kill unwanted plants. Selective herbicides kill specific targets while leaving the desired crop relatively unharmed. Some of these act by interfering with the growth of the weed and are often synthetic "imitations" of plant...
s were subsidised. Double-cropping of rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
was encouraged, so farmers could harvest twice in one year and effectively double their output. The Farmers' Organization Authority
Farmers' Organization Authority
Farmers' Organization Authority is a Malaysian government statutory body under the Ministry of Agriculture and Agro-based Industries, Malaysia.History=...
was established in 1973 with the goal of coordinating agricultural cooperatives, farmers' associations, and government agricultural agencies.
Growth in small-scale agriculture was viewed as crucial to creating jobs and reducing rural poverty, and government agencies such as FELDA (the Federal Land Development Authority) vastly increased the scope and size of their development programs. RISDA (the Rubber Industries Smallholder Development Agency) was given the task of diversifying smallholder estates; RISDA set itself the ambitious goal of developing 150000 acres (607 km²) during the Second Malaysia Plan. The main aim was to diversify into palm oil
Palm oil
Palm oil, coconut oil and palm kernel oil are edible plant oils derived from the fruits of palm trees. Palm oil is extracted from the pulp of the fruit of the oil palm Elaeis guineensis; palm kernel oil is derived from the kernel of the oil palm and coconut oil is derived from the kernel of the...
through the planting of oil palm
Oil palm
The oil palms comprise two species of the Arecaceae, or palm family. They are used in commercial agriculture in the production of palm oil. The African Oil Palm Elaeis guineensis is native to West Africa, occurring between Angola and Gambia, while the American Oil Palm Elaeis oleifera is native to...
s. The Malaysian economy relied heavily on rubber at the time—at its peak, Malaya (Peninsular Malaysia) alone produced more than half of the world's rubber. However, the Great Depression, which depressed rubber prices, greatly set back the Malayan economy. The Malaysian government thus aimed to avert another incident by diversifying the agriculture sector. However, RISDA overreached itself in attempting to so quickly reappropriate land; by the end of the Second Malaysia Plan, only 40000 acres (161.9 km²) had been developed, with only half this number comprising oil palm estates.
The land development and resettlement policies instituted by the government, however, failed to make an impact on rural poverty. The government managed to resettle only 40,000 people, despite an estimated 535,000 families engaged in agriculture living below the poverty level. Due to inefficiencies in the program, the beneficiaries of resettlement and development were not always those with the greatest need. It was also alleged by some that there had been too much emphasis on the difficult process of resettlement and development of new areas, instead of increasing productivity in existing farms. Matters were complicated by the Constitution, which gave the states much control over land development, and thus requiring the federal government to negotiate with individual state governments. Non-Malay rural families also did not benefit much due to this, as the Constitution reserved portions of land for the Malays, and state governments were not anxious to receive destitute non-Malays.
Although the Second Malaysia Plan greatly modernised the "rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
bowl" states of Kedah
Kedah
Kedah is a state of Malaysia, located in the northwestern part of Peninsular Malaysia. The state covers a total area of over 9,000 km², and it consists of the mainland and Langkawi. The mainland has a relatively flat terrain, which is used to grow rice...
and Perlis
Perlis
Perlis is the smallest state in Malaysia. It lies at the northern part of the west coast of Peninsular Malaysia and has Satun and Songkhla Provinces of Thailand on its northern border. It is bordered by the state of Kedah to the south...
—virtually eliminating the water buffalo by replacing it with tractor
Tractor
A tractor is a vehicle specifically designed to deliver a high tractive effort at slow speeds, for the purposes of hauling a trailer or machinery used in agriculture or construction...
s—most smallholders and individual farmers did not benefit technology-wise. In the corporate agriculture sector, the Malays held only a 0.3% stake, as opposed to 70.8% held by foreign interests. In the noncorporate sector, the Malays held 47.1%. Due to limited capital, many Malays were still engaged in "lower productivity activities" as the Second Malaysia Plan ended.
Health
The Second Malaysia Plan continued past initiatives in raising nutritionNutrition
Nutrition is the provision, to cells and organisms, of the materials necessary to support life. Many common health problems can be prevented or alleviated with a healthy diet....
al levels through a number of programs. These included incentives to grow nutritious food
Food
Food is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
, instruction in nutrition and menu planning, and provision of food for groups with the highest rates of malnutrition
Malnutrition
Malnutrition is the condition that results from taking an unbalanced diet in which certain nutrients are lacking, in excess , or in the wrong proportions....
. However, these programs were hindered by a lack of trained medical personnel.
