Closing the gap to high income nation


Between 2007 and 2013, Malaysia’s GNI per capita (Atlas method) had seen a compound annual growth rate (CAGR) of 8%.

Malaysia is steadily closing the gap to become a high income nation by 2020. The country’s gross national income (GNI) per capita (Atlas method) breached the US$10,000 mark last year at US$10,400, according to World Bank statistics released earlier this month.

If the nation maintains its GNI growth rate, it will breach the high-income threshold in 2017, ahead of its 2020 goal.

On this development, Frederico Gil Sander, World Bank senior country economist for Malaysia (pic – photo credit: World Bank), told Business Circle: “Malaysia is likely to cross the World Bank’s ‘high income’ threshold even before 2020. The country has also made significant progress in poverty reduction, and has been working hard to close gaps in areas such as rural and urban infrastructure. Further enhancing competition and capabilities in the economy will ensure that Malaysia completes its transformation into an inclusive and developed economy.”

Between 2007 and 2013, Malaysia’s GNI per capita (Atlas method) had seen a compound annual growth rate (CAGR) of 8%. During the same period, the CAGR for the high-income threshold had been 2%, given that high-income countries have lower growth rates. The World Bank’s current high-income threshold using the Atlas method is at US$12,746.

BC July 23.3

BC July 23.3In Southeast Asia, Malaysia is second only to Singapore in World Bank’s 2013 GNI per capita ranking, both under the Atlas method and purchasing power parity (PPP). While the nation’s GNI per capita (Atlas method) trailed far behind Singapore’s US$54,040, it was heaps ahead those of Thailand (US$5,370), Indonesia (US$3,580), the Philippines (US$3,270), Vietnam (US$1,730) and Cambodia (US$900).

In Asia Pacific, Malaysia was ranked eight, after Australia (US$65,520), Macau (US$64,050), Singapore, Japan (US$46,140), Hong Kong (US$38,420), New Zealand (US$35,520) and South Korea (US$25,920). So, while the nation has made great strides, it still has a lot of catching up to do to be on par with its high-income, developed neighbours, said Sander.

Social economic reforms

Malaysia is approaching the developed economy status along a number of dimensions. GNI has indeed been increasing and that is one of the hallmarks of a high-income country. It is closing in on its goal to become a high-income status nation by 2020, thanks to its various social economic programmes, chiefly the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP).

Performance Management and Delivery Unit (PEMANDU)Chief Executive Officer Dato’ Sri Idris Jala noted that while there is a minority of people who argue that the GTP and ETP do not ultimately impact the man on the street, “if we take a closer look at each and every GTP and ETP initiative, there would have been either a direct or indirect on impact people’s lives.”

For example, the Ministry of Rural and Regional Development, through its various projects under the Improving Rural Development National Key Results Area (NKRA) on rural infrastructure, have positively impacted the lives of 5.1 million people. Additionally, the ministry has achieved the impossible by building over 4,069km of roads, and delivered clean, treated water and electricity to rural villages. The government, together with federal and state agencies involved in poverty eradication, had managed to reduce poverty levels from 3.8% in 2009 to 1.7% in 2012.

According to Dato’ Sri Idris, Malaysia’s civil service has enabled and instilled transformational facets such as greater focus, prioritisation, problem solving components in their processes, improved transparency and accountability.

He acknowledged that transition is never an easy process, and may vary from person to person. “Overall, Malaysia’s civil service managed to come together and achieved for the country an average key performance indicator (KPI) score of 128% NKRA for the GTP as well as 102% for the National Key Economic Areas (NKEA) and 95% of the Strategic Reform Initiatives (SRIs) within the ETP,” he said.

The Public Service Delivery Transformation’s (PSDT) SRI, launched in 2013, have already seen positive results in improving the culture and deliverables of public services in 17 ministries, with 27 active projects. PEMANDU, together with the Chief Secretary General’s Office, had introduced the Change Acceleration Process (CAP).

Notable results include the expediting of land acquisition for infrastructure development projects by Muda Agricultural Development Authority (MADA) under the Ministry of Agriculture, narrowing the process from 29 months to 11. This will be further reduced to less than six months, benefiting 55,000 farmers.

The adoption of “Lean Healthcare” at Hospital Sultan Ismail, Johor streamlined its processes, saving the government RM30 million while drastically slashing the waiting time for a patient seeking treatment at its oncology departments from 120 days to 30 days. Simultaneously, the waiting time at its orthopaedic specialist clinics has also been reduced from 115 minutes to under 45 minutes.

“These achievements are continuously being challenged… Progress is made but there are certainly still lots more to do,” Dato’ Sri Idris acknowledged.

PEMANDU, the custodian and driver of the ETP and GTP, was recently named one of the “Top 20 Leading Government Innovation Teams Worldwide” by Bloomberg Philanthropies and Nesta.

“This is a strong testament of the work and commitment from Prime Minister Najib Tun Razak, all the Ministries, agencies and civil servants, towards Malaysia’s goals of becoming a high-income and developed nation.

“The last four years of the National Transformation Programme (NTP) have seen tremendous diligence and commitment from our civil service in embracing changes brought forth by the eight-step Big Fast Results methodology,” he said.

One of the success of PEMANDU highlighted in the report was the unit’s contribution that led to a 35% drop in reported street crime within a year in the country, said the New Straits Times.

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