MALAYSIA is well on its way to achieving high-income status by 2020 or earlier, going by official data and its economic performance thus far.
While there has been much debate over how effective the various measures and initiatives under the Economic Transformation Programme (ETP) have been, numbers do not lie.
In terms of gross national income (GNI), Malaysia saw its GNI per capita increase to $9,970 as of end last year compared to $6,700 in 2009, a surge of 49 per cent in the three years since the ETP was launched.
ETP, the brainchild of Najib Razak, contains a detailed action plan of that aims to place the country in the high-income band, as defined by the World Bank’s criterion of $15,000 per capita based on GNI by 2020.
Launched in October 2010, ETP saw gross domestic product (GDP) rise 7.2 per cent year-on-year in that year. Projects under ETP have given the economy a much-needed boost amid a slowdown in trade and the bleak global outlook, with GDP up 5.1 per cent in 2011 and 5.6 per cent last year.
For one thing, robust domestic demand, especially in private consumption, continues to be an indication that people’s incomes have risen, while the continued growth of the economy also indicates income growth, especially since many jobs have been created in areas which have pushed the country’s manufacturing sector up the value chain.
At end-2012, projects under the ETP had attracted committed investments of 211.34 billion ringgit ($69 billion) and increased GNI to 135.64 billion ringgit, creating 408,443 jobs. The ETP as a whole envisions investments worth 1.4 trillion ringgit and the creation of 3.3 million jobs in the 2011 to 2020 period for the country to achieve high-income status.
According to the Performance Management and Delivery Unit (Pemandu), Malaysia had surpassed its GNI and GDP targets for last year.
Pemandu pointed out that the country might even reach high-income-nation status by 2018, two years ahead of the 2020 goal, should current projections hold true, when measured against GDP growth, especially after the rollout of the ETP.
Growth last year even outpaced Asia-Pacific’s, which rose an average of 3.8 per cent. Again, this was supported by private investments and consumption.
“We believe that these developments were largely driven by the economic transformation agenda undertaken by the government from 2010 to propel Malaysia towards becoming a high-income nation by 2020,” Pemandu said in its 2012 annual report.
“It is this healthy economic growth that enabled the government to record its highest revenue in our history in 2012, estimated at about 207 billion ringgit.As a result, the government was able to implement many socio-economic programmes, including those under the Government Transformation Programme such as the Bantuan Rakyat 1Malaysia (BR1M).” However, there appear to be some disparities in economic progress for certain corners of the country. Besides politicians, economists would also like to see all parts of Malaysia improving at more or less the same pace.
But this has not been the case, with the states of Kedah and Kelantan lagging behind.
According to the latest available data from the Statistics Department, Kedah’s GDP per capita (a measure of the standard of living and not an indicator of per-capita income) was valued at 9,557 ringgit, with Kelantan at 6,496 ringgit based on constant 2000 prices compared to the country as a whole, where GDP per capita was at 19,772 ringgit.
In that year, Malaysia’s GDP was valued at 559.6 billion ringgit while the population stood at 28.3 million. Granted the data was from 2010, but things would not have changed much for both states when the 2011 data being compiled by the department becomes available.
The data showed that Kedah, largely an agrarian state with paddy rice production among the major crops, recorded a 4.4 per cent GDP growth, among the lowest in 2010, while Kelantan, also with an economy largely driven by agriculture with fisheries and cottage industries among its main economic activities, saw GDP grow 4.1 per cent.
Kedah’s poor performance was compounded by weak finances, as noted by the 2011 Auditor-General’s Report. In fact, the report said the state had been facing losses since 2008, reflecting the performance of its economic development unit, Kedah Corp Bhd.The report described some of the unprofitable investments like shrimp farms, rubber and oil palm as well as logging projects as ‘wasteful’.
As for Kelantan, it only attracted a meagre 0.3 per cent or 187 million ringgit of Malaysia’s total domestic and foreign investment in 2010 of 33 billion ringgit.
In terms of investment, Penang’s foreign direct investment dropped to 2.47 billion ringgit last year from 9.11 billion ringgit in 2011.
Between 2008 and 2010, the average negative growth was -1.8 per cent compared with the national average of 5.4 per cent, while 10,000 jobs were also lost between 2010 and last year. —Asia News Network/ The Star