Macroeconomic and Microeconomic Indicators of Malaysia

CONTENTS
LIST OF ABBREVIATIONS ................................................................................................ 5
REVISION NOTES (COMPULSORY READING) ............................................................ 6
INTRODUCTION................................................................................................................... 9
SECTION 1: MACROECONOMIC INDICATORS .......................................................... 9
1.1 Gross Domestic Product (GDP) ............................................................................ 9
1.1.1 Estimated Net Value Added by Bumiputera Ethnic Category ........................ 11
1.2 The External Sector .................................................................................................. 13
1.3 Research and Development (R&D) Expenditure to GDP ......................................... 14
1.4 Level of Technological Implementation (LoTI) in Manufacturing & Services Sector15
SECTION 2: MICROECONOMIC INDICATORS .......................................................... 19
2.1 Labour Productivity .................................................................................................. 19
2.2 Labour Force by Skill Category................................................................................ 19
2.3 Labour Force by Educational Attainment ................................................................. 20
2.4 Socioeconomic: Household Income ......................................................................... 21
2.5 Non-Financial Asset Transaction in Primary and Secondary Market, 2018............. 26
2.6 Bumiputera in Certain Registered Professional Occupations, 2010 and 2014 ......... 27
2.7 The Distribution of Cement Production in the Construction Industry ...................... 28
2.8 Bumiputera SMEs ..................................................................................................... 28
2. 9 Equity Ownership .................................................................................................... 28
2.10 Value-Added of Small Medium Enterprises, 2015 ................................................. 29
SECTION 3: SHARED PROSPERITY VISION 2030 TARGETS .................................. 29
3.1 Target 1: Projected GDP ........................................................................................... 30
3.2 Target 2: Contribution of SMEs and Micro Business to GDP .................................. 40
3.3 Target 3: Bumiputera Enterprise............................................................................... 41
3.4 Target 4: Decent Standard of Living ........................................................................ 42
3.5 Target 5: Ethnic Monthly Median Wage .................................................................. 42
1
3.6 Target 6: Monthly Median Household Income Ratio ............................................... 43
3.7 Target 7: Ratio of Return to Financial Assets Per Capita by Ethnicities .................. 46
3.8 Target 8: CE to GDP................................................................................................. 49
3.9 Target 9: Regional Development Targets ................................................................. 52
3.10 Target 10: GINI Coefficient ................................................................................... 54
APPENDIX I - DATA CHAPTER 4: SITUATIONAL ANALYSIS ................................ 55
APPENDIX II – DATA CHAPTER 8: TARGETS AND MEASURES OF SPV2030 .... 71
2
List of Figures
Situational Analysis
Figure 1: Estimated Net Value Added by Bumiputera Ethnic Category, 2014 11
Figure 2: Technology Application Rate in Manufacturing and Services Sector, 2018 17
Figure 3: Rate of Technology Adoption in Output of Manufacturing Sector, 1987 - 2015 18
Figure 4: Percent of Household with Income Less Than Half of the State Median Income, 2014 and 2016
23
Figure 5: Median Household Income Disparities Value between Urban and Rural, 1989-2016 23
Figure 6: Median Household Income Disparity Between T20-B40 Groups 24
Figure 7: Median Income Disparity between Bumiputera and Chinese Ethnic Household Groups, 1989-
2016. 25
Figure 8: Value of Median Household Income Disparities by Indian and Chinese Ethnic Groups, 1989-
2016 26
Figure 9: Value-Add of Small Medium Enterprises, 2015 29
Targets
Figure 10: AR (3) Forecast, NGDP, 2019-2030, RM Trillion 33

