The Philippines’ rate of progress, in particular, has been embarrassingly slow.

With the
exception of Brunei and Singapore, the Philippines used to lead the pack in the 1950s. But
Malaysia, Thailand, and Indonesia have long overtaken us: Malaysia in 1968, Thailand in 1984,
Indonesia in 1989.

Fast forward to 2014 (when the latest comparable data is available), only the CLMV countries –
Cambodia, Lao PDR, Myanmar, and Viet Nam – are poorer than us. But remarkably, their
incomes have caught up so fast that they are soon poised to match Filipinos’ income levels (Viet
Nam may have even already overtaken us).

Malaysia experienced an economic boom and underwent rapid development during the late
20th century and has GDP per capita (nominal) of US$11,062.043 in 2014.

Malaysia is richer from the start.

Well, this might not be answering the question but the reality is Malaysia was already richer than
Indonesia and Philippines per capita since early days. During the 1960's for example, Malaysia
GDP per capita is already around five times of Indonesia and twice of Philippines. Today,
Malaysia GDP per capita is three times of Indonesia and four times of Philippines.

So if you ask why Malaysian is wealthier (per capita) than Indonesia and Philippines, you might
need to look further than just decades ago.

Malaysia enjoys political stability

Compared to heated democracies in Indonesia and Philippines, Malaysia enjoys political
stability. Even though I don't think Malaysia has better politicians than Indonesia or Philippines,
but Malaysia does not experience much political turbulences like Indonesia and Philippines.

Malaysia invested wealth better

Malaysia has infrastructure boom during 1980-1990 and they focused into what it takes to boost
their economy during that time. Albeit the economic crisis of 1998 hit them hard, they bounced
back in five years. Meanwhile in Philippines and Indonesia, the wealth did not really being
managed well.

Takes advantage of natural resources. While the Philippines is an agricultural country, majority
of its people are in the service industry. Malaysia also marketed the durian fruit so well even
though the southern part of the Philippines also exports durian (in addition to high-quality
mangoes and bananas).
Studies also showed that Malaysia being a former British colony is one of the 3 richest countries
in the SEA as of 2018.

Global Competitiveness Index (This one is the strongest data because consist of 12th Pillar
from Institution, Infastructure, Macroeconomic environment, Education, Market efficiency,
Technology, Bussiness and Inovation)

Malaysia 18th
Philippines 47th

Foreign Direct Investment (Higher amount means this country investment environment & facility
much safer, better, stabile than the others with lower amount, and the higher amounts mean this
country being based of international company and corporation):

Malaysia(33rd) $166 B
Philippines(59th) $58 B

Market capitalization stock exchange (That means amount of all bussiness that happen in each
country, bigger amount mean massive economies). This is data is 2015:
Malaysia $382 B
Philippines $238 B

Malaysia’s plan for economic development started with the First Malaya Plan which emphasizes
the development of the country’s basic infrastructure and modernizes agricultural production in
rural areas. In this regard 44.5% of total budget allocation went to rural development projects.
The primary concern was to push for diversification and income growth amid fluctuating oil and
rubber prices.

In the year 1956 the Federal land development authority (FELDA) was established for the
development of land and relocation of settlers with the objective of poverty eradication through
cultivation of oil palm and rubber.

The Second Malaya Plan

The objectives were to

 Improve the rural sectors standard for living

 Provide more job opportunities
 Achieve higher economic growth
 Diversify agricultural activities
 Promote industrial growth
 Improve and expand social services such as education, health, utilities, etc.
 Achievements

 Created 344,000 jobs

 Attained 6.4% annual output growth
 Achieve 2.7% per capita income growth
 Developed more than 40,000 hectares of land under FELDA

First Malaysian Plan

 To promote the integration of the people and the states of Malaysia.

