Propelling Malaysia Towards Becoming A High-income Developed Nation
The Economic Transformation Programme (ETP) is a comprehensive effort that will transform Malaysia into a high-income nation by 2020.
It will lift Malaysia's gross national income (GNI) per capita from USD6,700 or RM23,700 in 2009 to more than USD15,000 or RM48,000 in 2020, propelling the nation to the level of other high income nations. This GNI growth of six per cent per annum will allow us to achieve the targets set under Vision 2020.
Successful implementation of the ETP will see Malaysia's economy undergo significant changes to resemble other developed nations. We will continue our shift towards a service-based economy, with the services sector contribution growing from 58 percent to 65 percent in the same period. More than 3.3 million new jobs will be created by 2020, spread across the country in urban and rural areas. The nature of these new jobs will result in a shift towards middle and high-income salary brackets. Greater Kuala Lumpur/Klang Valley will be transformed into a world-class city. Finally, growth will be achieved in a sustainable manner, without cost to future generations, through initiatives such as building alternative energy generation capacity and conserving our environment to promote eco-tourism.
The ETP is Different from Past Attempts to Grow the Economy
A bold new approach has been taken to develop the ETP. It is the first time that any effort of this kind has been undertaken in the history of Malaysia, or of any other developed nation.
From its inception, the private sector and the business community have been involved in the ETP.
In May 2010, a Thousand Person Workshop was run to help identify the 12 NKEAs. The private sector continued to play a large role, when the labs began in June, with 500 of the best minds from the private sector (350 persons from 200 different companies) and the Government (150 persons from 60 different public institutions, ministries and agencies) coming together to develop plans for the 12 NKEAs.
The lab ideas and the plans that were developed were syndicated extensively throughout the eight-week lab period, with more than 600 syndication meetings with ministries, agencies, multi-national corporations, local corporations and non-governmental organisations.
"Important stakeholders such as the prime minister, ministeres and business leaders, were brought in early to visit the labs and provide feedbacks to the participants"
Subsequent to the labs, Open Days were conducted in Kuala Lumpur, Sabah and Sarawak, where 5,500 visitors (business community, multinational corporations, rakyat and media) visited NKEA booths and provided further input. The result of this process is a clear roadmap for Malaysia to become a high-income nation.
The effectiveness of any transformation programme often lies in the details.
The ETP consists of two parts – the vertical thrusts represented by the 12 National Key Economic Areas (NKEAs) which will provide focus, and the six Strategic Reform Initiatives (SRIs), cross-cutting policy changes that will enable Malaysia to be competitive in the global arena.
National Key Economic Areas (NKEAs): Providing the Focus for Economic Growth
Through extensive collaboration with the private sector, the 12 NKEAs were determined to be sectors where Malaysia is globally competitive. They are the key growth engines for our economy going forward.
To ensure that these NKEAs produce big results fast, they receive prioritised public investment and policy support. The ETP is designed to be led by the private sector while the Government will primarily play the role of facilitator.
Most of the funding will come from the private sector (92 per cent) with public sector investment being used as a catalyst to spark private sector participation.
The ETP presents a departure from the norm because it is focused on actions, not on theoretical principles and ideas. Each NKEA has a lead minister who will assume responsibility for ensuring smooth implementation and delivery. Entry Point Projects (EPPs) concretely outline actions required to grow the economy and business opportunities (BOs), have been earmarked as areas for potential expansion. The EPPs and BOs identified under each NKEA are anchored on how much they contribute to Gross National Income (GNI). Any public spending will be allocated on the basis of maximising GNI per ringgit of public expenditure.
Strategic Reform Initiatives (SRIs): Policy Reforms to Ensure Competitiveness
The six SRIs were born from the 51 policy measures recommended by the National Economic Advisory Council (NEAC) in the Concluding Part of the New Economic Model (NEM). They complement the focus provided by the 12 NKEAs by driving policy changes to ensure Malaysia emains competitive globally.
Of the 51 policy measures in the NEM, 14 policy measures have been aligned with initiatives under existing NKRAs and NKEAs, hence they have natural homes. The remaining 37 policy measures have been clustered into the six SRIs. Each SRI has a lead minister or ministers, who are responsible for the successful implementation of the initiatives. Key Performance Indicators (KPIs) have been included into their ministerial scorecards.