Although family planning
Family planning
Family planning is the planning of when to have children, and the use of birth control and other techniques to implement such plans. Other techniques commonly used include sexuality education, prevention and management of sexually transmitted infections, pre-conception counseling and...
was established as a national goal in 1964, efforts during the Second Malaysia Plan to promote it were hampered by government neglect. Much of the success achieved by the National Family Planning Board occurred during the years of the First Malaysia Plan
First Malaysia Plan
The First Malaysia Plan was an economic development plan implemented by the government of Malaysia. It was the first economic plan for the whole of Malaysia—Sabah and Sarawak included—as opposed to just Malaya, which previous economic plans had confined themselves to...
(1966–1970). The Second Malaysia Plan hoped to add 600,000 new users of family planning techniques, but the facilities and personnel provided were inadequate. The topic was viewed as rather sensitive by the government, and thus family planning was mostly ignored. Ironically, in 1984 Malaysian Prime Minister Mahathir bin Mohamad
Mahathir bin Mohamad
Tun Dr. Mahathir bin Mohamad . is a Malaysian politician who was the fourth Prime Minister of Malaysia. He held the post for 22 years from 1981 to 2003, making him Malaysia's longest serving Prime Minister. His political career spanned almost 40 years.Born and raised in Alor Setar, Kedah, Mahathir...
effectively eliminated family planning as a government policy by announcing the National Population Policy, which targeted a 70 million population by 2100—up from 12.6 million in 1984.
Education
Although educationEducation in Malaysia
Education in Malaysia is overseen by two government ministries. The Ministry of Education handles matters pertaining to pre-school, primary school, secondary school and post-secondary school. Matters regarding tertiary education are dealt with by the Ministry of Higher Education...
was mostly sidelined in favour of socieconomic restructuring programs during the Second Malaysia Plan, some important initiatives were taken during its tenure. In 1970, Malay
Malay language
Malay is a major language of the Austronesian family. It is the official language of Malaysia , Indonesia , Brunei and Singapore...
, the national language, became the major medium of instruction from primary to tertiary level, replacing English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
. British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
standardised examinations were replaced with local ones, and new Malay-language textbooks were introduced. By the end of the plan, most formerly English-based schools had converted the first four years of instruction entirely to the new Malay-medium curriculum.
In 1973, the Curriculum Development Centre was established. Its goal was to coordinate projects to reform the curriculum that had previously been handled by varying government departments. It also began revamping the curriculum for science
Science
Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe...
and mathematics
Mathematics
Mathematics is the study of quantity, space, structure, and change. Mathematicians seek out patterns and formulate new conjectures. Mathematicians resolve the truth or falsity of conjectures by mathematical proofs, which are arguments sufficient to convince other mathematicians of their validity...
, and began a new program to review the various social science curricula.
The Second Malaysia Plan also hoped to increase the availability of vocational and technical training. Despite some attempts, little progress was made in improving the curriculum, which focused on providing a general education and made little room for vocational or technical training. Several new technical and vocational schools were built under the Second Malaysia Plan, with seven institutions alone completed in 1975. It was hoped this would alleviate the problem of unemployment, especially among the youth.
Transportation
The Second Malaysia Plan aimed to modernise Malaysian railroads, which the government regarded as crucial to development and industry. All trains were converted to use the more efficient diesel fuel, and the government increased allocations for maintenance and modernisation of the rail infrastructure. In particular, emphasis was placed on upgrading existing rolling stockRolling stock
Rolling stock comprises all the vehicles that move on a railway. It usually includes both powered and unpowered vehicles, for example locomotives, railroad cars, coaches and wagons...
, roadbeds, and repair facilities.
Air service was expanded under the plan, which paid for the purchase of all-weather and night traffic control equipment, as well as the training of staff to handle the equipment. The Second Malaysia Plan also saw Malaysia-Singapore Airlines split into the Malaysia Airline System (MAS) and Singapore Airlines
Singapore Airlines
Singapore Airlines Limited is the flag carrier airline of Singapore. Singapore Airlines operates a hub at Changi Airport and has a strong presence in the Southeast Asia, East Asia, South Asia, and "Kangaroo Route" markets...
(SIA).
The Second Malaysia Plan also saw the introduction of containerisation in Malaysia to better facilitate transportation. The plan called for the establishment of a national haulage company to handle inland transport; in August 1971, Kontena Nasional Berhad (National Containers Limited) was established by the government. In December, M.V. Benavon became the first container vessel to dock in Malaysia, at the North Terminal of Port Klang
Port Klang
Port Klang is a town and the main gateway by sea into Malaysia. Colonially known as Port Swettenham, it is also the location of the largest and busiest port in the country. As such, its economic progress has been greatly influenced by the port activities in its area...
in Selangor.
