Toll roads criss crossing the nation and subsidsed food and petrol are signs of the nation’s prosperity
IN the cacophony assailing many parts of the world today, and where ills, tensions, warring and strife dictate much of daily life, we are living a life of plenty.

Our political climate is stable. We are at full employment, and our poor have enough to eat. Our children go to school and our graduates have opportunities.
We are attracting investments to our shores and multinationals are setting up shop. We are recognised for our talents and reforms, and are progressing headlong into a high-income, knowledge-based economy by the end of the decade.
If we are to be dictated by commentaries on social media alone, we will be sucked into a vortex of doom and gloom where everything has gone south and we should be defeated.
Social media, being free and rife, opens up also spaces for people to air their grievances whether valid or otherwise. But I believe we are maturing as a society and can learn to differentiate hate speech from the truth of good people trying to do good work to make a real difference for our future.
There is a lot going for us. Our GDP this year beat forecast to grow
 at 6.3%, while investments continue to impress even the cynical with 
its 12.1% spike this second quarter at RM53.1bil compared with the same 
period last year.
As a minister in the Economic Council, I was happy with the World 
Economic Forum’s resounding recognition of Malaysia as one of the 
world’s top 20 most competitive nations in the Global Competitiveness 
Report 2014. They described Malaysia as the highest ranked among the 
developing Asian economies and highlighted strengths in financial market
 development, efficiency in goods and services market, and a government 
that was able to tackle corruption and red tape.
This wasn’t the case just six years ago. In fact it was a whole different scenario, crippling even the best.
The US subprime meltdown sucker-punched Asia squarely in the gut and
 Malaysia was not spared. We had barely recovered from the economic hit 
of the 1998 Asian Financial Crisis, weighed down in debt and struggling 
with a ballooning deficit.
Our Prime Minister stepped into leadership at a particularly chaotic
 and trying time. America and Europe had plunged into severe economic 
recession. Asia, skittishly reacting to plummeting demand for its 
products and services, suffered also a jittery, highly volatile and 
unpredictable capital market.
The world was mired with insecurities and some first world countries
 embarked on austerity measures that further slowed any hope for growth 
and momentum. It was a dark period, especially for a relatively small 
and open market like Malaysia, straining to see the light at the end of 
the tunnel.
Our Prime Minister recognised we cannot continue with business as 
usual. We cannot keep doing the same things and expect different 
results.
We had to act fast, and to take bold, radical steps to arrest 
slowdown, strengthen economic fundamentals and escalate efforts to grow 
our sectors to successfully compete with global players.
There was no room for complacency and half-measures.
The New Economic Model
Enter the New Economic Model. In 2009, a panel was convened to 
diagnose the nation’s economic health and to come up with a plan to 
transform government and the economy.
What really impressed me about the NEM was its mandate to pursue the
 high-income agenda, while keeping equally focused on inclusivity and 
sustainability.
I have often said that achieving high-income as a result of 
increasing GNI is easy enough. Do a few things right and we will get 
there.
But it is not enough. As a responsible government, we must make sure
 everyone benefits from prosperity. This wealth and wellbeing must be 
sustained so that our children and their children will live in a safe, 
progressive and prosperous nation.
Even developed countries struggle with the challenge of inclusivity.
 It is always missing in many international economic models resulting in
 unequal development – a combustible  cocktail that has led to uprising 
and social dysfunctions as evident in the London riots, the Occupy 
movement and the Arab Spring.
Which brings me to this critical point that keeps governments awake 
at night – creating jobs for its people. There is no shortcut to this. 
It is the basis to secure stability and progress for any country, and 
allows people to feel confident and hopeful of their future.
The most sustainable way to create high value and quality jobs is 
through private investments. It is as simple and as complicated as that.
Investments
The domino effect of investment is obvious. Investments create jobs.
 The more people are gainfully employed, the more revenue a government 
will receive through tax and consumption. The more revenue we secure, 
the more government can spend on its people especially the poor and 
marginalised.
This is the “circle of life”, and private investment is the cog that will turn the wheel.
Under the ETP, private investment grew five times to 15.3% (CAGR 
2010-2013) compared to 3.1% (CAGR 2007-2010). These are realised numbers
 and not merely committed so you can understand why I am very confident 
our economy is on track. (
Chart 1)
Mida’s pipeline of approved investments in the last three years 
breezed past the goalpost of the 10th Malaysia Plan’s RM148bil annual 
target. In 2011, we recorded RM154.6bil, 2012 RM167.8bil and just last 
year, we chalked a whopping RM216.5bil. (
Chart 2)
The ETP
Under the ETP, we deliberately chose the top 12 sectors which are 
strong revenue drivers and where we have the confidence to compete. 
These sectors alone will create 3.3 million high value, high income jobs
 by 2020.
In fact in 2010-2013, we logged 1.3 million employment in the NKEA universe, putting us on a sure footing.
In an advanced economy, workers will be paid higher wages, and this 
will lead to higher costs of production. In turn, we will experience a 
rise in the cost of living.
