Rural Development in Malaysia1

Assoc Prof Dr Ibrahim Ngah,

Department of Urban and Regional Planning,
Faculty of Built of Environment,
Universiti Teknologi Malaysia,
81310 Skudai
Johor

INTRODUCTION

Since Malaysia became independent from British rule in 1957, rural development has

always been considered important in the agenda of national development. Many

strategies and programmes were introduced to promote the well-being of rural people

ranging from development of the agriculture sector, rural industrialisation, resettlement

schemes, provision of public facilities and infrastructure to human and community

development. Rural development can be seen as a process of change carried out

deliberately for the betterment of rural people. The process of change is continuous, and

its essentially interventionist aims are to achieve certain goals or to solve problems of the

rural areas. As a process of induced change led by the state, rural development activities

covered elements such as planning, implementation, monitoring and involved multi-

disciplinary actors, such as state agencies, the private sector, NGOs and the general

public. Due to the nature of rural development activities with overriding state

interventions, rural development in Malaysia tended to be viewed as synonymous with

the state rural development strategies and programmes aimed at solving problems facing

1
Paper published in Malaysia’s Economy, Past, Present & Future, Ch. 2, ed. Ishak Yussof (2009), Kuala
Lumpur: Malaysian Strategic Research Centre.

1
rural sectors such as poverty, low productivity, low income, lack of proper and adequate

rural infrastructures and the rural-urban disparity that existed prior to independence.

During the decades after independence, much effort and many resources were spent to

improve the well-being of rural people ranging from development of infrastructure and

facilities, modernisation of rural sectors through the use of modern techniques of

production, agriculture support services, integrated area development and institutional

development. An assessment of the success and shortfall of implementation and

outcomes has been widely discussed and debated by researchers and practitioners in the

field. The discourses on rural development tended to fall within the theoretical

framework of development economics, focusing on the dichotomy between

modernisation theory and technocratic approach on one hand and reformist and political

economy on the other. The approach to rural development appeared to be problem

oriented and focused on the basic needs of the poor sections of the community. The

extent of rural development in the future is expected to look into the potential and

strength of our rich rural heritage and to venture into the future guided by rural vision.

This chapter will provide an overview of rural development activities in Malaysia since

independence; it will examine the progress achieved by looking into some social

economic development indicators of rural areas and highlight the issues and challenges

facing rural development in achieving Vision 2020. The last part presents some

suggestions about possible future directions and new dimensions of rural development.

2
INITIAL CONDITION AFTER INDEPENDENCE

Towards the end of British colonialism, the Malaysian economy (Malaya, Sabah and

Sarawak) consisted of a modern sector, largely owned and controlled by foreign and

Chinese capitals on one hand, and on the other, traditional sectors engaged by small scale

farmers and other indigenous people. The modern sector was characterised by high

capital investment, market-oriented, high technology and high productivity, which

included plantation, production of timber, mining and a mercantile economy. People who

were engaged in the modern sector such as the owners and salaried workers were better

off, not only due to the relatively higher income received but also were more secure in

terms of cash flow and access to a better standard of living and quality of life. The

traditional sector, such as fishing, cultivation of rice, coconut and other food crops were

characterised by low productivity, low technology, and small-scale. This traditional

economy of poverty and chronic deprivation, as termed by Silcock (1963), was generally

neglected during British rule. The policy of the colonial authorities was rather to

encourage peasants to continue cultivating rice and to discourage them from leaving their

land or from changing to other crops because of concerns for food security and the

balance of payments. Since rice cultivation was unprofitable, the Malay peasants who

continued living on rice were kept poor.

3
By 1957, out of the 6.5 million population in Peninsular Malaysia, 73.4 per cent lived in

rural areas, of which 60.2 per cent were Malays, 28 per cent Chinese and 10.5 percent

Indians. It was the Malay who largely engaged in traditional subsistence agriculture such

as cultivation of rice and other food crops and fishing. The Orang Asli, who were fewer

in number, mainly lived in the forest, with their livelihood depending on hunting,

gathering of jungle products and shifting cultivation. In the plantation sector, foreign

capital largely employed Indian workers who stayed in quarters built on the estates. There

was also a substantial number of Chinese who lived in rural areas, particularly those who

were forced to move into the jungle fringes during the economic recession in the1930s to

earn their living by engaging in farming (Mohd Syukri, 1992). Since their methods of

farming were more productive and had better access to the market, their standard of

living was higher than that of the Malay rice grower and fisherman. During the

Emergency period between1948-1960, many Chinese who lived scattered along the

jungle fringes were resettled in “New Villages”. As noted by Voon and Khoo (1986),

about 550,000 persons were resettled in 445 villages out of which 86 per cent were

Chinese.

In Sarawak, just before joining Malaysia in 1963, the population was about 800,000 with

more than 80 per cent living in rural areas. The rural population was sparse and scattered

along coastal areas and rivers, where communication was possible. Huge areas of land

was covered with jungle, inaccessible by land transportation, and many villages in remote

areas were not easily reached and lacked in basic infrastructure and facilities. The

livelihood of rural people including the Iban, Bidayuh, Malays and Melanau was often

4
not sufficiently remunerative, and it included swamp and wet rice farming, sago

cultivation, coconut growing and fishing. Farming was commonly a small-scale, low-

yielding and low value system with many farmers involved in some subsistence

production and shifting cultivation of rice (King, 1992). The Orang Ulu (such as Punan,

Penan, Kayan, Kelabit, Kenyah) could be found in the interior, such as upstream Baram

River, Balui River and some other main rivers in Sarawak. They generally practised

shifting cultivation especially hill rice and gathering of forest products. Apart from low

income and low productivity, rural development in Sarawak faced another challenge

related to land regulation and administration. Large portions of rural Sarawak are under

“Native Customary Land”, held by the indigenous population under various forms of

customary tenure without registered title. The land becomes an obstacle to development

because it cannot be transferred or used as collateral.

The development of a market economy in Sabah expanded rapidly when the British

Chartered Company gained control of Sabah to exploit resources and conduct trading

activities. Logging activities and rubber plantations were the main modern economic

activities in rural Sabah. Unlike in Peninsular Malaysia, the Company brought in Chinese

and Javanese to work in the rubber plantations and timber industries. Many of the

Chinese later settled down in the rural areas while the Javanese returned to their origins

(Lee Yong Leng, 1982). The majority of the indigenous population lived on subsistence

farming, fishing and shifting cultivation.

5
In 1961 the population of Sabah was about 455,000 consisting of 67.5 per cent

Bumiputera, 23 per cent Chinese and 9.5 per cent others. Among the Bumiputera the

majority were Dusun, followed by Bajau, Murut and others. About 81 per cent of the total

population lived and worked in rural areas. The 1977 agriculture census revealed that

58.5 percent of total rural households operated agricultural land and 45.4 per cent of

agricultural households operated land less than 5 acres. The greatest incidence of poverty

was in the rural traditional sector where 65.7 percent were earning below the poverty

income level. Traditional small-scale farmers were further beset with inherent and

complex socio-economic limitations including uneconomic size holdings, low return

crops, traditional methods of production, inadequate access to assistance and support

services and the lack of credit and marketing facilities. The interplay of these constraints

resulted in low productivity and low income and thus the high incidence of poverty

among small-scale farmers. The incidence of poverty is similarly felt among shifting

cultivators, the landless and subsistence fisherman.

