The NEM would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians, with their per capita income increasing to US$15,000 by the end of the decade from US$7,000 currently, said Najib, who is also Finance Minister.
Under the NEM, the government would no longer tolerate practices that support the behaviours of rent-seeking and patronage, which have long tarnished the altruistic aims of the New Economic Policy (NEP).
The NEM will be ‘inclusive’ with all Malaysians contributing and benefiting from economic growth – a fundamental element of any new economic approach, he said in his speech at ‘Invest Malaysia 2010’ conference.
Among the highlights of the NEM are:
● Employees Provident Fund (EPF) will be allowed to invest more in overseas assets;
●Malaysian Industrial Development Authority (MIDA) will be corporatised and renamed as Malaysian Investment Development Authority to make it more effective as an investment promotion agency;
● Government and EPF to form a joint venture to promote the development of 1,200 hectares of land (3,000 acres) in Sungai Buloh into a new hub for the Klang Valley;
● Several parcels of land in Jalan Stonor, Jalan Ampang, Jalan Lidcol in Kuala Lumpur will be tendered out and developed by private sector, failing which it will be wasteful if the assets were not developed as the government will incur cost of maintaining them;
● The land development in Sungai Buloh and development of parcels of land in the city centre is expected to generate new investments worth over RM5 billion;
● The Ministry of Finance Inc companies such as Percetakan Nasional Malaysia, CTRM Aero Composites Sdn Bhd, Nine Bio Sdn Bhd and Innobio may be privatised;
● Petronas has identified two sizeable subsidiaries with good track record to be listed this year on Bursa Malaysia, a move that will reduce government’s presence in business and enhance private sector’s role;
● Khazanah Nasional Bhd will divest its 32 per cent stake in Pos Malaysia Bhd through a two-stage strategic divestment process;
Khazanah Nasional, the government’s investment arm, will have to achieve greater progress in divesting non-core assets to increase liquidity of these counters, said Najib.
He also said the government will reassess the subsidy system and broaden revenue-raising base through proposed Goods and Services Tax (GST).
This will place Malaysia in line with international norms and reduce unsustainable reliance on a small number of industries, business and taxpayers.
He also said Malaysia should rise out of the “middle-income trap” that will be a precarious position for any nation in the new global economy, which means pursuing economic policies in knowledge industries of the future with high-wage jobs and prosperity that can be shared by all.
The Prime Minister said the NEM, formulated by the independent National Economic Advisory Council (NEAC), will be integrated into the 10th Malaysia Plan with a longer term vision that will be delivered through the 11th Malaysia Plan.
“These can transform the economy to become one with high incomes and quality growth over the next decade,” he said.
Najib said Malaysia should make a quantum leap from the current US$7,000 per capita annual income to US$15,000 in 10 years.
“It will be no easy task, but the rewards will be great if we make this transformation…the challenge is how we will do it,” he said.
He said that creating a high-income nation will mean higher wages throughout the economy as growth is derived not only from capital, but from greater productivity through the use of skills and innovation, improved coordination, stronger branding and compliance with international standards and intellectual property rights.
Najib lamented that 80 per cent of the workforce today have education only up to SPM qualification — Malaysia’s equivalent of the O-levels, which “is not in line with the high income economy that Malaysia aspires to be.”
The Prime Minister also said under the NEM, no one would be left out in contributing to and sharing in the creation of wealth as the country progresses.
“Not only do I want the rakyat to earn better but they must also live better” which is why raising the quality of life is an integral part of the economic model, he said.
Najib also cautioned that Malaysians will have to experience some short-term pain for long-term benefits as certain economic sectors might experience adverse effects.
“The process of change is never easy and there will be painful moments. But for the long-term strength of our nation, we cannot afford to duck these issues any longer.
“While the NEP’s original policies are still relevant, it is time to review its implementation. We will chase the same goals but transform the way we do things,” he said.
The renewed affirmation action policy will be market-friendly, merit-based, transparent and needs-based.
A notable point under the NEM was that a competitive and transparent tender process with set and clear rules for the whole Bumiputera community made up of both Malay and other indigenous groups was developed, said Najib.
He also said there would be a renewed affirmative action policy in the NEM with a focus on raising income levels of all disadvantaged groups.
They include those living in longhouses in Sabah and Sarawak, poor rural households in Peninsular Malaysia and fishermen, petty traders and small farmers and “not forgetting the Orang Asli and low-income urban dwellers eking out a livelihood in tough economic circumstances.
He said the NEAC report suggested that focus be placed on the bottom 40 per cent of Malaysia’s income strata — both individually and regionally. These are the disadvantaged groups of people special attention is still required.
“The ultimate goal in time is that no Malaysian lives in poverty, that all get the chance to succeed and share in prosperity,” he said.
The NEAC report says the previous mechanism which concentrates on target-setting should now focus on structured and dedicated capacity-building investment that allows Bumiputeras to take advantage of new opportunities in the economy.
With the NEM, he said there was a need to change the perception that non-Bumiputeras have not benefited from the progress made to date although facts and figures showed otherwise.
For far too long implementation of Malaysia’s affirmative action policies have not reached the people who needed them the most, he said.
He also said New Key Economic Activities (NKEAs) will be selected and implemented under the 10th Malaysia Plan spearheaded by a special Economic Delivery Unit to be set up to institute the economic reform process as well as drive innovation rather than simply importing them.
Among the areas are information technology (IT), electrical and electronics sector, small-and medium-scale enterprises (SMEs) supplying big firms on a larger scale basis, resource-based industries in palm oil, oil and gas sector, bio-fuel from biomass, cosmetics and bio-degradable plastics, tourism and agriculture.
He said Malaysia’s international expertise in energy could help companies in the industry and beyond to expand internationally by sharing its know-how, partnering on international bids and offering support on a truly global scale.
Malaysia could also embrace a leadership role in green technology by developing a niche in high-value green industries and services and emerge as a green hub from research to design to manufacturing and commercialisation.
Against a backdrop of international competition no longer among countries but also between cities, Najib suggested that cities like Kuala Lumpur and Johor Baharu must be developed to be more liveable and able to attract top-class talents.
He said the report on the NEM for Malaysia will be published and made available to the public to gather their input and provide them the opportunity to be part of the decision-making progress over the coming months in transforming the nation’s economy.
From yesterday, the Cabinet and the NEAC began detailed deliberations on the NEM to prepare a roadmap for the future, encompassing the 10th and 11th Malaysia plans as well as the 2011 budget to be tabled on Oct 15.
The era of “government knows best” was over and that all important stakeholders — the people, business leaders and investors will be consulted in joint efforts to achieve a strong, convincing and effective plan to implement the NEM, he added. — Bernama
March 31, 2010, Wednesday
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