KUALA LUMPUR, March 30 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak on Tuesday unveiled the much-awaited New Economic Model (NEM) which will transform the nation into a high-income economy that is sustainable and inclusive and will position the nation on the right path towards attaining developed nation status by 2020.
The NEM would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians, with their per capita income increasing to US$15,000 by the end of the decade from US$7,000 currently, said Najib, who is also Finance Minister.
Under the NEM, the Government would no longer tolerate practices that support the behaviours of rent-seeking and patronage, which have long tarnished the altruisic aims of the New Economic Policy (NEP).
The NEM wil be "inclusive" with all Malaysians contributing and benefiting from economic growth -- a fundamental element of any new economic approach, he said in his speech at "Invest Malaysia 2010" conference.
Among highlights of the NEM are:
*Employees Provident Fund (EPF) will be allowed to invest more in overseas assets;
*Malaysian Industrial Development Authority (MIDA) will be corporatised and renamed as Malaysian Investment Development Authority to make it more effective as an investment promotion agency;
*Government and EPF to form a joint venture to promote the development of 1,200 hectares of land (3,000 acres) in Sungai Buloh into a new hub for the Klang Valley;
*Several parcels of land in Jalan Stonor, Jalan Ampang, Jalan Lidcol in Kuala Lumpur will be tendered out and developed by private sector, failing which it will be wasteful if the assets were not developed as the government will incur cost of maintaining them;
*The land development in Sungai Buloh and development of parcels of land in the city centre is expected to generate new investments worth over RM5 billion;
*The Ministry of Finance Inc companies such as Percetakan Nasional Malaysia, CTRM Aero Composites Sdn Bhd, Nine Bio Sdn Bhd and Innobio may be privatised;
*Petronas has identified two sizeable subsidiaries with good track record to be listed this year on Bursa Malaysia, a move that will reduce government's presence in business and enhance private sector's role;
*Khazanah Nasional Bhd will divest its 32 per cent stake in Pos Malaysia Bhd through a two-stage strategic divestment process;
Khazanah Nasional, the government's investment arm, will have to achieve greater progress in divesting non-core assets to increase liquidity of these counters, said Najib.
He also said the government will reassess the subsidy system and broaden revenue-raising base through proposed Goods and Services Tax (GST).
This will place Malaysia in line with international norms and reduce unsustainable reliance on a small number of industries, business and taxpayers.
He also said Malaysia should rise out of the "middle-income trap" that will be a precarious position for any nation in the new global economy, which means pursuing economic policies in knowledge industries of the future with high-wage jobs and prosperity that can be shared by all.
The Prime Minister said the NEM, formulated by the independent National Economic Advisory Council (NEAC), will be integrated into the 10th Malaysia Plan with a longer term vision that will be delivered through the 11th Malaysia Plan.
"These can transform the economy to become one with high incomes and quality growth over the next decade," he said.
Najib said Malaysia should make a quantum leap from the current US$7,000 per capita annual income to US$15,000 in 10 years.
"It will be no easy task, but the rewards will be great if we make this transformation...the challenge is how we will do it," he said.
He said that creating a high-income nation will mean higher wages throughout the economy as growth is derived not only from capital, but from greater productivity through the use of skills and innovation, improved coordination, stronger branding and compliance with international standards and intellectual property rights.
Najib lamented that 80 per cent of the workforce today have education only up to SPM qualification -- Malaysia's equivalent of the O-levels, which "is not in line with the high income economy that Malaysia aspires to be."
The Prime Minister also said under the NEM, no one would be left out in contributing to and sharing in the creation of wealth as the country progresses.
"Not only do I want the rakyat to earn better but they must also live better" which is why raising the quality of life is an integral part of the economic model, he said.
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