Malaysia’s economy is set to skyrocket to a super-impressive level in just another 10-year, thanks to an economic road map involving investments of about US$444 billion (RM1.3 trillion) to power the country towards becoming a high income economy by 2020, provided you believe this is not another Mother of all Slogans gimmick to create feel-good factors before the next snap election.
Minister in PM Department and Pemandu CEO Idris Jala claimed the so-called ETP (Economic Transformation Programme) would triple the country’s GNI from RM660 billion to RM1.7 trillion. It was definitely a blockbuster presentation by Idris with all the buzzwords such as ETP, GTP, NKEA, NKRA, SRI, NEM and whatnot thrown in.
The wish-list presented:
- The country’s GNI (it’s gross national income and not “genie”) would grow at 6% annually and set to hit US$523 billion by 2020 from US188 billlion last year – a staggering 178% improvement *whoa*
- GNI per capita will jumped to RM48,000 by 2020 from RM23,700 in 2009
- Estimated new jobs creation – 3.3 millions (you hear that, Barack Obama?)
- The RM1.3 trillion investments are derived from 131 EPP (entry point projects) and 60 business opportunities – 92% funding to come from private sector
- Seven projects worth RM115 billion is set to start by end of 2010
- Plans to build 141km of rail lines via a Mass Rapid Transit high-speed rail system connecting Kuala Lumpur and Singapore
- Transform the Klang River to a “River of Life” commercial and heritage district
- EPP spread across 12 NKEAs (national key economic areas) namely:
- Oil, gas and energy
- investment – RM217.6 billion
- incremental GNI – RM131.5 billion
- new jobs creation – 52,000 by 2020
- Palm oil
- investment – RM124.2 billion (98% from private sector)
- incremental GNI – RM178 billion
- new jobs creation – 42,000 by 2020
- hope to contribute RM1,889 GNI per capita
- Financial services
- GNI contribution – RM180 billion (by RM121 billion)
- Employees with more than RM1 million in EPF accounts encouraged to invest in private pension fund
- investment – RM204 billion (2% from public sector)
- GNI contribution – RM104 billion (triple from RM37 billion in 2009)
- To develop IR (integrated resort) in Sabah – another Singapore’s IRs like consists of new casino(s)?
- Business services
- Electrical and electronics
- GNI contribution – RM90 billion
- new jobs creation – 157,000 by 2020
- Wholesale and retail
- To attract 200,000 foreign students by 2020
- GNI contribution – RM61 billion
- New jobs creation – 536,000
- Communications content and infrastructure
- GNI contribution – RM58 billion
- Connecting 6,000 schools including 6 million users and 860,000 wireless broadband users
- Greater Kuala Lumpur
The hidden problems government would not share with you:
- The projected 6% annual growth rate for 10-years did not take into consideration the possible slowdown or recession within the period. Furthermore the country has never experience annual growth rate of more than 5% from 2000 to 2010
- The plans did not take into consideration of currency fluctuation although the ringgit has strengthened against the dollar recently.
- The government has been very inefficient in fighting inflation and almost all the time the inflation figure released were deliberately modified to the taste of the government. Even with the strength of the ringgit now, the prices of consumer goods have actually gone up instead of goes down.
- Not much has been said about preventing brain-drain, one of the most important factors in driving the so-called ETP.
- Malaysia’s universities world ranking continue to drop or fluctuate within levels that do not reflect any progress that could fit into ETP’s ambitious plan.
- The UNCTAD World Foreign Investment Report (WIR) 2010 showed that FDI in Malaysia plunged 81% in 2009 (attracted only US$1.38 billion compared to US$7.3 billion in 2008), trailing behind countries like the Singapore, Thailand, Indonesia and even Philippines and Vietnam. So will the FDI miraculously jump with this ETP?
- The government was deadly silent on how the country can compete with neighbouring countries for the FDI hence the majorities skeptical of such plan.
- Quality Research and Development is in exceptionally poor capacity since most of the top brains have migrated but does the government have the political will to improve human capital?
- Over the last 10-years, private investment totalled only RM535 billion so it’s amazing to see the private investors would suddenly more than double their investment in the next 10-years considering the current political and global economic climate
- To put a tag of 50% leakage (or rather corruption) in any government projects is a understatement. Using this as a rule of thumb nevertheless shows that half of RM1.3 trillion will actually goes into corruption, a staggering figure indeed. In case you’re math-blind we’re talking about RM650 billion leakages here, mind you.
Hari Raya may have just ended and the Christmas is still 3-months away but credit should be given to Idris Jala and Najib’s administration for putting the effort in convincing the voters that Santa Claus will indeed grant us the nice to have wishful items list. The fact is the ruling government is still too busy playing the racial games in separating the ethnic-Malay, ethnic-Chinese and ethnic-Indian – a key ingredient in moving human capital towards the economic goal.
However the government can always put the blame on private sector should the initiative fails because it has warned before-hand that ETP is actually private sector driven. Heck, that’s the problem if you have an administration who thought the country’s economy can be transformed as easily as Transformer being transformed into Bumble Bee.
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