overview - Prime Minister's Office of Malaysia

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overview - Prime Minister's Office of Malaysia

RUKUNEGARADECLARATIONOUR NATION MALAYSIA being dedicatedto achieving a greater unity of all her peoples;to maintaining a democratic way of life;to creating a just society in which the wealth of the nation shallbe equitably shared;to ensuring a liberal approach to her rich and diverse culturaltraditions;to building a progressive society which shall be oriented tomodern science and technology;WE, her peoples, pledge our united efforts to attain these endsguided by these principles:Belief in GodLoyalty to King and CountryUpholding the ConstitutionRule of LawGood Behaviour and Morality


prime ministermalaysiaForewordThe Mid-Term Review of the Ninth Malaysia Plan takes place amidst an extremely challenging operatingenvironment. Nations the world over are facing a conjunction of challenges, driven by rising globalcommodity prices. Soaring prices of fuel, metals and food have caused tremendous hardship to populationsand governments. The situation is exacerbated by uncertainty in the global financial markets due to therecent credit crisis in the United States and Europe.Against this backdrop, the Mid-Term Review represents a time to reassess national priorities in order toensure that lower income groups are protected. It is a time to re-examine policies in order to incorporatechanges required by the new challenging environment. The road ahead will test our resilience and as such,efforts must be refocused and multiplied towards overcoming these difficulties. We shall emerge from thisperiod stronger and better able to withstand future trials.The National Mission remains as the Government’s guiding framework. The thrusts of the National Missionensure that a balance of objectives is kept, between ensuring advancement of the economy up the valuechain; improving the country’s human capital; reducing poverty and inequality; maintaining a high qualityof life; and strengthening the nation’s institutions.The Mid-Term Review shows encouraging progress on all the aforementioned five thrusts. The nationcontinues to transform into a knowledge-based economy. The private sector continues to be facilitatedthrough various assistance programmes. Measures were taken to improve the business environment, notablyvia the dedicated Taskforce to Facilitate Business or PEMUDAH. Moving forward, the emphasis will be onencouraging efficiency improvements, particularly energy consumption in the economy.With respect to the nation’s human capital development, two significant plans were launched with theaim of improving our schools and the higher education system. The education sector continues to receivethe biggest allocation of development expenditure.The Mid-Term Review recorded significant progress in reducing poverty, restructuring employment patternsand improving equity ownership. A more equitable distribution of economic opportunities will continuev


to be a major aim of the remaining 9 th Malaysia Plan period; in this direction, the five regional corridorsinitiative will continue to be pursued to ensure that disparities between parts of the country and theKlang Valley are reduced.The rakyat’s quality of life has become a new area of concern within the current environment of rising oiland commodity prices. Priority will be given to mitigating the impact on low to middle income groupsthrough a variety of measures. Energy conservation and renewable energy will also be a new area of focusin line with current challenges.Finally, the Government will continue to initiate measures to strengthen the country’s institutions such asthe judiciary and the civil service. Steps have been taken to set up a Judicial Appointments Commissionand a Malaysian Commission on Anti-Corruption. There is now more media openness and more stakeholderengagement by the public sector. The Government will continue to pursue policies and measures toenhance transparency and good governance.United, we will overcome any adversity and we will achieve our Vision to become a fully developed countryby 2020. Let us not falter. Let us move forward together.DATO’ SERI ABDULLAH BIN HAJI AHMAD BADAWIPrime Minister, MalaysiaPutrajaya26 June 2008vi


contentsOVERVIEW 3PageMACROECONOMIC PERFORMANCE AND PROSPECTSI. INTRODUCTION 11II. KEY RESULTS, 2006-2007Domestic EconomyProductivityProgress Towards a Knowledge-Based EconomyAggregate DemandSectoral PerformanceFederal Government AccountExternal SectorMerchandise TradeBalance of PaymentsResource BalancePrice Development111111131314151515151515III. MOVING FORWARD, 2008-2010Macroeconomic StrategiesInternational Economic OutlookMalaysian EconomyTotal Factor ProductivityAggregate DemandSectoral OutputFederal Government AccountExternal SectorMerchandise TradeBalance of PaymentsResource BalancePrice Development16161616161818192020202121IV. CONCLUSION 22vii


PageTHRUST 1:MOVING THE ECONOMY UP THE VALUE CHAINI. INTRODUCTION 25II. KEY RESULTS, 2006-2007 25III. MOVING FORWARD, 2008-2010Enhancing Productivity and CompetitivenessHuman CapitalResearch and DevelopmentICT InfrastructureInfrastructure Network and Transport SystemSustainable Energy SupplyInstitutional and Regulatory FrameworkPrivate Sector ParticipationIdentifying and Accelerating New Sources of GrowthExpanding Markets for Malaysian Products and Services3030303131323233333435IV. OUTCOMES, 2010 36V. CONCLUSION 39THRUST 2:RAISING THE CAPACITY FOR KNOWLEDGE AND INNOVATION ANDNURTURING ‘FIRST CLASS MENTALITY’I. INTRODUCTION 43II. KEY RESULTS, 2006-2007Labour Market and Employment4345III. MOVING FORWARD, 2008-2010Labour Market and EmploymentEducation ProgrammesPrimary and Secondary EducationPre-school EducationHigher EducationTechnical Education and Vocational TrainingLifelong LearningDeveloping Strong Moral and Ethical Values464647474848505252IV. OUTCOMES, 2010 53V. CONCLUSION 54viii


PageTHRUST 3:ADDRESSING PERSISTENT SOCIO-ECONOMIC INEQUALITIESCONSTRUCTIVELY AND PRODUCTIVELYI. INTRODUCTION 57II. KEY RESULTS, 2006-2007 57III. MOVING FORWARD, 2008-2010Poverty EradicationIncome DistributionOwnership RestructuringEmployment RestructuringRegional BalanceCorridor DevelopmentBridging the Digital DivideDevelopment of BCIC626263646565666767IV. OUTCOMES, 2010 68V. CONCLUSION 70THRUST 4:IMPROVING THE STANDARD AND SUSTAINABILITY OF QUALITY OF LIFEI. INTRODUCTION 73II. KEY RESULTS, 2006-2007 73III. MOVING FORWARD, 2008-2010HealthHousing and Urban ServicesElectricity SupplyWater Supply and SewerageTransport System and Road SafetyFamily DevelopmentPublic SafetyEnvironmentCulture, Arts and HeritageSports7777798080818284848585IV. OUTCOMES, 2010 85V. CONCLUSION 89ix


PageTHRUST 5:STRENGTHENING THE INSTITUTIONAL AND IMPLEMENTATION CAPACITYI. INTRODUCTION 93II. KEY RESULTS, 2006-2007 93III. MOVING FORWARD, 2008-2010Integrating ServicesRe-engineering Service DeliveryCreating Virtual One-Stop CentresPromoting Information and Infrastructure SharingReviewing Legal and Regulatory FrameworkMoving Towards Greater Self-RegulationImproving GovernanceDeveloping CompetencyIncreasing Confidence in Electronic-based ServicesOutcome-based Planning, Monitoring and Evaluation95959697979898989999100IV. OUTCOMES, 2010 100V. CONCLUSION 101FEDERAL GOVERNMENT DEVELOPMENT ALLOCATIONI. FEDERAL GOVERNMENT DEVELOPMENT ALLOCATION OF THE NINTH MALAYSIA PLANBY THRUSTGLOSSARY OF ACRONYMSINDEX105109115x


list of charts, boxes, tablesand figuresLIST OF CHARTsChart M-1 The Knowledge-Based Economy Development Index: 13Malaysia, 2000 and 2007Chart M-2 The Knowledge-Based Economy Development Index 13by Country, 2000 and 2007Chart M-3 Total Factor Productivity, 2006-2010 16Chart M-4 Gross Domestic Product by Expenditure, 2006-2010 18Chart M-5 Gross Domestic Product by Industry Origin, 2006-2010 19Chart 1-1 Gross R&D Expenditure, 2007 31Chart 1-2 Broadband Penetration Rate 32Chart 1-3 Gas Supply and Demand in Peninsular Malaysia 33Chart 2-1 Population by Ethnic Group, 2005-2010 45Chart 2-2 Employment by Sector, 2005-2010 45Chart 2-3 Employment by Major Occupational Group, 2005-2010 46Chart 2-4 Pupil Enrolment in Education Institutions, 2005-2010 47Chart 2-5 Enrolment in Tertiary Education Institutions by 49Level of Study, 2005-2010Chart 2-6 Skilled Human Capital, 2005-2010 50Chart 5-1 Share of Non-Cash Retail Payments by Volume 96Chart 5-2 Resolution of Complaints with iAduan 97Chart 5-3 Internet and Mobile Banking Growth 100Chart A-1 Federal Government Development Allocation of the 105N i n t h M a l a y s i a P l a n b y T h r u s tPagexi


LIST OF BOXesPageBox M-1 Key Results, 2006-2007 12Box 1-1 Key Results, 2006-2007 26Box 1-2 Expected Outcomes, 2010 36Box 2-1 Key Results, 2006-2007 44Box 2-2 Expected Outcomes, 2010 53Box 3-1 Key Results, 2006-2007 58Box 3-2 Regional Growth Corridor 66Box 3-3 Expected Outcomes, 2010 69Box 4-1 Key Results, 2006-2007 74Box 4-2 Expected Outcomes, 2010 86Box 5-1 Key Results, 2006-2007 94Box 5-2 Expected Outcomes, 2010 101xii


LIST OF TABLEsTable M-1 Key Economic Indicators 17Table M-2 Federal Government Fiscal Position, 2005-2010 20Table M-3 Balance of Payments, 2005-2010 21Table 4-1 Health Personnel: Population Ratio, 2005 and 2007 79Table A-1 Federal Government Development Allocation of the 105Ninth Malaysia Plan by ThrustPageLIST OF FIGUREsFigure 1-1 Moving the Economy Up the Value Chain 30Figure 1-2 Railway Network 32Figure 3-1 Key Strategies to Address Socio-Economic Inequalities 62xiii


list of charts, boxes, tablesand figuresLIST OF CHARTsChart M-1 The Knowledge-Based Economy Development Index: 13Malaysia, 2000 and 2007Chart M-2 The Knowledge-Based Economy Development Index 13by Country, 2000 and 2007Chart M-3 Total Factor Productivity, 2006-2010 16Chart M-4 Gross Domestic Product by Expenditure, 2006-2010 18Chart M-5 Gross Domestic Product by Industry Origin, 2006-2010 19Chart 1-1 Gross R&D Expenditure, 2007 31Chart 1-2 Broadband Penetration Rate 32Chart 1-3 Gas Supply and Demand in Peninsular Malaysia 33Chart 2-1 Population by Ethnic Group, 2005-2010 45Chart 2-2 Employment by Sector, 2005-2010 45Chart 2-3 Employment by Major Occupational Group, 2005-2010 46Chart 2-4 Pupil Enrolment in Education Institutions, 2005-2010 47Chart 2-5 Enrolment in Tertiary Education Institutions by 49Level of Study, 2005-2010Chart 2-6 Skilled Human Capital, 2005-2010 50Chart 5-1 Share of Non-Cash Retail Payments by Volume 96Chart 5-2 Resolution of Complaints with iAduan 97Chart 5-3 Internet and Mobile Banking Growth 100Chart A-1 Federal Government Development Allocation of the 105N i n t h M a l a y s i a P l a n b y T h r u s tPagexi


LIST OF BOXesPageBox M-1 Key Results, 2006-2007 12Box 1-1 Key Results, 2006-2007 26Box 1-2 Expected Outcomes, 2010 36Box 2-1 Key Results, 2006-2007 44Box 2-2 Expected Outcomes, 2010 53Box 3-1 Key Results, 2006-2007 58Box 3-2 Regional Growth Corridor 66Box 3-3 Expected Outcomes, 2010 69Box 4-1 Key Results, 2006-2007 74Box 4-2 Expected Outcomes, 2010 86Box 5-1 Key Results, 2006-2007 94Box 5-2 Expected Outcomes, 2010 101xii


LIST OF TABLEsTable M-1 Key Economic Indicators 17Table M-2 Federal Government Fiscal Position, 2005-2010 20Table M-3 Balance of Payments, 2005-2010 21Table 4-1 Health Personnel: Population Ratio, 2005 and 2007 79Table A-1 Federal Government Development Allocation of the 105Ninth Malaysia Plan by ThrustPageLIST OF FIGUREsFigure 1-1 Moving the Economy Up the Value Chain 30Figure 1-2 Railway Network 32Figure 3-1 Key Strategies to Address Socio-Economic Inequalities 62xiii


OverviewMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010overview1


OverviewoverviewThe first two years of the Ninth MalaysiaPlan period, 2006-2007, witnessedfavourable economic performance with realGDP growth slightly surpassing the targetdespite a challenging global economicenvironment. This resulted in a higherper capita income and improved qualityof life for all Malaysians. The incidence ofpoverty declined, and inter and intra ethnicincome gaps narrowed. The quality of andaccessibility to education, health care, andhousing improved. Infrastructure facilitiesincluding roads, highways, airports, portsand electricity distribution networks wereupgraded and expanded. The structure ofthe economy became knowledge-based asdemonstrated by the increased knowledgereadiness across all key industries andservices.The second half of the Ninth Plan period isexpected to be challenging with the globaleconomy losing its growth momentum anda new set of issues emerging in the globaleconomic landscape. World economicgrowth is expected to slow down as aresult of a standstill in the growth of theUS economy, and its knock-on effects onwestern Europe and the emerging anddeveloping economies. The possibilityof the US subprime mortgage marketcollapse unfolding into a full blown globalcredit crunch, and global inflation due toprotracted increase in energy, commodityand food prices further dampen theprospects of the world economy.Despite this scenario, Malaysia’s realGDP growth is expected to remainrobust at 6% per annum during theremaining Plan period. Malaysia, a veryopen economy, is not completely insulatedfrom these external shocks. The nationwill take proactive measures and remainalert to downside risks from the globaleconomic slowdown and increasing stresson financial markets. The macroeconomicfundamentals remain strong and there areadequate policy levers available to cushionthe effects of these external shocks onthe domestic economy. Pro-businesspolicies, including further deregulation andliberalisation, will continue to be pursuedto provide a conducive environmentto increase private sector participationin the economy and drive economicgrowth. Foreign direct investment willbe promoted in high technology- andknowledge-intensive activities.The priority during the remaining Planperiod will be to focus on people-centredprojects that bring tangible benefits andimprove the quality of life of the people.In line with this, the following initiativeswill top the agenda:• eradicating poverty;• providing affordable housing tothe low and middle income;• providing access to water andelectricity;• enhancing health care;• improving the standard of livingof marginalised groups;• narrowing intra and inter ethnicincome and wealth gaps;3


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010• strengthening human capital;• upgrading public safety;• i m p r o v i n g e n v i r o n m e n t a lmanagement and conservation;and• developing regional corridorsand accelerating development ofSabah and Sarawak.The Mid-term Review will also provide astrong response to the protracted increasein the price of oil and food with themain aim of minimising its impact onthe people, particularly the poor. Whilethe subsidy on petroleum and gas willbe systematically and gradually reduced,a social safety net will be introducedto ensure that the poor and deservingcontinue to receive some form of supportto mitigate its impact. The restructuringof this subsidy is essential in the lightof escalating oil prices and to ensureadequate resources are available toundertake essential development projects.To address increasing food prices and shortsupply, the Government will implementthe National Food Security Policy thatincludes creating a rice stockpile, ensuringsustained import of essential food itemsand opening up new land to raise foodproduction.The five thrusts of the National Missionwill continue to govern all developmentefforts during the remaining Plan periodto ensure that Malaysia is on track tobecoming a developed nation by 2020.National unity will remain fundamental,guided by the universal principles ofRukunegara and Islam Hadhari.The Mid-Term Review evaluates allNinth Plan projects to ensure that theiroutcomes contribute to the achievementof the National Mission. The review alsoreprioritises projects in the light of currenteconomic concerns.Policy and Strategy Framework for the Mid-Term Review of the Ninth Malaysia PlanVISION 2020NATIONAL MISSION, 2006-2020THRUST 1To move theeconomy up thevalue chainTHRUST 2To raise thecapacity forknowledge andinnovation andnurture first classmentalityTHRUST 3To addresspersistentsocio-economicinequalitiesTHRUST 4To improve thestandard andsustainability ofquality of lifeTHRUST 5To strengtheninstitutional andimplementationcapacityPOLICY/STRATEGYINTIATIVES•• Enhanceproductivity andcompetitiveness•• Generate newsources of growth•• Expand into newmarkets•• Improve thequality of andaccessibility toeducation•• Make nationalschools thepreferred choice•• Provide tertiaryeducation ofinternationalrepute•• Nurture R&Dand innovationcapability•• Foster a societywith exemplaryvalues•• Reduce incidenceof poverty•• Improve incomedistribution•• Reduce regionaldisparity•• Restructureemploymentpattern•• Restructure wealthownership patternDevelop BCIC•••• Improveaccessibility to andquality of healthcare•• Provide affordablehousing and waterand electricity tothe poor•• Improvetransportationnetwork•• Improve publicsafety•• Improve theenvironment•• Address issuesrelated to children,youth and women•• Integrate servicesacross agencies•• Increaseconfidence inelectronic-basedservices•• Pursue outcomebasedplanning,monitoring andevaluationUNDERPINNINGPRINCIPLES NATIONAL UNITY RUKUNEGARAislam hadhari4


OverviewTo achieve Thrust one, to move theeconomy up the value chain, the focuswill be on three key areas namely toenhance productivity and competitivenessof the nation; generate new sources ofgrowth; and expand into new markets.Initiatives to enhance productivity andcompetitiveness will include ensuringadequate supply of skilled workforce tomeet the needs of promoted industries,focusing research and developmentin selected areas and facilitating itscommercialisation, improving access tofinancing, liberalising the institutionaland regulatory framework, providing highspeed broadband infrastructure, improvingtransportation network and availingsustainable and quality energy supply. Thedevelopment of new sources of growthin high technology- and knowledgeintensiveareas such as biotechnology, newagriculture, health tourism, Islamic financialservices, creative multimedia, and sharedservices and outsourcing will be acceleratedby promoting greater private sectorparticipation. The market for Malaysianproducts and services will be expandedthrough better branding, upgrading qualityof products to international standards,undertaking aggressive market promotionand increasing market access.To realise Thrust two, to raise the capacityfor knowledge and innovation and nurturefirst class mentality, five key initiativeswill be undertaken, that is, improving thequality of and accessibility to education;making national schools the preferredchoice; providing tertiary educationof international repute; nurturing R&Dand innovation capability; and fosteringa society with exemplary values.Improvement in the quality of andaccessibility to education will be madeby upgrading the quality of teachers andacademic staff, providing better amenitiesand basic facilities to rural schools, andavailing skills training opportunities toschool drop-outs. The appeal of nationalschools will be further improved to make itthe preferred choice by expediting the rollout of the smart school programme to all10,000 schools, moving from examinationsto continuous assessments, offeringMandarin and Tamil as well as j-QAF inall primary schools, setting up specialisedsecondary schools for S&T and upgradingeducational facilities. Among the measuresthat will be introduced to elevate tertiaryeducation to match international standardsare developing academic programmessimilar to that provided by Ieadinguniversities, improving the capability ofthe four designated research universities,streaming top students to local universities,and raising the quality of academicstaff. R&D and innovation capability willbe enhanced by focusing resources inthe new growth areas, improving theintellectual property protection regimeand nurturing innovation culture throughthe education system.To achieve Thrust three, to addresspersistent socio-economic inequalities,the focus will be on further reducingthe incidence of poverty, improvingdistribution of income, reducing regionaldisparities, restructuring employmentand wealth ownership, and developingBumiputera Commercial and IndustrialCommunity (BCIC). Hardcore poverty willbe eradicated and incidence of generalpoverty reduced in line with the Ninth Plantarget. Poverty eradication programmeswill be tailored to suit the needs ofthe different target groups namely therural poor, urban poor, minority groupsand unproductive poor, and will includeavailing housing and basic amenities,creating income generating activities, andproviding education and skills training toensure sustainability. Income distributionwill be improved by further reducingincome disparities between rural andurban households, between and among5


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010ethnic groups and income strata as wellas increasing the income share of thebottom 40% of households. The regionalcorridor development projects will serveas an important means for this purpose.To achieve more equitable ownership ofwealth, initiatives will be introduced toraise Bumiputera equity ownership to20-25% by 2010 and increase theirownership of non-financial assets suchas residential and business premises. Theshare of equity ownership of the Indiancommunity and Bumiputera of Sabah andSarawak will also be raised. The privatesector will drive BCIC development throughthe cluster approach, franchise andvendor programmes, and by facilitatingBumiputera entrepreneur participation inthe regional corridors and new growthareas.To accomplish Thrust four, to improve thestandard and sustainability of quality oflife, accessibility to and quality of healthcare and other social amenities will beenhanced and environmental managementimproved. Health care delivery will bestrengthened at the primary, secondaryand tertiary levels, and the issues ofchanging disease patterns and urbanruraldisparity in health care services willbe addressed. The provision of adequate,affordable and quality housing as wellas water and electricity to the poorincluding in the urban areas as well asin Sabah and Sarawak will be a priority.The network of transport facilities willbe expanded to integrate the urban andrural areas to provide access to the ruralpeople to markets and urban services.Integrated public transport systems willbe expanded to address traffic congestionin major cities and urban centres. Publicsafety will be improved by increasing thecapacity and capability of the police force,use of modern technology and the greaterinvolvement of the local community andNGOs in crime prevention and reduction.Environmental considerations will bemainstreamed in the implementationof all development activities. Air andwater quality will be improved andsustainable forest management practicesintensified to conserve natural resourcesand protect biodiversity. Implementationof flood mitigation measures will begiven priority.To attain Thrust five, to strengthen theinstitutional and implementation capacity,a customer-focused approach will beadopted by integrating services, increasingconfidence in electronic-based servicesand pursuing outcome-based planning,monitoring and evaluation. Integrationof services is aimed at designing servicesaround the citizen and business and willinvolve re-engineering and streamliningprocesses across agencies, providing easieraccess through the creation of virtualone stop centres, promoting the sharingof data among agencies, liberalisingthe legal and regulatory environment,and moving towards self-regulation. Thegovernance structure will also be improvedto achieve greater integrity, transparencyand accountability. Increasing confidencein electronic-based services has becomecrucial to promote the use of ICT todeliver and access services. Towards thisend, greater awareness will be createdamong providers of service and thepublic, adherence to security standardswill be imposed, and a supportive legaland regulatory environment will bepromoted. An outcome-based planning,monitoring and evaluation approachwill be adopted to maximise gains fromGovernment projects. For this purpose, theorganisational structure of ministries andagencies will be adapted, competency inthis area will be improved, global bestpractices will be taken into account andKPI-based rating system will be introducedto assess performance. PEMUDAH, a highlevel task force to facilitate all aspects of6


Overviewdoing business, will continue to furtherimprove work processes, procedures,policies and regulations to improve servicedelivery and enhance efficiency.The development expenditure ceiling willbe raised to RM230 billion from RM200billion that was approved under the NinthPlan. The increased allocation will mainlygo towards financing priority projectsincluding the food security programme,construction of rural roads and provisionof low cost housing as well as to meetthe escalation in cost of building materialsfor approved infrastructure projects. Itwill be accompanied by measures toreduce expenditure on subsidies andimprove efficiency in expenditure. At thislevel of expenditure, the Government’sfiscal position will continue to remainhealthy.The G overnment will improve itsgovernance structure to ensure thatit gets maximum value for the moneyspent. For this purpose, projects andprocurement will be carried out throughan open tender process. Implementationand project management capability will beenhanced to improve efficiency, ensuretimely delivery of projects and minimisewastage. The emphasis will be on providinggood quality functional facilities andservices with the required capacity thatachieves the set policy outcomes.In essence, the Mid-Term Review of theNinth Plan streamlines policies, strategiesand programmes, where necessary, torespond to the emerging trends in theglobal economic environment whileensuring that the National Mission Thrustsare attained so that Malaysia is on trackto become a developed nation by 2020.Towards this end, the private sector willspearhead economic growth while theGovernment will provide a supportiveenvironment.7


OverviewMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010overview1


OverviewoverviewThe first two years of the Ninth MalaysiaPlan period, 2006-2007, witnessedfavourable economic performance with realGDP growth slightly surpassing the targetdespite a challenging global economicenvironment. This resulted in a higherper capita income and improved qualityof life for all Malaysians. The incidence ofpoverty declined, and inter and intra ethnicincome gaps narrowed. The quality of andaccessibility to education, health care, andhousing improved. Infrastructure facilitiesincluding roads, highways, airports, portsand electricity distribution networks wereupgraded and expanded. The structure ofthe economy became knowledge-based asdemonstrated by the increased knowledgereadiness across all key industries andservices.The second half of the Ninth Plan period isexpected to be challenging with the globaleconomy losing its growth momentum anda new set of issues emerging in the globaleconomic landscape. World economicgrowth is expected to slow down as aresult of a standstill in the growth of theUS economy, and its knock-on effects onwestern Europe and the emerging anddeveloping economies. The possibilityof the US subprime mortgage marketcollapse unfolding into a full blown globalcredit crunch, and global inflation due toprotracted increase in energy, commodityand food prices further dampen theprospects of the world economy.Despite this scenario, Malaysia’s realGDP growth is expected to remainrobust at 6% per annum during theremaining Plan period. Malaysia, a veryopen economy, is not completely insulatedfrom these external shocks. The nationwill take proactive measures and remainalert to downside risks from the globaleconomic slowdown and increasing stresson financial markets. The macroeconomicfundamentals remain strong and there areadequate policy levers available to cushionthe effects of these external shocks onthe domestic economy. Pro-businesspolicies, including further deregulation andliberalisation, will continue to be pursuedto provide a conducive environmentto increase private sector participationin the economy and drive economicgrowth. Foreign direct investment willbe promoted in high technology- andknowledge-intensive activities.The priority during the remaining Planperiod will be to focus on people-centredprojects that bring tangible benefits andimprove the quality of life of the people.In line with this, the following initiativeswill top the agenda:• eradicating poverty;• providing affordable housing tothe low and middle income;• providing access to water andelectricity;• enhancing health care;• improving the standard of livingof marginalised groups;• narrowing intra and inter ethnicincome and wealth gaps;3


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010• strengthening human capital;• upgrading public safety;• i m p r o v i n g e n v i r o n m e n t a lmanagement and conservation;and• developing regional corridorsand accelerating development ofSabah and Sarawak.The Mid-term Review will also provide astrong response to the protracted increasein the price of oil and food with themain aim of minimising its impact onthe people, particularly the poor. Whilethe subsidy on petroleum and gas willbe systematically and gradually reduced,a social safety net will be introducedto ensure that the poor and deservingcontinue to receive some form of supportto mitigate its impact. The restructuringof this subsidy is essential in the lightof escalating oil prices and to ensureadequate resources are available toundertake essential development projects.To address increasing food prices and shortsupply, the Government will implementthe National Food Security Policy thatincludes creating a rice stockpile, ensuringsustained import of essential food itemsand opening up new land to raise foodproduction.The five thrusts of the National Missionwill continue to govern all developmentefforts during the remaining Plan periodto ensure that Malaysia is on track tobecoming a developed nation by 2020.National unity will remain fundamental,guided by the universal principles ofRukunegara and Islam Hadhari.The Mid-Term Review evaluates allNinth Plan projects to ensure that theiroutcomes contribute to the achievementof the National Mission. The review alsoreprioritises projects in the light of currenteconomic concerns.Policy and Strategy Framework for the Mid-Term Review of the Ninth Malaysia PlanVISION 2020NATIONAL MISSION, 2006-2020THRUST 1To move theeconomy up thevalue chainTHRUST 2To raise thecapacity forknowledge andinnovation andnurture first classmentalityTHRUST 3To addresspersistentsocio-economicinequalitiesTHRUST 4To improve thestandard andsustainability ofquality of lifeTHRUST 5To strengtheninstitutional andimplementationcapacityPOLICY/STRATEGYINTIATIVES•• Enhanceproductivity andcompetitiveness•• Generate newsources of growth•• Expand into newmarkets•• Improve thequality of andaccessibility toeducation•• Make nationalschools thepreferred choice•• Provide tertiaryeducation ofinternationalrepute•• Nurture R&Dand innovationcapability•• Foster a societywith exemplaryvalues•• Reduce incidenceof poverty•• Improve incomedistribution•• Reduce regionaldisparity•• Restructureemploymentpattern•• Restructure wealthownership patternDevelop BCIC•••• Improveaccessibility to andquality of healthcare•• Provide affordablehousing and waterand electricity tothe poor•• Improvetransportationnetwork•• Improve publicsafety•• Improve theenvironment•• Address issuesrelated to children,youth and women•• Integrate servicesacross agencies•• Increaseconfidence inelectronic-basedservices•• Pursue outcomebasedplanning,monitoring andevaluationUNDERPINNINGPRINCIPLES NATIONAL UNITY RUKUNEGARAislam hadhari4


OverviewTo achieve Thrust one, to move theeconomy up the value chain, the focuswill be on three key areas namely toenhance productivity and competitivenessof the nation; generate new sources ofgrowth; and expand into new markets.Initiatives to enhance productivity andcompetitiveness will include ensuringadequate supply of skilled workforce tomeet the needs of promoted industries,focusing research and developmentin selected areas and facilitating itscommercialisation, improving access tofinancing, liberalising the institutionaland regulatory framework, providing highspeed broadband infrastructure, improvingtransportation network and availingsustainable and quality energy supply. Thedevelopment of new sources of growthin high technology- and knowledgeintensiveareas such as biotechnology, newagriculture, health tourism, Islamic financialservices, creative multimedia, and sharedservices and outsourcing will be acceleratedby promoting greater private sectorparticipation. The market for Malaysianproducts and services will be expandedthrough better branding, upgrading qualityof products to international standards,undertaking aggressive market promotionand increasing market access.To realise Thrust two, to raise the capacityfor knowledge and innovation and nurturefirst class mentality, five key initiativeswill be undertaken, that is, improving thequality of and accessibility to education;making national schools the preferredchoice; providing tertiary educationof international repute; nurturing R&Dand innovation capability; and fosteringa society with exemplary values.Improvement in the quality of andaccessibility to education will be madeby upgrading the quality of teachers andacademic staff, providing better amenitiesand basic facilities to rural schools, andavailing skills training opportunities toschool drop-outs. The appeal of nationalschools will be further improved to make itthe preferred choice by expediting the rollout of the smart school programme to all10,000 schools, moving from examinationsto continuous assessments, offeringMandarin and Tamil as well as j-QAF inall primary schools, setting up specialisedsecondary schools for S&T and upgradingeducational facilities. Among the measuresthat will be introduced to elevate tertiaryeducation to match international standardsare developing academic programmessimilar to that provided by Ieadinguniversities, improving the capability ofthe four designated research universities,streaming top students to local universities,and raising the quality of academicstaff. R&D and innovation capability willbe enhanced by focusing resources inthe new growth areas, improving theintellectual property protection regimeand nurturing innovation culture throughthe education system.To achieve Thrust three, to addresspersistent socio-economic inequalities,the focus will be on further reducingthe incidence of poverty, improvingdistribution of income, reducing regionaldisparities, restructuring employmentand wealth ownership, and developingBumiputera Commercial and IndustrialCommunity (BCIC). Hardcore poverty willbe eradicated and incidence of generalpoverty reduced in line with the Ninth Plantarget. Poverty eradication programmeswill be tailored to suit the needs ofthe different target groups namely therural poor, urban poor, minority groupsand unproductive poor, and will includeavailing housing and basic amenities,creating income generating activities, andproviding education and skills training toensure sustainability. Income distributionwill be improved by further reducingincome disparities between rural andurban households, between and among5


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010ethnic groups and income strata as wellas increasing the income share of thebottom 40% of households. The regionalcorridor development projects will serveas an important means for this purpose.To achieve more equitable ownership ofwealth, initiatives will be introduced toraise Bumiputera equity ownership to20-25% by 2010 and increase theirownership of non-financial assets suchas residential and business premises. Theshare of equity ownership of the Indiancommunity and Bumiputera of Sabah andSarawak will also be raised. The privatesector will drive BCIC development throughthe cluster approach, franchise andvendor programmes, and by facilitatingBumiputera entrepreneur participation inthe regional corridors and new growthareas.To accomplish Thrust four, to improve thestandard and sustainability of quality oflife, accessibility to and quality of healthcare and other social amenities will beenhanced and environmental managementimproved. Health care delivery will bestrengthened at the primary, secondaryand tertiary levels, and the issues ofchanging disease patterns and urbanruraldisparity in health care services willbe addressed. The provision of adequate,affordable and quality housing as wellas water and electricity to the poorincluding in the urban areas as well asin Sabah and Sarawak will be a priority.The network of transport facilities willbe expanded to integrate the urban andrural areas to provide access to the ruralpeople to markets and urban services.Integrated public transport systems willbe expanded to address traffic congestionin major cities and urban centres. Publicsafety will be improved by increasing thecapacity and capability of the police force,use of modern technology and the greaterinvolvement of the local community andNGOs in crime prevention and reduction.Environmental considerations will bemainstreamed in the implementationof all development activities. Air andwater quality will be improved andsustainable forest management practicesintensified to conserve natural resourcesand protect biodiversity. Implementationof flood mitigation measures will begiven priority.To attain Thrust five, to strengthen theinstitutional and implementation capacity,a customer-focused approach will beadopted by integrating services, increasingconfidence in electronic-based servicesand pursuing outcome-based planning,monitoring and evaluation. Integrationof services is aimed at designing servicesaround the citizen and business and willinvolve re-engineering and streamliningprocesses across agencies, providing easieraccess through the creation of virtualone stop centres, promoting the sharingof data among agencies, liberalisingthe legal and regulatory environment,and moving towards self-regulation. Thegovernance structure will also be improvedto achieve greater integrity, transparencyand accountability. Increasing confidencein electronic-based services has becomecrucial to promote the use of ICT todeliver and access services. Towards thisend, greater awareness will be createdamong providers of service and thepublic, adherence to security standardswill be imposed, and a supportive legaland regulatory environment will bepromoted. An outcome-based planning,monitoring and evaluation approachwill be adopted to maximise gains fromGovernment projects. For this purpose, theorganisational structure of ministries andagencies will be adapted, competency inthis area will be improved, global bestpractices will be taken into account andKPI-based rating system will be introducedto assess performance. PEMUDAH, a highlevel task force to facilitate all aspects of6


Overviewdoing business, will continue to furtherimprove work processes, procedures,policies and regulations to improve servicedelivery and enhance efficiency.The development expenditure ceiling willbe raised to RM230 billion from RM200billion that was approved under the NinthPlan. The increased allocation will mainlygo towards financing priority projectsincluding the food security programme,construction of rural roads and provisionof low cost housing as well as to meetthe escalation in cost of building materialsfor approved infrastructure projects. Itwill be accompanied by measures toreduce expenditure on subsidies andimprove efficiency in expenditure. At thislevel of expenditure, the Government’sfiscal position will continue to remainhealthy.The G overnment will improve itsgovernance structure to ensure thatit gets maximum value for the moneyspent. For this purpose, projects andprocurement will be carried out throughan open tender process. Implementationand project management capability will beenhanced to improve efficiency, ensuretimely delivery of projects and minimisewastage. The emphasis will be on providinggood quality functional facilities andservices with the required capacity thatachieves the set policy outcomes.In essence, the Mid-Term Review of theNinth Plan streamlines policies, strategiesand programmes, where necessary, torespond to the emerging trends in theglobal economic environment whileensuring that the National Mission Thrustsare attained so that Malaysia is on trackto become a developed nation by 2020.Towards this end, the private sector willspearhead economic growth while theGovernment will provide a supportiveenvironment.7


Macroeconomic Performance and ProspectsMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010macroeconomicPerformance andPrOSPECTS9


Macroeconomic Performance and ProspectsMacroECONOMICPerformance and PrOSPECTSI.INTRODUCTIONII.KEY RESULTS, 2006-2007During the review period, 2006-2007,the Malaysian economy continued itsgrowth momentum, driven by robustdomestic demand. The resilience of theeconomy strengthened with a morediversified economic base and a shifttowards a knowledge-based economicstructure. The services sector was themain source of growth, mainly fromnew growth areas in finance, businessservices and communications, supportedby robust domestic demand. The strongeconomic performance was achieved inan environment of low inflation.The strong economic per formanceh a s p r o m o t e d g r e a t e r s t r u c t u r a ltransformation and strengthened thecountry’s macroeconomic fundamentals.Consequently, the economy is in a betterposition to weather uncertainties and risksarising from the world economic slowdown,global inflation, sub-prime issue and stiffercompetition from emerging economies.The macroeconomic strategies during theremaining Plan period 2008-2010, willfocus on managing inflation, enhancingcompetitiveness and stimulating newsources of growth. The private sectorwill be the main driver of economicgrowth. The Government will providea conducive environment for local andforeign investments.Domestic EconomyGross domestic product (GDP) in real termsgrew at 6.1% per annum surpassing theNinth Malaysia Plan target of 6.0%. Growthwas supported by strong domestic demand,particularly private sector expenditure. Percapita income in current terms increased by10.6% per annum to RM23,066 or US$6,714and per capita income in purchasing powerparity increased by 14.2% per annum toUS$13,529 in 2007.ProductivityThe contribution of total factor productivity(TFP) to GDP growth increased to 34.8%during the 2006–2007 period comparedwith 29.0% achieved during the EighthMalaysia Plan. Contribution from capitalwas 36.7% and labour 28.5%. Incrementalcapital output ratio (ICOR) 1 improved,averaging at 3.7 compared to the Plantarget at 4.6. Productivity improvementwas contributed by the increased intensityof research and development (R&D) andinnovation activities as well as increasedutilisation of technology and informationand communications technology (ICT).Real GDP growthsurpasses target...Increased TFPcontribution to GDPgrowth...1Based on a 3-year moving average.11


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box M-1Key Results, 2006-2007CommitmentOutput•Achieving a creditable growth rate whilemaintaining strong economic fundamentals••Real GDP growth: 6.1% per annumInflation rate: 2.8% per annum•Unemployment rate: 3.2% in 2007•Balance of payments current account surplus increased fromRM78.3 billion in 2005 to RM100.5 billion in 2007•Per capita income increased from RM18,840 in 2005 toRM23,066 in 2007• Strengthening competitiveness• Malaysia’s International Rankings:th• y World competitiveness ranking improved from 26position out of 55 countries in 2005 to 19 th position outof 55 countries in 2008 (source: IMD World CompetitivenessYearbook 2008)th• y Global competitiveness ranking improved from 25position out of 125 countries in 2005 to 21 st position out of131 countries in 2007 (source: WEF Global CompetitivenessReport 2007-2008)th• y Ease of doing business improved from 25 position out of175 countries in 2006 to 24 th position out of 178 countriesin 2008 (source: Doing Business 2008, World Bank)•Enhancing higher contribution to growth fromprivate sector and government-linked companies(GLCs) and attracting quality foreign directinvestment (FDI) to accelerate progress towardshigher technology activities and expand marketlinkages•••Share of private investment (nominal) to total investmentincreased from 50.1% in 2005 to 53.5% in 2007Contribution of private investment to GDP increased from11.3% in 2005 to 11.9% in 2007Ministry of International Trade and Industry approved FDIincreased from RM17.9 billion in 2005 to RM33.4 billion in2007•Raising the efficiency of capital, productivity oflabour and the contribution of TFP•Contribution of TFP to GDP growth increased from 29.0%during Eighth Malaysia Plan to 34.8% during 2006-2007• Sustaining pragmatic fiscal management• Fiscal deficit reduced from 3.6% to GDP in 2005 to 3.2% to GDP•in 2007Total debt of Federal Government reduced from 43.8% to GDPin 2005 to 41.6% to GDP in 200712


Macroeconomic Performance and ProspectsProgress Towards a Knowledge-BasedEconomyT h e k n o w l e d g e - b a s e d e c o n o m ydevelopment index, which monitors theprogress of the economy towards becomingknowledge-based, increased by 227 pointsfrom 2,413 in 2000 to 2,640 in 2007. Themost significant improvement was incomputer infrastructure, which registeredan increase of 220.5%; research anddevelopment and technology 24.1%; andeducation and training 6.5%. There was adecline in infostructure due to the reductionin the number of fixed telephone lines.Based on a comparison of 22 selectedcountries, Malaysia remained at the 17 thposition in 2007. Nonetheless, Malaysiawas among the top five countries thatregistered the largest progression to aknowledge-based economy since 2000after the Republic of Korea, the People’sRepublic of China, Japan and the UnitedKingdom.Chart M-1The Knowledge-Based EconomyDevelopment Index: Malaysia,2000 and 2007Chart M-2The Knowledge-Based EconomyDevelopment Index by Country,2000 and 2007USA 1 (1)Japan 2 (6)Denmark 3 (5)Sweden 4 (2)Finland 5 (3)Norway 6 (4)United Kingdom 7 (10)Switzerland 8 (7)Germany 9 (12)Canada 10 (8)Korea 11 (16)Australia 12 (9)Netherlands 13 (11)Ireland 14 (13)New Zealand 15 (15)Singapore 16 (14)MALAYSIA 17 (17)People‘s Rep. of China 18 (19)Thailand 19 (18)Philippines 20 (20)Indonesia 21 (21)India 22 (22)647Notes: Numbers in brackets are 2000 rankings2,6402,4551,7681,4551,3634,8224,7744,7004,6104,2554,2394,0984,0614,0493,9863,9853,9663,5693,4773,411Scores5,4592000 2007In addition, between 2002 and 2006,improvements have been recorded in allindustries in terms of building knowledgecompetency and capability as well asembarking on some form of knowledgeacquisition, generation and sharingactivities. Overall, the telecommunications,information technology, chemicals andfinancial industries led in terms ofknowledge readiness.Scores3,5003,0002,5002,0001,5001,00050002,4132,640Knowledge-BasedEconomyDevelopment Index1,3311,250Education & Training756642InfostructureR&D & Technology3244022000 200726683Computer InfrastructureAggregate DemandPrivate investment grew by 8.6% per annumand its share of total investment increasedto 51.1% in 2007. However, it fell shortof the target of 11.2%. Increased capitalspending was recorded in most economicsectors, particularly in manufacturing andservices. Net FDI inflows also increasedfrom RM15.0 billion in 2005 to RM29.1billion in 2007. The Government continuedto support and encourage private sectoractivities by reducing the cost of doingbusiness and improving the efficiency ofPrivate sector ledgrowth...13


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Services sector as majorsource of growth...the public delivery system. This includedreducing the corporate tax rate from 28%in 2006 to 27% in 2007.Private consumption grew at 8.6% per annumexceeding the Plan target and its share toGDP increased to 50.5% in 2007. The increasein private consumption was attributed to thesupportive financial environment, higherdisposable income and positive wealtheffect from strong commodity prices. Inaddition, the strong performance of theequity market and positive developments inthe labour market further buoyed consumersentiments.Public investment grew at 8.9% per annum,higher than the Ninth Plan target of 5.0%per annum, mainly due to the speedierimplementation of development projects.Public consumption increased by 5.7%per annum due to higher expenditureon emoluments arising from the salaryadjustment for civil servants in 2007 aswell as supplies and services.Sectoral PerformanceAll sectors registered positive growth, ledby the services sector, which expanded by8.5% per annum. Robust growth in theservices sector was contributed by thefinance, insurance, real estate and businessservices subsector, which grew by 10.8%per annum. Financial and business activitiesexpanded in line with the implementationof the Financial Sector Master Plan andthe diversification of financial products,especially Islamic banking and finance aswell as shared services and outsourcing.Another major contributor to the expansionof the services sector was the wholesale andretail trade, accommodation and restaurantssubsector, which grew by 9.5% per annumdue to the rapid expansion in tourism.The manufacturing sector grew at 5.1% perannum, lower than the targeted growth dueto sluggish global demand for electronicsand weak domestic demand for transportequipment. However, strong performancewas recorded by the domestic-orientedindustries 2 , growing at 6.6% per annummainly attributed to the constructionrelatedindustries such as iron and steel,fabricated metal products and non-metallicmineral products. The overall capacityutilisation rate of the manufacturing sectorwas sustained at 76% in 2007.Growth in the agriculture sector moderatedto 3.8% per annum following the slowgrowth of 2.1% per annum in the outputof industrial crops. Production of palm oiland rubber was affected by floods in early2007 as well as biological stress. Productionof crude palm oil declined by 0.5% in 2007with average fresh fruit bunches yieldper hectare falling by 2.9% to 19 tonnes.Production of rubber also declined by 6.5%in 2007 to 1.2 million tonnes. The foodcrop subsector grew at 6.3% per annumdue to increase in productivity followinglarge scale commercial activities and betteragronomic practices.The construction sector recorded an averagegrowth of 2.0% per annum. The growth wasmainly attributed to the civil engineeringactivities related to the implementationof the Plan projects. Demand for housingand commercial buildings also contributedto the growth of the sector.2This comprises construction-related, fabricated metal, food processing, transport equipment, beverages andtobacco, petroleum products, paper products and other manufacturing industries.14


Macroeconomic Performance and ProspectsThe mining sector grew marginally at0.2% per annum, due to a decline in theoutput of crude oil and gas in 2006. Theproduction was affected by the closureof a number of oil fields for maintenanceand the planned upgrading to expand thecapacity at the Malaysia Liquefied NaturalGas 2 (MLNG2) plant in Bintulu, Sarawak.Mining activities picked up in 2007 withthe coming on-stream of Malaysia’s firstdeep sea oil field in Kikeh, Sabah and there-opening of the MLNG2 plant.Federal Government AccountThe Federal Government continued topursue a prudent fiscal policy as reflectedby the narrowing of fiscal deficit from3.6% to GDP in 2005 to 3.2% in 2007. Totalrevenue recorded strong growth at 14.7%per annum arising from higher revenue,particularly petroleum income tax andreturns on investment income. On the otherhand, operating expenditure also grew ata higher rate of 12.2% per annum due tosalary adjustment for civil servants as wellas subsidy payments. The developmentexpenditure was financed by the increasingcurrent surplus and manageable level ofborrowings. The Federal Government debtstood at RM266.7 billion or 41.6% to GDPin 2007.External SectorMerchandise TradeTrade surplus averaged RM100 billion ayear in spite of a moderate growth of6.2% per annum for gross exports due tothe slowdown in the export of electricaland electronics products. Exports weresustained by primary commodities, mainlyagriculture products and crude oil. Grossimports grew at 8.0% per annum attributedby the increase in demand for capital andintermediate goods that support domesticactivities. However, average import intensitydeclined to 47.3% in 2007 from 48.3% in2005, indicating the improved capabilityof local industries in supplying capital andintermediate goods.Balance of PaymentsThe overall balance of paymentsstrengthened to RM45.3 billion or 7.2%of gross national product (GNP) in 2007,attributed to the large surplus in thecurrent account arising from sustainedsurplus in goods, turnaround in servicesand reduced deficit in the income account.For the first time, the services accountregistered a surplus following lower deficitin transportation services and higher netreceipts in the travel account. The deficitin the income account decreased from4.8% of GNP in 2005 to 2.2% in 2007,mainly due to the inflow of profits anddividends accruing to Malaysian companiesoperating abroad.Resource BalanceGross national savings remained high,averaging 38.4% to GNP in 2006-2007,enabling Malaysia to finance its economicactivities from domestic sources. Grossnational investments, including change instocks, stood at 22.0% of GNP. Thus, theresource balance recorded a surplus of16.4% to GNP.Price DevelopmentInflation rate increased by 2.8% per annumin 2006-2007. The increase was mainly due tohigher food and energy prices while pricesof textile products and telecommunicationsTrade surplus of RM100billion a year...Services account insurplus for the firsttime...15


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010services declined. Despite world oil pricesremaining high in 2007, domestic fueland gas prices were increased only oncein March 2006. Producer prices grew at afaster rate of 5.9% per annum, due largelyto buoyant prices of commodity-relatedproducts.expected to remain high as a result ofprotracted increase in oil prices as well asother commodities, including food. Worldtrade is expected to grow at 6.2% perannum, supported by steady demand-drivenexpansion in global high-tech productsand increasing liberalisation.Sustainingmacroeconomicstability...III.MOVING FORWARD,2008-2010Macroeconomic StrategiesThe world economic environment isexpected to be more challenging arisingfrom slower growth in the advancedeconomies, high energy and commodityprices and geopolitical uncertaintiesas well as increased competition fromemerging economies. To ensure thatMalaysia moves towards achieving Vision2020, the macroeconomic strategies, inline with the five thrusts of the NationalMission, will be as follows:• y• y• y• yManaging price stability;Enhancing competitiveness;Stimulating new sources of growth;Raising productivity; and• y Maintaining prudent fiscalmanagement.International Economic OutlookThe world economy is projected to growat 4.1% per annum during the 2008-2010 period. Despite moderation in thegrowth of the United States of America,Europe and Japan, the strong growth inthe People’s Republic of China, India andemerging Asia is expected to sustain theprojected growth. Inflation is projectedto remain moderate at 2.2% per annumin the advanced economies and at 5.9%per annum in the emerging markets anddeveloping countries. Global inflation isMalaysian EconomyGDP in real terms is expected to grow at6.0% per annum during the 2008-2010period. Growth is expected to be drivenby domestic demand, particularly privatesector expenditure. On the supply side, theservices, manufacturing and agriculturesectors will remain as the main sourcesof growth. Per capita income in currentterms is projected to increase by 8.8%per annum to RM29,711 (US$9,285) andper capita income in purchasing powerparity to US$18,439 in 2010.Total Factor ProductivityDuring the remaining Plan period, TFPcontribution to growth is expectedChart M-3Total Factor Productivity, 2006-2010Percentage7GDP6.0%654321035.8%29.9%34.3%OriginalTargetGDP6.0%36.2%28.1%35.7%RevisedTarget2006-2010GDP6.0%37.2%27.8%35.0%Target2008-2010Capital Labour TFPGDP6.1%34.8%28.5%36.7%Achieved2006-200716


Macroeconomic Performance and ProspectsTable M-1Key Economic IndicatorsItem9MP Target2006-2010Achieved2006-2007Target2008-2010Revised9MP Target2006-2010Real GDP (% growth per annum) 6.0 6.1 6.0 6.0Per Capita Income in Current Price (RM) 1 23,573 23,066 29,711 29,711Annual Growth Rate (%) 5.9 10.6 8.8 9.5Per Capita Income in Purchasing Power Parity (US$) 1 13,878 13,529 18,439 18,439Demand Side, in 2000 Constant Prices (% growth per annum)Consumption 6.5 8.0 7.4 7.6Private 6.9 8.6 7.6 8.0Public 5.3 5.7 6.6 6.2Gross Fixed Capital Formation 7.9 8.7 8.5 8.6Private 11.2 8.6 10.6 9.8Public 5.0 8.9 6.3 7.0Exports of Goods and Services 7.1 5.6 4.3 4.8Imports of Goods and Services 7.9 6.9 6.0 6.4Supply Side, in 2000 Constant Prices (% growth per annum)Agriculture 5.0 3.8 4.4 4.1Mining and Quarrying 3.4 0.2 3.4 2.1Manufacturing 6.7 5.1 3.5 4.1Construction 3.5 2.0 5.8 4.3Services 6.5 8.5 7.9 8.2External Trade (% growth per annum)Gross Exports 8.5 6.2 8.1 7.4Gross Imports 9.8 8.0 9.8 9.1Balance of Payments (RM billion) 2Goods 149.8 127.7 134.1 134.1Services -4.5 2.4 3.8 3.8Income -39.5 -13.8 -21.4 -21.4Current Account Balance 91.2 100.5 95.7 95.7% to GNP 13.4 16.0 11.4 11.4Savings (% to GNP) 36.2 38.4 37.2 37.6Consumer Price Index (% growth per annum)Headline - 2.8 3.0 ~ 4.0 -Rural - 2.9 - -Urban - 2.8 - -Producer Price Index (% growth per annum)Domestic Economy - 5.9 - -Local Production - 7.1 - -Imports - 3.5 - -Notes:Source:1End period.2End period, net.Economic Planning Unit and Department of Statistics Malaysia17


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Private sector drivinggrowth...18to increase. TFP contribution will beincreased by focusing on enhancingskills and knowledge and providing anenabling environment for creativity andinnovation.Aggregate DemandPrivate investment is projected to growat 10.6% per annum. In nominal terms,private investment is estimated to reachRM121.0 billion or 56.4% to total investmentin 2010. Total private investment in theremaining Plan period is estimated to beRM305.8 billion. Private investment willbe promoted by providing a conduciveenvironment for investment, includingenhancing the delivery system, removingregulatory impediments and addressingskills shortages. In addition, dedicatedincentive packages will be provided forhigh technology and knowledge-intensiveinvestments. The privatization programmeand private finance initiatives (PFI) willalso contribute towards increasing privateinvestments.Chart M-4Gross Domestic Product byExpenditure, 2006-2010(% growth)Private InvestmentPublic InvestmentPrivate ConsumptionPublic ConsumptionExportsImports6.3%7.0%5.0%7.6%8.0%6.9%6.6%6.2%5.3%4.3%4.8%7.1%6.0%6.4%7.9%10.6%9.8%11.2%2008-20102006-2010 (Revised)2006-2010 (Original)Public investment is anticipated to grow at6.3% per annum, taking into account theexpected additional capital expenditure ofnon-financial public enterprises and thegeneral government. The Government willcontinue to implement programmes andprojects to expand the productive capacityof the economy. Focus will be on peoplecentredprojects such as poverty eradication,reducing disparities and the provision ofsocial and physical infrastructure.Private consumption will continue to be amajor source of growth and is expected togrow at 7.6% per annum with its share toGDP increasing to 52.9% in 2010. Consumerconfidence is anticipated to improve furtherwith increasing employment opportunitiesand higher disposable income. Publicconsumption is expected to grow at 6.6%per annum, reflecting higher expenditureon emoluments to improve the deliverysystem.Sectoral OutputThe services sector is expected to sustainits growth momentum at 7.9% per annum.Growth will be led by the financial andbusiness services subsector growing at9.8% per annum with Islamic banking,takaful and re-takaful, shared services andoutsourcing as the main contributors. ICTservices such as software and contentdevelopment as well as Internet-basedservices and e-commerce solutions areexpected to gain more prominence.The wholesale and retail trade,accommodation and restaurants subsectoris projected to expand by 8.4% per annumwith a robust performance expected fromtourism and tourism-related sectors. Thetransport and communication subsector isprojected to expand with further promotionof Port Klang, Selangor and Port of TanjungPelepas, Johor as cargo transhipmentcentres as well as the further developmentof low-cost carrier services.


