Malaysia no longer caught in middle-income trap: Idris

KUALA LUMPUR: Malaysia is no longer caught in the middle-income trap, according to the Performance Management and Delivery Unit (Pemandu) CEO Datuk Seri Idris Jala.
In his keynote address at a roundtable on "Public-Private Partnerships" organised by Brickfields Asia College together with The Business Year here yesterday, Idris said this is premised on the narrower gap between the World Bank's high-income threshold and Malaysia's current income level.
"We have become unstuck (in the middle-income trap). The gap is just 15% for 2015 compared with 33% in 2010," he said.
Malaysia's national income per capita has increased from US$8,280 in 2010 to US$10,570 in 2015, while the World Bank's high-income threshold has just been adjusted from US$12,276 in 2010 to US$12,475 in 2015.
Apart from that, Idris said, the government has been able to register revenue growth and fiscal deficit reduction for six years in a row, which bode well for the country. The fiscal deficit to gross domestic product (GDP) has been reduced from 6.6% in 2009 to 3.2% in 2015.
He noted that the Economic Transformation Programme (ETP) has benefited private investment, which has seen a higher compound annual growth rate of 12.1% from 2011 to 2015 compared with 5.5% from 2006 to 2010.
"Before the ETP was launched, the percentage of public investment was taking the lion's share of total investments. It was more than 60%, but we've totally reversed that in the past five years. Now more than 60% investment is from the private sector.
"That would make sure we don't overborrow, otherwise we would have ballooned our national debt," he explained.
Idris noted that the federal government's debt of GDP is still contained at 53.5% compared with 2010. This compares with the self-imposed debt limit of 55%. "This is because we depend on the private sector to inject funds and it is a highly innovative approach to move forward."
To achieve high-income nation status, Idris said, the implementation of all economic initiatives is of utmost importance for the country.
"I know there are many things we're not doing right in the government, but I'm very clear in my mind that we've to focus on things that matter.
"If we chase every problem in this government, we'll not go anywhere. Eventually, we try to do other things as well," he added.
The problems that the government is tackling are unclear direction, lack of leadership commitment, high-level plans not translated into practical three-feet programmes, rigid implementation, silo mentality and work approach, public demands and input not adequately heard/obtained, poor accountability as well as lack of transparency.