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Wednesday, June 9, 2010

PM tables RM230bil 10th Malaysia Plan

Published: Thursday June 10, 2010 MYT 9:35:00 AM
Updated: Thursday June 10, 2010 MYT 2:00:28 PM
PM tables RM230bil 10th Malaysia Plan

KUALA LUMPUR: The Government has allocated RM230bil for development expenditure under the 10th Malaysia Plan. The allocation will comprise 55% for the economic sector, 30% for the social sector, 10% for security sector and 5% for general administration.

This was revealed by Prime Minister Datuk Seri Najib Tun Razak in his speech, when tabling the 10MP in Parliament on Thursday.

The key points of the 10th Malaysia Plan are:
Prime Minister Datuk Seri Najib Tun Razak tabling the 10 Malaysia Plan in the Dewan Rakyat.

- The gross national income per capita is targeted to increase to RM38,850, or US$12,140, in 2015. This requires achieving real GDP growth of 65 per annum. Growth will be led by the services.

- The 10MP is based on 10 ideas:

First: Internally driven, externally aware.

Second: Leveraging on our diversity internationally.

Third: Transforming to a high-income nation through specialisation.

Fourth: Unleashing productivity-led growth and innovation.

Fifth: Nurturing, attracting and retaining top talent.

Sixth: Ensuring equality of opportunities and safeguarding the vulnerable.

Seventh: Concentrated growth, inclusive development.

Eighth: Supporting effective and smart partnerships.

Ninth: Valuing our environmental endowments.

10th: The Government as a competitive corporation.

- To achieve the aspirations of the 10MP, five key strategic thrusts have been identified. They are:

First: Designing Government philosophy and approach to transform Malaysia using NKRA methodology.

Second: Creating a conducive environment for unleashing economic growth.

Third: Moving towards inclusive socio-economic development.

Fourth: Developing and retaining a first-world talent base.

Fifth: Building an environment that enhances quality of life.

- The Government will focus on efforts to develop non-physical infrastructure, including human capital development such as skills development and strong innovation capabilities. The 10MP allocation for non-physical infrastructure will be increased to 40%, compared with 21.8% in the 9MP.

Focus will be given to skills development programmes, R&D activities and venture capital funding geared towards promoting a higher level of innovation in the country.

- The main approach in transforming to a high-income economy will be to adopt strategies based on specialisation, given that strong and sustainable competitiveness is difficult to achieve without specialisation.

This Plan will focus on 12 national key economic areas or NKEAs which have potential to generate high income. Apart from 11 sectors, Greater Kuala Lumpur has also been selected as an NKEA as it has the potential to become a world-class city that can be a driver of economic growth. Details of the NKEA will be finalised in the Economic Transformation Programme, which will be announced in October.

The NKEAs are: (i) Oil and gas; (ii) Palm oil and related products; (iii) Financial services; (iv) Wholesale and retail; (v) Tourism; (vi) Information and communications technology (ICT); (vii) Education services; (viii) Electrical and electronic; (ix) Business services; (x) Private healthcare; (xi) Agriculture (xii) Greater Kuala Lumpur

An Economic Transformation Unit will be established to plan and coordinate the implementation and development of the NKEAs.

- The achievement of the 6% per annum growth target for the 10MP period requires a significant leap in investment activities, led by a more dynamic private sector. To achieve this goal, the Malaysian Investment Development Authority (MIDA) has been corporatised and rebranded.

In addition, business regulations which are outdated will be abolished. Towards this end, the Malaysian Productivity Corporation (MPC) will be restructured to spearhead a comprehensive review of business regulations and improve processes and procedures to increase productivity and competitiveness of major economic sectors.

- Healthy competition is needed to make the economy more efficient and dynamic. For this, the Competition Law will be introduced to provide a regulatory framework against market manipulation and cartel practices that may affect market efficiency. A Competition Commission and Appeal Tribunal will be established to ensure more orderly and effective implementation of the law.

- Smart and effective partnerships between the public and private sectors will be established to drive the economic transformation agenda. This new wave of public-private partnership (PPP) will ensure equitable sharing of risks and returns.

To date, 52 high-impact projects have been identified for implementation. These include:

First: Seven highway projects at an estimated cost of RM15bil. Among the projects are the West Coast Expressway, Guthrie-Damansara Expressway, Sungai Juru Expressway and Paroi-Senawang-KLIA Expressway.

Second: Two coal electricity generation plants at an estimated cost of RM10bil.

Third: Development of the Malaysian Rubber Board's land in Sungai Buloh, Selangor, covering an area of 3,300 acres at an estimated cost of RM10bil.