Macroeconomic Performance and ProspectsThe manufacturing sector is expected torecord moderate growth at 3.5% perannum, arising from sluggish global demandof electrical and electronics products.Growth will be led by the domestic-orientedindustries expanding at 5.5% per annum,mainly the construction-related industries,in line with the expected expansion ofconstruction activities.The agriculture sector is expected to growat 4.4% per annum with the food cropsubsector growing at 6.2% per annum andthe industrial crop subsector growing at3.0% per annum. Emphasis will be given toincreasing productivity through replantingactivities with new and high-yield clones,land consolidation, good farm managementpractices as well as maximising the use oftechnology and mechanisation.The construction sector is expected torecord a robust growth of 5.8% per annum,contributed mainly by civil engineeringactivities as well as the residential andcommercial property subsector. Theimplementation of social and physicalinfrastructure projects will generate growthin this sector. The development of regionalgrowth corridors will further stimulate theexpansion of this sector.Federal Government AccountThe Government will continue to practisefiscal prudence. The fiscal deficit is expectedto be sustained at 3.2% of GDP in 2010.Measures will be taken to enhance therevenue base by reviewing tax incentivesand improving tax collection.Construction sectorto resume its growthmomentum...Sustainable fiscaldeficit...The mining sector is expected to grow at 3.4%per annum. The oil and gas subsector willcontinue to be the main source of growthcontributing 98.7% to the sector.Chart M-5Gross Domestic Product byIndustry Origin, 2006-2010(% growth)ServicesManufacturingAgricultureMiningConstruction2.1%3.5%4.1%3.4%3.4%4.4%4.1%5.0%4.3%3.5%5.8%6.5%6.7%7.9%8.2%2008-20102006-2010 (Revised)2006-2010 (Original)During the remaining Plan period, theoperating expenditure of the FederalGovernment is targeted to moderate to6.9% per annum. Subsidy on petroleumproducts will be reduced gradually as theGovernment will introduce a fairer systemfor the benefit of the poor and the lowerincome group.Development expenditure ceiling for theNinth Plan will be increased by RM30billion to RM230 billion. The additionalceiling is to take into account additionaldevelopment requirements and theincrease in construction-related materialscost. Development projects will alsobe reprioritised giving priority topeople-centred projects. In addition, theprivatization program and the PFI will beused to complement public investment toprovide better quality services to the publicand ensure value for money. Fiscal disciplinewill be strengthened through competitivebidding and promoting best practices inthe implementation of projects.People-centreddevelopment projects...19


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Table M-2Federal Government Fiscal Position, 2005-2010RM billion% to GDPItem2005 2007 2010 2005 2007 2010Original2006-2010RevisedRevenue 106.3 139.9 179.0 20.3 21.8 20.8 21.9 21.5OperatingExpenditure97.7 123.1 150.3 18.7 19.2 17.5 19.1 18.4Current Surplus 8.6 16.8 28.7 1.6 2.6 3.3 2.8 3.1Net DevelopmentExpenditure27.3 37.5 56.6 5.2 5.8 6.6 6.2 6.3Overall Deficit -18.7 -20.7 -27.9 -3.6 -3.2 -3.2 -3.4 -3.2Source: Economic Planning Unit and Ministry of FinanceExternal SectorMerchandise TradeGross exports is projected to grow at 8.1%per annum. Malaysian producers andexporters are expected to benefit fromthe continuing liberalisation of tradein goods and services under the WorldTrade Organization (WTO) and ASEAN FreeTrade Area, regional trade agreements andbilateral free trade agreements.The exports of manufactures is projectedto expand by 8.1% per annum, reflectingthe sustained expansion in demand fromtraditional and new markets. Exports ofagricultural and mining commodities areexpected to grow by 14.2% and 9.2% perannum respectively, mainly attributed tohigher export prices.Gross imports is projected to grow at 9.8%per annum arising mainly from importsof intermediate and capital goods, whichtogether constitute 85.3% of total imports.This is in line with the sustained demand forimported components with the expansionin the manufacturing sector. Imports ofconsumption goods is expected to grow at9.7% per annum. As a result, trade balanceis projected to decline from RM100.3 billionin 2007 to RM97.0 billion in 2010.Balance of PaymentsThe overall balance of payments is expectedto remain strong due to high surplus inthe goods account as well as the biggersurplus in the services account. The currentaccount surplus is projected to reachRM95.7 billion or 11.4% of GNP in 2010,supported by the sustained strong positionin the goods account, partly due to bettercommodity prices and terms of trade. Theservices account surplus is projected toimprove to RM3.8 billion or 0.4% of GNPin 2010, mainly contributed by higher nettravel receipts. This is in tandem with the20


Macroeconomic Performance and ProspectsGovernment’s efforts to position Malaysiaas a premier tourist destination and theincrease in exports of services such aseducation, health care and outsourcing.The income account is expected to remainin deficit, mainly due to repatriation ofprofits and dividends accruing to foreigninvestors. Gross outflow of profits anddividends is estimated to be RM21.4 billionor 2.6% of GNP in 2010. Foreign investorswill continue to be encouraged to reinvestin Malaysia.Resource BalanceGross national product in current prices isprojected to grow at 10.1% per annum,in line with the expansion in domesticeconomic activities and strong commodityprices. Despite higher consumptionspending growing at 11.0% per annum,gross national savings is expected to expandby 8.9% per annum, constituting 37.2%of GNP. Investment, including changes instocks is expected to be robust and expandby 15.3% per annum. Consequently, theresource position is expected to be insurplus at RM292.2 billion or 12.8% of GNPduring the 2008-2010 period, reflectingthe country’s capacity to finance domesticinvestment without relying on foreignborrowings.Price DevelopmentHigh world oil and commodity prices willcontinue to put pressure on domesticHealthy resourceposition to supportinvestment growth...Table M-3Balance of Payments, 2005-2010ItemRM billion% to GNP2005 2007 2010 2005 2007 2010Balance on Goods 128.9 127.7 134.1 25.9 20.3 16.0Exports 539.4 605.9 765.8 108.2 96.5 91.3Imports 410.5 478.2 631.7 82.4 76.1 75.3Balance on Services -9.6 2.4 3.8 -1.9 0.4 0.4Transportation -15.9 -13.2 -13.5 -3.2 -2.1 -1.6Travel 18.7 29.1 31.7 3.7 4.6 3.8Others -12.4 -13.6 -14.4 -2.5 -2.2 -1.7Balance on Income -24.0 -13.8 -21.4 -4.8 -2.2 -2.6Balance on CurrentAccountFinancial and CapitalAccountOverall Balance ofPaymentsNotes: As at 30 May 2008Source: Economic Planning Unit and Department of Statistics Malaysia78.3 100.5 95.7 15.7 16.0 11.4-37.0 -37.2 - -7.4 -5.9 -13.6 45.3 - 2.7 7.2 -21


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010inflation. To maintain a stable and lowprice level, efforts will be taken to ensuresufficient supply of essential goods andservices to meet the growing demand.This includes measures to increaseproductivity of the food subsector, theimplementation of the National FoodSecurity Policy and better distributionnetwork. The Government will continue toclosely monitor price movements, adoptan accommodative monetary stance andencourage consumers to practise prudentspending and avoid wastage. Efforts willalso be taken to adopt market-orientedpricing mechanism in the long-term.IV.CONCLUSIONDuring 2006-2007, the Malaysian economyachieved a robust growth, driven bydomestic demand. During the remainingPlan period, 2008-2010, macroeconomicstrategies will focus on enhancing resilience,productivity and competitiveness to sustainthe rate of economic growth. Growth willbe accompanied by low inflation andunemployment as well as healthy externalbalance and sustainable fiscal deficit. Theprivate sector will continue to be theengine of growth while the public sectorwill provide the enabling environment.22


Macroeconomic Performance and ProspectsMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010macroeconomicPerformance andPrOSPECTS9


Macroeconomic Performance and ProspectsMacroECONOMICPerformance and PrOSPECTSI.INTRODUCTIONII.KEY RESULTS, 2006-2007During the review period, 2006-2007,the Malaysian economy continued itsgrowth momentum, driven by robustdomestic demand. The resilience of theeconomy strengthened with a morediversified economic base and a shifttowards a knowledge-based economicstructure. The services sector was themain source of growth, mainly fromnew growth areas in finance, businessservices and communications, supportedby robust domestic demand. The strongeconomic performance was achieved inan environment of low inflation.The strong economic per formanceh a s p r o m o t e d g r e a t e r s t r u c t u r a ltransformation and strengthened thecountry’s macroeconomic fundamentals.Consequently, the economy is in a betterposition to weather uncertainties and risksarising from the world economic slowdown,global inflation, sub-prime issue and stiffercompetition from emerging economies.The macroeconomic strategies during theremaining Plan period 2008-2010, willfocus on managing inflation, enhancingcompetitiveness and stimulating newsources of growth. The private sectorwill be the main driver of economicgrowth. The Government will providea conducive environment for local andforeign investments.Domestic EconomyGross domestic product (GDP) in real termsgrew at 6.1% per annum surpassing theNinth Malaysia Plan target of 6.0%. Growthwas supported by strong domestic demand,particularly private sector expenditure. Percapita income in current terms increased by10.6% per annum to RM23,066 or US$6,714and per capita income in purchasing powerparity increased by 14.2% per annum toUS$13,529 in 2007.ProductivityThe contribution of total factor productivity(TFP) to GDP growth increased to 34.8%during the 2006–2007 period comparedwith 29.0% achieved during the EighthMalaysia Plan. Contribution from capitalwas 36.7% and labour 28.5%. Incrementalcapital output ratio (ICOR) 1 improved,averaging at 3.7 compared to the Plantarget at 4.6. Productivity improvementwas contributed by the increased intensityof research and development (R&D) andinnovation activities as well as increasedutilisation of technology and informationand communications technology (ICT).Real GDP growthsurpasses target...Increased TFPcontribution to GDPgrowth...1Based on a 3-year moving average.11


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box M-1Key Results, 2006-2007CommitmentOutput•Achieving a creditable growth rate whilemaintaining strong economic fundamentals••Real GDP growth: 6.1% per annumInflation rate: 2.8% per annum•Unemployment rate: 3.2% in 2007•Balance of payments current account surplus increased fromRM78.3 billion in 2005 to RM100.5 billion in 2007•Per capita income increased from RM18,840 in 2005 toRM23,066 in 2007• Strengthening competitiveness• Malaysia’s International Rankings:th• y World competitiveness ranking improved from 26position out of 55 countries in 2005 to 19 th position outof 55 countries in 2008 (source: IMD World CompetitivenessYearbook 2008)th• y Global competitiveness ranking improved from 25position out of 125 countries in 2005 to 21 st position out of131 countries in 2007 (source: WEF Global CompetitivenessReport 2007-2008)th• y Ease of doing business improved from 25 position out of175 countries in 2006 to 24 th position out of 178 countriesin 2008 (source: Doing Business 2008, World Bank)•Enhancing higher contribution to growth fromprivate sector and government-linked companies(GLCs) and attracting quality foreign directinvestment (FDI) to accelerate progress towardshigher technology activities and expand marketlinkages•••Share of private investment (nominal) to total investmentincreased from 50.1% in 2005 to 53.5% in 2007Contribution of private investment to GDP increased from11.3% in 2005 to 11.9% in 2007Ministry of International Trade and Industry approved FDIincreased from RM17.9 billion in 2005 to RM33.4 billion in2007•Raising the efficiency of capital, productivity oflabour and the contribution of TFP•Contribution of TFP to GDP growth increased from 29.0%during Eighth Malaysia Plan to 34.8% during 2006-2007• Sustaining pragmatic fiscal management• Fiscal deficit reduced from 3.6% to GDP in 2005 to 3.2% to GDP•in 2007Total debt of Federal Government reduced from 43.8% to GDPin 2005 to 41.6% to GDP in 200712


Macroeconomic Performance and ProspectsProgress Towards a Knowledge-BasedEconomyT h e k n o w l e d g e - b a s e d e c o n o m ydevelopment index, which monitors theprogress of the economy towards becomingknowledge-based, increased by 227 pointsfrom 2,413 in 2000 to 2,640 in 2007. Themost significant improvement was incomputer infrastructure, which registeredan increase of 220.5%; research anddevelopment and technology 24.1%; andeducation and training 6.5%. There was adecline in infostructure due to the reductionin the number of fixed telephone lines.Based on a comparison of 22 selectedcountries, Malaysia remained at the 17 thposition in 2007. Nonetheless, Malaysiawas among the top five countries thatregistered the largest progression to aknowledge-based economy since 2000after the Republic of Korea, the People’sRepublic of China, Japan and the UnitedKingdom.Chart M-1The Knowledge-Based EconomyDevelopment Index: Malaysia,2000 and 2007Chart M-2The Knowledge-Based EconomyDevelopment Index by Country,2000 and 2007USA 1 (1)Japan 2 (6)Denmark 3 (5)Sweden 4 (2)Finland 5 (3)Norway 6 (4)United Kingdom 7 (10)Switzerland 8 (7)Germany 9 (12)Canada 10 (8)Korea 11 (16)Australia 12 (9)Netherlands 13 (11)Ireland 14 (13)New Zealand 15 (15)Singapore 16 (14)MALAYSIA 17 (17)People‘s Rep. of China 18 (19)Thailand 19 (18)Philippines 20 (20)Indonesia 21 (21)India 22 (22)647Notes: Numbers in brackets are 2000 rankings2,6402,4551,7681,4551,3634,8224,7744,7004,6104,2554,2394,0984,0614,0493,9863,9853,9663,5693,4773,411Scores5,4592000 2007In addition, between 2002 and 2006,improvements have been recorded in allindustries in terms of building knowledgecompetency and capability as well asembarking on some form of knowledgeacquisition, generation and sharingactivities. Overall, the telecommunications,information technology, chemicals andfinancial industries led in terms ofknowledge readiness.Scores3,5003,0002,5002,0001,5001,00050002,4132,640Knowledge-BasedEconomyDevelopment Index1,3311,250Education & Training756642InfostructureR&D & Technology3244022000 200726683Computer InfrastructureAggregate DemandPrivate investment grew by 8.6% per annumand its share of total investment increasedto 51.1% in 2007. However, it fell shortof the target of 11.2%. Increased capitalspending was recorded in most economicsectors, particularly in manufacturing andservices. Net FDI inflows also increasedfrom RM15.0 billion in 2005 to RM29.1billion in 2007. The Government continuedto support and encourage private sectoractivities by reducing the cost of doingbusiness and improving the efficiency ofPrivate sector ledgrowth...13


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Services sector as majorsource of growth...the public delivery system. This includedreducing the corporate tax rate from 28%in 2006 to 27% in 2007.Private consumption grew at 8.6% per annumexceeding the Plan target and its share toGDP increased to 50.5% in 2007. The increasein private consumption was attributed to thesupportive financial environment, higherdisposable income and positive wealtheffect from strong commodity prices. Inaddition, the strong performance of theequity market and positive developments inthe labour market further buoyed consumersentiments.Public investment grew at 8.9% per annum,higher than the Ninth Plan target of 5.0%per annum, mainly due to the speedierimplementation of development projects.Public consumption increased by 5.7%per annum due to higher expenditureon emoluments arising from the salaryadjustment for civil servants in 2007 aswell as supplies and services.Sectoral PerformanceAll sectors registered positive growth, ledby the services sector, which expanded by8.5% per annum. Robust growth in theservices sector was contributed by thefinance, insurance, real estate and businessservices subsector, which grew by 10.8%per annum. Financial and business activitiesexpanded in line with the implementationof the Financial Sector Master Plan andthe diversification of financial products,especially Islamic banking and finance aswell as shared services and outsourcing.Another major contributor to the expansionof the services sector was the wholesale andretail trade, accommodation and restaurantssubsector, which grew by 9.5% per annumdue to the rapid expansion in tourism.The manufacturing sector grew at 5.1% perannum, lower than the targeted growth dueto sluggish global demand for electronicsand weak domestic demand for transportequipment. However, strong performancewas recorded by the domestic-orientedindustries 2 , growing at 6.6% per annummainly attributed to the constructionrelatedindustries such as iron and steel,fabricated metal products and non-metallicmineral products. The overall capacityutilisation rate of the manufacturing sectorwas sustained at 76% in 2007.Growth in the agriculture sector moderatedto 3.8% per annum following the slowgrowth of 2.1% per annum in the outputof industrial crops. Production of palm oiland rubber was affected by floods in early2007 as well as biological stress. Productionof crude palm oil declined by 0.5% in 2007with average fresh fruit bunches yieldper hectare falling by 2.9% to 19 tonnes.Production of rubber also declined by 6.5%in 2007 to 1.2 million tonnes. The foodcrop subsector grew at 6.3% per annumdue to increase in productivity followinglarge scale commercial activities and betteragronomic practices.The construction sector recorded an averagegrowth of 2.0% per annum. The growth wasmainly attributed to the civil engineeringactivities related to the implementationof the Plan projects. Demand for housingand commercial buildings also contributedto the growth of the sector.2This comprises construction-related, fabricated metal, food processing, transport equipment, beverages andtobacco, petroleum products, paper products and other manufacturing industries.14


Macroeconomic Performance and ProspectsThe mining sector grew marginally at0.2% per annum, due to a decline in theoutput of crude oil and gas in 2006. Theproduction was affected by the closureof a number of oil fields for maintenanceand the planned upgrading to expand thecapacity at the Malaysia Liquefied NaturalGas 2 (MLNG2) plant in Bintulu, Sarawak.Mining activities picked up in 2007 withthe coming on-stream of Malaysia’s firstdeep sea oil field in Kikeh, Sabah and there-opening of the MLNG2 plant.Federal Government AccountThe Federal Government continued topursue a prudent fiscal policy as reflectedby the narrowing of fiscal deficit from3.6% to GDP in 2005 to 3.2% in 2007. Totalrevenue recorded strong growth at 14.7%per annum arising from higher revenue,particularly petroleum income tax andreturns on investment income. On the otherhand, operating expenditure also grew ata higher rate of 12.2% per annum due tosalary adjustment for civil servants as wellas subsidy payments. The developmentexpenditure was financed by the increasingcurrent surplus and manageable level ofborrowings. The Federal Government debtstood at RM266.7 billion or 41.6% to GDPin 2007.External SectorMerchandise TradeTrade surplus averaged RM100 billion ayear in spite of a moderate growth of6.2% per annum for gross exports due tothe slowdown in the export of electricaland electronics products. Exports weresustained by primary commodities, mainlyagriculture products and crude oil. Grossimports grew at 8.0% per annum attributedby the increase in demand for capital andintermediate goods that support domesticactivities. However, average import intensitydeclined to 47.3% in 2007 from 48.3% in2005, indicating the improved capabilityof local industries in supplying capital andintermediate goods.Balance of PaymentsThe overall balance of paymentsstrengthened to RM45.3 billion or 7.2%of gross national product (GNP) in 2007,attributed to the large surplus in thecurrent account arising from sustainedsurplus in goods, turnaround in servicesand reduced deficit in the income account.For the first time, the services accountregistered a surplus following lower deficitin transportation services and higher netreceipts in the travel account. The deficitin the income account decreased from4.8% of GNP in 2005 to 2.2% in 2007,mainly due to the inflow of profits anddividends accruing to Malaysian companiesoperating abroad.Resource BalanceGross national savings remained high,averaging 38.4% to GNP in 2006-2007,enabling Malaysia to finance its economicactivities from domestic sources. Grossnational investments, including change instocks, stood at 22.0% of GNP. Thus, theresource balance recorded a surplus of16.4% to GNP.Price DevelopmentInflation rate increased by 2.8% per annumin 2006-2007. The increase was mainly due tohigher food and energy prices while pricesof textile products and telecommunicationsTrade surplus of RM100billion a year...Services account insurplus for the firsttime...15


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010services declined. Despite world oil pricesremaining high in 2007, domestic fueland gas prices were increased only oncein March 2006. Producer prices grew at afaster rate of 5.9% per annum, due largelyto buoyant prices of commodity-relatedproducts.expected to remain high as a result ofprotracted increase in oil prices as well asother commodities, including food. Worldtrade is expected to grow at 6.2% perannum, supported by steady demand-drivenexpansion in global high-tech productsand increasing liberalisation.Sustainingmacroeconomicstability...III.MOVING FORWARD,2008-2010Macroeconomic StrategiesThe world economic environment isexpected to be more challenging arisingfrom slower growth in the advancedeconomies, high energy and commodityprices and geopolitical uncertaintiesas well as increased competition fromemerging economies. To ensure thatMalaysia moves towards achieving Vision2020, the macroeconomic strategies, inline with the five thrusts of the NationalMission, will be as follows:• y• y• y• yManaging price stability;Enhancing competitiveness;Stimulating new sources of growth;Raising productivity; and• y Maintaining prudent fiscalmanagement.International Economic OutlookThe world economy is projected to growat 4.1% per annum during the 2008-2010 period. Despite moderation in thegrowth of the United States of America,Europe and Japan, the strong growth inthe People’s Republic of China, India andemerging Asia is expected to sustain theprojected growth. Inflation is projectedto remain moderate at 2.2% per annumin the advanced economies and at 5.9%per annum in the emerging markets anddeveloping countries. Global inflation isMalaysian EconomyGDP in real terms is expected to grow at6.0% per annum during the 2008-2010period. Growth is expected to be drivenby domestic demand, particularly privatesector expenditure. On the supply side, theservices, manufacturing and agriculturesectors will remain as the main sourcesof growth. Per capita income in currentterms is projected to increase by 8.8%per annum to RM29,711 (US$9,285) andper capita income in purchasing powerparity to US$18,439 in 2010.Total Factor ProductivityDuring the remaining Plan period, TFPcontribution to growth is expectedChart M-3Total Factor Productivity, 2006-2010Percentage7GDP6.0%654321035.8%29.9%34.3%OriginalTargetGDP6.0%36.2%28.1%35.7%RevisedTarget2006-2010GDP6.0%37.2%27.8%35.0%Target2008-2010Capital Labour TFPGDP6.1%34.8%28.5%36.7%Achieved2006-200716


Macroeconomic Performance and ProspectsTable M-1Key Economic IndicatorsItem9MP Target2006-2010Achieved2006-2007Target2008-2010Revised9MP Target2006-2010Real GDP (% growth per annum) 6.0 6.1 6.0 6.0Per Capita Income in Current Price (RM) 1 23,573 23,066 29,711 29,711Annual Growth Rate (%) 5.9 10.6 8.8 9.5Per Capita Income in Purchasing Power Parity (US$) 1 13,878 13,529 18,439 18,439Demand Side, in 2000 Constant Prices (% growth per annum)Consumption 6.5 8.0 7.4 7.6Private 6.9 8.6 7.6 8.0Public 5.3 5.7 6.6 6.2Gross Fixed Capital Formation 7.9 8.7 8.5 8.6Private 11.2 8.6 10.6 9.8Public 5.0 8.9 6.3 7.0Exports of Goods and Services 7.1 5.6 4.3 4.8Imports of Goods and Services 7.9 6.9 6.0 6.4Supply Side, in 2000 Constant Prices (% growth per annum)Agriculture 5.0 3.8 4.4 4.1Mining and Quarrying 3.4 0.2 3.4 2.1Manufacturing 6.7 5.1 3.5 4.1Construction 3.5 2.0 5.8 4.3Services 6.5 8.5 7.9 8.2External Trade (% growth per annum)Gross Exports 8.5 6.2 8.1 7.4Gross Imports 9.8 8.0 9.8 9.1Balance of Payments (RM billion) 2Goods 149.8 127.7 134.1 134.1Services -4.5 2.4 3.8 3.8Income -39.5 -13.8 -21.4 -21.4Current Account Balance 91.2 100.5 95.7 95.7% to GNP 13.4 16.0 11.4 11.4Savings (% to GNP) 36.2 38.4 37.2 37.6Consumer Price Index (% growth per annum)Headline - 2.8 3.0 ~ 4.0 -Rural - 2.9 - -Urban - 2.8 - -Producer Price Index (% growth per annum)Domestic Economy - 5.9 - -Local Production - 7.1 - -Imports - 3.5 - -Notes:Source:1End period.2End period, net.Economic Planning Unit and Department of Statistics Malaysia17


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Private sector drivinggrowth...18to increase. TFP contribution will beincreased by focusing on enhancingskills and knowledge and providing anenabling environment for creativity andinnovation.Aggregate DemandPrivate investment is projected to growat 10.6% per annum. In nominal terms,private investment is estimated to reachRM121.0 billion or 56.4% to total investmentin 2010. Total private investment in theremaining Plan period is estimated to beRM305.8 billion. Private investment willbe promoted by providing a conduciveenvironment for investment, includingenhancing the delivery system, removingregulatory impediments and addressingskills shortages. In addition, dedicatedincentive packages will be provided forhigh technology and knowledge-intensiveinvestments. The privatization programmeand private finance initiatives (PFI) willalso contribute towards increasing privateinvestments.Chart M-4Gross Domestic Product byExpenditure, 2006-2010(% growth)Private InvestmentPublic InvestmentPrivate ConsumptionPublic ConsumptionExportsImports6.3%7.0%5.0%7.6%8.0%6.9%6.6%6.2%5.3%4.3%4.8%7.1%6.0%6.4%7.9%10.6%9.8%11.2%2008-20102006-2010 (Revised)2006-2010 (Original)Public investment is anticipated to grow at6.3% per annum, taking into account theexpected additional capital expenditure ofnon-financial public enterprises and thegeneral government. The Government willcontinue to implement programmes andprojects to expand the productive capacityof the economy. Focus will be on peoplecentredprojects such as poverty eradication,reducing disparities and the provision ofsocial and physical infrastructure.Private consumption will continue to be amajor source of growth and is expected togrow at 7.6% per annum with its share toGDP increasing to 52.9% in 2010. Consumerconfidence is anticipated to improve furtherwith increasing employment opportunitiesand higher disposable income. Publicconsumption is expected to grow at 6.6%per annum, reflecting higher expenditureon emoluments to improve the deliverysystem.Sectoral OutputThe services sector is expected to sustainits growth momentum at 7.9% per annum.Growth will be led by the financial andbusiness services subsector growing at9.8% per annum with Islamic banking,takaful and re-takaful, shared services andoutsourcing as the main contributors. ICTservices such as software and contentdevelopment as well as Internet-basedservices and e-commerce solutions areexpected to gain more prominence.The wholesale and retail trade,accommodation and restaurants subsectoris projected to expand by 8.4% per annumwith a robust performance expected fromtourism and tourism-related sectors. Thetransport and communication subsector isprojected to expand with further promotionof Port Klang, Selangor and Port of TanjungPelepas, Johor as cargo transhipmentcentres as well as the further developmentof low-cost carrier services.


Macroeconomic Performance and ProspectsThe manufacturing sector is expected torecord moderate growth at 3.5% perannum, arising from sluggish global demandof electrical and electronics products.Growth will be led by the domestic-orientedindustries expanding at 5.5% per annum,mainly the construction-related industries,in line with the expected expansion ofconstruction activities.The agriculture sector is expected to growat 4.4% per annum with the food cropsubsector growing at 6.2% per annum andthe industrial crop subsector growing at3.0% per annum. Emphasis will be given toincreasing productivity through replantingactivities with new and high-yield clones,land consolidation, good farm managementpractices as well as maximising the use oftechnology and mechanisation.The construction sector is expected torecord a robust growth of 5.8% per annum,contributed mainly by civil engineeringactivities as well as the residential andcommercial property subsector. Theimplementation of social and physicalinfrastructure projects will generate growthin this sector. The development of regionalgrowth corridors will further stimulate theexpansion of this sector.Federal Government AccountThe Government will continue to practisefiscal prudence. The fiscal deficit is expectedto be sustained at 3.2% of GDP in 2010.Measures will be taken to enhance therevenue base by reviewing tax incentivesand improving tax collection.Construction sectorto resume its growthmomentum...Sustainable fiscaldeficit...The mining sector is expected to grow at 3.4%per annum. The oil and gas subsector willcontinue to be the main source of growthcontributing 98.7% to the sector.Chart M-5Gross Domestic Product byIndustry Origin, 2006-2010(% growth)ServicesManufacturingAgricultureMiningConstruction2.1%3.5%4.1%3.4%3.4%4.4%4.1%5.0%4.3%3.5%5.8%6.5%6.7%7.9%8.2%2008-20102006-2010 (Revised)2006-2010 (Original)During the remaining Plan period, theoperating expenditure of the FederalGovernment is targeted to moderate to6.9% per annum. Subsidy on petroleumproducts will be reduced gradually as theGovernment will introduce a fairer systemfor the benefit of the poor and the lowerincome group.Development expenditure ceiling for theNinth Plan will be increased by RM30billion to RM230 billion. The additionalceiling is to take into account additionaldevelopment requirements and theincrease in construction-related materialscost. Development projects will alsobe reprioritised giving priority topeople-centred projects. In addition, theprivatization program and the PFI will beused to complement public investment toprovide better quality services to the publicand ensure value for money. Fiscal disciplinewill be strengthened through competitivebidding and promoting best practices inthe implementation of projects.People-centreddevelopment projects...19


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Table M-2Federal Government Fiscal Position, 2005-2010RM billion% to GDPItem2005 2007 2010 2005 2007 2010Original2006-2010RevisedRevenue 106.3 139.9 179.0 20.3 21.8 20.8 21.9 21.5OperatingExpenditure97.7 123.1 150.3 18.7 19.2 17.5 19.1 18.4Current Surplus 8.6 16.8 28.7 1.6 2.6 3.3 2.8 3.1Net DevelopmentExpenditure27.3 37.5 56.6 5.2 5.8 6.6 6.2 6.3Overall Deficit -18.7 -20.7 -27.9 -3.6 -3.2 -3.2 -3.4 -3.2Source: Economic Planning Unit and Ministry of FinanceExternal SectorMerchandise TradeGross exports is projected to grow at 8.1%per annum. Malaysian producers andexporters are expected to benefit fromthe continuing liberalisation of tradein goods and services under the WorldTrade Organization (WTO) and ASEAN FreeTrade Area, regional trade agreements andbilateral free trade agreements.The exports of manufactures is projectedto expand by 8.1% per annum, reflectingthe sustained expansion in demand fromtraditional and new markets. Exports ofagricultural and mining commodities areexpected to grow by 14.2% and 9.2% perannum respectively, mainly attributed tohigher export prices.Gross imports is projected to grow at 9.8%per annum arising mainly from importsof intermediate and capital goods, whichtogether constitute 85.3% of total imports.This is in line with the sustained demand forimported components with the expansionin the manufacturing sector. Imports ofconsumption goods is expected to grow at9.7% per annum. As a result, trade balanceis projected to decline from RM100.3 billionin 2007 to RM97.0 billion in 2010.Balance of PaymentsThe overall balance of payments is expectedto remain strong due to high surplus inthe goods account as well as the biggersurplus in the services account. The currentaccount surplus is projected to reachRM95.7 billion or 11.4% of GNP in 2010,supported by the sustained strong positionin the goods account, partly due to bettercommodity prices and terms of trade. Theservices account surplus is projected toimprove to RM3.8 billion or 0.4% of GNPin 2010, mainly contributed by higher nettravel receipts. This is in tandem with the20


Macroeconomic Performance and ProspectsGovernment’s efforts to position Malaysiaas a premier tourist destination and theincrease in exports of services such aseducation, health care and outsourcing.The income account is expected to remainin deficit, mainly due to repatriation ofprofits and dividends accruing to foreigninvestors. Gross outflow of profits anddividends is estimated to be RM21.4 billionor 2.6% of GNP in 2010. Foreign investorswill continue to be encouraged to reinvestin Malaysia.Resource BalanceGross national product in current prices isprojected to grow at 10.1% per annum,in line with the expansion in domesticeconomic activities and strong commodityprices. Despite higher consumptionspending growing at 11.0% per annum,gross national savings is expected to expandby 8.9% per annum, constituting 37.2%of GNP. Investment, including changes instocks is expected to be robust and expandby 15.3% per annum. Consequently, theresource position is expected to be insurplus at RM292.2 billion or 12.8% of GNPduring the 2008-2010 period, reflectingthe country’s capacity to finance domesticinvestment without relying on foreignborrowings.Price DevelopmentHigh world oil and commodity prices willcontinue to put pressure on domesticHealthy resourceposition to supportinvestment growth...Table M-3Balance of Payments, 2005-2010ItemRM billion% to GNP2005 2007 2010 2005 2007 2010Balance on Goods 128.9 127.7 134.1 25.9 20.3 16.0Exports 539.4 605.9 765.8 108.2 96.5 91.3Imports 410.5 478.2 631.7 82.4 76.1 75.3Balance on Services -9.6 2.4 3.8 -1.9 0.4 0.4Transportation -15.9 -13.2 -13.5 -3.2 -2.1 -1.6Travel 18.7 29.1 31.7 3.7 4.6 3.8Others -12.4 -13.6 -14.4 -2.5 -2.2 -1.7Balance on Income -24.0 -13.8 -21.4 -4.8 -2.2 -2.6Balance on CurrentAccountFinancial and CapitalAccountOverall Balance ofPaymentsNotes: As at 30 May 2008Source: Economic Planning Unit and Department of Statistics Malaysia78.3 100.5 95.7 15.7 16.0 11.4-37.0 -37.2 - -7.4 -5.9 -13.6 45.3 - 2.7 7.2 -21


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010inflation. To maintain a stable and lowprice level, efforts will be taken to ensuresufficient supply of essential goods andservices to meet the growing demand.This includes measures to increaseproductivity of the food subsector, theimplementation of the National FoodSecurity Policy and better distributionnetwork. The Government will continue toclosely monitor price movements, adoptan accommodative monetary stance andencourage consumers to practise prudentspending and avoid wastage. Efforts willalso be taken to adopt market-orientedpricing mechanism in the long-term.IV.CONCLUSIONDuring 2006-2007, the Malaysian economyachieved a robust growth, driven bydomestic demand. During the remainingPlan period, 2008-2010, macroeconomicstrategies will focus on enhancing resilience,productivity and competitiveness to sustainthe rate of economic growth. Growth willbe accompanied by low inflation andunemployment as well as healthy externalbalance and sustainable fiscal deficit. Theprivate sector will continue to be theengine of growth while the public sectorwill provide the enabling environment.22


Moving the Economy up the Value Chain1thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010moving the economy upthe value chain23


Moving the Economy up the Value Chainmoving the economy up thevalue chainI. INTRODUCTIONDuring the first half of the Ninth Planperiod, steady progress was made inmoving the economy up the value chain.In the services sector, advancementswere made in the new growth areassuch as information and communicationstechnology (ICT), telecommunications,tourism, Islamic finance and sharedservices and outsourcing (SSO). Growthin the manufacturing sector was mainlydriven by domestic-oriented industries.The continuous transformation of thesector to capital- and skill-intensive andhigh-technology activities was supportedby research and development (R&D),design and development and goodmanufacturing practices. Growth in theagriculture sector was contributed mainlyby agricultural industrial commodities,particularly palm oil, rubber and sawlogs,and strong growth in the fisheries andlivestock subsectors. The adoption ofnew technologies and good agriculturepractices further modernised and increaseddynamism and competitiveness of thesector.I n m oving fo r w a rd, t h e e n a b l i n genvironment will be further improvedincluding through deregulation andliberalisation to increase private sectorparticipation and enhance efficiencyacross all sectors. This will support andintensify the development of knowledgeintensiveactivities and adoption ofadvanced technologies. In addition, thesupply of human capital that meets therequirements of industries and new growthactivities will be increased, inter-agencycoordination improved and utilisation ofresources optimised.II. Key results, 2006-2007Migration to higher value added andknowledge-intensive activities alongthe value chain was achieved in severalindustries in the key economic sectors.New growth areas identified under theNinth Plan were also at various stagesof development. The progress achievedin improving productivity, generating newsources of growth and expanding intonew markets is as shown in Box 1-1.25


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 1-1Key Results, 2006-2007CommitmentOutputServicesTourism•I ntensifying m a r k e t i n g a n d p romotionactivities•Tourist arrivals reached 21 million with receipts of RM46.1billion in 2007 compared with 16.4 million tourist arrivalswith receipts of RM31.9 billion in 2005•Tourist per capita expenditure increased from RM1,945 in2005 to RM2,198 in 2007•Average occupancy rate of hotels increased to 70.0% in2007 from 63.5% in 2005•Developing innovative tourism products andservices•637,975 foreign patients sought treatment contributingRM457.5 million to foreign exchange earnings•Enrolment of foreign students at tertiary level totalled 92,318with foreign exchange earnings of RM1.4 billion•2.8 million participated in Meetings, Incentives, Conventionsand Exhibitions (MICE) with receipts of RM5.9 billion•1,503 foreigners participated in Malaysia My Second HomeProgramme in 2007 resulting in RM43.8 million in acquisitionof residential propertiesFinance•Building an internationally competitive financialsector•Market presence of 6 domestic banking groups operatingoverseas increased from 12 countries in 2005 to 19 countriesin 2007•Total assets of domestic banking groups overseas increasedfrom RM88.8 billion in 2005 to RM111.6 billion in 2007•16 foreign banks, including 3 Islamic banks, operated inMalaysia in 2007•Promoting competitive domestic financialinstitutions•Pre-tax profit of the banking institutions increased fromRM12.4 billion in 2005 to RM17.7 billion in 2007•Assets of the banking institutions increased from RM958.8billion in 2005 to RM1,221.5 billion in 2007•Productivity measured by pre-tax profit per employeeincreased from RM130,297 in 2005 to RM168,094 in 2007•Developing Malaysia as an international centre forIslamic banking and finance as well as initiatingniche capital market specialisation at regionaland global levels••Malaysia secured 27% or US$1.7 billion of global takafulpremium in 200668.9% of the global outstanding sukuk originated in Malaysiaat end 2007•Market capitalisation of Islamic Real Estate InvestmentTrusts (REITs) increased by 192.7% to RM995.3 million atend 200726


Moving the Economy up the Value ChainCommitmentOutputDistributive trade• Strengthening the modes of distribution • Total sales turnover reached RM293.9 billion in 2007 from•RM198.1 billion in 2005Franchisors increased from 206 in 2005 to 267 in 2007• Turnover of direct sales increased to RM8.8 billion in 2007from RM6.6 billion in 2005• Accelerating the growth of e-commerce • Estimated value of e-commerce transactions increased fromUS$8.8 billion in 2005 to US$20.9 billion in 2007Professional services• Promoting cross border investment• As at end 2007:•y 111 firms exported services to 33 countries•y Malaysian contractors secured 76 projects valued atRM45.1 billion•y 333 projects in 23 countries were completed valuedat RM23 billionManufacturing• Promoting new sources of industrial growth • 51 companies granted BioNexus status with approved•investment of RM1 billion65 R&D findings commercialised and 13,732 patents•approvedRM2.3 billion spent on R&D in manufacturing activities in•200610 projects with high-end R&D activities involving RM588.4•million investments were implemented in areas suchas integrated wafer fabrication, advanced integratedcircuit packaging, and precision test and measurementequipment4 new petrochemical projects with investment totalling RM4billion were implemented•Providing more focused incentives for high valueadded industries•66 projects with FDI worth RM33.3 billion were approved,mainly in Electrical and Electronics (E&E), petroleum products,ICT and Machinery and Equipment (M&E)•Capital investment per employee in approved projectsincreased from RM278,126 in 2005 to RM613,600 in 2007•Developing innovation-driven Small and MediumEnterprises (SMEs)•532 SMEs registered under the Industrial Linkages Programmelinked to multinational companies (MNCs) and largecompanies in 2006•528 SMEs rated under the SMEs Competitive Rating forEnhancement 1 (SCORE) assessment programme1SCORE is an assessment tool to measure the level of growth of enterprises in terms of innovation, technical capabilities, production capacities,financial and business performance, quality systems and management capabilities as well as identify areas of strengths and weaknesses of SMEs.27


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutputAgriculture• Venturing into new sources of growth • Increase in production:•y Kenaf - from 1,163 metric tonnes (MT) in 2005 to 4,185MT in 2007•y Deep sea fishing - from 221,228 MT in 2005 to 264,000MT in 2007•y Ornamental fish - from 458 million tails in 2005 to 679million tails in 2007•y Livestock - from 1.7 million MT in 2005 to 1.9 millionMT in 2007•y Seaweed - from 46,000 MT in 2005 to 68,000 MT in2007•y Herbs and spices - from 7,098 MT in 2005 to 13,251MT in 2007• Expanding agro-based processing activities • Investment in food manufacturing totalled RM2 billion• Investment in manufacturing of rubber products totalled•RM918 millionInvestment in manufacturing of furniture and fixturestotalled RM596 million•Strengthening marketing and globalnetworking•Total export value of agriculture commodities increased fromRM37.5 billion in 2005 to RM52.4 billion in 2007•Total export value of agro-based products increased fromRM35.6 billion in 2005 to RM45.3 billion in 2007ICT•Enhancing Malaysia’s position as a global ICTand multimedia hub•6 new Multimedia Super Corridor (MSC) cybercentresdeveloped•MSC status companies increased from 1,421 companies in2005 to 1,994 companies in 2007•Number of jobs in MSC increased from 33,851 in 2005 to50,821 jobs in 2006• Expanding communications network• Broadband penetration increased from 11.0% per 100•household in 2005 to 15.5% per 100 household in 2007Internet penetration increased from 7.0% per 100 household•in 2005 to 19.3% per 100 household in 2007Subscription of cellular telephone increased from 74.1 per 100population in 2005 to 85.1 per 100 population in 200728


Moving the Economy up the Value ChainCommitmentOutputEnergy• Expanding electricity generation capacity • Coal-based plant in Johor (2,100 megawatts (MW ))was commissioned in 2007 and construction of theBakun Hydroelectric project in Sarawak (2,400 MW) wascontinued• Enhancing transmission and distributionsystem••••East-West Interconnection Grid in Sabah was completedUpgrading of transmission system commenced in KotaKinabalu, Sandakan and Tawau, SabahRehabilitation of distribution networks in Perak, constructionof regional control centres and replacement of substationassets commencedReinforcement of distribution system commenced in majortowns in Sabah•Enhancing productivity and efficiency of electricitysupply system•System Average Interruption Duration Index (minutes/customer/year) improved:•y•y•yPeninsular Malaysia: 147 in 2005 to 88 in 2007Sabah: 4,109 in 2005 to 2,717 in 2007Sarawak: 310 in 2005 to 286 in 2007Infrastructure• Increasing capacity and improving efficiency oftransport infrastructure•••••••A total of 32,964 kilometres (km) of roads upgraded/builtincluding 4,824 km in Sabah and 7,258 km in SarawakButterworth Outer Ring Road (12.1 km) and Kuala Lumpur–Putrajaya Highway (26 km) completedRawang-Ipoh electrified double tracking rail project (179km) completedTotal railway freight traffic increased from 4.0 million tonnesin 2005 to 4.7 million tonnes in 2007Total container handled by rail increased from 310,011twenty-foot equivalent units (TEU) in 2005 to 333,688 TEUin 2007Alor Setar airport upgraded and a low-cost carrier terminalat KLIA builtTotal container handled at Malaysian ports increased from12.0 million TEU in 2005 to 15.3 million TEU in 200729