Generally, at the initial stage after independence, there appeared quite common economic

problems faced by rural Malaysia, such as the persistence of poverty, lack of access to

basic infrastructure, poor health and education. But behind the scenes, there existed

variations of rural conditions such as socio-cultural, political, ecological resources,

respective physical settings. The efforts made to address rural problems often overlooked

the diversity of the rural context, and thus common prescriptions had been applied to

solve the problems.

6
OVERVIEW OF RURAL DEVELOPMENT STRATEGY

A lot of research and publications exist on rural development in Malaysia covering a

diverse range of scope and perspective, from the general overview of strategies to

comprehensive evaluation of the impact of the programmes (see Zulkurnain 1989;

Chamhuri and Nik Hashim, 1988; King and Nazaruddin (eds) 1992; Mohd Shukri, 1992).

However, very few made an attempt to combine the analysis to cover the whole of

Malaysia. They looked into the analysis of Peninsular Malaysia, Sabah or Sarawak

separately. In this article it is thus not quite possible to review rural development in

Malaysia as one entity but instead we must examine the progress in parallel by regions i.e.

Peninsular Malaysia, Sabah and Sarawak. An overview of rural development strategies

will be discussed according to the development context by period as outlined in Figure

10.1. The division of the periods is based on major variations in the development

approaches or philosophy adopted by the government.

7
 Vision 2020

New National OPP4 ?

Development Vision
Policy Policy
Economic (OPP2)
Colonial New Economic Policy (OPP3)
policy of Growth
(OPP1)
resource (Laissez-
exploitation faire
approach) Building a
resilient
Context Growth and
Eradication of poverty & with equity competitive
restructuring of society
nation

1st 5YP 2nd 5YP 1st MP 2nd MP 3rd MP 4th MP 5th MP 6th MP 7th MP 8th MP 9th MP

1960 1990 2010 2020

1970 1980 2000

Independence Malaysia New land development

Rural schemes New
Gerakan
Developmen Regional development Philosophy &
Daya
t Strategies Integrated in-situ Strategy of
Infrastructure Basic Wawasan
development Rural
& Programs for resource infrastructure &
Orang Asli Regrouping Development
exploitation social facilities Improve
Schemes (A developed,
Modernisation & quality of life
attractive and
Diversification of Expand
New profitable
Crops infrastructure
Village rural)
New land schemes & amenities
Schemes New Approach
Gerakan Desa to remote
Community to Village & areas
Rural Wawasan
Development Zero hardcore
Development
Eradicate poverty
Red Book
Rural Growth hardcore
Centre poverty

8
Rural Development from Independence to 1970

The late Tun Abdul Razak as Deputy Prime Minister and Minister of Rural Development

was an important figure in the history of rural development. He took special interest in

the development of rural areas by bringing impoverished Malays and other Bumiputera

into the country’s economic mainstream. The urgency of addressing the development of

rural areas related to the initial condition of under-development of the traditional sectors

which were essentially neglected during colonial rule. In addition, the agenda for the

development of the Malays who largely lived in rural areas was interpreted as part of the

bargaining and compromise agreed upon between Malays and non-Malays prior to

independence, i.e. the protection of ‘special rights of the Malays’. However, such

privileges when pursued must not affect the interest of non-Malays (Mohd Syukri, 1992).

Within the framework of a laissez-faire economy, rural development started with

programmes for the provision of basic infrastructure and facilities and some initial

programmes for addressing poverty and land hunger. Given various constraints and

shortages, a planning mechanism called the ‘Red Book’ was introduced to plan,

coordinate development implementation and receive information from the grassroots. The

Red Book was basically a district rural development plan manual, containing instructions

on how to prepare a rural district plan including the setting and working of the District

Rural Development Committee, procedures of plan preparation, sectoral policy to be

considered in the preparation of development programmes and projects, costing and

9
responsibility for implementing the plan. The methodology of the Red Book was very

effective, the approach brought together top-down and bottom-up planning. In line with

this new approach of rural development, a structure of district development machinery

was set up such as the Village Development and Security Committee (or JKKK) and the

District Rural Development Committee.

The three main focuses of rural development during the Tun Razak Period (1960s) were:

• Infrastructure development such as building roads, schools, bridges, clinics,

irrigation schemes, mosques, community halls, water supply and electricity;

• The opening up of new land schemes to resettle landless peasants;

• Modernisation of agriculture and diversification of agricultural crops.

A few agencies related to rural development were established during this period in

addition to the Rural and Industrial Development Authority (RIDA) and the Federal Land

Development Authority (FELDA), established a few years prior to independence. These

include the Federal Land Consolidation and Rehabilitation Authority (FELCRA);

Federal Agricultural Marketing Authority (FAMA), Agricultural Bank Malaysia (BPM),

Malaysia Agricultural Research and Development Institute (MARDI), Council of Trust

for Indigenous People (MARA- replacing RIDA). However, the government commitment

was limited in scope and scale not only because of lack of experience and resources but

more importantly the policy at that time tended to follow a relatively laissez-faire

economic philosophy.

10
In Sabah and Sarawak not much was done for the development of rural traditional

sectors prior to 1970s. A few land resettlement schemes developed in Sarawak started in

1964 such as Rubber Planting Scheme B in Skrang and Melugu (King and Jayum, 1992).

Lee (1982) noted a few resettlement schemes for Orang Dusun in Kerikot and Keningau

initiated by the colonial authorities to attract them to stay in the low-lands and to

transform them into the practice of permanent farming. Similarly undertaken were several

settlement schemes for the Chinese population in the district of Keningau, Tenom and

Papar. After independence, Sabah Department of Agriculture managed to develop 12

land development schemes covering about 18,000 hectares, which was later handed over

to Sabah Land Development Board (SDLB).

The New Economic Policy Period (1970 - 1990)

The 1970 -1990 period marked an era of government intervention and an accelerated

effort in the development of rural areas as a response to the problem of poverty and

inequality. The NEP was incorporated in the Second Malaysia Plan as presented to

Parliament on 11 July 1971. The plan had a two-pronged objective of the eradication of

poverty, irrespective of race, and the restructuring of society so that the association of

different ethnic groups with specific economic roles would be eliminated within a

planning period of 20 years (1971-1990). In rural areas, new land development, regional

development and in-situ development programmes became important instruments for

restructuring and reducing rural poverty and regional imbalance.

11
New Land Development and Resettlement

In Peninsular Malaysia, the development of new land for agriculture in the post-1970

period was largely undertaken by government agencies. The Federal Land development

Authority (FELDA) alone successfully opened more than 600,000 hectares of land for

agriculture between 1970 and 1990. Other state agencies such as the Regional

Development Authorities (RDAs), the State Economic Development Corporations

(SEDCs), the Federal Land Consolidation and Rehabilitation Authority (FELCRA) and

the Rubber Industry Smallholders Development Authority (RISDA) also participated in

new land development. The role of the private sector was marginal, since under the NEP

the state agencies were given priority to develop new land in order to ensure Bumiputera

participation, and the high price of palm oil in the 1970s and early 1980s ensured good

returns on state investment.

As the price of palm oil and other agricultural commodities fell to low levels in the mid-

1980s and remained so for a few years, the development of new land for agriculture has

been largely privatised. FELDA, which has been successful in developing land schemes

for Malay small holders, was not allocated any more land in the Sixth Malaysia Plan and

subsequent period except in Sabah. This is not only because land suitable for agriculture

has become scarce, but also due to the cost of resettling families in FELDA schemes has

become expensive and continued to rise. According to the Sixth Malaysia Plan, the

average cost of resettling a family under FELDA schemes had increased from RM49,700

in 1986 to RM55,000 in 1990 compared to RM26,500 in 1976 (Government of Malaysia,

12
1991:117). Given the present level of commodity prices and the present system of settler

loan repayment, new FELDA schemes will not provide favourable net income for the

settlers. More importantly, with the current pace of rapid industrialisation in Malaysia

demanding cheap labour, the development of FELDA schemes will increase competition

for labour. The large plantations were also hit badly by a shortage of labour since they

were unable to offer higher wages than the industrial sector.

