Going forward, economic growth will be driven by the high-tech sectors, underlining the potential of the digital economy in ensuring Malaysia’s transition to a high-income and developed economy. It is expected that the PPPs will help with that.
Some 45 out of the 67 public-private partnership (PPP) projects under the Public Private Partnership Unit (UKAS) that are under review have been approved, according to a recent report.
However, the status of the remaining 22 PPP projects under UKAS is not known.
However, the Malaysian Finance Minister said that the ministry had no intention of cancelling any of the PPP projects. He added that at the moment, 45 out of 67 PPP projects under review have been given the green light to proceed, on the condition that they go through an open tender process.
The minister also said that the projects approved after the review would not only generate additional economic growth but also raise the quality of growth and leave no space for financial abuse, moving forward.
Additionally, the minister pointed out that Malaysia was not undergoing “austerity” measures, but was employing “smarter spending” strategies.
It was noted that the government was adopting a wider application of the open tender process, selective public investments and renegotiating mega-infrastructure projects.
If there are areas of priority that require spending, the government would be more than happy to spend, especially for long-term sustainable growth, the minister promised.
The government had managed to shave RMB5.22 billion off the MRT2’s total cost of RMB56.93 billion by rationalising the above-ground portion of the project.
More savings will be gained when we re-tender the underground segment soon, according to the leader.
Earlier, Economic Affairs Minister had said that the government remained committed to growing and breaking out of the middle-income trap to become an advanced high-income economy. Malaysia remains stuck in the middle-income trap, as it has not yet been able to transition towards becoming a high-income nation, the minister had said at his speech at the forum.
As of 2017, gross domestic product (GDP) per capita as measured in terms of nominal US dollars had fallen to 9,944 from a peak of 11,183 in 2014.
Breaking out of the middle-income trap would require a different economic logic for Malaysia.
The second idea is economic complexity or diversification of the economy, via exports in agriculture, manufacturing or services because exporting to the world requires that whatever goods or services we produce be globally competitive. Hence, Malaysia’s economy must be as far along the technology and efficiency frontiers as possible.
He noted that firms also need to move away from being too narrowly focused on chasing short-term profits. Short-term thinking necessarily means that companies will hold off on reinvesting for the future, therefore reducing their long-term sustainability and profitability.
In summary, the country’s leaders suggest the pursuance of a balanced development path, with policies that enhance inclusion, integrity and sustainability, as well as delivering economic growth for the continued prosperity of Malaysians.
Meanwhile, the minister said that growth in terms of GDP alone could not be considered successful unless translated into real benefits for the people.
On the subject of foreign investment, he said there’s a need to emphasise that while short-term capital inflows may do wonders for the stock market, that would not translate into value creation.
That is why the government encourages long-term foreign direct investment in greenfield investments that would create jobs, boost purchasing power and help create a better economic eco-system.
Going forward, economic growth will also be driven by the high-tech sectors, underlining the potential of the digital economy in ensuring Malaysia’s transition to a high-income and developed economy. He said that there would be changes in the investment mandate that would address the current challenges.
Among the programmes that the country needs to speed up are especially in research and development as well as green investment, he had said.
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