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010III.MOVING FORWARD,2008-2010The wave of globalisation and rapidtechnological progress, leading to a highlycompetitive global environment, requiresMalaysia to reshape its economic structureand strengthen its productive capacity.Efficient use of resources, particularly innew knowledge-intensive high-technologyactivities that yields higher value added,is critical in shifting the economy furtherup the value chain.Three major pillars underpinning thethrust are enhancing productivity andcompetitiveness, generating new sourcesof growth and expanding markets forMalaysian products and services. Efficientallocation and use of resources, focusingon higher value added activities wherethe nation has comparative advantage aswell as adoption of good practices andadvanced technology will significantlyenhanced productivity and competitiveness.Generation of new sources of growth willenhance and sustain the growth trajectorytowards achieving high-income status. Thiswill lead to greater economic dynamismFigure 1-1Moving the Economy upthe Value ChainEnhancingProductivity&CompetitivenessMOVING UPTHE VALUECHAINGeneratingNew Sourcesof GrowthExpandingMarket forMalaysianProducts &ServicesPrivate Sector as the Engine of Growthand resilience for Malaysia in facing globalchallenges. Greater liberalisation of theworld economy will lead to expansionof markets for Malaysian products andservices. Measures will be introducedto position Malaysia strategically in theglobal supply chain.Enhancing Productivity andCompetitivenessHuman CapitalThe supply of competent workforce withthe requisite skills in key sectors of theeconomy, particularly in Islamic bankingand finance, high-end retailing, creativemultimedia content development, advancedmaterials, biotechnology, mechatronicsand agriculture will be increased in linewith industry demand. The hiring ofexpatriates in these specialised areas willbe facilitated. In addition, the intake intoskills training institutes and institutionsof higher learning as well as the offeringof specialised courses will be expanded.Public-private sector collaboration forexample the knowledge workers skillsdevelopment programme will also bepromoted in specific areas. universityindustrycollaboration and linkages willbe enhanced to improve curriculumdesign to produce graduates with therelevant knowledge and skills requiredby industry.In the services sector, industry playersand associations will be encouraged toenhance professionalism by providingtraining for their employees and membersin areas such as customer service relations,hospitality and business ethics. For theIslamic financial subsector, the InternationalCentre for Education in Islamic Financewill focus on increasing the supply ofqualified workforce. To revitalise interestin agriculture, greater allocation ofscholarships and education loans will beprovided and the number of courses andtraining programmes in higher learning30


Moving the Economy up the Value Chaininstitutions will be increased. Awarenessof career opportunities in services andagriculture sectors will be enhancedthrough nationwide campaigns.Skills upgrading programmes for SMEsprovided by the Small and MediumIndustries Development Corporation(SMIDEC) in collaboration with otheragencies will be further intensified.Collaboration between multinationaland large companies with SMEs will beleveraged to enable these SMEs to becomeown-design and own-brand manufacturers.Multimedia Development Corporation(MDeC) through its technopreneurdevelopment programmes will strengthenbusiness skills and enterprise developmentof ICT-related SMEs and increase thenumber of competent ICT professionalsand business managers.Research and DevelopmentRecognising the critical role of R&D, theGovernment will continue to supportfundamental and applied research toenhance productivity and competitiveness.Chart 1-1Gross R&D Expenditure, 2007(% of GDP)3.2Japan3.0Korea2.5Taiwan2.4SingaporePeople’sRepublic of ChinaSource: World Competitiveness Yearbook 2007and National R&D Survey1.30.8India0.6Malaysia0.3ThailandPotential research areas and next generationtechnology products for commercialexploitation will be identified and thefunds for R&D and commercialisation ofits findings will be realigned to ensurethe optimal utilisation of resources. TheGovernment will also promote technologyacquisition to speed up market-driveninnovation.Efforts will be undertaken to facilitate thecommercialisation of research findingsincluding through public-private sectorcollaboration in market-driven research.Among the initiatives will be thesharing of facilities and infrastructure,particularly in developing new high valueaddedproducts; a strong laboratory-tomarketintermediation programme; andstrengthening of technology licensingoffices in higher learning institutions.In addition, the existing database onresearch findings with potential forcommercialisation will be expandedand made accessible to investors. Moretechnology-foresight studies in selectedareas will be undertaken to provideSMEs with the latest information on thebest and most appropriate technologiesavailable in various subsectors.ICT InfrastructureHigh speed broadband infrastructure,particularly in urban and industrial centresis a key enabler to provide a conduciveenvironment for making Malaysia apreferred choice for private investmentand knowledge-intensive activities. Theroll-out of broadband infrastructure willbe accelerated through a public-privatepartnership initiative to achieve 50%household penetration by 2010. Demandfor broadband will be stimulated byexpanding e-Government applications,developing local content and applicationswith private sector participation andintensifying awareness campaigns. Gradualmigration will be made to Internet ProtocolMarket-driveninnovation...Accelerating broadbandroll-out...31


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010version 6 (IPv6) from the current Internetprotocol addresses based on the IPv4,which will be exhausted in the next 5-10years. This is also to support the futurerequirement of increasing Internet-enabledappliances, applications and electronicdevices.Chart 1-2Broadband Penetration Rate(per 100 household)Penetration rate (%)60.050.050.0airports, the construction and upgradingof roads and implementation of theIpoh-Padang Besar and Seremban-Gemaselectrified double tracking rail project, tocater for the increasing traffic volumeand international trade. Strategic alliancesbetween domestic transport serviceproviders with global partners will bepromoted to leverage on their expertiseand international networks.Figure 1-2Railway Network40.0THAILAND30.020.010.0020.015.511.07.02005 2006 2007 2008Year30.02009 2010Padang BesarAlor SetarButterworthSungai PetaniBukit MertajamRantauPanjangTumpatPasir MasGua MusangSOUTHCHINA SEAIPOHKuala LipisSource: Malaysian ICT 2007 and MalaysianCommunications and MultimediaCommissionSTRAITS OFMALACCATanjung MalimBatu CavesRawangMentakabSentulPort KUALA LUMPURKlangSerembanGemasPort DicksonInfrastructure Network and TransportSystemTo accelerate and support growth as wellas improve connectivity, efforts will betaken to increase infrastructure networkand coverage. In this regard, a transportmaster plan will be formulated to guidethe development of a more comprehensiveinfrastructure network and integratedmultimodal transport system. Additionalintegrated transport terminals will bedeveloped, particularly in major citiesto increase integration between variousmodes of transport and improve networkefficiency. Efforts will also be focusedon improving capacity and enhancingefficiency of the infrastructure facilities,including the upgrading of ports andLEGEND:Double TrackDouble Track(Under Construction)Single TrackSustainable Energy SupplyKluangJohor Bahru PasirPort of Tanjung Pelepas GudangTanjung PagarSustainable and quality supply ofenergy is critical to ensure Malaysia’scompetitiveness. This has to be addressedwithin the context of rising energy pricesand the need to conserve depletingenergy resources. Sustainable developmentof the energy sector will be emphasisedto ensure long-term energy security. Thisincludes expanding generation capacityas well as strengthening transmissionsystem and distribution networks inSabah and Sarawak. Energy efficiency (EE)32


Moving the Economy up the Value Chaininitiatives will be intensified to encourageproductive and prudent use of energyresources. Energy pricing and subsidyschemes will be continuously reviewed inthe light of depleting energy resourcesand rising production cost as well as theneed to encourage optimal allocation ofresources. Efforts will be undertaken tointensify R&D on clean and cost-effectiveindigenous renewable energy-based (RE)technologies to expedite the developmentof alternative sources of energy towardsenhancing energy security. Studies willalso be undertaken to formulate newenergy policies and strategies includingfuel security, RE and EE.Chart 1-3Gas Supply and Demand inPeninsular MalaysiaMillion standard cubic feetper day4,4004,0003,6003,2002,8002,4002,0001,6001,2008004000Gas supply fromexisting fieldsProposed newfield developmentProjectedgas demandImportrequirement2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027YearInstitutional and RegulatoryFrameworkThe institutional and regulatory frameworkwill be improved to support developmentof promoted areas. Comprehensive marketdrivenpolicies and regulations, includingensuring safety and quality of productsand services, will be promoted to facilitateentrepreneurs and service providersmarket their products effectively. TheFederal Agriculture Marketing Authority(FAMA) Act, 1965 will be amended toenable registration of operators engagedin post-harvest handling and marketingof agricultural produce, particularly fruitsand vegetables. The Task Force on ServicesStatistics (TFSS) will undertake a study todevelop profiles of the industries in theservices sector and improve collectionof statistics. Dissemination of up-todateinformation to facilitate trade willbe enhanced through the Ministry ofInternational Trade and Industry andAgencies Trade and Industry InformationExchange (MATRIIX) system. A Fair TradePractices Act will be introduced topromote conducive market environmentand enhance Malaysia’s competitiveness.Progressive liberalisation in areas criticalto the development of healthy andfair operations will be continued. Toimprove IP protection, more IP courtswill be established and the capabilitiesand capacities of IP practitioners will beenhanced.Private Sector ParticipationGreater private sector participation iscrucial to push the economy up thevalue chain. Policies and regulations willbe further liberalised to facilitate andattract more private investment in keyeconomic sectors. To enhance domesticmarket penetration for takaful and retakaful,the Malaysia International IslamicFinancial Centre (MIFC) will facilitate takafuloperators to embark on promotionalprogrammes that will increase the sizeof takaful uptake, particularly for megaprojects. In addition, private institutions ofhigher learning and health providers willbe encouraged to improve their facilitiesand services to ensure the success ofeducation and health tourism.To improve productivity and competitivenessin manufacturing, SMEs will be encouragedto strengthen collaboration with MNCs tobecome suppliers of parts and components.Knowledge-intensive SMEs targeting at33


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010the global market will be nurtured. Thevarious incentive schemes, includinggrants, will be streamlined and theirapplication processes simplified to attractnew investments in high technology andknowledge-based projects. Private sectorinvestment in promoted areas will beencouraged by providing a conduciveenvironment including by improvingpublic safety and social infrastructureand customised incentives. Better supportservices and speedier patent approvals willalso be provided.Private sector investment in large-scaleagriculture ventures, particularly foodcrops, will be further promoted to supportthe national food security measures,among others, through the provisionof incentives and adequate agriculturalinfrastructure in the designated foodproducing areas. Risk management andmitigation measures will also be promotedfor selected food crops. In addition, effortswill be undertaken to establish a centralinformation system on suitable land foragriculture with the cooperation of stategovernments and land owners.Identifying and Accelerating NewSources of GrowthNew sources of growth within the services,manufacturing and agriculture sectors willbe identified and resources channelledfrom laboratory-to-market. In addition,the supporting infrastructure, regulatoryregime and appropriate incentives will beprovided to accelerate growth of thesenew activities.In the services sector, three key areas,namely tourism, Islamic finance andprofessional services were identifiedas new sources of growth. Customisedtourism packages based on specificproducts and locations, including foreducation and health, will be developedand promoted through public-privatecollaboration. These customised packageswill be targeted at the growing middleclass in the emerging economies. Islamicfinancial products and services, particularlytakaful and re-takaful, will be furtherpromoted while the role of the MIFCwill be enhanced to promote Malaysiaas a world recognised Islamic financialcentre. Construction and professionalservices were identified as potentialexport earners with the liberalisationof the services sector and the signingof mutual recognition arrangements.Towards this end, services providers will beencouraged to enhance their professionalcapabilities and expertise to capitalise onthese opportunities.In the manufacturing sector, effortswill be intensified to encourage thedevelopment of domestic and regionalclusters of industries identified underthe Third Industrial Master Plan as newsources of growth such as E&E, medicaldevices and petrochemicals. Supportservices utilising advanced technologiessuch as nanotechnology, photonics, laserand fuel cells will be established to meetthe needs of the clusters. Customisedincentives will continue to be offeredto MNCs to establish and expand theiroperations in specialised industrial parksin these identified areas.To harness the potential of biotechnologyas a new source of growth and wealthcreation, M alaysian biotechnologycompanies will be encouraged to identifyand build upon niche products andservices. Biotechnology applications inagriculture, healthcare and industrial usewill be expanded through acquisition ofplatform technology, intensifying R&D andadoption of good laboratory practices toenhance the value added of products.Development of new sources of growth inagriculture will be undertaken selectivelyto ensure more focused efforts andefficient allocation of resources. The Halal34


Moving the Economy up the Value ChainIndustry Development Master Plan willguide the development of Malaysia as aglobal halal hub and a leading countryin the development of halal products.Customised incentives will be providedto attract private investment in theproduction of halal products includingspeciality processed food, cosmetics,pharmaceutical and healthcare products.The cultivation of kenaf will be encouragedas an important source of supply for highendfibre, raw material for biocompositesproducts and animal feed. Greater supportwill be provided to promote downstreamactivities of key agriculture commoditiesthat yield higher value-added such aspalm oil-based oleochemical derivativesand advanced rubber materials. Other newsources of growth in agriculture such asdeep sea fishing, seaweed, ornamental fishand herbs and spices industries will befurther developed and promoted.To sustain Malaysia’s position as amultimedia and ICT hub, three technologyareas were identified, namely thewireless sensor network for applications,particularly in agricultural farming anddisaster management; predictive analysistechnology for software applications,particularly in Islamic financing, retail andlogistics industries; and 3-DimensionalInternet technology for development ofmultimedia digital content, including ineducation, gaming and entertainment. TheGovernment will continue to promoteMalaysia as a preferred destination forSSO activities and attract leading globalICT players and MNCs investment in thenew growth areas.Strategies and initiatives will be undertakento stimulate private venture capitalfinancing of new growth areas. In addition,development financial institutions willbe encouraged to offer more attractiveterms and conditions on financing offered,particularly for new agriculture venturesand biotechnology. The financial advisoryprogramme under Bank Negara Malaysiawill place greater emphasis on agricultureto facilitate the financing of agricultureventures. Financial institutions and venturecapitalists will be encouraged to enterinto strategic partnerships with partieswith profound technical and businessknowledge to ensure credible evaluationof projects in the new growth areas.Expanding Markets for MalaysianProducts and ServicesMalaysian products and services will beintensively promoted to new markets inAfrica, west and south Asia as well as theEuropean Union and ASEAN. Trade missionswill be increased and new marketingnetworks strengthened in these regions.In line with the greater integration ofthe ASEAN economies, focus will be onunlocking the potentials of cross-bordersynergies. Marketing information systemsunder different agencies such as MalaysianExternal Trade Development Corporation(MATRADE), FAMA and MDeC will beupgraded and integrated to provide easyaccess to information for traders. Imagebuilding programmes on branding Malaysiaand Malaysian brand products will befurther intensified.Financial institutions will be encouragedto support Malaysian companies toventure abroad. Assistance will alsobe provided to members of trade andindustry associations to undertake exportpromotion programmes as well as providesupport for logistics and warehousing.Incentives based on outcomes will beprovided to the private sector to undertakeexport promotion activities.Access of Malaysian products and servicesinto the global market will be facilitatedthrough mutual recognition arrangements,free trade agreements and multilateralarrangements. Strategic alliances andjoint-ventures between local companiesand established MNCs will be promotedGreater accessibilityinto new markets...35


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010to widen the marketing network for agrobased,manufactured and ICT productsand services. In addition, Malaysianstandards and technical regulationswill be harmonised with internationallyrecognised standards to ensure greateraccess into the global market. Malaysia’shalal certification will be futher promotedas a globally recognised halal standard toensure greater accessibility of Malaysianhalal products into the internationalm a r k e t . I n a d d i t i o n , c o o p e r a t i o nwith the International Halal IntegrityAlliance will be initiated to promotehalal certification based on MalaysianStandards including MS 1500:2004 2 .Pro-market incentives will be expandedto encourage SMEs to undertake qualityimprovements and adopt advancedtechnology applications.IV. OUTCOMES, 2010The key outcomes for the various sectorsare as shown in Box 1-2.Box 1-2Expected Outcomes, 2010CommitmentOutcomeEnhancing Productivity and Competitiveness••Increasing value added of the services sector by 7.9% toRM948 billionIncreasing share of services sector to GDP to 55.7%• Increased value added and share to GDP of the servicessector••Targeting 24.6 million tourist arrivals with receipts ofRM59.4 billionIncreasing tourist per capita expenditure to RM2,417• Increased contribution of tourism to foreign exchangeearnings•Increasing value added of the manufacturing sector by3.5% to RM168.9 billion•y Targeted value added of major subsectors• Increased investment and value added in themanufacturing sector--------E&EM&EPetrochemicalTransport equipmentRM32.9 billionRM19.2 billionRM20.5 billionRM16.2 billion•yAverage annual investment level of RM27.5 billion.Target by major subsectors-- E&ERM14.0 billion-- M&ERM1.7 billion-- Petrochemical RM1.7 billion-- Transport equipment RM2.1 billion-- Medical devices RM0.8 billion2‘Halal Food: Production, Preparation, Handling and Storage - General Guidelines‘ (MS 1500: 2004).36


Moving the Economy up the Value Chain•CommitmentIncreasing share of private sector expenditure in R&D to1.1% of GDPOutcome• Increased private sector expenditure in R&D•Increasing the number of SMEs with 4 star ratings as wellas creating SMEs with 5 star ratings under the SCOREprogramme• Increased participation of SMEs in the global market•Increasing production and local processing of industrialcommodities• Increased production and local processing of industrialcommoditiesProductionLocal processingPalm Oil 16.5% to 18.4 million MT 0.1% to 1.5 million MTRubber 8.3% to 1.3 million MT 3.5% to 437,000 MTCocoa 34.3% to 47,000 MT 30.4% to 30,000 MT•Increasing food production and self sufficiency level (SSL)• Increased food production and achieve SSLProduction% SSLRice 27.4% to 2.9 million MT 86Fisheries 33.4% to 1.8 million MT 103Beef 31.2% to 45,000 MT 28Poultry 18.2% to 1.3 million MT 122••Increasing ICT value added to RM30 billionIncreasing ICT-related jobs to 500,000• Increased value added and jobs in the ICT sector••••Construction of East Coast Expressway Phase II fromKuantan - Kuala Terengganu, Senai-Desaru andKemuning-Shah Alam highwaysConstruction of roads to link resettlement areas with ruralindustrial areas and estates, particularly in Sabah andSarawakUpgrading of Kuching, Kota Kinabalu, Kuala Terengganuand Labuan airportsConstruction of Seremban-Gemas and Ipoh-Padang Besarelectrified double tracking rail projects. The projects areexpected to be completed in 2012 and 2013, respectively• Increased capacity, efficiency and network coverage oftransport infrastructureGenerating New Sources of Growth••Increasing earnings of health tourism to RM1 billionIncreasing earnings of education tourism to RM2 billion• Health and education tourism established as majortourism products37


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Commitment• Takaful to capture 20% of total assets in the insurance andtakaful industry• Islamic banking to capture 20% of total assets in thebanking system• Developing International Syariah Research Academy forIslamic Finance to undertake research in muamalatOutcome• Malaysia as Islamic banking and finance hub• Establishing 200 BioNexus status companies• Achieve targeted number of BioNexus status companies•Increasing production• Increased production of new sources of growthCommoditiesKenafDeep sea fishingSeaweedOrnamental fishHerbs and spicesProduction target45,000 MT380,800 MT95,000 MT860 million tails103,000 MT•••Increasing export from MSC status companies to RM4.9billionIncreasing number of MSC status companies to 2,500Increasing ICT global players’ investment in high-valuedoutsourcing• Malaysia as a multimedia and ICT hub and as an attractivedestination for SSO activitiesExpanding Markets for Malaysian Products and Services•Increasing presence of Malaysian professionals in Africa,West Asia and new emerging economies• Increased export of professional services•Increasing number of Malaysian Islamic financial productsoffered to Africa, ASEAN and Asia• Expanded global presence of Malaysian Islamic finance•Increasing share of tourist arrivals from non-ASEAN marketto 30%• Higher tourist arrivals from non-ASEAN market••Targeting new high growth markets in North East Asia andemerging markets in South Asia, West Asia and EasternEuropeIncreasing export value of selected manufacturingsubsectors:•y E&ERM960.1 billion•y Chemical products RM127.0 billion•y Metal products RM90.3 billion•y Petroleum products RM75.7 billion• Increased share of exports to new markets and increasedexport value38


Moving the Economy up the Value Chain••••CommitmentIncreasing value of agriculture exports to RM72 billionIncreasing export value of agro-based products to RM58.7billionExpanding market for frozen food to Australia and theNetherlandsExpanding market for processed food to People’s Republicof China, Japan, the Netherlands and Saudi ArabiaOutcome• Increased exports of agriculture and agro-basedproducts•Penetrating new markets in People’s Republic of China,India and West Asia for multimedia digital content foreducation and entertainment• Secured new markets for ICT products and servicesV. CONCLUSIONThe growth in key sectors of the economy duringthe first half of the Ninth Plan was supported byadoption of new technologies and best practicesas well as greater R&D. The highly competitiveglobal environment requires Malaysia to reshapeits economic structure and strengthen its resiliencethrough concerted efforts with greater privatesector participation. To move the economy up thevalue chain, more synergistic and focused effortswill be undertaken to increase productivity andcompetitiveness, generate new sources of growthand expand into new markets.39


Mid-Term Review of the Ninth Malaysia Plan, 2006-201040


Moving the Economy up the Value Chain1thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010moving the economy upthe value chain23


Moving the Economy up the Value Chainmoving the economy up thevalue chainI. INTRODUCTIONDuring the first half of the Ninth Planperiod, steady progress was made inmoving the economy up the value chain.In the services sector, advancementswere made in the new growth areassuch as information and communicationstechnology (ICT), telecommunications,tourism, Islamic finance and sharedservices and outsourcing (SSO). Growthin the manufacturing sector was mainlydriven by domestic-oriented industries.The continuous transformation of thesector to capital- and skill-intensive andhigh-technology activities was supportedby research and development (R&D),design and development and goodmanufacturing practices. Growth in theagriculture sector was contributed mainlyby agricultural industrial commodities,particularly palm oil, rubber and sawlogs,and strong growth in the fisheries andlivestock subsectors. The adoption ofnew technologies and good agriculturepractices further modernised and increaseddynamism and competitiveness of thesector.I n m oving fo r w a rd, t h e e n a b l i n genvironment will be further improvedincluding through deregulation andliberalisation to increase private sectorparticipation and enhance efficiencyacross all sectors. This will support andintensify the development of knowledgeintensiveactivities and adoption ofadvanced technologies. In addition, thesupply of human capital that meets therequirements of industries and new growthactivities will be increased, inter-agencycoordination improved and utilisation ofresources optimised.II. Key results, 2006-2007Migration to higher value added andknowledge-intensive activities alongthe value chain was achieved in severalindustries in the key economic sectors.New growth areas identified under theNinth Plan were also at various stagesof development. The progress achievedin improving productivity, generating newsources of growth and expanding intonew markets is as shown in Box 1-1.25


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 1-1Key Results, 2006-2007CommitmentOutputServicesTourism•I ntensifying m a r k e t i n g a n d p romotionactivities•Tourist arrivals reached 21 million with receipts of RM46.1billion in 2007 compared with 16.4 million tourist arrivalswith receipts of RM31.9 billion in 2005•Tourist per capita expenditure increased from RM1,945 in2005 to RM2,198 in 2007•Average occupancy rate of hotels increased to 70.0% in2007 from 63.5% in 2005•Developing innovative tourism products andservices•637,975 foreign patients sought treatment contributingRM457.5 million to foreign exchange earnings•Enrolment of foreign students at tertiary level totalled 92,318with foreign exchange earnings of RM1.4 billion•2.8 million participated in Meetings, Incentives, Conventionsand Exhibitions (MICE) with receipts of RM5.9 billion•1,503 foreigners participated in Malaysia My Second HomeProgramme in 2007 resulting in RM43.8 million in acquisitionof residential propertiesFinance•Building an internationally competitive financialsector•Market presence of 6 domestic banking groups operatingoverseas increased from 12 countries in 2005 to 19 countriesin 2007•Total assets of domestic banking groups overseas increasedfrom RM88.8 billion in 2005 to RM111.6 billion in 2007•16 foreign banks, including 3 Islamic banks, operated inMalaysia in 2007•Promoting competitive domestic financialinstitutions•Pre-tax profit of the banking institutions increased fromRM12.4 billion in 2005 to RM17.7 billion in 2007•Assets of the banking institutions increased from RM958.8billion in 2005 to RM1,221.5 billion in 2007•Productivity measured by pre-tax profit per employeeincreased from RM130,297 in 2005 to RM168,094 in 2007•Developing Malaysia as an international centre forIslamic banking and finance as well as initiatingniche capital market specialisation at regionaland global levels••Malaysia secured 27% or US$1.7 billion of global takafulpremium in 200668.9% of the global outstanding sukuk originated in Malaysiaat end 2007•Market capitalisation of Islamic Real Estate InvestmentTrusts (REITs) increased by 192.7% to RM995.3 million atend 200726


Moving the Economy up the Value ChainCommitmentOutputDistributive trade• Strengthening the modes of distribution • Total sales turnover reached RM293.9 billion in 2007 from•RM198.1 billion in 2005Franchisors increased from 206 in 2005 to 267 in 2007• Turnover of direct sales increased to RM8.8 billion in 2007from RM6.6 billion in 2005• Accelerating the growth of e-commerce • Estimated value of e-commerce transactions increased fromUS$8.8 billion in 2005 to US$20.9 billion in 2007Professional services• Promoting cross border investment• As at end 2007:•y 111 firms exported services to 33 countries•y Malaysian contractors secured 76 projects valued atRM45.1 billion•y 333 projects in 23 countries were completed valuedat RM23 billionManufacturing• Promoting new sources of industrial growth • 51 companies granted BioNexus status with approved•investment of RM1 billion65 R&D findings commercialised and 13,732 patents•approvedRM2.3 billion spent on R&D in manufacturing activities in•200610 projects with high-end R&D activities involving RM588.4•million investments were implemented in areas suchas integrated wafer fabrication, advanced integratedcircuit packaging, and precision test and measurementequipment4 new petrochemical projects with investment totalling RM4billion were implemented•Providing more focused incentives for high valueadded industries•66 projects with FDI worth RM33.3 billion were approved,mainly in Electrical and Electronics (E&E), petroleum products,ICT and Machinery and Equipment (M&E)•Capital investment per employee in approved projectsincreased from RM278,126 in 2005 to RM613,600 in 2007•Developing innovation-driven Small and MediumEnterprises (SMEs)•532 SMEs registered under the Industrial Linkages Programmelinked to multinational companies (MNCs) and largecompanies in 2006•528 SMEs rated under the SMEs Competitive Rating forEnhancement 1 (SCORE) assessment programme1SCORE is an assessment tool to measure the level of growth of enterprises in terms of innovation, technical capabilities, production capacities,financial and business performance, quality systems and management capabilities as well as identify areas of strengths and weaknesses of SMEs.27


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutputAgriculture• Venturing into new sources of growth • Increase in production:•y Kenaf - from 1,163 metric tonnes (MT) in 2005 to 4,185MT in 2007•y Deep sea fishing - from 221,228 MT in 2005 to 264,000MT in 2007•y Ornamental fish - from 458 million tails in 2005 to 679million tails in 2007•y Livestock - from 1.7 million MT in 2005 to 1.9 millionMT in 2007•y Seaweed - from 46,000 MT in 2005 to 68,000 MT in2007•y Herbs and spices - from 7,098 MT in 2005 to 13,251MT in 2007• Expanding agro-based processing activities • Investment in food manufacturing totalled RM2 billion• Investment in manufacturing of rubber products totalled•RM918 millionInvestment in manufacturing of furniture and fixturestotalled RM596 million•Strengthening marketing and globalnetworking•Total export value of agriculture commodities increased fromRM37.5 billion in 2005 to RM52.4 billion in 2007•Total export value of agro-based products increased fromRM35.6 billion in 2005 to RM45.3 billion in 2007ICT•Enhancing Malaysia’s position as a global ICTand multimedia hub•6 new Multimedia Super Corridor (MSC) cybercentresdeveloped•MSC status companies increased from 1,421 companies in2005 to 1,994 companies in 2007•Number of jobs in MSC increased from 33,851 in 2005 to50,821 jobs in 2006• Expanding communications network• Broadband penetration increased from 11.0% per 100•household in 2005 to 15.5% per 100 household in 2007Internet penetration increased from 7.0% per 100 household•in 2005 to 19.3% per 100 household in 2007Subscription of cellular telephone increased from 74.1 per 100population in 2005 to 85.1 per 100 population in 200728


Moving the Economy up the Value ChainCommitmentOutputEnergy• Expanding electricity generation capacity • Coal-based plant in Johor (2,100 megawatts (MW ))was commissioned in 2007 and construction of theBakun Hydroelectric project in Sarawak (2,400 MW) wascontinued• Enhancing transmission and distributionsystem••••East-West Interconnection Grid in Sabah was completedUpgrading of transmission system commenced in KotaKinabalu, Sandakan and Tawau, SabahRehabilitation of distribution networks in Perak, constructionof regional control centres and replacement of substationassets commencedReinforcement of distribution system commenced in majortowns in Sabah•Enhancing productivity and efficiency of electricitysupply system•System Average Interruption Duration Index (minutes/customer/year) improved:•y•y•yPeninsular Malaysia: 147 in 2005 to 88 in 2007Sabah: 4,109 in 2005 to 2,717 in 2007Sarawak: 310 in 2005 to 286 in 2007Infrastructure• Increasing capacity and improving efficiency oftransport infrastructure•••••••A total of 32,964 kilometres (km) of roads upgraded/builtincluding 4,824 km in Sabah and 7,258 km in SarawakButterworth Outer Ring Road (12.1 km) and Kuala Lumpur–Putrajaya Highway (26 km) completedRawang-Ipoh electrified double tracking rail project (179km) completedTotal railway freight traffic increased from 4.0 million tonnesin 2005 to 4.7 million tonnes in 2007Total container handled by rail increased from 310,011twenty-foot equivalent units (TEU) in 2005 to 333,688 TEUin 2007Alor Setar airport upgraded and a low-cost carrier terminalat KLIA builtTotal container handled at Malaysian ports increased from12.0 million TEU in 2005 to 15.3 million TEU in 200729


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010III.MOVING FORWARD,2008-2010The wave of globalisation and rapidtechnological progress, leading to a highlycompetitive global environment, requiresMalaysia to reshape its economic structureand strengthen its productive capacity.Efficient use of resources, particularly innew knowledge-intensive high-technologyactivities that yields higher value added,is critical in shifting the economy furtherup the value chain.Three major pillars underpinning thethrust are enhancing productivity andcompetitiveness, generating new sourcesof growth and expanding markets forMalaysian products and services. Efficientallocation and use of resources, focusingon higher value added activities wherethe nation has comparative advantage aswell as adoption of good practices andadvanced technology will significantlyenhanced productivity and competitiveness.Generation of new sources of growth willenhance and sustain the growth trajectorytowards achieving high-income status. Thiswill lead to greater economic dynamismFigure 1-1Moving the Economy upthe Value ChainEnhancingProductivity&CompetitivenessMOVING UPTHE VALUECHAINGeneratingNew Sourcesof GrowthExpandingMarket forMalaysianProducts &ServicesPrivate Sector as the Engine of Growthand resilience for Malaysia in facing globalchallenges. Greater liberalisation of theworld economy will lead to expansionof markets for Malaysian products andservices. Measures will be introducedto position Malaysia strategically in theglobal supply chain.Enhancing Productivity andCompetitivenessHuman CapitalThe supply of competent workforce withthe requisite skills in key sectors of theeconomy, particularly in Islamic bankingand finance, high-end retailing, creativemultimedia content development, advancedmaterials, biotechnology, mechatronicsand agriculture will be increased in linewith industry demand. The hiring ofexpatriates in these specialised areas willbe facilitated. In addition, the intake intoskills training institutes and institutionsof higher learning as well as the offeringof specialised courses will be expanded.Public-private sector collaboration forexample the knowledge workers skillsdevelopment programme will also bepromoted in specific areas. universityindustrycollaboration and linkages willbe enhanced to improve curriculumdesign to produce graduates with therelevant knowledge and skills requiredby industry.In the services sector, industry playersand associations will be encouraged toenhance professionalism by providingtraining for their employees and membersin areas such as customer service relations,hospitality and business ethics. For theIslamic financial subsector, the InternationalCentre for Education in Islamic Financewill focus on increasing the supply ofqualified workforce. To revitalise interestin agriculture, greater allocation ofscholarships and education loans will beprovided and the number of courses andtraining programmes in higher learning30


Moving the Economy up the Value Chaininstitutions will be increased. Awarenessof career opportunities in services andagriculture sectors will be enhancedthrough nationwide campaigns.Skills upgrading programmes for SMEsprovided by the Small and MediumIndustries Development Corporation(SMIDEC) in collaboration with otheragencies will be further intensified.Collaboration between multinationaland large companies with SMEs will beleveraged to enable these SMEs to becomeown-design and own-brand manufacturers.Multimedia Development Corporation(MDeC) through its technopreneurdevelopment programmes will strengthenbusiness skills and enterprise developmentof ICT-related SMEs and increase thenumber of competent ICT professionalsand business managers.Research and DevelopmentRecognising the critical role of R&D, theGovernment will continue to supportfundamental and applied research toenhance productivity and competitiveness.Chart 1-1Gross R&D Expenditure, 2007(% of GDP)3.2Japan3.0Korea2.5Taiwan2.4SingaporePeople’sRepublic of ChinaSource: World Competitiveness Yearbook 2007and National R&D Survey1.30.8India0.6Malaysia0.3ThailandPotential research areas and next generationtechnology products for commercialexploitation will be identified and thefunds for R&D and commercialisation ofits findings will be realigned to ensurethe optimal utilisation of resources. TheGovernment will also promote technologyacquisition to speed up market-driveninnovation.Efforts will be undertaken to facilitate thecommercialisation of research findingsincluding through public-private sectorcollaboration in market-driven research.Among the initiatives will be thesharing of facilities and infrastructure,particularly in developing new high valueaddedproducts; a strong laboratory-tomarketintermediation programme; andstrengthening of technology licensingoffices in higher learning institutions.In addition, the existing database onresearch findings with potential forcommercialisation will be expandedand made accessible to investors. Moretechnology-foresight studies in selectedareas will be undertaken to provideSMEs with the latest information on thebest and most appropriate technologiesavailable in various subsectors.ICT InfrastructureHigh speed broadband infrastructure,particularly in urban and industrial centresis a key enabler to provide a conduciveenvironment for making Malaysia apreferred choice for private investmentand knowledge-intensive activities. Theroll-out of broadband infrastructure willbe accelerated through a public-privatepartnership initiative to achieve 50%household penetration by 2010. Demandfor broadband will be stimulated byexpanding e-Government applications,developing local content and applicationswith private sector participation andintensifying awareness campaigns. Gradualmigration will be made to Internet ProtocolMarket-driveninnovation...Accelerating broadbandroll-out...31


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010version 6 (IPv6) from the current Internetprotocol addresses based on the IPv4,which will be exhausted in the next 5-10years. This is also to support the futurerequirement of increasing Internet-enabledappliances, applications and electronicdevices.Chart 1-2Broadband Penetration Rate(per 100 household)Penetration rate (%)60.050.050.0airports, the construction and upgradingof roads and implementation of theIpoh-Padang Besar and Seremban-Gemaselectrified double tracking rail project, tocater for the increasing traffic volumeand international trade. Strategic alliancesbetween domestic transport serviceproviders with global partners will bepromoted to leverage on their expertiseand international networks.Figure 1-2Railway Network40.0THAILAND30.020.010.0020.015.511.07.02005 2006 2007 2008Year30.02009 2010Padang BesarAlor SetarButterworthSungai PetaniBukit MertajamRantauPanjangTumpatPasir MasGua MusangSOUTHCHINA SEAIPOHKuala LipisSource: Malaysian ICT 2007 and MalaysianCommunications and MultimediaCommissionSTRAITS OFMALACCATanjung MalimBatu CavesRawangMentakabSentulPort KUALA LUMPURKlangSerembanGemasPort DicksonInfrastructure Network and TransportSystemTo accelerate and support growth as wellas improve connectivity, efforts will betaken to increase infrastructure networkand coverage. In this regard, a transportmaster plan will be formulated to guidethe development of a more comprehensiveinfrastructure network and integratedmultimodal transport system. Additionalintegrated transport terminals will bedeveloped, particularly in major citiesto increase integration between variousmodes of transport and improve networkefficiency. Efforts will also be focusedon improving capacity and enhancingefficiency of the infrastructure facilities,including the upgrading of ports andLEGEND:Double TrackDouble Track(Under Construction)Single TrackSustainable Energy SupplyKluangJohor Bahru PasirPort of Tanjung Pelepas GudangTanjung PagarSustainable and quality supply ofenergy is critical to ensure Malaysia’scompetitiveness. This has to be addressedwithin the context of rising energy pricesand the need to conserve depletingenergy resources. Sustainable developmentof the energy sector will be emphasisedto ensure long-term energy security. Thisincludes expanding generation capacityas well as strengthening transmissionsystem and distribution networks inSabah and Sarawak. Energy efficiency (EE)32


Moving the Economy up the Value Chaininitiatives will be intensified to encourageproductive and prudent use of energyresources. Energy pricing and subsidyschemes will be continuously reviewed inthe light of depleting energy resourcesand rising production cost as well as theneed to encourage optimal allocation ofresources. Efforts will be undertaken tointensify R&D on clean and cost-effectiveindigenous renewable energy-based (RE)technologies to expedite the developmentof alternative sources of energy towardsenhancing energy security. Studies willalso be undertaken to formulate newenergy policies and strategies includingfuel security, RE and EE.Chart 1-3Gas Supply and Demand inPeninsular MalaysiaMillion standard cubic feetper day4,4004,0003,6003,2002,8002,4002,0001,6001,2008004000Gas supply fromexisting fieldsProposed newfield developmentProjectedgas demandImportrequirement2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027YearInstitutional and RegulatoryFrameworkThe institutional and regulatory frameworkwill be improved to support developmentof promoted areas. Comprehensive marketdrivenpolicies and regulations, includingensuring safety and quality of productsand services, will be promoted to facilitateentrepreneurs and service providersmarket their products effectively. TheFederal Agriculture Marketing Authority(FAMA) Act, 1965 will be amended toenable registration of operators engagedin post-harvest handling and marketingof agricultural produce, particularly fruitsand vegetables. The Task Force on ServicesStatistics (TFSS) will undertake a study todevelop profiles of the industries in theservices sector and improve collectionof statistics. Dissemination of up-todateinformation to facilitate trade willbe enhanced through the Ministry ofInternational Trade and Industry andAgencies Trade and Industry InformationExchange (MATRIIX) system. A Fair TradePractices Act will be introduced topromote conducive market environmentand enhance Malaysia’s competitiveness.Progressive liberalisation in areas criticalto the development of healthy andfair operations will be continued. Toimprove IP protection, more IP courtswill be established and the capabilitiesand capacities of IP practitioners will beenhanced.Private Sector ParticipationGreater private sector participation iscrucial to push the economy up thevalue chain. Policies and regulations willbe further liberalised to facilitate andattract more private investment in keyeconomic sectors. To enhance domesticmarket penetration for takaful and retakaful,the Malaysia International IslamicFinancial Centre (MIFC) will facilitate takafuloperators to embark on promotionalprogrammes that will increase the sizeof takaful uptake, particularly for megaprojects. In addition, private institutions ofhigher learning and health providers willbe encouraged to improve their facilitiesand services to ensure the success ofeducation and health tourism.To improve productivity and competitivenessin manufacturing, SMEs will be encouragedto strengthen collaboration with MNCs tobecome suppliers of parts and components.Knowledge-intensive SMEs targeting at33


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010the global market will be nurtured. Thevarious incentive schemes, includinggrants, will be streamlined and theirapplication processes simplified to attractnew investments in high technology andknowledge-based projects. Private sectorinvestment in promoted areas will beencouraged by providing a conduciveenvironment including by improvingpublic safety and social infrastructureand customised incentives. Better supportservices and speedier patent approvals willalso be provided.Private sector investment in large-scaleagriculture ventures, particularly foodcrops, will be further promoted to supportthe national food security measures,among others, through the provisionof incentives and adequate agriculturalinfrastructure in the designated foodproducing areas. Risk management andmitigation measures will also be promotedfor selected food crops. In addition, effortswill be undertaken to establish a centralinformation system on suitable land foragriculture with the cooperation of stategovernments and land owners.Identifying and Accelerating NewSources of GrowthNew sources of growth within the services,manufacturing and agriculture sectors willbe identified and resources channelledfrom laboratory-to-market. In addition,the supporting infrastructure, regulatoryregime and appropriate incentives will beprovided to accelerate growth of thesenew activities.In the services sector, three key areas,namely tourism, Islamic finance andprofessional services were identifiedas new sources of growth. Customisedtourism packages based on specificproducts and locations, including foreducation and health, will be developedand promoted through public-privatecollaboration. These customised packageswill be targeted at the growing middleclass in the emerging economies. Islamicfinancial products and services, particularlytakaful and re-takaful, will be furtherpromoted while the role of the MIFCwill be enhanced to promote Malaysiaas a world recognised Islamic financialcentre. Construction and professionalservices were identified as potentialexport earners with the liberalisationof the services sector and the signingof mutual recognition arrangements.Towards this end, services providers will beencouraged to enhance their professionalcapabilities and expertise to capitalise onthese opportunities.In the manufacturing sector, effortswill be intensified to encourage thedevelopment of domestic and regionalclusters of industries identified underthe Third Industrial Master Plan as newsources of growth such as E&E, medicaldevices and petrochemicals. Supportservices utilising advanced technologiessuch as nanotechnology, photonics, laserand fuel cells will be established to meetthe needs of the clusters. Customisedincentives will continue to be offeredto MNCs to establish and expand theiroperations in specialised industrial parksin these identified areas.To harness the potential of biotechnologyas a new source of growth and wealthcreation, M alaysian biotechnologycompanies will be encouraged to identifyand build upon niche products andservices. Biotechnology applications inagriculture, healthcare and industrial usewill be expanded through acquisition ofplatform technology, intensifying R&D andadoption of good laboratory practices toenhance the value added of products.Development of new sources of growth inagriculture will be undertaken selectivelyto ensure more focused efforts andefficient allocation of resources. The Halal34


Moving the Economy up the Value ChainIndustry Development Master Plan willguide the development of Malaysia as aglobal halal hub and a leading countryin the development of halal products.Customised incentives will be providedto attract private investment in theproduction of halal products includingspeciality processed food, cosmetics,pharmaceutical and healthcare products.The cultivation of kenaf will be encouragedas an important source of supply for highendfibre, raw material for biocompositesproducts and animal feed. Greater supportwill be provided to promote downstreamactivities of key agriculture commoditiesthat yield higher value-added such aspalm oil-based oleochemical derivativesand advanced rubber materials. Other newsources of growth in agriculture such asdeep sea fishing, seaweed, ornamental fishand herbs and spices industries will befurther developed and promoted.To sustain Malaysia’s position as amultimedia and ICT hub, three technologyareas were identified, namely thewireless sensor network for applications,particularly in agricultural farming anddisaster management; predictive analysistechnology for software applications,particularly in Islamic financing, retail andlogistics industries; and 3-DimensionalInternet technology for development ofmultimedia digital content, including ineducation, gaming and entertainment. TheGovernment will continue to promoteMalaysia as a preferred destination forSSO activities and attract leading globalICT players and MNCs investment in thenew growth areas.Strategies and initiatives will be undertakento stimulate private venture capitalfinancing of new growth areas. In addition,development financial institutions willbe encouraged to offer more attractiveterms and conditions on financing offered,particularly for new agriculture venturesand biotechnology. The financial advisoryprogramme under Bank Negara Malaysiawill place greater emphasis on agricultureto facilitate the financing of agricultureventures. Financial institutions and venturecapitalists will be encouraged to enterinto strategic partnerships with partieswith profound technical and businessknowledge to ensure credible evaluationof projects in the new growth areas.Expanding Markets for MalaysianProducts and ServicesMalaysian products and services will beintensively promoted to new markets inAfrica, west and south Asia as well as theEuropean Union and ASEAN. Trade missionswill be increased and new marketingnetworks strengthened in these regions.In line with the greater integration ofthe ASEAN economies, focus will be onunlocking the potentials of cross-bordersynergies. Marketing information systemsunder different agencies such as MalaysianExternal Trade Development Corporation(MATRADE), FAMA and MDeC will beupgraded and integrated to provide easyaccess to information for traders. Imagebuilding programmes on branding Malaysiaand Malaysian brand products will befurther intensified.Financial institutions will be encouragedto support Malaysian companies toventure abroad. Assistance will alsobe provided to members of trade andindustry associations to undertake exportpromotion programmes as well as providesupport for logistics and warehousing.Incentives based on outcomes will beprovided to the private sector to undertakeexport promotion activities.Access of Malaysian products and servicesinto the global market will be facilitatedthrough mutual recognition arrangements,free trade agreements and multilateralarrangements. Strategic alliances andjoint-ventures between local companiesand established MNCs will be promotedGreater accessibilityinto new markets...35


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010to widen the marketing network for agrobased,manufactured and ICT productsand services. In addition, Malaysianstandards and technical regulationswill be harmonised with internationallyrecognised standards to ensure greateraccess into the global market. Malaysia’shalal certification will be futher promotedas a globally recognised halal standard toensure greater accessibility of Malaysianhalal products into the internationalm a r k e t . I n a d d i t i o n , c o o p e r a t i o nwith the International Halal IntegrityAlliance will be initiated to promotehalal certification based on MalaysianStandards including MS 1500:2004 2 .Pro-market incentives will be expandedto encourage SMEs to undertake qualityimprovements and adopt advancedtechnology applications.IV. OUTCOMES, 2010The key outcomes for the various sectorsare as shown in Box 1-2.Box 1-2Expected Outcomes, 2010CommitmentOutcomeEnhancing Productivity and Competitiveness••Increasing value added of the services sector by 7.9% toRM948 billionIncreasing share of services sector to GDP to 55.7%• Increased value added and share to GDP of the servicessector••Targeting 24.6 million tourist arrivals with receipts ofRM59.4 billionIncreasing tourist per capita expenditure to RM2,417• Increased contribution of tourism to foreign exchangeearnings•Increasing value added of the manufacturing sector by3.5% to RM168.9 billion•y Targeted value added of major subsectors• Increased investment and value added in themanufacturing sector--------E&EM&EPetrochemicalTransport equipmentRM32.9 billionRM19.2 billionRM20.5 billionRM16.2 billion•yAverage annual investment level of RM27.5 billion.Target by major subsectors-- E&ERM14.0 billion-- M&ERM1.7 billion-- Petrochemical RM1.7 billion-- Transport equipment RM2.1 billion-- Medical devices RM0.8 billion2‘Halal Food: Production, Preparation, Handling and Storage - General Guidelines‘ (MS 1500: 2004).36


Moving the Economy up the Value Chain•CommitmentIncreasing share of private sector expenditure in R&D to1.1% of GDPOutcome• Increased private sector expenditure in R&D•Increasing the number of SMEs with 4 star ratings as wellas creating SMEs with 5 star ratings under the SCOREprogramme• Increased participation of SMEs in the global market•Increasing production and local processing of industrialcommodities• Increased production and local processing of industrialcommoditiesProductionLocal processingPalm Oil 16.5% to 18.4 million MT 0.1% to 1.5 million MTRubber 8.3% to 1.3 million MT 3.5% to 437,000 MTCocoa 34.3% to 47,000 MT 30.4% to 30,000 MT•Increasing food production and self sufficiency level (SSL)• Increased food production and achieve SSLProduction% SSLRice 27.4% to 2.9 million MT 86Fisheries 33.4% to 1.8 million MT 103Beef 31.2% to 45,000 MT 28Poultry 18.2% to 1.3 million MT 122••Increasing ICT value added to RM30 billionIncreasing ICT-related jobs to 500,000• Increased value added and jobs in the ICT sector••••Construction of East Coast Expressway Phase II fromKuantan - Kuala Terengganu, Senai-Desaru andKemuning-Shah Alam highwaysConstruction of roads to link resettlement areas with ruralindustrial areas and estates, particularly in Sabah andSarawakUpgrading of Kuching, Kota Kinabalu, Kuala Terengganuand Labuan airportsConstruction of Seremban-Gemas and Ipoh-Padang Besarelectrified double tracking rail projects. The projects areexpected to be completed in 2012 and 2013, respectively• Increased capacity, efficiency and network coverage oftransport infrastructureGenerating New Sources of Growth••Increasing earnings of health tourism to RM1 billionIncreasing earnings of education tourism to RM2 billion• Health and education tourism established as majortourism products37


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Commitment• Takaful to capture 20% of total assets in the insurance andtakaful industry• Islamic banking to capture 20% of total assets in thebanking system• Developing International Syariah Research Academy forIslamic Finance to undertake research in muamalatOutcome• Malaysia as Islamic banking and finance hub• Establishing 200 BioNexus status companies• Achieve targeted number of BioNexus status companies•Increasing production• Increased production of new sources of growthCommoditiesKenafDeep sea fishingSeaweedOrnamental fishHerbs and spicesProduction target45,000 MT380,800 MT95,000 MT860 million tails103,000 MT•••Increasing export from MSC status companies to RM4.9billionIncreasing number of MSC status companies to 2,500Increasing ICT global players’ investment in high-valuedoutsourcing• Malaysia as a multimedia and ICT hub and as an attractivedestination for SSO activitiesExpanding Markets for Malaysian Products and Services•Increasing presence of Malaysian professionals in Africa,West Asia and new emerging economies• Increased export of professional services•Increasing number of Malaysian Islamic financial productsoffered to Africa, ASEAN and Asia• Expanded global presence of Malaysian Islamic finance•Increasing share of tourist arrivals from non-ASEAN marketto 30%• Higher tourist arrivals from non-ASEAN market••Targeting new high growth markets in North East Asia andemerging markets in South Asia, West Asia and EasternEuropeIncreasing export value of selected manufacturingsubsectors:•y E&ERM960.1 billion•y Chemical products RM127.0 billion•y Metal products RM90.3 billion•y Petroleum products RM75.7 billion• Increased share of exports to new markets and increasedexport value38