In Sabah, a few agencies were involved in the development of a large scale land

settlements including SLDB (established in 1969), Sabah Forestry Development

Authority (SAFODA), the Sabah Rubber Fund Board (SRFB), the State Ministry of

Culture, Youth and Sport (MCYS) and FELDA (Yap et al, 1988). By the end of 1980s,

about 94,000 hectares of land had been developed and mainly planted with oil palm, to

benefit about 7,000 settlers.

In Sarawak the development of new land was not that significant compared to the in-situ

kind, probably because of problems related to land regulations. Resettlement schemes

were developed mainly for security reasons (such as Rajang Security Command Schemes

(RASCOM) to resettle Iban communities in the Kanowit and Sibu areas in an attempt to

combat communist terrorists) and the construction of dams such as Wong Irup dam near

Lubok Antu and lately (in 1999) the resettlement scheme at Sungai Asap for Orang Ulu

( Kenyah, Kayan, Ukit, Kajang, and Punan) affected by the construction of Bakun Dam.

The resettlement schemes such as at Sungai Asap may have promised a better future for

the young generation but it posed adaptation problems for old people, whose skills and

13
livelihood were based on hunting and gathering of jungle products and shifting

cultivation, which the new area cannot provide.

Sarawak has plenty of land bank to be developed in the future. The state has already

targeted to turn about one million hectares of land into oil palm plantation by 2010,

largely through private-public sector initiatives. The Lembaga Pembangunan dan

Lindungan Tanah (PELITA) was established to expedite the development of rural land

under “Native Customary Right”. Through joint-venture arrangement with private sector,

PELITA had already managed to arrange about 247,000 hectares for development, out of

which about 27,000 hectares had been planted (Abdullah, 2005). However the success of

the schemes depended on the economic return for the developers and the participation of

the natives in the job created. In oil palm plantation, productivity very much depends on

the management and working discipline of the workforce, which might not be the culture

of the natives who are used to living by hunting, gathering of jungle products and shifting

cultivation with a lot of time flexibility.

Orang Asli Regrouping Schemes

In Peninsular Malaysia the Orang Asli consist of three main ethnic groups: the Senoi, the

Proto-Malay and Negrito, with a total population of about 120,000 in year 2000. The

majority were Senoi (living in Perak, Pahang, Kelantan and Selangor) and the Proto-

Malay (largely found in Pahang, Johor, Terengganu and Negeri Sembilan). Efforts to

develop Orang Asli communities can be traced back to 1953 and the establishment of the

14
Department of Orang Asli Affairs (JHEOA). The development of Orang Asli schemes

began in 1977, which involved regrouping of the Orang Asli into a centralised village

within or close to their traditional homeland. The schemes include provision of basic

facilities such as a primary school, health clinic, housing and some form of income

generating activities such as rubber and palm oil cultivation (Nicolas, 2000). In some

schemes the cultivation of crops were carried out together with FELCRA who managed

the plantation on a cooperative system. There were 18 regrouping schemes developed for

the whole of Peninsular Malaysia involving about 10,000 Orang Asli.

JHEOA also pursued other programmes ranging from the development of

entrepreneurship to provision of facilities and human development. There has been a lot

of improvement in the living conditions of Orang Asli. However, the overall level

standard of living and achievement are far behind other communities. Poverty, low

education achievement with a high drop out-rate, and persistence of infectious and

parasitic diseases (malaria, tuberculosis, cholera, measles, whooping cough and scabies)

are some of the indicators of under development.

Among Orang Asli communities, there exists a lot of variation in living conditions. Those

near urban centre tend to be more equipped with facilities and exposed to modern living.

In remote locations where accessibility posed a problem, livelihoods and life remain

traditional, living by subsistence farming, hunting and gathering of jungle products. In

one extreme case the Jahai community in Royal Belum Forest Reserve (Perak), chose to

15
live in the traditional way and refuse to stay in the regrouping scheme provided, and do

not send their children to school.

The Regional Development Authorities

On broader scale and in a comprehensive strategy of development in rural regions,

several statutory regional development authorities were established to implement the

development strategy in resource frontier areas, mainly virgin forest situated in the less-

developed parts of Peninsular Malaysia such as in the southeast of Pahang, southeast of

Johor, the south of Kelantan and the middle parts of Terengganu. Most RDAs,

particularly those related to the development of new towns, were established in the 1970s

not long after the NEP was launched.

Apart from the main goals of poverty eradication and the restructuring of society, the

RDAs were given the following mandates: to redress economic and structural imbalances

between regions; to utilise resource strengths/endowments of less developed states

towards national economic development; to strengthen agricultural and industrial

development in lagging regions, to redirect new development and growth to less

developed regions and finally, to urbanise rural agricultural regions by development of

towns in the rural areas (Quazi, 1987:4).

Three decades after RDAs were established, more than 40 new towns had been developed.

Twenty-three new towns were in the Pahang Tenggara Development Authority (DARA)

16
region, twelve in the Johor Tenggara Development Authority (KEJORA) region, five in

the Terengganu Tengah Regional Development Authority (KETENGAH) region and one

each in the Jengka Regional Development Authority (JENGKA) and the South Kelantan

Development Authority (KESEDAR) region. These towns were mainly developed by the

RDAs and FELDA. Two RDAs, the Penang Regional Development Authority (PERDA)

and the Kedah Regional Development Authority (KEDA) are not involve in new

townships development and their main programs are in-situ rural development projects

such as improvement of the physical conditions of existing settlements and rural

industrialisation.

Among the reasons for the failure in the development of urban-based economic activities

are competition with existing towns, locational disadvantages, lack of infrastructure and

facilities, failure of the growth centre concept, and the nature of leakages of capital or

trickle up mechanism which favour large urban centres and large capitalists (Ibrahim,

1993; Norizan, 1992, Ghani, 1991; Wong, 1989; Muda, 1989)

Wong (1989), who evaluated the resource frontier strategy of DARA and KESEDAR,

revealed that the economy of the frontier regions, which depended on rubber and palm oil

production, created relatively little value added within the regions. These commodities

are strongly tied to the world market and served the interest of national metropolitan

centres. The development of DARA and KESEDAR has not boosted Malay urbanisation

nor reduced regional inequality. He also observed that most FELDA settlers have

improved their standard of living since moving. However, the benefit has been restricted

to first generation settlers since few non-agricultural jobs had been created in the regions.

17
An overview of the performance of new townships in several frontier regions generally

indicates the failure of the new towns to generate economic growth. The development of

new towns has not boosted Malay urbanisation nor reduced regional disparity to any

significant extent. The development of agriculture and resource-based activities in the

new towns has not created the ‘propulsive force’ to boost the economic base of the towns.

These activities have not generated a “trickle-down” effect because they did not purchase

inputs from local small businesses and their products were not for domestic use but

primarily for export. The new towns are also locationally disadvantaged and lack the

necessary infrastructure to attract industrial activities.

