Saturday February 20, 2010
Malaysia must catch up to gain high-income status
WITH 2020 only a decade away, Malaysia has a lot of catching up to do if it is to become a high-income economy.
This was the message conveyed by several prominent speakers at the recent 1Malaysia Economic Conference in Kuala Lumpur.
Malaysia’s new economic model, which will be the backbone of the 10th and 11th Malaysia Plans, is expected to accelerate the country’s progress into the next decade to ensure the success of Vision 2020.
According to the World Bank, a high-income economy is one with a gross national income per capita of US$12,000 and above.
Datuk Noriyah Ahmad, director-general of the Economic Planning Unit in the Prime Minister’s Department, said Malaysia recorded relatively slower economic growth from 2000 to 2008 compared with the 1990–1997 period.
In addition, the country’s private investments also need to be revitalised as savings exceed investment by a significant amount largely due to a collapse in private investment.
Going forward, she said the Government has taken new steps in development planning, with the introduction of a two-year rolling plan under the 10th Malaysia Plan (10MP).
“Other measures in the 10MP will come from the private sector which is expected to be the engine of growth.
“Wide-ranging private business initiatives are needed to lead sustainable recovery and not direct consumption. Unlike China, our consumers favour spending once permanent income is forthcoming. Business confidence must be nurtured where stimulus is still needed until recovery is secured,” he said.
“Being green or environmentally friendly is not an option. We have to re-invent and expand green stimulus elements that include energy efficiency and renewables, mass transit, smart electricity grid, finance and reforestation,” he said.
From a private sector perspective, Association for Shopping Complex and High-Rise Management president Joyce Yap expects the new economic model to further promote the retail industry.
“The retail industry is the second largest contributor to tourism expenditure and supports 204,000 employees.
“Thus, it is important to continue developing Malaysia as a prominent shopping destination in this region; to be comparable with countries like Singapore and Hong Kong,” she said.
Yap recommended that the Government crafts consistent and long-term policies to encourage domestic spending and market Malaysia abroad.