Malaysia Economic Transformation Programme

The Economic Transformation Program is an initiative by the Malaysian government to turn Malaysia into a high income economy by the year of 2020. It is managed by the Performance Management and Delivery Unit (PEMANDU), an agency under the Prime Minister Department of Malaysia.

Launched on September 21, 2010,  it is a comprehensive economic transformation plan to propel Malaysia's economy into high income economy.  The program will lift Malaysia's Gross National Income (GNI) to US$523 billion by 2020, and raise per capita income from US$6,700 to at least US$15,000, meeting the World Bank's threshold for high income nation. It is projected that Malaysia will be able to achieve the targets set if GNI grows by 6% per annum.

Set to revitalize Malaysia's private sector, the 60% of the blueprint's investment would derived from private sector, 32% from government linked companies and the remaining 8% from the government.  Various sectors for development have been identified and are called National Key Economic Activities (NKEA).

The Performance Management and Delivery Unit (PEMANDU) has conducted laboratories to study how to implement Malaysia's goal of becoming a high-income country by 2020.  As of 2010 131 entry point projects (EPPs) and 60 business opportunities have been identified by the laboratories.  It is estimated that these initiatives will generate RM500 billion of national income annually and create up to 2.2 million jobs by 2020. 92% of the necessary funding is slated to come from the private sector.

The labs took place over a period of two months in the summer of 2010. 425 people from the government and private sector took part. 211 companies have taken part, including Shell, Exxon-Mobil, MYDIN, Sime Darby, Genting Plantations, Petronas, PricewaterhouseCoopers, Celcom, Ericsson, Maybank, Tesco, Sunway Medical Centre, Masterskill University College, The Body Shop, AirAsia, Malaysia Airlines, RapidKL and Digi Telecommunications.

National Key Economic Activities

Since 92% of the total investments will originate from private sector, the sector is much involved in the planning of this transformation blueprint. A workshop had been organized by Performance and Delivery Unit (PEMANDU) to identify the 12 National Key Economic Activities (NKEA). The NKEA is the key driver to the success of this program as such activities have the potential to contribute significantly to the growth of the economy of Malaysia.

There are 131 entry point projects (EPP) identified under the NKEA, which includes a high speed railway connecting Penang to Singapore and MRT in Kuala Lumpur.

Economic activities that are categorized as NKRA will be prioritized in government planning and funds allocation. Policies will be amended to facilitate fast track implementation of such activities, including liberalizing the market and removal of bottlenecks.

Under this policy, private companies are invited to get involved, with PEMANDU pushing for the implementation to speed up the implementation. Among the companies that are involved in the transformation programme are YTL, Shell Malaysia, Airasia, Hovid Inc, Select-TV, Exxon-Mobil, Dialog Group, Tenaga Nasional, Cisco.

Key economic sectors focus by the Economic Transformation Programme are:

• Oil, Gas and Energy

• Palm Oil

• Financial Services

• Wholesale & Retail

• Tourisms

• Information and Communication Technology

• Education

• Business Services

• Private Healthcare

• Electrical & Electronics

• Agriculture

• Greater Kuala Lumpur

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