There were profound effects of the Great Depression (1929–34) on both the political and economic fronts. Describe Franklin D. Roosevelt’s New Deal. Did he want to impose a form of socialism?
The New Economic Policy (NEP) was a economic policy implemented in Malaysia from 1971 to 1990, which aimed to reduce the country's economic dependence on agriculture and to promote rapid industrialization. The NEP was introduced by the Malaysian government, led by Prime Minister Tunku Abdul Rahman,Read more
The New Economic Policy (NEP) was a economic policy implemented in Malaysia from 1971 to 1990, which aimed to reduce the country’s economic dependence on agriculture and to promote rapid industrialization. The NEP was introduced by the Malaysian government, led by Prime Minister Tunku Abdul Rahman, with the goal of reducing poverty, improving income distribution, and promoting economic growth.
Impact of the NEP:
- Poverty reduction: The NEP helped to reduce poverty in Malaysia by providing opportunities for low-income groups to access education and employment in the industrial sector.
- Industrialization: The NEP led to the development of a manufacturing sector, which helped to reduce the country’s dependence on agriculture and increase its economic growth.
- Income distribution: The NEP aimed to improve income distribution by promoting the participation of Bumiputeras (indigenous Malaysians) in the economy. This was achieved through policies such as affirmative action programs and quotas for Bumiputera-owned businesses.
- Infrastructure development: The NEP led to significant investments in infrastructure, including transportation networks, power generation, and telecommunications.
Abandonment of the NEP:
- Rapid industrialization: By the 1990s, Malaysia’s economy had grown rapidly, and the government felt that it was no longer necessary to continue with the NEP’s emphasis on poverty reduction and social equity.
- Globalization: Malaysia’s economy had become increasingly integrated into the global economy, and the government felt that it needed to focus on attracting foreign investment and promoting exports in order to compete globally.
- Changes in government priorities: The Malaysian government’s priorities had shifted from poverty reduction and social equity to economic growth and competitiveness.
Consequences of abandoning the NEP:
- Widening income inequality: The abandonment of the NEP led to a widening income gap between the rich and poor, as well as a decline in social mobility for low-income groups.
- Increased inequality in education and employment: The abandonment of the NEP led to a decline in education and employment opportunities for low-income groups, particularly Bumiputeras.
- Loss of industrial capacity: The rapid industrialization policy pursued by the government after the abandonment of the NEP led to a loss of industrial capacity in certain sectors, such as manufacturing.
- Dependence on oil exports: Malaysia’s economy became increasingly dependent on oil exports, which made it vulnerable to fluctuations in global oil prices.
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The Great Depression started after a major fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of OctobRead more
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The Great Depression started after a major fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929, known as Black Tuesday.
Economic And Political Consequences Of Great Depression
The Great Depression had devastating effects on both rich and poor countries. Personal income, tax revenue, profits and prices dropped, while international trade fell by more than 50%. Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. In the political sphere, the great depression was considered as one of the prominent causes for the rise of totalitarian regimes that led to world war 2.
New Deal Of FDR
The new deal is a set of economic and social welfare measures taken by president Roosevelt to tackle the great depression and revive the American economy. Based on Keynesian principles of state spending, this policy is credited with creating massive employment and preventing further decline in the economy. The new deal was introduced with three aims:
Did New Deal Introduce Socialism?
The major criticism against the new deal came from businessmen who accused FDR of encouraging socialism. State governments also resented the extent to which the federal government was interfering in state affairs, effectively harming the federal spirit and centralizing the governance. However, a close look at the new deal and its implications are necessary to come to a definitive conclusion on this aspect.
Fdr Rationale For Socialistic Policies
As FDR himself stated, the goal of the new deal is to save capitalism from communism. Thus the new deal is pragmatic and is intended to do two birds with one stone. It aims to revive the American economy while also fighting back the rising radical left-wing in American politics. While many European nations doing the same turned into fascist and totalitarian governments, FDR tactically co-opted the left to preserve capitalism. The biggest consequence of this co-opting left is it gave rise to the Welfare state model of polity that is widely followed now across the world.
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