In 1992, the government undertook a study reviewing the role and position of RDAs. The

existence of RDAs has to a certain extent succeeded in reducing development disparity

between regions such as in agriculture development, communication networks and social

services. On the other hand, less successful is the development of services, private

investments and new growth centres.

With the changing development paradigm in the 1990s, and emphasis on private sector

led growth, was a government decision to dissolve RDAs by stages. In April 1999, the

Cabinet approved privatisation of DARA to Teras Dara Konsortium and Jengka Regional

Development Authority to Warisan Jengka Holdings Sdn Bhd. The other RDAs still

continue their operation, having less scope for new land development than the

development of existing settlements and community.

18
In-situ Rural development

Rural development activities in existing rural areas carried out by agencies created in

1960s to provide various assistance to traditional sectors were not comprehensive enough

and lacked coordination in implementation. Each agency, including Federal Land

Consolidation and Rehabilitation Authority (FELCRA), Agricultural Bank of Malaysia

(BPM), Farmers Organisation Authority and Department of Agriculture Development,

served the rural and agricultural sector in their own capacity. Although coordination of

the implementation was carried out at district level by the District Development

Committee, the impact was not substantial due to its small scale and other administrative

problems such as lack of manpower, qualified staff and focus of development. The

funding and manpower of each agency had to be dispersed to all state and district branch

offices and it was quite impossible to give focus to certain priorities and areas under such

a set-up.

Thus a more integrated approach to the rural development programme was introduced to

give focus to a comprehensive programme for combating poverty in traditional village

regions where poverty was concentrated. Among large-scale Integrated Agricultural

Development Projects (IADP) under the Ministry of Agriculture were Kemubu

Agricultural Development Authority (KADA), Muda Agricultural Development

Authority (MADA), Kemubu and Besut Irrigation Schemes, North West Selangor and

the West Johor Schemes implemented largely in the 1970, . The IADP is an integrated

package programme providing capital intensive measures such as providing irrigation,

19
farm machinery and high yielding crop varieties and the provision of infrastructure and

services. The objectives were to increase agricultural productivity and farmers’ income,

modernising agriculture, improving extension services, uplifting the standard of living of

the rural population and encouraging farmers to work in groups or organisations.

There were some positive outcomes of the IADP programmes such as an increase in padi

production and farmers’ income, employment opportunities both on and off-farm. Also

recorded was the reduction of poverty levels in IADP areas (Maimunah and Bahaman,

1992). Although the projects were successful to some extent in improving rural

productivity, they tended to favour big land-owner or rich farmers. A large number of

peasants who had no land or owned small plots benefited little from the schemes and still

remained in poverty. Farmer participation also tended to be passive, confined to

acceptance of new technology and receipt of government subsidies (Chamhuri and Nik

Hashim, 1988; Mohd Shukri, 1992). Courtenay (1988) also noted the reduction of padi

cultivated area due to farmer withdrawal from padi growing and a phenomenon of

massive migration away from the padi growing districts, reflecting the shortfall of IADP.

In Sabah, the implementation of in-situ development programmes was carried out by

several agencies such as the Department of Agriculture, the Rural Development

Corporation (KPD), the Sabah Rubber Fund Board (SRFB), the Department of Veterinary

Services and Animal Industry (DOVSAI), the Department of Fisheries (DOF) and

Drainage and Irrigation (DID). The KPD as a leading agency in rural development

initiated many programmes ranging from crop diversification, aquaculture, livestock

20
development, socio-economic programmes, mini irrigation projects, commercial farming,

processing and marketing of agricultural and related products. Overall performance was

encouraging in terms of production and land area under crops, livestock and fisheries

development, but as pointed out by Zulkifli (1992), human development aspects were not

given sufficient attention, such as skills on operation and management. This resulted in

the failure of some projects related to non-traditional crops. In rural areas, socio-cultural

factors such as traditional beliefs and customs, institutions, values and needs had to be

addressed not only to minimise conflict in development objectives but also to ensure that

the programs introduced were received and widely participated in by the communities.

In-situ development in Sarawak involved measures for agricultural improvement carried

out by the Department of Agriculture, and Drainage and Irrigation Department and

Sarawak Land Consolidation and Rehabilitation Authority (SALCRA). The Department

of Agriculture was responsible for several schemes for small farmers including Rubber

Planting Schemes, Coconut Planting Schemes, the Pepper Subsidy Scheme, Agricultural

Diversification Scheme, Assistance to Padi Planters Schemes, Livestock Development

Subsidy Scheme and Inland Fisheries and Aquaculture Development Programme. The

Rural Growth Centre (RGC) programme was also pursued under the Sarawak Ministry of

Rural and Land Development, consisting of an infrastructure component, economy,

service centre and human development. Implementation of the RGC was executed by

existing agencies such as the Drainage and Irrigation Department (DID), Sarawak Land

Development Board (SLDB) and Sarawak Land Custody and Development Authority

(LCDA).

21
Generally, the subsidy schemes have been instrumental in raising the standard of living of

many farmers and reduced the area used for swidden agriculture, intensifying farming

practices and usage of subsidised fertiliser, pesticides and weed killers on smaller rice

plots. They also diversified into cash crops such as pepper, cocoa, fruit and vegetable

growing and some had fish ponds (King, V.T, 1992). Similar to other in-situ development

elsewhere the programmes cannot create jobs for the new labour force. The migration of

youth after completing secondary education was prominent. Many of the young

generation migrated to towns in Sarawak, Peninsular Malaysia and even Singapore in

search of jobs.

The New Approach to Village and Rural Development (NAVRD)

NAVRD is another programme of rural development launched in October 1984, a

modern land and agrarian reform. The aim is to increase income of small farmers by

improving efficiency and productivity through economies of scale in production and

utilisation of modern methods of production and management, and improve the standard

of living of traditional village people by provision of infrastructure and facilities. The

new move aimed to address the persistent and increasing socio-economic gap between

traditional rural dwellers and the urban and modern sector. An alarming increase in idle

alienated land, a continued productivity gap between traditional agriculture sectors and

modern estate sectors and the limited access of traditional villages to basic modern

22
services, were signs of the inability of the conventional approach to cope with the needs

of contemporary socio-economic change.

The three main components of NAVRD were:

a. A voluntary consolidation of individually owned private land into large holdings

called estates. The estates were to be owned by the participating land-owners,

who were receiving shares in ratio to the land they had contributed. The new

estates were to be managed as co-operatives by professional managers with the

objective of profit maximisation.

b. The development of agricultural and non-agricultural based industry within the

project area to provide additional employment opportunities and income, and to

accelerate further the process of rural transformation.

c. Resettlement of scattered villages to a centralised village with modern basic

facilities such as schools, clinics, piped water, electricity and recreation.

The implementation of NAVRD would utilise the existing government set-up and

machinery, without introducing new enabling legislation. The programme relied on the

reallocation of existing financial and other resources from existing government

organisations dealing with rural development.

23
On the basis of case studies of a few pioneer projects of NAVRD, Zulkurnain (2001)

highlighted some shortcomings of the programme which were:

1. The programme failed to address the landless, the tenants and very small farmers

which constituted about half of the target group. The process of land consolidation

and estatisation of farms tended to benefit the large land owners since the

distribution of profit was based on the ratio of land contributed.

2. The programme did not show clear intention to close the existing economic gap

between well-to-do and poor villagers.

3. The difficulty of finding a village which has 500 households or more to develop

as a growth centre for the provision of facilities and infrastructure.

4. The problem of getting participation from farmers.

5. The negative impact of introducing modern methods and machinery on

employment opportunities.

