ETP: An Update and Opportunities - Ku Kok Peng

Economic Transformation Programme: An UpdateKu Kok PengDirector, ETP InvestmentPEMANDU

National Transformation PolicyTowards Vision 2020 1Malaysia (People First, Performance Now) Transformation Programme Transformation Programme Transformation Programme Government Economic Political 10th & 11th Malaysia Plan

The ConnectionWEMUSTDOBOTH • Grow The Economy • Spend Revenue Based • Increase Revenue On Rakyat Needs • Increase Job / Income • Distribute The Revenue (RBI / LIH)

GTP Delivered 121% Of Its Target NKRA Overall Performance 2010 NKPIs 2010 Actual Urban Public Transport 107% Crime 168% Rural Basic Infrastructure 91% Education 156% Low Income Household 79% Corruption 121% Overall Composite Scoring 121%

GTP 2010 ResultsWere Endorsed ByAn InternationalPanel & Sir Michael Barber Partner, McKinsey UK; ex-Head of Prime Minister’s Delivery Unit (PMDU) of Tony Blair Administration Ravi Balakrishnan IMF Resident Representative, SingaporeAudit Firm Michael Hershman Co-founder of Transparency International; Current CEO of the Fairfax Group Sergei Dodzin Senior Economist, Asia & Pacific Department – International Monetary Fund Stephen Sedgwick Kwak Seung-Jun Australian Public Service Chairman Commissioner Presidential Council for Future and Vision

1H 2011: Continuing To Deliver On PromisesCrime Corruption RBI• Index Crime - 9.6% (5%) • 68% of EPPs under CIP • 474 of rural roads (905)• Street Crime – 41.6% (40%) (70%) • 12,004 rural houses• TNS Fear of Crime Index • 84% gov’t contracts under with clean water supply 48.9% (< 50%) IP (58,087)• 1st in safety & security in SEA • Enhanced IP for KV MRT • 2,906 rural houses with by Global Peace Index • 237 convicted grand electricity supply• 1st /19 middle income corruption offenders listed (26,882) countries by World Justice • 2.99 score for regulatory / • 2,567 houses for rural Report enforcement agencies (3.5) poor (9,146)UPT LIH Education• 22% increase in BET 1-4 • 20,650 households • Pre-school enrollment rate ridership participated in 1AZAM 58.3% (80%)• 15.7% increase in rail (57,793) • 95% Numeracy (95%) ridership; 29 new 4-car train • 90% verified under • 90% Literacy (95%) set operationalised eKasih (100%) • 1,945 pre-school classes• Line integration at Masjid • 430 women started (2,755) Jamek & Titiwangsa entrepreneurs trained • 54,569 children benefited in completed (1,000) 2010• Refurbished Puduraya re- • 401 low-cost houses • Best UPSR results in 4 opened handed over (4,965) years in 20102011 full-year targets in brackets ( )

NEW ECONOMIC MODEL:Making Us A Rich Country, For Everyone &For A Long Time Target USD 15,000 High-Income GNI per capita by 2020 Quality of Life Enables all Meets present communities needs without to benefit Inclusiveness Sustainability compromising from the future wealth of the generations country

For A Country To BecomeA High Income Nation, We Need: FOCUS & COMPETITIVENESS We Need We Need “Enablers” “Drivers” To To Ensure Ensure Focus Competitiveness NKEAs SRIs

We MustFocus

1,000+ CEO & Top LeadersFrom MNCs, GLCs, SMEs, Ministries & Gov’t AgenciesAttended The Thousand Person WorkshopAnd Determine NKEAs

12 NKEAs (National Key Economic Areas) Greater KL/ Klang Valley Agriculture Electrical & Palm Oil & Electronics Healthcare Rubber Tourism Wholesale Financial Business & Retail Education Services Services Oil, Gas Comms & Energy Content & 12 NKEAs Infra

LABLabs Assembled Best Mindsfrom Private and Public Sectors to ChartGrowth Plans

NKEAs LAB Objectives1 Increase GNI per capita From USD6,700 To USD15,000 By 2020

NKEAs LAB Objectives2 Identify Projects To Achieve Above Target

NKEAs LAB Objectives3 Ensure The Projects Are Mainly Privately Funded

NKEAs LAB Objectives4 Ensure More Job Creation And Shift Towards High Income Bracket

Output Of The Labs LAB500 Lab Members From 12 NKEAs Are An Extract Of 12200+ Companies Defined And Set Lab Reports.Participated Full Time To Roll-Out. A DetailedFor 9 Weeks. Description Of 131 Entry Point Projects and 60 Business Opportunities.