Figure 11: AR (3) Forecast, RGDP, 2019-2030, RM Trillion (100 = 2015) 34
Figure 12: Projection of SME Contribution to GDP 41
Figure 13: Ratio of Monthly Median Household Income by Ethnicities (Bumiputera: Chinese) 45
Figure 14: Ratio of Monthly Median Household Income by Ethnicities (Indian: Chinese) 45
Figure 15: Projection of Compensation of Employees SPV 2030 50
3
List of Table
Situational Analysis
Table 1: Components of External Sector 13
Table 2: Classification of the Level of Technology Use 15
Table 3: Classification of Occupation 20
Table 4: Description of Type of Educational Attainment 21
Table 5: Level of Income cut-off for Income Strata Between the Urban and Rural Population 22
Targets
Table 6: Correlogram and Partial Correlogram, First Differences of NGDP, Malaysia, 1960-2018. 30
Table 7: Search for the Best Model – Akaike and Schwarz Criterion. 31
Table 8: Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) Unit Root Tests at Level and First
Difference 32
Table 9: Diagnostics Statistics 34
Table 10: SPV2030 Definition of Regions 53
4
LIST OF ABBREVIATIONS
AC Autocorrelation
ADF Augmented Dickey-Fuller
AIC Akaike Info Criterion
AR Autoregressive
CAGR Compounded Annual Growth Rate
CE Compensation of Employees
FDI Foreign Direct Investment
GDP Gross Domestic Product
GLC Government Linked Company
MASA Institut Masa Depan Malaysia
MIL Million
NGDP Nominal Gross Domestic Product
5
REVISION NOTES (COMPULSORY READING)
a. This revised version of the Technical Notes corresponds to the outcome of the meeting
held on 9 April 2020 by the Jawatankuasa Kuasa Teknikal Wawasan Kemakmuran
Bersama (Shared Prosperity) Sebagai Hala Tuju Baharu Negara 2021 – 2030, chaired by
the Deputy Director General (Policy), Economic Planning Unit, Prime Minister’s
Department (EPU), (hereinafter referred to as “JKT Meeting”)
b. For ease of reference and navigation throughout this revised version, MASA divided the
required changes on the Technical Notes transpired from the JKT Meeting to three (3)
categories:
i. Verbal – includes revision required on the definition of terminology, typing error,

spelling error
ii. Quantitative – includes correction required on constant, recalculation of formula
and development of new formula (if necessary)
iii. Justification – additional information to justify the basis of definition or
calculation
c. For ease of navigation throughout this revised version, the Verbal revisions will be
incorporated directly into the document, the Quantitative revisions, changes will be
illustrated in a BLUE BOX right below the original formula or calculation, and the
Justification will be provided in a GREEN BOX.
d. Due to the changes in calculations of SPV2030 targets, the relevant additional appendices
are also indicated in a BLUE BOX in Appendix II.
e. Please refer to the Revision Table below for reference –
No Page Para. Category Revision Description Box
1 5 ABB. Verbal REPLACED the word Production to Product in Gross -

Domestic Product (GDP)
REPLACED the word Corporation to Company in

Government Linked Company (GLC)
ADDED abbreviation for Million, i.e. MIL
2 9 1.1 Verbal REPLACED the word Production to Product in Gross -

Domestic Product (GDP)
3 10 1.1 Quantitative ADDED GDP calculation based on Expenditure Revision 1

Approach
6
4 10 1.1 Verbal REVISED the justification of selecting Kelantan, -
Kedah, Pahang, Sabah, and Sarawak For Figure 4.14
“Share of States to National GDP”
5 11 1.1 Verbal REVISED the justification of selecting Federal -

Territory of Kuala Lumpur and Selangor For Figure
4.14 “Share of States to National GDP”
6 11 1.1.1 Verbal REVISED Estimated GDP By Bumiputera Ethnic -

Group to Estimated Net Value Added by Bumiputera
Ethnic Category
7 11 1.1.1 Verbal REVISED Figure 1: Estimated Gross Domestic -

Product (GDP) by Bumiputera Ethnic Group, 2014 to
Figure 1: Estimated Net Value Added by Bumiputera
Ethnic Category, 2014
8 11 1.1.1 Verbal ADDED the word Report in point #1. Compensation of -

Employees (CE) was directly taken from the Social
Accounting Matrix Report (SAM) in 2014
9 11 1.1.1 Verbal REPLACED the word Corporation to Company in -

point #4. MASA presumed that GOS Bumiputera
included Government Linked Company (GLC). It was
estimated that 18 percent of Bumiputera GOS came
from GLC.
10 12 1.1.1 Justification ADDED the list of GLCs below point #5. To obtain Justification 1
the final estimate of Bumiputera GOS, 18 percent of
GOS from GLC was deducted from GOS Bumiputera.
11 12 1.1.1 Verbal REPLACED the word Account to Accounting at Social -

Account Matrix to Social Accounting Matrix in footnote
1 of the equation was used to estimate the Bumiputera
GDP
12 12 1.1.1 Verbal REVISED the Matrix Account Social Report 2014 to -

