ABSTRACT
On 30 March 2010, in the wake of a close general election and the aftermath of the Global Financial Crisis, Malaysian Prime Minister Najib Abdul Razak announced a New Economic Model (NEM) for the country. A country that had once boasted average annual economic growth rates of 8 per cent between 1990 and 1997, had been listed as one of the few countries to post an average 7 per cent growth rate over a 25-year period, and confidently announced aspirations of achieving high-income status by 2020, was slowing down and grinding to a halt. Post-1997, annual economic growth had halved, investment as a proportion of GDP dropped precipitously and the country was leaking foreign direct investment (FDI) to its regional competitors. Although absolute poverty had been practically eradicated, Malaysia was now stuck in a ‘middle income trap,’ with most Malaysians still occupying low-skilled jobs, 40 per cent earning less than US$15 per day and 350,000 of Malaysia's most educated preferring to work and live overseas.
