THE 10th Malaysia Plan (10MP) comes with 10 big ideas that will be the pillars in charting the development towards a high income economy by 2020.

According to the 10MP report, Malaysia needs to achieve an average 6% gross domestic product growth per annum during the 10MP period where the target need comprehensive economic transformation.

The country now is at a critical juncture where the imperative for change is driven by the changes in the global competitive landscape and past successful strategies are proving inadequate for the journey from middle to high-income.

Over the last decade, Malaysia’s momentum of growth has noticeably slowed, while the growth rates of several countries in the region have improved.

The first big idea is to make sure Malaysia continues to remain a beneficiary of globalisation where the level of competitiveness has intensified.

The report said it required a unified effort and policy alignment towards a relentless pursuit of global competitiveness and economic growth.

The pursuit of competitiveness growth will translate into implications on policy priorities and resource allocation under the tenth plan.

Specific policy initiatives to be undertaken towards driving the competitiveness of the domestic economy include the implementation of competition law, removal of distortionary price controls and advancing liberalisation especially in the services sector.

Continued emphasis will be given to the trade and export oriented sectors, in addition to services that support trade.

The Government will continue to review and modernise regulations, such as labour laws, towards facilitating a well functioning market economy where appropriate price signals will lead to efficient allocation of resources.

Priority will be given to regulations that can materially improved the ease of doing business in Malaysia towards facilitating greater private investments and enabling the private sector to be the engine of growth.

The Government will also support private sector activities through facilitating availability of funding, particularly in terms of supporting micro-enterprises, venture capital for innovation and export related financing.

At the same time, the focus on growth will include priortising public sector investment with high spin-off potential particularly in the strategic sectors.

The second idea is to leverage on the country’s diversity internationally.

The three major ethnic groups provide a natural linkage to China, Indonesia and India. Islam as the official religion links Malaysia with the Organisation of the Islamic Conference, including the resource rich Gulf states.

Such cultural endowment gives Malaysia an advantage to build greater trade and investment linkages.

Under the 10MP, Malaysia will increasingly focus on new fast growing markets, particularly in Asia and Asean.

Key initiatives includes trade promotion, enhancing regional connectivity (such as through extending network of flight routes and broadband connectivity).

The Government will also have the Talent Corporation, which one of its key functions include the task of actively sourcing top talent including among the Malaysian diaspora.

Next, the transformation from a middle-income to high-income nation, requires a shift towards higher value-add and knowledge intensive activities.

Competitiveness in higher value activities necessitates specialisation, in terms of having a critical mass and ecosystem of firms and talent to drive economies of scales.

Sustaining industries that cannot be competitive risks crowding out competitive sectors, especially given finite resources, such as availability of gas.

In line with the private sector led economy, the Government’s role is not to pick winners but rather to accelerate and facilitate emerging specialisations, especially through co-investments with industry in terms of skills training, research and development and enabling infrastructure.

Under the 10MP, the Government will focus its resources towards prioritising specific National Key Economic Areas (NKEAs) as part of the strategy towards greater specialisation. Further, within NKEAs, there will also be specialisation in terms of subsectors.

The fourth idea is on unleashing productivity led growth and innovation where the transformational shift to higher value-added activities requires productivity growth.

The Government is committed in investing in creativity, including effort such as entrepreneurship, revamping school curriculum, focusing on R&D and promoting the availability of capital.

The Government will provide a larger pool of funds for venture capital, especially on a Mudharabah basis.

To promote innovation through knowledge-based small entreprises, regulatory flexibility will be accorded for companies with five or less employees.

The fifth idea hovers around concentrated growth and inclusive development where towards transforming Malaysia into a high-income economy, the strategy will be focused to build density, develop clusters and specialised in high-value sectors.

The concentration of firms and talent supports faster economic growth, primarily by reaping the benefits of agglomeration of scale, productivity and innovation.

By 2020, approximately 70% of Malaysia’s population will be concentrated in urban areas and therefore the challenge is to facilitate this increasing density while ensuring that the benefits of agglomeration are not lost to escalating crime, grime and time.

The Greater Kuala Lumpur conurbation has been identified as an NKEA with major projects and initiatives, such as the expansion of public transport rail system and other construction projects, would be initiated to develop the capital.

After that, Malaysia must support effective and smart partnerships between the public and private sectors.

A key public-private partnership initiative under the Tenth Plan will be the creation of a RM20bil Facilitation Fund to catalyse private investments in nationally strategic areas.

Government will provide infrastructure and assistance such as in the form of grants and offtake agreements.

Areas to be considered facilitation support include strategic infrastructure such as transportation and NKEA sectors such as education, healthcare and tourism.

The Government will also encourage greater collaboration between Government-linked companies and the private sector to pursue overseas opportunities.

In the spirit of 1Malaysia, the Government will also promote genuine partnerships between bumiputra and non-bumiputra businesses.

The big idea also focuses on the need of Government to be a competitive corporation.

The transformation of Malaysia requires a new approach and a transformation of Government.

Other big ideas include valuing the country’s environmental endowments and nurturing, attracting and retaining top talents.

Last but not least, the pillar will also ensure equality of opportunities under the 1Malaysia concept.

This social justice principle necessitates a renewed focused on championing the interest and of each and every community, ensuring no group is left behind or marginalised in the course of nation’s development. - The Star