Launched on 25 September, 2010, the Economic Transformation Programme (ETP) was formulated as part of Malaysia's National Transformation Programme. Its goal is to elevate the country to developed-nation status by 2020, targeting GNI per capita of US$15,000. This will be achieved by attracting US$444 billion in investments which will, in turn, create 3.3 million new jobs.
The ETP's targets for 2020 will be achieved through the implementation of 12 National Key Economic Areas (NKEAs), representing economic sectors which account for significant contributions to GNI. The programme is also centred on raising Malaysia's competitiveness through the implementation of six Strategic Reform Initiatives (SRIs). The SRIs comprise policies which strengthen the country's commercial environment to ensure Malaysian companies are globally competitive.
In arriving at the high-income threshold of US$15,000, the Government followed the World Bank’s threshold for a high-income economy of US$12,476 and factored in its published historical global inflation rate of 2% until 2020.
The ETP represents the catalyst for economic growth and investments needed for Malaysia to achieve high-income status by 2020. The Government's role in the ETP is that of facilitator, coordinating, tracking and monitoring the programme. While the Government will prioritise its policies and spending for the ETP, the bulk of investments, targeted at 92% by 2020, are to be financed by the private sector. The private sector, therefore, has been placed in the driver's seat in the implementation of the ETP.
Focus and competitiveness: The two pillars of the ETP
The ETP is driven by two components. These comprise 12 National Key Economic Areas (NKEAs), representing sectors where growth will be focused on. These sectors were identified based on their potential to contribute to GNI and create multiplier effects across the economy. The Government also factored in Malaysia's competitive advantages such as its skilled workforce, abundance of natural resources, expertise in manufacturing and its potential to create a niche for itself in the selected sectors.
Each NKEA comprises Entry Point Projects (EPPs), which explore new growth areas, and Business Opportunities (BOs), which enable the sectors to move further up the value chain.
The programme also identified six Strategic Reform Initiatives (SRIs) made up of supportive policies that will drive Malaysia’s global competitiveness. The main thrust of the SRIs is to create an efficient, competitive and business-friendly environment in Malaysia that will allow world-class, local champions to thrive and attract valuable foreign investment.
Numbers featured within this section are correct as of announcement date.