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Back | Programme Area: Gender and Development, Special Events

The Gender Implications of Macroeconomic Policy and Performance in Malaysia (Draft)



Background paper prepared for the UNRISD report "Gender Equality: Striving for Justice in an Unequal World"

Prior to the Asian crisis, Malaysia was one of the fastest growing economies in the world and was on track to achieving developed country status by the year 2020. Since Independence in 1957, the Malaysian economy has grown by an average of seven percent per year. Over this period the Malaysian economy was transformed from an agricultural exporter of primary commodities to one where manufactured exports comprise more than eighty percent of exports.

Malaysia also made considerable inroads into poverty reduction generally as well as in reducing income imbalances among its multi-ethnic population. Today, Malaysia is a multi-ethnic society with a population (in 2000) of approximately 23 million. The Malaysian population is composed of three main ethnic groups with Malays or Bumiputeras comprising 63.3 percent, Chinese 26.5 percent and Indians 7.6 percent. Since the implementation of the New Economic Policy in 1970 the pursuit of greater equality of incomes and opportunities have played an important role in determining the course of economic development and macroeconomic policy in Malaysia.

While the progress towards the achievement of greater inter-ethnic income equality has been meticulously tracked in succesive development plans, little is known of about whether greater gender equality was also achieved during this period of rapid economic growth and profound structural transformation. Gender equality is not only a fundamental human right but as the World Bank notes countries that reduce gender inequality reap significant rewards in terms of faster economic growth and lower poverty rates.

This study aims to examine more fully the relationship between past macroeconomic regimes on the well being of women and gender equality. It focuses on the gender implications of the broad effects of macroeconomic policy as well as specific aspects of macroeconomic policies. The possible feedback effects of gender relations/gender inequality on macroeconomic policy will also be explored.

The Sixth Malaysia Plan (1991–95) undertook to support the objectives of the National Policy for Women which was launched in 1989. It objectives are to ensure equitable sharing in the acquisition of resources and information as well as access to opportunities and benefits of development for both men and women. It also seeks to integrate women in all sectors of national development in line with their abilities and needs, in order to improve the quality of life, eradicate poverty, abolish ignorance and illiteracy and ensure a peaceful and prosperous nation.

The goal of achieving greater inter-ethnic economic parity between the various races have been precisely set out by the NEP. Targets were set to achieve them and successive development plans meticulously tracked the fulfillment of these over time. The same cannot be said about the pursuit of greater gender equality.

Development Planning documents in Malaysia have included a chapter on Women in Development since the Sixth Malaysia Plan. From the Sixth Plan until the Eighth Plan the focus of this chapter has been on the employment distribution women in the workforce by occupation and sector. A short summary is also made of the gains that women have achieved in the areas of health and education. However there is lack of gender disaggregated data on wide range of indicators in Malaysia and to a large extent limitations are imposed on the extent of the analysis reported in this paper because of this.

Section two of this paper provides an overview of Malaysia's evolving political economy, and is divided into four periods; Independence and the Laissez-Faire Approach (1957–1969), the NEP and the Rise of Dirigisme (1970–1985) the High Growth Era (1986–1996) and the Crisis and Post Crisis Era (1997–2001). For each of the periods above economic policy will also be viewed within context of the overall framework of national development policies, plans and objectives. Section three presents an overview of social policy and its implications for the well being of women in Malaysia. Section four presents an assessment of how past macroeconomic policies were helpful in advancing women’s well being and contributing to greater gender equality. Section five concludes by discussing the lessons that can be drawn from the Malaysian experience as well as future directions for research.

The findings in this paper indicate that women benefited from the implementation of the NEP particularly in terms of seeking to eliminate the identification of ethnic background with occupation. Expenditure on education was high and women made gains in terms of literacy rates and participation at all levels of education. However in spite of achieving gender equity in education far fewer women are employed in higher level occupations than men. Foreign Direct Investment has had a profound impact on both the economy and women’s employment in the manufacturing sector. Here the prohibition of industry based unions have most likely contributed to a trade off between greater female participation in the labour force and gender wage equality. More recently increases in female labour force participation has stagnated, while immigrant labour has increased during the era of high economic growth. This suggests that perhaps to some extent female labour may have been substituted with migrant labour. Generally this indicates that high growth rates alone will not ensure an improvement in the well being of women. More research is needed to explore these links.