Mixed economy

1.0 Introduction

Mixed

economy

is

an

economic

system

in

which

both

the

state

and

private

sector

direct the economy, reflecting characteristics of both market economies and planned

economies

(According

to

Schiller.

Bradley

2010).

Most

mixed

economies

can

be

described

as

market

economies

with

strong

regulatory

oversight,

and

many

mixed

economies feature a variety of government-run enterprises or government provision of

public goods.

Malaysia is a democratic country with excellent economic system. Malaysia also is a

leading country in economic terms and being an example for the economy system we

are

using.

In

Malaysia,

government

use

mixed

economy

system.

This

economy

system is the leading type of economic system that is used in most of the countries

such as United States. Mixed economy system includes a mixture of capitalism and

socialism. It combines private economic freedom, centralized economic planning and

government regulation. Government plays major role in economic growth as well as

distribution of wealth. For example, Malaysia government collects tax and provides

subsidies at the same time for the public.

The

basic

idea

of

the

mixed

economy

is

that

the

means

of

production

are

mainly

under

private

ownership;

that

markets

remain

the

dominant

form

of

economic

coordination;

and

that

profit- seeking

enterprises

and

the

accumulation

of

capital

remain

the

fundamental

driving

force

behind

economic

activity.

However,

unlike

a

free- market

economy,

the

government

would

wield

considerable

indirect

influence

over

the

economy

through

fiscal

and

monetary

policies

designed

to

counteract

economic

downturns

and

capitalism's

tendency

toward

financial

crises

and

unemployment, along with playing a role in interventions that promote social welfare

(According to Pollin, 2006). Subsequently, some mixed economies have expanded in

scope to include a role for indicative economic planning and/or large public enterprise

sectors.

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2.0 Mixed economy in Malaysia

Malaysia

is

a

nation

of

tremendous

ethnic

diversity.

Malaysia

use

mixed

economy

system

starts

from

the

day

of

Malaysia

independent.

The

government

development

goals

in

1950s

have

modernized

Malaysia.

Importance

was

given

to

infrastructural

development

and

agricultural

diversification

in

the

1960s.

In

the

first

two

decades

since independence, social services and infrastructural network development were the

main points for the socio-economic development programme.

In

1957

Malaysia

are

an

agricultural

producer

country.

Because

of

the

unstable

community

price

in

world

market,

start

from

1970

Malaysia

was

focusing

on

manufacturing

type

industry

and

start

from

1980

Malaysia

was

in

the

medium

technology

manufacturing

and

service

sector.

The

structures

of

economic

are

still

changing now and Malaysia is currently practicing knowledge based economic.

In

the

process

of

changing

and

growing

entrepreneur

in

that

country

play

a

very

important

role.

Without

entrepreneur

doing

business

and

make

their

investment

country

will

not

growing

faster

than

what

we

have

now.

The

participate

of

entrepreneurs will growing the economic more rapidly.

During this time, Malaysia sought to emulate the economic success of Japan and other

East

Asian

countries.

(According

to

Economy

of

Malaysia,

2006)

To

this

end,

the

Look

East

Policy

was

adopted

to

replicate

in

Malaysia

the

work

ethic

of

these

successful

economies.

This

policy

was

followed

by

the

Malaysia

Incorporated

concept which stressed the importance of cooperation between the public and private

sectors

in

order

to

ensure

rapid

economic

growth

and

national

development.

To

complement these policies, the government launched the Privatization Policy in 1983.

Privatization

was

intended

to

facilitate

economic

growth,

relieve

the

financial

and

administrative

burden

of

the

government,

reduce

the

government’s

presence

in

the

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economy,

decrease

public

spending

and

allow

market

forces

to

govern

economic

activities

and

improve

efficiency.

The

policy

was

also

integral

to

the

government’s

strategy of realizing active participation by Bumiputera in the corporate sector.

In 1991, the aim of Vision 2020, namely, to achieve developed nation status by that

year,

was

announced.

The

framework

for

this

was

laid

out

in

the

National

Development

and

National

Vision

Policies.

In

2002,

the

government

launched

the

K-economy Master Plan. (According to Ministry of Finance, 2000) The master plan

articulated

the

means

of

developing

a

knowledge-based

economy

to

advance

the

country’s economic growth.

Three main factors responsible for Malaysia’s success mixed economy are:

1. Sound and sustained socio-economic development programme.

2.

A

committed

and

modernized

bureaucracy,

responsive

to

the

political

leadership

and peoples’ needs

.

3.

A

system

of

planning,

monitoring

and

evaluation

that

ensures

implementation

always remain on track.

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3.0 Examples

3.1

PETRONAS

About

mixed

economy

in

Malaysia,

and

government

subsidy

，

we

have

to

say

‘PETRONAS’

.

Short

for

Petroliam

Nasional

Berhad,

is

a

state-owned

entity

controlling Malaysia’s oil and gas resources.

The company stands tall at 80th

place in the Fortune 500 list of companies, and as a consolidated company, it is

the ninth highest profit making company in the world. (According to GLOBAL

500

LIST,

2008)

Petronas

has

so

far

played

a

key

role

in

the

economy

of

Malaysia, and the country’s march towards becoming a developing country, with

an

annual

GDP

growth

rate

of

close

to

7

per

cent.

Since

the

incorporation

of

Petronas

in

1974,

the

Malaysian

government

chose

to

create

a

state

company,

rather than using taxes, production limits, leasing, or other familiar instruments

of supervision to develop its economy. Petronas has perfectly filled that gap, and

has co-operated with the government in meeting its objectives. It has acted as a

state

owned

company,

having

both

supervisory

powers

over

the

majors

and

production activities of its own, and acted as a compromise in Malaysia towards

achieving that goal, along with providing capital, contribution to exchequer and

expertise. Petronas has a special place in the Malaysian economy. (According to

John Bonar, 2009)

It contributed 44% of the Malaysian government’s revenue in

the 2008 fiscal year.

Because of ‘PETRONAS’ powerful

income support,

Malaysia

government

can

added

more

petrol

subsidy

to

Malaysian

customer.

compare

with

China,

India,

korea,

Japan

and

other

asia

countries,

Malaysia

petrol

price

is

more

cheaper,

price of RON95 petrol would remain steady at RM1.90 (s$$0.75) per litre even if

global

fuel

prices

were

to

increase.

(According

to

Bera,

2012)

Under

Budget

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2012 of Malaysia, about RM17 billion was provided in subsidies for petroleum

products.

3.2

AirAsia

AirAsia

is

a

symbol

of

mixed

economy

system

in

Malaysia,

by

the

state

to

private, but

get a better future. And break of State-owned enterprises Malaysia

Airlines monopoly. Bring a better quality of service on the sky.

AirAsia was established in 1993 and began operations on 18 November 1996. It

was originally founded by a government- owned conglomerate, DRB-Hicom. On

2

December

2001

the

heavily-indebted

airline

was

bought

by

former

Time

Warner

executive Tony

Fernandes's

company Tune Air Sdn

Bhd

for the

token

sum of one ringgit (about USD 0.26 at the time) with USD 11 million (MYR 40

million) worth of debts. (According to AMC, 2010)

Fernandes turned the company around, producing a profit in 2002 and launching

new

routes

from

its

hub

in

Kuala

Lumpur,

undercutting

former

monopoly

operator Malaysia Airlines with promotional fares as low as MYR 1 (USD 0.27).

Through AirAsia and Malaysia Airlines competition

，

our flying services are not

compromised, we get more convenient and cheaper services.

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