KUALA LUMPUR: Ambitious but realistic goals, not only to pull Malaysia out of its current economic quagmire, but also to spur growth over the next five years, are the essence of the 12th Malaysia Plan 2021-2025 (12MP).
Among other things, the government envisages an annual growth of the gross domestic product (GDP) of 4.5% to 5.5% for the period from 2021 to 2025.
If achieved, it will be a major turnaround from the drop of more than 8% between 2019 and 2020.
In addition to allocating RM400 billion not only to complete existing infrastructure projects but also to launch new ones, the government has also identified several key programs and projects to help boost growth in strategic sectors and industries.
Growth targets ranging from 2.6% to 5.7% have been set for the various sectors of the economy.
Prime Minister Datuk Seri Ismail Sabri Yaakob (Photo), who tabled the 12 MP for debate in Dewan Rakyat yesterday, said the government has received many suggestions and proposals from MPs, state governments and members of the public to help Malaysia’s economic recovery and to its subsequent expansion.
The 12MP, titled âA Prosperous, Inclusive and Sustainable Malaysiaâ encompasses themes such as resetting the economy, enhancing security, well-being and inclusion as well as promoting sustainability.
Ismail Sabri noted that the eight economic stimulus packages launched since March last year have succeeded in stabilizing the economy and even boosting GDP growth by 16.1% in the second quarter of 2021, after contracting in during the previous four quarters.
He said he was confident that the 12MP will be able to help the country achieve growth rates of 2.6% for the mining and quarrying sector, 3.8% for agriculture, 4.2% for construction, 5.2% for the service sector and 5.7% for manufacturing.
“A growth target of 3.8% has been set for the tourism sector, which has been hit hardest by the Covid-19 pandemic,” he said.
He added that small and medium-sized businesses are expected to account for 45% of GDP and 25% of total exports by 2025.
Ismail Sabri said funds will also be allocated for research and development in aerospace as well as in electricity and electronics.
A center of excellence for future industries, an intellectual property fund and an easy financing program for the digitization and adoption of technology to help local businesses to switch to advanced technology will be established.
âBy 2025, we estimate that household income will reach RM 10,000 per month,â he said. Average household income in Malaysia increased from RM 7,901 in 2019 to RM 7,089 in 2020.
Ismail Sabri said there was “very limited” space for the implementation of development projects and the situation is expected to continue until next year.
âTherefore, the government’s development allocation is more focused on existing projects,â he said.
Under Malaysia’s 11th plan, the government spent RM248.5 billion on development. Of the total, 58% went to economic sectors, 26% to social development, 11% to security and defense and 5% to general administration.
Ismail Sabri pointed out that the pandemic had negatively affected the government’s financial situation last year.
“In 2020, the budget deficit widened to 6.2% of GDP and the total statutory debt of the federal government stood at 57.9% of GDP,” he said.
However, he added that the situation is expected to improve in 2023 when the economy stabilizes and by 2025 Malaysia will be a high-income country and people will have a better quality of life.