IMF managing director Christine Lagarde said Malaysia was the only country the IMF had to revise upward its GDP growth forecast when she met Najib in November. – Bernama

IN the journey of transforming Malaysia’s economy where the impossible must be made possible, there is no room for doubt. We must push ahead to do what needs to be done to make sure that the high income economy is achieved by 2020.

Make no mistake about it, Malaysia’s economic resilience today, having recorded a 5.3% growth in GDP as at the third quarter of this year amidst a global economic slowdown is no fluke. Our GDP growth for this period surpassed regional peers Singapore’s 1.3%, Thailand‘s 3%, South Korea’s 1.6%, Taiwan’s 1% and Hong Kong’s 1.3%.

Furthermore, when the International Monetary Fund’s (IMF) managing director Christine Lagarde met Prime Minister Datuk Seri Najib Tun Razak in November, she said that Malaysia was the only country for which the IMF had to revise upward their GDP growth forecast.

I believe that this resilience is a result of the concerted, cohesive Economic Transformation Programme (ETP) Malaysians from different segments of society put into motion two years ago.

Indeed, the year 2012 has been a win on many counts for the ETP which is led by our Prime Minister.

Setting the true north of the ETP was certainly one of the most defining moments. We repeat it like a mantra – we want to ensure that the gross national income (GNI) per capita in Malaysia reaches at least US$15,000 by 2020. This is our true north.

In 2009, our GNI per capita was US$6,700 and we managed to increase this to reach US$9,700 by 2011. This is a remarkable 45% increase.

To get to our true north target by 2020, the challenge is to secure a total of RM1.4 trillion in investment, 3.3 million incremental jobs and RM1.4 trillion in GNI, all to be achieved by 2020.

Are we on the right track, many have asked.

The ETP is dual in its objectives. It aims to create specific economic focus areas through the 12 National Key Economic Areas (NKEAs) so that potential investors know beforehand what prospects the Malaysian economy has for them. It also addresses policies and procedures to create conditions for competitiveness to flourish under the six Strategic Reform Initiatives (SRIs).

The sense of buy-in we have secured from the private sector cannot be stronger than what it is today. To date, it has attracted RM212bil in investments which will create almost 411,000 new jobs and RM137.6bil in GNI by 2020.

A total of RM20.6bil out of RM29bil investment committed in 2011 to 2012 was realised. For the years between 2013 and 2015, we intend to surpass that.

Private investment growth in Malaysia averaged 6.7% between 2000 and 2010, but doubled in 2011 to 12.2% after the first year of the ETP. We’re on track to do even better in 2012, with investment having tripled to 22.5% after three quarters.

It is encouraging to see the private sector is retaking its rightful role as the engine of economic growth in this country. A government cannot carry the bulk of the burden in generating economic growth.

There are limitations in the ways a government can earn income. Also, that income needs to be used for developmental purposes and where possible, for fiscally prudent practices to ensure we do not end up in the same situation of bankrupt nations like Greece.

Thus, with the private sector taking the lead role in economic development, the Government can now focus on truly catalytic projects with great economic returns such as the Mass Rapid Transit, River of Life project, Pengerang Integrated Petroleum Complex as well as tipping point for infrastruture investment in economic corridors.

When these projects are up and running, the beneficiaries would be the private sector and the rakyat, the product or service provider and the consumer. It results in both sustainable wealth creation and improvement in the quality of life for Malaysians.

Despite positive signs so far, we are yet to reach the pinnacle and we must continue to up our game.

One very real objective that the ETP hopes to achieve is to bring structural changes to gross domestic product (GDP) make-up in order to achieve a higher degree of sustainability.

We cannot be too dependent on either private investments or domestic consumption but need to achieve a healthy mix of components so that we are able to weather global headwinds through a robust and resilient economy.

As a percentage of GDP, in the past, private investments have been 20%-22%. For the nine months of 2012, this has risen to 27%, and it needs to stay at this level.

Our net trade is impacted and reflective of the recessionary state of the United States and euro economy. To deal with this, our exports need to significantly increase and the only way we can penetrate the global marketplace is when our products and services are competitive, meeting with global standards.

Local companies and brands must be challenged to grow their base outside the comfort of the local market and compete with the best in the regional and global arena.

Renowned global institutions have been taking note of the country’s positive change. The World Bank’s Doing Business Report 2013 saw us move from the 18th position in 2012 to 12th in 2013 whilst the AT Kearney’s FDI confidence index for Malaysia has risen from 21 in 2010 to 10 in 2012 ahead of France, South Korea, and Canada.

While we have a long way to go to fight graft, the Corruption Perception Index (CPI) by Transparency International shows that Malaysia’s global ranking has improved from 60th to 54th this year. This demonstrates that the Government’s effort in combating corruption is delivering some encouraging results, albeit we have a long way to go.

Yes, we must keep moving. We must keep pushing to change policies, attitudes and behaviours necessary to make Malaysia a competitive and business-friendly destination.

It is important to keep in mind that this transformation is not something being pushed down by the Government to the private sector but a culmination of both government-industry collaboration to identify the best way forward for the country’s economy.

On the ETP’s methodology, I was heartened to learn that Harvard University and Princeton University, two Ivy league universities in the United States, have written case studies on the transformation of Malaysia. These are used in their teaching courses.

I believe this is not something for the Government alone to be happy about; all Malaysians should be proud of this achievement. In many ways, we are beginning to see the results of this collective, industry-wide effort targeted at economic transformation for Malaysia.

As the momentum builds up, we cannot become complacent. There are even bigger wins in store in the future for the ETP. We just have to stay focused in our efforts and be positive on our high-income target. With that, season’s greetings and wishing you a wonderful and prosperous 2013. Happy New Year!

Datuk Seri Idris Jala is CEO of the Performance Management and Delivery Unit and Minister in the Prime Minister’s Department.

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