Pemandu: NTP helped Malaysia escape middle-income trap

Pemandu CEO Idris Jala says NTP has rejuvenated economic activity and reduced reliance on oil and gas.

KUALA LUMPUR: Malaysia is no longer stuck in the middle-income trap, six years after the implementation of the National Transformation Programme (NTP), with the country’s gross national income (GNI) per capita at US$10,010.

Performance Management and Delivery Unit CEO Idris Jala said Malaysia faced challenges from socioeconomic disparity, a precarious fiscal position and stagnating economic growth when the NTP was introduced in 2010.

“Six years on, our objective remains steadfast to become a high-income nation by 2020 in a manner that is inclusive and sustainable,” he noted in the National Transformation Programme Annual Report 2016 released here today.

He pointed out that Malaysia was said to be “stuck in the middle-income trap” in 2009 because in the preceding years, the gap between the country’s GNI per capita and the World Bank’s high-income threshold had not narrowed.

Idris said the NTP had rejuvenated economic activity, enabling the private sector to drive growth through business-friendly policies. It had also reduced reliance on oil and gas from 41.3% of government revenue in 2009 to 14.7% in 2016.

He said Malaysia continued to achieve stable gross domestic product (GDP) growth of 4.2% in 2016, sustaining a trajectory of over 4% since the start of the NTP in 2010.

The fiscal deficit was reduced to 3.1% in 2016 from 6.7% in 2009, he said, adding that the government maintained its goal of achieving its target of fiscal balance by 2020.

On investment, Idris said the private sector had outpaced public sector investment since 2010 and accounted for a 71% share against public sector investment last year.

“The vibrant landscape for private investment has been enabled by NTP’s 12 National Key Economic Areas designed as the engine of economic growth.

“The NKEAs have accounted for the largest share of GDP, representing RM865.3 billion or 70% of the country’s GDP of RM1.23 trillion in 2016,” he added. - FMT