At the time of the Second Malaysia Plan, there were only two sea port
Port
A port is a location on a coast or shore containing one or more harbors where ships can dock and transfer people or cargo to or from land....
s in Malaysia; one in Penang
Penang
Penang is a state in Malaysia and the name of its constituent island, located on the northwest coast of Peninsular Malaysia by the Strait of Malacca. It is bordered by Kedah in the north and east, and Perak in the south. Penang is the second smallest Malaysian state in area after Perlis, and the...
, and one in Klang
Klang
Klang , formerly known as Kelang, is the royal city and former capital of the state of Selangor, Malaysia. It is located within the Klang District in Klang Valley. It is located about 32 km to the west of Kuala Lumpur and 6 km east of Port Klang...
. The plan called for the construction of two new ports, both in peninsular Malaysia; one would be in Johor
Johor
Johor is a Malaysian state, located in the southern portion of Peninsular Malaysia. It is one of the most developed states in Malaysia. The state capital city and royal city of Johor is Johor Bahru, formerly known as Tanjung Puteri...
, and another would be in Kuantan
Kuantan
Kuantan is the state capital of Pahang, the 3rd largest state in Malaysia. It is situated near the mouth of the Kuantan River and faces the South China Sea. If one measures the distance along the east coast of Peninsular Malaysia, it is located roughly halfway between Singapore and Kota Bharu...
, a major town in Pahang
Pahang
Pahang is the third largest state in Malaysia, after Sarawak and Sabah, occupying the huge Pahang River river basin. It is bordered to the north by Kelantan, to the west by Perak, Selangor, Negeri Sembilan, to the south by Johor and to the east by Terengganu and the South China Sea.Its state...
. The two main objectives of these projects were to meet increasing demand for sea transportation of freight, and to bring development to underdeveloped states. Johor Port
Johor Port
Johor Port is located at Pasir Gudang in the southeast of Johor in Peninsular Malaysia. Built by the Johor Port Authority and run by Johor Port Berhad in 1977, it is the first port in Johor and is designed as a multi-purpose port that caters to practically all types of cargo. It is the first port...
was completed in 1977, while Kuantan Port
Kuantan Port
Situated about 25 KM to the north of Kuantan city and facing South China Sea, Kuantan Port is a multipurpose port in the East Coast Region of Peninsular Malaysia....
began full operations in 1984.
Legacy
At the end of the Second Malaysia Plan, the poverty rate was found to have declined from 49% to 43%. Unemployment improved slightly, decreasing from 7.5% to 7.4%. Great strides were made in increasing Bumiputra involvement in the private sector, however; the employment rate of Bumiputra in the manufacturing sector increased from 29% to 33%, and from 24% to 34% in the commercial sector. Bumiputra equity ownership more than doubled from 3% to 7.8%. However, this was considered unsatisfactory by many, especially as much of the progress had been made by government enterprises holding the equity in trust. Although the plan had initially targeted a GDP growth rate of 12.5% a year, only an average of 11% was managed. The growth was extremely uneven; while in 1973 GDP grew by 27%, in 1975, it grew a paltry 3% due to the global recession at the time. Despite the government's efforts to tackle unemployment, creating 600,000 new jobs during the Second Malaysia Plan, the number of unemployed actually increased between 1970 and 1975; in 1970, there were 275,000 unemployed, but by 1975, the number stood at 324,000.The Second Malaysia Plan was also forced to confront an unexpected problem: inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. Between 1972 and 1975, the consumer price index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
(CPI) unexpectedly increased by 40%. In 1974, the inflation rate averaged 18%, although it was reduced to 7% by 1975. This new conundrum was therefore considered by the government when it set out the Third Malaysia Plan (1976–1980).
Another overarching consequence of the Second Malaysia Plan was its efforts in crop diversification
Agricultural diversification
In the agricultural context, diversification can be regarded as the re-allocation of some of a farm's productive resources, such as land, capital, farm equipment and paid labour, into new activities...
. Despite RISDA failing to meet its targets, the palm oil
Palm oil
Palm oil, coconut oil and palm kernel oil are edible plant oils derived from the fruits of palm trees. Palm oil is extracted from the pulp of the fruit of the oil palm Elaeis guineensis; palm kernel oil is derived from the kernel of the oil palm and coconut oil is derived from the kernel of the...
industry in Malaysia continued to grow. By 1998, palm oil was the second-largest contributor towards Malaysia's GDP, second only to electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
products.
Overall, the Second Malaysia Plan made much more substantial progress towards reducing the inequity in the economy than its predecessor had. However, the emphasis on improving the lot of the Malays greatly worried the non-Malays, and when the Third Malaysia Plan was launched, the government toned down its rhetoric on affirmative action and emphasised greater economic growth, which would benefit all.