ETP Is AProgramme Not A Plan Projects Strategic intent Action items Strategic plan Timeline Blueprint Project owner Strategy document Targets

We Must BeCompetitive

ETP = NKEAs + SRIs SRIs (Enablers) Public Service Delivery Public Finance International Standards & Liberalisation Human Capital Development Government’s Role In Business Narrowing Disparities 15,000+ GNI per capita | USD 7,000NKEAs (Drivers) Current NKEA 1 NKEA 2 NKEA 3 NKEA 4 NKEA 5 Others Target

SRIs Provide The Enablers For MalaysiaTo Be Competitive 51 Policy Measures 14 With Natural Homes 37 Grouped In SIX Within The NKEAs / Clusters For NKRAs Execution

37 Policy Measures Grouped Into 6 Clusters1 2 3 Int’l Standards Public Public Service & Liberalisation Finance Delivery 9 policies 5 policies 7 policies4 5 6 Narrowing Human Capital Government‘s Disparities / Development Role in Business Bumi SMEs 9 policies 5 policies 2 policies

AnchoringKPIs1. Define Your True North2. Communicate The True North3. Ask Always, ‘Does It Move The Needle?’

Incremental GNI Impact Of~USD 250 Billion By 2020 2020 GNI per capita: USD15,000 86 523 112 138 188 2009 Entry Point Business Growth In 2020 GNI GNI Projects Opportunities Other Target (EPP) (BOs) Sectors 11 Sector NKEAs

131 EPPs & 60 Business Opportunities (BOs) Total Expected Expected Incremental Expected Incremental Incremental GNI Impact1 No. Of GNI Impact No. Of GNI ImpactNKEAs USD Billions EPPs USD Billions BOs USD Billions Oil, Gas & Energy 45.8 12 19.2 7 19.12 Financial Services 41.8 10 10.2 6 24.8 Palm Oil & Rubber 39.2 8 14.7 4 23.3 Wholesale & Retail 34.1 15 12.8 1 14.1 Tourism 20.9 12 8.9 4 8.9 Business Services 17.8 8 10.7 9 6.1 Electrical & Electronics 16.8 11 11.0 4 4.3 Comms, Content & Infra 11.9 10 5.1 4 3.7 Healthcare 11.1 6 6.4 5 4.6 Education 10.4 13 5.9 4 4.5 Agriculture 9.1 16 5.6 11 1.1 Greater KL/KV 121.8 10 59.7 1 62.11 Includes multiplier effect from EPPs2 Including USD 10 billion from oil price adjustment into OGE3 Overall GNI impact is counted only for 11 Economic sectors – Greater KL not included to avoiddouble-countingSource: NKEA Labs Week 8 Templates

NKEAs Will Contribute73% Of Total GNI In 2020Total Nominal GNI1 by Sector in 2020USD Billion Nominal GNI 523 600 144 Accumulate GNI 27% Of 500 Total GNI 15 15 18 18 400 24 73% Of 27 Total GNI 31 300 50 54 200 55 72 100 2020 GNI% Of Total2020 GNI 14 10 10 10 6 5 5 3 3 3 3 271 Does not include GNI impact from Greater KL to avoid double-counting2 Others includes: Transport & storage, Livestock & fisheries, Real Estate, Automotive & Assembly,Construction, Forestry & Related Products, Metal Products & Heavy Equipment, Rubber & plasticproducts, Utilities based on EPU growth forecastSource: Week 9 EPP & Business Opportunities Templates (28 July 2010)

A Total Of3.3 Million Additional JobsWill Be CreatedBy Year 2020...

Shift Towards HIGHER INCOME2020 Projected Salary Distribution 2009Salary Bracket 2020 (Projected) Low Income 2.9 < RM 750 2.3 RM 750 – 1.5k 3.3 4.7 Middle Income 3.3 RM 1.5k – 3.5k 4.6 RM 3k – 5k 1.3 2.8 Middle Income 0.3 RM 1.5k – 3.5k 1.2 RM 3k – 5k 0.2 0.6 1. 0 2. 0 3. 0 4. 0 5. 0 Number Of Jobs, Millions

46% Created RequireOf New JobsVocational And Diploma Million Jobs By 2020 = 100,000 PhD. Masters / Professional Degree Diploma Vocational / Certificate Unskilled

92% FromOf InvestmentThe Private Sector Public 8% USD34b Private (Non- 60% 32% Private USD266b USD144b GLC) (GLC)

73% Investment FromOf PrivateDomestic Direct Investment(DDI)

Overview Of ETP • USD15,000 (RM48,000) Gross National Income (GNI) per Capita GNI • USD523 Billion (RM1.7 Trillion) GNI • 6% GDP Growth per Annum Transformational • 3.3 Million JobsFOCUS Actions Additional‘Drivers’ Jobs• 12 NKEAS• 131 EPPs• 60 BOs • USD444 Billion (RM1.4 Trillion)COMPETITIVENESS Investment‘Enablers’ Investment • 92% Private, 8% Public Investment• 51 Policy Measures • 73% Domestic, 27% Foreign Direct• 6 SRIs & Natural Homes Investment