This is the flipside to being a high-income economy. You cannot have your cake and eat it too.
As long as the rise in income is higher than cost of living people will enjoy higher disposable income.
Today we are already seeing and feeling its effects. With the 
enforcement of the Minimum Wage Gazette 2013, it is unacceptable for 
Malaysians to earn less than the Poverty Index Line at RM900 per month 
(For Sabah and Sarawak, it is at RM800 per month).
Many employers were worried their production costs will escalate and
 their businesses will shut down. But as evident in many countries 
applying the same principles, what we will see in due time is efficient 
use of labour and resources, adoption of technology and overall greater 
productivity.
Managing finances
The common gripe I hear from some quarters is that they don’t feel 
the nation’s growing prosperity affecting them in any tangible or 
meaningful way.
I don’t know whether to laugh or cry. We are one of the most heavily
 subsidised nations in the world where our annual subsidy ticket in 
recent times rose to a massive RM40bil a year, of which half is used for
 fuel.
So it is fair to say, each time you fill up the tank in your vehicle, you are feeling the country’s prosperity.
I could draw up a list. Toll roads that crisscross the nation; 
public hospitals for consultancy and medication capped at RM1 since 
1982; billions spent to keep electricity tariffs artificially low; and 
subsidised food items across the smorgasbord of gas, cooking oil and 
rice.
There are four ways to fix our problems:
1. Reduce expenses
We are carrying a debt burden of RM568.9bil since the 1998 crisis. 
The government has over the years, borrowed money for development as a 
result of channelling revenue to subsidies.
This is untenable and unsustainable with the ballooning subsidy bill.
It is easy to keep dolling out the feel-good factors of more and 
more subsidies. But living this fantasy will only plunge our next 
generation into a quagmire of liabilities and the slow debilitation of a
 society in regress.
We have to gradually reduce our subsidies. This is the bullet we have to bite.
To give you a sense of possibilities, if we were to reduce fuel 
subsidies by 30% or 50% – and it is a reasonable expectation – that will
 release about RM15bil-RM20bil that can make tremendous headways in the 
lives of the country’s bottom 40%.
2. Increase revenue
GST will come into effect next year and will broaden our tax base. 
Currently only 1 million people pay tax for a nation of 29 million.
As a consumption tax, anybody buying will be contributing to the 
national revenue. Of course basic products and services will be exempted
 from GST to safeguard the interests of the vulnerable.
Even at 6%, it is estimated that we will be able to capture RM22bil 
in revenue annually whereas with the current sales and services tax we 
have been able to earn about RM15bil-RM16bil annually.
Once we are able to reach the international benchmark for GST, the 
upside potential in terms of revenue is tremendous. We can do a lot for 
infrastructure and people development, and improve our social safety 
nets.
3. Reduce deficit
In 2013, Malaysia for the first time moved into the fiscal Safe Zone matrix developed by the Boston Consulting Group.
 
 
The “safe zone” is for countries whose public debt is below 75% of 
GDP and deficit is at 4% of GDP or below. Public debt equals or above 
the GDP and deficit of 8% and above places a country in the “Danger 
Zone”.
With much resolve, we reduced fiscal deficit in the last three years
 from 6.6% in 2009 to 3.9% last year. We remain on track for this year’s
 3.5% reduction, and by 2020, are confident of hitting budget neutral, 
as targeted. We are also steadfast in maintaining our debt below the 55%
 legislated ceiling. (
Chart 3)
4. Proliferation of entrepreneurship and innovation
I am passionate about efforts to create conditions for people to become self-employed and run thriving businesses.
There is much room for growth amongst Malaysian SMEs. Local 
businesses are fighting for slivers of a domestic pie when in reality 
the world has opened up to us. We must let go of our comfort zones and 
learn to ride the waves.
Although Malaysia entered the industrial sector aggressively at 
about the same time as Taiwan and South Korea, we lag behind them in 
terms of innovation. Samsung is a great example of brand that has 
captured the imagination of a global audience and today takes on the 
likes of Apple.
Agencies such as Mida, SME Corp and Agensi Inovasi Malaysia (AIM) 
are here to support local companies so they are able to step up but 
companies themselves must develop a strong appetite for competition and 
become global champions.
It is inaccurate to say the government is doing very little to make
 things better for the rakyat today. To put it into perspective, you 
will feel the transformation if you are the segments we are reaching out
 to:
> 5.16 million students benefit from highly subsidised public education
> School students have not been left out. 1.2 million tertiary 
education students received RM250 book vouchers via the Baucar Buku 
1Malaysia, whilst 5.2 million students received RM100 via the Back to 
School Assistance initiative
> The government also opened 6,843 pre-school classes and trained
 20,138 pre-school teachers. Total enrolment of pre-schooling children 
increased to 81.7% or 793,269 with more children having better access to
 quality early childhood education and getting a head start before 
primary school
> More than 10 million people use public hospitals and clinics, benefitting from affordable health and care in 2012 alone
> 4.6 million out of 6.5 million households benefit from free and low electricity tariff
> 22 million registered cars and motorcycles in Malaysia with 13 
million licensed drivers directly enjoying cheap fuel everyday
> 4 million people are using toll roads in Malaysia
> Commuters on public transportation benefit from the additional 
38 new six car train sets on the KTM Komuter service. We also introduced
 35 sets of new four car trains for the LRT Kelana Jaya line, created a 
new integrated transport terminal at Bandar Tasik Selatan and revamped 
Puduraya. They are now more spacious and convenient. Every single one of
 the 400,000 daily commuters feel the transformation.
