Malaysia sets ambitious $444 bln investment target
KUALA LUMPUR, Malaysia (AP) — Malaysia has set an ambitious target of luring $444 billion of investments over the next decade, unveiling plans to blanket the country with broadband, develop nuclear energy and build a high-speed rail link to Singapore as it seeks to become a developed nation by 2020.
Idris Jala, a minister in the Prime Minister's Department, said Tuesday that 131 projects have been identified under a 10-year blueprint, known as the Economic Transformation Program, to kick-start the Southeast Asian country's drive toward high-income nation status.
The projects are spread over 12 areas ranging from oil and gas, palm oil and agriculture to tourism, financial services, education and urban infrastructure.
The blueprint seeks to nearly triple the country's gross national income from $188 billion in 2009 to close to $523 billion by 2020, and raise per capita income from $6,700 to at least $15,000 — meeting the World Bank's benchmark for a high-income nation.
"Malaysia has no time to lose. We need a complete, radical economic transformation. The days of depending on traditional growth engines are over," Jala said at a roadshow to gauge public response to the plan.
Analysts, however, said that meeting the investment target would be a tall order.
Foreign direct investment in Malaysia has slumped in recent years, plunging 81 percent to $1.4 billion in 2009 as it lost out to more competitive rivals such as Singapore, Indonesia and Thailand. Malaysia's decades-old system of preferences and quotas for the Malay majority and lack of human capital are often cited as stumbling blocks for investors.
"The expectations appear to be overambitious at this stage. There is nothing in the blueprint which indicates any transformation in policy and practices," said Ramon Navaratnam, chairman for the independent Center for Public Policy Studies, a think tank.
Jala said 60 percent of the total investment required would come from the private sector, 32 percent from government-linked companies and 8 percent from the government. Some 3.3 million new jobs would be created, of which 60 percent would be in occupations with medium to high-income level salaries.
Jala said affirmative action that includes business, education and other privileges for Malays would continue but the government has pledged to make it more transparent and fair.
"We do not pick winners. We will make clear the rules ... so that competition is done on an even keel," he said.
Seven projects worth $37 billion would be inked in the next few months, he said, but declined to give details.
Under the economic blueprint, a massive regional oil storage facility will be built in southern Johor state by 2015 to make Malaysia an oil services center in Asia. Malaysia will have a nuclear plant to boost power generation and become the world's second largest solar panel maker by 2020.
Urban transportation will be upgraded with plans for a mass rail transit network for Malaysia's largest city Kuala Lumpur that includes 141 kilometers (87 miles) of tunnels. It also suggests a high-speed rail link from Kuala Lumpur to Singapore, a plan proposed a few years ago by conglomerate YTL that failed to take off.
Officials said a feasibility study for the high-speed train will be submitted to Cabinet by January.
Tourism will be beefed up, with plans to build covered walkways to link Kuala Lumpur's shopping malls, make Malaysia a duty-free center for goods and building a cultural center based on the "Malaysia Truly Asia" tourism campaign.
Prime Minister Najib Razak is due to launch the blueprint on Oct. 26.
Najib, who took office in April 2009, has pledged to reform the economy including rehauling energy subsidies that had bled the government, introducing a new goods and services tax and roll back the affirmative action program for Malays.
But he faces enormous political challenges from power brokers within and outside his party, which fears a voter backlash ahead of general elections due in 2013.