In these circumstances, Abdullah Badawi took charge of the primer ship in October 2003. Later on, he became an elected Prime Minister in 2004, after 11th General elections. He listed three big challenges. First, corruption; second, Economic imbalances along racial lines and finally Malaysian mindsets, attitude and mentality.29 Malaysians liked Badawi’s style of leadership which is inclusive and his statement that “he was the leader of all Malaysians” is up to the aspirations of the Malaysian people. On National Day he stated: “Let all citizens of Malaysia, without feeling unfair, without feeling sidelined, irrespective of race or religion, rise to become statesmen in our land. We are equal, we are all Malaysians. No individual in this county is more Malaysian than another”.30
All these positive developments in Malaysian politics indicate different trends and a new phase of the state-society relationship. In order to eliminate ethnic and religious differences, Abdullah’s government initiated National Service (NS) program that targets better racial integration, mobilizing over 85,000 youth in 2004. All these efforts show the Government’s seriousness regarding ethnic integration. Moreover, the cabinet also came up with a compulsory course for ethnic studies that will be offered in all Malaysian universities in order to understand the issue in a more objective manner.31
On economic front, Malaysia’s GDP grew by 7.1 per cent in 2004, the fastest pace since 2000.32 The Private investment also increased during 2004 and all major sectors registered positive growth (Private sector contributed 6.2 percentage points to overall economic expansion). In the manufacturing sector, both export and domestic oriented industries expanded strongly due to the upturn in global electronics as well as stronger domestic demand. The services sector experienced strong expansion and contributed 57.4 per cent of the GDP in 2004, driven mainly by higher consumer spending amidst rising disposable incomes, increased trade-related activities as well as higher tourist arrivals. Malaysia experienced a 50 per cent increase in tourist arrivals compared with 2003. These tourists brought 17.5 billion RM (4.61 billions dollars) in foreign exchange.33 The sustained strong expansion of the agriculture sector to 8.5 per cent of GDP in 2004 was driven by higher production of crude palm oil and rubber as well as food related crops, and good prices for agriculture products. Focusing on agriculture sector was also because of Malaysia’s food import bill, which was almost 20 billion RM (53 billion US dollars) in 2004, up from RM 11.4 billion in 2000, the cumulative result of the single minded focus on manufacturing as the vehicle for import substitution form the mid 70’s.
Besides, projections of Malaysia in 2005 are more modest. Nevertheless, GDP of 5-6 per cent would still make it the fastest growing economy in Asia behind China and India. Currently, Malaysia classified as medium human development country (on HDI list Malaysia is on 57 which is considered a medium scale on the HDI scale).34 Compared to top 5 countries, Malaysia’s achievements in health and education are exemplary. Federal government expenditure on education is 20.6 per cent in the year 2004.35 The challenges facing by Malaysia, the fact is that Badawi’s agenda to reform Malaysia has a solid backing of the people of Malaysia, whose strong desire is to see vision 2020 practically in terms of one Malaysia.