6. Failure to develop non-agricultural activities such as industry due to remoteness

of market, poor infrastructure and unavailability of required skills.

NAVRD also shared a common feature with other agrarian reforms which treated

peasants as passive subjects of change to be moulded and modified at the will of central

planners rather than as agents of change.

24
The New Development Policy (NDP) Period (1991-2000)

This period was covered under The Second Outline Perspective Plan (OPP2) and the 6th

and 7th Malaysia Plan. The NDP with its philosophy of growth with equity emphasised

the eradication of hard core poverty, meaningful participation of Bumiputera in the

modern sector of the economy, role of private sector in restructuring objectives and

human resource development.

The in-situ land development strategy continued to be given emphasis in rural

development during the Sixth and Seventh Plan Period, including replanting programmes,

land consolidation and rehabilitation programmes and Integrated Agricultural

Development Projects (IADP). Due to limited availability of suitable land in Peninsular

Malaysia, the opening up of new land was concentrated in Sabah and Sarawak. The

private sector played a more prominent role in the development of new land for

agriculture including joint ventures with state agencies. FELDA managed to develop

about 15,000 hectares of new land in Sabah under plantation schemes but its main tasks

were to manage existing schemes such as replanting, entrepreneurship and skill training,

settler development and provision of social amenities.

Other programmes for the improvement of the quality of life in interior rural areas were

also emphasised, such as provision of roads, bridges, piped water, electricity, medical and

education facilities, including the establishment of Rural Growth Centres to facilitate the

expansion of economic activities in selected areas.

25
In line with the changes in overall strategy for national development and a new Vision

2020 of Malaysia to become a fully developed country by 2020, a new philosophy for

rural development was also formulated. The new paradigm to rural development called

“New Philosophy and Strategy of Rural Development” (NPSRD) shifted the focus of

development from infrastructure (or eco-centric) to human as the focus of development

(or homo-centric). The NPSRD launched in 1994 becomes the framework for the second

transformation of the rural areas with the goal of transforming rural Malaysia into a

developed, attractive and profitable place for living. This phase of rural development also

marked the beginning of a vision - driven approach to rural development, although much

effort still needs to be poured into problems of poverty, provision of basic infrastructure

and social amenities, particularly in interior rural areas. The human focus emphasises

developing human capacity building which would ensure their initiative and participation

in rural development. The main strategies to achieve the goal of NPSRD include

development of human resources, strengthening family values, development of a society

which is self-reliant, provision of quality infrastructure, development of sustainable rural

economy, effective delivery system and the establishment of a more responsive

institution for rural development (Government of Malaysia, 1996:167).

Under NPSRD a new programme called “Gerakan Desa Wawasan” (Visionary Village

Movement) was launched in 1996, emphasising the empowerment of rural people in

planning and implementing development projects in their own village. During the

Seventh Plan Period, 3000 villages had participated in the programme under the

26
supervision of various agencies of the Ministry of Rural and Regional Development, such

as KEMAS, FELCRA, RDAs and RISDA (Table 10.1). For capability building of village

people an Institute for Rural Advancement was established in 1996 and has trained more

than 9000 grass root leaders such as JKKK for preparation of village master plans, project

planning and management, organisation and leadership. However, the outcome of the

programme has not yet been evaluated, particularly how the knowledge and skills learned

are being applied in the development of villages.

27
 Table 10.1 Distribution of Villages under Gerakan Desa Wawasan

by States, 1996-2000

Number of GDW Village by State and Coordinating

Agencies

States KEMAS RISDA FELCRA LKW Total

Johor 221 13 12 28 274

Kedah 173 9 4 48 234

Kelantan 208 9 3 47 267

Melaka 138 10 3 151

N. Sembilan 183 14 3 200

Pahang 249 14 8 61 332

P. Pinang 119 1 30 150

Perak 251 10 8 269

Perlis 90 6 1 97

Selangor 200 10 210

Terengganu 195 13 7 29 244

Sabah 220 220

Sarawak 334 3 337

W. Persekutuan 18 18

Total 2,599 108 53 486 3,003

Sumber: Bahagian Permodenan Desa, Kementerian Pembangunan Luar Bandar.

28
National Vision Policy Period (2001-2010)

The third Outline Perspective Plan or the National Vision Policy set up a framework for

development covering the 2001-2010 period in which the Eighth and Ninth Malaysia

Plan will be executed. The plan, with national unity as its overriding goal, outlined

general strategies to move foreword in a balanced and sustainable manner in which

economic growth will be promoted alongside efforts to eradicate poverty, restructuring of

society, narrowing the social, economic and regional imbalances, inculcating positive

social and spiritual values as well as concern for the environment. It focuses on building

a resilient and competitive nation.

The National Agriculture Policy III (NAP 3) 1998-2010 launched in 1998 provided a

framework for agricultural development during this period. It contained an overriding

goal of income maximisation through optimal utilisation of the sector’s resources with

the objectives of enhancing food security; increasing productivity and competitiveness;

strengthening linkages with other sectors particularly the agro-based industry; exploring

and developing new sources of growth; conservation and utilisation of natural resources

on a sustainable basis. With new emphasis and priority given to the development of

agriculture sector and good prices of main commodities, the progress was quite

encouraging. New ideas and techniques were also introduced such as Good Agriculture

Practice, marketing services such as FAMAXchange, Agribazaa, and Malaysia Best; new

production zone (high tech) for fruits, vegetable, aquaculture and animal husbandry and

organic farming.

29
During this period, rural development focused on creating a conducive environment to

attract investment and maintain tranquility of countryside living. The strategies included

the provision of the full range of basic and quality infrastructure and social services,

expanding infrastructure and facilities to remote rural areas and estates, expanding

coverage of water and electricity in Sabah and Sarawak and improvement of development

programmes of RDAs. Rural development programmes among others focused on

providing good housing, encouraging rural tourism, increasing training and opportunities

for raising incomes for youth and settlers in rural areas, development of small scale

industries such as craft and resource based, integrated programmes of human and

physical development for the Orang Asli.

The programme for human development under Gerakan Daya Wawasan was changed to

Gerakan Daya Wawasan (Visionary Capability Movement) to give more focus to the

development of three types of human capabilities i.e. human capital, financial capital and

marketing capability. The Visionary Capability Movement is a movement to inculcate

awareness, changes in mind and attitudes and empowering rural people including their

minds and skills, utilising efforts, capabilities and participation in planning and

implementing village programmes towards achieving a developed, attractive and

profitable village. The success of the programme very much related to the willingness of

village people not only to participate in training and awareness programmes, but more

important to be actively involved in creative activities of planning, implementation and

team working. In addition these activities required sacrifice of time and sometimes

30
resources. Without having any immediate economic returns it was most unlikely for the

village people, who are occupied with their own jobs, to participate.

31
PROGRESS AND ACHIEVEMENT

To examine the achievement in the process of rural transformation requires a set of time

series data on certain development indicators such as social, economic and physical. But

not much such data is available because most statistics on the subject do not have any

break down by rural area. In this article only a few indicators will be examined related to

income and poverty, infrastructure provision and rural population growth.

