According to Minister in the Prime Minister’s Department, Senator Datuk Seri Idris Jala, 131 Entry Point Projects (EPPs) and 60 Business Opportunities (BOs) have been identified across 12 National Key Economic Areas (NKEAs) identified in the 10th Malaysia Plan (10MP).

The NKEAs comprise 11 industry sectors — oil, gas & energy, palm oil, financial services, tourism, business services, electrical & electronics, wholesale & retail, education, healthcare, communications content & infrastructure and agriculture — and one geographical location, Greater Kuala Lumpur.

The EPPs are expected to deliver up to 31% of the incremental growth required and a further 10% through multiplier effects while BOs can deliver an additional 33% growth. The remaining 26% of incremental growth is expected to come from non-NKEA sectors.

According to Idris, the EPPs are projects identified by the Performance Management and Delivery Unit (Pemandu) laboratories and is aimed at generating big results fast.

“They are clearly defined initiatives that have potential investors already identified, a well-developed implementation plan and funding requirements clearly articulated,” said Idris.

“Business opportunities capture the potential of the sectors to further develop after the successful implementation of EPPs.”

High-income characteristics

If the programme comes to fruition, Malaysia will not only have a high GNI per capita but also characteristics of a high-income economy such as services having a greater share of the economy, accounting for 65% of the gross domestic product (GDP) in 2020, up from 58% in 2010.

Domestic consumption will also be a key driver, moving from 54% to 59% of GDP between 2010 and 2020.

Malaysia’s economy then is also expected to be more balanced and sustainable over the longer term with the oil and gas industry’s share of GDP brought down from 21% in 2008 to 14% in 2020.

According to Idris, Malaysia will become a more urbanised country with the share of population living in the urban areas growing from 64% to 70%. “Greater KL will be the primary engine of growth, with opportunities across the country,” he added.

The ETP is forecast to create an additional 3.3 million jobs, of which 63% will be in the middle and high-income segment compared to the current 43%.

Level-playing field?
But while Idris remained confident of private investment being the main driver for the ETP, the big question yesterday was ‘how would the government handle affirmative action policies?’

“It is very clear that the discussions on affirmative action will continue, but on merit. There is no doubt that regardless of race, the poor people need to be helped,” said Idris during the press conference.

“So 44,643 hardcore poor households are being targeted to be helped by the government regardless of race or religion as their needs are very clear.

“The prime minister has also made it explicit that what is in the (Federal) Constitution is in the constitution. There are very specific privileges which will continue. But we must make sure that the bumiputeras who do not need to be helped... we would like them to compete on a level playing field with the non-bumiputeras because that is how we become strong as a nation.

According to Idris, the government would like to have a lot of bumiputera companies which are now able to compete on an even playing field.

“And we are encouraging them to compete internationally as in those countries, they will have to stand and be counted like all others.

“In a world where companies compete aggressively for market and talents, the best of Malaysia will be the reason why we can become a high-income economy.

“The government does not want to pick winners but what we want to do is to make the rules very clear. What we got loud and clear from the private sector is the government must make those rules clear and transparent for everybody. We will have to ensure that to be the case,” said Idris.

When asked when RM118 billion worth of seven EPPs are expected to begin, Idris said “Soon. In the next couple of months and before the end of the year”.

He, however, declined to elaborate on the projects. When asked whether the government planned to implement a minimum wage policy, Idris said that the Cabinet has agreed in principle on one but it is still undecided on how it will be implemented.

“There are suggestions that it be implemented by regional or sectoral basis but we are still looking into this,” he added.

On why GNI was used as a benchmark instead of GDP, Idris said the global definition for a high-income economy is based on gross national income per capita.

“If we want to participate in the global definition, we have to comply with these requirements.

“If we invest outside, the returns brought back contributes towards GNI. The 131 EPP projects identified are predominantly in our local economy but this does not preclude investments abroad.

This article appeared in The Edge Financial Daily, September 22, 2010.