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technologies as well as from improvements to infrastructure. Economic Transformation Programme 85
A Roadmap For Malaysia PRIVATE INVESTMENT-LED GROWTH
Investment in the Malaysian economy to 2020 will be driven and led by the private sector. Private
investment will account for 92 percent of overall investment in the NKEAs and public funding for only
8 percent as shown in Exhibit 2-8. This is a significant increase from the 37 percent share of private
investment in 2008 and is consistent with the targetted growth rate in private investment of 12.8 percent in
the Tenth Malaysia Plan (2011 to 2015) as well as the longer-term target of 12.2 percent growth from 2011 to
2020. This 92 percent share fits with the new role for Government as a facilitator of economic growth as set
out in the Tenth Malaysia Plan.
Exhibit 2-8 Private investment-led growth means that the economy will be less dependent on Government funding,
which is constrained by the need to manage the nation’s fiscal position. It also means that investment will
be subjected to market disciplines and targetted at areas where private investors believe there is the greatest
chance of success. Government funding will be targetted at initiatives that will maximise GNI impact for
every ringgit of public money spent.
Of the total private investment required, domestic direct investment will account for approximately 73
percent, and about 27 percent will be sourced from foreign direct investment as shown in Exhibit 2-9. 86 Chapter 2
Overview of the Economic Transformation Programme Exhibit 2-9 As highlighted in Exhibit 2-10, Malaysia has the capacity to generate this high level of domestic investment
because of a significant gap between its rates of savings and investment. Malaysia’s savings rate is a very
healthy 22 percent of GDP, but the investment rate is only 10 percent, resulting in a gap of 12 percent.
The savings rate is projected to stay relatively constant, so there is room for the investment rate to rise
significantly. The EPU projects that the domestic investment rate could reach 18 percent by 2020, which
would deliver the total investment needed for the ETP.
Exhibit 2-10 Economic Transformation Programme 87
A Roadmap For Malaysia CREATING MIDDLE- AND HIGH-INCOME JOBS
The initiatives and reforms of the ETP are designed to deliver growth that will benefit many Malaysians. In
particular, an incremental 3.3 million jobs are projected to be created from the initiatives developed in the
NKEA labs. Over 60 percent of the new jobs will have middle or high salaries as shown in Exhibit 2-11.
Exhibit 2-11 An overall impact of the ETP will be significant growth in the job market, a shift towards higher paid
jobs, a wide variety of new opportunities for Malaysians and a strengthening of the skills base. In 2009
approximately 57 percent of employed workers were low-income earners. Due to the combined effect of
new jobs created by the NKEAs and growth in real wages some...
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This note was uploaded on 02/24/2014 for the course ACCOUNTING financial taught by Professor Alan during the Spring '14 term at Howard.
- Spring '14