Social Accounting Matrix Report 2014 For Figure 4.26
“Estimated Gross Domestic Product (GDP) by
Bumiputera Ethnic Group” the data was obtained from
Social Accounting Matrix Report 2014, Economic
Census 2016”
13 14 1.2 Verbal DELETED the definition of Direct Investment Returns -

in Table 1: Components of External Sector
14 16 1.4 Quantitative REVISED the calculation For Figures 4.8 and 4.9 Revision 2
7
15 19 2.1 Verbal DELETED The Ministry of Human Resource definition -
of productivity. REPLACED with Labour Productivity
definition by DOSM instead
16 19 2.1 Quantitative REPLACED Employment Productivity Formula with Revision 3

Labour Productivity Formula
17 21 2.3 Verbal REVISED the Description of No Formal Education in -

Table 4
18 22 2.4 Verbal REVISED the justification of selecting Kelantan, -

Kedah, Pahang, Sabah, and Sarawak For Figure 4.15
“Share of States to National GDP”.
19 22 2.4 Verbal REVISED the justification of selecting Federal -

Territory of Kuala Lumpur and Selangor For Figure
4.15 “Share of States to National GDP”
20 24 2.4 Verbal REPLACED Average to Median in Figure 6 -
21 29 2.10 Verbal REPLACED Figure 4.23: SPV2030 to Department of -

Statistics Malaysia and Analysis by Institut MASA
22 35 3.1 Quantitative REVISED calculation of SPV2030 Target 1: Projected Revision 4

GDP. Figures 10 and 11 changed to Figures 10A and
11A
23 42 3.3 Quantitative REVISED calculation of SPV2030 Target 3: Revision 5

Bumiputera Enterprises
24 43 3.5 Justification ADDED further explanation for SPV2030 Target 5: Justification 2

Ethnic Monthly Median Wage.
25 44 3.6 Quantitative REVISED CAGR and estimated the median household Revision 6
wage for SPV2030 Target 6: Monthly Median
Household Income Ratio
26 46 3.6 Quantitative REVISED Figures 13 and 14 to Figures 13A and 14A Revision 7
based on the revised calculation of SPV2030 Target 6:
Monthly Median Household Income Ratio.
27 47 3.7 Quantitative REVISED calculation of SPV2030 Target 7: Ratio of Revision 8
Return to Financial Assets Per Capita by Ethnicities
28 48 3.7 Justification ADDED justification of 2014 – 2016 selection for Justification 3
SPV2030 Target 7: Ratio of Return to Financial Assets
Per Capita by Ethnicities
29 51 3.8 Quantitative REVISED Projection of Compensation of Employees Revision 9
SPV 2030. Figure 15 changed to Figure 15A
30 53 3.9 Justification ADDED justification for Table 10: SPV2030 Justification 4
Definition of Regions
f. This revised Technical Notes will supersede the earlier version.
8
INTRODUCTION
The Government of Malaysia commissioned the “Shared Prosperity Vision 2030” to Institut Masa
Depan Malaysia (MASA) through the Ministry of Economic Affairs (MEA) on the 15th of October
2019. The study has resulted in the development of Shared Prosperity Vision (SPV) 2030.
This document will briefly detail out the definition, techniques, and procedures used by Institute
MASA in developing the goals and reporting the situational analysis as presented in the Shared
Prosperity Vision 2030. The structure of these technical notes is in a particular order: first,
Macroeconomic Indicators in Section 1, second, Microeconomic Indicators in Section 2, and third,
SPV2030 Targets in Section 3.
In reading these technical notes, it should be noted that these analyses were conducted with limited
access to economic data.
SECTION 1: MACROECONOMIC INDICATORS
First, it is crucial to elaborate on the macroeconomic indicators since it helps us understand the
functioning of a complicated modern economic system. It describes the fundamentals of the
economy and how it functions as a whole.
1.1 Gross Domestic Product (GDP)
The first macroeconomic indicator to be explained in this document is GDP. It will serve to explain
Figure 4.2, Figure 4.3, Figure 4.10, and Figure 4.14 from the Shared Prosperity Vision 2030
(SPV2030) book, respectively.
GDP is a measure of the total value of production of all resident producing units of a country in a
specified period before deducting allowances for the consumption of fixed capital. A producing
unit is considered as a resident in a country if it retains its central economic interest in the economic
territory of that country. The economic territory of a country consists of the geographic territory
administered by a government within which persons, goods, and capital circulate freely. 1
GDP calculation was based on the income production and expenditure approach.
The income approach is calculated as:
𝐺𝐷𝑃(𝐼𝑛𝑐𝑜𝑚𝑒 𝐴𝑝𝑝𝑟𝑜𝑎𝑐ℎ) =
𝐶𝑜𝑚𝑝𝑒𝑛𝑠𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 + 𝐺𝑟𝑜𝑠𝑠 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑆𝑢𝑟𝑝𝑙𝑢𝑠 + 𝑇𝑎𝑥𝑒𝑠 (𝐿𝑒𝑠𝑠 𝑆𝑢𝑏𝑠𝑖𝑑𝑖𝑒𝑠) 𝐺𝐷𝑃
1
National Accounts Gross Domestic Production 2019, Department of Statistics Malaysia
9
……………………………………………………………………………………………(1)
The production approach is calculated as:
𝐺𝐷𝑃 (𝑃𝑟𝑜𝑑𝑢𝑐𝑡 𝐴𝑝𝑝𝑟𝑜𝑎𝑐ℎ) =

