As these sectors develop it may be likely that they

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ill likely grow to become significant GNI contributors in the future. As these sectors develop, it may be likely that they will become candidates for NKEA status. Economic Transformation Programme 71 A Roadmap For Malaysia What Does it Mean to be an NKEA Malaysia will focus its economic growth efforts on NKEAs. NKEAs will receive prioritised Government support including funding, top talent and Prime Ministerial attention. In addition, policy reforms such as the removal of barriers to competition and market liberalisation will be targetted at the NKEAs. The Tenth Malaysia Plan notes that the comprehensive review of business regulations that will be undertaken to improve the business environment will commence with the regulations that impact the NKEAs. This focus will involve deliberate choices and trade-offs. Prioritising investment in NKEA sectors implies reducing investment in other sectors. The designation of sectors as NKEA sectors has to have real resource implications if it is to lead to meaningful change. The same philosophy of prioritisation will also apply to other support provided by the Government to these sectors, such as operating expenditure and efforts aimed at sector-specific policy and regulatory change. The non-NKEA sectors will also benefit from policy measures that will improve the general business environment. This includes the policies announced in the Tenth Malaysia Plan, such as infrastructure investment, a revamped Malaysia Productivity Corporation and reduced business compliance costs amongst others. The Government is committed to the ongoing support of growth in the non-NKEA sectors. However, the Government will focus its efforts on the NKEAs because of the significance of the GNI contribution that these parts of the economy can drive. Why is Focusing on the NKEAs Important Malaysia’s success in transforming itself from a poor country at Independence to a middle-income economy today was driven largely by a deliberate diversification strategy. Initially, competitiveness across multiple sectors could be supported by our generally low-cost base. However, an excessively diverse strategy is no longer sustainable, given that Malaysia can no longer rely on a low-cost base as a source of competitive advantage. In today’s globalised economy, production networks are increasingly regional thus leading to greater regional integration. The next phase of transformation, from a middle-income to high-income nation, requires a shift towards higher value-add and knowledge-intensive activities. Competitiveness in higher value-add activities necessitates speation in terms of having a critical mass and an ecosystem of firms and talent to drive economies of scale. Malaysia’s relatively small population further limits the number of areas that its economy can spee in and be truly globally competitive. A shift from an initial phase of diversification across sectors towards speation is therefore needed. The benefits from focusing on a limited number of sectors have been observe...
View Full Document

This note was uploaded on 02/24/2014 for the course ACCOUNTING financial taught by Professor Alan during the Spring '14 term at Howard.

Ask a homework question - tutors are online