 To provide steady increases in income and consumption per head.
 To increase the well-being of Malaysia's rural inhabitants and other lower income groups.
 To generate employment opportunities.
 To stimulate new kinds of economic activities, both agricultural and industrial.
 To educate and train Malaysians to better equip them for better participation in the
process and economic and social development.
 To lay the groundwork for less rapid population growth.
 To open for development sufficient new land.
 To provide electricity, transportation facilities, and communication services.
 To progress with health and social welfare development.

In the 1970’s Petronas was established to better manage and control the country’s oil and
gas resources. The energy industry contributes to one-fifth of Malaysia’s gross domestic
product.

In 1971 the Second Malaysian plan was introduced for the new economic policy which has
the objective of
 Eradicating poverty, irrespective of race
 Restructuring Malaysian society to reduce and eliminate identification of race with
economic function
Malaysia's GDP in current US Dollars almost doubled in five years, rising from $379.57
in 1971 to $755.28 in 1975.

2010-current year

10th Malaysian plan

Malaysia’s environmental agenda under the Tenth Malaysia Plan (10MP) will be
protecting the environment while harnessing economic value from the process. To reach
the goal, the government is placing focus on operating the National Policy on the
Environment (2002), the National Green Technology Policy (2009) and the National
Climate Change Policy (2009).

Major policies
 National commodity Policy
 National Automotive Policy
 Look east policy
 Major Achievements

(The New Straits Times) “The 11MP report states that the country’s growth achieved a stable
real Gross Domestic Product (GDP) of 6.2 per cent per annum since 1970, successfully
transforming the nation from a predominantly agriculture-based economy in the 1970s, to
manufacturing in the mid-1980s and to modern services in the 1990s. The national per capita
income expanded more than 25-fold, from US$402 in 1970 to US$10,796 last year, and is well
on track to surpass the US$15,000 threshold of a high-income economy by 2020. All these
gains are made possible by Malaysia’s development philosophy which places the prosperity and
well-being of the rakyat at the heart of economic growth."

11th Malaysian Plan

11th Malaysia Plan Economic highlights – “Malaysia’s economy to expand 5%-6% a year based
on sustained domestic demand and increasing contribution from the external sector. Private
consumption and investment to drive growth, resulting in a 7.9% per annum rise in gross
national income (GNI) per capita. Four strategies to boost economic fundamentals: 1) Unlocking
the potential of productivity to ensure sustainable and inclusive growth; 2) Promoting investment
to spearhead economic growth; 3) Increasing exports to improve trade balance; 4) Enhancing
fiscal flexibility to ensure sustainable fiscal position

The current high-income target is determined by the World Bank, which classifies all countries
with a gross national income (GNI) per capita of above a certain fixed threshold as "high-
income". The standard currency used by World Bank to measure high-income threshold is in
US$. By 2020, the value of this threshold is projected by Pemandu to be US$15,000. This is
derived using the compound annual growth rate (CAGR) of the historical high-income threshold
by World Bank, for which the GNI per capita of high-income for 2020 is computed to be
US$15,000. ...As highlighted in our recent reports, our most recent GNI saw us recording
US$10,750 per capita. This signifies that that we are only 15% away from the high-income
economy benchmark

According to Hawksworth, Clarry and Audino (2017), Malaysia is currently in the 27th place out
of 32 in 2016, with Philippines, South Africa, Colombia, Bangladesh and Vietnam in the 28th,
29th, 30th, 31st, 32nd place respectively. In 2030, Malaysia is predicted to climb up to the 25th
place, and eventually to the 24th in 2050. Surprisingly, countries such as Philippines, Vietnam
and Bangladesh are projected to surpass Malaysia in terms of GDP in PPP terms as they move
up to the 19th, 20th and 23rd place in 2050.

As shown in the development of Malaysia. They focused on infrastracture and innovation they
also searched and found new ways to earn revenue instead of relying on their main product
which is oil. Not only they did focus on the economic side but also focused on the welfare and
living standards of the people which is not noticeable in our country. They relocated settlers to
reduce poverty and utilized the land for agriculture which was maintained by settlers. As of the
current reports by 2020 Malaysia will be seen as a high income country second only to
Singapore.