[KUALA LUMPUR] The Malaysian government is committed to allocating at least RM90 billion (S$26 billion) a year from 2023 to 2025 to boost the economy and turn it into a high-income nation by 2025, said Prime Minister Anwar Ibrahim on Monday (Sep 11).
He announced this at the tabling of the mid-term review (MTR) of the 12th Malaysia Plan (12MP) in parliament. With the revised allocation, the government’s commitment goes up to RM415 billion, from RM400 billion.
The 12MP MTR highlighted 17 bold measures covering 71 main strategies and initiatives aimed at catalysing efforts to reform the country’s socio-economic development.
The 12MP is a five-year development plan covering 2021 to 2025, aimed at driving the country to become a developed and inclusive nation. The MTR aims to reassess the country’s economic condition and re-prioritise its needs after the Covid-19 pandemic.
In the first two years, Malaysia recorded an average gross domestic product (GDP) growth of 5.9 per cent per annum. The average monthly household income rose to RM8,479 in 2022, from RM7,901 in 2019.
Parliament will have a six-day special sitting to discuss and debate the initiatives under the 12MP MTR.
New initiatives under the 12MP MTR include an allocation of RM1.5 billion to increase the salary of low-income earners, embracing advanced technology and enhancing skilled talent, as well as accelerating the transition to high-value industries.
Anwar said the review of 12MP will accelerate economic structure reform and strengthen the country’s competitiveness, to make Malaysia the preferred destination for investors.
The reforms cover five areas – energy transition; technology and digital; electrical and electronics; agricultural and agro-based; and rare earth.
Anwar said the country’s electrical and electronics industry will be strengthened, so that it moves up the value chain towards more high-value upstream activities.
He said foreign investors have regained their confidence in Malaysia’s technological capabilities, as global semiconductor players are entering the country or increasing their investment to expand their facilities in Malaysia. These investors include German semiconductor company Infineon Technologies, which announced an additional RM25 billion investment in Malaysia last month. Tesla and Samsung Engineering have also said they will invest more in the country.
To encourage commercialisation and innovation, the government will review the policy on intellectual property to proliferate technology ownership, adoption and transfer.
On the rare-earth business, the government is considering a new policy called the National Mineral Policy to ban the export of rare earth raw materials, thus preventing exploitation and loss of resources.
“The rare-earth industry will emerge as a new growth resource. The sustainable and environmentally friendly non-radioactive rare-earth elements are crucial in manufacturing batteries, super magnets and electronic devices,” he added.
He noted that the rare-earth industry is expected to contribute up to RM9.5 billion to Malaysia’s GDP by 2025 and create 7,000 job opportunities.
On infrastructure development, Anwar shortlisted 10 new transportation projects under the 12MP, including the Penang light rail transit project, the expansion of Penang International Airport, and the regeneration of Subang Airport.
He said the government also aims to make Malaysia a leader in the global halal market, and achieve an export value of RM63.1 billion by 2025.
“We will focus on products such as pharmaceuticals, medical devices and Muslim fashion with high-added value. This will also create more high-income job opportunities for Malaysians,” he added.
Industrial production rebounds
In a separate statement on Monday, the Department of Statistics Malaysia said the industrial production index (IPI) rebounded 0.7 per cent year on year in July, driven by the growth momentum in the mining and electricity sectors.
The growth reversed the year-on-year decline of 2.2 per cent in June. It was also higher than the 0.2 per cent forecast by 11 economists in a recent Reuters poll.
In July, the output from the mining and electricity sector increased 4.2 per cent and 1.5 per cent year on year respectively; the manufacturing sector declined 0.2 per cent.
From January to July, the country’s IPI expanded 1.2 per cent from that in the same period last year.
Source: https://www.businesstimes.com.sg/international/asean/malaysia-spend-rm90-billion-yearly-speed-economic-transformation