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Make Way for Malaysia?

 4 min read / 

“Reduced lead time for starting business operations which is due to provision under the ETP of preferential treatment in the approval and licensing process, is a considerable benefit for us…Malaysia will contribute to future development of medical treatment and expansion of the medical equipment industry in Malaysia”

Yasuo Nobuta, Vice President , Toshiba Medical Systems

The firm pledged an investment, which will add 32.6 million Malaysian Ringgit (RM) to the country’s GNI by 2020. The young concept of community-based care and outpatient is one that Econ Medicare Hub is sure to exploit by building a retirement village-cum-nursing home facility in Cheras; a town in southwest Kuala Lumpur. This project will attract another 6.17m RM in GNI, by 2020. The concept offers great expansionary potential, promising some 4.3m RM more to Malaysia’s GNI. It is also a stimulating factor for the mobility of young adults as they pursue employment.

2020 and National Income are the common cries. With its Economic Transformation Programme (ETP); Malaysia planned to jump in the high-income game by its self-ruled target year, 2020. The World Bank currently lists Malaysia as an upper-mid-income country with a $4,126 to $12,735 income per capita. IMF analysts see the country as an emerging market with a $313bn GDP. These were not enough for the ambitious Prime Minister Najib Razak. Resourceful thanks to the Performance Management and Deliver Unit (PEMANDU), he had initiated the ETP on 25th September 2010, targeting all major growth drivers of an economy, namely savings/investment, demographic prospects, health, education, quality of institutions, policies, and trade openness.

Enforcement of mandatory standards is being carried out by the National Standards Compliance Programme (NSCP), since its launch in June 2014. Further standards are being set in the country’s cyber security to protect sensitive and valuable information, and services. The PEMANDU claims that 3,200 farms have, so far, been certified under Malaysian Good Agricultural Practices (MyGAP). Palm oil related entry point projects (EPPs), focusing on mechanising plantations, enforcing best practices to enhance yields, developing biogas facilities at palm mills, are being established.

Agriculture aside, there are 131 other EPPs identified, including megaprojects such has the high speed railway connecting Singapore and Kuala Lumpur. As part of the programme, the Malaysia Competition Commission was established in April 2011. Health, Travel, Technical Vocational Educational Training (TVET), private higher education and renewable energy are examples of the domestic sub-sectors that are being formally addressed to enhance competition.

Singapore and the other neighbour Hong Kong, bring about competition in the regional financial sector. Malaysia claimed that lack of economies of scale, poor liquidity, lack of diversity and low levels of financial knowledge were factors that proved its inability to keep up. To bulk-up, the country’s government is worked towards attracting and retaining talented professionals, reducing regulation, lowering taxes and making its business environment more attractive to international capital. As Toshiba Medical Systems, SteriPack pledged to bring its manufacturing base from USA to Klang, which caters for both medical device and pharmaceutical manufacturing.

By strengthening corporate governance and developing avenues for growth such as expanding the asset management business, Malaysia aimed to grow the contribution from its financial industry from RM 121bn to RM180bn by 2020; bringing the average compensation in the sector to $950 per month. After deep introspection, six policies supporting and maintaining such growths had been identified: Competition, Standards and Liberalisation (CSL),Public Finance Reform (PFR), Public Service Delivery (PSD), Narrowing Disparity (ND), reducing Government’s Role in Business (GRiB), and Human Capital Development (HCD). And they applied equally to all the growth sectors.

The plan was near perfection; build catalytic infrastructures, copy from the exemplary, stimulating the economy enough to turn the embryo into a living foetus. Bring targeted sectors to strength then let the great invisible hand trigger continual multiplier effects, taking the country to an income per capita of $ 15,000 and into the playground of grown-ups. Microcredit facilities were made available to encourage entrepreneurship. About 55% of Malaysians struck are no longer below poverty line. Even the country’s reliance on oil and gas has decreased. Of course, it is just near perfect; the “other” invisible hand is waiting for its push and we are only halfway. There will be enough windows of opportunity for self-dealings and nepotism to present themselves. Money that could shake this majestic transformation is at play.

1 Comment

1 Comment

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  1. Ved Boojihawon

    October 14, 2015 at 9:47 AM

    The Federal Bureau of Investigation and the US Department of Justices are now examining Goldman Sachs Group Inc’s role in allegations of corruption and money laundering at 1MDB.

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