Industrial restructuring: beyond the Industrial Master Plan (IMP)

Abstract

During the 1950s, rubber and tin, the principal produced in Malaysia, accounted for more than 80 per cent of the country's gross export earnings. During the 1960s and 1970s, revenue earners decreased with the export composition to include palm oil, their role as diversification of the timber, petroleum and manufactures, complemented by by the increasing importance of the services sector. The consequence of these changes was that Malaysia entered the 1980s with a relatively diversified and stable economy, although exceptionally open by world standards. Nevertheless there are still a number of structural or policy adjustments that have to be made if Malaysia were to achieve the industrialised nation status that it seeks by the end of this century, and this is aptly reflected in the Industrial Master Plan, 1986-95 (IMP). While the implementation of the IMP will greatly determine Malaysia's capability to be at par with the other newly industrialised countries (NICs), the "catching up" itself will pose a formidable challenge to policy-makers given the socio- economic constraints that have to be resolved within the short- and medium-term. In examining these constraints and thus the challenges ahead, this paper will in Section 2 deal with the broad structural changes in the Gross Domestic Product, the industrialization process and its implications on the the broad outline of the IMP and recent indicators manufacturing trends. Section 3 will explore the and restructuring prospects of industrial growth challenges that lie ahead for our industrial planners.