Economic Transformation Programme going full steam ahead

SINCE the Prime Minister launched the Economic Transformation Programme’s (ETP) Annual Report 2013, I have been reading some news headlines decrying that the ETP is “losing steam”, “losing momentum” and “struggling”. Far from that, and I want to set the record straight.

Where we are today in terms of investments within the ETP is by design and not a result of the programme experiencing fatigue or Malaysia becoming less attractive to investors.

When the ETP kicked-off in 2010, the Entry Point Projects (EPPs) were meant to be catalytic to the economy. By taking in those investment projects and playing our role to facilitate, track and intervene – we were able to discover the realities of what private sector faces on ground when they want to do business here.

Issues faced by EPPs were brought to the Steering Committee held with lead ministers and tough decisions were made. Essentially, we were going for a “green lane” effect i.e. by solving problems faced by EPPs, the pathway becomes open for other projects to flow through.

At the launch of the ETP, 131 EPPs were announced. I could have just been happy with 50 new projects, but I wanted to make sure we had enough critical mass to catalyse change. At that time in the early stages of the ETP, we consolidated investment figures from these projects to provide clarity, confidence and build momentum at the kick-off point.

Today, the ETP no longer needs to emphasise on increasing the pathfinder projects (EPPs). With this initial set of critical mass, we have been knee-deep into execution. It is in this rigour of execution that the pathway is cleared for investments to flow into agencies tasked with attracting investments such as Malaysian Investment Development Authority, Multimedia Development Corp and the regional corridors.

Let me stress that Pemandu (Performance Management and Delivery Unit) was not formed to take over the roles of these agencies. It is also naive to equate the performance of the ETP to the number of new EPPs we gather to the fold year on year. Our role is simple as it is complex – to facilitate change within sectors and structure policy reforms to improve the economy and the business environment.

While the ETP looks into projects to discover and resolve real issues on the ground faced by businesses via the EPPs, Pemudah (Special Task Force to Facilitate Business) addresses specific processes identified by the World Bank to improve the ease of doing business. When the ETP started out in 2010, Malaysia was 23rd in the World Bank’s Doing Business Report. Efforts from Pemudah and the ETP moved Malaysia’s position to 6th for 2014. It is heart-warming that we have successfully jumped ahead of developed countries like the United Kingdom, Norway and Australia.

Just last week, it was announced that Malaysia’s ranking in the IMD World Competitiveness Yearbook 2014 also advanced a few notches, moving up from 15th to 12th position. So when someone tells me that the ETP is losing steam, I disagree. And for very good reasons.

First, approved pipeline investments have been increasing year on year and since 2010 have surpassed the Government’s annual investment target of RM148bil under the 10th Malaysia Plan. In 2011, approved investment stood at RM154.6bil; in 2012, RM167.8bil and in 2013, RM216.5bil.

The EPPs are but a fraction of these approved investments. Just because we did not classify these big investment figures as EPP, it is wrong to assume the transformation of the Malaysian economy is dwindling.

Second, realised investments have also been rising year on year in the last few years since we started the ETP. In 2010, investment hit RM179.8bil (55% private investment); in 2011, RM197.2bil (57% private investment); in 2012, RM241.7bil (58% private investment) and in 2013, RM264.6bil (61% private investment).

I don’t understand people who are so bent on looking for any signs to indicate negative trends that their parsimony misleads the public at large.

With the ETP now entering its mid-point, I am also aware of criticism about our relentless focus on the 12 National Key Economic Areas and why we do not want to increase the focus areas.

We chose 12 out of many subsectors because these were areas Malaysia has a natural competitive advantage. I am not apologetic about this decision to stick to this set of 12. A lack of focus will rack up Government debt and we will end up spreading our resources too thin. In all likelihood, public funds will be borrowed and will reach a level where public debt will surely surpass the self-imposed debt ceiling.

We have to keep making sure we deliver more for less public money. Public funds should be used to deliver benefits and the only way to do that is to focus on the key economic sectors.

There are six years left in the transformation journey. We are going full steam ahead and are within striking distance to achieve our ambitions.

Datuk Seri Idris Jala is CEO of Pemandu, the Performance Management and Delivery Unit, and Minister in the Prime Minister’s Department. Fair and reasonable comments are most welcome at [e-mail]