Income and Level of Poverty

Income and the level of poverty can provide a good measure of economic progress. The

increase in household income together with a reduction in poverty reflects an improved

standard of living and quality of life. On the other hand, low average household income

with high incidence of poverty indicates the failure of development to spread benefit to

wider sections of society. The initial state after independence reflected this failure and it

is not surprising since the colonial authorities were more concerned with maximising

exploitation of resources. Table 10.2 shows improvement in average monthly incomes of

rural and urban households. Income differential between urban and rural areas reduced

during the 1970 to 1990 period, but increased again after 1990, indicating a slower pace

of productivity improvement in the rural sector compared to the urban sector. The level of

poverty in rural areas was reduced from 45 per cent in 1976 to 21.8 per cent in 1990 and

11.9 per cent in 2004. The incidence of hard-core poverty was also reduced from 5.2

32
percent in 1990 to 2.9 percent in 2004 (Table 10.3). Rural development efforts which

gave due emphasis to the eradication of poverty appeared to be effective. However, there

are variations in the achievement. Rural poverty tended to be higher in less developed

states such as Sabah, Sarawak, Kelantan, Terengganu and Kedah (Government of

Malaysia, 1991a: pp. 52). The incidence of poverty also varies according to

occupations/economic activities. A higher rate of poverty occurred among padi farmers,

rubber and coconut small holders and fishermen.

Table 10.2 Average Gross Monthly Household Income by Urban and Rural

Areas (RM) 1970-2002

1970 1979 1990 1999 2002

Urban 428 587 1,606 3,103 3,652

Rural 200 331 957 1,718 1,729

Malaysia 264 417 1,169 2,472 3,011

Ratio urban/rural 2.1 1.8 1.7 1.8 2.1

Source: Min. of Rural and Regional Development

Provision of Infrastructure

Table 10.4 and 10.5 shows a quite high achievement of provision of water supply and

electricity in rural areas. The percentage of households with piped water had increased

from 42 per cent in 1980 to more than 90 percent in 2005. Only Sabah and Kelantan

show low levels of achievement with only about 60 percent of rural households having

33
piped water in 2005. Electricity supply was widely covered in Peninsular Malaysia in

which all states recorded more than 90 per cent of households with electricity in 2000.

Lower coverage of slightly less than 70 per cent was recorded in Sabah and Sarawak.

High development costs due to geographical factors and sparse population have hindered

the rapid expansion of rural electrification in Sabah and Sarawak. However, the overall

achievements in the provision of piped water and electricity were encouraging.

34
Table 10.3 : Malaysia Incidence of
Rural and Urban Poverty 1976-2004
1976* 1990** 1999***
Total Rural Urban Total Rural Urban Total Rural Urban T
Overall Poverty

Incidence of poverty 37.1 45.7 15.4 17.1 21.8 7.5 8.5 14.8 3.3

Number of households 879,300 784,900 94,400 619,400 530,300 89,100 409,000 323,200 86,100 311
Hard-Core Poverty
Incidence of hard-core
poverty 4.0 5.2 1.4 1.9 3.6 0.5

Number of households 143,100 126,800 16,300 91,700 79,800 11,900 67

Source:
*Fourth Malaysia Plan, Table 3-4,
pp.44
**Mid-Term Review of the Sixth Malaysia Plan, Table3-
1, pp. 58
***Ninth Malaysia Plan,Table 16-1, pp. 350
Note
Poverty is measured on the basis of a poverty line income (PLI) which take into account the minimum requirement for food,
clothing and shelter, and other regular expenditures that are necessary to maintain a household in a decent standard of living.
For estimating the incidence of hardcore poverty, half of the PLI is used.
PLI was revised in the Ninth Malaysia Plan to include two main components i.e. food and non-food PLI.
Hardcore poverty is based on income level below the PLI for food component, which is slightly higher than half of the total PLI.

35
Table 10.4: Malaysia: Percentage of Households with Piped Water Supply by Urban and

Rural Areas According to State, 1980-2005

Urban Ru
Negeri 1980* 1985* 1990** 1995** 2000*** 2005*** 1980* 1985* 1990** 199
Johor 87.0 91.6 96.0 98.0 100.0 100.0 28.0 61.3 67.0
Kedah 90.0 95.0 98.0 99.0 100.0 100.0 52.4 57.7 69.0
Kelantan 58.0 65.0 70.0 85.0 63.0 80.0 17.0 30.0 40.0
Melaka 98.0 100.0 100.0 100.0 100.0 100.0 70.0 81.7 98.0
Negeri Sembilan 86.8 89.3 96.0 98.0 100.0 100.0 66.0 75.0 89.0
Pahang 92.0 95.0 98.0 98.0 98.0 99.0 47.0 65.0 70.0
Perak 96.0 98.0 99.0 99.0 100.0 100.0 55.0 75.0 77.0
Perlis 90.0 93.0 97.0 100.0 100.0 100.0 45.0 50.0 75.0
Pulau Pinang 97.0 98.0 99.0 100.0 100.0 100.0 78.0 85.0 96.0
Sabah 99.0 100.0 100.0 100.0 89.0 90.0 18.0 38.0 52.0
Sarawak 87.0 95.0 98.0 100.0 100.0 100.0 20.0 33.0 47.0
Selangor1 90.0 94.5 98.0 100.0 100.0 100.0 65.0 73.0 85.0
Terengganu 75.0 85.0 90.0 95.0 84.0 100.0 25.0 40.0 54.0
Malaysia 89.0 93.1 96.0 98.0 97.0 98.0 42.9 57.6 67.0

Source
*Fifth Malaysia Plan, Table 18-2 & 18-3, pp. 472
** Seventh Malaysia Plan, Table 11-7, pp. 361
*** Ninth Malaysia Plan, Table 18-6, pp. 409
Note
# included under Selangor
1 Including W.P. Kuala Lumpur

36
Table 10.5: Malaysia: Percentage of Households with Electricity Supply by

Urban and Rural Areas According to States 1992 & 2000

Urban (%) Rural (%)

Negeri 1992 2000 1992 2000
Johor 98.9 100.0 96.4 98.2
Kedah 99.3 100.0 93.0 98.6
Kelantan 98.1 71.0 93.6 97.5
Melaka 99.7 100.0 98.1 99.3
Negeri Sembilan 98.9 100.0 95.2 98.6
Pahang 98.9 98.0 91.0 94.0
Perak 97.4 100.0 92.2 96.1
Perlis 97.9 100.0 95.0 99.2
Pulau Pinang 99.4 100.0 96.0 99.2
Sabah 99.4 88.0 65.3 67.1
Sarawak 89.3 100.0 76.5 66.9
Selangor 96.8 100.0 96.6 97.9
Terengganu 99.0 97.0 94.4 98.2
W.P Kuala Lumpur 98.9 99.8
Sumber: Economic Planning Unit (2005),

Rural Population Growth

Population growth indicates the ability of rural development programmes to sustain

population in rural areas. This basically relates to the number of job opportunities created

against the available manpower in the rural areas. Table 10.5 shows the overall growth of

rural population reducing from 1.45 per cent during the 1970-1980 period to 0.02 per cent

and -0.24 per cent for the 1980-1991 and 1991-2000 periods respectively.

Variation of growth rates occurred by state. During the 1970-1980 period Pahang and

Sabah managed to sustain a rural population growth of more than 3 per cent per annum.

37
In Pahang this could be related to massive land development schemes such as in DARA

and Jengka which managed to attract migrants from rural areas in other states. Sabah

continues to maintain high rural population growth during the 1980-1991 period, which

could be related to land development programmes but experienced low growth rate

during the 1991-2000 period. Terengganu also experience high rural growth rate during

the 1980-1991 period probably due to massive land development schemes in

KETENGAH and other FELDA schemes in rural areas. The slowing down of new land

development activities and continuing concentration on urban development activities in

core regions could be related to the very low or negative growth of rural population

experienced during 1991-2000.

