NOT FOR QUOTATIONDRAFT FOR COMMENT 08/15/2006

Malaysia

Ownership

  1. Partners have operational national development strategies
  1. Coherent long-term vision with medium-term strategy derived from vision
  1. Malaysia has a rich history in long-term planning, having drawn up and implemented long-term national policy frameworks since the early 1970s. Since then, the Government hasput into practice a comprehensive planning system of short-, medium- and long-term development plans and strategies, eachlinked to one another, reinforcing the course of policy directions toward meeting the long-term goals. In 1991, long-term development goals were set out in a 30-year plan, Vision 2020. Ten-year Outline Perspective Plans designate priority themes, framing the policies geared toward the Vision 2020 goals; the current National Vision Policy covers the 2000-10 period and focuses on strengthening competitiveness and resilience. In addition, the Government has set forth adjustments in the policy planning approach for the second 15-year phase of the 1990-2020 Vision 2020 period, called the National Mission.
  2. The planning process is further broken down into five-year plans, subject to prioritization on a sectoral level,which orient the implementation of government development programs. The current Ninth Malaysia Plan (9thMP) serves as the medium-term strategy, setting targets for the 2006-10 period.
  3. Some sectoral strategies also guide progress toward the Vision 2020 goals, like the National Agricultural Policy 1992-2010 and the five-year National Strategic Plan for HIV/AIDS.[1]
  1. Country specific development targets with holistic, balanced, and well sequenced strategy
  1. The 9th MP is geared toward the achievement of the MDGs [confirm]. Five key thrusts are identified, from which government programs are being developed: (i) to move the economy up the value chain; (ii) to raise the capacity for knowledge and innovation and nurture a ‘first class mentality’; (iii) to address persistent socio-economic inequalities constructively and productively; (iv) to improve the standard and sustainability of quality of life; and (v) to strengthen the institutional and implementation capacity.
  2. The 9th MP is the result of the Government’s efforts to takea well-sequenced approach to development policy in a long-term perspective. The development programs outlined in the9th MPfirst include a retrospective of the progress achieved under the previous plan to justify adjustments in the focus and targets. Regular mid-point reviews of the five-year plans serve as stocktaking exercises to reaffirm the course of development policy and readjust targets accordingly. Similarly, the National Mission is a product of the same approach, calling for an adjustment of the policy emphasis toward a reduction of economic and racial inequalities following a retrospective analysis of the progress toward the Vision 2020 goals and of the structural reformsundertaken since 1991.
  3. Cross-cutting issues that underpin Malaysia’sdevelopment processare covered in the 9th MP.It addresses issues of issues of women in development and of fostering family and community development, with a number of objectives tasked to the Ministry of Women, Family and Community Development with support from several other ministries, the private sector and NGOs. The 9th MPalso calls for cross-ministerial and multi-stakeholder efforts for the implementation of its measures to promote pollution reduction and sustainable resource management. In addition, itannounces increased efforts in the fight against HIV/AIDS with the launch of a five year National Strategic Plan for HIV/AIDS, with the establishment of a comprehensive framework, a coordinating authority and a national monitoring and evaluation system for AIDS treatment and prevention.
  1. Capacity and resources for implementation
  1. Steps have been taken since the 1960s toward a establishing a performance-based budgeting system. The Modified Budgeting System first introduced as a pilot in 1989 requires ministries and agencies to conduct impact evaluations of their budgets every five years, institutionalizing both flexibility and accountability in the use of public resources. The medium-term expenditure framework of the 9th MP is reflected in the annual budgets in both the overall and sectoral allocations. In addition to defining the targets for the outlined public sector development programs, the five-year plans define the size and budgetary allocation for each of the respective programs over the plan period, effectively integrating the policy prioritization process with the budget allocation process. The plan’smid-point review evaluates progress achieved with relation to the program targets established at the outset,triggering adjustments in the respective allocations in the subsequent annual budgets.

Participation of national stakeholders in strategy formulation and implementation