Discipline Of Action

ETP Governance Structureto ensure delivery Secretariat ETP Updates, Annual Report Monthly, Annual Economic Council Weekly NKEA Investment Monthly Steering Committee Committee Lead Monthly Bi-Monthly Ministries Respective Ministries / EPP / BO Year-round EPP owners owners

Performance Now

NKEAs Are MakingProgress In The Last11 Months

7 Progress Updates by the Prime MinisterRound #1 Round #2 Round #3 Round #4 Round #5 Round #6 Round #67(25 Oct 2010) (30 Nov 2010) (11 Jan 2011) (8 Mar 2011) (19 Apr 2011) (13 Jun 2011) (8 Sep 2011)9Initiatives 9 Initiatives 19 Initiatives 23 Initiatives 12 Initiatives 15 Initiatives 10 InitiativesInvestment: Investment: Investment: Investment: Investment: Investment: Investment:RM5.3b RM9.6b RM65.6b RM14.78b RM11.16b RM63.88b RM1.43bGNI: RM100m GNI: RM85.5b GNI: RM31.5b GNI: RM20.1b GNI: RM16.62b GNI: RM66.31b GNI: RM8.4bJobs: 13,100 Jobs: 70,500 Jobs: 52,400 Jobs: 88,354 Jobs: 74,457 Jobs: 63,531 Jobs: 9,965 RM RM 53% 171 228 RM 372,361 EPPs Off The Ground* Billion In Committed Investment 220 Billion GNI Up To 2020 Billion GNI New Jobs Will Be Created Up To 2020 *97 initiatives in 70 EPPs

NKEAs Tracking To Targets Target = Target = Target = RM1.7 T RM1.4 T RM3.3 M (by 2020) (by 2020) (by 2020) 100% 13% 12% 11% RM228 B RM171 B 372,361 GNI Investment Job Forecast Commitment ForecastSource: PEMANDU Analysis (Oct 2010 - June 2011)

Calibration with regional corridors via labs in Sept-Nov Greater Johor Bahru / Iskandar Malaysia Transformation Programme With support from : Greater Kuantan / ECER Transformation Programme Greater Penang / NCER Transformation Programme Kota Kinabalu / SDC Transformation Programme Kuching / SCORE Private Sector / NGOs Transformation Programme

Consumer Confidence Is High… 120 107 110 103 105 96 98 99 100 95 87 81 80 60 40 20 0 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Source : Nielsen Consumer Confidence Index

FDI, Trade Grew Strongly In 1H FDI Trade RM21.2b RM614.3b 1H 2011 1H 2011 76% 7.9% RM12.1b RM569.3b 1H 2010 1H 2010Source: Department of Statistics Source: Ministry of International Trade & Industry

Becoming More Competitiveness World Economic Forum • #21 out of 142 countries globally Global Competitiveness Report • #6 amongst Asia Pacific countries #21 • #2 in ASEAN #24 #26 • Malaysia scored 5.08 points out of a maximum of 7, vs 4.88 last year • Overtook UAE, New Zealand, South Korea, Luxembourg, 2009 2010 2011 Israel

Institutions Have Improved • The institutions pillar has improved 12 positions to 30th (42nd in 2010- 2011) • Strength in investor protection ranked 4th globally • Lesser burden of government regulation ranked 8th globally • Efficacy of corporate boards ranked 9th globally • Prudent government spending ranked 12th globally

GTP Made Big StridesThe success of GTP is reflected in thecriteria of:•Crime and violence, ranked 63rd (93rd in2010-2011), up 30 positions•Organised crime, ranked 54th (77th in2010-2011)•Reliability of police services, ranked 39th(50th in 2010-2011)

MalaysiaLargest ProspectusIs Open ForBusiness

To ‘Subscribe’… 131 EPPs 60 BOs

How You Can Participate… A High Level Pitch to Government Should The initial meeting with Government can Contain: provide a  Clear analysis of how the project strong signal of likely Government’s interest in addresses the issues and opportunities your proposed project.  Clear high level estimate of potential GNI and employment impact If there are positive signals, then a detailed  Clear articulation of support you need from investment analysis and business case will need the Government. to be prepared. These project meetings are important: A detailed analysis which provides a robust  To secure the necessary support estimate on  To facilitate fast and successful the project’s impact on GNI, employment and implementation investment.  To resolve any issues or roadblocks The appropriate PEMANDU NKEA director will assist to facilitate the project. These include meetings with various ministers and ministry officials.

THANK YOU+ www.pemandu.gov.my/etp+ www.pemandu.gov.my/etp/blog+ www.facebook.com/etpmalaysia+ @etp_roadmap

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ETP: An Update and Opportunities - Ku Kok Peng

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