Malaysia launch New Economic Model

The Prime Minister announced the New Economic Model framework at Bursa Malaysia’s Invest Malaysia 2010 conference yesterday. Datuk Seri Najib Tun Razak said the Government wants income to leap from the current US$7,000 (RM23,100) per capita annual income to US$15,000 (RM49,500) in 10 years.

Other highlights:

– Six economic activities as engines of growth are oil and gas, electronic and electrical, tourism, agriculture and financial services.
– PETRONAS will list two subsidiaries on the Malaysian Bourse.
– EPF, the state-controlled pension fund, will be allowed to invest more money overseas.
– Private sector investment to be allowed in government-linked corporations.

Excerpts from the NEM documents (download):

We urgently need a radical change in our approach to economic development which will be sustainable over the long-term, will reach everyone in the country and will enable Malaysia to reach high income status. The NEM will be the catalyst to unleash Malaysia’s growth potential. The ETP is designed to drive Malaysia forward from its current stagnant situation to be a high income economy which is both inclusive and sustainable (Figure B). The NEAC believes that by consistently implementing bold policies across eight SRIs, the fundamentals of doing business in Malaysia will be changed from the old approach, enabling the private sector to step up and make a full contribution to growth.

But the NEM strives for broader goals than just boosting growth and attracting private investment. The NEM takes a holistic approach, focussing also on the human dimension of development, recognising that while we have substantially reduced poverty, a hefty 40% of Malaysian households still earn less than RM1,500 a month. Income disparity must still be actively addressed. Measures are needed to narrow the economic differences prevalent in Sabah and Sarawak as well as in the rural areas of the Peninsula.

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