  1. The locus of initiative for the 9th MP is the Economic Planning Unit (EPU) of the Prime Minister’s office, which not only approves development programs and projects but also determines the allocation ceiling for national development expenditure. The Prime Minister is simultaneously Minister of Finance and Minister of Internal Security. The EPU also acts as the secretariat of the National Development Planning Committee, composed of key Cabinet members and government agency heads including the head of the central bank. This Committee is in charge of formulating and reviewing the overall development plans as well as overseeing their implementation.
  2. In addition to the National Development Planning Committee, other mechanisms of inter-ministerial coordination includethe National Development Committee,in charge of monitoring implementation,and working-level Inter-Agency Planning Groups. The EPU chairs the Inter-Agency Planning Groups established for each of the thematic issues addressed in the plan, which agree on the strategic thrusts for the plan’s policy framework. An Implementation and Coordination Unit, located in the Prime Minister’s office, coordinates the implementation of inter-ministry and inter-state development programs and reports on plan implementation to the Cabinet-level National Development Committee. Monitoring of plan implementation takes place through a multi-tiered management system of reporting committees and councils throughout the government hierarchy. Ministry Development Committees monitor sectoral progress at the federal level. Representatives from Ministry Development Committees report to the Implementation Coordination Unit of the Prime Minister’s office and ultimately to the National Development Committee at the Cabinet level.[If the EPU and National Development Planning Committee are also involved in implementation, what are their roles and how do they coordinate with the Implementation Coordination Unit? How often does the National Action Council meet to review implementation?]
  3. Local governments are integrated in the development process. Project proposals drawn up at the local level to be considered for the national plan and budget are first submitted to the State EPUs. The State EPUs evaluate and prioritize the local proposals send the national EPU a consolidated set of requests for consideration. District and State Development Working Committees report on implementation progress to the State Development Council. The State Development Working Committees also report to the Implementation Coordination Unit of the Prime Minister’s office.
  4. A number ofparticipatory mechanisms have been institutionalized to systematically involve stakeholders in development planning and implementation. Stakeholder representatives are selected on the basis of capacity considerations to participate in the Inter-Agency Planning Groups alongside government representatives in the development of both the five-year plans and the mid-term reviews.Academicians, trade unions, political parties, religious and youth organizations, professional bodies, NGOsand other interest groups are represented. Another consultative body composed of a wide range of stakeholders,called the National Economic Consultative Council, provides policy input to the ten-year Outline Perspective Plans. In preparing the 2001-10 National Vision Policy, 154 stakeholders were organized into seven committees to draw up a report of proposals for the Government’s consideration. Parts of the report were incorporated into the [draft?] National Vision Policy.In addition, in several of its development programs, the 9th MP calls upon CSOs and NGOs to play an important part in implementation, in particular in the area of poverty reduction.
  5. Malaysia has established a tradition of involving the private sector in policymaking since the 1983 launch of the Government’s “Malaysia Incorporated” approach, which emphasizes the role of the private sector in the national development process. The 9th MP sets out several areas for public-private partnership in its development programs aimed at greater economic growth. In addition, structuresexist for continued dialogue between the Government and the private sector. The National Economic Action Council was established in 1998 to achieve consensus between Government and stakeholders on the emergency plans that addressed the financial crisis of 1997. The Councilbrings together the Prime Minister, Deputy Prime Minister, Government Ministers and private sector representatives in meetings held several times a year, consistent with the Government’s pro-business growth agenda. The National Economic Action Council is part of the Prime Minister’s office, and the EPU holds a seat on its executive committee. [Was the National Economic Action Council involved in the preparation of the 9th MP?Are other civil society representatives represented in the National Economic Action Council?].
  6. Parliament is involved in the process through its approval of the plans [verify – is plan approval a constitutional requirement?], the mid-term reviews [verify]and the budget.[Is there a parliamentary committee that discusses the plan in detail? Did the discussion in Parliament bring about any substantial policy change? Has Parliament brought about any shift in the allocations proposed by the Executive?]

Alignment

  1. Reliable country systems
  1. Public financial management is strong. The Auditor General regularly audits the final accounts of the federal government and produces a public report. [Who appoints the Auditor General? How is the budget of the Auditor General defined?]The parliamentary Public Accounts Committee, which includes opposition party members, reviews the audit reports, questions officials about any wrongdoing or shortcoming and reports its recommendations to Parliament.
  2. Malaysia is not a signatory of the WTO agreement on government procurement and maintains its requirement that all government entities procure goods and services from national providers. It has, however, taken measures aimed at improving competition among national bidders with the establishment of an e-procurement system in 2000 that has expedited procurement processes, reduced bidding costs and improved transparency [confirm. Does the Government have plans to align procurement standards with international standards?].
  3. Malaysia is ranked 39th of 158 in the 2005 Transparency International Corruption Perception Index. Its rating, on a 10-point scale, has marginally improved from 5.0 in 2001 to 5.1 in 2005. [What anti-corruption efforts has the Government pursued in recent years?]
  1. Aid flows are aligned on national priorities
  2. Government leadership of coordination
  1. The Government takes leadership of coordinating external partner assistance through the EPU.There is no formal CG-like mechanism to coordinate assistance among external partners. Some development assistance agencies exchange information on their support programs, though mainly on a bilateral basis [confirm]. The EU holds regular meetings to coordinate assistance among the bilateral agencies of its member states [confirm].
  2. Partners’ assistance strategy alignment
  3. The five major external partners are Japan, Denmark, Germany, France andSpain, accounting for over 95 percent of gross ODA in 2003-04. Net ODA accounted for 0.2 percent of GNI in 2004.[2][Is the assistance of these external partners in line with the 9th MP?]
  4. Partnership organization
  5. [What examples are there of external partners strengthening technical expertise in the field? What is the percentage of externally-financed projects managed from the field rather than from HQs?]
  1. Strengthen capacity by coordinated support

