Malaysia will be a high-income nation by 2025, GDP will grow 4.5-5.5 pct a year – PM - MIDA | Malaysian Investment Development Authority
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Malaysia will be a high-income nation by 2025, GDP will grow 4.5-5.5 pct a year – PM

Malaysia will be a high-income nation by 2025, GDP will grow 4.5-5.5 pct a year – PM

27 Sep 2021

The various reforms under the 12th Malaysia Plan (12MP) will make Malaysia a high-income country and have a better quality of life by 2025, said Prime Minister Datuk Seri Ismail Sabri Yaakob today.

The 12MP is a comprehensive development plan that will introduce a number of reforms, to ensure sustainable economic growth with a more equitable distribution of opportunities and outcomes, he said.

“The government is taking a whole-of-nation approach that involves all government machinery and agencies, industry and society in a single mission to implement reforms,” ​​said the prime minister in his speech while tabling the motion on the 12MP 2021-2025 in parliament today.

“The purpose of this reform is not only to generate national wealth. It is also to address some of the challenges of economic structure, provide the workforce of the future, improve the well-being of Malaysian families and bridge the developmental gap between regions.”

It is also to ensure the implementation of more effective methods in delivering services to the people, he said.

He added that in the five years (2021-2025), Gross Domestic Product (GDP) growth is targeted at 4.5 to 5.5 per cent per annum.

“I believe we will be able to achieve the services sector average growth target of 5.2 per cent, manufacturing 5.7 per cent, agriculture 3.8 per cent, mining and quarrying 2.6 per cent and construction of 4.2 per cent during the 12MP period.”

The tourism sector, most affected by the pandemic, is expected to recover with a growth target of 3.8 per cent. Micro, small and medium enterprises (MSMEs) are expected to contribute 45 per cent to GDP, and 25 per cent to total exports by 2025, he said.

Ismail Sabri said the focus to boost the economy would be on restoring the growth momentum of all economic sectors and creating new sources of growth.

“The growth of several strategic and high-impact industries, namely electrical and electronics, global services, aerospace, halal industries, creative, tourism, biomass and smart agriculture activities will be boosted. The transformation of MSMEs will also be strengthened.”

Productivity growth will be boosted through research and innovation activities, the use of advanced technology as well as reducing dependence on less skilled labour.

He said the government wanted to see the private sector play a bigger role in helping the country drive economic growth.

“In this regard, I assure you that the government will reduce bureaucracy, provide quality and reliable infrastructure, strengthen the ecosystem to support private investment and develop a skilled workforce.”

Among others, the government has agreed to approve several major programmes and projects to be implemented in the 12MP to boost the growth of strategic sectors and industries.

“They are investment loan fund for research and development in aerospace, electrical and electronics; the establishment of the Centre of Excellence for Future Industry; intellectual property funds; and easy financing schemes for digitisation and technology adoption to support local companies in transitioning to advanced technology.”

He said the government also intended to make Malaysia a high-tech country.

“For Malaysia to become a high-income and high-tech country, we have no choice but to accept the use of new technology and strive to create and develop our own technology. We also need to ensure that infrastructure is strengthened and future talent is developed to catalyse economic growth.”

Among others, the provision of digital infrastructure involves public and private sector investment, worth RM28 billion to improve the existing 4G network. To accelerate the implementation of 5G nationwide, a further RM15 billion ringgit will be invested by the private sector.

In line with technological development and innovation, efforts to produce local technology developers and creators will be intensified to generate wealth and economic growth.

“For this purpose, all development and research, commercialisation and innovation (R&D and C&I) activities will be aligned with national priorities. As much as 50 per cent of the government’s research funds will be provided for experimental research that has the potential to be commercialised.”

In this regard, the government has approved the establishment of a one-stop centre for commercialisation and technology transfer as well as the NanoMalaysia Energy Storage Technology Initiative (NESTI) Programme.

To coordinate R&D and C&I activities and ensure that they are in line with national priorities, a research management unit (RMU) has been established.

The role of the RMU is to reduce duplication of functions, strengthen cooperation between industry, academia and government in various fields as well as increase efficiency in the use of existing resources.

In 2025, the percentage of gross R&D expenditure to GDP is expected to reach 2.5 per cent, compared to only 1.0 per cent in 2020.

The private sector is targeted to contribute more, with a two-fold increase, reaching 70 per cent of total R&D expenditure, he added.

Source: Bernama