KUALA LUMPUR: Malaysia is no longer caught in the middle-income trap and has moved halfway towards becoming a high-income economy following the success in lowering the fiscal deficit and raising private investments.
Sunway University’s Business School Economics Professor Dr Yeah Kim Leng said Malaysia had achieved this by reducing subsidies, introducing the Goods and Services Tax and enabling a business friendly environment for businesses to expand.
He said implementation of the Economic Transformation Programme (ETP) and the National Transformation Programme (NTP) were significant, as they had benefited Malaysia’s economy, as well as private investments, whereby more than 60% income now comes from the private sector.
“To achieve high-income nation status, the implementation of all economic initiatives is of utmost importance for the country,” he told Bernama.
Prime Minister Najib Razak said to date, the country had achieved a per capita Gross National Income (GNI) of US$10,010 (RM42,908) compared with US$8,230 in 2010.
Yeah said the NTP had also recorded excellent achievements, whereby the gap towards attaining a high-income threshold had been reduced to 18% today from 33% in 2010.
“The narrowing gap between the high-income threshold and the country’s GNI is also an indicator that we are no longer stuck in the middle-income trap,” he added.
Meanwhile, according to the Performance Management and Delivery Unit (Pemandu), which manages the ETP, in order to turn Malaysia into a high-income economy, there is a need to lift the GNI to US$523 billion by 2020 or raise per capita income from US$10,010 to at least US$15,000.
When the ETP was first introduced in 2010, the exchange rate was RM3.2 to the US dollar. In 2015, the ringgit declined to RM4.2 and the current exchange rate is RM4.4.
The NTP has also helped raise the quality of life for everyday Malaysians in an inclusive way, such as through the completion of 5,286 km of rural roads, connecting 144,025 rural houses to reliable electricity supply, 1.68 million people living in 334,593 rural houses having access to clean water, as well as having built and restored 79,137 houses to benefit 412,360 people.
Yeah said through the NTP as the model of national socio-economic transformation, Malaysia has been recognised by many global institutions, academic groups and governments in the last seven years, and this was definitely a great achievement.