Are Five-Year Development Plans Passé in Malaysia?

Abstract

Since July 2017 bureaucrats in Malaysia’s Economic Planning Unit have been busy preparing the mid-term review report assessing the progress achieved in country’s latest five-year development plan, the Eleventh Malaysia Plan 2016-2020 (11MP).1 The five-year development plan is part of an unbroken tradition that dates back to colonial times. In total, fourteen five-year plans have been published since the early 1950s. Over the years, the orientations of these plans have evolved in response to changes in economic structure, policy goals, resource constraints and external shocks. In more recent years, the structure and contents of five-year plans such as the Tenth Malaysian Plan 2000-2015 (10MP) and the 11MP have been altered in significant ways. In particular, there is less emphasis on the presentation of detailed sectoral allocations for development expenditures. Instead, both the 10MP and 11MP were mainly concerned with proposing broad policy goals. In light of such changes, it is pertinent to ask whether the five-year development plan is still relevant as a tool for economic policy-making for Malaysia? This is not an unusual question to ask, given that many countries such as South Korea and India have already abandoned the use of five-year development plans. This essay seeks to answer the question whether Malaysian policymakers should continue to draft five-year development plans in the future. We begin by discussing the basic nature of five-year development plans.