In conclusion, rural development appears to be able to improve living conditions of rural

people, through improvement of rural economic activities, poverty eradication, provision

of infrastructure and amenities but it cannot sustain the population in the rural areas.

While new land development is capable of providing jobs and attracting migrants to new

rural areas during the early phase of development, it cannot create sufficient jobs for the

second and subsequent generations. The massive development of frontier regions such as

DARA, Jengka, KETENGAH, KEJORA and KESEDAR, which is agriculture based, has

not succeeded in creating extensive multiplier effects for the further development of other

economic activities, such as manufacturing and services. In-situ development programme

on the other hand are only able to cater for groups of people, especially those who are not

likely to migrate to urban areas. They have little success in reducing rural-urban

migration. Although the rural sector, especially plantation estates, has been facing a

38
shortage of workers, they are unable to compete for labour with economic activities in

urban areas which offer better wages. As a result there is the potential for more out-

migration from rural areas in the future, a trend which has already occurred during the

last decades.

The result would be quite negative for rural areas although some of the rural populace

might benefit from remittances sent by out-migrants (their children). The main effect will

be depopulation of the rural areas leaving behind the older population. The number of

children even born will decrease since the population of child bearing ages gradually

diminishes. Thus, the long term effect will be under utilisation of facilities and utilities

provided and inefficient running of services. The level of agricultural productivity will

drop if there is no replacement for labour shortages.

39
Table 10.6: Malaysia: Percentage of Rural Population and Average Annual Growth Rate

by State 1970-2000

Percentage Rural Growth rate (%)

Negeri 1970 1980 1991 2000 1970-80 1980-91 1991-2000

Johor 73.7 64.8 52.2 36.1 0.84 0.49 -1.70

Kedah 87.4 85.6 67.5 61.3 1.00 -0.44 1.02

Kelantan 84.9 71.9 66.5 66.5 0.61 2.18 0.97

Melaka 74.9 76.6 61.3 32.7 1.23 -0.89 -5.05

Negeri Sembilan 78.4 67.4 58.0 45.0 -0.15 0.71 -0.82

Pahang 81.0 73.9 69.6 57.9 3.28 2.25 -0.23

Perak 72.5 67.8 46.4 40.5 0.38 -2.78 -0.63

Perlis 100.0 91.1 73.4 66.2 0.85 0.21 -0.31

Pulau Pinang 49.0 52.5 25.0 20.5 -5.21 -0.65 -0.65

Sabah 83.1 79.4 66.8 51.7 3.42 4.02 0.99

Sarawak 84.5 82.0 62.5 52.1 0.12 0.25 0.25

Selangor 73.8 65.8 24.8 11.7 -4.53 -2.30 -2.30

Terengganu 73.0 57.1 55.5 50.6 0.14 3.18 0.51

W.P Kuala Lumpur - - 0.0 0.0 1.39 1.39 0.00

W.P Labuan 100.0 53.7 51.6 23.2 -1.91 6.17 -5.96

Malaysia 71.6 65.8 49.3 38.2 1.45 0.02 -0.24

Sumber: Jabatan Perangkaan Malaysia(2001), Laporan Kira Permulaan Bagi Kawasan Bandar dan Luar Bandar,

Banci Penduduk dan Perumahan Malaysia 2000;

40
RURAL CHALLENGES

The challenge for rural communities is quite apparent. Major problems faced during the

earlier periods after independence have greatly reduced, e.g. poverty, lack of

infrastructure and amenities, low level of education and health. As old problems vanish

new problems crop up and more challenges appear on the scene. Globalisation is one of

the great challenges. The continuing concentration on urban development in core regions

also poses a threat of the backwash effect to rural regions and increasing rural-urban

disparity. Rural regions are losing population due to out migration. The problem oriented

approach adopted in rural development in the past has ignored the potential rural heritage

and these strengths are being depleted out of neglect. The potential which should have

been preserved or utilised instead has been destroyed in the process of problem solving.

There are issues of quality and human values. The modern lifestyle and social structure

has eroded traditional values that preserve family structure and community.

Globalisation

Globalisation is a phenomenon of complex interrelationships in economic activities

across international space as a result of increased internationalisation of production

activities. It arises particularly from the development and worldwide adoption of modern

information and telecommunication technologies, the global liberalisation of international

trade and capital movements, the associated enhanced ability of multinational

41
corporations to assemble capital wherever the costs of production are lowest and social

and environmental restrictions are weakest and international agreements that limit the

power of national governments to directly bolster and protect the economies of their

lagging region (Moseley, 2003). The outcome of globalisation is the increased opening

up of local economies to global competition.

By implication globalisation can pose a threat to rural products from increased

competition as well as opportunities from the opening up of markets worldwide. The key

challenge is how to enhance rural products so that they remain the choice of local users

and also serve overseas market. This relates to the question of quality, uniqueness and

cost of the products. Enhancing skills and technology in production and marketing will

ensure quality of product and wider penetration of the market. But quality also relates to

general health and the cleanliness of the environment in the countryside. If it is to

produce good and healthy foods, not only skills and technology matter, but also the

environment. There is a need to portray the quality of the rural environment where the

products come from.

Rural strategies need to focus on identifying niches and the comparative advantage of

each rural locality. The development of rural products must closely integrate with the

safeguarding and enhancing environmental assets. Marketing of quality products must

portray both the quality of the products and also the quality of the environment and

people where the products come from.

42
Uneven Development

Uneven development not only relates to uneven spatial development but also the uneven

process of development in economic power and capital accumulation as expressed in

social inequality. With the phenomenon of globalisation it is expected that the growth of

major cities will continue while absorbing resources from rural areas including labour,

mineral and other natural resources. The state will continue to invest in capital cities and

along development corridors in order to provide a conducive environment to attract

global businesses such as development of mega infrastructure and other modern facilities

to cater for the needs of the cosmopolitan lifestyles of expatriates. This has been

explicitly noted in national policy such as the National Physical Plan which emphasised

concentration of development in major conurbation areas. The formation of the Iskandar

Regional Development Authority would expedite further the process of urban

polarisation.

Due to the nature of global business which is capital intensive and highly specialised in

services, they are most unlikely to have linkages with local small business in rural areas

and thus most unlikely to benefit rural development as a whole.

Under this scenario the gap between urban and rural prosperity will widen. The rural

economy will not be able to catch up, with declining services and out migration will be

unavoidable. The phenomenon of rural decline will occur at an accelerated rate, leaving

behind, the old population, rural poor and a lack of services. Thus, rural development as a

43
measure needed to intervene in the process of uneven development is more pressing and

emphasised for the future.

Rural Variation

Malaysia is very rich in rural heritage. There are wide variations of people and

communities in rural areas. The socio-cultural, economy, physical, values and belief

systems are not similar such as the Malays in traditional villages, Chinese in small towns

and Indians in estates, the indigenous people of Sabah and Sarawak, the remote

communities of Orang Asli and Orang Ulu. Different rural regions also have different

problems and potential. Rural areas near conurbation regions are facing problems of

development pressure, urban activities are continuing to encroach at a rapid pace, with

the rural environment deteriorating and infrastructure under strain.

In remote rural areas, basic infrastructure is still inadequate. Economic activities are still

practised on a subsistence basis while rural communities are losing the younger

generation due to out migration. Rural businesses in small towns and social services can

no longer be sustained and face closure. Modernisation is rapidly changing the lifestyle

and increases the need for cash to consume goods and obtain modern services. Sustaining

livelihood in the rural remoteness is becoming more difficult as natural resources have

been over-exploited, such as the timber industry destroying natural habitat and causing

erosion and river pollution.