Coherent and coordinated capacity support

  1. [Does the Government have a comprehensive capacity building strategy? Do external partners support capacity building in a coordinated way?]
  1. Use of country systems

Donor financing relying on country systems

  1. [What is the percentage of development assistance provided through budget support? What external partners, if any, are providing budget support? Are there other examples of partners offering assistance through programmatic approaches, relying on country systems for project financial management, procurement, auditing or monitoring and evaluation?]

Managing for results

  1. Results oriented frameworks
  2. Quality of development information
  1. The quality and availability of poverty-related data is [improving?]. A significant amount of statistical data on socio-economic indicators is collected regularly. [What is the source of the poverty-related and socio-economic statistics used in the 9th MP to monitor progress under the previous plan and to set targets for the 2006-10 period?] Malaysia participates in the IMF Specific Data Dissemination System, which provides guidance in dissemination of certain economic and financial data.
  2. Stakeholder access to development information
  3. Information on Government policies is easily accessible and disseminated regularly. The 9th MP is accessible through the EPU website, along with the NVP, previous five-year plans, mid-term reviews and information on budget allocations for development programs.[3]The Social Statistics Bulletin, Vital Statistics, and the Quarterly Review of Malaysia Population Statistics are among the Department of Statistics’ regular publications. [Have there been efforts to disseminate the 9th MP further to the general public, e.g. by circulating a simplified version in local languages?]
  4. Coordinated country-level monitoring and evaluation
  5. The 9th MP includes information on progress in the previous plan with respect its original outcome targets, and sets outcome targets for each of its current development programs for 2006-10. The Government has established an IT-based system called the Project Monitoring System II (PMSII) to monitor the implementation of development projects under the five-year development plans. PMSII has online links to all ministries as well as government department and agencies, and up-to-date information on projects are accessible to all linked to the system [confirm]. PMSII was launched by the Prime Minister in 2001 and is currently being used by ministries and agencies [confirm]. [Does the PMSII adequately provide aggregate information to monitor progress on sector and program targets for the 9th MP?]

Mutual accountability

Development effectiveness assessment frameworks

  1. Malaysia has endorsed the Paris Declaration on Aid Effectiveness. [Have Government and external partners committed themselves to an action plan to support harmonization, with implementation linked to performance indicators for both Government and external partners, to assess progress towards measures for increased aid effectiveness, in line with the Paris Declaration.? If so, who is responsible for its preparation/monitoring?]

Bibliography

Chung, C., Park, J., eds. (2003), National Visions and Strategies. KDISchool of Public Policy and Management, OECD and World Bank. Seoul, Korea

EIU (2006), Malaysia Country Report.London.

Economic Planning Unit (2004) Malaysia: 30 Years of Poverty Reduction, Growth and Racial Harmony in Reducing Poverty, Sustaining Growth—What World, What Doesn’t, and Why A Global Exchange for Scaling Up Success, World Bank, Washington, D.C.

Economic Planning Unit (2004) Development Planning in Malaysia. Putrajaya, Malaysia.

EU (2005), Malaysia National Indicative Programme 2005-2006. Brussels.

Federation of Malaysia and UNDP (2005), Malaysia - Achieving the Millennium Development Goals: Successes and Challenges.Kuala Lampur.

Federation of Malaysia (2006), Ninth Malaysia Plan2006-2010. Putrajaya, Malaysia.

IDEA, World Bank, ECLAC (2004), National Visions Matter: Lessons of Success. Proceedings of a Public Private Sector Development Forum, July 25-27, 2004, Santiago, Chile.

World Bank (2002), World Development Report 2003t: Sustainable Development in a Dynamic World – Transforming Institutions, Growth and Quality of Life. Washington, DC.

World Bank (2000), Malaysia Public Expenditures: Managing the Crisis; Challenging the Future. Report No. 20371-MA. Washington, DC.

World Bank (1999) Malaysia Country Assistance Strategy 1999-2001. Washington, DC.

Other websites:

ADB website:

APEC website:

Economic Planning Unit website:

IMF website:

Department of Statistics website:

Malaysian Treasury website:

National Economic Action Council website:

Parliament of Malaysia website:

Prime Minister’s Office website:

Transparency International website:

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[1] The Vision 2020 document was completed in 1991. The current Outline Perspective Plan, the NVP for 2000-10 was completed in 1999. The 9th MP was completed in early 2006 [confirm]. The National Mission for 2006-20 was completed in 2005 [confirm] ?.

[2]

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