- An important measure in the 10MP is improving the method of financing for public venture capital companies. Currently, government financing for public venture capital companies, such as the Malaysian Technology Development Corporation and Malaysian Venture Capital, is provided through long-term loans. In this Plan, financing will be in the form of equity to match the risk profile of venture capital investment. For this purpose, the Mudharabah Innovation Fund (MIF), with an allocation of RM500mil, will be introduced to provide risk capital to government venture capital companies. To bridge the financing gap between the early stage of commercialisation and venture capital financing for high tech products, the Government will set up a Business Growth Fund with an initial allocation of RM150mil. The aim of this fund is to support these companies until they can generate sufficient commercial value to attract venture capital financing and other forms of financing.

- To ensure that the SMEs have better access to financing facilities, the Government established the Working Capital Guarantee Scheme totalling RM7bil and the Industry Restructuring Loan Guarantee Scheme totalling RM3bil, announced under the Second Economic Stimulus Package. The entire RM7bil under the Working Capital Guarantee Scheme has been approved. In view of the encouraging response to the Working Capital Guarantee Scheme, the Government will provide an additional RM3bil under 10MP, making it a total of RM10bil.
Prime Minister Datuk Seri Najib Tun Razak is flanked by his deputy Tan Sri Muhyiddin Yassin (r)and Tan Sri Mohd Nor Yacob (L) on arrival at the parliament house.

- The bumiputra development agenda will continue to be addressed in line with the concept of growth with distribution. In view of the increasingly challenging global and domestic economic environment, there is a need to transform the agenda to enhance participation among competitive and resilient bumiputra companies. This new approach will be based on four key principles: market-friendly, needs-based, merit-based and transparency.

- Five strategic initiatives to strengthen the bumiputra development agenda have been identified for implementation:

First: Increasing equity ownership through institutionalisation. In this regard, private equity programmes in government-linked investment companies, such as Permodalan Nasional Berhad (PNB), Lembaga Tabung Angkatan Tentera and Tabung Haji will be renewed, strengthened and expanded to consolidate and pool various funds to broaden ownership and control of Bumiputra equity.

Second: Increasing bumiputra property ownership. In this context, Pelaburan Hartanah Berhad will establish a Real Estate Investment Trusts (REITs) to facilitate Bumiputra investment in commercial and industrial properties and benefit from property appreciation. In addition, Kg Baru, Kuala Lumpur, will be redeveloped to enable landowners to realise and unlock the value of their properties without affecting Malay ownership.

Third: Improving skill and entrepreneurial development programmes and funding through various Bumiputra development agencies. An integrated development package will be provided to the Bumiputra Commercial and Industrial Community (BCIC) to strengthen their competitiveness and resilience.

Fourth: Developing professional bumiputra employment in a more holistic manner.

Fifth: Establishing a high-level council to plan, coordinate and monitor the implementation of the bumiputra development agenda. The Prime Minister will lead this Council, made up of relevant cabinet ministers, senior government officials and the private sector. The Economic Planning Unit in the Prime Minister's Department will be the secretariat to the Council. The Project Management Unit in the Finance Ministry will monitor the implementation of programmes to ensure their efficient and effective implementation.

- Specific focus will be given to disadvantaged groups, especially those living in the interior, in long houses in Sabah and Sarawak, as well as the orang asli and estate workers in Peninsular Malaysia.

- The Government is also considering granting land titles to the orang asli and bumiputras of Sabah and Sarawak.

- Focus will also be given to improving the quality of life of workers in estates and displaced estate workers. Water supply will be provided to 182 estates, up to 1,000 acres in size and located less than 5km from the water mains, costing RM109mil.

- Skills training will be provided, especially to school dropouts from various ethnic groups, to enhance their employability.

- Residents in Chinese new villages will also be given assistance. They will be provided soft loans to assist them pay their land premiums and renewals of leasehold. The loan will be channelled through Bank Simpanan Nasional and an initial fund of RM100mil will be provided.

- In addition, the Cabinet Committees for Indians as well as Sabah and Sarawak Bumiputra affairs will continue to address the issues of the respective communities.

- To improve the quality of students, the proportion of graduate teachers in primary schools will be increased from 28 to 60%.

- The performance of students in critical subjects, particularly the National Language, English, Science and Mathematics, will also be improved by increasing the number of quality teachers.

- In order to meet the demand for quality Mandarin language teachers in Chinese National Schools and National Schools, those with Unified Examination Certification and Sijil Pelajaran Malaysia or SPM will be considered for enrolment into the Chinese Language Programme in Institutes of Teacher Education.

- For purposes of renovating and upgrading government-aided schools, a sum of RM280mil will be allocated for 2011 and 2012. Each category of government-aided school, namely Chinese schools, Tamil schools, religious schools and mission schools will receive an allocation of RM70mil for the first two years of the Plan. In addition, assistance will be provided to pay electricity and water bills, up to RM2,000 ringgit per month per government-aided school, benefiting about 1,900 government-aided schools.

- To improve the competence of graduates, their employability will be one of the KPIs of universities. Financial allocation to universities will depend on the achievement of their KPI targets. In addition, the Government will grant gradual autonomy to the universities to improve their performance.

