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I. STATE OF THE ENVIRONMENT IN MALAYSIA
[ I-A | I-B | I-C ]
B. Overview of national development policies
[ B-1 | B-2 | B-3 | B-4 | B-5 ]
1. Industrial Master Plan, 1986-1995
The Industrial Master Plan (IMP) was formulated to guide the development of the manufacturing sector in Malaysia between 1986 and 1995. IMP provided a framework for ensuring a more diversified and integrated manufacturing sector and establishing the foundation for its sustained growth. Towards that end, various industrial development policies, strategies and programmes were designed and implemented. One of the principal objectives of manufacturing development, as set out in IMP, was to lay the foundation for leapfrogging towards an advanced industrial economy by increasing indigenous technological capability and competitiveness.
IMP adopted a plan-rationale approach to industrial development, a strategy followed by Japan and the Republic of Korea in their successful economic reconstruction after the Second World War and the Korean War, respectively. The premise was that while the competitive market mechanism was indispensable, planning was fundamentally important in achieving industrial development objectives. In the plan-rationale approach, development objectives are first propounded and then the necessary resources and policies, including government incentives, are directed towards achieving those objectives. Market forces play their part by ensuring allocative efficiency within the framework of the plan. The main function of IMP was to indicate to private investors the targets and goals of the government, in terms of industrial development, and to coordinate the functions of various government departments, agencies and ministries in their support of private sector-led growth in achieving industrial development.
IMP has achieved its major goals, that is, to ensure both continued growth in the manufacturing sector and its diversification in order to include new manufacturing industries, both in the resource-based and non-resource-based sectors. Key Malaysian resource-based industries include rubber and palm oil products, food processing, wood-based products, chemicals, non-ferrous metals and non-metallic mineral products. The non-resource-based sector includes the electronics and electrical industry, the road transport industry, shipbuilding and ship repair, the machinery and engineering industry, the iron and steel producers, and the textiles and apparel industry. In general, the macroeconomic and sectoral targets of IMP have been achieved, and in many cases, the actual performance has overtaken the targets in terms of growth of output, value-added, exports, and employment.
The framework provided by IMP for the growth of the manufacturing sector from 1986 to 1995 succeeded in developing a more integrated and diverse industrial sector, although some weaknesses remain and others have emerged. The government is currently embarking on a study to chart the path of industrialization in the coming decades and to address those problems in its efforts to ensure the continuation of economic dynamism in Malaysia.
Notwithstanding those successes, IMP did not specifically address environmental concerns. The document was comprehensive in its coverage of the macroeconomic framework for industrialization, the various targeted sectoral or industrial subsectors, as well as the necessary support policies such as human resource development, science and technology, infrastructure requirements, and the socio-economic perspective. However, it did not examine the impact of the industrialization policies and strategies concerning the environment, as recommended in the Plan, nor did it suggest appropriate mitigating measures to ensure that manufacturing growth would be truly sustainable and that there would be no deterioration of the quality of life as a result. Yet that did not mean that policies on the environment were lacking, since environmental management and protection proceeded simultaneously with industrial development principally through the efforts of the Department of the Environment within the Ministry of Science, Technology, and the Environment. Nevertheless, an integration of environmental concerns within the IMP framework would have been invaluable to ensuring coherence between industrial development policies and environmental management.
That weakness was, however, rectified in subsequent government plans and policies which took a strong stand on the need for sound environmental management to support economic development. The policies for environmental management were integrated within the plans themselves.
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