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etp_handbook_chapter_1-4_economic_model

etp_handbook_chapter_1-4_economic_model - chapter 1 New...

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chapter 1 New Economic Model
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57 Economic Transformation Programme A Roadmap For Malaysia Chapter 1: New Economic Model of Malaysia alaysia has achieved significant economic and social progress over the past several decades. However, the world economy is changing, and Malaysia needs a fundamentally new economic model in order to become a high-income nation. Our historical growth engines are slowing, we risk being caught in a middle-income trap, our fiscal position is arguably unsustainable while global competition for markets, capital and talent is increasingly intense. In response, the Economic Transformation Programme (ETP) represents a marked change in approach that builds on the Tenth Malaysia Plan and input from the National Economic Advisory Council (NEAC). The ETP focuses on key growth engines or National Key Economic Areas (NKEAs). It relies heavily on private sector-led growth, describes very specific investments and policy actions and has a clear transparent implementation roadmap with strong performance management. MALAYSIA HAS MADE SIGNIFICANT PROGRESS Sustained rapid economic growth has raised Malaysia from an agricultural and commodity-based low-income economy to a successful middle-income economy. Our story of moving from low-to middle-income status is one of the world’s success stories of the past few decades. Since 1945, Malaysia is one of only 13 countries 1 to have sustained growth of over 7 percent or more for 25 years. This strong economic performance has helped improve the quality of life for Malaysians and supported advances in education, health, infrastructure, housing and public amenities, some of which are shown in Exhibit 1-1 . Growth has also been accompanied by a near-eradication of hardcore poverty, which fell from 6.9 percent in 1984 to 0.9 percent in 2010. Primary school enrolment is now nearly universal. Basic healthcare has improved in the past two decades with life expectancy rising and infant mortality rates falling significantly. As a result, Malaysia’s score in the United Nations Human Development Index rose from 0.67 in 1980 to 0.83 in 2007, surpassing the 0.8 score benchmark for countries with high standards of human development. M 1 The 13 countries are Botswana, Brazil, China, Hong Kong SAR, Indonesia, Japan, Republic of Korea, Malaysia, Malta, Oman, Singapore, Taiwan and Thailand
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58 Chapter 1 New Economic Model of Malaysia Exhibit 1-1 Despite this progress, significant challenges remain. For example, 7 percent of the rural population live below the poverty line; only 80 percent of the workforce have education up to SPM (Sijil Penilaian Menengah) qualifications (high school equivalent to O-levels); and Malaysia’s economic growth has been sluggish over the decade since the Asian financial crisis. Our task is to build on the platform we have established over the past few decades and create the next generation of national development.
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