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Review of the ETP 2014

In 2014, GNI per capita rose to RM34,1232, from RM30,809 boosted by private sector investments at RM146 billion3. We have also been able to create 1.8 million new employment opportunities within the larger economy in the last four years, striding closer to our 2020 target.

There is no denying that 2014 was a watershed year in cementing the Government’s commitment towards fiscal discipline. We demonstrated our seriousness to transform policies to meet the needs of the current fiscal climate and ensure sustainability in the long term. These measures include shifting towards a managed float for retail prices of RON95 petrol and diesel, the implementation of GST in April 2015 and our disciplined approach in keeping the nation’s fiscal deficit in close check.

Such manoeuvres have without a doubt helped us become increasingly resilient to external volatility. More importantly, our economic fundamentals remain intact and continue to improve through crucial fiscal reforms.
Enhancing Sustainability and Inclusiveness

Achieving our targeted numbers in GNI, investment and employment make up only a portion of our pursuit towards high-income status. In order to truly transform, we must include as many people as possible in wealth creation, while developing at a sustainable pace over time without straining available resources.

Reducing reliance on oil & gas contribution
In formulating the ETP, one of the Government’s objectives was to reduce its historical reliance on revenue from oil and gas, and encourage diversification of sectors in the Malaysian economy. It was to this end that the 12 National Key Economic Areas (NKEAs) were identified as areas for focused development.

Four years on from the start of the ETP, this diversification has clearly paid off. Reliance on oil and gas contribution towards the nation’s revenue has steadily dropped from 40.3 per cent in 2009 to 29.7 per cent in 2014 with other sectors increasingly contributing to the country’s coffers.

Exercised growing fiscal discipline
We have also exercised growing fiscal discipline as we aim for a balanced budget by 2020. With the progressive elimination of subsidies for fuel (petrol, diesel and gas), electricity, cooking oil and sugar, in tandem with efforts to increase revenue through more stringent tax collection, we have reduced our fiscal deficit by leaps and bounds to 3.5 per cent6 in 2014 from 6.7 per cent in 2009.

Over the years, we have seen tremendous success in poverty eradication. According to the latest preliminary data from the Department of Statistics Malaysia (DOSM), only one per cent of our population was in poverty as at 2014, compared with 3.8 per cent in 2009. This also represents a far cry from the first records of poverty in Malaysia collected in 1970, when 49.3 per cent, or almost half, of the population was classified as living in poverty.

Poverty Eradication
In a survey done by the Asian Development Bank (2013), Malaysia recorded a 55.3 per cent reduction in the percentage of population living below the poverty line. It is the biggest reduction among ASEAN countries such as Indonesia (six per cent), Vietnam (six per cent) and the Philippines (2.5 per cent). ADB noted that this was achieved in Malaysia through cash assistance, 1AZAM programmes which offer microcredit facilities to encourage entrepreneurship among low-income families, healthcare, education, housing and more.
Towards the Last Mile: Key Indicators of Transformation

We have made progress in supporting broader economic development as shown by the following key indicators.
  1. Stable Economic Growth
  2. Closing in on High Income with NKEAs Being Main Contributors to GNI
  3. Employment on the Rise
  4. Growing Share of Private Investment
  5. Fiscal Consolidation Measures on Track
  6. Government Revenue Increases
  7. Reducing Dependence on Oil & Gas Revenue, Diversification of Economy
  8. Robust Capital Market Economy
  9. Private Consumption on Uptrend
  10. Continued Global Recognition
NKEAs Drive Growth
The ETP’s 12 NKEAs represent our efforts to focus economic growth on industries in which our capabilities, expertise and specialisation can be enhanced in line with those of a high-income economy. In 2014, our overall KPI for the NKEAs stood at 110 per cent.
The following is a snapshot of the activities of each NKEA during the year, with detailed reporting disclosed within the respective chapters of this report.
SRIs Foster Global Competitiveness

Formulated from policy recommendations from the New Economic Model, the SRIs represent components required for Malaysia to achieve global competitiveness. Initially made up of six SRIs, 2014 saw the Public Service Delivery SRI transferred to a higher platform and renamed the Public Service Delivery Transformation programme, the reporting of which is available in the GTP Annual Report 2014.

In 2014, the overall KPI achievement for SRIs was 120 per cent.

2020: Staying the Course
Malaysia has shown significant progress towards high-income status in the past four years. As we enter the final phase of the ETP, it has become more important than ever for us to stay the course and maintain the momentum that has been established in the country’s transformation.
In the next five years, PEMANDU will remain in its role of overseeing the ETP to ensure we arrive at our targeted goals for 2020, while working in tandem with other Government programmes, such as the 11th Malaysia Plan which will commence in 2016 and see us through the final lap towards 2020.
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