Investment in the Malaysian economy to 2020 will be driven and led by the private sector.
Private investment will account for 92 per cent of the RM1.4 trillion investment required for the NKEAs from 2010 to 2020 and public funding for only 8 per cent.
This requires an investment from the private sector of around RM120 billion per year, a significant increase from the RM72 billion in 2010 (Exhibit 3)
This 92 percent share will bring Malaysia in line with other high-income countries and fits with the new role for Government to become the facilitator of economic growth. Private investment-led growth also means that the economy will be less dependent on public funding, which is currently constrained by the need to manage the country's fiscal position. Government funding will be targeted at initiatives that will provide the greatest GNI impact for every ringgit of public money spent.
Domestic direct investment (DDI) will account for about 73 percent of total private investment with about 27 percent sourced from Foreign Direct Investment (FDI). Though achieving a high level of domestic investment will be a challenge, Malaysia has a capacity to generate this domestic investment due to the significant gap between our savings and investment rates, which are currently 22 per cent and 10 per cent respectively.
NKEAs Will Facilitate a Shift Towards More Middle and High-income Jobs
The initiatives and reforms of the ETP are designed to deliver growth that will benefit many Malaysians.
"These new jobs will attract top foreign talent as well as 150,000 high-skilled Malaysians diaspora"
Many well-paying new jobs will be created. The initiatives are projected to create an incremental 3.3 million jobs. Over 60 per cent of these jobs will be middle-income or high-income. The overall effect will be a significant growth in the jobs market, a shift towards higher paid jobs, a wide variety of new opportunities for Malaysians and strengthening of the skills base. Through the new jobs created by the NKEAs and growth in real wages in existing jobs, the number of low-income earners is projected to fall to 43 percent by 2020 (from 57 percent in 2009), as shown in Exhibit 4
. The percentage of middle-income jobs will increase from 39 percent to 46 percent and the proportion of high-income jobs will increase by almost three times.
There will be a better fit between the skills demanded in the labour market and the skills developed. What Malaysia needs most of all is a much larger pool of well-trained and competent individuals with the right vocational and technical training (46 percent of additional jobs). The investment in education in Malaysia is designed to deliver the increased quantity and quality of these vocational and technical qualifications.