Moving the Economy up the Value Chain••••CommitmentIncreasing value of agriculture exports to RM72 billionIncreasing export value of agro-based products to RM58.7billionExpanding market for frozen food to Australia and theNetherlandsExpanding market for processed food to People’s Republicof China, Japan, the Netherlands and Saudi ArabiaOutcome• Increased exports of agriculture and agro-basedproducts•Penetrating new markets in People’s Republic of China,India and West Asia for multimedia digital content foreducation and entertainment• Secured new markets for ICT products and servicesV. CONCLUSIONThe growth in key sectors of the economy duringthe first half of the Ninth Plan was supported byadoption of new technologies and best practicesas well as greater R&D. The highly competitiveglobal environment requires Malaysia to reshapeits economic structure and strengthen its resiliencethrough concerted efforts with greater privatesector participation. To move the economy up thevalue chain, more synergistic and focused effortswill be undertaken to increase productivity andcompetitiveness, generate new sources of growthand expand into new markets.39


Mid-Term Review of the Ninth Malaysia Plan, 2006-201040


Raising the Capacity for Knowledge and Innovation2thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010Raising the capacityfor knowledge andinnovation andnurturing ‘first classmentality’41


Raising the Capacity for Knowledge and InnovationRaising the capacity forknowledge and innovationand nurturing ‘first classmentality’I.INTRODUCTIONIn line with economic growth, employmentexpanded with contribution mainly fromthe services and manufacturing sectors.The economy maintained full employmentand recorded increasing growth in labourproductivity. The quality of the labourforce improved with an increasing supplyof educated and skilled human capital.Various initiatives were undertaken toincrease accessibility and improve thequality of education and training includingthe formulation of two major educationand training blueprints, namely theEducation Development Master Plan andthe Higher Education Strategic Plan.The transformation towards a knowledgebasedeconomy and the promotion of newsources of growth and development ofregional growth corridors have increasedthe demand for skilled and knowledgeworkers, especially managers, professionalsand technicians. To meet this increasingdemand, public and private traininginstitutions will embark on capacityexpansion and improvements in trainingcontent through greater collaborationwith industries. In addition, efforts willbe intensified to produce quality humancapital in a holistic manner, not onlyin matching the demand for humancapital but also inculcating a progressiveoutlook with strong moral values asespoused in Islam Hadhari. These efforts areessential in ensuring a smooth transitionto a knowledge-based economy thatis characterised by higher productivityand competitiveness, as outlined in theNational Mission.II.KEY RESULTS, 2006-2007Efforts to develop human capital werebased on five main strategic thrusts,namely improving education quality andaccessibility, making national schools theschool of preferred choice, creating tertiaryeducation institutions of internationalstanding, nurturing quality researchand development (R&D) and enhancingscientific and innovative capabilities, andfostering a tolerant society with a senseof belonging and patriotism. The outputsof these strategies in developing humancapital are shown in Box 2-1.43


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 2-1Key Results, 2006-2007CommitmentOutputImproving Education Quality and Accessibility•Providing greater access to tertiaryeducation 1 - to achieve the target of40% participation rate of the age group17-23 years in 2010••Participation rate increased from 17.6% in 2005 to 21.9% in 2007Enrolment in public institutions increased from 390,828 in 2005 to465,094 in 2007, and 258,825 to 364,737 in private institutions•Intensifying the National Dual TrainingSystem (NDTS). 2007 target: 400companies and 2,000 trainees••A total of 574 companies participated in NDTS involving 3,060traineesNDTS coverage expanded to include school dropouts•Bridging the gap between rural andurban schools: improving infrastructurein rural schools•••Clean water supplied to 300 schools in rural areas benefitting120,000 pupilsAll rural schools in Sarawak and 72% in Sabah provided with adequateelectricity supplyPilot projects for solar energy were completed to complement theexisting electricity supply to 12 remote schools in Sabah•Expanding pre-school programme toprovide full coverage for children in thefive to six years age group•Increased enrolment in public and private pre-school children from702,897 in 2005 to 753,027 in 2007, increasing coverage from 63.7%in 2005 to 67.8% in 2007•Introducing early childhood developmentprogramme for children aged four andbelow (PERMATA)•15 PERMATA pilot projects were implementedMaking National Schools the School of Preferred Choice• Increasing the enrolment rate of Chineseand Indian pupils into national schools•The enrolment rate of Chinese and Indian pupils in national primaryschools was 6% and 40% in 2007, respectively•Achieving target of 25% of teachers inprimary schools and 100% in secondaryschools with degree qualification by2010•Graduate teachers increased from 6.1% in 2005 to 13.7% in 2007 forprimary and 82.4% to 87.1% for the secondary•Making national schools ‘smart’ throughMaking All Schools Smart Programme•Established Internet access centres in 40% of all primary schools or3,025 primary schoolsCreating Tertiary Institutions of International Standing•Achieving 60% of academic staff withPh.Ds in public universities by 2010•Academic staff with Ph.Ds increased from 26.6% in 2005 to 31.6% in2007 (Universiti Putra Malaysia achieved 64% while Universiti Malayaand Universiti Sains Malaysia achieved 51% and 50%, respectivelyin 2007)•Increasing post-graduate enrolment to be25% of degree enrolment by 2010•Enrolment of post-graduates was 12% in 2007 (post-graduate enrolmentin public institutions increased from 36,516 in 2005 to 40,573 in 2007and in private institutions declined from 5,447 to 5,338)1Refers to public and private universities, university colleges, branch campuses, colleges, polytechnics and community colleges.44


Raising the Capacity for Knowledge and InnovationCommitmentOutputNurturing Quality R&D and Enhancing Scientific and Innovative Capabilities•Targeting 50 research scientists andengineers (RSEs) per 10,000 labour forceby 2010•The ratio of RSEs was 17.9 in 2006Fostering a Society with Strong Values•Fostering a tolerant society with a senseof belonging and patriotism•195,000 youths benefitted from National Service Programmeand 1,016,749 participants benefitted from Biro TatanegaraprogrammesLabour Market and EmploymentWith the population increasing from 26.45million in 2005 to 27.23 million in 2007,the labour force increased by 2.1% perannum to 11.8 million. The quality oflabour force improved as reflected bythe increasing share of labour force withtertiary education from 20.0% in 2005 to22.5% in 2007 while those with secondarylevel increased from 57.6% to 58.6%.Chart 2-2Employment by Sector, 2005-2010(‘000 persons)802.31,401.33,133.25,556.0800.21,386.33,317.15,894.4811.71,375.83,520.76,314.5Mining, Quarrying &ConstructionAgriculture, Forestry,Livestock & FishingManufacturingServicesTotal 2005 2007 2010 eChart 2-1Population by Ethnic Group,2005-2010(million persons)Labour Force 11,290.5 11,775.1 12,406.8Employment10,892.8 11,398.0 12,022.7Unemployment Rate (%) 3.5 3.2 3.1eNotes: estimatesBumiputeraTotal15.796.0916.356.2017.216.351.821.861.920.29 0.29 0.292.462.532.47200526.45 million200727.23 millionSource: Department of StatisticsNotes:eestimates2010 e28.24 millionChineseIndianOthersNon-CitizensAll sectors of the economy generatedadditional employment with the servicessector recording the highest employmentgrowth at 3.0% per annum during thereview period. Total employment in theservices sector increased from 5.56 millionin 2005 to 5.89 million in 2007. A total of505,100 job opportunities was created, ofwhich 46.7% was for knowledge workerscomprising managers, professionals andtechnicians.Jobs for knowledgeworkers…45


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Chart 2-3Employment by Major OccupationalGroup, 2005-2010(‘000 persons)Notes:The unemployment rate continued todecline from 3.5% in 2005 to 3.2% in2007, reflecting further tightening ofthe labour market during this period. In2006, a total of 785,000 skilled Malaysiansworked in various countries, especially inSingapore and developed countries. Theemployment of foreign labour increasedfrom 1.80 million in 2005 to 2.04 millionin 2007.III.2,818.62,684.92,928.93,054.62,842.73,003.41,375.7 1,402.01,084.7 1,095.3eestimates3,348.32,957.63,162.01,430.71,124.12005 2007 2010 eTotal 10,892.8 11,398.0 12,022.7MOVING FORWARD,2008-2010Managers, Professionals andTechniciansClerical & Service WorkersCraft Related Trade & PlantWorkersAgriculture & FisheryWorkersElementary OccupationsLabour Market and EmploymentThe population is expected to grow ata lower rate of 1.2% per annum in theremaining Plan period to reach 28.24million in 2010. The population growthrate is expected to further decline in linewith the decreasing fertility rate from 2.23in 2008 to 2.07 in 2010 due to, amongothers, late marriages and preference forsmaller family size.The labour force will grow at a slowerrate of 1.76% per annum and employmentis expected to grow marginally higherat 1.79%, thus decreasing further theunemployment rate to 3.1% in 2010.The share of labour force with tertiaryeducation will increase to 26.7% in2010 while those with secondary levelis expected to increase to 60.1%.For the remaining Plan period, a total of625,000 new jobs will be created, includingin the regional growth corridors. Demandfor knowledge workers is expected togrow at an average rate of 3.1% perannum to form 47% of total jobs created.The increasing demand for skilled humancapital will be met by expansion incapacity and improvement in quality ofeducation and training at all levels withthe emphasis on high performance workculture and positive values.Various measures will be undertaken toreduce the number of low-skilled foreignlabour to 1.80 million in 2010. This willbe achieved through a combination ofshort- and long-term measures includingimproving foreign labour intake and levysystem, capping the number of foreignlabour by subsector, revising the wagesystem, providing better facilities andbenefits to retain locals in selectedsectors and systematically phasing outlabour-intensive industries. In addition,participation of women in labour forcewill be increased from 46.1% in 2007to 50.0% in 2010. The Government willreview the policy, strategies, labour lawsand procedures related to employment ofexperts and highly skilled foreign labourin specific occupations.The Brain Gain Programme will beimproved to provide a more conduciveenvironment to attract global talents tofill the critical gaps and transfer skills andknowledge. The Malaysian diaspora will beleveraged to forge closer linkages amongacademia, public and private sectorsto facilitate knowledge and technologyacquisition.46


Raising the Capacity for Knowledge and InnovationEducation ProgrammesPrimary and Secondary EducationThe Education Development MasterPlan, 2006-2010 provides the frameworkto further improve the quality andaccessibility to education. This plan isfocusing on nation building, developinghuman capital, strengthening nationalschools, bridging the education gap,enhancing the teaching profession andstrengthening educational institutions.To address the issues of overcrowding inurban schools, additional classrooms willbe provided and the educational systemwill be improved. Enrolment is expectedto increase from 3.07 million in 2007 to3.20 million in 2010 for primary schoolsand from 2.24 million to 2.38 million forsecondary schools.Chart 2-4Pupil Enrolment in EducationInstitutions, 2005-2010(%)63.7 67.8 68.8 98.1 95.898.42005 2007 2010 e91.986.8 88.4Prasekolah Rendah MenengahSource: Ministry of EducationNotes:eestimatesSchools have an important role innurturing and building a strong foundationin science and technology to producefuture researchers and innovators. Toincrease the number of knowledgeworkers, specialised secondary schools forscience and technology will be established.These schools will expose the pupils to awide range of subjects and enrichmentprogrammes in science and technology.The schools will collaborate with researchuniversities and the private sector inimplementing this programme.There still exists a gap in academicachievement between rural and urbanschools, especially in mathematics, scienceand the English language. This will beaddressed through the introduction ofincentives and specialised teacher trainingto increase the number of teachersto serve in rural areas. In addition, toenhance the performance of pupils,implementation of the improved earlyintervention programme, namely theRemedial Programme for Year 1 and 3RMastering Programme for Year 4 andYear 6 pupils will be intensified. Theprovision of electricity for rural schoolsand computerisation projects will alsoprovide a more conducive learning andteaching environment.To increase the enrolment of pupils fromthe various ethnic groups in nationalschools, the appeal of these schools willbe further enhanced. For this purpose,quality and facilities in national schoolswill be improved. All national schoolswill be equipped with adequate ICTfacilities through the ongoing MakingAll Schools Smart Programme, includingSchoolNet, Education TV via the Internetand ICT training for teachers. In addition,the teaching of Mandarin and Tamillanguages as well as j-QAF will beenhanced by increasing the number ofqualified teachers. A new comprehensiveassessment system, which gives moreemphasis to continuous evaluation andcreativity to nurture a culture of innovationwill be implemented through a pilotproject covering 50 schools.Reducing theperformance gapbetween rural andurban schools…47


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010To reduce the number of school dropouts,the intake into skills and vocationalstreams will be increased to ensure pupilsremain in the school system. Existingskills training and vocational educationat technical schools will be reviewedto enhance their appeal to secondaryschool pupils.More educational opportunities for childrenwith special needs will be enhanced byproviding special classes in regular schoolsto enable them to adapt to the normalschool environment. A total of 96 classesin regular schools will be set up andupgraded for children with special needsin the remaining Plan period.The facilities for all schools in Sabah andSarawak will be improved by providingadequate hostels, quarters for teachers,computer labs, Internet access, electricityand other basic utilities. The variouseducational support programmes, suchas the Tuition Voucher Scheme, FoodAid, and Trust Fund for Poor Pupils, willbe intensified to assist pupils from lowincomefamilies. ICT-based teaching andlearning will also be expanded to theseschools.Pre-school EducationNational Pre-school Curriculum will bereviewed to enhance the quality of preschoolsby developing a good pre-schoolcurriculum and improving coordinationbetween the agencies involved. In addition,all teachers and assistant teacherswill be required to attend standardtraining programmes. To ensure effectiveimplementation, pre-school programmewill be coordinated at federal, state anddistrict levels. In addition, early childhooddevelopment programme for childrenaged four and below (PERMATA) will berolled-out after an impact assessmentis undertaken on the 15 PERMATA pilotprojects.Higher EducationIncreasing Accessibility. The Higher EducationStrategic Plan, 2020 will provide the longtermdirection for quality education andbetter accessibility. Enrolment in publicinstitutions of higher education willincrease, especially with the completionof three new universities, namely UniversitiDarul Iman Malaysia, Universiti MalaysiaKelantan and Universiti Pertahanan NasionalMalaysia. In addition, the construction ofbranch campuses of Universiti TeknologiMARA (UiTM) and the expansion of theUiTM franchise programme will increasestudent enrolment.Enrolment in institutions of highereducation is expected to increasefrom 829,831 in 2007 to 1,349,978 in2010, of which 35% will be at diplomalevel and 33% at first degree level.With the designation of four researchuniversities, enrolment at post-graduatelevel particularly Ph.D will increase.Enhancing Quality. A rating system willbe implemented in public institutionsof higher education as an instrument toassess their quality and competitiveness.In addition, the Malaysian QualificationsAgency (MQA) will be strengthenedto improve the implementation of theMalaysian Qualifications Framework andquality assurance. Public institutions ofhigher education will strengthen theirquality assurance units to conduct selfevaluationand develop high performanceculture. The approval for new privateinstitutions of higher education will onlybe given to those offering courses meetingmarket requirements. In addition, regularauditing will be carried out to ensurequality education. Private institutions ofhigher education will be encouraged toconsolidate and merge in order for themto be more viable and competitive.Public institutions of higher education willfocus on developing quality content toensure that academic programmes meet48


Raising the Capacity for Knowledge and InnovationChart 2-5Enrolment in Tertiary EducationInstitutions 1 by Level of Study,2005-2010500,000450,000400,000350,000300,000250,000200,000150,000100,00050,00002005 2007 2010 eEnrolment 649,653829,831 1,349,978Certificate Diploma First DegreeMastersPh.DSource: Ministry of Higher Education1Notes: Refers to public and private universities,university colleges, branch campuses,colleges, polytechnics and communitycolleges.eestimatesindustry needs. Comprehensive marketanalysis will be made compulsory for allinstitutions in obtaining approval fromthe Higher Education Committee for theintroduction of new programmes and forreviewing existing programmes. To helpgain international recognition, assessorsfrom leading foreign universities, industriesand professional bodies will be appointedto evaluate the academic programmesoffered by public and private institutions.The Government will only subsidiseselected academic programmes in linewith current market needs. In addition,top students will be sponsored to pursuetheir studies at the local universitiesand follow up tracer studies will beimplemented to assess the marketabilityof graduates and their career path oneyear after graduation as well as to provideinput on the relevancy of the academicprogrammes.The implementation of the AcademicTraining Scheme for Public Institutionsof Higher Education will be intensifiedand new strategies will be formulatedto achieve the 60% target of academicstaff with Ph.D by 2010. A total of3,700 academic staff will be awardedscholarships to pursue their Ph.D underthis programme and 70% will be inscience and technology (S&T ). Newlyappointed academic staff will be requiredto pursue their Ph.D within three yearsas a pre-requisite for their appointmentas permanent staff. In addition, academicstaff will be required to undergo industrialattachment and internship programmes atmultinational companies for the maximumof one semester for every three tofive years. As an interim measure toincrease qualified academic staff, publicinstitutions of higher education willbe allowed to directly recruit expertsglobally on a contract basis, particularlyin critical fields of study. Contract forservice and direct appointment will beintroduced to encourage those withexcellent qualification to join publicinstitutions of higher education.To increase the employability of graduates,all public universities will introduce shortinternship, attachment and finishingprogrammes in collaboration withmultinational, government-linked andlarge local companies and industryassociations. The programmes will bestructured and built into the existingcurriculum. Entrepreneurial skills willbe incorporated into the educationcurriculum of key technical disciplines withspecific targets for researchers, scientists,prototype engineers and designers.Customised programmes will be conductedon entrepreneurship, innovation, riskmanagement and mind-set change.Improving Capability in Science & Technology.More scholarships will be provided atthe post-graduate level to increasenumber of S&T students and meet thetargeted ratio of 50 research scientists andengineers (RSEs) per 10,000 labour force.To address the shortage of R&D personnel,a comprehensive study will be undertakenImproving the quality ofacademic staff…49


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010to identify the S&T area and number ofRSEs required. The private sector will beencouraged to provide more scholarshipsand financial assistance for strategicresearch and commercialisation.Post-doctoral fellowships for multidisciplinaryS&T based research projectswill be increased. In addition, S&Tundergraduates will be encouragedto conduct joint research with facultymembers to further develop their researchskills. In order to intensify R&D andcommercialisation (R&D&C) activities inpublic institutions of higher education,their capabilities and collaborationwith industries will be strengthened.The Malaysian Research Institute willbe established to enhance researchcollaboration with leading internationaluniversities.Developing Regional Centre of Excellence.Efforts will be intensified to developMalaysia as a regional centre for educationalexcellence through smart partnershipbetween the private and public institutionsof higher education and reputableforeign universities. Private institutionsof higher education will be encouragedto have more joint degree and twinningprogrammes, especially at post-graduatelevel. The quality of academic programmesin public and private universities mustbe of international standing. Concertedefforts will be undertaken to attractforeign students through dedicatedpromotional programmes. In addition, morerenowned professors will be employedby local universities and leading foreignuniversities will be invited to establishbranch campuses in Malaysia.National Higher Education Fund Corporation(PTPTN) will continue to provide loans forstudents to pursue their tertiary educationin public and private institutions. PTPTNwill enhance it sustainability and capacityto provide loans through strategic allianceswith financial institutions.Strengthening the Research Universities.The designated research universitieswill be strengthened in terms of theirgovernance system, funding mechanismand recruitment of academic staff. Theseuniversities will be given more autonomyand flexibility in their management togenerate their own source of income. Theuniversities will also be allowed to recruitacademic staff, researchers and studentsfrom abroad. The proportion of postgraduatestudents in these universities willbe increased to 50% of total enrolment,especially in S&T related courses.Technical Education and VocationalTrainingDuring the remaining Plan period, 305,930skilled workers will be trained, meeting80% of the demand for skilled workforce.Public TEVT institutions will contribute55.7% while private TEVT institutions willcontribute the rest. The TEVT deliverysystem will be enhanced to keep pacewith the changing market demand forskilled workers.Chart 2-6Skilled Human Capital, 2005-201070,00060,00050,00040,00030,00020,00010,0000Total56.4%200576,027EngineeringHospitality43.6%56.2%200783,202Building TradesOthers43.8%55.5%2010 e112,745ICT44.5%Public Private Public Private Public PrivateSource: Ministry of Higher Education, Ministry ofHuman Resource, Ministry of Youth andSports, Ministry of Agriculture and Agro-Based Industry, Majlis Amanah Rakyat andConstruction Industry Development BoardeNotes: estimates50


Raising the Capacity for Knowledge and InnovationEnhancing Quality. The quality of TEVTwill be enhanced by increasing theavailability of qualified instructors andexpediting recruitment of instructors fornewly established institutions. A specialscheme of service for instructors will beintroduced to attract qualified personnelfrom industry to join. Flexible promotionalposts for instructors will be establishedto ensure they remain in their fieldof specialisation. Training agencies willalso be empowered to directly recruitcontract staff.The quality of teaching and learningmaterials will be further improved throughstandardisation. The quality of the NationalOccupational Skills Standard (NOSS)will be enhanced through a validationprocess by employers across industriesand by introducing a standard templateto provide a clear process and format fordeveloping quality NOSS.The teaching and learning approachwill be strengthened by developing the‘Pro3-Based Learning’ programme thatconstitutes Problem-Based Learning,Project-Based Learning and Production-Based Learning. The development of thisapproach is expected to be completedin 2009 and will be implemented as apilot project in the German-MalaysianInstitute before being extended to allTEVT institutions.The implementation of the Sk illsDevelopment and Training Blueprint,2008-2020 will provide the directionand strategies for developing TEVT.The blueprint will be supported bya strategic action plan to guide itsimplementation and will require TEVTagencies to formulate long-term trainingplans and key performance indicators.Small private TEVT institutions will beconsolidated to increase their quality oftraining, financial and marketing capabilityas well as ability to attract students. Inorder to encourage consolidation andintroduction of hard-courses, soft-loans willbe provided to private TEVT institutionsthat fulfil the selection criteria such asenrolment capacity, student-teacher ratioand quality of instructors. In addition,the enforcement of the National SkillsDevelopment Act, 2006 will be intensifiedto ensure that the accredited trainingcentres comply with accreditation rulesand procedures.Increasing Accessibility. Efforts will beundertaken to increase accessibility bymaximising the capacity utilisation ofexisting TEVT institutions. The financingof students to attend private traininginstitutions and double-shift programmesat public TEVT institutions will be expandedand intensified. Additional allocation will beprovided to the Skills Fund DevelopmentCorporation to provide loans to trainees.The intake of trainees, including intopolytechnics and community colleges,will also be centralised to enhancethe effectiveness and efficiency of therecruitment process.TEVT institutions will also target and trainschool dropouts to increase the supply ofskilled and semi-skilled workers and toreduce dependence on foreign labour. Theexisting TEVT institutions accommodateonly 10% of the 80,000 annual dropoutsfrom secondary schools. The establishmentof new GiatMARA Training Centres willbe accelerated and 80% intake quota forschool dropouts will be introduced.Implementation of the National DualTraining System will also be intensifiedand the target groups will be expandedto include school dropouts. This will helpincrease the intake of school dropoutsby 4,000 and Malaysian Certificate ofEducation school leavers, including workersby 12,000 in 2010.51


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Lifelong LearningThe National Advisor y Council forEducation and Training will formulate acomprehensive plan for lifelong learningprogrammes, which cover distance-learning,part-time courses and skills upgradingbeing implemented by various ministriesand private institutions. The enrolment ofstudents in lifelong learning programmesin public institutions of higher educationwill be increased by 10%. Flexible entryrequirements such as work experienceand qualification recognised by the MQAwill be introduced. The Human ResourceDevelopment Fund which can be accessedfor lifelong learning will be expandedto include firms involved in franchising,broadcasting, outsourcing, and motorvehicle repair and maintenance.L i fe l o n g l e a r n i n g p r o g r a m m e s i ncommunity colleges will be enhancedthrough the introduction of e-learning. Atotal of 584,500 places in short courseswill be offered by community collegesduring the remaining Plan period.Industry participation will be encouragedby providing them tax exemption forexpenditure incurred in training conductedin their companies for students at diplomalevel.Developing Strong Moral and EthicalValuesProgrammes for enhancing moral andethical values such as good corporategovernance, corporate social responsibilityand responsible citizenship in theMalaysian society will continue to begiven emphasis in line with the principlesof Islam Hadhari. The involvement offamily, religious, educational and traininginstitutions as well as the workplaceand the community will be encouragedto organise programmes to inculcatestrong moral and ethical values. Themedia will also be encouraged to assumemore effective role in disseminating andinculcating moral and ethical values amongthe people by providing more materialsand programmes with positive contenton behaviour, lifestyle and values. Inaddition, concerted efforts will be madeto identify root cause of social problemsin order to provide the right solutions indeveloping a society with strong moraland ethical values.Values and ethics will be incorporatedinto the school curriculum and cocurricularactivities. The j-QAF programmewill be expanded to Muslim pupils in allprimary schools while moral educationwill continue to be taught to non-Muslim pupils. The teaching of civicsand citizenship will be expanded to Year5 and 6 pupils in primary schools andwill be introduced to secondary schools.In the institutions of higher education,Islamic and Asia Civilisation as well asEthnic Relations will remain as compulsorysubjects for all students to improveunderstanding of different cultures andcivilisations and to promote tolerance inmulti-racial society.The implementation of family-friendlyprogrammes for character buildingand inculcation of family values willbe expanded. At the community level,the Rakan Muda and National ServiceProgramme will be strengthened. Effortswill be increased to encourage thecommunity to adopt Rukun Tetanggaprogramme to promote harmony amongthe people and the implementation ofCourtesy and Noble Values Campaignwill be intensified at all levels of thecommunity.The public sector will conduct moreprogrammes including training towardsinculcating positive values and ethics52


Raising the Capacity for Knowledge and Innovationamong their personnel. The private sectoris also expected to expand their corporatesocial responsibility for the benefit ofwider target groups and the community atlarge. Companies will also be encouragedto integrate ethical consideration intotheir business and management processes.Efforts will be intensified to enhancethe understanding and knowledge ofIslam Hadhari among the community.Two indices will be formulated, namelyMalaysian Ummah Development Index andJust and Trustworthy Government Index tomeasure the progress of Muslim societyand Government trustworthiness.Enhancing Integrity. The Malaysian Instituteof Integrity and other relevant agencies willintensify the implementation of NationalIntegrity Plan. The non-governmentalorganisations, private sector and thecommunity will be involved in programmesto enhance integrity. Corporate governanceand business ethics in the private sectorwill be strengthened by enhancingcompliance with the relevant laws andregulations as well as the Malaysian Codeon Corporate Governance and RukuniagaMalaysia.Addressing Corruption. Efforts to addresscorruption will be further enhancedby intensifying preventive measures,educational initiatives and rigorousenforcement. In addition, the publicservice delivery system will be improvedto eliminate opportunities for corruptpractices. The Anti-Corruption Agencywill be transformed into an independentbody to make it more effective.IV.OUTCOMES, 2010Box 2-2Expected Outcomes, 2010CommitmentOutcomeImproving Education Quality and Accessibility2• Providing greater access to tertiary education - toachieve the target of 40% participation rate of the agegroup 17-23 years in 2010•Increased education attainment of labour force forbetter productivity and quality•Intensifying the National Dual Training System (NDTS).2010 target: 3,200 companies and 16,000 trainees•••Increased supply of work force with hands-on trainingto meet industrial needsGreater private sector participation in trainingIncreased skill levels of work force to move jobs qualityup the value chain•Bridging the gap between rural and urban schools:improving infrastructure in rural schools•Equal opportunity to quality education•Expanding pre-school education programmes to providefull coverage for children in the five to six years agegroup•All pupils able to read and write prior to formaleducation2Refers to public and private universities, university colleges, branch campuses, colleges, polytechnics and community colleges.53


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutcomeMaking National Schools the School of Preferred Choice•Increasing enrolment rate of Chinese and Indian in nationalschools•Strengthened national unity•Achieving target of 25% of teachers in primary schools and100% in secondary schools with degree qualification by2010•Quality teachers that will increase the appeal of nationalschools•Making national schools ‘smart’ through Making AllSchools Smart Programme•Improved teaching and learning methods to enhancequality of national schoolsCreating Tertiary Institutions of International Standing•Achieving 60% of academic staff with Ph.Ds by 2010•••Malaysia as a regional educational hubAt least one local university ranked in the top 100World best academic programmes in Islamic finance,biotechnology, tropical diseases and biodiversity studies•Increasing post-graduate enrolment to be 25% of degreeenrolment by 2010•Increased R&D&C capabilitiesNurturing Quality R&D and Enhancing Scientific and Innovation Capabilities•Targeting 50 research scientists and engineers (RSEs) per10,000 labour force by 2010•Increased capability for scientific R&D and innovation tomove the economy up the value chainFostering a Society with Strong Values•Fostering a tolerant society with a sense of belonging andpatriotism••United society with high patriotismHigh performance culture work force•Enhancing integrity and eliminating corruption•Society with high integrityV. CONCLUSIONDuring the remaining Plan period, educationand TEVT delivery systems will continue toemphasise on producing quality humancapital needed for the development ofthe economy. The implementation of thevarious programmes by public and privatesectors is expected to help address theneed for knowledge workers in movingthe economy up the value chain. Theinculcation of strong ethics, positive valuesand integrity will be given emphasis indeveloping holistic human capital andenhancing good governance in the publicand private sectors. These efforts will assistMalaysia to meet the challenges broughtby globalisation and the competitive worldmarket. The availability of quality humancapital and good governance system willmake Malaysia an attractive destinationfor investments.54


Raising the Capacity for Knowledge and Innovation2thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010Raising the capacityfor knowledge andinnovation andnurturing ‘first classmentality’41


Raising the Capacity for Knowledge and InnovationRaising the capacity forknowledge and innovationand nurturing ‘first classmentality’I.INTRODUCTIONIn line with economic growth, employmentexpanded with contribution mainly fromthe services and manufacturing sectors.The economy maintained full employmentand recorded increasing growth in labourproductivity. The quality of the labourforce improved with an increasing supplyof educated and skilled human capital.Various initiatives were undertaken toincrease accessibility and improve thequality of education and training includingthe formulation of two major educationand training blueprints, namely theEducation Development Master Plan andthe Higher Education Strategic Plan.The transformation towards a knowledgebasedeconomy and the promotion of newsources of growth and development ofregional growth corridors have increasedthe demand for skilled and knowledgeworkers, especially managers, professionalsand technicians. To meet this increasingdemand, public and private traininginstitutions will embark on capacityexpansion and improvements in trainingcontent through greater collaborationwith industries. In addition, efforts willbe intensified to produce quality humancapital in a holistic manner, not onlyin matching the demand for humancapital but also inculcating a progressiveoutlook with strong moral values asespoused in Islam Hadhari. These efforts areessential in ensuring a smooth transitionto a knowledge-based economy thatis characterised by higher productivityand competitiveness, as outlined in theNational Mission.II.KEY RESULTS, 2006-2007Efforts to develop human capital werebased on five main strategic thrusts,namely improving education quality andaccessibility, making national schools theschool of preferred choice, creating tertiaryeducation institutions of internationalstanding, nurturing quality researchand development (R&D) and enhancingscientific and innovative capabilities, andfostering a tolerant society with a senseof belonging and patriotism. The outputsof these strategies in developing humancapital are shown in Box 2-1.43


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 2-1Key Results, 2006-2007CommitmentOutputImproving Education Quality and Accessibility•Providing greater access to tertiaryeducation 1 - to achieve the target of40% participation rate of the age group17-23 years in 2010••Participation rate increased from 17.6% in 2005 to 21.9% in 2007Enrolment in public institutions increased from 390,828 in 2005 to465,094 in 2007, and 258,825 to 364,737 in private institutions•Intensifying the National Dual TrainingSystem (NDTS). 2007 target: 400companies and 2,000 trainees••A total of 574 companies participated in NDTS involving 3,060traineesNDTS coverage expanded to include school dropouts•Bridging the gap between rural andurban schools: improving infrastructurein rural schools•••Clean water supplied to 300 schools in rural areas benefitting120,000 pupilsAll rural schools in Sarawak and 72% in Sabah provided with adequateelectricity supplyPilot projects for solar energy were completed to complement theexisting electricity supply to 12 remote schools in Sabah•Expanding pre-school programme toprovide full coverage for children in thefive to six years age group•Increased enrolment in public and private pre-school children from702,897 in 2005 to 753,027 in 2007, increasing coverage from 63.7%in 2005 to 67.8% in 2007•Introducing early childhood developmentprogramme for children aged four andbelow (PERMATA)•15 PERMATA pilot projects were implementedMaking National Schools the School of Preferred Choice• Increasing the enrolment rate of Chineseand Indian pupils into national schools•The enrolment rate of Chinese and Indian pupils in national primaryschools was 6% and 40% in 2007, respectively•Achieving target of 25% of teachers inprimary schools and 100% in secondaryschools with degree qualification by2010•Graduate teachers increased from 6.1% in 2005 to 13.7% in 2007 forprimary and 82.4% to 87.1% for the secondary•Making national schools ‘smart’ throughMaking All Schools Smart Programme•Established Internet access centres in 40% of all primary schools or3,025 primary schoolsCreating Tertiary Institutions of International Standing•Achieving 60% of academic staff withPh.Ds in public universities by 2010•Academic staff with Ph.Ds increased from 26.6% in 2005 to 31.6% in2007 (Universiti Putra Malaysia achieved 64% while Universiti Malayaand Universiti Sains Malaysia achieved 51% and 50%, respectivelyin 2007)•Increasing post-graduate enrolment to be25% of degree enrolment by 2010•Enrolment of post-graduates was 12% in 2007 (post-graduate enrolmentin public institutions increased from 36,516 in 2005 to 40,573 in 2007and in private institutions declined from 5,447 to 5,338)1Refers to public and private universities, university colleges, branch campuses, colleges, polytechnics and community colleges.44


Raising the Capacity for Knowledge and InnovationCommitmentOutputNurturing Quality R&D and Enhancing Scientific and Innovative Capabilities•Targeting 50 research scientists andengineers (RSEs) per 10,000 labour forceby 2010•The ratio of RSEs was 17.9 in 2006Fostering a Society with Strong Values•Fostering a tolerant society with a senseof belonging and patriotism•195,000 youths benefitted from National Service Programmeand 1,016,749 participants benefitted from Biro TatanegaraprogrammesLabour Market and EmploymentWith the population increasing from 26.45million in 2005 to 27.23 million in 2007,the labour force increased by 2.1% perannum to 11.8 million. The quality oflabour force improved as reflected bythe increasing share of labour force withtertiary education from 20.0% in 2005 to22.5% in 2007 while those with secondarylevel increased from 57.6% to 58.6%.Chart 2-2Employment by Sector, 2005-2010(‘000 persons)802.31,401.33,133.25,556.0800.21,386.33,317.15,894.4811.71,375.83,520.76,314.5Mining, Quarrying &ConstructionAgriculture, Forestry,Livestock & FishingManufacturingServicesTotal 2005 2007 2010 eChart 2-1Population by Ethnic Group,2005-2010(million persons)Labour Force 11,290.5 11,775.1 12,406.8Employment10,892.8 11,398.0 12,022.7Unemployment Rate (%) 3.5 3.2 3.1eNotes: estimatesBumiputeraTotal15.796.0916.356.2017.216.351.821.861.920.29 0.29 0.292.462.532.47200526.45 million200727.23 millionSource: Department of StatisticsNotes:eestimates2010 e28.24 millionChineseIndianOthersNon-CitizensAll sectors of the economy generatedadditional employment with the servicessector recording the highest employmentgrowth at 3.0% per annum during thereview period. Total employment in theservices sector increased from 5.56 millionin 2005 to 5.89 million in 2007. A total of505,100 job opportunities was created, ofwhich 46.7% was for knowledge workerscomprising managers, professionals andtechnicians.Jobs for knowledgeworkers…45


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Chart 2-3Employment by Major OccupationalGroup, 2005-2010(‘000 persons)Notes:The unemployment rate continued todecline from 3.5% in 2005 to 3.2% in2007, reflecting further tightening ofthe labour market during this period. In2006, a total of 785,000 skilled Malaysiansworked in various countries, especially inSingapore and developed countries. Theemployment of foreign labour increasedfrom 1.80 million in 2005 to 2.04 millionin 2007.III.2,818.62,684.92,928.93,054.62,842.73,003.41,375.7 1,402.01,084.7 1,095.3eestimates3,348.32,957.63,162.01,430.71,124.12005 2007 2010 eTotal 10,892.8 11,398.0 12,022.7MOVING FORWARD,2008-2010Managers, Professionals andTechniciansClerical & Service WorkersCraft Related Trade & PlantWorkersAgriculture & FisheryWorkersElementary OccupationsLabour Market and EmploymentThe population is expected to grow ata lower rate of 1.2% per annum in theremaining Plan period to reach 28.24million in 2010. The population growthrate is expected to further decline in linewith the decreasing fertility rate from 2.23in 2008 to 2.07 in 2010 due to, amongothers, late marriages and preference forsmaller family size.The labour force will grow at a slowerrate of 1.76% per annum and employmentis expected to grow marginally higherat 1.79%, thus decreasing further theunemployment rate to 3.1% in 2010.The share of labour force with tertiaryeducation will increase to 26.7% in2010 while those with secondary levelis expected to increase to 60.1%.For the remaining Plan period, a total of625,000 new jobs will be created, includingin the regional growth corridors. Demandfor knowledge workers is expected togrow at an average rate of 3.1% perannum to form 47% of total jobs created.The increasing demand for skilled humancapital will be met by expansion incapacity and improvement in quality ofeducation and training at all levels withthe emphasis on high performance workculture and positive values.Various measures will be undertaken toreduce the number of low-skilled foreignlabour to 1.80 million in 2010. This willbe achieved through a combination ofshort- and long-term measures includingimproving foreign labour intake and levysystem, capping the number of foreignlabour by subsector, revising the wagesystem, providing better facilities andbenefits to retain locals in selectedsectors and systematically phasing outlabour-intensive industries. In addition,participation of women in labour forcewill be increased from 46.1% in 2007to 50.0% in 2010. The Government willreview the policy, strategies, labour lawsand procedures related to employment ofexperts and highly skilled foreign labourin specific occupations.The Brain Gain Programme will beimproved to provide a more conduciveenvironment to attract global talents tofill the critical gaps and transfer skills andknowledge. The Malaysian diaspora will beleveraged to forge closer linkages amongacademia, public and private sectorsto facilitate knowledge and technologyacquisition.46


Raising the Capacity for Knowledge and InnovationEducation ProgrammesPrimary and Secondary EducationThe Education Development MasterPlan, 2006-2010 provides the frameworkto further improve the quality andaccessibility to education. This plan isfocusing on nation building, developinghuman capital, strengthening nationalschools, bridging the education gap,enhancing the teaching profession andstrengthening educational institutions.To address the issues of overcrowding inurban schools, additional classrooms willbe provided and the educational systemwill be improved. Enrolment is expectedto increase from 3.07 million in 2007 to3.20 million in 2010 for primary schoolsand from 2.24 million to 2.38 million forsecondary schools.Chart 2-4Pupil Enrolment in EducationInstitutions, 2005-2010(%)63.7 67.8 68.8 98.1 95.898.42005 2007 2010 e91.986.8 88.4Prasekolah Rendah MenengahSource: Ministry of EducationNotes:eestimatesSchools have an important role innurturing and building a strong foundationin science and technology to producefuture researchers and innovators. Toincrease the number of knowledgeworkers, specialised secondary schools forscience and technology will be established.These schools will expose the pupils to awide range of subjects and enrichmentprogrammes in science and technology.The schools will collaborate with researchuniversities and the private sector inimplementing this programme.There still exists a gap in academicachievement between rural and urbanschools, especially in mathematics, scienceand the English language. This will beaddressed through the introduction ofincentives and specialised teacher trainingto increase the number of teachersto serve in rural areas. In addition, toenhance the performance of pupils,implementation of the improved earlyintervention programme, namely theRemedial Programme for Year 1 and 3RMastering Programme for Year 4 andYear 6 pupils will be intensified. Theprovision of electricity for rural schoolsand computerisation projects will alsoprovide a more conducive learning andteaching environment.To increase the enrolment of pupils fromthe various ethnic groups in nationalschools, the appeal of these schools willbe further enhanced. For this purpose,quality and facilities in national schoolswill be improved. All national schoolswill be equipped with adequate ICTfacilities through the ongoing MakingAll Schools Smart Programme, includingSchoolNet, Education TV via the Internetand ICT training for teachers. In addition,the teaching of Mandarin and Tamillanguages as well as j-QAF will beenhanced by increasing the number ofqualified teachers. A new comprehensiveassessment system, which gives moreemphasis to continuous evaluation andcreativity to nurture a culture of innovationwill be implemented through a pilotproject covering 50 schools.Reducing theperformance gapbetween rural andurban schools…47


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010To reduce the number of school dropouts,the intake into skills and vocationalstreams will be increased to ensure pupilsremain in the school system. Existingskills training and vocational educationat technical schools will be reviewedto enhance their appeal to secondaryschool pupils.More educational opportunities for childrenwith special needs will be enhanced byproviding special classes in regular schoolsto enable them to adapt to the normalschool environment. A total of 96 classesin regular schools will be set up andupgraded for children with special needsin the remaining Plan period.The facilities for all schools in Sabah andSarawak will be improved by providingadequate hostels, quarters for teachers,computer labs, Internet access, electricityand other basic utilities. The variouseducational support programmes, suchas the Tuition Voucher Scheme, FoodAid, and Trust Fund for Poor Pupils, willbe intensified to assist pupils from lowincomefamilies. ICT-based teaching andlearning will also be expanded to theseschools.Pre-school EducationNational Pre-school Curriculum will bereviewed to enhance the quality of preschoolsby developing a good pre-schoolcurriculum and improving coordinationbetween the agencies involved. In addition,all teachers and assistant teacherswill be required to attend standardtraining programmes. To ensure effectiveimplementation, pre-school programmewill be coordinated at federal, state anddistrict levels. In addition, early childhooddevelopment programme for childrenaged four and below (PERMATA) will berolled-out after an impact assessmentis undertaken on the 15 PERMATA pilotprojects.Higher EducationIncreasing Accessibility. The Higher EducationStrategic Plan, 2020 will provide the longtermdirection for quality education andbetter accessibility. Enrolment in publicinstitutions of higher education willincrease, especially with the completionof three new universities, namely UniversitiDarul Iman Malaysia, Universiti MalaysiaKelantan and Universiti Pertahanan NasionalMalaysia. In addition, the construction ofbranch campuses of Universiti TeknologiMARA (UiTM) and the expansion of theUiTM franchise programme will increasestudent enrolment.Enrolment in institutions of highereducation is expected to increasefrom 829,831 in 2007 to 1,349,978 in2010, of which 35% will be at diplomalevel and 33% at first degree level.With the designation of four researchuniversities, enrolment at post-graduatelevel particularly Ph.D will increase.Enhancing Quality. A rating system willbe implemented in public institutionsof higher education as an instrument toassess their quality and competitiveness.In addition, the Malaysian QualificationsAgency (MQA) will be strengthenedto improve the implementation of theMalaysian Qualifications Framework andquality assurance. Public institutions ofhigher education will strengthen theirquality assurance units to conduct selfevaluationand develop high performanceculture. The approval for new privateinstitutions of higher education will onlybe given to those offering courses meetingmarket requirements. In addition, regularauditing will be carried out to ensurequality education. Private institutions ofhigher education will be encouraged toconsolidate and merge in order for themto be more viable and competitive.Public institutions of higher education willfocus on developing quality content toensure that academic programmes meet48


Raising the Capacity for Knowledge and InnovationChart 2-5Enrolment in Tertiary EducationInstitutions 1 by Level of Study,2005-2010500,000450,000400,000350,000300,000250,000200,000150,000100,00050,00002005 2007 2010 eEnrolment 649,653829,831 1,349,978Certificate Diploma First DegreeMastersPh.DSource: Ministry of Higher Education1Notes: Refers to public and private universities,university colleges, branch campuses,colleges, polytechnics and communitycolleges.eestimatesindustry needs. Comprehensive marketanalysis will be made compulsory for allinstitutions in obtaining approval fromthe Higher Education Committee for theintroduction of new programmes and forreviewing existing programmes. To helpgain international recognition, assessorsfrom leading foreign universities, industriesand professional bodies will be appointedto evaluate the academic programmesoffered by public and private institutions.The Government will only subsidiseselected academic programmes in linewith current market needs. In addition,top students will be sponsored to pursuetheir studies at the local universitiesand follow up tracer studies will beimplemented to assess the marketabilityof graduates and their career path oneyear after graduation as well as to provideinput on the relevancy of the academicprogrammes.The implementation of the AcademicTraining Scheme for Public Institutionsof Higher Education will be intensifiedand new strategies will be formulatedto achieve the 60% target of academicstaff with Ph.D by 2010. A total of3,700 academic staff will be awardedscholarships to pursue their Ph.D underthis programme and 70% will be inscience and technology (S&T ). Newlyappointed academic staff will be requiredto pursue their Ph.D within three yearsas a pre-requisite for their appointmentas permanent staff. In addition, academicstaff will be required to undergo industrialattachment and internship programmes atmultinational companies for the maximumof one semester for every three tofive years. As an interim measure toincrease qualified academic staff, publicinstitutions of higher education willbe allowed to directly recruit expertsglobally on a contract basis, particularlyin critical fields of study. Contract forservice and direct appointment will beintroduced to encourage those withexcellent qualification to join publicinstitutions of higher education.To increase the employability of graduates,all public universities will introduce shortinternship, attachment and finishingprogrammes in collaboration withmultinational, government-linked andlarge local companies and industryassociations. The programmes will bestructured and built into the existingcurriculum. Entrepreneurial skills willbe incorporated into the educationcurriculum of key technical disciplines withspecific targets for researchers, scientists,prototype engineers and designers.Customised programmes will be conductedon entrepreneurship, innovation, riskmanagement and mind-set change.Improving Capability in Science & Technology.More scholarships will be provided atthe post-graduate level to increasenumber of S&T students and meet thetargeted ratio of 50 research scientists andengineers (RSEs) per 10,000 labour force.To address the shortage of R&D personnel,a comprehensive study will be undertakenImproving the quality ofacademic staff…49


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010to identify the S&T area and number ofRSEs required. The private sector will beencouraged to provide more scholarshipsand financial assistance for strategicresearch and commercialisation.Post-doctoral fellowships for multidisciplinaryS&T based research projectswill be increased. In addition, S&Tundergraduates will be encouragedto conduct joint research with facultymembers to further develop their researchskills. In order to intensify R&D andcommercialisation (R&D&C) activities inpublic institutions of higher education,their capabilities and collaborationwith industries will be strengthened.The Malaysian Research Institute willbe established to enhance researchcollaboration with leading internationaluniversities.Developing Regional Centre of Excellence.Efforts will be intensified to developMalaysia as a regional centre for educationalexcellence through smart partnershipbetween the private and public institutionsof higher education and reputableforeign universities. Private institutionsof higher education will be encouragedto have more joint degree and twinningprogrammes, especially at post-graduatelevel. The quality of academic programmesin public and private universities mustbe of international standing. Concertedefforts will be undertaken to attractforeign students through dedicatedpromotional programmes. In addition, morerenowned professors will be employedby local universities and leading foreignuniversities will be invited to establishbranch campuses in Malaysia.National Higher Education Fund Corporation(PTPTN) will continue to provide loans forstudents to pursue their tertiary educationin public and private institutions. PTPTNwill enhance it sustainability and capacityto provide loans through strategic allianceswith financial institutions.Strengthening the Research Universities.The designated research universitieswill be strengthened in terms of theirgovernance system, funding mechanismand recruitment of academic staff. Theseuniversities will be given more autonomyand flexibility in their management togenerate their own source of income. Theuniversities will also be allowed to recruitacademic staff, researchers and studentsfrom abroad. The proportion of postgraduatestudents in these universities willbe increased to 50% of total enrolment,especially in S&T related courses.Technical Education and VocationalTrainingDuring the remaining Plan period, 305,930skilled workers will be trained, meeting80% of the demand for skilled workforce.Public TEVT institutions will contribute55.7% while private TEVT institutions willcontribute the rest. The TEVT deliverysystem will be enhanced to keep pacewith the changing market demand forskilled workers.Chart 2-6Skilled Human Capital, 2005-201070,00060,00050,00040,00030,00020,00010,0000Total56.4%200576,027EngineeringHospitality43.6%56.2%200783,202Building TradesOthers43.8%55.5%2010 e112,745ICT44.5%Public Private Public Private Public PrivateSource: Ministry of Higher Education, Ministry ofHuman Resource, Ministry of Youth andSports, Ministry of Agriculture and Agro-Based Industry, Majlis Amanah Rakyat andConstruction Industry Development BoardeNotes: estimates50


