Towards a high-income nation

By Fintan Ng, The Star

THE Economic Transformation Programme (ETP), through the identified projects and initiatives, will be key in transforming the country into a high-income nation with a gross national income (GNI) per capita of above RM48,000 by 2020 from RM23,700 in the present.

GNI in 2020 would rise to just over RM1.7 trillion from RM660bil in 2009. Up to 31% of the GNI growth would be delivered by the EPPs plus a further 10% from multiplier effects.

Business opportunities could deliver an additional 33% while the remaining 26% of incremental growth is expected from other non National Key Economic Areas (NKEA).

The four largest NKEAs (oil, gas and energy, financial services, palm oil and wholesale and retail) are projected to generate 60% of the incremental GNI growth from the 11 NKEA sectors.

The incremental GNI growth from the initiatives in greater Kuala Lumpur would be calculated separately to avoid double-counting, as some of the income from the 11 NKEA sectors would be generated in the greater Kuala Lumpur area.

According to Datuk Seri Idris Jala, Minister in the Prime Minister’s Department and CEO of Pemandu, this level of GNI per capita would correspond to that of a high-income economy as currently defined by the World Bank.

He said achieving high-income status by 2020 would require an annual real growth rate of about 6% in the next 10 years and also allow the country to achieve the targets set under Vision 2020.

He said the high-income target would be achieved in an inclusive way and specific attention would be paid to lifting the incomes of the bottom 40% of households, with a target of increasing the monthly mean income of this group to RM2,300 in 2015 as stated in the Tenth Malaysia Plan from RM1,440 in 2009.

“The Government will encourage employment-rich growth that creates 3.3 million new jobs, of which half will require diploma or vocational qualifications. The investments made in education and training will ensure that more Malaysians are able to participate in these new opportunities,” he said.

He said the nature of these new jobs would result in a shift towards middle and high-income salary brackets while greater Kuala Lumpur will be transformed into a world-class city.