etp_handbook_chapter_1-4_economic_model

Etp_handbook_chapter_1-4_economic_model

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Unformatted text preview: e goals will be reached jointly. The Government will not seek short-term progress on one goal at the expense of delaying progress on the others. The ETP is designed to drive Malaysia forward from its current stagnant situation to be a high income economy which is both inclusive and sustainable as shown in Exhibit 1-2 Economic Transformation Programme 59 A Roadmap For Malaysia Exhibit 1-2 High-income Economy The Government defines high income as a per capita income USD15,000 or RM48,000 in 2020, based on the World Bank’s current definition of high income. Malaysia’s per capita gross national income (GNI) is currently about RM23,700 or USD6,700. Therefore, achieving high-income status by 2020 will require GNI to grow at an annual real growth rate of 6 percent between 2011 and 2020. The Government’s high-income objective is not just a quantitative target. It is also about Malaysia becoming an advanced, developed nation with an economy possessing the characteristics that are common to developed nations. Specifically, Malaysia will focus on developing: • A large and thriving services sector, to supplement the nation’s historical strengths in oil and gas, agriculture and manufacturing; • A balanced economy, with significant contributions from private consumption and investment as well as from government spending and exports. In developed countries domestic demand typically accounts for 50 to 70 percent of GDP. In Malaysia it is currently 53 percent; and • Productivity levels similar to those of other leading Asian economies. Achieving this will require developing an economy that is more heavily driven by skills, innovation and knowledge. These three structural shifts in the economy will support Malaysia’s ongoing growth and will enable Malaysia to compete more effectively with other developed nations in the region and beyond. 60 Chapter 1 New Economic Model of Malaysia Inclusive Society The way in which Malaysia grows to achieve this high-income target will be inclusive in nature, enabling all Malaysians to share in the benefits. The Government will encourage employment-rich growth that creates new higher-wage jobs. We will also invest in education and training to ensure that more Malaysians are able to participate in these new opportunities. A key focus will be on ensuring that substantial improvements are made for people with the lowest household incomes. Specific attention will be paid to lifting the incomes of the bottom 40 percent of households, with a target of increasing the mean monthly income of this group from RM1,440 in 2009 to RM2,300 in 2015, as stated in the Tenth Malaysia Plan. Sustainable Growth The measures we take to achieve high-income status must be sustainable in both economic and environmental terms, meeting present needs without compromising those of future generations. In economic terms, growth will have to be achieved without running down Malaysia’s natural resources. Malaysia will not achieve high-income status simply through the income derived from extracting Malaysia’s...
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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.

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