Raising the Capacity for Knowledge and InnovationEnhancing Quality. The quality of TEVTwill be enhanced by increasing theavailability of qualified instructors andexpediting recruitment of instructors fornewly established institutions. A specialscheme of service for instructors will beintroduced to attract qualified personnelfrom industry to join. Flexible promotionalposts for instructors will be establishedto ensure they remain in their fieldof specialisation. Training agencies willalso be empowered to directly recruitcontract staff.The quality of teaching and learningmaterials will be further improved throughstandardisation. The quality of the NationalOccupational Skills Standard (NOSS)will be enhanced through a validationprocess by employers across industriesand by introducing a standard templateto provide a clear process and format fordeveloping quality NOSS.The teaching and learning approachwill be strengthened by developing the‘Pro3-Based Learning’ programme thatconstitutes Problem-Based Learning,Project-Based Learning and Production-Based Learning. The development of thisapproach is expected to be completedin 2009 and will be implemented as apilot project in the German-MalaysianInstitute before being extended to allTEVT institutions.The implementation of the Sk illsDevelopment and Training Blueprint,2008-2020 will provide the directionand strategies for developing TEVT.The blueprint will be supported bya strategic action plan to guide itsimplementation and will require TEVTagencies to formulate long-term trainingplans and key performance indicators.Small private TEVT institutions will beconsolidated to increase their quality oftraining, financial and marketing capabilityas well as ability to attract students. Inorder to encourage consolidation andintroduction of hard-courses, soft-loans willbe provided to private TEVT institutionsthat fulfil the selection criteria such asenrolment capacity, student-teacher ratioand quality of instructors. In addition,the enforcement of the National SkillsDevelopment Act, 2006 will be intensifiedto ensure that the accredited trainingcentres comply with accreditation rulesand procedures.Increasing Accessibility. Efforts will beundertaken to increase accessibility bymaximising the capacity utilisation ofexisting TEVT institutions. The financingof students to attend private traininginstitutions and double-shift programmesat public TEVT institutions will be expandedand intensified. Additional allocation will beprovided to the Skills Fund DevelopmentCorporation to provide loans to trainees.The intake of trainees, including intopolytechnics and community colleges,will also be centralised to enhancethe effectiveness and efficiency of therecruitment process.TEVT institutions will also target and trainschool dropouts to increase the supply ofskilled and semi-skilled workers and toreduce dependence on foreign labour. Theexisting TEVT institutions accommodateonly 10% of the 80,000 annual dropoutsfrom secondary schools. The establishmentof new GiatMARA Training Centres willbe accelerated and 80% intake quota forschool dropouts will be introduced.Implementation of the National DualTraining System will also be intensifiedand the target groups will be expandedto include school dropouts. This will helpincrease the intake of school dropoutsby 4,000 and Malaysian Certificate ofEducation school leavers, including workersby 12,000 in 2010.51


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Lifelong LearningThe National Advisor y Council forEducation and Training will formulate acomprehensive plan for lifelong learningprogrammes, which cover distance-learning,part-time courses and skills upgradingbeing implemented by various ministriesand private institutions. The enrolment ofstudents in lifelong learning programmesin public institutions of higher educationwill be increased by 10%. Flexible entryrequirements such as work experienceand qualification recognised by the MQAwill be introduced. The Human ResourceDevelopment Fund which can be accessedfor lifelong learning will be expandedto include firms involved in franchising,broadcasting, outsourcing, and motorvehicle repair and maintenance.L i fe l o n g l e a r n i n g p r o g r a m m e s i ncommunity colleges will be enhancedthrough the introduction of e-learning. Atotal of 584,500 places in short courseswill be offered by community collegesduring the remaining Plan period.Industry participation will be encouragedby providing them tax exemption forexpenditure incurred in training conductedin their companies for students at diplomalevel.Developing Strong Moral and EthicalValuesProgrammes for enhancing moral andethical values such as good corporategovernance, corporate social responsibilityand responsible citizenship in theMalaysian society will continue to begiven emphasis in line with the principlesof Islam Hadhari. The involvement offamily, religious, educational and traininginstitutions as well as the workplaceand the community will be encouragedto organise programmes to inculcatestrong moral and ethical values. Themedia will also be encouraged to assumemore effective role in disseminating andinculcating moral and ethical values amongthe people by providing more materialsand programmes with positive contenton behaviour, lifestyle and values. Inaddition, concerted efforts will be madeto identify root cause of social problemsin order to provide the right solutions indeveloping a society with strong moraland ethical values.Values and ethics will be incorporatedinto the school curriculum and cocurricularactivities. The j-QAF programmewill be expanded to Muslim pupils in allprimary schools while moral educationwill continue to be taught to non-Muslim pupils. The teaching of civicsand citizenship will be expanded to Year5 and 6 pupils in primary schools andwill be introduced to secondary schools.In the institutions of higher education,Islamic and Asia Civilisation as well asEthnic Relations will remain as compulsorysubjects for all students to improveunderstanding of different cultures andcivilisations and to promote tolerance inmulti-racial society.The implementation of family-friendlyprogrammes for character buildingand inculcation of family values willbe expanded. At the community level,the Rakan Muda and National ServiceProgramme will be strengthened. Effortswill be increased to encourage thecommunity to adopt Rukun Tetanggaprogramme to promote harmony amongthe people and the implementation ofCourtesy and Noble Values Campaignwill be intensified at all levels of thecommunity.The public sector will conduct moreprogrammes including training towardsinculcating positive values and ethics52


Raising the Capacity for Knowledge and Innovationamong their personnel. The private sectoris also expected to expand their corporatesocial responsibility for the benefit ofwider target groups and the community atlarge. Companies will also be encouragedto integrate ethical consideration intotheir business and management processes.Efforts will be intensified to enhancethe understanding and knowledge ofIslam Hadhari among the community.Two indices will be formulated, namelyMalaysian Ummah Development Index andJust and Trustworthy Government Index tomeasure the progress of Muslim societyand Government trustworthiness.Enhancing Integrity. The Malaysian Instituteof Integrity and other relevant agencies willintensify the implementation of NationalIntegrity Plan. The non-governmentalorganisations, private sector and thecommunity will be involved in programmesto enhance integrity. Corporate governanceand business ethics in the private sectorwill be strengthened by enhancingcompliance with the relevant laws andregulations as well as the Malaysian Codeon Corporate Governance and RukuniagaMalaysia.Addressing Corruption. Efforts to addresscorruption will be further enhancedby intensifying preventive measures,educational initiatives and rigorousenforcement. In addition, the publicservice delivery system will be improvedto eliminate opportunities for corruptpractices. The Anti-Corruption Agencywill be transformed into an independentbody to make it more effective.IV.OUTCOMES, 2010Box 2-2Expected Outcomes, 2010CommitmentOutcomeImproving Education Quality and Accessibility2• Providing greater access to tertiary education - toachieve the target of 40% participation rate of the agegroup 17-23 years in 2010•Increased education attainment of labour force forbetter productivity and quality•Intensifying the National Dual Training System (NDTS).2010 target: 3,200 companies and 16,000 trainees•••Increased supply of work force with hands-on trainingto meet industrial needsGreater private sector participation in trainingIncreased skill levels of work force to move jobs qualityup the value chain•Bridging the gap between rural and urban schools:improving infrastructure in rural schools•Equal opportunity to quality education•Expanding pre-school education programmes to providefull coverage for children in the five to six years agegroup•All pupils able to read and write prior to formaleducation2Refers to public and private universities, university colleges, branch campuses, colleges, polytechnics and community colleges.53


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutcomeMaking National Schools the School of Preferred Choice•Increasing enrolment rate of Chinese and Indian in nationalschools•Strengthened national unity•Achieving target of 25% of teachers in primary schools and100% in secondary schools with degree qualification by2010•Quality teachers that will increase the appeal of nationalschools•Making national schools ‘smart’ through Making AllSchools Smart Programme•Improved teaching and learning methods to enhancequality of national schoolsCreating Tertiary Institutions of International Standing•Achieving 60% of academic staff with Ph.Ds by 2010•••Malaysia as a regional educational hubAt least one local university ranked in the top 100World best academic programmes in Islamic finance,biotechnology, tropical diseases and biodiversity studies•Increasing post-graduate enrolment to be 25% of degreeenrolment by 2010•Increased R&D&C capabilitiesNurturing Quality R&D and Enhancing Scientific and Innovation Capabilities•Targeting 50 research scientists and engineers (RSEs) per10,000 labour force by 2010•Increased capability for scientific R&D and innovation tomove the economy up the value chainFostering a Society with Strong Values•Fostering a tolerant society with a sense of belonging andpatriotism••United society with high patriotismHigh performance culture work force•Enhancing integrity and eliminating corruption•Society with high integrityV. CONCLUSIONDuring the remaining Plan period, educationand TEVT delivery systems will continue toemphasise on producing quality humancapital needed for the development ofthe economy. The implementation of thevarious programmes by public and privatesectors is expected to help address theneed for knowledge workers in movingthe economy up the value chain. Theinculcation of strong ethics, positive valuesand integrity will be given emphasis indeveloping holistic human capital andenhancing good governance in the publicand private sectors. These efforts will assistMalaysia to meet the challenges broughtby globalisation and the competitive worldmarket. The availability of quality humancapital and good governance system willmake Malaysia an attractive destinationfor investments.54


Addressing Persistent Socio-Economic Inequalities3thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010addressingpersistent socioeconomicinequalitiesconstructively andproductively55


Addressing Persistent Socio-Economic InequalitiesAddressing persistentsocio-economicinequalitiesI.INTRODUCTIONThe commitment towards a developmentphilosophy emphasising economic growthwith distribution was reaffirmed in theNational Mission. Persistent socio-economicinequalities in income, employment andownership will negatively impact growthand threaten national unity and socialstability. During the 2006-2007 period, thesound economic growth was accompaniedwith greater distribution and moreeconomic opportunities for all Malaysians.There was an increase in the mean incomeof all Malaysians, a decline in the incidenceof poverty and an improvement in therestructuring of employment pattern andcorporate equity ownership. Developmentof Bumiputera Commercial and IndustrialCommunity (BCIC) also witnessed greaterparticipation of Bumiputera entrepreneursand enterprises in various economicactivities.During the remaining Plan period, measuresundertaken will be further enhanced toensure a more equitable distributionof economic and social opportunitieswith a view towards strengthening theparticipation of various ethnic groups inthe modern economic activities. Povertyeradication efforts will be continued toattain the Plan targets of eradicatinghardcore poverty and reducing theincidence of overall poverty to 2.8%by the end of the Plan period. In orderto further improve income distribution,rigorous measures will be undertakento narrow disparities between the ruraland urban population as well as regions.Special efforts will be given towards raisingthe income share of the lowest 40% ofhouseholds through the enhancementof skills and capabilities. In the contextof regional balance, the Governmentwill spearhead corridor development infive regions based on natural resourcesendowment and economic potentials.Restructuring of employment and equityownership will be continued to ensure afair and balanced participation of all ethnicgroups in the economy. With respect tothe development of BCIC, efforts will beundertaken to develop more competitiveand resilient Bumiputera entrepreneurs andsmall and medium enterprises throughintensified implementation of public andprivate sector BCIC development initiatives.Taking into account the achievementsof distributional objectives thus far aswell as its limitations, the Governmentwill undertake studies to review existinginstruments for the restructuring ofsociety in line with the current economicchallenges and opportunities.II.KEY RESULTS, 2006-2007The performance of various strategies andprogrammes to address socio-economicinequalities are in Box 3-1.57


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 3-1Key Results, 2006-2007CommitmentOutputPoverty Eradication•Eradicating hardcore poverty and reducingoverall poverty to 2.8% by 20102004 (%) 2007 (%)Incidence of Hardcore PovertyPeninsular Malaysia 0.7 0.3Sabah 6.5 3.7Sarawak 1.1 0.7malaysia 1.2 0.7Urban 0.4 0.3Rural 2.9 1.4Incidence of Overall PovertyPeninsular Malaysia 3.6 2.3Sabah 23.0 16.0Sarawak 7.5 4.2malaysia 5.7 3.6Urban 2.5 2.0Rural 11.9 7.1••Improving access to credit facilitiesProviding financial assistance and training toIndian youthNotes: The average poverty line incomes (PLI) for 2007: RM720 in Peninsular Malaysia,RM960 in Sabah and RM830 in Sarawak. For hardcore poverty, the PLIs wereRM430, RM540 and RM520, respectively. Different sets of PLIs were used for urbanand rural areas• Micro-credit facilities extended to 162,701 by Amanah Ikhtiar Malaysia(AIM) and 2,160 by Yayasan Usaha Maju (YUM) Sabah• Financial assistance extended through Skim Pembangunan UsahawanMuda India (YEIDS) under TEKUN Nasional amounting to RM3 million• A total of 6,260 Indian youth trainedIncome Distribution•Reducing income gaps among ethnic groupsas well as between rural and urban areasMalaysia/Ethnic Group and StrataMean Income(In Current Prices, RM)GrowthRate2004 2007(% p.a)Bumiputera 2,711 3,156 5.2Chinese 4,437 4,853 3.0Indian 3,456 3,799 3.2Others 2,312 3,651 15.5Malaysia 3,249 3,686 4.3Urban 3,956 4,356 3.3Rural 1,875 2,283 6.8Disparity RatioBumiputera:Chinese 1:1.64 1:1.54Bumiputera:Indian 1:1.27 1:1.20Rural:Urban 1:2.11 1:1.9158


Addressing Persistent Socio-Economic InequalitiesCommitmentOutputGini CoefficientBumiputera 0.452 0.430Chinese 0.446 0.432Indian 0.425 0.414Others 0.462 0.545Malaysia 0.462 0.441Urban 0.444 0.427Rural 0.397 0.388Sabah/Ethnic Mean Income Growth Sarawak/ Mean Income GrowthGroup (RM) Rate Ethnic (RM) Rate2004 2007 (% p.a) Group 2004 2007 (% p.a)Malay 2,779 3,089 3.6 Malay 2,717 3,503 8.8Kadazandusun 2,037 2,401 5.6 Iban 1,725 2,243 9.2Bajau 1,824 2,250 7.2 Bidayuh 1,769 2,723 15.5Murut 1,638 2,063 8.0 Melanau 2,341 2,858 6.9OtherOtherBumiputera 1,707 2,259 9.8 Bumiputera 2,146 2,564 6.1Chinese 4,248 4,745 3.8 Chinese 4,254 4,768 3.9Others 3,665 3,133 -5.1 Others 2,819 4,996 21.0Ownership Restructuring•Attaining Bumiputera equity ownershipbetween 20% to 25% by 2010Ownership Group 2004 2006RM million (%) RM million (%)Bumiputera 100,037.2 18.9 120,387.6 19.4Individual 79,449.9 15.0 93,982.2 15.1Institution 11,890.7 2.2 16,039.6 2.6Trust Agencies 8,696.6 1.7 10,365.8 1.7Non-Bumiputera 214,972.8 40.6 273,214.4 43.9Chinese 206,682.9 39.0 263,637.8 42.4Indian 6,392.6 1.2 6,967.8 1.1Others 1,897.3 0.4 2,608.8 0.4Nominee 42,479.1 8.0 41,185.7 6.6Foreigners 172,279.6 32.5 187,045.8 30.1Total 529,768.7 100.0 621,833.5 100.0Notes: The estimation takes into account about 680,000 active companies fromCompanies Commission of Malaysia (CCM). In estimating the equity ownership,par value was used as it covers all companies, listed and non-listed, registered withCCM as compared to the market value which is available only for listed companiesin Bursa Malaysia. The Government shares in companies, including Governmentlinkedcompanies (GLCs), were excluded in the estimation•Increasing participation in unit trust schemesamong Bumiputera in Sabah and SarawakStateNo. ofInvestors(‘000)2004 2007RM millionNo. ofInvestors(‘000)RM millionSabah 808 3,551.5 861 5,179.0Sarawak 694 3,862.3 753 5,431.659


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010••CommitmentProviding opportunities to the Indiancommunity to participate in selected unittrust schemesExpanding ownership in non-financial assetsOutput• Investment of the Indian community in Permodalan Nasional Berhad(PNB) increased by 128% from RM262.4 million in 2004 to RM598.9million in 2007Type of Building2007 (%)Bumiputera Chinese Indian Others TotalBuilding 15.7 75.7 4.3 4.3 100.0One Floor 24.9 69.0 3.8 2.3 100.0Two Floor 13.8 78.5 4.2 3.5 100.0Three Floor 14.3 75.8 3.6 6.3 100.0More Than ThreeFloor8.6 79.2 5.7 6.5 100.0Business Complex 29.2 61.9 2.9 6.0 100.0Industrial Premise 3.5 87.2 1.5 7.8 100.0Hotel 20.8 54.0 2.7 22.5 100.0Total 15.0 76.1 3.8 5.1 100.0Employment Restructuring•Restructuring of employment pattern toreflect ethnic composition of the populationProfession2005 (%) 2007 (%)Bumiputera Chinese Indian Bumiputera Chinese IndianAccountant 21.5 73.0 4.9 23.5 71.4 4.9Architect 45.3 53.1 1.4 46.2 52.1 1.5Doctor 38.1 31.2 27.4 43.8 28.2 20.2Dentist 44.4 35.3 18.4 46.5 34.5 16.9Engineer 46.0 47.6 5.4 46.2 46.0 5.3Lawyer 38.0 37.1 24.1 39.0 36.5 23.5Surveyor 48.2 47.0 3.2 50.5 44.7 3.2VeterinarySurgeon39.0 32.2 24.8 43.3 34.1 22.5Regional Balance••Establishing growth corridors in transborderareas involving two or more statesBridging digital divide• Five growth corridors established namely Iskandar Malaysia ( im),Northern Corridor Economic Region (NCER), East Coast EconomicRegion (ECER), Sabah Development Corridor (SDC) and SarawakCorridor of Renewable Energy (SCORE)• 108 Medan Info Desa constructed in rural areas and 19,330 trained onthe usage of information and communications technology (ICT)•387 telecentres established• 42 Pusat Internet Desa upgraded60


Addressing Persistent Socio-Economic InequalitiesCommitmentOutputBumiputera Commercial and Industrial CommunityPublic Sector Driven Initiatives•Creating entrepreneurs through variousprogrammes•67,533 new entrepreneurs created• 173 vendors created and 8 anchor companies participated underVendor Development Programme• 153 franchisees created and 6 franchisors participated underFranchise Development Programme• 423 cooperatives created in business related activities• 304 technopreneurs created• 358 entrepreneurs developed under the Ministry of Entrepreneurand Cooperative Development Strategic and Target Industry(MESTI) programme• 886 entrepreneurs developed under Perbadanan UsahawanNasional Berhad (PuNB) Entrepreneur Programme• 63 entrepreneurs involved in craft industries•Upgrading and strengthening existingenterprises to higher level•10,618 micro, small and medium size enterprises upgraded includingunder Groom Big programme•Providing new business premises•1,524 new business premises provided•Creating micro-businesses• 24,449 micro-businesses created under TEKUN Nasional•Providing entrepreneurial training and skillsto existing and potential entrepreneurs•120,720 participants trainedPrivate Sector Driven Initiatives•Increasing Bumiputera participation throughCluster Development Initiatives•11 clusters established (Building & Construction, ICT &Telecommunications, Defence & Aerospace, Travel & Tourism, Logistics& Transport, Banking & Finance, Automotive Industry, Education &Human Resource, Agribusiness, Biotechnology & Bio-Industry and Oil,Gas & Petrochemical)•Major achievements included:• Implementation of anchor and tiering system initiative forBumiputera contractors in various government projects• Establishment of Malaysian Virtual Trading Corporation(MAVTRAC) as a centralise supplier of core building andconstruction materials• Establishment of National Content Development Corporation(NCDC) to spearhead the development of Bumiputeraentrepreneurs in the digital content industry• Establishment of three edupreneur championsCollegiate Franchise Model at tertiary levelunder theImplementation of• management of Government Portal Services(MPS) to provide opportunities for Bumiputera enterprises andunemployed graduates to be technopreneurs61


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010III.MOVING FORWARD,2008-2010The Government will place greateremphasis on addressing the causesof socio-economic inequalities andimplementing bold measures to attaindistributional objectives under the Planthrough the following key strategies asillustrated in Figure 3-1.Figure 3-1Key Strategies to Address Socio-Economic InequalitiesNATIONAL MISSIONTHRUSTAddressing Persistent Socio-EconomicInequalities Constructively and ProductivelyPovertyEradicationIncomeDistributionOwnershipRestructuringEmploymentRestructuringRegionalBalanceBCICMAINPILLARSEradicatehardcorepoverty by2010Reduceoverallpoverty to2.8% by2010Narrowincome gapbetweenand amongethnicgroups andstrataEnlargemiddleincomegroupIncreaseBumiputeraequity to20%-25%by 2010IncreaseIndianequityownership to1.5% by2010EliminateethnicidentificationwitheconomicfunctionDevelopBumiputeraScience andTechnologyCommunity(BSTC)Reduceimbalancesbetweenregions,states as wellas betweenrural andurban areasCreate anddevelop moreBumiputeraentrepreneursand SMEsSUPPORTINGINSTITUTIONSGovernment (Federal and State), GLCs, Private Sector and NGOsPoverty EradicationProgrammes for poverty eradication willbe designed based on an integratedapproach to enable micro-targeting toincrease the coverage of the target groupand ensure effectiveness and sustainabilityof the programme. Programmes willbe designed to meet specific needs ofhousehold including providing incomesuppor t and basic amenities withemphasis on education, skills trainingand income generating activities. Tocomplement Government’s efforts inpoverty eradication, non-governmentalorganizations (NGOs) and Governmentlinkedcompanies (GLCs) will assume amore active role through their corporatesocial responsibility initiatives.Income generating activities and theprovision of basic amenities particularlyhousing, will continue to be emphasisedas a critical element in poverty eradicationprogrammes. The scope of the housingprogramme will also incorporate buildingof longhouses in Sabah and Sarawak tocater to the socio-cultural practice of thelocal communities. In addition, agropolitanprojects, an integrated land developmenton a smaller scale, will be implementedin Johor, Pahang, Perak, Sabah, Sarawakand Terengganu. These projects aimedat improving the socio-economic positionand standard of living of the hardcorepoor in the rural areas. The three maincomponents of the projects are theprovision of basic infrastructure, incomegenerating projects and the developmentof human capital.62


Addressing Persistent Socio-Economic InequalitiesAs for poverty eradication in Sabah, thestate will receive a special allocation toimplement people-centred projects suchas rural roads, electricity and water supply,and other social amenities. In addition,the Federal Land Development Authority(FELDA) will assist in implementing severalprojects including Program PembangunanMasyarakat Setempat (PPMS), incomegenerating activities and training as wellas micro-credit facilities.The poverty eradication programmes forthe minority groups will be designed totake into account the differences in theirneeds and level of development. A total of5,000 hectares of land will be developedto benefit more than 10,000 Orang Aslifamilies. In addition, emphasis will begiven to increase school enrolment andacademic achievement among Orang Aslistudents. The standard of living of minoritygroups such as the Rungus, Suluk, OrangSungei and Tidong in Sabah, and thePenan, Kenyah, Kajang and Kedayan inSarawak will be improved by providingbetter access to education, health andbasic amenities.For the urban poor, the focus will be oncreating income generating programmesand providing basic facilities such ashousing and social amenities. Thecoverage of the urban poverty eradicationprogrammes will be expanded to includetechnical and non-technical training,entrepreneurship development and familysupport. In addition, a total of 20,000urban poor and hardcore poor, is expectedto benefit from the special share schemeof Amanah Saham Wawasan (ASW), worthRM100 million. To further assist the urbanpoor to secure jobs, a job-matchingprogramme will be implemented.The Government will also address relativepoverty by strengthening the accessibilityof economic and education opportunities,increasing home ownership and providingbasic social infrastructure, particularlyin the urban areas. Measures will beintroduced to cushion the impact ofhigher prices on the lower and middleincome groups.In implementing poverty eradicationprogrammes, effor ts will focus onenhancing the effectiveness of the deliverymechanism through the three-tier FocusGroup on Poverty at the national, stateand district levels. These focus groupswill oversee the planning, implementationand monitoring of poverty eradicationprogrammes and projects as well asallocation of funds. For this purpose,the eKasih database system will be usedas a central reference point providingcomprehensive profiling of the poor andhardcore poor groups.Income DistributionConcerted efforts will continue to beundertaken to further reduce incomeand economic gaps between and amongstrata and ethnic groups. The rural-urbandisparity ratio is targeted to improve to1:1.7 by 2010. More emphasis will begiven to increasing the income shareof the lowest 40% of households andcreating a larger and more prosperousmiddle income group. This group, definedas those earning household incomebetween RM2,000 to RM4,000 per month,is expected to increase in size and achievea more rapid growth in income level.To reduce inter-ethnic income disparity,emphasis will be on human capitaldevelopment through skills enhancementand instilling of positive attitude andwork culture. These will strengthen thecapacity of the people to increase incomeand create wealth through business,investment and entrepreneurial activities.Enhancing the deliverymechanism...Reducing income gaps...63


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010The development of BCIC and BumiputeraScience and Technology Community(BSTC) will be enhanced through businessintegration and linkages as well as greateradoption of knowledge and innovation inorder to generate value added businesses.At the same time, employment andownership restructuring programmesespecially for Bumiputera, includingBumiputera of Sabah dan Sarawak, theIndian community and minority groups,will be accelerated to ensure all ethnicgroups benefit from the economic growthof the country.The implementation of various initiativesunder the corridor development willcontribute directly towards reducingincome gaps by strata and region. It willgenerate employment and wealth-creatingopportunities among the local populationespecially in the less developed areas.In addition, the digital divide will benarrowed through the provision of Internetaccess to the underserved community,enabling them to gain information onincome generating opportunities.Ownership RestructuringEfforts will be focused on improvingBumiputera par ticipation includingBumiputera of Sabah and Sarawak andincreasing their equity ownership in thecorporate sector as well as in non-financialassets to meet the restructuring objectives.Measures will be introduced to ensure longterm sustainability of the wealth generated.At the same time, a special packageprogramme will be created to facilitategreater Bumiputera participation in theeconomy, particularly in the new growthand high value-added sectors. Efforts willalso be taken to increase the corporatewealth of the Indian community and toencourage more Indians to venture intobusiness. It is targeted that the ownershipof equity by the Indian community willreach 1.5% by the end of 2010.To enhance Bumiputera participationin the economy, a number of measureswill be undertaken during the remainingPlan period. Firstly, greater emphasiswill be given to ensuring Bumiputeracommunity has controlling stake inprivate companies. Bumiputera will beencouraged to invest in new growth areassuch as information and communicationstechnology (ICT), biotechnology, photonics,nanotechnology, advanced manufacturingand precision engineering. Secondly, therole of Bumiputera institutions such asPermodalan Nasional Berhad (PNB) andTabung Haji will be strengthened toconsolidate the funds of Bumiputeraindividuals. Pooling of Bumiputera funds viathese institutions will enable Bumiputerainstitutions to have a stronger andsustainable source of funds to undertakebigger projects and to further diversifyinvestments. Thirdly, talented Bumiputeragraduates with creative and innovativeideas will be provided with capital tocommercialise their ideas. For this purpose,a special fund will be set up to assistpotential entrepreneurs among Bumiputeragraduates to market their productsand services. Fourthly, a comprehensivedatabase to monitor the performanceof Bumiputera in the corporate sectorwill be set up. Wealth ownership ofBumiputera in the non-financial assetssuch as ownership of commercial andresidential buildings will be used asan additional yardstick to evaluate theperformance of Bumiputera.The existing restructuring instrumentsto enhance Bumiputera participation inthe economy will be reviewed. Thesewill include the Foreign InvestmentCommittee Guidelines, public procurementprocedures and the Industrial CoordinationAct, 1975.Development of commercial assets suchas hotel and business premises onwakaf land will be expanded to increase64


Addressing Persistent Socio-Economic InequalitiesBumiputera ownership of non-financialassets. A strategic plan will be drawnup to ensure that the income generatedfrom the development of wakaf landwill enable state religious authoritiesto be more self reliant in developingnew wakaf land. In addition, Bumiputeraownership of residential and commercialproperties will be further improvedthrough agencies such as the UrbanDevelopment Authority (UDA), YayasanAmanah Hartanah Bumiputera and MajlisAmanah Rakyat (MARA).To increase the equity ownership ofBumiputera of Sabah and Sarawak,programmes such as unit trust schemesand entrepreneurship development andskills training will be further enhanced. Toincrease the ownership of non-financialassets of Bumiputera of Sarawak, nativeand customary land will continue to bedeveloped.The involvement of the Indian communityin the modern sectors of the economywill be encouraged through trainingand entrepreneurship developmentprogrammes especially among the youth.A total of 3,000 Indian youth is expectedto benefit from various skills and businesstraining programmes. In addition, specialassistance will be given to the Indiancommunity to raise their equity ownershipthrough unit trust schemes.professionals and semi-professionals,enrolment in Universiti Teknologi MARA(UiTM) will be increased through thefranchise programme with Bumiputeraprivate institutions of higher learning.In addition, Universiti Kuala Lumpur(UniKL) will continue to offer coursesat diploma and degree levels in scienceand technology, including computer andmedical engineering to complementUiTM’s efforts. The quality of the facultymembers and facilities will be upgradedto ensure these universities producequality graduates.The development of a viable and innovativeBSTC is vital towards attaining a morebalanced employment restructuring andequitable distribution of wealth amongvarious ethnic groups. To acceleratethe creation of BSTC, a comprehensivedevelopment framework will be preparedto outline the strategic action plan.Measures will be undertaken to ensure theprivate sector will employ more Bumiputera,Indian and minority communities atprofessional and managerial levels.For purpose of monitoring, all publiclisted companies will be required todisclose information of human resourcescomposition by ethnicity at all occupationallevels. In addition, more non-Bumiputerawill be encouraged to work in the publicsector.Developing BumiputeraScience and TechnologyCommunity...Employment RestructuringEmployment imbalances among ethnicgroups will be reduced in various sectorsand occupations by raising participationof Bumiputera and non-Bumiputerain sectors in which they are underrepresented.Education, skills trainingand technopreneur development willremain as important initiatives to attainthe employment restructuring objective.To enlarge the pool of BumiputeraRegional BalanceThe focus of regional development willcontinue to emphasise on raising thestandard of living as well as attainingbalanced socio-economic developmentacross regions and states. Growth centresand growth corridors transcending stateboundaries will be developed, the economicbase of less developed states modernisedand diversified and urban-rural digitaldivide reduced.65


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Corridor DevelopmentCorridor development will reduce regionalimbalance and bring about equitablegrowth, investment and employmentopportunities to all regions of Malaysia.This new approach aims at creatingnew sources of growth and ensuring acomprehensive and widespread economicdevelopment in a more coordinatedand integrated manner. Generation ofadditional income in the region willfurther accelerate poverty eradication,restructuring of society and overallwealth creation. The regional corridorauthorities will spearhead efforts tofacilitate and expedite the implementationof programmes and projects identifiedin the Master Plan of each growthcorridor.Box 3-2Regional Growth CorridorIskandarMalaysiaNorthernCorridorEconomicRegionEast CoastEconomic RegionSabahDevelopmentCorridorSarawak Corridorof RenewableEnergyDevelopmentPeriod2006 - 2025 2007 - 2025 2007 - 2020 2008 - 2025 2008 - 2030VisionA Strong andSustainableMetropolis ofInternationalStandingWorld-ClassEconomic Regionby 2025A DevelopedRegion - Distinctive,Dynamic andCompetitiveHarnessing Unity inDiversity for WealthCreation and SocialWell BeingDeveloped andIndustrialised StateArea ofCoverage2,216 squarekilometres(District of JohorBahru and partialdistrict of Pontian- Mukim JeramBatu, MukimSungai Karang,Mukim Serkat andPulau Kukup)17,816 squarekilometres(Penang, Kedah,Perlis andNorthern Perak -Districts of HuluPerak, Kerian,Kuala Kangsarand LarutMatang-Selama)66,736 squarekilometres(Pahang, Kelantan,Terengganu anddistrict of Mersing,Johor)73,997 squarekilometres (Wholeof Sabah)70,708 squarekilometres (TanjungManis-Similajau andhinterland)Focus Sector/Industry1. Education2. Financial3. Health Care4. ICT andCreativeIndustries5. Logistics6. Tourism1.2.3.4.5.AgricultureHuman CapitalInfrastructureManufacturingTourism1. Agriculture2. Education3. Manufacturing4. Oil, Gas &Petrochemical5. Tourism1.2.3.4.5.6.AgricultureEnvironmentHuman CapitalInfrastructureManufacturingTourism1. Aluminium2. Glass3. MarineEngineering4. Metal-Based5. Petroleum-Based6. Timber-Based7. Aquaculture8. Livestock9. Palm Oil10. Tourism66


Addressing Persistent Socio-Economic InequalitiesIskandarMalaysiaNorthernCorridorEconomicRegionEast CoastEconomic RegionSabahDevelopmentCorridorSarawak Corridorof RenewableEnergyCorridorAuthorityIskandar RegionDevelopmentAuthority (IRDA)Northern CorridorImplementationAuthority (NCIA)East CoastEconomic RegionDevelopmentCouncil (ECERDC)Sabah EconomicDevelopmentand InvestmentAuthority (SEDIA)Regional CorridorDevelopmentAuthority (RECODA)ExpectedEmployment 1(million)ExpectedInvestment 1(RM billion)1.4 3.1 1.9 2.1 3.0382 178 112 113 334Notes: 1 By the end of the respective development period.The participation of private sector is crucialto drive the development of the growthcorridors. The Government will promotea more conducive environment to attractgreater private sector participation indeveloping these growth corridors. Forthis purpose, a competitive package ofincentives will be offered. To enhancedeliver y of ser vices and promoteinvestments, one-stop centres will beestablished in growth corridors.Bridging the Digital DivideEfforts to narrow the digital divide will befurther intensified to ensure all Malaysians,particularly the underserved community,share the benefits of the knowledgebasedeconomy. In the rural areas, moreMedan Info Desa and Pusat Internet Desawill continue to be built and upgraded,respectively. To ensure more equitableaccess to ICT, the Government has set thetarget to provide at least one telecentrefor each mukim by 2010. Other efforts thatwill be undertaken include the provisionof affordable personal computers (PCs) andonline services to the public. Steps willbe taken to introduce best practices andre-model the telecentres to become self-sustainable. The development of contentwill also be promoted and a communityportal that serves the needs and interestof various underserved communities willbe developed.Development of BCICIn the remaining Plan period, the secondphase of BCIC development will begiven further emphasis through theimplementation of the private sectordriven cluster development initiatives.The initiatives will be further intensifiedto enable Bumiputera entrepreneursto move from the low-end to highendeconomic value chain. Specificprogrammes will be implemented tospearhead strong Bumiputera sectoralpresence across the value chain in areassuch as construction, logistics, education,tourism and distributive trade.The Government will continue to implementvarious programmes to ensure effectiveBumiputera participation in business andeconomic activities. Implementation of thepackaged programmes such as franchiseand vendor development, technopreneursdevelopment, ‘Groom Big’ and retailing in67


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010strategic commercial complexes will befurther strengthened. Measures will beundertaken to facilitate upward mobility ofentrepreneurs such as listing of companiesin Bursa Malaysia and converting existingbusiness entities through the adoptionof modalities including franchising andretailing. The wider use of competitivebidding will help to develop credible andcompetent Bumiputera entrepreneurs.A dedicated BCIC unit will be establishedin each of the corridor authorities to assistBumiputera entrepreneurs to capitaliseon the economic opportunities createdin the corridors. In collaboration with therespective implementing agencies, thecorridor authorities will identify potentialbusiness opportunities for Bumiputeraentrepreneurs to participate as firstmovers. In addition, the Governmentwill continue to facilitate entry andgrowth of Bumiputera enterprises innew growth areas, particularly in hightechnology-based manufacturing, halalindustry, biotechnology and bio-industries,health and edu-tourism, as well as creativeindustry.GLCs will implement their programmeswith specific targets more vigorously. Todevelop, nurture and increase the numberof promising Bumiputera entrepreneursand enterprises in specific niche areasalong the value chain, programmes suchas Management Buyout (MBO), smartpartnership and equity participation willbe given further emphasis. In addition,measures will also be taken to discourageGLCs from directly competing withBumiputera enterprises for businessopportunities.Bumiputera entrepreneurs have to developglobal mindset, acquire knowledge andskills, forge international networks andbe ICT savvy to cope with the changingeconomic landscape. Entrepreneurialdevelopment programmes will focuson driving mindset change, inculcatingpositive values and attitudes as well ashigh performance culture and attractingmore Bumiputera professionals to beinvolved in business.Public-Private Partnership modality willbe strengthened to increase inter andintra collaboration and business networksamong Bumiputera enterprises; betweenBumiputera and non-Bumiputera; andbetween enterprises and the Government.Joint venture collaboration and smartpartnership between Bumiputera andnon-Bumiputera as well as with foreignpartners will be emphasized.The monitoring of BCIC programmeswill be intensified to ensure effectiveimplementation and coordination.Implementing agencies will strengthentheir monitoring mechanism to ensuretheir programmes comply with BCICobjectives and targets. The effectivenessof BCIC programmes will be evaluatedbased on various measurement toolssuch as performance management systemand auditing.IV.OUTCOMES, 2010The expected outcomes of the variousstrategies and programmes to addresssocio-economic inequalities are in Box3-3.68


Addressing Persistent Socio-Economic InequalitiesBox 3-3Expected Outcomes, 2010CommitmentOutcomePoverty Eradication•Eradicating hardcore poverty and reducing overall povertyto 2.8%••Hardcore poverty eradicatedOverall poverty reduced to 2.8%Income Distribution•Reducing Bumiputera:Chinese income disparity ratio to1:1.50• Reduced Bumiputera:Chinese income disparity•Reducing Bumiputera:Indian income disparity ratio to1:1.15•Reduced Bumiputera:Indian income disparity•Reducing rural-urban income disparity ratio to 1:1.70•Reduced rural-urban income disparity•Reducing Gini coefficient to 0.35 by 2020• Improved income distributionOwnership Restructuring•Increasing Bumiputera equity ownership to 20%-25%•Improved Bumiputera equity ownership•Increasing Indian equity ownership to 1.5%•Improved Indian equity ownershipEmployment Restructuring• Eliminating ethnic identification by occupation• Towards balanced ethnic employment patternRegional Balance•Reducing regional disparities through corridordevelopment•Towards balanced regional developmentBumiputera Commercial and Industrial CommunityPublic Sector Driven Initiatives•Creating 150,000 entrepreneurs through variousprogrammes, including:•Greater Bumiputera participation in commercial andindustrial sector• 240 vendors and 15 new anchor companies underVendor Development Programme• 500 Bumiputera franchisees and 20 franchisors underthe Franchise Development Programme• 800 cooperatives in the business sectors• 750 technopreneurs69


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutcome• 800 entrepreneurs in MESTI programme• 1,500 entrepreneurs under the PunB EntrepreneurProgramme••••Upgrading and strengthening 25,000 enterprisesProviding 4,900 new business premisesCreating 40,000 micro-businesses through financing byTEKUN NasionalProviding entrepreneurial skills training to 275,000participantsPrivate Sector Driven Initiatives• Intensifying BCIC cluster development initiatives• Strong Bumiputera sectoral presence across alleconomic value chainV.CONCLUSIONGood progress was made during theReview period in reducing poverty,narrowing income imbalances betweenethnic groups and increasing Bumiputeraparticipation in key occupations andsectors of the economy. During theremaining Ninth Plan period, distributionalstrategies will continue to be pursuedtowards a more balanced participationand equitable distribution of qualityopportunities among the various ethnicgroups. Emphasis will be on increasingthe income share of the lowest 40% ofhouseholds, creating a bigger middleincome group and narrowing ethnic andregional disparities. Measures will alsobe taken to increase the participation ofBumiputera in the private sector, enhanceBumiputera corporate equity ownershipand further develop BCIC and BSTC. Thedevelopment of less developed statesand regions will be accelerated to reduceregional disparities. The implementationof these distributional strategies willcontribute positively towards maintainingequitable economic growth, promotinghuman development and strengtheningnational unity.70


Addressing Persistent Socio-Economic Inequalities3thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010addressingpersistent socioeconomicinequalitiesconstructively andproductively55


Addressing Persistent Socio-Economic InequalitiesAddressing persistentsocio-economicinequalitiesI.INTRODUCTIONThe commitment towards a developmentphilosophy emphasising economic growthwith distribution was reaffirmed in theNational Mission. Persistent socio-economicinequalities in income, employment andownership will negatively impact growthand threaten national unity and socialstability. During the 2006-2007 period, thesound economic growth was accompaniedwith greater distribution and moreeconomic opportunities for all Malaysians.There was an increase in the mean incomeof all Malaysians, a decline in the incidenceof poverty and an improvement in therestructuring of employment pattern andcorporate equity ownership. Developmentof Bumiputera Commercial and IndustrialCommunity (BCIC) also witnessed greaterparticipation of Bumiputera entrepreneursand enterprises in various economicactivities.During the remaining Plan period, measuresundertaken will be further enhanced toensure a more equitable distributionof economic and social opportunitieswith a view towards strengthening theparticipation of various ethnic groups inthe modern economic activities. Povertyeradication efforts will be continued toattain the Plan targets of eradicatinghardcore poverty and reducing theincidence of overall poverty to 2.8%by the end of the Plan period. In orderto further improve income distribution,rigorous measures will be undertakento narrow disparities between the ruraland urban population as well as regions.Special efforts will be given towards raisingthe income share of the lowest 40% ofhouseholds through the enhancementof skills and capabilities. In the contextof regional balance, the Governmentwill spearhead corridor development infive regions based on natural resourcesendowment and economic potentials.Restructuring of employment and equityownership will be continued to ensure afair and balanced participation of all ethnicgroups in the economy. With respect tothe development of BCIC, efforts will beundertaken to develop more competitiveand resilient Bumiputera entrepreneurs andsmall and medium enterprises throughintensified implementation of public andprivate sector BCIC development initiatives.Taking into account the achievementsof distributional objectives thus far aswell as its limitations, the Governmentwill undertake studies to review existinginstruments for the restructuring ofsociety in line with the current economicchallenges and opportunities.II.KEY RESULTS, 2006-2007The performance of various strategies andprogrammes to address socio-economicinequalities are in Box 3-1.57


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 3-1Key Results, 2006-2007CommitmentOutputPoverty Eradication•Eradicating hardcore poverty and reducingoverall poverty to 2.8% by 20102004 (%) 2007 (%)Incidence of Hardcore PovertyPeninsular Malaysia 0.7 0.3Sabah 6.5 3.7Sarawak 1.1 0.7malaysia 1.2 0.7Urban 0.4 0.3Rural 2.9 1.4Incidence of Overall PovertyPeninsular Malaysia 3.6 2.3Sabah 23.0 16.0Sarawak 7.5 4.2malaysia 5.7 3.6Urban 2.5 2.0Rural 11.9 7.1••Improving access to credit facilitiesProviding financial assistance and training toIndian youthNotes: The average poverty line incomes (PLI) for 2007: RM720 in Peninsular Malaysia,RM960 in Sabah and RM830 in Sarawak. For hardcore poverty, the PLIs wereRM430, RM540 and RM520, respectively. Different sets of PLIs were used for urbanand rural areas• Micro-credit facilities extended to 162,701 by Amanah Ikhtiar Malaysia(AIM) and 2,160 by Yayasan Usaha Maju (YUM) Sabah• Financial assistance extended through Skim Pembangunan UsahawanMuda India (YEIDS) under TEKUN Nasional amounting to RM3 million• A total of 6,260 Indian youth trainedIncome Distribution•Reducing income gaps among ethnic groupsas well as between rural and urban areasMalaysia/Ethnic Group and StrataMean Income(In Current Prices, RM)GrowthRate2004 2007(% p.a)Bumiputera 2,711 3,156 5.2Chinese 4,437 4,853 3.0Indian 3,456 3,799 3.2Others 2,312 3,651 15.5Malaysia 3,249 3,686 4.3Urban 3,956 4,356 3.3Rural 1,875 2,283 6.8Disparity RatioBumiputera:Chinese 1:1.64 1:1.54Bumiputera:Indian 1:1.27 1:1.20Rural:Urban 1:2.11 1:1.9158


Addressing Persistent Socio-Economic InequalitiesCommitmentOutputGini CoefficientBumiputera 0.452 0.430Chinese 0.446 0.432Indian 0.425 0.414Others 0.462 0.545Malaysia 0.462 0.441Urban 0.444 0.427Rural 0.397 0.388Sabah/Ethnic Mean Income Growth Sarawak/ Mean Income GrowthGroup (RM) Rate Ethnic (RM) Rate2004 2007 (% p.a) Group 2004 2007 (% p.a)Malay 2,779 3,089 3.6 Malay 2,717 3,503 8.8Kadazandusun 2,037 2,401 5.6 Iban 1,725 2,243 9.2Bajau 1,824 2,250 7.2 Bidayuh 1,769 2,723 15.5Murut 1,638 2,063 8.0 Melanau 2,341 2,858 6.9OtherOtherBumiputera 1,707 2,259 9.8 Bumiputera 2,146 2,564 6.1Chinese 4,248 4,745 3.8 Chinese 4,254 4,768 3.9Others 3,665 3,133 -5.1 Others 2,819 4,996 21.0Ownership Restructuring•Attaining Bumiputera equity ownershipbetween 20% to 25% by 2010Ownership Group 2004 2006RM million (%) RM million (%)Bumiputera 100,037.2 18.9 120,387.6 19.4Individual 79,449.9 15.0 93,982.2 15.1Institution 11,890.7 2.2 16,039.6 2.6Trust Agencies 8,696.6 1.7 10,365.8 1.7Non-Bumiputera 214,972.8 40.6 273,214.4 43.9Chinese 206,682.9 39.0 263,637.8 42.4Indian 6,392.6 1.2 6,967.8 1.1Others 1,897.3 0.4 2,608.8 0.4Nominee 42,479.1 8.0 41,185.7 6.6Foreigners 172,279.6 32.5 187,045.8 30.1Total 529,768.7 100.0 621,833.5 100.0Notes: The estimation takes into account about 680,000 active companies fromCompanies Commission of Malaysia (CCM). In estimating the equity ownership,par value was used as it covers all companies, listed and non-listed, registered withCCM as compared to the market value which is available only for listed companiesin Bursa Malaysia. The Government shares in companies, including Governmentlinkedcompanies (GLCs), were excluded in the estimation•Increasing participation in unit trust schemesamong Bumiputera in Sabah and SarawakStateNo. ofInvestors(‘000)2004 2007RM millionNo. ofInvestors(‘000)RM millionSabah 808 3,551.5 861 5,179.0Sarawak 694 3,862.3 753 5,431.659


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010••CommitmentProviding opportunities to the Indiancommunity to participate in selected unittrust schemesExpanding ownership in non-financial assetsOutput• Investment of the Indian community in Permodalan Nasional Berhad(PNB) increased by 128% from RM262.4 million in 2004 to RM598.9million in 2007Type of Building2007 (%)Bumiputera Chinese Indian Others TotalBuilding 15.7 75.7 4.3 4.3 100.0One Floor 24.9 69.0 3.8 2.3 100.0Two Floor 13.8 78.5 4.2 3.5 100.0Three Floor 14.3 75.8 3.6 6.3 100.0More Than ThreeFloor8.6 79.2 5.7 6.5 100.0Business Complex 29.2 61.9 2.9 6.0 100.0Industrial Premise 3.5 87.2 1.5 7.8 100.0Hotel 20.8 54.0 2.7 22.5 100.0Total 15.0 76.1 3.8 5.1 100.0Employment Restructuring•Restructuring of employment pattern toreflect ethnic composition of the populationProfession2005 (%) 2007 (%)Bumiputera Chinese Indian Bumiputera Chinese IndianAccountant 21.5 73.0 4.9 23.5 71.4 4.9Architect 45.3 53.1 1.4 46.2 52.1 1.5Doctor 38.1 31.2 27.4 43.8 28.2 20.2Dentist 44.4 35.3 18.4 46.5 34.5 16.9Engineer 46.0 47.6 5.4 46.2 46.0 5.3Lawyer 38.0 37.1 24.1 39.0 36.5 23.5Surveyor 48.2 47.0 3.2 50.5 44.7 3.2VeterinarySurgeon39.0 32.2 24.8 43.3 34.1 22.5Regional Balance••Establishing growth corridors in transborderareas involving two or more statesBridging digital divide• Five growth corridors established namely Iskandar Malaysia ( im),Northern Corridor Economic Region (NCER), East Coast EconomicRegion (ECER), Sabah Development Corridor (SDC) and SarawakCorridor of Renewable Energy (SCORE)• 108 Medan Info Desa constructed in rural areas and 19,330 trained onthe usage of information and communications technology (ICT)•387 telecentres established• 42 Pusat Internet Desa upgraded60


