Malaysia is well on its way to achieving high-income status

GNI per capita up 49% since 2009 following the launch of the Economic Transformation Programme

[You must be registered and logged in to see this image.] Great accomplishment:
The country may achieve high-incom e-nation status by 2018, two years
ahead of the 2020 goal, especially after the rollout of the ETP. PETALING
JAYA: Malaysia is well on its way to achieving high-income status by
2020 or earlier, going by official data and economic performance thus
far.
While there has been much debate over how effective the
various measures and initiatives under the Economic Transformation
Programme (ETP) have been, numbers do not lie.
In terms of gross national income (GNI), Malaysia saw its GNI
per capita increase to US$9,970 (RM30,239) as of end last year compared
to US$6,700 (RM20,321) in 2009, a surge of 49% in the three years since
the ETP was launched.
The ETP, the brainchild of Datuk Seri Najib Tun Razak, contains a detailed plan of action that aims to place the country in the high-income band, as defined by the World Bank's criterion of US$15,000 per capita based on GNI by 2020.
The
ETP was launched in October 2010, which saw gross domestic product
(GDP) rise 7.2% year-on-year in that year. Projects under the ETP have
given the economy a much-needed boost amid a slowdown in trade and the
bleak global outlook, with GDP up 5.1% in 2011 and 5.6% last year.
For
one thing, robust domestic demand, especially in private consumption,
continues to be an indication that people's incomes have risen, while
the continued growth of the economy also indicates income growth,
especially since many jobs have been created in areas which have pushed
the country's manufacturing sector up the value chain.
At
end-2012, projects under the ETP had attracted committed investments of
RM211.34bil and grew GNI to RM135.64bil, creating 408,443 jobs. The ETP
as a whole envisions investments worth RM1.4 trillion and the creation
of 3.3 million jobs in the 2011 to 2020 period for the country to
achieve high-income status.
According to the Performance
Management and Delivery Unit (Pemandu), Malaysia had surpassed its GNI
and GDP targets for last year.
Pemandu
pointed out that the country might even reach high-income-nation status
by 2018, two years ahead of the 2020 goal, should current projections
hold true, when measured against GDP growth, especially after the
rollout of the ETP.
Growth last year even outpaced
Asia-Pacific's, which rose an average of 3.8%. Again, this was supported
by private investments and consumption.
“We believe that these
developments were largely driven by the economic transformation agenda
undertaken by the Government from 2010 to propel Malaysia towards
becoming a high-income nation by 2020,” Pemandu said in its 2012 annual
report.
“It is this healthy economic growth that enabled the
Government to record its highest revenue in our history in 2012,
estimated at about RM207bil. As a result, the Government was able to
implement many socio-economic programmes, including those under the
Government Transformation Programme such as the Bantuan Rakyat 1Malaysia
or BR1M.” However, there appear to be some disparities in economic
progress for certain corners of the country. Besides politicians,
economists would also like to see all parts of Malaysia improving at
more or less the same pace.
But this has not been the case, with the states of Kedah and Kelantan lagging behind.
According
to the latest available data from the Statistics Department, Kedah's
GDP per capita (a measure of the standard of living and not an indicator
of per-capita income) was valued at RM9,557, with Kelantan at RM6,496
based on constant 2000 prices compared to the country as a whole, where
GDP per capita was at RM19,772.
In that year, Malaysia's GDP was
valued at RM559.6bil while the population stood at 28.3 million. Granted
the data was from 2010, but things would not have changed much for both
states when the 2011 data being compiled by the department becomes
available.
The data showed that Kedah, largely an agrarian state
with paddy rice production among the major crops, recorded a 4.4% GDP
growth, among the lowest in 2010, while Kelantan, also with an economy
largely driven by agriculture with fisheries and cottage industries
among its main economic activities, saw GDP grow 4.1%.
Kedah's poor performance was compounded by weak finances, as noted by the 2011 Auditor-General's Report.
In fact, the report said the state had been facing losses since 2008,
reflecting the performance of its economic development unit, Kedah Corp Bhd.
The
report described some of the unprofitable investments like shrimp
farms, rubber and oil palm as well as logging projects as “wasteful”.
As
for Kelantan, it only attracted a meagre 0.3% or RM187mil of Malaysia's
total domestic and foreign investment in 2010 of RM33bil.
In
terms of investment, Penang's foreign direct investment dropped to
RM2.47bil last year from RM9.11bil in 2011. Between 2008 and 2010, the
average negative growth was -1.8% compared with the national average of
5.4%, while 10,000 jobs were also lost between 2010 and last year.