MALAYSIA has lowered its fiscal deficit, raised private investments and has moved halfway towards a high-income economy, according to Pemandu president and CEO Idris Jala.

The country has achieved this by reducing subsidies, introducing a goods and services tax (GST) and enabling a friendlier business environment for business to flourish, Idris wrote in the foreword to World Bank’s report “Driving Performance from the Centre: Malaysia’s experience with Pemandu”. The report was released on April 13.

The former senator and minister in the Prime Minister’s Department said that Malaysia had four problems when he joined the public sector in 2009.

“Firstly, there had been concerns that Malaysia was caught in the middle income trap since the 1990s. Secondly, our fiscal deficit was 6.6%. Thirdly, government debt was rising at 12% per annum of GDP.

“And fourthly, we needed to move the country into high-income status by 2020,” he wrote.

Idris said that according to data from the World Bank, Malaysia’s gross national income (GNI) per capita as at 2015 was US$10,570 or 15% below the current high-income threshold of US$12,475.

“In comparison, our GNI per capita was US$8,280 in 2010. There was a gap of 33% from the then-high-income threshold of US$12,276. Additionally, we have catalyzed a 2.2 times growth in the compound annual growth rate (CAGR) of private investment.

“While the previously recorded CAGR was 5.5% in 2006-2010, private investment recorded a CAGR of 12.1% between 2011-2015,” said Idris.

The former Malaysia Airlines Berhad CEO said these achievements were made while Malaysia improved its fiscal deficit from 6.6% of GDP in 2009 to 3.2% in 2015.

In 2010, the government lauched the Economic Transformation Programme which aimed to take Malaysia into a high-income economy. The ETP, which was managed by Pemandu, aims to lift Malaysia’s GNI to US$523 billion by 2020 or raise per capita income from US$6,700 to at least US$15,000.

When the ETP was first introduced, the exchange rate in 2010 was RM3.2 to US$1. In 2015, the Ringgit had declined to RM4.2 to US$1, while the current exchange rate has dipped lower to RM4.4 to US$1.

Still, Idris applauded the “success” of the different initiatives under Pemandu’s leadership, saying that they were a result of a series of tough measures the government had to implement.

“Since 2010, the NTP has been getting Malaysians to adapt to a new reality. A reality where they are expecting positive trade-offs for the opportunity cost.

“To this end, through the NTP, we have helped raise the quality of life of everyday Malaysians in an inclusive way, such as through the completion of 5,286 km of rural roads, connected 144,025 rural houses to reliable electricity, provided 1.68 million living in 334,593 rural houses with access to clean water; as well as having built and restored 79,137 houses bene ting 412,360 people.”

Idris, however, said that the change was not easy as clear, directed and committed leadership was needed to make it happen.

“Transformational leadership is about disappointing people at a rate that they will permit you to.

“Malaysia has been recognised by many global institutions, academic groups and governments in the last seven years of the NTP as a model of national socioeconomic transformation. This did not come without perspiration,” said Idris.

Idris’ comments come in the midst of growing public criticism against Pemandu, which many claim to be ineffective despite the high costs of running the unit.

Pemandu was set up in 2009 as a unit within the Prime Minister’s Department, and has an annual operating budget of about RM40 million.

The World Bank report said that with more than 100 staff members, Pemandu is the largest government “delivery unit” in the world, noting that most other similar units in other countries comprised about six to 16 workers. – April 29, 2017.