Addressing Persistent Socio-Economic InequalitiesCommitmentOutputBumiputera Commercial and Industrial CommunityPublic Sector Driven Initiatives•Creating entrepreneurs through variousprogrammes•67,533 new entrepreneurs created• 173 vendors created and 8 anchor companies participated underVendor Development Programme• 153 franchisees created and 6 franchisors participated underFranchise Development Programme• 423 cooperatives created in business related activities• 304 technopreneurs created• 358 entrepreneurs developed under the Ministry of Entrepreneurand Cooperative Development Strategic and Target Industry(MESTI) programme• 886 entrepreneurs developed under Perbadanan UsahawanNasional Berhad (PuNB) Entrepreneur Programme• 63 entrepreneurs involved in craft industries•Upgrading and strengthening existingenterprises to higher level•10,618 micro, small and medium size enterprises upgraded includingunder Groom Big programme•Providing new business premises•1,524 new business premises provided•Creating micro-businesses• 24,449 micro-businesses created under TEKUN Nasional•Providing entrepreneurial training and skillsto existing and potential entrepreneurs•120,720 participants trainedPrivate Sector Driven Initiatives•Increasing Bumiputera participation throughCluster Development Initiatives•11 clusters established (Building & Construction, ICT &Telecommunications, Defence & Aerospace, Travel & Tourism, Logistics& Transport, Banking & Finance, Automotive Industry, Education &Human Resource, Agribusiness, Biotechnology & Bio-Industry and Oil,Gas & Petrochemical)•Major achievements included:• Implementation of anchor and tiering system initiative forBumiputera contractors in various government projects• Establishment of Malaysian Virtual Trading Corporation(MAVTRAC) as a centralise supplier of core building andconstruction materials• Establishment of National Content Development Corporation(NCDC) to spearhead the development of Bumiputeraentrepreneurs in the digital content industry• Establishment of three edupreneur championsCollegiate Franchise Model at tertiary levelunder theImplementation of• management of Government Portal Services(MPS) to provide opportunities for Bumiputera enterprises andunemployed graduates to be technopreneurs61


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010III.MOVING FORWARD,2008-2010The Government will place greateremphasis on addressing the causesof socio-economic inequalities andimplementing bold measures to attaindistributional objectives under the Planthrough the following key strategies asillustrated in Figure 3-1.Figure 3-1Key Strategies to Address Socio-Economic InequalitiesNATIONAL MISSIONTHRUSTAddressing Persistent Socio-EconomicInequalities Constructively and ProductivelyPovertyEradicationIncomeDistributionOwnershipRestructuringEmploymentRestructuringRegionalBalanceBCICMAINPILLARSEradicatehardcorepoverty by2010Reduceoverallpoverty to2.8% by2010Narrowincome gapbetweenand amongethnicgroups andstrataEnlargemiddleincomegroupIncreaseBumiputeraequity to20%-25%by 2010IncreaseIndianequityownership to1.5% by2010EliminateethnicidentificationwitheconomicfunctionDevelopBumiputeraScience andTechnologyCommunity(BSTC)Reduceimbalancesbetweenregions,states as wellas betweenrural andurban areasCreate anddevelop moreBumiputeraentrepreneursand SMEsSUPPORTINGINSTITUTIONSGovernment (Federal and State), GLCs, Private Sector and NGOsPoverty EradicationProgrammes for poverty eradication willbe designed based on an integratedapproach to enable micro-targeting toincrease the coverage of the target groupand ensure effectiveness and sustainabilityof the programme. Programmes willbe designed to meet specific needs ofhousehold including providing incomesuppor t and basic amenities withemphasis on education, skills trainingand income generating activities. Tocomplement Government’s efforts inpoverty eradication, non-governmentalorganizations (NGOs) and Governmentlinkedcompanies (GLCs) will assume amore active role through their corporatesocial responsibility initiatives.Income generating activities and theprovision of basic amenities particularlyhousing, will continue to be emphasisedas a critical element in poverty eradicationprogrammes. The scope of the housingprogramme will also incorporate buildingof longhouses in Sabah and Sarawak tocater to the socio-cultural practice of thelocal communities. In addition, agropolitanprojects, an integrated land developmenton a smaller scale, will be implementedin Johor, Pahang, Perak, Sabah, Sarawakand Terengganu. These projects aimedat improving the socio-economic positionand standard of living of the hardcorepoor in the rural areas. The three maincomponents of the projects are theprovision of basic infrastructure, incomegenerating projects and the developmentof human capital.62


Addressing Persistent Socio-Economic InequalitiesAs for poverty eradication in Sabah, thestate will receive a special allocation toimplement people-centred projects suchas rural roads, electricity and water supply,and other social amenities. In addition,the Federal Land Development Authority(FELDA) will assist in implementing severalprojects including Program PembangunanMasyarakat Setempat (PPMS), incomegenerating activities and training as wellas micro-credit facilities.The poverty eradication programmes forthe minority groups will be designed totake into account the differences in theirneeds and level of development. A total of5,000 hectares of land will be developedto benefit more than 10,000 Orang Aslifamilies. In addition, emphasis will begiven to increase school enrolment andacademic achievement among Orang Aslistudents. The standard of living of minoritygroups such as the Rungus, Suluk, OrangSungei and Tidong in Sabah, and thePenan, Kenyah, Kajang and Kedayan inSarawak will be improved by providingbetter access to education, health andbasic amenities.For the urban poor, the focus will be oncreating income generating programmesand providing basic facilities such ashousing and social amenities. Thecoverage of the urban poverty eradicationprogrammes will be expanded to includetechnical and non-technical training,entrepreneurship development and familysupport. In addition, a total of 20,000urban poor and hardcore poor, is expectedto benefit from the special share schemeof Amanah Saham Wawasan (ASW), worthRM100 million. To further assist the urbanpoor to secure jobs, a job-matchingprogramme will be implemented.The Government will also address relativepoverty by strengthening the accessibilityof economic and education opportunities,increasing home ownership and providingbasic social infrastructure, particularlyin the urban areas. Measures will beintroduced to cushion the impact ofhigher prices on the lower and middleincome groups.In implementing poverty eradicationprogrammes, effor ts will focus onenhancing the effectiveness of the deliverymechanism through the three-tier FocusGroup on Poverty at the national, stateand district levels. These focus groupswill oversee the planning, implementationand monitoring of poverty eradicationprogrammes and projects as well asallocation of funds. For this purpose,the eKasih database system will be usedas a central reference point providingcomprehensive profiling of the poor andhardcore poor groups.Income DistributionConcerted efforts will continue to beundertaken to further reduce incomeand economic gaps between and amongstrata and ethnic groups. The rural-urbandisparity ratio is targeted to improve to1:1.7 by 2010. More emphasis will begiven to increasing the income shareof the lowest 40% of households andcreating a larger and more prosperousmiddle income group. This group, definedas those earning household incomebetween RM2,000 to RM4,000 per month,is expected to increase in size and achievea more rapid growth in income level.To reduce inter-ethnic income disparity,emphasis will be on human capitaldevelopment through skills enhancementand instilling of positive attitude andwork culture. These will strengthen thecapacity of the people to increase incomeand create wealth through business,investment and entrepreneurial activities.Enhancing the deliverymechanism...Reducing income gaps...63


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010The development of BCIC and BumiputeraScience and Technology Community(BSTC) will be enhanced through businessintegration and linkages as well as greateradoption of knowledge and innovation inorder to generate value added businesses.At the same time, employment andownership restructuring programmesespecially for Bumiputera, includingBumiputera of Sabah dan Sarawak, theIndian community and minority groups,will be accelerated to ensure all ethnicgroups benefit from the economic growthof the country.The implementation of various initiativesunder the corridor development willcontribute directly towards reducingincome gaps by strata and region. It willgenerate employment and wealth-creatingopportunities among the local populationespecially in the less developed areas.In addition, the digital divide will benarrowed through the provision of Internetaccess to the underserved community,enabling them to gain information onincome generating opportunities.Ownership RestructuringEfforts will be focused on improvingBumiputera par ticipation includingBumiputera of Sabah and Sarawak andincreasing their equity ownership in thecorporate sector as well as in non-financialassets to meet the restructuring objectives.Measures will be introduced to ensure longterm sustainability of the wealth generated.At the same time, a special packageprogramme will be created to facilitategreater Bumiputera participation in theeconomy, particularly in the new growthand high value-added sectors. Efforts willalso be taken to increase the corporatewealth of the Indian community and toencourage more Indians to venture intobusiness. It is targeted that the ownershipof equity by the Indian community willreach 1.5% by the end of 2010.To enhance Bumiputera participationin the economy, a number of measureswill be undertaken during the remainingPlan period. Firstly, greater emphasiswill be given to ensuring Bumiputeracommunity has controlling stake inprivate companies. Bumiputera will beencouraged to invest in new growth areassuch as information and communicationstechnology (ICT), biotechnology, photonics,nanotechnology, advanced manufacturingand precision engineering. Secondly, therole of Bumiputera institutions such asPermodalan Nasional Berhad (PNB) andTabung Haji will be strengthened toconsolidate the funds of Bumiputeraindividuals. Pooling of Bumiputera funds viathese institutions will enable Bumiputerainstitutions to have a stronger andsustainable source of funds to undertakebigger projects and to further diversifyinvestments. Thirdly, talented Bumiputeragraduates with creative and innovativeideas will be provided with capital tocommercialise their ideas. For this purpose,a special fund will be set up to assistpotential entrepreneurs among Bumiputeragraduates to market their productsand services. Fourthly, a comprehensivedatabase to monitor the performanceof Bumiputera in the corporate sectorwill be set up. Wealth ownership ofBumiputera in the non-financial assetssuch as ownership of commercial andresidential buildings will be used asan additional yardstick to evaluate theperformance of Bumiputera.The existing restructuring instrumentsto enhance Bumiputera participation inthe economy will be reviewed. Thesewill include the Foreign InvestmentCommittee Guidelines, public procurementprocedures and the Industrial CoordinationAct, 1975.Development of commercial assets suchas hotel and business premises onwakaf land will be expanded to increase64


Addressing Persistent Socio-Economic InequalitiesBumiputera ownership of non-financialassets. A strategic plan will be drawnup to ensure that the income generatedfrom the development of wakaf landwill enable state religious authoritiesto be more self reliant in developingnew wakaf land. In addition, Bumiputeraownership of residential and commercialproperties will be further improvedthrough agencies such as the UrbanDevelopment Authority (UDA), YayasanAmanah Hartanah Bumiputera and MajlisAmanah Rakyat (MARA).To increase the equity ownership ofBumiputera of Sabah and Sarawak,programmes such as unit trust schemesand entrepreneurship development andskills training will be further enhanced. Toincrease the ownership of non-financialassets of Bumiputera of Sarawak, nativeand customary land will continue to bedeveloped.The involvement of the Indian communityin the modern sectors of the economywill be encouraged through trainingand entrepreneurship developmentprogrammes especially among the youth.A total of 3,000 Indian youth is expectedto benefit from various skills and businesstraining programmes. In addition, specialassistance will be given to the Indiancommunity to raise their equity ownershipthrough unit trust schemes.professionals and semi-professionals,enrolment in Universiti Teknologi MARA(UiTM) will be increased through thefranchise programme with Bumiputeraprivate institutions of higher learning.In addition, Universiti Kuala Lumpur(UniKL) will continue to offer coursesat diploma and degree levels in scienceand technology, including computer andmedical engineering to complementUiTM’s efforts. The quality of the facultymembers and facilities will be upgradedto ensure these universities producequality graduates.The development of a viable and innovativeBSTC is vital towards attaining a morebalanced employment restructuring andequitable distribution of wealth amongvarious ethnic groups. To acceleratethe creation of BSTC, a comprehensivedevelopment framework will be preparedto outline the strategic action plan.Measures will be undertaken to ensure theprivate sector will employ more Bumiputera,Indian and minority communities atprofessional and managerial levels.For purpose of monitoring, all publiclisted companies will be required todisclose information of human resourcescomposition by ethnicity at all occupationallevels. In addition, more non-Bumiputerawill be encouraged to work in the publicsector.Developing BumiputeraScience and TechnologyCommunity...Employment RestructuringEmployment imbalances among ethnicgroups will be reduced in various sectorsand occupations by raising participationof Bumiputera and non-Bumiputerain sectors in which they are underrepresented.Education, skills trainingand technopreneur development willremain as important initiatives to attainthe employment restructuring objective.To enlarge the pool of BumiputeraRegional BalanceThe focus of regional development willcontinue to emphasise on raising thestandard of living as well as attainingbalanced socio-economic developmentacross regions and states. Growth centresand growth corridors transcending stateboundaries will be developed, the economicbase of less developed states modernisedand diversified and urban-rural digitaldivide reduced.65


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Corridor DevelopmentCorridor development will reduce regionalimbalance and bring about equitablegrowth, investment and employmentopportunities to all regions of Malaysia.This new approach aims at creatingnew sources of growth and ensuring acomprehensive and widespread economicdevelopment in a more coordinatedand integrated manner. Generation ofadditional income in the region willfurther accelerate poverty eradication,restructuring of society and overallwealth creation. The regional corridorauthorities will spearhead efforts tofacilitate and expedite the implementationof programmes and projects identifiedin the Master Plan of each growthcorridor.Box 3-2Regional Growth CorridorIskandarMalaysiaNorthernCorridorEconomicRegionEast CoastEconomic RegionSabahDevelopmentCorridorSarawak Corridorof RenewableEnergyDevelopmentPeriod2006 - 2025 2007 - 2025 2007 - 2020 2008 - 2025 2008 - 2030VisionA Strong andSustainableMetropolis ofInternationalStandingWorld-ClassEconomic Regionby 2025A DevelopedRegion - Distinctive,Dynamic andCompetitiveHarnessing Unity inDiversity for WealthCreation and SocialWell BeingDeveloped andIndustrialised StateArea ofCoverage2,216 squarekilometres(District of JohorBahru and partialdistrict of Pontian- Mukim JeramBatu, MukimSungai Karang,Mukim Serkat andPulau Kukup)17,816 squarekilometres(Penang, Kedah,Perlis andNorthern Perak -Districts of HuluPerak, Kerian,Kuala Kangsarand LarutMatang-Selama)66,736 squarekilometres(Pahang, Kelantan,Terengganu anddistrict of Mersing,Johor)73,997 squarekilometres (Wholeof Sabah)70,708 squarekilometres (TanjungManis-Similajau andhinterland)Focus Sector/Industry1. Education2. Financial3. Health Care4. ICT andCreativeIndustries5. Logistics6. Tourism1.2.3.4.5.AgricultureHuman CapitalInfrastructureManufacturingTourism1. Agriculture2. Education3. Manufacturing4. Oil, Gas &Petrochemical5. Tourism1.2.3.4.5.6.AgricultureEnvironmentHuman CapitalInfrastructureManufacturingTourism1. Aluminium2. Glass3. MarineEngineering4. Metal-Based5. Petroleum-Based6. Timber-Based7. Aquaculture8. Livestock9. Palm Oil10. Tourism66


Addressing Persistent Socio-Economic InequalitiesIskandarMalaysiaNorthernCorridorEconomicRegionEast CoastEconomic RegionSabahDevelopmentCorridorSarawak Corridorof RenewableEnergyCorridorAuthorityIskandar RegionDevelopmentAuthority (IRDA)Northern CorridorImplementationAuthority (NCIA)East CoastEconomic RegionDevelopmentCouncil (ECERDC)Sabah EconomicDevelopmentand InvestmentAuthority (SEDIA)Regional CorridorDevelopmentAuthority (RECODA)ExpectedEmployment 1(million)ExpectedInvestment 1(RM billion)1.4 3.1 1.9 2.1 3.0382 178 112 113 334Notes: 1 By the end of the respective development period.The participation of private sector is crucialto drive the development of the growthcorridors. The Government will promotea more conducive environment to attractgreater private sector participation indeveloping these growth corridors. Forthis purpose, a competitive package ofincentives will be offered. To enhancedeliver y of ser vices and promoteinvestments, one-stop centres will beestablished in growth corridors.Bridging the Digital DivideEfforts to narrow the digital divide will befurther intensified to ensure all Malaysians,particularly the underserved community,share the benefits of the knowledgebasedeconomy. In the rural areas, moreMedan Info Desa and Pusat Internet Desawill continue to be built and upgraded,respectively. To ensure more equitableaccess to ICT, the Government has set thetarget to provide at least one telecentrefor each mukim by 2010. Other efforts thatwill be undertaken include the provisionof affordable personal computers (PCs) andonline services to the public. Steps willbe taken to introduce best practices andre-model the telecentres to become self-sustainable. The development of contentwill also be promoted and a communityportal that serves the needs and interestof various underserved communities willbe developed.Development of BCICIn the remaining Plan period, the secondphase of BCIC development will begiven further emphasis through theimplementation of the private sectordriven cluster development initiatives.The initiatives will be further intensifiedto enable Bumiputera entrepreneursto move from the low-end to highendeconomic value chain. Specificprogrammes will be implemented tospearhead strong Bumiputera sectoralpresence across the value chain in areassuch as construction, logistics, education,tourism and distributive trade.The Government will continue to implementvarious programmes to ensure effectiveBumiputera participation in business andeconomic activities. Implementation of thepackaged programmes such as franchiseand vendor development, technopreneursdevelopment, ‘Groom Big’ and retailing in67


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010strategic commercial complexes will befurther strengthened. Measures will beundertaken to facilitate upward mobility ofentrepreneurs such as listing of companiesin Bursa Malaysia and converting existingbusiness entities through the adoptionof modalities including franchising andretailing. The wider use of competitivebidding will help to develop credible andcompetent Bumiputera entrepreneurs.A dedicated BCIC unit will be establishedin each of the corridor authorities to assistBumiputera entrepreneurs to capitaliseon the economic opportunities createdin the corridors. In collaboration with therespective implementing agencies, thecorridor authorities will identify potentialbusiness opportunities for Bumiputeraentrepreneurs to participate as firstmovers. In addition, the Governmentwill continue to facilitate entry andgrowth of Bumiputera enterprises innew growth areas, particularly in hightechnology-based manufacturing, halalindustry, biotechnology and bio-industries,health and edu-tourism, as well as creativeindustry.GLCs will implement their programmeswith specific targets more vigorously. Todevelop, nurture and increase the numberof promising Bumiputera entrepreneursand enterprises in specific niche areasalong the value chain, programmes suchas Management Buyout (MBO), smartpartnership and equity participation willbe given further emphasis. In addition,measures will also be taken to discourageGLCs from directly competing withBumiputera enterprises for businessopportunities.Bumiputera entrepreneurs have to developglobal mindset, acquire knowledge andskills, forge international networks andbe ICT savvy to cope with the changingeconomic landscape. Entrepreneurialdevelopment programmes will focuson driving mindset change, inculcatingpositive values and attitudes as well ashigh performance culture and attractingmore Bumiputera professionals to beinvolved in business.Public-Private Partnership modality willbe strengthened to increase inter andintra collaboration and business networksamong Bumiputera enterprises; betweenBumiputera and non-Bumiputera; andbetween enterprises and the Government.Joint venture collaboration and smartpartnership between Bumiputera andnon-Bumiputera as well as with foreignpartners will be emphasized.The monitoring of BCIC programmeswill be intensified to ensure effectiveimplementation and coordination.Implementing agencies will strengthentheir monitoring mechanism to ensuretheir programmes comply with BCICobjectives and targets. The effectivenessof BCIC programmes will be evaluatedbased on various measurement toolssuch as performance management systemand auditing.IV.OUTCOMES, 2010The expected outcomes of the variousstrategies and programmes to addresssocio-economic inequalities are in Box3-3.68


Addressing Persistent Socio-Economic InequalitiesBox 3-3Expected Outcomes, 2010CommitmentOutcomePoverty Eradication•Eradicating hardcore poverty and reducing overall povertyto 2.8%••Hardcore poverty eradicatedOverall poverty reduced to 2.8%Income Distribution•Reducing Bumiputera:Chinese income disparity ratio to1:1.50• Reduced Bumiputera:Chinese income disparity•Reducing Bumiputera:Indian income disparity ratio to1:1.15•Reduced Bumiputera:Indian income disparity•Reducing rural-urban income disparity ratio to 1:1.70•Reduced rural-urban income disparity•Reducing Gini coefficient to 0.35 by 2020• Improved income distributionOwnership Restructuring•Increasing Bumiputera equity ownership to 20%-25%•Improved Bumiputera equity ownership•Increasing Indian equity ownership to 1.5%•Improved Indian equity ownershipEmployment Restructuring• Eliminating ethnic identification by occupation• Towards balanced ethnic employment patternRegional Balance•Reducing regional disparities through corridordevelopment•Towards balanced regional developmentBumiputera Commercial and Industrial CommunityPublic Sector Driven Initiatives•Creating 150,000 entrepreneurs through variousprogrammes, including:•Greater Bumiputera participation in commercial andindustrial sector• 240 vendors and 15 new anchor companies underVendor Development Programme• 500 Bumiputera franchisees and 20 franchisors underthe Franchise Development Programme• 800 cooperatives in the business sectors• 750 technopreneurs69


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutcome• 800 entrepreneurs in MESTI programme• 1,500 entrepreneurs under the PunB EntrepreneurProgramme••••Upgrading and strengthening 25,000 enterprisesProviding 4,900 new business premisesCreating 40,000 micro-businesses through financing byTEKUN NasionalProviding entrepreneurial skills training to 275,000participantsPrivate Sector Driven Initiatives• Intensifying BCIC cluster development initiatives• Strong Bumiputera sectoral presence across alleconomic value chainV.CONCLUSIONGood progress was made during theReview period in reducing poverty,narrowing income imbalances betweenethnic groups and increasing Bumiputeraparticipation in key occupations andsectors of the economy. During theremaining Ninth Plan period, distributionalstrategies will continue to be pursuedtowards a more balanced participationand equitable distribution of qualityopportunities among the various ethnicgroups. Emphasis will be on increasingthe income share of the lowest 40% ofhouseholds, creating a bigger middleincome group and narrowing ethnic andregional disparities. Measures will alsobe taken to increase the participation ofBumiputera in the private sector, enhanceBumiputera corporate equity ownershipand further develop BCIC and BSTC. Thedevelopment of less developed statesand regions will be accelerated to reduceregional disparities. The implementationof these distributional strategies willcontribute positively towards maintainingequitable economic growth, promotinghuman development and strengtheningnational unity.70


Improving the Standard and Sustainability of Quality of Life4thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010improving the standardand sustainability ofquality of life71


Improving the Standard and Sustainability of Quality of Lifeimproving the standardand sustainability ofquality of lifeI.INTRODUCTIONThe Ninth Plan emphasised that economicgrowth must be accompanied by a risein the quality of life across the country.For this, the Plan laid down variousstrategies to ensure better accessibility tohealth care, utilities and housing; extendroads to rural areas, and improve publictransportation and road safety. Measureswere also taken to provide a safe andsecure environment for the people. Giventhe challenges of rapid socio-economicdevelopment and its impact on the family,various programmes were implementedto build a more caring society andpromote community well-being. Theseincluded measures to empower women,protect children and enhance the role ofyouth in society. Sports and recreationalactivities were enhanced to attract moreMalaysians to adopt a healthy lifestyle aswell as to achieve excellence in sportsat the national and international levels.There were also measures to enhancethe role of culture, arts and heritage topromote national identity and unity. ThePlan also recognised the need to managethe environment and natural resources ina more holistic and integrated manner aspart of raising the quality of life.The remaining Plan period will see amajor push to raise the quality of livingof the people across the country throughgreater accessibility as well as improvedquality of health care and other socialamenities. Provision of adequate, qualityand affordable housing and extendingelectricity and potable water to therural areas and the urban poor will beemphasised. An enlarged network oftransport facilities will integrate the urbanand rural areas. This will help improveaccessibility of the rural populationto markets and urban services. Thedevelopment of an integrated publictransport system will be undertaken toprovide efficient services. Public safetywill be further improved with the increasein capacity and capabilities of the policeforce and greater involvement of thecommunity. Strategic programmes willbe implemented to strengthen the familyinstitution to meet the challenges ofurbanisation and modern living styles.Sports and recreational activities will befurther expanded to promote an activeand healthy lifestyle as well as achievesporting excellence. The appreciation forthe nation’s culture, arts and heritage willbe promoted. Further measures will alsobe taken to protect the environment andensure sustainable use of natural resources,including mainstreaming environmentalc o n s i d e r a t i o n s i n t o d e v e l o p m e n tplanning.II.KEY RESULTS, 2006-2007There were concerted efforts to fulfilthe needs that are intrinsically linkedto improving the quality of life. Theseincluded implementation of variousinitiatives and projects geared towardsimproving accessibility and quality ofhealth care and basic utilities; providing73


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010affordable housing and better urbanservices; creating a healthy and safeenvironment; improving transportation;and promoting sustainable managementof resources. Together, these initiativescontributed towards improving the wellbeingof society. In addition, social stabilitywas maintained within a milieu of a caringsociety that continued to enjoy peace,security and harmony. The output of thevarious initiatives is shown in Box 4-1.Box 4-1Key Results, 2006-2007Commitment OutputHealth• Expanding primary care services• Increasing health promotion andeducation activities• Implementing and consolidating theprovision of secondary and tertiarycare• Addressing health needs of specifictarget groups• Meeting human resource needs of themedical sector• 34 health clinics and 72 rural clinics built, bringing the total to 824health clinics and 2,073 rural clinics• MyHealth portal launched as an Internet-based health educationchannel. Screening and early detection of risk factors were integratedinto services provided at health clinics• 21 hospitals completed, bringing the total to 130, while 61 hospitalsprovided secondary care and tertiary care was provided on a regionalbasis• Health care for the elderly was provided in 600 clinics or 73% of thetotal, while health care for children with special needs were providedin 214 clinics or 26% of the total• Number of doctors increased from 15,421 in 2005 to 18,140 in2007. Number of specialists increased from 2,014 in 2005 to 2,413in 2007Housing and Urban Services• Constructing low-cost houses• Enhancing management capabilities oflocal authorities• 32,000 units of low-cost houses built• 3,702 units built under Program Perumahan Rakyat (PPR) Dimiliki withGovernment subsidy of RM129.6 million• e-PBT, one-stop centres (OSCs) and star rating system implementedFamily Development• Strengthening family institution• Protecting children and improvingtheir welfare• 4,000 participants benefitted from family development programmes,including SMARTSTART and Parenting@Work programmes• 11,000 children benefitted from crisis and educational support services,child development activities and motivational camps• 13,000 children benefitted from 103 programmes carried out throughchild welfare committees74


Improving the Standard and Sustainability of Quality of LifeCommitment Output• Moulding dynamic youth• Improving the status and well-beingof women• Integrating persons with disabilities(PWDs) into society• Promoting active and productiveageing• 90,100 youth benefitted from Youth to Youth programmes• 738,000 youth benefitted from Rakan Muda programmes• 195,000 youth benefitted from National Service Programme• National Youth Act enacted in 2007 to promote and facilitate youthdevelopment• Malaysian Institute for Research in Youth Development establishedto undertake research on youth issues• 11,000 women trained in information and communications technology(ICT) skills and handicraft• 420 single mothers trained under Inkubator Kemahiran Ibu Tunggal(I-KIT) programme• 66 rehabilitation centres built, making a total of 379 centres• Persons with Disabilities Act and a national policy on PWDs enactedin 2007• Database on PWDs developed• 35 mobile Caring Services Units provided• 3 day-care centres built, making a total of 19 centres• Lifelong learning programmes implementedElectricity Supply•1Expanding rural electricity coverage2005 2007Peninsular Malaysia 98.6% 98.7%Sabah 72.7% 74.7%Sarawak 80.8% 84.1%Malaysia 92.9% 93.5%Water Supply• Rural electrification programme benefitted 18,300 housing units inMalaysia comprising 4,900 housing units in Peninsular Malaysia, 5,600in Sabah and 7,800 in Sarawak• Expanding rural water coverage2005 2007Peninsular Malaysia 92.0% 93.6%Sabah 61.0% 65.0%Sarawak 92.0% 92.0%Malaysia 92.9% 93.0%• Rural water supply programme benefitted 117,465 households inPeninsular Malaysia, 50,925 in Sabah and 9,370 in SarawakSewerage• Expanding sewerage services• 650,000 new population equivalent (PE) served• 308 existing small sewerage treatment plants (STPs) repaired andupgraded1This refers to rural housing units served as a percentage of total rural housing units. This figure is computed based on Census 2000data excluding housing units served with private individual generators.75


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010EnvironmentCommitment Output• Improvingair quality• Environmental Quality (Control of Petrol and Diesel Properties)Regulations 2007 gazetted on 1 April 2007 to improve quality offuel• Improving river water quality• Managing toxic and hazardous waste• Protecting endangered species of wildflora and fauna• Flood management• 91 out of 143 river basins classified as clean in 2007 as comparedto 80 in 2005• Environmental Quality Act 1974 amended to provide for mandatoryjail sentence for illegal disposal of scheduled waste and to makethe chief executive officer liable for the offence committed by thecompany• International Trade in Endangered Species Act 2008 (Act 686) gazettedto regulate international trade in endangered species of wild floraand fauna• River Basin Management Plan on Sungai Kedah completed in 2007and the Kedah Water Resources Enactment gazetted• SMART Tunnel started operation in 2007Roads• Co n s t r u c t i n g roads to connec tresettlement areas to rural industrialareas and estates, particularly in Sabahand Sarawak• Implementing road safety programmes• 317 km of rural roads constructed/upgraded, including 98 km inSabah and 60 km in Sarawak• 988 accident-prone spots improved• Road accident fatality rate per 10,000 registered vehicles decreasedfrom 4.2 in 2005 to 3.7 in 2007Urban Transport• Improving the efficiency and reliabilityof urban transport services• Kepong Sentral Station completed and 29 Komuter stationsupgraded• Average passengers per day for urban rail increased from 438,055in 2005 to 478,300 in 2007• Rapid Penang bus service in Pulau Pinang commenced in July2007Air Transport• Expanding airport capacity andfacilities• One airport upgraded and one terminal for low-cost carrier built• Total passenger traffic increased by 8.6% from 42.8 million in 2005to 46.5 million in 2007Rail Transport• Increasing network coverage/accessibility• Rawang–Ipoh electrified double tracking rail project completed in2007• Rehabilitation and upgrading of Tampin and Jerantut stations76


Improving the Standard and Sustainability of Quality of LifeCommitment OutputPublic Safety• Enhancing public safety• An additional 5,202 police personnel recruited in 2006 and 5,342•in 2007162 new police stations established in private premises mainly in Johor,Pulau Pinang, Selangor and Wilayah Persekutuan Kuala LumpurCulture, Arts and Heritage• Inculcating cultural values• Enhancing culture, arts and heritage• 300,000 people benefitted from 8 nationwide campaigns on courtesyand good values• 600,000 people benefitted from 3,215 culture and arts activities• 569 culture and arts trainers received enhanced training• 134 conservation projects implementedSports• Promoting active and healthy lifestylesthrough sports and recreation• Developing a sports culture• 2 million people benefitted from 800 aerobic and fitness programmesconducted nationwide• 640,000 people benefitted from 1,623 sports and recreationalprogrammes• 2,737 sports associations benefitted from financial aid and otherassistanceIII.HealthMOVING FORWARD,2008-2010Sustaining and raising the health statusof all Malaysians is a vital componentof national development. The provisionof health care services will be furtherintegrated and the quality of careenhanced towards achieving a healthiersociety. Health care delivery will beimproved at the primary, secondary andtertiary levels. The changing diseasepatterns, rural-urban disparities andrising expectations of the public will beaddressed.Primary health care will continue to bethe thrust of the health care system.Although there is an overall improvementin the health status of the population,new challenges have arisen. Communicablediseases such as Human ImmunodeficiencyVirus/Acquired Immunodeficiency Syndrome(HIV/AIDS) are on the increase, whilemalaria and tuberculosis have re-emerged.Non-communicable diseases, such ascardiovascular diseases, cancers, diabetesand mental disorders, are also on theincrease. Since non-communicable diseasesare preventable, greater investment willbe made on health promotion, educationand adoption of healthy lifestyle practices.This will include promoting physical77


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Affordable and qualityhealth care…activity and extending the healthy livingconcept to schools and workplace. HIV/AIDS prevention and control programmeswill be strengthened, by among others,intensifying cooperation with nongovernmentalorganisations (NGOs) toprovide care and support for thoseinfected and affected. Clinical preventiveservices, which include screening as wellas early detection and management ofpreventable risk factors, will be providedat all health clinics.The delivery of affordable and accessiblehealth care will focus on improvingintegration between all levels of carethrough greater collaboration betweenthe public and private sectors and makingservices more patient-oriented. Existingfacilities will be upgraded and new onesbuilt, equipped with modern diagnosticequipment to provide higher quality carein a more conducive environment. Healthcare to the less accessible groups, suchas the Orang Asli and minority groupsin remote parts of Sabah and Sarawak,will be further enhanced. More mobileclinics, including flying doctor services,will be made available for those in remoteareas. Health surveillance and responsewill be further strengthened to preventand minimise the impact of diseaseoutbreaks and disasters. The delivery ofpre-hospital, emergency and ambulatorycare services will be upgraded to reducethe number of admissions and period ofhospitalisation. Home care nursing will beexpanded with multidisciplinary teamscapable of providing pharmaceutical adviceas well as palliative and rehabilitativecare. Teleconsultation services will beexpanded nationwide and the MyHealthportal enhanced to allow for interactivehealth risk assessment.Secondary and tertiary care services, whichfocus on curative and rehabilitative care,will continue to be strengthened. Clinicalcare networks, centres of excellence andregionalisation of tertiary care serviceswill be further developed to improveaccess. The integration of traditional andcomplementary medicine (TCM) into thehealth delivery system will focus on itsapplication in practices such as painmanagement, nutrition and rehabilitation.Health research will support evidencebaseddecision-making and improvehealth outcomes. Registries for diabetes,hypertension, mental illness and injurieswill be developed to enable researchto provide broad-based interventionsto control and prevent these diseases.Quality assurance will be enhancedto improve quality of care and ensurepatient safety.A key challenge facing the health sectoris ensuring the availability of adequatehealth personnel in the public sector.Although the health professionals topopulation ratios have improved, somedisparities still exist. Since human resourceremains the central component of thehealth care delivery system, the capacityof health professionals will be continuouslydeveloped to keep abreast with latestadvancements to meet the changinghealth needs of the people. Initiatives toovercome health personnel shortage willinclude increasing the intake of studentsinto institutions of higher learning anddecentralising decisions on human resourcedeployment. A new benefits package toretain health personnel in the publicsector will also be considered.78


Improving the Standard and Sustainability of Quality of LifeTable 4-1Health Personnel: Population Ratio, 2005 and 2007Type of PersonnelNumberRatio to Population2005 2007 2005 2007Doctors 1 20,105 23,738 1 : 1,300 1 : 1,145Dentists 1 2,751 3,163 1 : 9,497 1 : 8,586Pharmacists 1 4,012 5,730 1 : 6,512 1 : 4,742Nurses 1 44,120 48,196 1 : 592 1 : 556Medical Assistants 1 6,709 7,948 1 : 3,894 1 : 3,419Dental Technicians 2 655 684 1 : 39,889 1 : 39,728Dental Surgery Assistants 2 2,355 2,632 1 : 11,094 1 : 10,324Community Nurses 2 15,618 16,883 1 : 1,673 1 : 1,610Dental Nurses 2 2,071 2,319 1 : 12,616 1 : 11,718Occupational Therapists 2 301 405 1 : 86,802 1 : 67,096Physiotherapists 2 468 576 1 : 55,828 1 : 47,177Radiographers 2 1,156 1,375 1 : 22,602 1 : 19,763Medical Laboratory Technologists 2 3,302 3,684 1 : 7,913 1 : 7,376Notes:1Includes public and private sectors.2Refers to the ratio in Ministry of Health.Collaboration between public and privatehealth care providers will be strengthenedto ensure efficient and optimal utilisationof resources. Outsourcing of services,leasing of public health facilities toprivate practitioners and collaborating withprivate medical institutions in the trainingof medical and allied health personnelwill continue to be undertaken. Privateproviders will also be encouraged to givegreater emphasis to disease preventionand health promotion.The ever increasing demand for betterhealth services and the changing diseasepatterns are contributing towardsescalating health care costs. Accordingly,the Government will examine optionstowards meeting the rising cost of healthcare to ensure that health care remainsaccessible, affordable and relevant to thepeople’s needs. These efforts will contributetowards achieving better health for all.Housing and Urban ServicesThe public sector housing programmewill continue to focus on the provision ofadequate, quality and affordable houses forall, particularly the low- and low-middleincome groups. The implementation ofthe low-cost housing programme will beexpedited with the construction of anadditional 18,500 units under the PPR forrental scheme. In addition, 12,300 unitsof affordable houses under the RumahMampu Milik programme will be builtby 2010. Efforts will also be undertakento provide low-cost housing areas with79


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010adequate facilities and amenities toprovide a pleasant living environment.In the case of long houses in Sabahand Sarawak, the PPR scheme will beadapted to produce appropriate housedesigns, taking into account prevailingownership practices. Steps will also betaken to promote ownership by expandingrent-to-buy schemes. The identification ofqualified applicants for low-cost houseswill be improved with the integrationof the database for registration anddistribution of low-cost houses at theFederal and state levels. Greater effortswill be taken to promote the use of theIndustrialised Building System (IBS) in theconstruction of affordable homes.Rapid urbanisation continues to increasethe demand for housing, public amenitiesand infrastruc ture, posing greaterchallenges to local authorities. In thisregard, local authorities will have todepart from the routine provision ofservices and improve upon the delivery ofrequired services. Measures will continueto be taken to strengthen the capacityand management capability of localauthorities. As community involvementis crucial to good governance especiallyat the local level, the formation ofpartnerships between local authoritiesand communities will continue to beencouraged, including through the LocalAgenda 21 programme.The coming into enforcement of the SolidWaste and Public Cleansing ManagementAct and the Solid Waste and PublicCleansing Management Corporation Act,will enable the Government to implement,among others, more cost-effective andefficient schemes for the collection,transportation and disposal of solidwaste. Programmes and activities willbe intensified to close dumping sitesor upgrade them to sanitary landfills. Inaddition, solid waste management willbe further improved through greateruse of material recovery technologiesand emphasis on the waste to wealthconcept, including the expansion of wasteminimisation and recycling schemes.Additional incentives to encourage wasteminimisation and promote recyclingactivities will be introduced.Electricity SupplyAccess to electricity supply, especially inrural areas of Sabah and Sarawak will beexpanded to improve the quality of lifeof rural communities. The increasing costof supplying electricity to rural areas willbe addressed by adopting cost-effectivemodes of supply, such as solar hybrid,micro-hydro and micro-wind turbine. Toenable better planning of the programmeand assessment of outcomes, database onthe rural community will be improved.I m p l e m e n t a t i o n a n d coordinationmechanism will be further strengthenedto expedite supply of electricity to ruralareas. Community involvement will alsobe enhanced to ensure sustainability ofthe programme. By the end of the planperiod, rural electricity coverage in Sabahand Sarawak is expected to increase to82.6% and 93.2%, respectively.Water Supply and SewerageCoverage of water supply in remote areaswill be expanded with the implementationof more gravity flows, tube wells andrain water harvesting system throughthe rural water supply programme. Ruralwater coverage is expected to increaseto 70% in Sabah and 95% in Sarawakby 2010. Water supply services will focuson expanding and upgrading the supplysystem and rehabilitation programmesto reduce non-revenue water. Emphasiswill be placed on raising the quality of80


Improving the Standard and Sustainability of Quality of Lifewater to meet international standards. Inline with the restructuring of the waterservices industry, corporatisation exercisefor the remaining states of Kedah, Pahang,Perak, Perlis and WP Labuan will beimplemented, while the establishmentof the state water regulatory body willbe expedited.The sewerage system in highly populatedareas, especially in the Klang Valley, willbe improved to enhance public health,safeguard the environment and reducewater pollution. Priority will be given tothe rationalisation and centralisation of thesewerage networks, as well as upgradingof treatment plants. The implementationof a joint billing system by SuruhanjayaPerkhidmatan Air Negara (SPAN) will bepursued towards improving sewage billcollection.Transport System and Road SafetyThe rural road network will continue tobe expanded to meet the inadequatecoverage, especially in Sabah and Sarawak.A study is being undertaken to identifyadditional road requirements to improvethe road network and accessibility inthese two states. Meanwhile, other roaddevelopments will include the EastCoast Highway Phase II from Kuantan toKuala Terengganu and the Senai-DesaruHighway.Traffic congestion continues to be achallenge in major cities and urban centres.The insufficient road space to cope withthe rapidly increasing number of privatevehicles and inadequate public transportservices will be addressed systematically.Efforts such as increasing coverage of theurban rail transit system and buildingmore integrated transport terminals aswell as improving the efficiency of theKomuter, bus and taxi services will beundertaken to achieve the target ratioof private vehicles to public transportof 70:30 by 2010, particularly in theKlang Valley. The development of varioustransport infrastructure will also take intoconsideration providing greater accessibilityand more convenient public transportfacilities to PWDs. A public transportcommission will be established to plan andcoordinate all public transport programmesand initiatives. The commission will alsobe responsible for regulating the publictransport sector and develop a moreefficient and integrated public transportsystem.The coverage of the Komuter servicewill be extended with the completionof the Sentul-Batu Caves electrifieddouble tracking rail project, benefittingapproximately 8,800 commuters per day.The Light Rail Transit (LRT) Kelana JayaLine will be extended from Kelana Jaya toPutra Heights while the Ampang Line fromSri Petaling to Putra Heights. Connectivitywill be provided at Putra Heights by aninterchange station for both lines.Despite the increased number of roadsafety campaigns, road accidents andfatalities remain high. Measures willbe undertaken to reduce road fatalityrates from 3.7 in 2007 to 3.0 per 10,000registered vehicles by 2010. Amongothers, these will include rehabilitationof accident-prone spots and increasingsafety features of roads.The growth of low-cost air services hasenhanced air travel opportunities as wellas fostered greater travel between differentparts of the country. The upgrading ofthe low-cost carrier (LCC) terminal at theKL International Airport will increase itscapacity and enhance the efficiency oflow-cost air services. Rural air serviceswill be expanded to improve access toremote areas in Sabah and Sarawak.Integrated publictransport system…81


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Resilient families...82Further improvement of the LCC terminalswill enable expansion of facilities andprovide greater access to low-cost travelto a larger segment of the population.Inland water transport is an alternative, costeffective and environmentally sustainablemode of transport in remote areas. Toexpand the riverine and coastal transportsystem in Sarawak, a master plan will bedrawn up. Meanwhile, construction of newjetties and upgrading of existing oneswill be undertaken to enhance mobilityof the rural population.Family DevelopmentThe family institution needs to bestrengthened to effectively nurture andinstill moral and ethical values in theyoung to cope with rapid socio-economicdevelopment and changing lifestyles.Strong family units will also be necessaryto provide care and support for the sick,disabled and the elderly. A conducivefamily environment will provide for astrong foundation that is crucial for societalwell-being. The National Family Policywill be formulated to integrate actionsto strengthen the family institution. Theshrinking family size and rising numberof older persons will require formalinstitutions to complement traditionalfamily responsibilities. More one-stopfamily service centres will be establishedto provide the necessary support services,including counselling, parenting skillstraining and reproductive health services.The private sector will be encouraged toimplement programmes to assist familiesand individuals in need as part of theircorporate social responsibility initiatives.Child safety remains a priority. An earlychildhood care and education policy willbe formulated to provide the frameworkfor the development of children frombirth to four years. In addition, theprovision of quality child care and achild-safe environment is essential towardsimproving and safeguarding the wellbeingof children. The amended ChildCare Centre Act 1984, which amongothers, enables the authorities to sealpremises not in compliance with the Act,will be enforced to enhance the qualityof child care centres. The establishmentof child care facilities in the workplacewill be encouraged. The role of childprotection teams, child welfare committees,advisors to courts for children and childwitnesssupport service will continue tobe strengthened. Communities will beencouraged to assume a greater rolein ensuring child safety in their areasas well as in reducing violence againstchildren. More community child carecentres will be set-up to benefit lowincomehouseholds.Youth must be equipped with therequisite skills and engaged as partnersin development. Programmes will bedirected at empowering youth withknowledge, qualities and attitudes tobecome responsible citizens and tobe prime movers in development aswell as contribute towards enhancingnational unity. The National ServiceProgramme will be made more attractiveto participants and to receive wideracceptance by parents, among others,by enhancing the modules on social andliving skills. Rakan Muda programmes willbe enhanced to encourage participation,develop positive values as well aspromote a healthy lifestyle among youth.Leadership training programmes will bestrengthened and expanded to reachmore youth. Collaborative efforts will alsobe undertaken with the private sectorand NGOs to organise and implementprogrammes for the benefit of youth.In addition, youth organisations willbe empowered to ensure that they


Improving the Standard and Sustainability of Quality of Lifeare managed in a more efficient andprofessional manner and able to contributesignificantly to youth development. Studieson issues pertaining to youth, such as onsocialisation, leadership and education aswell as on the effectiveness of existingprogrammes will be undertaken to furtherenhance youth development.The changing roles and responsibilitiesof women in the family and societyrequire specific strategies to help themcope with new challenges. An actionplan to enable women to occupy atleast 30% of decision-making positionswill be put in place. More training andskills upgrading programmes in areassuch as information and communicationstechnology and entrepreneurship willbe implemented to facilitate greaterself-employment and participation ofwomen in the economy. A strategicplan covering economic, education andtraining programmes will be formulatedto assist single mothers improve theiremployability. The I-KIT programme willcontinue to be implemented to enablemore single mothers to be involved inincome generating activities. Affordablechild care services will be expanded andflexible working arrangements promoted,including working from home.Programmes will be implemented tocreate awareness on the importance ofthe well-being of women. The relevantlaws and regulations will be reviewedand amended to improve the status andwell-being of women. Better access toadequate social protection, particularlyin facing illness, invalidity and old agewill be provided to women. Variousprogrammes for improving women’shealth will be implemented to ensure thatwomen are healthy throughout their lifespan. The mammogram programme willbe intensified and more mobile clinicsprovided to increase accessibility to basichealth services for women.Integrating PWDs into the mainstream ofsociety and economy will enable them tobe more independent as well as contributetowards national development. Measureswill be undertaken to improve accessto education and vocational training,employment as well as in providing abarrier-free environment to enable PWDsto be mobile, self-reliant and financiallyindependent. Efforts will be undertakento promote employment opportunities forPWDs in the public and private sectors,while self-employment among PWDswill be further encouraged. The NationalCouncil for Persons with Disabilitieswill spearhead efforts to strengthenthe partnership between the publicand private sectors as well as NGOs toensure a more coordinated approach inimplementing policies and programmes.Additional community-based rehabilitationcentres and one-stop service centreswill be built and existing ones furtherdeveloped to provide more comprehensiveservices. Efforts to register PWDs will beintensified to facilitate the planning ofprogrammes and facilities as well as toensure that they gain access to benefitsand grants available.The provision of adequate quality care andservices for older persons is an importantemerging challenge as Malaysia movestowards becoming an ageing society by2035 when 15% of the population isexpected to be above 60 years. In thisregard, steps will be taken to assessthe socio-economic consequences of anageing population covering the provisionof health care, income security andhousing. The national policy and actionplans on ageing will be reviewed tofacilitate and implement programmes toenable older persons lead healthy andproductive lives.83


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Towards safercommunities...Clean and healthyenvironment...84Public SafetySafety in towns and cities will be enhancedthrough the safe city programme. Atotal of 23 crucial measures have beenidentified for implementation by variouslocal authorities and property developersto address vandalism and petty crimes.Guidelines on Crime Prevention throughEnvironmental Design will also beformulated to supplement efforts toenhance safety in towns and cities.Recruitment of additional police personnelwill be expedited to reach 60,000 by2012. The People’s Volunteer Corps(RELA) and Neighbourhood Watch (RukunTetangga) will also be engaged in crimeprevention efforts. The effectiveness andefficiency of policing operations will beimproved through the use of moderncommunications technology and anintegrated ICT management framework.G reater i nvo l ve m e nt o f t h e l o c a lcommunity and NGOs to create a safeenvironment will be promoted. Moreawareness programmes will be carriedout in schools to inculcate positivevalues among school children to becomeresponsible citizens. The community willcontinue to be encouraged to join theRakan Cop programme in promotingpublic safety.EnvironmentEnvironmental and natural resourcemanagement will continue to focus onsustaining a clean and healthy livingenvironment, while simultaneouslyfulfilling economic development needs.Implementation of the existing programmeswill be further strengthened throughenhanced multi-stakeholders approachto improve coordination between theplanning and implementing agencies. Atthe same time, enforcement measureswill be intensified to ensure compliancewith environmental standards, particularlyby the industries. Greater emphasis willalso be placed on increasing the levelof public awareness as the responsibilityof protecting the environment rests witheach and every citizen.The development planning processwill incorporate environmental issuesin a holistic and integrated manner.I n t h i s r e g a r d , w i d e r u s a g e o fenvironmental planning tools such asthe Strategic Environmental Assessmentand Sustainability Assessment will beencouraged. This is crucial as sustainablemanagement of natural resourcesand biodiversity will enable optimalresource utilisation and ensure longtermsustainability. Land-use planningfor development will be improved inline with the National Physical Plan. Thedevelopment of regional corridors willgive due attention to environmental andbiodiversity protection.Measures will be implemented to reducepollution and conserve the nation’snatural resources. Specific attention willbe given to continuous improvementof air and water quality and to reducecontamination of water and land resourcesfrom illegal discharge of solid waste, toxicand hazardous substances. Guidelines willalso be formulated for proper managementand disposal of electrical and electronicwaste.The protection of biodiversity and criticalhabitats will be intensified. Programmeson in-situ and ex-situ conservation,propagation, breeding, and rehabilitationof degraded forest areas will be furtherexpanded to reduce pressure on floraand fauna in its natural habitat. Twoconservation initiatives, namely the CentralForest Spine in Peninsular Malaysiaand the Heart of Borneo in Sabah andSarawak will be carried out to improveconnectivity of forests for wildlife mobility,biodiversity reservoir, protection ofwatershed areas and create a destinationfor eco-tourism.