- In order to promote and encourage R&D activities among the higher education institutions, the Government has declared UM, UKM, UPM and USM as research universities. To further enhance R&D activities and programmes under the 10MP, Universiti Teknologi Malaysia (UTM) to be elevated to the status of a research university.

- Currently, the country has approximately 1.9 million foreign workers. However, the continued reliance on unskilled foreign workers will hinder country's aspiration to shift to higher value-added economic activities. Therefore, the foreign worker employment policy will be streamlined by introducing different levy rates according to the ratio of foreign workers to total workers in the company, and vary according to the skill level of the foreign workers. Higher rates will apply for lower-skilled workers. The rates will be increased yearly.

- To attract more skilled workers into the country, the Government will establish a Talent Corporation, which will identify skill shortages in key sectors, and attract and retain necessary skilled human capital.

- The Government aims to provide an attractive and comfortable living environment for city dwellers to live, work and play. Open spaces and green areas will be created and improved. Among the initiatives to be implemented are the transformation of the Lake Gardens in Kuala Lumpur into a botanical garden and the setting up of a Malaysia Truly Asia Tourism Centre in Kuala Lumpur.

- Waterfront areas of cities will be beautified and turned into attractive spaces, similar to the restoration of the Malacca River waterfront.

- Focus will be given to increasing the coverage of basic infrastructure such as roads, electricity and water supply, and communication networks to rural areas. The government will build 6,300km of paved roads in Peninsular Malaysia, 2,500km in Sabah and 2,800km in Sarawak, which is expected to benefit 3.3 million people.

- The Government will also improve rural water supply with a target of 99% in Peninsular Malaysia, 98% in Sabah and 95% in Sarawak. This will involve the extension of water supply to 117,000 homes in Peninsular Malaysia, 112,700 in Sabah and 87,400 in Sarawak.

- In line with the "Greater Kuala Lumpur" NKEA, the Government will further enhance the public transportation network in Kuala Lumpur with the implementation of the high-capacity Mass Rapid Transit system. This is an iconic project in our capital city that will be highly beneficial to commuters and have large spillovers to the economy.

When completed, the system is expected to cover a radius of 20km from the city centre with a total length of about 150km, and when fully operational, will serve up to two million passenger trips per day from 480,000 trips on current urban rail systems.

The construction of bus and rail terminals such as the Gombak Integrated Transport Terminal, will ensure that public transport runs smoothly. These measures are expected to increase the public transport modal share in Greater KL from 12% in 2009 to 30% in 2015.

Efforts to enhance the public land transport system will also be expanded to other cities. For this purpose, a Bus Rapid Transit system will be introduced in Iskandar, Johor, while the number of public buses in Pulau Pinang will be increased by 200 buses to enable the expansion of 26 routes with an added capacity of 75,000 passengers per day.

- Healthcare access, coverage and quality will continue to be improved under 10MP. Among the major initiatives are the construction of eight hospitals, including specialist hospitals, 197 clinics and 50 additional 1Malaysia clinics, which are expected to be ready in the first half of the 10MP.

- Seventy-eight thousand affordable houses will be built during the Plan period. Related laws will also be tightened and enforcement enhanced to ensure the quality of affordable houses built.

A fund of RM500mil will be established for the repair and maintenance works of public and private low-cost housing. This fund will be allocated on a matching grant basis, where half of the contribution will be borne by the Government and the other half by the management committee or residents' association.

- Steps will be will be taken to increase the participation of women at all levels in both the public and private sectors, including entrepreneurial ventures. Existing laws and related regulations will be reviewed to create a more conducive environment that encourages greater female participation in the workforce. Private sector is urged to increase the participation of women, especially in senior positions, such as chief executive officers and members of Board of Directors.

- By 2020, it is estimated that there will be 3.4 million senior citizens. The Government realises that harnessing this pool of resource is valuable and this group should be given the opportunity to remain healthy, active and productive in their golden years. In line with this, programmes will focus on enhancing elderly-friendly infrastructure, improving access to affordable healthcare, ensuring adequate provision of homes and improving financial security as well as employment opportunities.

- The Government will also promote environmentally-friendly housing by introducing guidelines and a green rating system. Putrajaya and Cyberjaya will serve as flagship green townships. The Government will take the lead in adopting green building standards.

New Government buildings will be designed to meet green standards. Energy efficiency of existing buildings will be enhanced and as a showcase example, the Prime Minister's Office complex will be upgraded to meet the Gold Standard Green rating.

- Beginning with the 10th Plan, the implementation of programmes and projects on a rolling plan basis will be introduced. With this approach, allocation for programmes and projects will be provided on a two-year basis beginning 2011-2012.

This allows commitment to be made based on the financial position of the Government and provides flexibility to respond to new priorities and changes in the global and domestic economic environment.

The detailed list of the programmes and projects for the first rolling plan will be ready by the end of August 2010.

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