CIA report: Dr M made wrong policy choices on NEP in the 80s
(MMO) – A declassified Central Intelligence Agency (CIA) report concluded that Malaysia’s dependence on heavy industrial policy during the implementation of the New Economic Policy (NEP) in the 1980s was ill advised.
It said then Prime Minister Tun Dr Mahathir Mohamed’s vigorous push towards industries such as manufacturing and financial services at a time when the country did not have any competitive advantage would not be well received.
“Dr Mahathir’s economic policy thus far emphasises heavy industry, resource-based development, government financial assistance and joint ventures in sectors where private businesses appear reluctant to invest.
“Recognising this, Malaysians themselves have begun to debate the wisdom of Mahathir’s approach, but the prime minister showed little inclination to reconsider his plans,” it said in a 17-page report.
The report titled Malaysia: Economic Policy at the Crossroads also said that such policies contributed to the country taking on more foreign debt between 1981 and 1983.
Debate on the Mahathir administration’s push for industrialisation remains until today.
