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Unformatted text preview: natural resources.
In addition, Malaysia’s fiscal policy will be made sustainable. There will be a much stronger focus on
investment led by private sector that will avoid reliance on government funding. As stated in the Tenth
Malaysia Plan, the Government is committed to reduce its fiscal deficit from 7 percent in 2009 to 3 percent
In environmental terms, the Government is committed to the stewardship and preservation of our natural
environment and non-renewable resources. The Government will ensure that environmental resources are
properly priced and that the full costs of development are understood before investment decisions are made. BUSINESS AS USUAL IS NOT ENOUGH
Business as usual will not be enough to deliver on the goals of high income, inclusiveness and sustainability.
Malaysia is at a critical point in its economic development. There has been a loss of growth momentum over
the past decade, and it has become increasingly clear that the historical drivers of growth can no longer be
relied on to deliver strong economic outcomes. In an increasingly competitive global economy it is more
difficult to generate high rates of economic growth. Growth can no longer be taken for granted, but needs to
To achieve developed nation status by 2020, economic growth of 6 percent a year will be required.
Delivering this level of growth demands a comprehensive, structured transformation of the economy.
The following are four key reasons why a fundamentally new approach is required. Economic Transformation Programme 61
A Roadmap For Malaysia Historical Growth Engines are Slowing Down
Malaysia’s relatively sluggish economic performance over the past several years indicates that the historical
engines of Malaysia’s economic growth are slowing down . After strong growth through much of the 1990s,
Malaysia’s economic growth over the past decade has been considerably slower – at about half of the
average of the previous decade, as shown in Exhibit 1-3.
Exhibit 1-3 A large part of the reason for this relatively poor growth performance has been slow labour productivity
growth. Transforming Malaysia’s economic performance will therefore require a transformation in
Delivering this transformation will require significant improvements in two areas. First, the level of business
investment will need to be substantially increased. Private investment grew at just 2 percent per year over
the past five years rather than the 10 percent projected in the Ninth Malaysia Plan. The Tenth Malaysia
Plan estimates that achieving the 6 percent annual growth rate required to achieve high-income status will
require annual growth of private investment of 12.8 percent to 2015, as shown in Exhibit 1-4. 62 Chapter 1
New Economic Model of Malaysia Exhibit 1-4 Private sector investment growth has slowed considerably relative to the pre-1997 period for reasons
including the high cost of doing business in Malaysia, lengthy bureaucratic procedures, investors’ concern
about the availability of skilled professionals and inadequat...
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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