44
Acknowledging rural variation is very important in planning the development of rural

areas in the future. By acknowledging local variation, centralised planning becomes less

relevant. There is a need to pursue rural development at a local level as well as for

working collaboratively between central agencies, local agencies and local people in

planning and implementing rural development.

FUTURE DIRECTION

Rural Vision

While rural development in the early period of independence focused on problem solving

to overcome the problem of underdevelopment, under-employment, poverty and

deprivations, the future strategy of rural development should be vision driven. Within the

overall vision of achieving a developed nation status by 2020, national vision and

strategy for rural development should spell out clearly the general direction and strategic

actions to guide rural development at a local level. It should address strategic issues such

as globalisation, uneven development and rural variation which foresee wide ranging

implications for rural development in the future. For example globalisation calls for

strategic concentration of investment in a few core conurbation regions, in order to

compete with other global cities, which will further increase the polarisation effects of

existing core regions. Rural regions will suffer from backwash effects in which rural

resources will be forced to move out from rural areas.

45
A comprehensive review of rural resources at local levels has to be undertaken to address

the issue of rural variation and diversity. Rural strategy in the future has to look into the

strengths and weaknesses of such diversified rural heritage and derive strategic actions to

achieve the vision. There is also a need to look into the emerging agenda of rural

development at an international level to be at par with developed nations, such as

sustainable development and Agenda 21, the Millennium Development Goals and the

philosophy of ethical development emphasises noble universal values, such as that

embedded in the principles of Islam Hadhari.

Rural Resource Management

The way to plan rural areas has to be changed from the development planning approach

towards resource management. As rural areas become smaller in population, there will be

fewer needs for huge government investment. The role of the state will be more one of

managing rural resources and facilitating private sector or rural communities to

participate, and to sustain the prosperity and good quality of life in rural areas.

Conservation of the natural environment would become of more concern and how to

capitalise on the potential of the rural landscape for leisure and tourism activities. Rural

people have to be more friendly to the natural environment and caring of the natural

heritage such as flora and fauna. Rural areas also have to maintain the quality of human

resources which would ensure quality management and leadership.

46
Local Development and Participation

For sustainable management and development of rural areas, it is important that more

people be encouraged to participate in decision making at the local and community levels.

Active participation of local people in planning and implementation of rural development

programmes will ensure better prospects for self reliance and sustainable development.

This calls for the local development model which is essentially area-based or the

territorialisation of development initiatives. It implies a bottom-up approach, mobilising

local people and organisations in attempts to address problems of rural variation and

diversity which could not be tackled at a national or regional level. In developed nations

a local area perspective of rural development is widely applied. The programme of

Gerakan Daya Wawasan in Malaysia is moving towards this approach.

There are sound arguments for the adoption in Malaysia for those related to local

diversity, increasing local participation, adding value to local resources as emphasis on

utilisation of local resources and preventing leakage by not relying on excessive usage of

imported materials and capital. The approach is also a defence against globalisation as it

fosters local distinctness and strengths and thus competitiveness.

The Bumiputera Agenda

Given the future scenario of increasing globalisation of the Malaysian economy, the

policy to promote Bumiputera should be maintained as it was embedded in the bargaining

47
for independence, enshrined in Federal Constitution and the 20 Points and 18 Points

Memorandum for Sabah and Sarawak respectively. The development of Bumiputera

economic activities in rural areas should recognise the complex interplay of social,

economic and political factors influenced by national and international capitalism. The

development of the Bumiputra economy cannot be achieved simply by providing credit

facilities, training and advisory services. It needs to address the structural problems of

uneven concentration and accumulation of capital which favour big cities and benefit a

few capitalists. Within a framework of the capitalist society of Malaysia this suggests that

more effort and commitment have to be given to disperse development, to develop rural

areas and small businesses where the majority of Bumiputera live.

Since the trend of economic development is towards concentration in a few core regions,

efforts to disperse development will be costly and might end up wasting resources if

pursued on a large scale. A viable approach might be to generate selective incentive

policies applied to limited locations based on growth potential such as rural growth

centres and selected new townships in RDAs.

In the development of rural economic activities, emphasis must be given to the

development of those economic activities which have strong linkages with local small

business. This implies giving higher priority to the development of small and medium

scale industries utilising local resources and skills. For example, the operation of small

scale tourist businesses utilising the natural attractiveness of beaches, forest, rivers and

traditional settlements in rural areas will be more successful in promoting local

48
entrepreneurs, in comparison to a large scale tourist resort involving a lot of foreign

capital.

Efforts to promote Bumiputra entrepreneurs should also focus on those entrepreneurs

who have already shown evidence of experience in business and progress. It is also worth

looking into facilitating the heirs of progressive/successful business people who have the

interest and potential to continue businesses already run by their parents.

CONCLUSION

The discussion of rural development experiences in Malaysia reveals that the process of

rural transformation has taken place within the framework of a market economy. Rural

development has been used as a means to correct the failure of the market mechanisms to

trickle down the benefits of development. The persistence of poverty and

underdevelopment in rural areas were the manifestation of uneven development as the

process and outcome of capitalism. The early stages of state intervention focused on the

provision of basic needs such as infrastructure and basic amenities, and efforts to combat

poverty by modernisation of rural economic activities. Given the magnitude of rural

problems, and the deep rooted structure of underdevelopment of the traditional system,

initial measures of fragmented and small scale intervention did not give much impact.

A large scale and integrated approach of intervention was undertaken during the NEP

period of 1970-1990, which addressed both the improvement of the living conditions of

49
the existing villages and the relocation of the rural populace to new land development

schemes. The impact was quite substantial particularly in the case of land settlement

schemes which rectify the structural problems of land redistribution and productivity and

also access to social infrastructure and amenity. In-situ development of rice cultivation

areas also tended to be successful in the effort to improve productivity but has not

sufficiently addressed the issue of land distribution. Similar efforts have been carried out

in Sabah and Sarawak, but due to certain constraints such as land regulations, physical

features and socio-cultural factors the scale of development was relatively smaller.

However, it is unfortunate that physical constraints and time factors have made efforts to

redistribute land through a comprehensive land scheme to the poor sections of rural

communities in Sabah and Sarawak are no longer viable unless highly subsidised by

government. The possible options are through joint venture such as that pursued by the

Sarawak government under the coordination of PELITA. But this kind of venture does

not ensure active participation of the communities and the return was not as remunerative

as the farms managed and worked by individuals as in case of FELDA schemes.

Whatever the case, there is still a future for the rural areas. Rural development has not yet

ventured intp the potential or strengths of rural areas. A more systematic effort has to be

made to identify rural resources or capital in the rich rural heritage. The existing state of

underdevelopment of rural areas should not always be looked as a problem. It can be

viewed and realised into assets such as the unique arts and cultures of rural communities,

traditional skills and knowledge, the natural beauty and ecological resources endowed in

50
certain rural settings, and others which have not been explored sufficiently by

development planners before. It is time to consider rural development from wider and

multi faceted perspectives, not associated with particular disciplines such as development

economies. The curriculum and persons involved in rural development have to be

expanded to include the multi as well as inter disciplinary. Rural development needs

ideas from ecologists, experts on arts and culture, tourism planning and operators,

engineers, geologists, and others apart from development economists and agriculturalists.

51
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