Improving the Standard and Sustainability of Quality of LifeThe Centre of Excellence for BiodiversityLaw will be established to enhance thecapability in addressing legal issuespertaining to biodiversity, biotechnologyand biosafety. The import, export anduse of living modified organisms andproducts of such organisms, and tradein endangered flora and fauna will bebetter managed with the enforcement ofBiosafety Act 2007 and the InternationalTrade in Endangered Species Act 2008,respectively.Flood mitigation programmes will beintensified to ensure that effectivemeasures are put in place to deal withrecurrence of floods. In urban areas, thedrainage system will be upgraded toaddress flash floods. A comprehensivemaster plan based on integrated riverbasin management will be formulated tocover major flood-prone river basins. Themaster plan will encompass proper landuseplanning and zoning and stormwatermanagement to reduce the likelihoodand impact of floods and developingemergency response to floods.Efforts will continue to address the effectsof climate change on various sectorsof the economy and society. Mitigatingmeasures will focus on promoting energyefficiency and renewable resources andimprovements in public transport whileadaptation measures will be promotedin development projects.Culture, Arts and HeritageThe inculcation of positive values willcontinue to be emphasised throughcourtesy and integrity campaigns.Traditional culture and values will bepreserved by maintaining and encouragingtheir practice in the daily lives of Malaysiansto promote a sense of shared ownershipand nationhood. At the same time, thefostering of cross-cultural understandingand appreciation of cultural diversity willcontinue to be an important agenda inbuilding a united and harmonious nation.Participation in the arts to cultivate talentand instill appreciation for local cultureand arts will be further improved throughquality cultural programmes, exhibitionsand events.SportsEfforts will focus on promoting an activeand healthy lifestyle through sports andrecreation as well as nurturing talenttowards excellence. The Governmentwill continue to promote participationin mass and high performance sports.More instructors and facilitators in masssports will be trained to ensure effectiveimplementation of sports programmes.The professionalism and efficiency ofthe national sports associations will becontinuously improved to ensure deliveryand consistency of results. Promisingathletes will be trained and coachedsystematically to enable them to excelin competitions. The talent identificationprogramme will be expanded and theapplication of sports science strengthenedto improve performance. In addition, thenumber of coaches and experiencedtechnical officers will be increased,including through the recruitment ofretired national athletes to becomequalified coaches and making it theirprofession. The private sector will beencouraged to promote sports andrecreational activities.IV. outcomes, 2010Based on the programmes and strategiesoutlined in the remaining Plan period,the expected outcomes are shown inBox 4-2.Active lifestyles...85


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 4-2Expected Outcomes, 2010CommitmentOutcomeHealth• Reducing infant mortality rate to 4.9 per 1,000live births• Reducing maternal mortality rate to 2.5 per100,000 live births• Reducing incidence of TB to 59 per 100,000population• Reducing incidence of malaria to 19 per 100,000population• Improving doctor:population ratio to 1:763• Improving dentist:population ratio to 1:6,855• Improving pharmacist:population ratio to 1:3,267• Improved health statusHousing and Urban Services• Constructing 70,000 units of low-cost houses• Expanding OSCs and Local Agenda 21Programme to all 144 local authorities• Integrated solid waste management• Adequate, quality and affordable houses• Improved urban servicesFamily Development• Conducting family development programmes for60,000 participants• Implementing Rakan Muda programmes for1,750,000 youth• Conducting National Service Programme for766,000 youth• Improved family well-being• Empowered youth with positive attitudesElectricity supply• Expected rural electricity coverage:2010Peninsular Malaysia 98.4%Sabah 82.6%Sarawak 93.2%malaysia 95.5%• Expanded rural electricity coverage• Rural electrification programme is expected tobenefit an additional 61,700 housing units in thePlan period86


Improving the Standard and Sustainability of Quality of LifeCommitmentOutcomeRural Water Supply• Expected rural water coverage:2010Peninsular Malaysia 96.0%Sabah 70.0%Sarawak 95.0%Malaysia 95.2%• Expanded rural water coverage• By 2010, the rural water supply programme is expectedto benefit 546,870 households in Peninsular Malaysia,164,200 in Sabah and 167,170 in Sarawak• Corporatisation of water services authority in the statesof Kedah, Pahang, Perak, Perlis and WP Labuan as wellas the formation of state water regulatory body• Increased efficiency of water services managementSewerage• Construction of 11 new STPs to serve 2,859,000 PE• Increased efficiency of sewerage services• Decommissioning of small and scattered STPs• Introduction of a revolving fund to increase connectionof sewerage system at individual premises to thecentralised STPs• A joint billing system will be pursued by SPAN toensure consumers pay for the sewerage servicesRoads• Review of the Highway Network Development Plan(HNDP) for Sabah and Sarawak to be completed• Expanded road network coverage especially in Sabahand Sarawak• Construct roads to connect resettlement areas to ruralindustrial areas and estates, particularly in Sabah andSarawakAir Transport• Upgrading of airports and the LCC terminal at KLIA • Increased capacity and efficiency of air transportservicesUrban Transport• Extend Komuter service to Tanjung Malim• Extend LRT Ampang Line by 16 km from Sri Petalingto Putra Heights• Extend LRT Kelana Jaya Line by 16 km from KelanaJaya to Putra Heights• Completion of Sentul-Batu Caves electrified doubletracking rail project• Construction of integrated transport terminal at BandarTasik Selatan• Increased urban public transport network coverageand facilities87


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutcomeRail Transport• Construction of Ipoh-Padang Besar electrified doubletracking rail project, expected to be completed in2013.• Increased efficiency and reliability of intercity railtransport services• Construction of Seremban-Gemas electrified doubletracking rail project, expected to be completed in2012.• Refurbishment and procurement of rolling stocks• Rehabilitation of railway infrastructure in Sabah• Commence rapid intercity train service between KualaLumpur and IpohEnvironment• Sulphur content to be reduced in diesel from 3,000ppm to 500 ppm while petrol from 1,500 ppm to500 ppm• Polluted river basins to be upgraded from Class IIIcategory to Class II category through the PollutionPrevention and River Water Quality UpgradingProgramme• A database on Malaysia’s biodiversity to beestablished• Improved air quality• Improved river water quality• Better management of biodiversity• Capability in legal issues regarding biodiversity,biotechnology and biosafety in Malaysia to beenhanced• Master plans based on integrated and holistic approachto be drawn up as long-term solution for floodincidences especially in the flood-prone areas• Reduced incidences of floodsCulture, Arts and Heritage• Implementing 150 nationwide courtesy campaigns,involving 300,000 participants• Implementing 4,500 culture and arts activities• Tolerant and harmonious society• Enhanced appreciation of culture, arts and heritage• Producing 1,500 Akademi Seni Budaya dan WarisanKebangsaan (ASWARA) graduatesSports• 2.5 million people participating in mass sportsprogrammes• Training 24,000 coaches• Active and healthy lifestyles• Better sporting excellence• Developing 14,570 athletes through talent identificationprogramme88


Improving the Standard and Sustainability of Quality of LifeV. CONCLUSIONThe continued implementation ofprogrammes towards improving the qualityof life will ensure that the populationhas access to better quality health care,housing, utilities and other urban services.Efforts to strengthen the family institutionand protect vulnerable members of societywill contribute to a more caring society.Sports and recreational activities will bepromoted to enhance the well-beingof the community. Public safety will beimproved. Mainstreaming environmentalconsiderations in development will beemphasised for environmental protectionand sustainable use of natural resources.The promotion and preservation of culture,arts and heritage will contribute tobuilding national identity and unity.89


Improving the Standard and Sustainability of Quality of Life4thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010improving the standardand sustainability ofquality of life71


Improving the Standard and Sustainability of Quality of Lifeimproving the standardand sustainability ofquality of lifeI.INTRODUCTIONThe Ninth Plan emphasised that economicgrowth must be accompanied by a risein the quality of life across the country.For this, the Plan laid down variousstrategies to ensure better accessibility tohealth care, utilities and housing; extendroads to rural areas, and improve publictransportation and road safety. Measureswere also taken to provide a safe andsecure environment for the people. Giventhe challenges of rapid socio-economicdevelopment and its impact on the family,various programmes were implementedto build a more caring society andpromote community well-being. Theseincluded measures to empower women,protect children and enhance the role ofyouth in society. Sports and recreationalactivities were enhanced to attract moreMalaysians to adopt a healthy lifestyle aswell as to achieve excellence in sportsat the national and international levels.There were also measures to enhancethe role of culture, arts and heritage topromote national identity and unity. ThePlan also recognised the need to managethe environment and natural resources ina more holistic and integrated manner aspart of raising the quality of life.The remaining Plan period will see amajor push to raise the quality of livingof the people across the country throughgreater accessibility as well as improvedquality of health care and other socialamenities. Provision of adequate, qualityand affordable housing and extendingelectricity and potable water to therural areas and the urban poor will beemphasised. An enlarged network oftransport facilities will integrate the urbanand rural areas. This will help improveaccessibility of the rural populationto markets and urban services. Thedevelopment of an integrated publictransport system will be undertaken toprovide efficient services. Public safetywill be further improved with the increasein capacity and capabilities of the policeforce and greater involvement of thecommunity. Strategic programmes willbe implemented to strengthen the familyinstitution to meet the challenges ofurbanisation and modern living styles.Sports and recreational activities will befurther expanded to promote an activeand healthy lifestyle as well as achievesporting excellence. The appreciation forthe nation’s culture, arts and heritage willbe promoted. Further measures will alsobe taken to protect the environment andensure sustainable use of natural resources,including mainstreaming environmentalc o n s i d e r a t i o n s i n t o d e v e l o p m e n tplanning.II.KEY RESULTS, 2006-2007There were concerted efforts to fulfilthe needs that are intrinsically linkedto improving the quality of life. Theseincluded implementation of variousinitiatives and projects geared towardsimproving accessibility and quality ofhealth care and basic utilities; providing73


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010affordable housing and better urbanservices; creating a healthy and safeenvironment; improving transportation;and promoting sustainable managementof resources. Together, these initiativescontributed towards improving the wellbeingof society. In addition, social stabilitywas maintained within a milieu of a caringsociety that continued to enjoy peace,security and harmony. The output of thevarious initiatives is shown in Box 4-1.Box 4-1Key Results, 2006-2007Commitment OutputHealth• Expanding primary care services• Increasing health promotion andeducation activities• Implementing and consolidating theprovision of secondary and tertiarycare• Addressing health needs of specifictarget groups• Meeting human resource needs of themedical sector• 34 health clinics and 72 rural clinics built, bringing the total to 824health clinics and 2,073 rural clinics• MyHealth portal launched as an Internet-based health educationchannel. Screening and early detection of risk factors were integratedinto services provided at health clinics• 21 hospitals completed, bringing the total to 130, while 61 hospitalsprovided secondary care and tertiary care was provided on a regionalbasis• Health care for the elderly was provided in 600 clinics or 73% of thetotal, while health care for children with special needs were providedin 214 clinics or 26% of the total• Number of doctors increased from 15,421 in 2005 to 18,140 in2007. Number of specialists increased from 2,014 in 2005 to 2,413in 2007Housing and Urban Services• Constructing low-cost houses• Enhancing management capabilities oflocal authorities• 32,000 units of low-cost houses built• 3,702 units built under Program Perumahan Rakyat (PPR) Dimiliki withGovernment subsidy of RM129.6 million• e-PBT, one-stop centres (OSCs) and star rating system implementedFamily Development• Strengthening family institution• Protecting children and improvingtheir welfare• 4,000 participants benefitted from family development programmes,including SMARTSTART and Parenting@Work programmes• 11,000 children benefitted from crisis and educational support services,child development activities and motivational camps• 13,000 children benefitted from 103 programmes carried out throughchild welfare committees74


Improving the Standard and Sustainability of Quality of LifeCommitment Output• Moulding dynamic youth• Improving the status and well-beingof women• Integrating persons with disabilities(PWDs) into society• Promoting active and productiveageing• 90,100 youth benefitted from Youth to Youth programmes• 738,000 youth benefitted from Rakan Muda programmes• 195,000 youth benefitted from National Service Programme• National Youth Act enacted in 2007 to promote and facilitate youthdevelopment• Malaysian Institute for Research in Youth Development establishedto undertake research on youth issues• 11,000 women trained in information and communications technology(ICT) skills and handicraft• 420 single mothers trained under Inkubator Kemahiran Ibu Tunggal(I-KIT) programme• 66 rehabilitation centres built, making a total of 379 centres• Persons with Disabilities Act and a national policy on PWDs enactedin 2007• Database on PWDs developed• 35 mobile Caring Services Units provided• 3 day-care centres built, making a total of 19 centres• Lifelong learning programmes implementedElectricity Supply•1Expanding rural electricity coverage2005 2007Peninsular Malaysia 98.6% 98.7%Sabah 72.7% 74.7%Sarawak 80.8% 84.1%Malaysia 92.9% 93.5%Water Supply• Rural electrification programme benefitted 18,300 housing units inMalaysia comprising 4,900 housing units in Peninsular Malaysia, 5,600in Sabah and 7,800 in Sarawak• Expanding rural water coverage2005 2007Peninsular Malaysia 92.0% 93.6%Sabah 61.0% 65.0%Sarawak 92.0% 92.0%Malaysia 92.9% 93.0%• Rural water supply programme benefitted 117,465 households inPeninsular Malaysia, 50,925 in Sabah and 9,370 in SarawakSewerage• Expanding sewerage services• 650,000 new population equivalent (PE) served• 308 existing small sewerage treatment plants (STPs) repaired andupgraded1This refers to rural housing units served as a percentage of total rural housing units. This figure is computed based on Census 2000data excluding housing units served with private individual generators.75


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010EnvironmentCommitment Output• Improvingair quality• Environmental Quality (Control of Petrol and Diesel Properties)Regulations 2007 gazetted on 1 April 2007 to improve quality offuel• Improving river water quality• Managing toxic and hazardous waste• Protecting endangered species of wildflora and fauna• Flood management• 91 out of 143 river basins classified as clean in 2007 as comparedto 80 in 2005• Environmental Quality Act 1974 amended to provide for mandatoryjail sentence for illegal disposal of scheduled waste and to makethe chief executive officer liable for the offence committed by thecompany• International Trade in Endangered Species Act 2008 (Act 686) gazettedto regulate international trade in endangered species of wild floraand fauna• River Basin Management Plan on Sungai Kedah completed in 2007and the Kedah Water Resources Enactment gazetted• SMART Tunnel started operation in 2007Roads• Co n s t r u c t i n g roads to connec tresettlement areas to rural industrialareas and estates, particularly in Sabahand Sarawak• Implementing road safety programmes• 317 km of rural roads constructed/upgraded, including 98 km inSabah and 60 km in Sarawak• 988 accident-prone spots improved• Road accident fatality rate per 10,000 registered vehicles decreasedfrom 4.2 in 2005 to 3.7 in 2007Urban Transport• Improving the efficiency and reliabilityof urban transport services• Kepong Sentral Station completed and 29 Komuter stationsupgraded• Average passengers per day for urban rail increased from 438,055in 2005 to 478,300 in 2007• Rapid Penang bus service in Pulau Pinang commenced in July2007Air Transport• Expanding airport capacity andfacilities• One airport upgraded and one terminal for low-cost carrier built• Total passenger traffic increased by 8.6% from 42.8 million in 2005to 46.5 million in 2007Rail Transport• Increasing network coverage/accessibility• Rawang–Ipoh electrified double tracking rail project completed in2007• Rehabilitation and upgrading of Tampin and Jerantut stations76


Improving the Standard and Sustainability of Quality of LifeCommitment OutputPublic Safety• Enhancing public safety• An additional 5,202 police personnel recruited in 2006 and 5,342•in 2007162 new police stations established in private premises mainly in Johor,Pulau Pinang, Selangor and Wilayah Persekutuan Kuala LumpurCulture, Arts and Heritage• Inculcating cultural values• Enhancing culture, arts and heritage• 300,000 people benefitted from 8 nationwide campaigns on courtesyand good values• 600,000 people benefitted from 3,215 culture and arts activities• 569 culture and arts trainers received enhanced training• 134 conservation projects implementedSports• Promoting active and healthy lifestylesthrough sports and recreation• Developing a sports culture• 2 million people benefitted from 800 aerobic and fitness programmesconducted nationwide• 640,000 people benefitted from 1,623 sports and recreationalprogrammes• 2,737 sports associations benefitted from financial aid and otherassistanceIII.HealthMOVING FORWARD,2008-2010Sustaining and raising the health statusof all Malaysians is a vital componentof national development. The provisionof health care services will be furtherintegrated and the quality of careenhanced towards achieving a healthiersociety. Health care delivery will beimproved at the primary, secondary andtertiary levels. The changing diseasepatterns, rural-urban disparities andrising expectations of the public will beaddressed.Primary health care will continue to bethe thrust of the health care system.Although there is an overall improvementin the health status of the population,new challenges have arisen. Communicablediseases such as Human ImmunodeficiencyVirus/Acquired Immunodeficiency Syndrome(HIV/AIDS) are on the increase, whilemalaria and tuberculosis have re-emerged.Non-communicable diseases, such ascardiovascular diseases, cancers, diabetesand mental disorders, are also on theincrease. Since non-communicable diseasesare preventable, greater investment willbe made on health promotion, educationand adoption of healthy lifestyle practices.This will include promoting physical77


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Affordable and qualityhealth care…activity and extending the healthy livingconcept to schools and workplace. HIV/AIDS prevention and control programmeswill be strengthened, by among others,intensifying cooperation with nongovernmentalorganisations (NGOs) toprovide care and support for thoseinfected and affected. Clinical preventiveservices, which include screening as wellas early detection and management ofpreventable risk factors, will be providedat all health clinics.The delivery of affordable and accessiblehealth care will focus on improvingintegration between all levels of carethrough greater collaboration betweenthe public and private sectors and makingservices more patient-oriented. Existingfacilities will be upgraded and new onesbuilt, equipped with modern diagnosticequipment to provide higher quality carein a more conducive environment. Healthcare to the less accessible groups, suchas the Orang Asli and minority groupsin remote parts of Sabah and Sarawak,will be further enhanced. More mobileclinics, including flying doctor services,will be made available for those in remoteareas. Health surveillance and responsewill be further strengthened to preventand minimise the impact of diseaseoutbreaks and disasters. The delivery ofpre-hospital, emergency and ambulatorycare services will be upgraded to reducethe number of admissions and period ofhospitalisation. Home care nursing will beexpanded with multidisciplinary teamscapable of providing pharmaceutical adviceas well as palliative and rehabilitativecare. Teleconsultation services will beexpanded nationwide and the MyHealthportal enhanced to allow for interactivehealth risk assessment.Secondary and tertiary care services, whichfocus on curative and rehabilitative care,will continue to be strengthened. Clinicalcare networks, centres of excellence andregionalisation of tertiary care serviceswill be further developed to improveaccess. The integration of traditional andcomplementary medicine (TCM) into thehealth delivery system will focus on itsapplication in practices such as painmanagement, nutrition and rehabilitation.Health research will support evidencebaseddecision-making and improvehealth outcomes. Registries for diabetes,hypertension, mental illness and injurieswill be developed to enable researchto provide broad-based interventionsto control and prevent these diseases.Quality assurance will be enhancedto improve quality of care and ensurepatient safety.A key challenge facing the health sectoris ensuring the availability of adequatehealth personnel in the public sector.Although the health professionals topopulation ratios have improved, somedisparities still exist. Since human resourceremains the central component of thehealth care delivery system, the capacityof health professionals will be continuouslydeveloped to keep abreast with latestadvancements to meet the changinghealth needs of the people. Initiatives toovercome health personnel shortage willinclude increasing the intake of studentsinto institutions of higher learning anddecentralising decisions on human resourcedeployment. A new benefits package toretain health personnel in the publicsector will also be considered.78


Improving the Standard and Sustainability of Quality of LifeTable 4-1Health Personnel: Population Ratio, 2005 and 2007Type of PersonnelNumberRatio to Population2005 2007 2005 2007Doctors 1 20,105 23,738 1 : 1,300 1 : 1,145Dentists 1 2,751 3,163 1 : 9,497 1 : 8,586Pharmacists 1 4,012 5,730 1 : 6,512 1 : 4,742Nurses 1 44,120 48,196 1 : 592 1 : 556Medical Assistants 1 6,709 7,948 1 : 3,894 1 : 3,419Dental Technicians 2 655 684 1 : 39,889 1 : 39,728Dental Surgery Assistants 2 2,355 2,632 1 : 11,094 1 : 10,324Community Nurses 2 15,618 16,883 1 : 1,673 1 : 1,610Dental Nurses 2 2,071 2,319 1 : 12,616 1 : 11,718Occupational Therapists 2 301 405 1 : 86,802 1 : 67,096Physiotherapists 2 468 576 1 : 55,828 1 : 47,177Radiographers 2 1,156 1,375 1 : 22,602 1 : 19,763Medical Laboratory Technologists 2 3,302 3,684 1 : 7,913 1 : 7,376Notes:1Includes public and private sectors.2Refers to the ratio in Ministry of Health.Collaboration between public and privatehealth care providers will be strengthenedto ensure efficient and optimal utilisationof resources. Outsourcing of services,leasing of public health facilities toprivate practitioners and collaborating withprivate medical institutions in the trainingof medical and allied health personnelwill continue to be undertaken. Privateproviders will also be encouraged to givegreater emphasis to disease preventionand health promotion.The ever increasing demand for betterhealth services and the changing diseasepatterns are contributing towardsescalating health care costs. Accordingly,the Government will examine optionstowards meeting the rising cost of healthcare to ensure that health care remainsaccessible, affordable and relevant to thepeople’s needs. These efforts will contributetowards achieving better health for all.Housing and Urban ServicesThe public sector housing programmewill continue to focus on the provision ofadequate, quality and affordable houses forall, particularly the low- and low-middleincome groups. The implementation ofthe low-cost housing programme will beexpedited with the construction of anadditional 18,500 units under the PPR forrental scheme. In addition, 12,300 unitsof affordable houses under the RumahMampu Milik programme will be builtby 2010. Efforts will also be undertakento provide low-cost housing areas with79


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010adequate facilities and amenities toprovide a pleasant living environment.In the case of long houses in Sabahand Sarawak, the PPR scheme will beadapted to produce appropriate housedesigns, taking into account prevailingownership practices. Steps will also betaken to promote ownership by expandingrent-to-buy schemes. The identification ofqualified applicants for low-cost houseswill be improved with the integrationof the database for registration anddistribution of low-cost houses at theFederal and state levels. Greater effortswill be taken to promote the use of theIndustrialised Building System (IBS) in theconstruction of affordable homes.Rapid urbanisation continues to increasethe demand for housing, public amenitiesand infrastruc ture, posing greaterchallenges to local authorities. In thisregard, local authorities will have todepart from the routine provision ofservices and improve upon the delivery ofrequired services. Measures will continueto be taken to strengthen the capacityand management capability of localauthorities. As community involvementis crucial to good governance especiallyat the local level, the formation ofpartnerships between local authoritiesand communities will continue to beencouraged, including through the LocalAgenda 21 programme.The coming into enforcement of the SolidWaste and Public Cleansing ManagementAct and the Solid Waste and PublicCleansing Management Corporation Act,will enable the Government to implement,among others, more cost-effective andefficient schemes for the collection,transportation and disposal of solidwaste. Programmes and activities willbe intensified to close dumping sitesor upgrade them to sanitary landfills. Inaddition, solid waste management willbe further improved through greateruse of material recovery technologiesand emphasis on the waste to wealthconcept, including the expansion of wasteminimisation and recycling schemes.Additional incentives to encourage wasteminimisation and promote recyclingactivities will be introduced.Electricity SupplyAccess to electricity supply, especially inrural areas of Sabah and Sarawak will beexpanded to improve the quality of lifeof rural communities. The increasing costof supplying electricity to rural areas willbe addressed by adopting cost-effectivemodes of supply, such as solar hybrid,micro-hydro and micro-wind turbine. Toenable better planning of the programmeand assessment of outcomes, database onthe rural community will be improved.I m p l e m e n t a t i o n a n d coordinationmechanism will be further strengthenedto expedite supply of electricity to ruralareas. Community involvement will alsobe enhanced to ensure sustainability ofthe programme. By the end of the planperiod, rural electricity coverage in Sabahand Sarawak is expected to increase to82.6% and 93.2%, respectively.Water Supply and SewerageCoverage of water supply in remote areaswill be expanded with the implementationof more gravity flows, tube wells andrain water harvesting system throughthe rural water supply programme. Ruralwater coverage is expected to increaseto 70% in Sabah and 95% in Sarawakby 2010. Water supply services will focuson expanding and upgrading the supplysystem and rehabilitation programmesto reduce non-revenue water. Emphasiswill be placed on raising the quality of80


Improving the Standard and Sustainability of Quality of Lifewater to meet international standards. Inline with the restructuring of the waterservices industry, corporatisation exercisefor the remaining states of Kedah, Pahang,Perak, Perlis and WP Labuan will beimplemented, while the establishmentof the state water regulatory body willbe expedited.The sewerage system in highly populatedareas, especially in the Klang Valley, willbe improved to enhance public health,safeguard the environment and reducewater pollution. Priority will be given tothe rationalisation and centralisation of thesewerage networks, as well as upgradingof treatment plants. The implementationof a joint billing system by SuruhanjayaPerkhidmatan Air Negara (SPAN) will bepursued towards improving sewage billcollection.Transport System and Road SafetyThe rural road network will continue tobe expanded to meet the inadequatecoverage, especially in Sabah and Sarawak.A study is being undertaken to identifyadditional road requirements to improvethe road network and accessibility inthese two states. Meanwhile, other roaddevelopments will include the EastCoast Highway Phase II from Kuantan toKuala Terengganu and the Senai-DesaruHighway.Traffic congestion continues to be achallenge in major cities and urban centres.The insufficient road space to cope withthe rapidly increasing number of privatevehicles and inadequate public transportservices will be addressed systematically.Efforts such as increasing coverage of theurban rail transit system and buildingmore integrated transport terminals aswell as improving the efficiency of theKomuter, bus and taxi services will beundertaken to achieve the target ratioof private vehicles to public transportof 70:30 by 2010, particularly in theKlang Valley. The development of varioustransport infrastructure will also take intoconsideration providing greater accessibilityand more convenient public transportfacilities to PWDs. A public transportcommission will be established to plan andcoordinate all public transport programmesand initiatives. The commission will alsobe responsible for regulating the publictransport sector and develop a moreefficient and integrated public transportsystem.The coverage of the Komuter servicewill be extended with the completionof the Sentul-Batu Caves electrifieddouble tracking rail project, benefittingapproximately 8,800 commuters per day.The Light Rail Transit (LRT) Kelana JayaLine will be extended from Kelana Jaya toPutra Heights while the Ampang Line fromSri Petaling to Putra Heights. Connectivitywill be provided at Putra Heights by aninterchange station for both lines.Despite the increased number of roadsafety campaigns, road accidents andfatalities remain high. Measures willbe undertaken to reduce road fatalityrates from 3.7 in 2007 to 3.0 per 10,000registered vehicles by 2010. Amongothers, these will include rehabilitationof accident-prone spots and increasingsafety features of roads.The growth of low-cost air services hasenhanced air travel opportunities as wellas fostered greater travel between differentparts of the country. The upgrading ofthe low-cost carrier (LCC) terminal at theKL International Airport will increase itscapacity and enhance the efficiency oflow-cost air services. Rural air serviceswill be expanded to improve access toremote areas in Sabah and Sarawak.Integrated publictransport system…81


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Resilient families...82Further improvement of the LCC terminalswill enable expansion of facilities andprovide greater access to low-cost travelto a larger segment of the population.Inland water transport is an alternative, costeffective and environmentally sustainablemode of transport in remote areas. Toexpand the riverine and coastal transportsystem in Sarawak, a master plan will bedrawn up. Meanwhile, construction of newjetties and upgrading of existing oneswill be undertaken to enhance mobilityof the rural population.Family DevelopmentThe family institution needs to bestrengthened to effectively nurture andinstill moral and ethical values in theyoung to cope with rapid socio-economicdevelopment and changing lifestyles.Strong family units will also be necessaryto provide care and support for the sick,disabled and the elderly. A conducivefamily environment will provide for astrong foundation that is crucial for societalwell-being. The National Family Policywill be formulated to integrate actionsto strengthen the family institution. Theshrinking family size and rising numberof older persons will require formalinstitutions to complement traditionalfamily responsibilities. More one-stopfamily service centres will be establishedto provide the necessary support services,including counselling, parenting skillstraining and reproductive health services.The private sector will be encouraged toimplement programmes to assist familiesand individuals in need as part of theircorporate social responsibility initiatives.Child safety remains a priority. An earlychildhood care and education policy willbe formulated to provide the frameworkfor the development of children frombirth to four years. In addition, theprovision of quality child care and achild-safe environment is essential towardsimproving and safeguarding the wellbeingof children. The amended ChildCare Centre Act 1984, which amongothers, enables the authorities to sealpremises not in compliance with the Act,will be enforced to enhance the qualityof child care centres. The establishmentof child care facilities in the workplacewill be encouraged. The role of childprotection teams, child welfare committees,advisors to courts for children and childwitnesssupport service will continue tobe strengthened. Communities will beencouraged to assume a greater rolein ensuring child safety in their areasas well as in reducing violence againstchildren. More community child carecentres will be set-up to benefit lowincomehouseholds.Youth must be equipped with therequisite skills and engaged as partnersin development. Programmes will bedirected at empowering youth withknowledge, qualities and attitudes tobecome responsible citizens and tobe prime movers in development aswell as contribute towards enhancingnational unity. The National ServiceProgramme will be made more attractiveto participants and to receive wideracceptance by parents, among others,by enhancing the modules on social andliving skills. Rakan Muda programmes willbe enhanced to encourage participation,develop positive values as well aspromote a healthy lifestyle among youth.Leadership training programmes will bestrengthened and expanded to reachmore youth. Collaborative efforts will alsobe undertaken with the private sectorand NGOs to organise and implementprogrammes for the benefit of youth.In addition, youth organisations willbe empowered to ensure that they


Improving the Standard and Sustainability of Quality of Lifeare managed in a more efficient andprofessional manner and able to contributesignificantly to youth development. Studieson issues pertaining to youth, such as onsocialisation, leadership and education aswell as on the effectiveness of existingprogrammes will be undertaken to furtherenhance youth development.The changing roles and responsibilitiesof women in the family and societyrequire specific strategies to help themcope with new challenges. An actionplan to enable women to occupy atleast 30% of decision-making positionswill be put in place. More training andskills upgrading programmes in areassuch as information and communicationstechnology and entrepreneurship willbe implemented to facilitate greaterself-employment and participation ofwomen in the economy. A strategicplan covering economic, education andtraining programmes will be formulatedto assist single mothers improve theiremployability. The I-KIT programme willcontinue to be implemented to enablemore single mothers to be involved inincome generating activities. Affordablechild care services will be expanded andflexible working arrangements promoted,including working from home.Programmes will be implemented tocreate awareness on the importance ofthe well-being of women. The relevantlaws and regulations will be reviewedand amended to improve the status andwell-being of women. Better access toadequate social protection, particularlyin facing illness, invalidity and old agewill be provided to women. Variousprogrammes for improving women’shealth will be implemented to ensure thatwomen are healthy throughout their lifespan. The mammogram programme willbe intensified and more mobile clinicsprovided to increase accessibility to basichealth services for women.Integrating PWDs into the mainstream ofsociety and economy will enable them tobe more independent as well as contributetowards national development. Measureswill be undertaken to improve accessto education and vocational training,employment as well as in providing abarrier-free environment to enable PWDsto be mobile, self-reliant and financiallyindependent. Efforts will be undertakento promote employment opportunities forPWDs in the public and private sectors,while self-employment among PWDswill be further encouraged. The NationalCouncil for Persons with Disabilitieswill spearhead efforts to strengthenthe partnership between the publicand private sectors as well as NGOs toensure a more coordinated approach inimplementing policies and programmes.Additional community-based rehabilitationcentres and one-stop service centreswill be built and existing ones furtherdeveloped to provide more comprehensiveservices. Efforts to register PWDs will beintensified to facilitate the planning ofprogrammes and facilities as well as toensure that they gain access to benefitsand grants available.The provision of adequate quality care andservices for older persons is an importantemerging challenge as Malaysia movestowards becoming an ageing society by2035 when 15% of the population isexpected to be above 60 years. In thisregard, steps will be taken to assessthe socio-economic consequences of anageing population covering the provisionof health care, income security andhousing. The national policy and actionplans on ageing will be reviewed tofacilitate and implement programmes toenable older persons lead healthy andproductive lives.83


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Towards safercommunities...Clean and healthyenvironment...84Public SafetySafety in towns and cities will be enhancedthrough the safe city programme. Atotal of 23 crucial measures have beenidentified for implementation by variouslocal authorities and property developersto address vandalism and petty crimes.Guidelines on Crime Prevention throughEnvironmental Design will also beformulated to supplement efforts toenhance safety in towns and cities.Recruitment of additional police personnelwill be expedited to reach 60,000 by2012. The People’s Volunteer Corps(RELA) and Neighbourhood Watch (RukunTetangga) will also be engaged in crimeprevention efforts. The effectiveness andefficiency of policing operations will beimproved through the use of moderncommunications technology and anintegrated ICT management framework.G reater i nvo l ve m e nt o f t h e l o c a lcommunity and NGOs to create a safeenvironment will be promoted. Moreawareness programmes will be carriedout in schools to inculcate positivevalues among school children to becomeresponsible citizens. The community willcontinue to be encouraged to join theRakan Cop programme in promotingpublic safety.EnvironmentEnvironmental and natural resourcemanagement will continue to focus onsustaining a clean and healthy livingenvironment, while simultaneouslyfulfilling economic development needs.Implementation of the existing programmeswill be further strengthened throughenhanced multi-stakeholders approachto improve coordination between theplanning and implementing agencies. Atthe same time, enforcement measureswill be intensified to ensure compliancewith environmental standards, particularlyby the industries. Greater emphasis willalso be placed on increasing the levelof public awareness as the responsibilityof protecting the environment rests witheach and every citizen.The development planning processwill incorporate environmental issuesin a holistic and integrated manner.I n t h i s r e g a r d , w i d e r u s a g e o fenvironmental planning tools such asthe Strategic Environmental Assessmentand Sustainability Assessment will beencouraged. This is crucial as sustainablemanagement of natural resourcesand biodiversity will enable optimalresource utilisation and ensure longtermsustainability. Land-use planningfor development will be improved inline with the National Physical Plan. Thedevelopment of regional corridors willgive due attention to environmental andbiodiversity protection.Measures will be implemented to reducepollution and conserve the nation’snatural resources. Specific attention willbe given to continuous improvementof air and water quality and to reducecontamination of water and land resourcesfrom illegal discharge of solid waste, toxicand hazardous substances. Guidelines willalso be formulated for proper managementand disposal of electrical and electronicwaste.The protection of biodiversity and criticalhabitats will be intensified. Programmeson in-situ and ex-situ conservation,propagation, breeding, and rehabilitationof degraded forest areas will be furtherexpanded to reduce pressure on floraand fauna in its natural habitat. Twoconservation initiatives, namely the CentralForest Spine in Peninsular Malaysiaand the Heart of Borneo in Sabah andSarawak will be carried out to improveconnectivity of forests for wildlife mobility,biodiversity reservoir, protection ofwatershed areas and create a destinationfor eco-tourism.


Improving the Standard and Sustainability of Quality of LifeThe Centre of Excellence for BiodiversityLaw will be established to enhance thecapability in addressing legal issuespertaining to biodiversity, biotechnologyand biosafety. The import, export anduse of living modified organisms andproducts of such organisms, and tradein endangered flora and fauna will bebetter managed with the enforcement ofBiosafety Act 2007 and the InternationalTrade in Endangered Species Act 2008,respectively.Flood mitigation programmes will beintensified to ensure that effectivemeasures are put in place to deal withrecurrence of floods. In urban areas, thedrainage system will be upgraded toaddress flash floods. A comprehensivemaster plan based on integrated riverbasin management will be formulated tocover major flood-prone river basins. Themaster plan will encompass proper landuseplanning and zoning and stormwatermanagement to reduce the likelihoodand impact of floods and developingemergency response to floods.Efforts will continue to address the effectsof climate change on various sectorsof the economy and society. Mitigatingmeasures will focus on promoting energyefficiency and renewable resources andimprovements in public transport whileadaptation measures will be promotedin development projects.Culture, Arts and HeritageThe inculcation of positive values willcontinue to be emphasised throughcourtesy and integrity campaigns.Traditional culture and values will bepreserved by maintaining and encouragingtheir practice in the daily lives of Malaysiansto promote a sense of shared ownershipand nationhood. At the same time, thefostering of cross-cultural understandingand appreciation of cultural diversity willcontinue to be an important agenda inbuilding a united and harmonious nation.Participation in the arts to cultivate talentand instill appreciation for local cultureand arts will be further improved throughquality cultural programmes, exhibitionsand events.SportsEfforts will focus on promoting an activeand healthy lifestyle through sports andrecreation as well as nurturing talenttowards excellence. The Governmentwill continue to promote participationin mass and high performance sports.More instructors and facilitators in masssports will be trained to ensure effectiveimplementation of sports programmes.The professionalism and efficiency ofthe national sports associations will becontinuously improved to ensure deliveryand consistency of results. Promisingathletes will be trained and coachedsystematically to enable them to excelin competitions. The talent identificationprogramme will be expanded and theapplication of sports science strengthenedto improve performance. In addition, thenumber of coaches and experiencedtechnical officers will be increased,including through the recruitment ofretired national athletes to becomequalified coaches and making it theirprofession. The private sector will beencouraged to promote sports andrecreational activities.IV. outcomes, 2010Based on the programmes and strategiesoutlined in the remaining Plan period,the expected outcomes are shown inBox 4-2.Active lifestyles...85


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 4-2Expected Outcomes, 2010CommitmentOutcomeHealth• Reducing infant mortality rate to 4.9 per 1,000live births• Reducing maternal mortality rate to 2.5 per100,000 live births• Reducing incidence of TB to 59 per 100,000population• Reducing incidence of malaria to 19 per 100,000population• Improving doctor:population ratio to 1:763• Improving dentist:population ratio to 1:6,855• Improving pharmacist:population ratio to 1:3,267• Improved health statusHousing and Urban Services• Constructing 70,000 units of low-cost houses• Expanding OSCs and Local Agenda 21Programme to all 144 local authorities• Integrated solid waste management• Adequate, quality and affordable houses• Improved urban servicesFamily Development• Conducting family development programmes for60,000 participants• Implementing Rakan Muda programmes for1,750,000 youth• Conducting National Service Programme for766,000 youth• Improved family well-being• Empowered youth with positive attitudesElectricity supply• Expected rural electricity coverage:2010Peninsular Malaysia 98.4%Sabah 82.6%Sarawak 93.2%malaysia 95.5%• Expanded rural electricity coverage• Rural electrification programme is expected tobenefit an additional 61,700 housing units in thePlan period86


Improving the Standard and Sustainability of Quality of LifeCommitmentOutcomeRural Water Supply• Expected rural water coverage:2010Peninsular Malaysia 96.0%Sabah 70.0%Sarawak 95.0%Malaysia 95.2%• Expanded rural water coverage• By 2010, the rural water supply programme is expectedto benefit 546,870 households in Peninsular Malaysia,164,200 in Sabah and 167,170 in Sarawak• Corporatisation of water services authority in the statesof Kedah, Pahang, Perak, Perlis and WP Labuan as wellas the formation of state water regulatory body• Increased efficiency of water services managementSewerage• Construction of 11 new STPs to serve 2,859,000 PE• Increased efficiency of sewerage services• Decommissioning of small and scattered STPs• Introduction of a revolving fund to increase connectionof sewerage system at individual premises to thecentralised STPs• A joint billing system will be pursued by SPAN toensure consumers pay for the sewerage servicesRoads• Review of the Highway Network Development Plan(HNDP) for Sabah and Sarawak to be completed• Expanded road network coverage especially in Sabahand Sarawak• Construct roads to connect resettlement areas to ruralindustrial areas and estates, particularly in Sabah andSarawakAir Transport• Upgrading of airports and the LCC terminal at KLIA • Increased capacity and efficiency of air transportservicesUrban Transport• Extend Komuter service to Tanjung Malim• Extend LRT Ampang Line by 16 km from Sri Petalingto Putra Heights• Extend LRT Kelana Jaya Line by 16 km from KelanaJaya to Putra Heights• Completion of Sentul-Batu Caves electrified doubletracking rail project• Construction of integrated transport terminal at BandarTasik Selatan• Increased urban public transport network coverageand facilities87


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010CommitmentOutcomeRail Transport• Construction of Ipoh-Padang Besar electrified doubletracking rail project, expected to be completed in2013.• Increased efficiency and reliability of intercity railtransport services• Construction of Seremban-Gemas electrified doubletracking rail project, expected to be completed in2012.• Refurbishment and procurement of rolling stocks• Rehabilitation of railway infrastructure in Sabah• Commence rapid intercity train service between KualaLumpur and IpohEnvironment• Sulphur content to be reduced in diesel from 3,000ppm to 500 ppm while petrol from 1,500 ppm to500 ppm• Polluted river basins to be upgraded from Class IIIcategory to Class II category through the PollutionPrevention and River Water Quality UpgradingProgramme• A database on Malaysia’s biodiversity to beestablished• Improved air quality• Improved river water quality• Better management of biodiversity• Capability in legal issues regarding biodiversity,biotechnology and biosafety in Malaysia to beenhanced• Master plans based on integrated and holistic approachto be drawn up as long-term solution for floodincidences especially in the flood-prone areas• Reduced incidences of floodsCulture, Arts and Heritage• Implementing 150 nationwide courtesy campaigns,involving 300,000 participants• Implementing 4,500 culture and arts activities• Tolerant and harmonious society• Enhanced appreciation of culture, arts and heritage• Producing 1,500 Akademi Seni Budaya dan WarisanKebangsaan (ASWARA) graduatesSports• 2.5 million people participating in mass sportsprogrammes• Training 24,000 coaches• Active and healthy lifestyles• Better sporting excellence• Developing 14,570 athletes through talent identificationprogramme88


Improving the Standard and Sustainability of Quality of LifeV. CONCLUSIONThe continued implementation ofprogrammes towards improving the qualityof life will ensure that the populationhas access to better quality health care,housing, utilities and other urban services.Efforts to strengthen the family institutionand protect vulnerable members of societywill contribute to a more caring society.Sports and recreational activities will bepromoted to enhance the well-beingof the community. Public safety will beimproved. Mainstreaming environmentalconsiderations in development will beemphasised for environmental protectionand sustainable use of natural resources.The promotion and preservation of culture,arts and heritage will contribute tobuilding national identity and unity.89


Strengthening the Institutional and Implementation Capacity5thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010strengthening theinstitutional andImplementation Capacity91


Strengthening the Institutional and Implementation Capacitystrengthening theInstitutional andImplementation CapacityI. INTRODUCTIONThe nation’s commitment to enhanceits competitiveness demands thatsignificant improvements be madeto the service delivery system in allsectors of the economy. Efforts weretherefore instituted to put in placee-government, improve administrativeprocesses, reduce bureaucratic proceduresand measure performance. Initiativeswere also undertaken to enhance servicedelivery in the public and private sectorsthrough development of competencies,inculcation of positive values and workethics, introduction of relevant legislationand computerisation programmes as wellas use of appropriate technology. Theseinitiatives have brought about improvedservices and increased responsiveness tothe needs of clients.During the remaining Plan period, servicedelivery will be further enhanced. It will becustomer-focused and integrated to provideseamlessness across agencies, leading toshorter response time, better governanceand overall efficiency. Consumer confidencein electronic-based transactions will beincreased through further strengtheningthe legislative framework as well asincreasing awareness on informationsecurity and privacy. An outcome-basedapproach for planning, monitoring andevaluation of policies, programmes andprojects will be adopted to maximisegains to the target population.II. KEY RESULTS, 2006–2007During the Ninth Plan period, theGovernment is committed to improvingpublic service delivery with special focuson enhancing services at the district andlocal government levels, streamliningregulatory procedures, managing publiccomplaints, deploying informationand communications technology (ICT )applications and infrastructure as supportsystems and expediting the implementationof high impact projects (HIPs).A Special Task Force to Facilitate Business(PEMUDAH), comprising high-level officialsfrom both public and private sectors wasestablished to facilitate all aspects of doingbusiness by improving work processesand procedures as well as policies andregulations. The National ImplementationTask Force (NITF) was formed to expeditethe implementation of HIPs and thesecond phase of Bumiputra Commercialand Industrial Community initiatives. TheGovernment implemented several HIPsselected based on their significant directimpact on growth and distribution, strongmultiplier effect to the economy, highvisibility and quick impact with strongsocio-economic emphasis. These initiativesundertaken during the Review period ledto a number of significant achievements,as shown in Box 5-1.Success throughcollaboration...93


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 5-1Key Results, 2006-2007Commitment• Enhancing public servicedelivery with focus on districtand local government levelOutput• Time taken to process concurrent submission of development proposal from 357days to a maximum of 120 days with the setting up of One-stop Centres (OSCs)and OSC Committee• Cost of doing business reduced with the replacement of Certificate of Fitness forOccupation (CFO) by Certificate of Completion and Compliance (CCC), facilitatesinvestors and developers and increases the credibility of the industry• Simplifying systems and workprocedures• Time taken for automatic tax refund reduced from 1 year to between 14 and 30days for submissions through e-Filing• 47 provisions under the National Land Code amended to improve landmanagement• Processing of passports within 1 to 24 hours• Processing of expatriate employment pass applications within 7 days• Registration of new business reduced from 3 days to 1 hour• Renewal of business registration reduced from 1 day to 15 minutes• Duration for approval of preliminary Environmental Impact Assessment Reportreduced from 3 months to 5 weeks• A one nation one number through the 999 Emergency Call Service initiativeintroduced providing the public easier access to all emergency services forassistance in the Klang Valley• Streamlining regulatoryprocedures• Electronic transactions given legal recognition with enactment of ElectronicGovernment Activities Act, 2007, Electronic Commerce Act, 2006 and amendedConsumer Protection Act, 1999• National Cyber Security Policy introduced to promote a culture of security amongthe public and compliance to minimum security standards among critical serviceproviders• Managing public complaintsfor better service delivery• Deploying ICT applicationsand infrastructure to improveservice delivery• Speedier resolution of complaints with the establishment of iAduan• Mobile Complaint Counters and Integrated Mobile Complaint Counters introducedextending outreach to the population• Government Public Service Portal (myGovernment) set up as a single gateway to awide range of services and information offered by agencies. Until 2007:•y 3,749 downloadable forms, 1,174 online services and 80 services via SMS• y RM2 billion transaction value through e-Procurement•y 300,834 job seekers, 1,544,881 vacancies and 823,430 job matches providedthrough Electronic Labour Exchange (ELX)94


Strengthening the Institutional and Implementation CapacityCommitmentOutput• Data sharing on geospatial information among provider and user agencies madeavailable by the Malaysian Geospatial Data Infrastructure (MyGDI)• Business licensing processes made easier with Business Licensing ElectronicSupport System (BLESS), which also enables applicants to track their applicationsonline• Electronic submission of income tax returns through e-Filing• Growth in e-payment channels:•y Real-time Electronic Transfer of Funds and Securities (RENTAS) system handledan average of RM124.5 billion daily in 2007, an increase of 23.6% compared with2006• y Interbank Giro (IBG) grew from RM26.3 billion in 2005 to RM67.0 billion in 2007•y Internet banking subscribers surged from 2.5 million in 2005 to 4.5 million in2007•y mobile banking subscribers increased from 127.6 thousands in 2005 to 345.7thousands in 2007• Establishment of 495 new government telecentres provided more channels ofaccess to electronic services to the underserved communities• Expediting HIPs through NITF • HIPs include:•y Agro-based Industry Entrepreneur•y Agropolitan Development•y Rebranding of Community Colleges•y Quantum Leap in Rural Education•y Corridor development initiativesIII.MOVING FORWARD,2008-2010In order to meet current user demandsand to sustain competitiveness, publicservice delivery must transform to bemore client-focused by integrating services,increasing confidence in electronic-basedservices and adopting an outcome-basedapproach to planning, monitoring andevaluation of programmes and projects.Integrating ServicesIntegrating services by consolidatingprocesses and procedures across agencieswill be done by re-engineering servicedelivery, creating virtual one-stop centres,promoting information and infrastructuresharing, reviewing legal and regulatoryframeworks, moving towards self-regulation,improving governance and developingcompetencies.Customer-focusedservice delivery...95


