Malaysia's Economic Transformation Program (ETP)

I saw this in the Daily Express (also on 7 October 2010). The was no byline nor the issuing body. I presumed it was official. The article can be simplified / summarised as follows:

• The Economic Transformation Program (ETP) has the objective of raising the Gross National Income (GNI) per capita from US$6,700 to US$15,000 (RM23,700 to RM48,000) by 2020. This requires an annual growth rate of 6%. I presume this is "NET" Growth Rate; i.e. after deducting the inflation %.

• It aims to produce 3.3 million new jobs. The Services sector is to grow to 65% of the economy.
  
  
• The ETP says the focus will be on a few key growth engines. There will be 12 National key Economic Areas (NKEAs). The Government aims to be the facilitator with policies and incentives. 92% of the investments will come from the Private sector (including the Government Linked Companies - GLCs)
  
  
• The ETP claims to be action-oriented with 131 Entry Point Projects (EPPs) giving the required "returns" to achieve the desired 6% growth in GNI.
  
  
• Driving the program will be via PEMANDU (Performance Management and Delivery Unit in The Prime Minister's department). PEMANDU will monitor and report on the progress of the ETP.
  
  
• It was claimed that 500 persons (from private sector companies and government departments) formulated the 12 NKEAs.
  
  
• Many "Labs" (workshops) were held to obtain ideas which were then "syndicated" (co-ordinated) amongst the stakeholders.
  
  
• Obviously the past Malaysia Plans and development had brought us to a Middle-Income Level. This ETP is the next step. It is mandatory to have a New Economic Model in a New World.
  
  
• The US$15,000 per capita target is the current definition of "High-Income" by The World Bank.
  
  
• It says that the ETP development will be both "Inclusive" and "Sustainable".
  
  
• The achievement will be not just quantitative; but by balancing consumption, investments, productivity and with a thriving services sector.
  
  
• "Inclusive" means All Malaysians. It emphasised the creation of 3.3 million good jobs (half requiring diplomas). This will grow the income of the lowest 40% of Malaysian households from RM1,440 per month (2009) to RM2,300 per month (by 2015).
  
  
• The ETP wants to achieve the target without depleting the natural resources of Malaysia, and with reduced reliance on the Oil & Gas sector.
  
  
• The Government will not rely on public funding (92% from the private sector).
  
  
• The article said that growth was not up to standard ("loss of momentum") in the past decade! I have never heard this mentioned before in all The Budget Speeches.
  
  
• Slow Productivity Growth was one big factor. The ETP requires the private sector investment to grow 12% over the next 5 years (actual average of 2% p.a. in the past 5 years).
  
  
• Malaysia is no longer competitive in the high-volume low-cost product sectors. The ETP wants to move Malaysia to the high-value product sectors. Obviously the working population will have to change to function in a "high-skilled, knowledge-based, innovation-intensive" environment.
  
  
• Malaysia had fiscal deficits every year since 1998. In fact, the deficit in 2009 was 7% of GDP. The Government is committed to reduce the deficit to 3% of GDP by 2015. The availability of borrowing (even by governments) will be increasingly difficult in the future.
  
  
• The low Foreign Direct Investments (FDIs) in Malaysia in the past decade showed the eroding competitiveness of the country in the region.
  
  
• The Foundations of the ETP are 1Malaysia, Government Transformation Program (GTP), New Economic Model (NEM), and The 10th Malaysia Plan.
  
  
• The ETP is the starting point and will "evolve" over time.
  
  
• The 12 NKEAs are oil, gas and energy; palm oil; financial services; tourism; business services; electronic and electrical; wholesale and retail; education; healthcare; communications content and infrastructure; agriculture; and Greater KL.
  
  
• 60% of the GNI growth is to come from the first 4 NKEAs.
  
  
• By 2020, services sector will be 65% of GDP; domestic consumption will be 59% of GDP; 70% of the population will be urban.
  
  
• Total investment required of RM1.4 trillion; 92% from the private sector (RM120 billion a year - estimated 2010 figure is only RM72 billion); 73% of the private sector investments will be source domestically with the balance 27% from FDIs.
  
  
• The jobs classification will reach Low-paying 43% (57% in 2009); Middle-paying 46% (39% in 2009); and High-paying 11% (4% in 2009).
  
  
• The Government promises to ensure that EPPs are owned by the private sector wherever possible, fast track regulations amendments, revamp MIDA to get more DDIs and FDIs, transparent award of public tenders, seek feedback, report on ETP progress, and maintain the ETP as a priority.
  
  

There you are; you now know something about the ETP. You have learned quite a few acronyms to use in your daily conversations.

UPDATE: (13 October 2010 - Tengku Razaleigh Hamzah (Ku Li) said that the ETP is so big and life changing, a more exhaustive discussion must be held with people-influencing leaders of society to get the full support).