By Stephanie Jacob
Where are we three and half years into the ETP and GTP, has progress been good? In this article, Idris Jala addresses concerns such as the fall in Entry Point Projects and the rate at which public investment is rising.
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The National Transformation Programme, split into the Economic Transformation Programme (ETP) and the Government Transformation Programme (GTP) is three and a half years into its implementation, with the target year being 2020.
Collectively the transformation programme’s overarching goal is to drive the country towards becoming a high income nation.
This is to be achieved using a private sector-led model of growth, with the aim of hitting three main targets by 2020. These are, elevating Malaysia’s gross national income (GNI) per capita to US$15,000, creating 3.3 million jobs and securing US$444 billion in investments by 2020.
At the end of 2013, the three year mark , the programme appears to be progressing well. For instance, GNI per capita in 2013 stood at US$10,060, more than halfway towards the goal of US$15,000 – with seven years till the self imposed deadline.
While that appears to be good progress, there has been concerns with regards to some of the other headline numbers, and over the size of private investment. Speaking to KiniBiz, Idris Jala the chief executive officer (CEO) of the Performance Management and Delivery Unit (Pemandu) addresses some of the lingering questions and criticisms being lobbied against the programme.
Fewer entry point projects not an indication ETP is failing
In the ETP’s 2013 Annual Report, it was noted that the number Entry Point Projects (EPPs) only stood at 47. Although it was higher than the 39 seen in 2012, it was still substantially less than the original 110 projects seen when the ETP was launched.
This led to a lot of concern that the ETP was losing steam, a notion that Jala has sought to dispel. To understand why the falling numbers are not a concern, one must understand the purpose of the EPPs, said Jala.
He explains that during the early stages of the ETP, “we consolidated investment figures from these projects to provide clarity, confidence and build momentum at the kick-off point. We could have been happy with just 50 new projects, but I wanted to make sure we had enough critical mass to catalyse change.”
Secondly, the EPPs were identified as projects for the government to facilitate, track and intervene where necessary. This was done to discover the realities and the real implementation issues faced by the private sector when they do business in Malaysia.
In essence, the EPPs were case studies or pathfinders that enabled the government to identify which parts of the process needed to be reworked. “People tell me that ‘oh Idris, you have this number (of EPPs) and it is dwindling’. But we were actually doing the 131 EPPs, as pathfinders to make changes happen in the economy,” emphasises Jala.
Using hotel construction projects to illustrate his point, Jala said that after receiving feedback that the approval process for construction was very complex, several hotel projects were designated as EPPs so they could be monitored.
“We take some EPPs (hotel projects) under tourism and monitor these projects – the St Regis is one, the Majestic Hotel is one. So we are not putting all the hotels being built under EPP – we are not interested. What we want to do is pick one or two and then we follow them and when we follow them, we can change the approval process,” he explained.
Idris Jala
From monitoring the St Regis construction process, the team realised that there was not enough clarity with regard to what constitutes a platinum green building. By identifying this, the relevant ministries or agencies can then work on simplifying the process.
“Pemandu is not here to replace the Malaysian Investment Development Authority (Mida). If we were to replace them then our job will be to raise the EPPs to 1,000 (laughs) — but that is not our intention. Our intention is to transform (the way things are done), Mida is the investment arm,” he said.
A better measure of success perhaps is if the ETP has transformed the business environment enough to result in more private sector investment. This too has drawn criticism, with some saying private sector investment is not rising fast enough, and public investment is falling too slowly.
Jala firmly refutes this saying, “private investment is really rising and this is phenomenal growth for the private sector.”
He notes that approved pipeline investments have increased year on year since the launch of the ETP, and has surpassed the government’s annual investment target of RM148 billion under the 10th Malaysia Plan. In 2012, approved investment stood at RM154.6 billion, while in 2013 it grew to RM216.5 billion.
Realised investments have also risen year on year since the launch of the ETP. The year 2012 saw RM241.7 billion out of which 58% was private investment. In 2013, RM264.6 billion was recorded, out of which 61% was private investment.
With regards to the relatively high levels of public investment still needed in the economy, Jala admits that the reality is that the government is still in the midst of several big catch-up projects such as the MRT.
The Pemandu chief acknowledges that MRT for one, is something that should have been started five years ago. However he adds that the project is absolutely necessary, and that there will always need to be some measure of public investment in the economy — such as in big ticket infrastructure projects.
GTP has more touch-points for the rakyat
Another criticism levelled against the ETP is that the common man perhaps does not see or feel the impact of progress despite the seemingly large amounts of money and resources being spent.
Jala acknowledges that the ETP perhaps does not have obvious “rakyat touchpoints”, but said that ultimately more investment will translate into jobs. He pointed out that the programme has set a target to create 3.3 million jobs, and has so far created 1.3 million.
“Between the two, when you ask the question, which one has the rakyat touchpoints? Clearly the GTP has more rakyat touchpoints,” added Jala.
He highlighted that 4600km of rural roads and infrastructure had been built for communities over the past year — which is the distance from Johor Bahru to Bangladesh. The impact in places like Jala’s hometown of Bario in Sarawak has been tremendous; with these roads reducing travel time between villages from one day on foot to just one hour in a four wheel drive.
In the cities, urban public transport has been a key focus of the GTP; with efforts going into improving KTM services and upgrading the Puduraya bus station as well as Bandar Tasik Selatan transportation hub.
Jala also highlighted the push to reduce crime as an area that had seen results, but added that there was still plenty to be done.
Remaining focus on set goals
That said, even with the GTP dealing with everyday issues impacting the majority of Malaysians, there are still groups that do not feel the direct impact of the transformation programme. This has led to criticism over Pemandu’s stance to stick vigorously to it 12 original National Key Economic Areas (NKEA) and seven National Key Results Areas (NKRAs).
Jala said that this was important as the transformation must remain focused on its defined goals. “A lack of focus will rack up government debt and we will end up spreading our resources too thin. Public funds should be used to deliver benefits and the only way to do that is to focus on the key economic sectors.”
In the final part of this series, Idris Jala discusses other hot button issues such as corruption, subsidy rationalisation, GST and household debt.
Yesterday: Idris Jala, Malaysia’s ‘Transformation Minister’
Tomorrow: Other must do’s towards transformation
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