> Tackling the bottom 40% enabled us to reach and improve the 
lives of 188,000 individuals who are now lifted out of poverty, of which
 89% recorded increased income levels
> We worked on 54,000 hard core poor families and gave them cash 
every day in order to ensure they had enough to feed their children and 
put a roof over their heads
> In ‘teaching them how to fish’, these individuals were required
 to choose one of the 1AZAM programmes under the GTP so they could start
 their own small business and become self-sustainable
> Over 5,300 women entrepreneurs profited from training and 
reskilling to improve their economic value via micro credit assistance
> We have built over 4000 km of rural roads that is comparable to
 driving from Johor Baru to Dhaka, Bangladesh. About 2.1 million people 
have gained, allowing rural communities to trade and access goods and 
services
> 61,062 houses have been built and restored for the rural poor, benefiting 305,300 people
> Overall, a total of 5.1 million people have benefited from 
basic infrastructure such as new roads, and access to clean water and 
electricity
> Over 6.8 million low income Malaysians received assistance via BR1M
> Malaysia is only one of few countries that regulate and control
 many food items and this means all Malaysians can enjoy low food prices
 every day. Our CPI has been kept under check and has been easing slowly
 in recent months as prices begin to moderate
Government innovation
In July this year, Pemandu was rated one of the top 20 Leading 
Government Innovation Teams Worldwide by Bloomberg Philanthropies and 
Nesta. The accolade testifies to the commitment and work from our Prime 
Minister, ministries, agencies and civil servants.
It is also a recognition of Pemandu’s 8-step transformation 
process. A systematic and structured approach incorporating diagnosis, 
planning, execution and feedback – securing transparency and 
accountability.
Besides tracking Ministerial KPIs and holding regular Steering 
Committee Meetings, the Problem Solving Methodology (also known as the 
Putrajaya Inquisition) is held twice a year with the Prime Minister and 
top government officials to identify problems, make decisions and move 
milestone projects forward.
Success in sight
In the long-term, our economic transformation will bear fruits so 
all Malaysians – including the middle-class – will meaningfully gain. 
Better incomes, quality education, efficient public infrastructure, 
cleaner and greener cities, higher-paying jobs for graduates, and 
transparency and governance. These are fair expectations to ask of a 
government.
It is every government’s mandate to prioritise its citizen’s needs 
and to put in place policies that will safeguard the public’s wellbeing 
for this and future generations. We are no different. Even as we battle 
to steer the country into the economic ‘safe zone’, we must continue to 
be in service of the rakyat so that no one is left behind.
As evident, all of us are already ‘feeling’ the benefits of 
government initiatives in small and big ways and our lives are better 
for it.
It is about time we give credit where credit is due i.e. to our 
Prime Minister, Deputy Prime Minister, Ministers, Chief Secretary and 
the civil servants.
Our Prime Minister has provided the right leadership to steer us in 
transforming towards achieving vision 2020. There is no doubting the 
results delivered so far since he became Prime Minister, although more 
needs to be done.
Having worked in his Cabinet for the last five years, I can say 
categorically that he works extremely hard and is totally committed to 
doing what is best for the country.
Given the various polarities of views and divergence of opinions 
amongst our multi religious and multi-ethnic society, he is taking us 
through a path of moderation.
I know a lot of people would prefer him to take their extreme 
position but as the leader of our country, it takes wisdom on his part 
to avoid knee-jerk reactions. Even if he is often provoked, he is 
patient enough to stay the course of moderation for the sake of our 
beloved country, Malaysia
I am a believer that Malaysia will stride on regardless of the 
bumps on the path to 2020. We must be patient even as we relentlessly 
pursue our goals.
As a Malaysian and Sarawakian, I wish each and everyone Happy Malaysia Day.
 By Idris Jala Transformation Unplugged The Star
 By Idris Jala Transformation Unplugged The Star
Datuk Seri Idris Jala is CEO of Pemandu and Minister in the Prime 
Minister’s Department. Fair and reasonable comments are most welcome at 
idrisjala@pemandu.gov.my
Related:
 The BENCHMARK: PEMANDU - Proof of Incompetence (Pics Attached)
Happy (?) Malaysia Day and NEP2 for 
Malays      A historical black hole for Sabah - There is still a debate 
about wether North Borneo w...