The tenth Malaysia Plan is the first half of a expansive maestro program to transform our economic system and see us go a high-income state by 2020. This Plan is a 5-year development program that spans 2011 to 2015. The Government has reiterated in no unsure footings that it needs to implement the assorted steps late introduced as an built-in bundle of economic restructuring and transmutation. These steps include the Government Restructuring Plan launched in January and the New Economy Model launched in March. In this respect, one of the dogmas of the tenth Malaysia Plan is to advance invention and creativeness through upgrading our human capital, following emerging engineering and encouraging entrepreneurship. However, this is clearly non a simple undertaking, since Malaysia is presently holding a deficit of skilled workers ; moreover, I fear that our worsening quality of instruction is a shooting to our ain pess in the face of the daunting challenges in front.
In order to buffer our economic system against the impact of fluxes in the universe at big, the tenth Malaysia Plan has in peculiar highlighted the importance of advancing domestic demands as the chief engine of our economic growing in the hereafter. The Government will endeavor to revitalize the private sector to accomplish the end stated supra, as outlined in one of the strategic restructuring steps of the New Economy Model. With this, the tenth Malaysia Plan will seek to make an enabling environment to promote productiveness, fight and creativeness.
Although domestic demand is really of import and will be a comparatively stable beginning of stimulation of our economic growing, the field fact is, our domestic market is merely non large plenty to prolong a robust growing. This world cheque underscores the monumental challenge our authorities will confront in its command to accomplish the 6 % one-year growing in our economic system harmonizing to the tenth Malaysia Plan.
Doubt Over Ability To Achieve Goals Efficaciously
In fact, Malaysia has non been able to run into the one-year economic growing marks set out in the past three Malaysia Plans. We can, of class, ground that our failure to run into the targeted growing rates during the 7th ( 1996-2000 ) , 8th ( 2001 – 2005 ) and 9th ( 2006 – 2010 ) Malaysia Plans were due severally to external factors such as the 1997/98 Asiatic fiscal crisis, the IT and Internet bubble of 2001, and the 2008/09 U.S. subprime mortgage crisis and the resulting planetary fiscal crisis. However, possibly we should reflect on whether our ain failure to efficaciously implement the assorted ends and steps set out in the Malaysia Plans and advance private investings are the major lending factors to our botched Malaysia Plans.
Under the 8th Malaysia Plan, the mean one-year private investing grew by merely a mere 1.2 % , while under the current 9th Malaysia Plan which is stoping shortly, the same figure is expected to make 2 % merely. During the 7th Malaysia Plan, which coincided with the Asiatic fiscal crisis, private investing shrunk by a annual norm of about 5 % over the 5-year period. In contrast, under the fifth Malaysia Plan ( 1986-1990 ) and the 6th Malaysia Plan ( 1991-1995 ) , private investings chalked impressive one-year mean growing rates of 13.4 % and 20.2 % severally.
For this ground, the weightage of private investing in Malaysia ‘s GDP plunged from the extremum of 36.3 % in 1997 to simply 8.2 % in 2002, merely to bounce in 2009 to 10.1 % .
Worsening private investing may be the major lending factor to the extended diminution in Malaysia ‘s economic growing rate. During the 6th Malaysia Plan, our mean one-year economic growing rate was an impressive 9.5 % ; by the 7th Malaysia Plan, this figure plummeted to 5 % , withdrawing about by half.
By the 8th Malaysia Plan, the mean one-year growing rate fell farther to 4.7 % , while during the latest 9th Malaysia Plan, the estimated mean one-year growing rate reads a mere 4.2 % . If the Government had non taken a big-spending policy during the past few economic crises by implementing a more expansionary financial policy and functioning out a series of economic stimulation bundles to stifle the negative impact to our economic system, the growing figures for the past three Malayan Plans may be even lower.
Although the authorities had been increasing public disbursement over these periods, it could non change by reversal the southbound spiral of our existent economic growing rate. This besides goes to demo that the Government ‘s public outgo entirely can non change by reversal the unreassuring tendency of slow economic growing, though it did retard the slack slightly. Furthermore, due to loopholes in its executing, our authorities ‘s public outgo is seen as ineffective in advancing economic growing.
Difficult To Promote Private Investings
Even though the important Swiss International Institute for Management ( IMD ) announced that Malaysia ‘s ranking jumped from No. 18 antecedently to No.10 in the late published 2010 ranking of international fight, an unprecedented great leap forward notwithstanding, I feel that Malaysia ‘s push to promote private investings is still an acclivitous undertaking, sing the intense competition between states to pull foreign direct investings and the increasing sum local financess puting overseas. Therefore, the Government ‘s program to turn private investings at an one-year rate of 12.8 % is excessively ambitious and excessively optimistic.
Having said that, I must quantify that the assorted attempts by the Government therefore far had helped Malaysia recover a figure of disadvantages to successfully lasso in some private investings. If you could remember, shortly after taking office, Prime Minister Najib Razak announced on April 22, 2009 the opening up of 27 second-tier Fieldss of the service industry to excite private investings. In add-on, Najib besides abolished the Foreign Investment Commission Ordinance, and announced on June 30, 2009 a farther relaxation of the policy that stipulated a 30 % bumiputran portions ownership quota for all IPOs of newly-listed companies.
In add-on, the relationship between Malaysia and Singapore has besides been bettering late, which will assist to kickstart some investing activities in the Iskandar Development Zone in southern Johor. Meanwhile, the Government ‘s public-private partnerships and private-led funding program are besides expected to pull about RM62.7 billion in investings.