Intervention and Non-intervention

Policy Ideas for a Social Market Economy in Malaysia

This policy paper hopes to bring aspects of the Social Market Economy to the ongoing economic discussions among Malaysian decision-makers regarding ways to move the nation's economic and social well-being forward.


This policy brief provides a new and revised resource to continue the discussion of the overall ideas of the Social Market Economy and a focus on the development of social and economic policy.

It also covers the issues surrounding intervention and non-intervention by the government at federal and state levels and how this balance is struck in the Social Market Economy framework. The questions of both the level and the type of intervention are essential areas to discuss in the evolving socio-economic environment of Malaysia and ones which are rarely, if ever, exposed to objective, comparative discussion.

In addition, the questions around the issue of subsidiarity, the factors that determine the degree of delegated responsibility and the accountability and control mechanisms required are also under-researched and rarely discussed in Malaysia, although they are well understood in Germany within the Social Market Economy model.

The paper provides a summary of the research findings and offers policy recommendations, based on the Social Market Economy model’s approach to intervention and non-intervention, for politicians and bureaucrats to consider. The precise content is based in part on the responses to stakeholder inputs and policy ideas arising from the Opening Forum & Roundtable held at HELP University on 11th May 2017.

In general this policy brief focuses on three areas (1) the role of the state in the industrial economy and enterprise development, (2) the creation of a skilled labour force and the potential of a dual-vocational system and; (3) the current state of welfare provision in Malaysia and the scope for reform.

The main objective is to continue the discussion of these issues amongst policy makers within the context of the Social Market Economy approach and to prompt debate and elicit views and ideas from a wider group of stakeholders to help guide and inform our understanding of the main issues around the Social Market Economy in Malaysia going forward.