TULASI

NOORARPIZA

KJC 1010 168

KJC 1080 149

CONTENT
BACKGROUND ISSUES AND CHALLEANGE NEW ECONOMICS MODEL

MOVING FORWARD
CONCLUSION

BACKGROUND

Dato Sri Najib Razak took the office in April 2009 as the sixth Prime Minister of Malaysia. Pledge to continue the growth & development with new approach, continuous improvement of Governments delivery of services, performance-oriented measures and closer focus to the people. Introduce the clarion call: 1Malaysia, People First, Performance Now

The NEAC was first mooted by the Prime Minister after he came into office in April 2009, to evaluate the fluid state of the economy, and to recommend medium-to long-term strategic prescriptions for structural reform aimed at propelling Malaysia to a higher level of competitiveness and efficiency.

ISSUES AND CHALLENGES

The global landscape has evolved at such a drastic pace over the past decade that economies are grappling to find elusive niche areas to excel and prosper. The formula used to drive Malaysias success in the past no longer applies in todays environment. Regional competitors have overtaken us in the competition for investment and growth. We not only have to regain lost ground; we need to step up to the next stage of our countrys development while moving ahead of our competitors. In these challenging times, Malaysia must seek new opportunities

ISSUES & DEVELOPMENTS

The global economic crisis / financial tsunami (2007present). Emergence of China (PRC) as new economic superpower & major economic partner for Malaysia. He increasing importance of BRIC countries (Brazil, Russia, India + China) as large scale economies, trading partner and investment destinations. Increasing competitiveness of neighbouring ASEAN countries. Other developmental issues - climate changes, political instability, terrorism, developed countries VS developing countries VS less developed countries, etc

Inflow of foreign investments Trade as major sources of economic growth Free flow of goods to Malaysian market ASEAN, China, JapaneseMalaysia as popular tourism destination Socio-economic impact demography, economic distribution, changes in the lifestyle, the way of doing business, culture

GDP growth (2010) : 10.1% Total Trade : RM1.169 trillion Total Exports : RM639.43 billion Total Imports : RM529.19 billion Trade Surplus : RM110.23 billion Consumer Price Index : 1.7% (increased) Unemployment Rate (2010) : 2.9% Population (2010) : 28.5 million

SOURCE: Department of Statistics, Malaysia

OVERALL FRAMEWORK NATIONAL TRANSFORMATION

PRE-NEM ISSUES & CHALLENGES

1.
2. 3. Middle income trap. Slower economic engine & emergence of other developing economies.

Declining investment & attractiveness as investment destinations

Composition of exports were mainly commodities and low value-added 4. manufactured products. Slow productivity growth due to low creativity and product innovation (less focus on R&D). 5. 6. 7. 8.

High dependency on low skilled workers & foreign labours.

Critical stage of human capital brain drain, migration Wider gap between the rich and poor.

9. The Government is burdened with subsidies.

NEW ECONOMIC MODEL

DEFINITION

The overall framework of New Economic Model was unveiled on 30 Mac 2010, during Invest Malaysia 2010. The first part of NEM has been presented on 30 Mac, while the second part of the report will be presented together with 10th Malaysia Plan & Malaysian Government Budget Proposal in October 2010. For the first time a strategic plan was created in dynamic manner seeking consultation / feedback from all quarters, including general public.

THE NEW ECONOMIC MODEL

From a Middle Income to a High Income Economy by 2020. New Economic Model is expected anchored on: innovation creativity high value sources of growth modern services sector skilled manpower to be

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NEM PRINCIPLES

HIGH INCOME

SUSTAINABILITY

INCLUSIVENESS

Market friendly Merit based

Transparent

Need based

NEM GOAL

STRATEGIC REFORM INITIATIVES

WHY WE NEED NEM?

Malaysian people are wealthier and educated.

Our economic growth has not benefited all segments of the populations

Current stagnant situation to be a high income economy which is both inclusive and sustainable.

WHERE WE ARE NOW?

1. Malaysia is open for better and for worse

WHERE WE ARE NOW?

2. The economic engine is slowing.

WHERE WE ARE NOW?

3. The gap between rich and poor is widening.

WHERE WE ARE NOW?

4. Malaysia is stuck in a middle income trap.

WHAT ADVANTAGE WE HAVE?

We are not poor and we have good infrastructure.

Malaysia is a model of cultural, ethnic and biological diversity.

We have established a world-class manufacturing base.

Malaysia is at the heart of a vibrant region.

POST-NEM ISSUES & CHALLENGES

Change is todays buzzword - and with good reason. However, the underlying challenges for a change:

Mindset Culture & way of doing things Institutional changes Political will Satisfying all quarters? Sustaining the change

Integration of all strategic initiatives Monitoring the progress and success stories External environment global economy, trade & other pressing issues (e.g. terrorism, climate )range)

THE DIFFERENT BETWEEN OLD ECONOMIC DEVELOPMENT AND NEM

MOVING FORWARD

THE WAY FORWARD

Government Transformation Programme,

Private sector leads, Government Facilitates, Review of subsidies, Innovation, creativity, value-added activities
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New Economic Model

10th Malaysia Plan

Our economic and social goals will be achieved through the 1Malaysia concept.

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GOVERNMENT TRANSFORMATION PROGRAMME (GTP)

GOVERNMENT TRANSFORMATION PROGRAMME (GTP)

Objectives:

To transform the Government delivery system into people-centered and outcome-oriented; and To move Malaysia forward to become an advanced, united and just society with higher living standards for all. GTP is in line with the national mission of achieving Vision 2020.
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Reduce crime
upgrade living standards of lowincome households 6 NKRAs upgrade rural basic infrastructure upgrade urban public transportation
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Combat corruption

widen access to quality education

ECONOMIC TRANSFORMATION PROGRAMME (ETP)

Objectives:
Gross National income (GNI) per capita of RM48,000 (US$15,000, assuming US$1=RM3.20). This will make Malaysia a high-income nation, based on estimates using the current World Bank definition of a high-income nation. ETP will create more than 3.3 million jobs by 2020.

THE FUTURE OF MALAYSIA

Educate the people Initiate the change Detail out specific programmes Implement the programmes Performance measurement Continuous development Dynamism and flexibility

CONCLUSION

 Malaysia faced big challenges due to globalisation. New Economic Model (NEM) is a dynamic and strategic action plan to bring Malaysian economy to greater heights. The success of NEM depends on how the people (Malaysians) manage and overcome the challenges for the change.

 Prime Minister Department : www.pmo.gov.my National Economic Advisory Council: www.neac.gov.my Government Transformation Programme : www.transformation.gov.my 1Malaysia : www.1malaysia.com.my Malaysian Official Statistics : www.statistics.gov.my Ministry of International Trade & Industry : www.miti.gov.my Malaysian External Trade Development Corporation : www.matrade.gov.my Malaysian Industrial Development Authority : www.mida.gov.my

Q & A SESSION