IF I could sum up the National Transformation Programme (NTP) Annual Report 2017, which was presented on March 23, I would argue that it is more about a story than data. And, it is not merely a story of success, but also a strong, consistent and comprehensible narrative about the Malaysian economy.
With gross domestic product of 5.9 per cent and gross national income per capita at US$9,660 (RM37,288), Malaysia is moving closer to joining the ranks of developed high-income nation.
This, in itself, is a remarkable achievement. It proves that the NTP’s Big Fast Results methodology has been bearing fruit and will continue to deliver. After all, Malaysia has two more years to reach 2020. By the year 2050, Malaysia aims to become one of the top 20 developed countries through Transformasi Nasional 2050 (TN50).
Indeed, long-term economic planning must start from now and the TN50 initiative is the right move at the right time
as it will prepare Malaysia for the many challenges of a high-income economy.
Transforming an economy is not easy. Many Malaysians seem to take this for granted. It took Malaysia 35 years since independence to arrive at the high middle-income ranking. And, Malaysia has stayed in this category for more than 26 years until today.
The World Bank estimated, in 1960, that there were 101 countries in the middle-income category. By 2008, only about a dozen managed to prosper.
Many countries, upon reaching the middle-income category, find it difficult to move to developed nation status. Malaysia was said to be trapped in this category a decade ago. Malaysia’s GNI per capita was 30 to 33 per cent behind the World Bank’s threshold of a high-income nation.
Today, Malaysia has not only overcome the middle-income trap, but is also on track to enter the exclusive club of high-income economies. But, more interestingly, we have done so by choosing the road less travelled.
The Federal Government, through NTP, has managed the economy by not just improving the GDP growth rate, but also maintaining it at an average of 5.5 per cent since 2010, and increasing the GNI per capita growth rate by more than 50 per cent since 2009. Our deficit level has been reduced by more than half since 2009, and our debt-to-GDP ratio has been maintained below the self-imposed limit of 55 per cent of GDP at 50 per cent on average since 2010.
Malaysians have benefited most from NTP. The World Happiness Report 2018 ranked Malaysia as the happiest country among the developing Asian economies. Crime rates have dropped by 53 per cent since 2010, while poverty has been almost wiped out. A total of 2.26 million jobs have been created since 2011, and mean monthly household income has been steadily rising from RM4,025 in 2009 to RM6,958 in 2016, an increase of 73 per cent at an annual growth rate of 8.1 per cent.
Income inequality has been reduced and direct cash transfer of 1Malaysia People’s Aid has benefited more than seven million people, especially the bottom 40 per cent income group. It is little wonder that the World Economic Forum ranked Malaysia’s economy as the most inclusive among the emerging Asian economies.
People must understand that NTP is not about perfection, it is about a journey of transformation with a bold vision of embracing change.
DR IRWAN SHAH ZAINAL ABIDIN
Director, Asian Research Instituteof Banking and Finance, Universiti Utara Malaysia,
visiting research fellow, Islamic Finance, OCIS, Oxford University