Land reform: options and realities

Abstract

The importance of the agricultural sector in the Malaysian economy as shifted in terms of being a major contributor to the Gross Domestic Product (GDP), and employment in the sixties to that of being the dominant sector in which poverty has persisted. The declining role of the agricultural sector is clearly seen especially in the Fourth Malaysia Plan where it is recorded that the contribution of agriculture to GDP fell from 30.8 percent in 1970 to 22.2 percent a decade later. For the same period, the contribution of agriculture to employment dropped by 9 percent to only 41 percent of the total. In fact, the future role of agriculture in the country's economy is likely to decline further as envisaged in the Outline Perspective Plan (OPP). In fact, the OPP foresees a major structural change in the economy as the much higher projected growth rate in the manufacturing sector is expected to make manufacturing the major contributor to the GDP. Agricultural output, is projected to grow at only 3.5 percent per annum between 1981-90, and to contribute only 14.4 percent of GDP by 1990. Manufacturing output, is projected to grow at 10.9 percent per annum over the same period, and to contribute 26.6 percent of GDP by 1990. In employment, the OPP projects that the agricultural sector will contribute only 8.2 percent of new jobs between 1981 and 1990, whereas manufacturing is expected to contribute 29.6 percent. Although the agricultural sector will still contribute the largest single share of employment in 1990, this share is expected to fall to only 31.8 percent of total employment (FMP: 169).