ABSTRACT
In 1957, the first blueprint for Malaysia’s industrial policy was launched by an IBRD mission to encourage industrial development and to bring about both greater diversification and growth in national incomes (Lim 1987). The purpose in formulating a new industrial policy was to reduce dependency on rubber and tin which accounted for 30 percent of GDP and 75 percent of exports. The manufacturing sector, on the other hand, accounted for a mere five percent of GDP and three percent of exports (Spinanger 1986). The following measures were therefore proposed to cover the lack of existing resources (capital, skills, and managerial competence): first, most industrial development intitative was to be left to the private sector, while the government confined itself to the creation of a ‘favourable climate’ for private investment from both home and abroad. Second, industrial estates were created to provide an infrastructure (transport, power, services) suitable for such development. Thus, during the first development plans after Independence, the emphasis was on infrastructure development. More than 50 percent of total public sector investment in fact went to power and water utilities, transport facilities and communication during the period 1960-1970 (Lim 1987).