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Re-engineering Service DeliveryFor services that involve multiple agencies,work processes will be reviewed, reengineeredand streamlined to ensureefficient delivery. The processes will bedesigned around client needs where theadoption of a shared services culture,involving information and infrastructurewill be promoted. Appropriate technologywill be deployed to support the workflowof these re-engineered processes.Integrated services by consolidatingprocesses and procedures across agencieswill be offered through the e-KL initiativein the Klang Valley. This initiative includesjob applications, provision of a singlepoint of access for loans and grants,enrolment of international students, speedyapproval for billboard advertisements,single-window access for ICT companies tostart operations as well as a standardisedcomplaints management system. Theseefforts will provide better access to awide range of integrated, online servicesincluding electronic submissions, payments,communications and complaints. Inaddition, the introduction of eForms willreduce processing time and cost as wellas improve customer convenience.To accelerate migration to e-payments, theGovernment will continue to implementstrategies outlined in the roadmap,including removing barriers to allow forgreater efficiency and innovation in themarket. Further improvements will bemade in the retail payment systems toreduce the use of cash and cheques aswell as to leverage on the Internet andmobile phones as pervasive and lowcostdelivery channels for banking andpayment services.Chart 5-1Share of Non-Cash Retail Payments by Volume2003 2007Cheques35.9%Cheques19.2%E-Payments64.1%E-Payments80.8%Source: Bank Negara Malaysia96


Strengthening the Institutional and Implementation CapacityThe iAduan system will be upgradedinto a public complaints monitoringsystem, iSPAAA, which is an integratedand centralised online complaintsmanagement system for the publicsector. This system will be extendedto cover all ministries, agencies andlocal authorities with the “One NumberCall Centre, No Wrong Door” concept.Creating Virtual One-Stop CentresThe myGovernment single gateway will befurther enhanced to provide a wide rangeof services and information. Accessibility tothis portal will be improved by providingadditional kiosks in public places andenabling access through mobile phones.In addition, improvements will continueAll in one place...Chart 5-2Resolutions of Complaints with iAduan2005Resolutions of Complaints before iAduan2007Resolutions of Complaints after iAduan39%41%61%More than 2 monthsLess than 2 months59%Source: Public Complaints BureauWithin the realm of land administrationand management, the development ofthe e-Tanah system piloted in PulauPinang will integrate and improveupon all existing land administrationprocesses to ensure interoperabilityt o w a r d s m o r e e f f i c i e n t u s e a n dd i s s e m i n a t i o n o f i n fo r m a t i o n fo rdecision-making. It will also include thedevelopment of an e-Tanah por talfor online enquiries on status of landapplication and quit rent payment,land title search as well as to obtainfeedback from users. In addition, theimplementation of the e-Kadaster projectwill reduce the time taken for processingof land title survey from the current twoyears to two months.to be made to MyGeoportal, which isthe single-window access to nationalgeospatial content and related servicesfor development planning.Promoting Information and InfrastructureSharingThe 999 Emergency Call Services willcontinue into the next phase, whichinvolves the development and upgradingof application systems and the 999Call Centre as well as Agency DespatchCentres to provide better response.Training and awareness programmes willbe conducted continuously to ensurequality of service delivery is sustained.97


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Single provision,multiple usage...A National Registry System (NRS) will beset up to allow for sharing of data amongagencies where gathering of key data isdone only once and kept centrally to beused by relevant agencies. The single,centralised repository for input, updateand reference will help reduce errorsand the duplication of data in variousagencies, thereby providing convenienceto citizens and improving service deliveryefficiency.T h e G o v e r n m e n t I n t e g r a t e dTelecommunications Network (GITN)developed to provide a single networkinfrastructure linking all governmentdepartments will be expanded to coverall locations. Putrajaya Campus Network(PCN), which links all government agencieslocated in the Federal GovernmentAdministrative Centre in Putrajaya willbe upgraded, including the setting upof a new gateway for Internet accessto improve performance, reliability andsecurity. This shared and managednetwork to be completed by 2010will reduce costs, enhance informationsharing and improve service delivery.In addition, information, services andapplications on e-government, e-commerce,e-banking, e-education and e-health will bedisseminated through telecentres to theunderserved communities. The KomunitiKitaportal will also be set up to facilitateoutreach of other customised servicesand applications to these communitieswhich include the disabled, poor, elderly,women and indigenous.Reviewing Legal and RegulatoryFrameworkLegal and regulator y requirementsper taining to ser vice deliver y willcontinue to be reviewed to improveease to customers. The Strata Titles Act1985, Licensed Land Surveyors Act 1958,Licensed Land Surveyors Ordinance 1958,Licensed Land Surveyors Regulations 1959,Cadastral Survey Regulations 2002 andthe State Land Rules will be reviewedt o e n a b l e i m p r ove m e n t s i n l a n dadministration and management. TheGovernment will continue consultationswith the private sector regarding legaland regulatory procedures that affectservice delivery.Moving Towards Greater SelfRegulationThe Government will continue toencourage self-regulation and disclosurebasedapproaches for compliance inrelevant areas towards enhancing theefficiency and effectiveness of servicedelivery. The Malaysian Technical StandardsForum, Content Forum, ConsumerForum and Access Forum set up underthe Communications and MultimediaAct, 1998, will be further promoted.These Industry Forums collaborativelyformulate voluntary industry codes as aguide for the industry.Improving GovernanceThere will be a stronger emphasis ongood governance in the public andprivate sectors to enhance transparencyand efficiency towards making Malaysiaa more competitive and attractivelocation for investment. This will includeawarding projects through competitivebidding, further improving responsetime of service delivery, enhancingaccountability and closer monitoring98


Strengthening the Institutional and Implementation Capacityof project implementation. A culture ofhigh performance with integrity will bepromoted through assessment of publicand private service delivery standardslinked to performance indicators andbenchmarked against service deliverybest practices.Developing CompetencyTowards raising competency in thepublic service, training programmes willbe conducted to strengthen leadershipcapabilities as well as strategic, risk andproject management skills to ensurecontinuous efficient delivery of publicservices. This will include conductingtraining programmes in collaborationwith top business schools. In addition,the planning and development of humancapital will be continually upgradedthrough a central competency board forhuman resource management. Trainingprogrammes will also be conducted byagencies in order to keep abreast withcurrent trends and developments inline with their core businesses. Trainingprogrammes on customer relations will befurther emphasised by agencies dealingdirectly with customers.Increasing Confidence in ElectronicbasedServicesIncreasing confidence in electronic-basedservices is imperative to encouragegreater uptake of electronic transactionsand increase participation of the publicand businesses in the digital economy.Measures will be intensified to improvesecurity and privacy to protect theconfidentiality of information, assurethat information is not altered withoutauthorisation and be available whenneeded. This requires that service providersand users of such services understandrisks to security and privacy as well asgood security practices that must be putin place to enable safe and secure useof electronic services.Awareness programmes will be targeted atthe public to enable them to understandthe requirements of good security practicesin the cyber environment. Service providerswill be encouraged to comply withthe Information Security ManagementSystem (ISMS) MS ISO/IEC 27001:2006to adhere to basic security guidelinesto ensure secure and reliable servicedelivery. Regular checks and audits willbe carried out to help agencies assesstheir level of compliance and strengthensecurity implementation towards selfcomplianceor attaining certification ofcompliance to increase user confidence.Existing laws related to informationsecurity will be reviewed to determinetheir adequacy and relevance. As personaldata has become a valuable commoditythat can be traded, used and reused, thePersonal Data Protection (PDP) Bill willbe formulated to regulate the collection,usage and disclosure of personal data.The Electronic Government ActivitiesAct, 2007 will be further applied toinclude more tasks and transactions acrossgovernment agencies. An E-CommerceActivities Roadmap will provide forinformation dissemination and confidencebuilding among citizens and businesses.A guideline on electronic banking will beintroduced to manage risks, threats andvulnerabilities that may emerge from theuse of Internet banking.Promoting customerconfidence...99


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Chart 5-3Internet and Mobile Banking GrowthNo. ofsubscribers(million)5.04.03.02.01.00.0Internet Banking Growthand Penetration% Penetration16.5 18.016.014.011.812.09.610.07.87.08.06.04.02.00.02003 2004 2005 2006 2007No. ofsubscribers(million)0.40.30.20.10.00.00Mobile Banking Growthand Penetration0.100.480.92% Penetration1.262003 2004 2005 2006 20071.41.21.00.80.60.40.20.0No. of Internet banking subscribers (million)Penetration of Internet banking subscribers to population (%)No. of mobile banking subscribers (million)Penetration of mobile banking subscribers to population (%)Source: Bank Negara MalaysiaMaximise benefits,optimise costs...Outcome-based Planning, Monitoringand EvaluationAn outcome-based planning, monitoringand evaluation approach will be adoptedto ensure that projects implementedachieve the desired objectives. This willinvolve strengthening the competencyand capability of implementing agencies,improving systems and work processes aswell as adapting organisational structuresin ministries and agencies.These initiatives will introduce goodproject management practices, improvecoordination within and between agenciesas well as between policy and projectimplementation. Successful projectmanagement methodologies implementedin pilot ministries and agencies will bereplicated to improve project planningand implementation. Training will continueto be offered and updated to developbetter understanding of the processes,approaches and techniques in projectmanagement based on guidelines andinternational standards. In addition tothe monitoring of physical and financialprogress, the existing project monitoringsystem, SPP II will be expanded toi n c o r p o r a t e a n o u t c o m e - b a s e dapproach.IV. OUTCOMES, 2010The key outcomes expected by 2010with improvements in institutional andimplementation capacity are, as shownin Box 5-2.100


Strengthening the Institutional and Implementation CapacityBox 5-2Expected Outcomes, 2010Commitment• Integrating services acrossagencies• Increasing confidence inelectronic-based services• Implementing outcome-basedplanning, monitoring andevaluationOutcome• Customer-focused services across agencies• Easy access through virtual one-stop centres• Convenience to the public by one-time data provision enabled through data sharingamong agencies• Simplified submissions and transactions through eForms and e-payment• Better outreach of services for the underserved communities through telecentres• Effective management of complaints through a single, centralised platform for publiccomplaints• Favourable environment for setting up businesses• Easy access and convenience to customers through increased usage of electronicservices• Personal data protected with implementation of PDP Act• Benefits of programmes to target population maximised through efficient planningand management of programmes and projectsV. CONCLUSIONSignificant improvements were madein strengthening institutional andimplementation capacity during theReview period. Moving forward, furtherimprovements will be made particularlywith respect to service delivery bybeing more customer-focused. This willinclude measures to integrate systemsand services across agencies so as toprovide quality service with greater easeto public and businesses as well as toincrease confidence in electronic-basedservices towards promoting its wideracceptance and usage. In addition, anoutcome-based approach to planning,monitoring and evaluation of programmesand projects will be implementedto maximise benefits to the people.Together with the cooperation andcollaboration of the private sector,the Government will strive towardsachieving service delivery excellence,with greater transparency, integrity andprofessionalism.101


Strengthening the Institutional and Implementation Capacity5thrustMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010strengthening theinstitutional andImplementation Capacity91


Strengthening the Institutional and Implementation Capacitystrengthening theInstitutional andImplementation CapacityI. INTRODUCTIONThe nation’s commitment to enhanceits competitiveness demands thatsignificant improvements be madeto the service delivery system in allsectors of the economy. Efforts weretherefore instituted to put in placee-government, improve administrativeprocesses, reduce bureaucratic proceduresand measure performance. Initiativeswere also undertaken to enhance servicedelivery in the public and private sectorsthrough development of competencies,inculcation of positive values and workethics, introduction of relevant legislationand computerisation programmes as wellas use of appropriate technology. Theseinitiatives have brought about improvedservices and increased responsiveness tothe needs of clients.During the remaining Plan period, servicedelivery will be further enhanced. It will becustomer-focused and integrated to provideseamlessness across agencies, leading toshorter response time, better governanceand overall efficiency. Consumer confidencein electronic-based transactions will beincreased through further strengtheningthe legislative framework as well asincreasing awareness on informationsecurity and privacy. An outcome-basedapproach for planning, monitoring andevaluation of policies, programmes andprojects will be adopted to maximisegains to the target population.II. KEY RESULTS, 2006–2007During the Ninth Plan period, theGovernment is committed to improvingpublic service delivery with special focuson enhancing services at the district andlocal government levels, streamliningregulatory procedures, managing publiccomplaints, deploying informationand communications technology (ICT )applications and infrastructure as supportsystems and expediting the implementationof high impact projects (HIPs).A Special Task Force to Facilitate Business(PEMUDAH), comprising high-level officialsfrom both public and private sectors wasestablished to facilitate all aspects of doingbusiness by improving work processesand procedures as well as policies andregulations. The National ImplementationTask Force (NITF) was formed to expeditethe implementation of HIPs and thesecond phase of Bumiputra Commercialand Industrial Community initiatives. TheGovernment implemented several HIPsselected based on their significant directimpact on growth and distribution, strongmultiplier effect to the economy, highvisibility and quick impact with strongsocio-economic emphasis. These initiativesundertaken during the Review period ledto a number of significant achievements,as shown in Box 5-1.Success throughcollaboration...93


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Box 5-1Key Results, 2006-2007Commitment• Enhancing public servicedelivery with focus on districtand local government levelOutput• Time taken to process concurrent submission of development proposal from 357days to a maximum of 120 days with the setting up of One-stop Centres (OSCs)and OSC Committee• Cost of doing business reduced with the replacement of Certificate of Fitness forOccupation (CFO) by Certificate of Completion and Compliance (CCC), facilitatesinvestors and developers and increases the credibility of the industry• Simplifying systems and workprocedures• Time taken for automatic tax refund reduced from 1 year to between 14 and 30days for submissions through e-Filing• 47 provisions under the National Land Code amended to improve landmanagement• Processing of passports within 1 to 24 hours• Processing of expatriate employment pass applications within 7 days• Registration of new business reduced from 3 days to 1 hour• Renewal of business registration reduced from 1 day to 15 minutes• Duration for approval of preliminary Environmental Impact Assessment Reportreduced from 3 months to 5 weeks• A one nation one number through the 999 Emergency Call Service initiativeintroduced providing the public easier access to all emergency services forassistance in the Klang Valley• Streamlining regulatoryprocedures• Electronic transactions given legal recognition with enactment of ElectronicGovernment Activities Act, 2007, Electronic Commerce Act, 2006 and amendedConsumer Protection Act, 1999• National Cyber Security Policy introduced to promote a culture of security amongthe public and compliance to minimum security standards among critical serviceproviders• Managing public complaintsfor better service delivery• Deploying ICT applicationsand infrastructure to improveservice delivery• Speedier resolution of complaints with the establishment of iAduan• Mobile Complaint Counters and Integrated Mobile Complaint Counters introducedextending outreach to the population• Government Public Service Portal (myGovernment) set up as a single gateway to awide range of services and information offered by agencies. Until 2007:•y 3,749 downloadable forms, 1,174 online services and 80 services via SMS• y RM2 billion transaction value through e-Procurement•y 300,834 job seekers, 1,544,881 vacancies and 823,430 job matches providedthrough Electronic Labour Exchange (ELX)94


Strengthening the Institutional and Implementation CapacityCommitmentOutput• Data sharing on geospatial information among provider and user agencies madeavailable by the Malaysian Geospatial Data Infrastructure (MyGDI)• Business licensing processes made easier with Business Licensing ElectronicSupport System (BLESS), which also enables applicants to track their applicationsonline• Electronic submission of income tax returns through e-Filing• Growth in e-payment channels:•y Real-time Electronic Transfer of Funds and Securities (RENTAS) system handledan average of RM124.5 billion daily in 2007, an increase of 23.6% compared with2006• y Interbank Giro (IBG) grew from RM26.3 billion in 2005 to RM67.0 billion in 2007•y Internet banking subscribers surged from 2.5 million in 2005 to 4.5 million in2007•y mobile banking subscribers increased from 127.6 thousands in 2005 to 345.7thousands in 2007• Establishment of 495 new government telecentres provided more channels ofaccess to electronic services to the underserved communities• Expediting HIPs through NITF • HIPs include:•y Agro-based Industry Entrepreneur•y Agropolitan Development•y Rebranding of Community Colleges•y Quantum Leap in Rural Education•y Corridor development initiativesIII.MOVING FORWARD,2008-2010In order to meet current user demandsand to sustain competitiveness, publicservice delivery must transform to bemore client-focused by integrating services,increasing confidence in electronic-basedservices and adopting an outcome-basedapproach to planning, monitoring andevaluation of programmes and projects.Integrating ServicesIntegrating services by consolidatingprocesses and procedures across agencieswill be done by re-engineering servicedelivery, creating virtual one-stop centres,promoting information and infrastructuresharing, reviewing legal and regulatoryframeworks, moving towards self-regulation,improving governance and developingcompetencies.Customer-focusedservice delivery...95


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Re-engineering Service DeliveryFor services that involve multiple agencies,work processes will be reviewed, reengineeredand streamlined to ensureefficient delivery. The processes will bedesigned around client needs where theadoption of a shared services culture,involving information and infrastructurewill be promoted. Appropriate technologywill be deployed to support the workflowof these re-engineered processes.Integrated services by consolidatingprocesses and procedures across agencieswill be offered through the e-KL initiativein the Klang Valley. This initiative includesjob applications, provision of a singlepoint of access for loans and grants,enrolment of international students, speedyapproval for billboard advertisements,single-window access for ICT companies tostart operations as well as a standardisedcomplaints management system. Theseefforts will provide better access to awide range of integrated, online servicesincluding electronic submissions, payments,communications and complaints. Inaddition, the introduction of eForms willreduce processing time and cost as wellas improve customer convenience.To accelerate migration to e-payments, theGovernment will continue to implementstrategies outlined in the roadmap,including removing barriers to allow forgreater efficiency and innovation in themarket. Further improvements will bemade in the retail payment systems toreduce the use of cash and cheques aswell as to leverage on the Internet andmobile phones as pervasive and lowcostdelivery channels for banking andpayment services.Chart 5-1Share of Non-Cash Retail Payments by Volume2003 2007Cheques35.9%Cheques19.2%E-Payments64.1%E-Payments80.8%Source: Bank Negara Malaysia96


Strengthening the Institutional and Implementation CapacityThe iAduan system will be upgradedinto a public complaints monitoringsystem, iSPAAA, which is an integratedand centralised online complaintsmanagement system for the publicsector. This system will be extendedto cover all ministries, agencies andlocal authorities with the “One NumberCall Centre, No Wrong Door” concept.Creating Virtual One-Stop CentresThe myGovernment single gateway will befurther enhanced to provide a wide rangeof services and information. Accessibility tothis portal will be improved by providingadditional kiosks in public places andenabling access through mobile phones.In addition, improvements will continueAll in one place...Chart 5-2Resolutions of Complaints with iAduan2005Resolutions of Complaints before iAduan2007Resolutions of Complaints after iAduan39%41%61%More than 2 monthsLess than 2 months59%Source: Public Complaints BureauWithin the realm of land administrationand management, the development ofthe e-Tanah system piloted in PulauPinang will integrate and improveupon all existing land administrationprocesses to ensure interoperabilityt o w a r d s m o r e e f f i c i e n t u s e a n dd i s s e m i n a t i o n o f i n fo r m a t i o n fo rdecision-making. It will also include thedevelopment of an e-Tanah por talfor online enquiries on status of landapplication and quit rent payment,land title search as well as to obtainfeedback from users. In addition, theimplementation of the e-Kadaster projectwill reduce the time taken for processingof land title survey from the current twoyears to two months.to be made to MyGeoportal, which isthe single-window access to nationalgeospatial content and related servicesfor development planning.Promoting Information and InfrastructureSharingThe 999 Emergency Call Services willcontinue into the next phase, whichinvolves the development and upgradingof application systems and the 999Call Centre as well as Agency DespatchCentres to provide better response.Training and awareness programmes willbe conducted continuously to ensurequality of service delivery is sustained.97


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Single provision,multiple usage...A National Registry System (NRS) will beset up to allow for sharing of data amongagencies where gathering of key data isdone only once and kept centrally to beused by relevant agencies. The single,centralised repository for input, updateand reference will help reduce errorsand the duplication of data in variousagencies, thereby providing convenienceto citizens and improving service deliveryefficiency.T h e G o v e r n m e n t I n t e g r a t e dTelecommunications Network (GITN)developed to provide a single networkinfrastructure linking all governmentdepartments will be expanded to coverall locations. Putrajaya Campus Network(PCN), which links all government agencieslocated in the Federal GovernmentAdministrative Centre in Putrajaya willbe upgraded, including the setting upof a new gateway for Internet accessto improve performance, reliability andsecurity. This shared and managednetwork to be completed by 2010will reduce costs, enhance informationsharing and improve service delivery.In addition, information, services andapplications on e-government, e-commerce,e-banking, e-education and e-health will bedisseminated through telecentres to theunderserved communities. The KomunitiKitaportal will also be set up to facilitateoutreach of other customised servicesand applications to these communitieswhich include the disabled, poor, elderly,women and indigenous.Reviewing Legal and RegulatoryFrameworkLegal and regulator y requirementsper taining to ser vice deliver y willcontinue to be reviewed to improveease to customers. The Strata Titles Act1985, Licensed Land Surveyors Act 1958,Licensed Land Surveyors Ordinance 1958,Licensed Land Surveyors Regulations 1959,Cadastral Survey Regulations 2002 andthe State Land Rules will be reviewedt o e n a b l e i m p r ove m e n t s i n l a n dadministration and management. TheGovernment will continue consultationswith the private sector regarding legaland regulatory procedures that affectservice delivery.Moving Towards Greater SelfRegulationThe Government will continue toencourage self-regulation and disclosurebasedapproaches for compliance inrelevant areas towards enhancing theefficiency and effectiveness of servicedelivery. The Malaysian Technical StandardsForum, Content Forum, ConsumerForum and Access Forum set up underthe Communications and MultimediaAct, 1998, will be further promoted.These Industry Forums collaborativelyformulate voluntary industry codes as aguide for the industry.Improving GovernanceThere will be a stronger emphasis ongood governance in the public andprivate sectors to enhance transparencyand efficiency towards making Malaysiaa more competitive and attractivelocation for investment. This will includeawarding projects through competitivebidding, further improving responsetime of service delivery, enhancingaccountability and closer monitoring98


Strengthening the Institutional and Implementation Capacityof project implementation. A culture ofhigh performance with integrity will bepromoted through assessment of publicand private service delivery standardslinked to performance indicators andbenchmarked against service deliverybest practices.Developing CompetencyTowards raising competency in thepublic service, training programmes willbe conducted to strengthen leadershipcapabilities as well as strategic, risk andproject management skills to ensurecontinuous efficient delivery of publicservices. This will include conductingtraining programmes in collaborationwith top business schools. In addition,the planning and development of humancapital will be continually upgradedthrough a central competency board forhuman resource management. Trainingprogrammes will also be conducted byagencies in order to keep abreast withcurrent trends and developments inline with their core businesses. Trainingprogrammes on customer relations will befurther emphasised by agencies dealingdirectly with customers.Increasing Confidence in ElectronicbasedServicesIncreasing confidence in electronic-basedservices is imperative to encouragegreater uptake of electronic transactionsand increase participation of the publicand businesses in the digital economy.Measures will be intensified to improvesecurity and privacy to protect theconfidentiality of information, assurethat information is not altered withoutauthorisation and be available whenneeded. This requires that service providersand users of such services understandrisks to security and privacy as well asgood security practices that must be putin place to enable safe and secure useof electronic services.Awareness programmes will be targeted atthe public to enable them to understandthe requirements of good security practicesin the cyber environment. Service providerswill be encouraged to comply withthe Information Security ManagementSystem (ISMS) MS ISO/IEC 27001:2006to adhere to basic security guidelinesto ensure secure and reliable servicedelivery. Regular checks and audits willbe carried out to help agencies assesstheir level of compliance and strengthensecurity implementation towards selfcomplianceor attaining certification ofcompliance to increase user confidence.Existing laws related to informationsecurity will be reviewed to determinetheir adequacy and relevance. As personaldata has become a valuable commoditythat can be traded, used and reused, thePersonal Data Protection (PDP) Bill willbe formulated to regulate the collection,usage and disclosure of personal data.The Electronic Government ActivitiesAct, 2007 will be further applied toinclude more tasks and transactions acrossgovernment agencies. An E-CommerceActivities Roadmap will provide forinformation dissemination and confidencebuilding among citizens and businesses.A guideline on electronic banking will beintroduced to manage risks, threats andvulnerabilities that may emerge from theuse of Internet banking.Promoting customerconfidence...99


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010Chart 5-3Internet and Mobile Banking GrowthNo. ofsubscribers(million)5.04.03.02.01.00.0Internet Banking Growthand Penetration% Penetration16.5 18.016.014.011.812.09.610.07.87.08.06.04.02.00.02003 2004 2005 2006 2007No. ofsubscribers(million)0.40.30.20.10.00.00Mobile Banking Growthand Penetration0.100.480.92% Penetration1.262003 2004 2005 2006 20071.41.21.00.80.60.40.20.0No. of Internet banking subscribers (million)Penetration of Internet banking subscribers to population (%)No. of mobile banking subscribers (million)Penetration of mobile banking subscribers to population (%)Source: Bank Negara MalaysiaMaximise benefits,optimise costs...Outcome-based Planning, Monitoringand EvaluationAn outcome-based planning, monitoringand evaluation approach will be adoptedto ensure that projects implementedachieve the desired objectives. This willinvolve strengthening the competencyand capability of implementing agencies,improving systems and work processes aswell as adapting organisational structuresin ministries and agencies.These initiatives will introduce goodproject management practices, improvecoordination within and between agenciesas well as between policy and projectimplementation. Successful projectmanagement methodologies implementedin pilot ministries and agencies will bereplicated to improve project planningand implementation. Training will continueto be offered and updated to developbetter understanding of the processes,approaches and techniques in projectmanagement based on guidelines andinternational standards. In addition tothe monitoring of physical and financialprogress, the existing project monitoringsystem, SPP II will be expanded toi n c o r p o r a t e a n o u t c o m e - b a s e dapproach.IV. OUTCOMES, 2010The key outcomes expected by 2010with improvements in institutional andimplementation capacity are, as shownin Box 5-2.100


Strengthening the Institutional and Implementation CapacityBox 5-2Expected Outcomes, 2010Commitment• Integrating services acrossagencies• Increasing confidence inelectronic-based services• Implementing outcome-basedplanning, monitoring andevaluationOutcome• Customer-focused services across agencies• Easy access through virtual one-stop centres• Convenience to the public by one-time data provision enabled through data sharingamong agencies• Simplified submissions and transactions through eForms and e-payment• Better outreach of services for the underserved communities through telecentres• Effective management of complaints through a single, centralised platform for publiccomplaints• Favourable environment for setting up businesses• Easy access and convenience to customers through increased usage of electronicservices• Personal data protected with implementation of PDP Act• Benefits of programmes to target population maximised through efficient planningand management of programmes and projectsV. CONCLUSIONSignificant improvements were madein strengthening institutional andimplementation capacity during theReview period. Moving forward, furtherimprovements will be made particularlywith respect to service delivery bybeing more customer-focused. This willinclude measures to integrate systemsand services across agencies so as toprovide quality service with greater easeto public and businesses as well as toincrease confidence in electronic-basedservices towards promoting its wideracceptance and usage. In addition, anoutcome-based approach to planning,monitoring and evaluation of programmesand projects will be implementedto maximise benefits to the people.Together with the cooperation andcollaboration of the private sector,the Government will strive towardsachieving service delivery excellence,with greater transparency, integrity andprofessionalism.101


Federal Government Development AllocationMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010Federal governmentdevelopment allocation103


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010104


Federal Government Development Allocationfederal governmentdevelopment allocationChart A-1Federal Government Development Allocation of the Ninth Malaysia Plan by Thrust7.7%23.0%Moving the economy up the value chainRaising the capacity for knowledge andinnovation and nurturing ‘first classmentality’42.2%19.4%Addressing persistent socio-economicinequalities7.7%Improving the standard andsustainability of quality of lifeStrengthening the institutional andimplementation capacityTable A-1Federal Government Development Allocation of the Ninth Malaysia Plan by ThrustNo.ThrustAllocation2006-2010(RM million)% ofTotalExpenditure2006-2007(RM million)% ofAllocationBalance2008-2010(RM million)% ofTotal1 Moving the Economy Up the ValueChain2 Raising the Capacity for Knowledgeand Innovation and Nurturing ‘FirstClass Mentality’3 Addressing PersistentSocio-Economic Inequalities4 Improving the Standard andSustainability of Quality of Life5 Strengthening the Institutional andImplementation Capacity52,837 23.0 18,934 35.8 33,903 21.244,636 19.4 8,842 19.8 35,794 22.417,607 7.7 3,565 20.2 14,042 8.897,018 42.2 31,542 32.5 65,476 40.917,902 7.7 7,122 39.8 10,780 6.7Total 230,000 100.0 70,005 30.4 159,995 100.0105


Federal Government Development AllocationMID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010Federal governmentdevelopment allocation103


Mid-Term Review of the Ninth Malaysia Plan, 2006-2010104


Federal Government Development Allocationfederal governmentdevelopment allocationChart A-1Federal Government Development Allocation of the Ninth Malaysia Plan by Thrust7.7%23.0%Moving the economy up the value chainRaising the capacity for knowledge andinnovation and nurturing ‘first classmentality’42.2%19.4%Addressing persistent socio-economicinequalities7.7%Improving the standard andsustainability of quality of lifeStrengthening the institutional andimplementation capacityTable A-1Federal Government Development Allocation of the Ninth Malaysia Plan by ThrustNo.ThrustAllocation2006-2010(RM million)% ofTotalExpenditure2006-2007(RM million)% ofAllocationBalance2008-2010(RM million)% ofTotal1 Moving the Economy Up the ValueChain2 Raising the Capacity for Knowledgeand Innovation and Nurturing ‘FirstClass Mentality’3 Addressing PersistentSocio-Economic Inequalities4 Improving the Standard andSustainability of Quality of Life5 Strengthening the Institutional andImplementation Capacity52,837 23.0 18,934 35.8 33,903 21.244,636 19.4 8,842 19.8 35,794 22.417,607 7.7 3,565 20.2 14,042 8.897,018 42.2 31,542 32.5 65,476 40.917,902 7.7 7,122 39.8 10,780 6.7Total 230,000 100.0 70,005 30.4 159,995 100.0105


MID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010glossary ofacronyms107


108


glossary of ACRONYMSAIM = Amanah Ikhtiar MalaysiaASEAN = Association of Southeast Asian NationsASW = Amanah Saham WawasanASWARA = National Arts, Culture and Heritage Academy(Akademi Seni Budaya dan Warisan Kebangsaan)BALB = Rural Water Supply(Bekalan Air Luar Bandar)BCIC = Bumiputera Commercial and Industrial CommunityBLESS = Business Licensing Electronic Support SystemBSTC = Bumiputera Science and Technology CommunityCCC = Certificate of Completion and ComplianceCCM = Companies Commission of MalaysiaCFO = Certificate of Fitness for OccupationE&E = Electrical and ElectronicsECER = East Coast Economic RegionECERDC = East Coast Economic Region Development CouncilEE = Energy EfficiencyELX = Electronic Labour Exchangee-PBT = ICT Application for Local Authority(Sistem Aplikasi ICT untuk Pihak Berkuasa Tempatan)FAMA = Federal Agriculture Marketing AuthorityFDI = Foreign Direct InvestmentFELDA = Federal Land Development AuthorityGDP = Gross Domestic ProductGITN = Government Integrated Telecommunications NetworkGLCs = Government-linked CompaniesGNP = Gross National ProductHIPs = High Impact ProjectsHIV/AIDS = Human Immunodeficiency Virus/Acquired Immunodeficiency SyndromIBG = Interbank GIRO109


IBS = Industrialised Building SystemICOR = Incremental Capital Output RatioICT = Information and Communications TechnologyI-KIT = Incubator for Single Mothers’ Skills(Inkubator Kemahiran Ibu Tunggal )IM = Iskandar MalaysiaIPv4 = Internet Protocol version 4IPv6 = Internet Protocol version 6IRDA = Iskandar Region Development AuthorityISMS = Information Security Management SystemIWRM = Integrated Water Resources Managementj-QAF = Program Jawi, Al-Quran, Bahasa Arab dan Fardhu AinKLIA = KL International Airportkm = kilometreM&E = Machinery and EquipmentMARA = Majlis Amanah RakyatMATRADE = Malaysian External Trade Development CorporationMATRIIX = MITI and Agencies Trade and Industry Information ExchangeMAVTRAC = Malaysian Virtual Trading CorporationMBO = Management BuyoutMDeC = Multimedia Development CorporationMESTI = Ministry of Entrepreneur and Cooperative Development Strategic and Target IndustryProgrammeMICE = Meetings, Incentives, Conventions and ExhibitionsMIFC = Malaysia International Islamic Financial CentreMLNG2 = Malaysia Liquefied Natural Gas Project 2MNCs = Multinational CompaniesMPS = Management of Government Portal ServicesMQA = Malaysian Qualifications AgencyMQF = Malaysian Qualifications FrameworkMSC = Multimedia Super CorridorMT = Metric Tonnes110


MW = MegawattMyGDI = Malaysian Geospatial Data InfrastructureNCDC = National Content Development CorporationNCER = Northern Corridor Economic RegionNCIA = Northern Corridor Implementation AuthorityNDTS = National Dual Training SystemNGOs = Non-Governmental OrganisationsNITF = National Implementation Task ForceNOSS = National Occupational Skills StandardNRS = National Registry SystemOSCs = One-stop CentresPCN = Putrajaya Campus NetworkPCs = Personal ComputersPDP = Personal Data ProtectionPE = Population EquivalentPEMUDAH = Special Task Force to Facilitate Business(Pasukan Petugas Khas Pemudahcara Perniagaan)PERMATA = Program Permata NegaraPFI = Private Finance InitiativesPNB = Permodalan Nasional BerhadPPMS = Program Pembangunan Masyarakat SetempatPPR = People’s Housing Programme(Program Perumahan Rakyat)PTPTN = National Higher Education Fund Corporation(Perbadanan Tabung Pendidikan Tinggi Nasional)PUNB = Perbadanan Usahawan Nasional BerhadPWDs = Persons with DisabilitiesR&D = Research and DevelopmentR&D&C = Research and Development and CommercialisationRE = Renewable EnergyRECODA = Regional Corridor Development AuthorityREITs = Real Estate Investment Trusts111


RELA = People’s Volunteer Corps(Ikatan Relawan Rakyat Malaysia)RENTAS = Real-time Electronic Transfer of Funds and SecuritiesRSEs = Research Scientists and EngineersS&T = Science and TechnologySCORE = SMEs Competitive Rating for EnhancementSCORE = Sarawak Corridor of Renewable EnergySDC = Sabah Development CorridorSEDIA = Sabah Economic Development and Investment AuthoritySMEs = Small and Medium EnterprisesSMIDEC = Small and Medium Industries Development CorporationSMS = Short Messaging ServicesSPAN = National Water Services Commisssion(Suruhanjaya Perkhidmatan Air Negara)SPP = Project Monitoring System(Sistem Pemantauan Projek )SSL = Self Sufficiency LevelSSO = Shared Services and OutsourcingSTPs = Sewerage Treatment PlantsTCM = Traditional and Complementary MedicineTEKUN Nasional = Tabung Ekonomi Kumpulan Usaha Niaga NasionalTEU = Twenty-foot Equivalent UnitsTEVT = Technical Education and Vocational TrainingTFP = Total Factor ProductivityTFSS = Task Force on Services StatisticsUDA = Urban Development AuthorityUiTM = MARA University of Technology(Universiti Teknologi Mara)UniKL = Universiti Kuala LumpurWTO = World Trade OrganizationYEIDS = Youth Entrepreneur Indian Development SchemeYUM = Yayasan Usaha Maju112


MID-TERM REVIEW OF THE NINTH MALAYSIA PLAN, 2006-2010index113


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indexAaccessibility, 43, 44, 47, 48, 51, 53accident prone spots, 76, 81accredited training centre, 51active and healthy lifestyle, 77, 85, 88addressing corruption, 53advanced economies, 16aerobic programme, 77agriculture, 14, 15, 16, 19, 25, 28, 30, 33, 34, 35, 38agro-based, 28, 35, 38agropolitan, 62air quality, 76, 88Akademi Seni Budaya dan Warisan Kebangsaan, 88assessment system, 47Bbalance of payments, 15, 20banking, 26basic amenities, 62, 63biodiversity, 84, 85, 88biosafety, 85, 88biotechnology, 30, 34, 35, 84, 88BSTC, 64, 65Bumiputera Commercial and Industrial Community(BCIC), 57, 61, 62, 64, 67, 68, 69, 93Bumiputera fund, 64Bumiputera participation, 61, 64, 67, 69, 70Bumiputera professional, 68Bumiputera professionals and semi-professionals,65Business Licensing Electronic Support System(BLESS), 95Ccapacity building, 80capital goods, 15, 20Caring Services Unit, 75caring society, 73Certificate of Completion and Compliance (CCC), 94Certificate of Fitness for Occupation (CFO), 94changing disease patterns, 77, 79child care centres, 82climate change, 85clinical care networks, 78clinical preventive services, 78cluster development initiatives, 61, 67, 70commercial and residential buildings, 64commercialisation, 31communicable diseases, 77community colleges, 49, 51, 52competency, 93, 95, 99, 100competitiveness, 22, 25, 29, 30, 32, 33, 36, 39, 93, 95complaints, 93, 94, 96, 97, 101comprehensive plan, 52confidence, 93, 95, 99, 101conservation, 77, 84construction, 28, 29, 32, 34, 37construction sector, 14, 19Consumer Protection Act, 1999, 94consumption goods, 20corporate governance, 53Corporate Social Responsibilities, 52, 53, 82corridor development, 57, 64, 66, 69Courtesy campaign, 88Crime Prevention through Environmental Design, 84Culture, Arts and Heritage, 77current account, 15, 20curriculum, 48, 49, 52customer-focused, 93, 101customised incentives, 33, 34Ddeep sea fishing, 28, 34, 38degraded forest area, 84delivery mechanism, 63developing countries, 16development expenditure, 15, 19development of human capital, 63diaspora, 46digital divide, 60, 64, 65, 67115


disclosure-based approaches, 98disparity ratio, 58, 63, 69distributive trade, 27domestic demand, 11, 14, 16, 22domestic investment, 21domestic-oriented industries, 25double-shift programme, 51Ee-commerce, 27, 94, 98, 99Education Development Master Plan, 43, 47education tourism, 37educational hub, 54eKasih, 63electrical and electronic waste, 85electricitydistribution, 29, 32generation, 28, 32transmission, 29, 32electrified double tracking, 29, 32, 37, 76, 81, 88Electronic Commerce Act, 2006, 94Electronic Government Activities Act, 2007, 94, 99Electronic transactions, 94, 99emergency response to floods, 85emerging markets, 16employability, 49employment, 43, 83employment imbalances, 65employment restructuring, 60, 65, 69empowering youth, 82endangered species, 76, 85energyefficiency, 32prices, 32resources, 32security, 32enhancing integrity, 53, 54enhancing quality, 48, 51entrepreneurial development programmes, 68entrepreneurial skills, 49environmental planning tools, 84environmental standards, 84e-payments, 95, 96, 101e-PBT, 74equity ownership, 57, 59, 64, 65, 69, 70ethnic groups, 47export, 27, 28, 34, 35, 38FFair Trade Practices Act, 33family development programmes, 86fertility rate, 46finance, 26, 37fiscal deficit, 15, 19, 22fiscal policy, 15fitness programme, 77flood mitigation, 85flora and fauna, 76, 84Focus Group, 63food crops, 33, 34food manufacturing, 28foreign direct investment, 12, 13foreign exchange earnings, 26foreign labour, 46franchisors, 27furniture and fixtures, 28Ggas supply and demand, 33gateway, 94, 97, 98globaldemand, 14, 19inflation, 16good agriculture practices, 25good security practices, 99goods account, 15, 20governance, 93, 95, 98government debt, 15Government subsidy, 74gross domestic product (GDP), 11, 14, 15, 16, 18, 19gross exports, 15, 20gross imports, 15, 20gross national product, 15, 17, 20, 21116


gross national savings, 15, 21growth corridor, 60, 65, 66, 67growth rate, 46Hhalal, 34, 35hardcore poverty, 57, 58, 62, 69harmonious nation, 85healthclinics, 74promotion, 74, 77, 78tourism, 33, 37herbs and spices, 28, 34, 38high growth markets, 38High Impact Projects (HIPs), 93, 95high performance sports, 85high-end, 27, 30, 34home care nursing, 78housing programme, 62housing registration, 80hub, 28, 34, 35, 37, 38human capital development, 63human resource, 65, 74, 78IiAduan, 94, 95, 97ICT, 25, 27, 28, 30, 31, 35, 37, 38, 39, 60, 67, 84improving capability, 49incentives, 33, 67incomeaccount, 15, 21disparity, 63, 69gaps, 58, 64generating activities, 62, 63share, 57, 63, 70incremental capital output ratio (ICOR), 11Indian community, 60, 64, 65Industrial Linkages Programme, 27Industrialised Building System (IBS), 80industry participation, 52infrastructure, 29, 31, 32, 33, 34, 37inland water transport, 82instructor, 51integrated approach, 62integrated public transport system, 73, 81integrated transport terminal, 32, 81, 87integrating services, 95, 96, 101intermediate goods, 15, 20international standing, 43, 44, 50, 54International Syariah Research Academy, 37Internet banking, 95, 99, 100internship, 49investment , 26, 27, 28, 31, 33, 34, 35, 36, 38foreign investment, 11private investment, 13, 18IP courts, 33Islam Hadhari, 43, 52, 53Islamic banking, 26, 30, 37Islamic finance, 25, 30, 34, 37, 38Jjoint billing system, 81, 87joint research, 50j-QAF, 47,52Kkenaf, 28, 34, 38knowledge workers, 43, 45, 46, 47, 54knowledge-based economy, 13knowledge-intensive, 25, 29, 31, 33Llaboratory-to-market, 31, 34labour force, 11, 43, 45, 46, 49, 53, 54land-use planning, 84, 85laws and regulation, 83LCC terminal, 81, 87leadership, 82less accessible groups, 78less developed states, 65, 70lifelong learning, 52livestock, 25, 28living modified organisms, 85117


Local Agenda 21, 80local processing, 37logistics, 35long houses in Sabah and Sarawak, 80low-cost houses, 74, 79, 86MMaking All Schools Smart Programme, 44, 47, 54Malaysia International Islamic Financial Centre(MIFC), 33Malaysian products and services, 29, 30, 35, 38Malaysian Qualifications Agency (MQA), 48, 52Malaysian Qualifications Framework (MQF), 48manufacturing sector, 13, 14, 16, 19, 20, 25, 27, 28,33, 34, 36, 38, 43market-driven, 31, 32mass sport, 85, 88mean income, 57, 58, 59measurement tools, 68Medan Info Desa, 60, 67micro credit facilities, 58, 62micro-hydro, 80micro-wind turbine, 80middle income group, 63, 70mining sector, 15, 19minority groups, 63, 64mitigating measures, 85mobile banking, 95, 100mobile clinics, 78moral and ethical values, 52multimodal, 32mutual recognition arrangements, 34, 35myGovernment, 94, 97MyHealth portal, 74, 78Nnanotechnology, 34National Advisory Council on Education andTraining, 51National Family Policy, 82national food security, 22, 33National Higher Education Fund Corporation(PTPTN), 50National Implementation Task Force (NITF), 93, 95National Pre-school Curriculum, 48National Service Programme, 75, 82National Skills Development Act, 2006, 51National Sports Association, 85native and customary land, 65natural resources, 73, 84, 89Neighbourhood Watch (Rukun Tetangga), 84new growth areas, 68new sources of growth, 11, 16, 25, 28, 29, 30, 34, 37, 38,39non-communicable diseases, 77non-financial assets, 60, 64, 65non-revenue water, 80NOSS, 51Oolder persons, 83one-stop centre, 67, 74, 94operating expenditure, 19Orang Asli, 63ornamental fish, 28, 34, 38outcome, 35, 36, 80outcome-based approach, 93, 95, 100, 101Ppackaged programmes, 67palm oil, 25, 34, 37Parenting@Work, 74participation of women, 46patent, 27, 33People’s Volunteer Corps (RELA), 84people-centred projects, 19per capita income, 11, 12performance gap, 47PERMATA, 44, 48Personal Data Protection (PDP), 99, 101persons with disabilities, 83photonics, 34Policing Operations, 84polytechnics, 49, 51population equivalent, 75post-graduate, 44, 48, 49, 50, 54118


post-harvest handling, 33poverty eradication, 57, 58, 62, 63pre-school, 44, 48, 53pre-tax profit, 26primary care, 74, 77private consumption, 14,18private investment, 14,18private sector, 25, 26, 30, 31, 33, 35, 36, 39Pro3-Based Learning, 51productivity, 25, 26, 29, 30, 33, 36, 39professionals, 30, 38Program Perumahan Rakyat, 74, 80promising athletes, 85prudent fiscal policy, 15public consumption, 14, 18public investment, 14, 18, 19public-private collaboration, 34Public-Private Partnership modality, 68purchasing power parity, 11Pusat Internet Desa, 60, 67Qqualified coaches, 85quality of life, 80RRakan Cop, 84Rakan Muda Programme, 75, 82recreational activities, 85Regional Centre of Excellence, 50relative poverty, 63renewable energy, 32rent-to-buy scheme, 80research & development, 25, 27, 30, 31, 32, 34, 36, 39research scientists and engineers (RSEs), 45, 49, 54resource balance, 15, 21restructuring instruments, 64retail payment systems, 96re-takaful, 33, 34revenue, 15, 19river basin, 76, 85, 87road fatality, 81road safety, 76, 81rubber, 25, 28, 34, 37Rumah Mampu Milik, 79ruralair services, 81clinics, 74electricity coverage, 75, 80road, 76, 81water supply, 87SS&T, 49, 50safe and secure environment, 73safe city programme, 84school dropouts, 44, 48, 51schoolNet, 47secondary and tertiary care, 74, 77, 78security and privacy, 93, 99self sufficiency level, 37self-regulation, 96, 98service delivery, 93, 94, 95, 96, 97, 98, 99, 101services, 11, 14, 18, 25, 26, 27, 29, 30, 33, 34, 35,36, 38, 39, 45services account, 20sewerage system, 75, 81sewerage treatment plant, 75single mothers, 83single-window access, 96, 97skillssemi-skilled workers, 51,skilled human capital, 43, 46skilled workers, 50, 51Skills Development and Training Blueprint,2008-2010, 51Skilled Fund Development Corporation, 51skills training, 62small and medium enterprises, 30smart partnership, 50SMARTSTART, 74SMEs Competitive Rating for Enhancement, 37solar hybrid, 80Solid Waste and Public Cleansing ManagementAct, 80Solid Waste and Public Cleansing ManagementCorporation Act, 80solid waste management, 80special share scheme, 63specialised secondary school, 47sports culture, 77119


sports science, 85star rating system, 74state water regulatory body, 87, 81storm water management, 85strategic action plan, 65sukuk, 26sulphur content, 88supply chain, 30sustainable management, 74, 84sustainable energy development, 32System Average Interruption Duration Index, 29Ttakaful , 26, 33, 34, 37talent identification programme, 85teaching and learning approach, 51technology acquisition, 31technology-foresight, 31technopreneur, 65telecentre, 60, 67TEVT institutions, 50, 51The Higher Education Strategic Plan, 43, 48Third Industrial Master Plan, 34total factor productivity (TFP), 11, 12, 16, 18tourism, 25, 26, 33, 34, 36, 37toxic and hazardous substances, 76, 84trade surplus, 15traditional culture and values, 85traffic congestion, 81training, 43, 44, 46, 47, 48, 49, 50, 51, 52, 53transport master plan, 32transportation, 15travel account, 15Uunemployment rate, 46unit trust schemes, 59, 60, 65university-industry, 30urban poor, 63Vvalidation process, 51value added, 25, 29, 31, 34, 36, 37value chain, 67, 70venture, 33, 35Wwakaf, 64, 65warehousing, 35water quality, 76, 88water services industry, 81women in decision making, 83women’s health, 83world economy, 16world trade, 16, 20Yyouth development, 75, 82120

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