𝑠𝑢𝑚𝑚𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑉𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑 𝑜𝑓 𝑎𝑙𝑙 𝑠𝑒𝑐𝑡𝑜𝑟 ( 𝑡𝑜𝑡𝑎𝑙 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡 𝑏𝑒𝑡𝑤𝑒𝑒𝑛 𝑔𝑟𝑜𝑠𝑠 𝑜𝑢𝑡𝑝𝑢𝑡 −
𝑖𝑛𝑡𝑒𝑟𝑚𝑒𝑑𝑖𝑎𝑡𝑒 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛) + 𝑖𝑚𝑝𝑜𝑟𝑡 𝑑𝑢𝑡𝑖𝑒𝑠
……………………………………………………………………………………………(2)
Revision 1:
The expenditure approach is calculated as:
𝐺𝐷𝑃 (𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 𝐴𝑝𝑝𝑟𝑜𝑎𝑐ℎ) =

𝑠𝑢𝑚𝑚𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑜𝑓 𝑝𝑟𝑖𝑣𝑎𝑡𝑒 𝑎𝑛𝑑 𝑔𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 𝑓𝑖𝑛𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 +
𝑔𝑟𝑜𝑠𝑠 𝑓𝑖𝑥𝑒𝑑 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑓𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛 + 𝑐ℎ𝑎𝑛𝑔𝑒𝑠 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑖𝑒𝑠 𝑎𝑛𝑑 𝑣𝑎𝑙𝑢𝑎𝑏𝑙𝑒𝑠 +
(𝑒𝑥𝑝𝑜𝑟𝑡𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 − 𝑖𝑚𝑝𝑜𝑟𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠
……………………………………………………………………………………………(3)
For Figure 4.2 “GDP by Selected Countries and Regions” was compiled directly using data
available from the World Bank2. Meanwhile, the Malaysian portion of the data was acquired from
the Department of Statistics Malaysia (DOSM)3.
For Figure 4.3 “GDP Growth Rate and Trade Balance”, the GDP growth rate and trade balance
data were directly compiled from DOSM4 while the trade balance growth percent figures were
calculated using the formula:
𝑇𝑟𝑎𝑑𝑒 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝐺𝑟𝑜𝑤𝑡ℎ 𝑅𝑎𝑡𝑒

(𝑇𝑟𝑎𝑑𝑒 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝑖𝑛 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟 − 𝑇𝑟𝑎𝑑𝑒 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝑖𝑛 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟)
= 𝑥 100
𝑇𝑟𝑎𝑑𝑒 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝑖𝑛 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟
…………………………………………………………………………………………….(4)
For Figure 4.10 “Compensation of Employees to GDP”, the secondary data was sourced from
DOSM5.
For Figure 4.14 “Share of States to National GDP”, the data was extracted from the
“Socioeconomic State”, 2018 DOSM. The selection of states is based on the criteria of low per
capita in 2018 and low average household income in 2016 as well as low GDP contribution
compared to its land area in 2018. Kelantan, Kedah, Pahang, Sabah, and Sarawak were identified
2
"Real Gross Domestic Product Growth." World Development Indicators, The World Bank Group, 2018
3
States Accounts Gross Domestic Production 2019, Department of Statistics Malaysia
4
External Accounts 2019, Department of Statistics Malaysia
5
CE 2019, Department of Statistics Malaysia
10
due to their relatively low median household income and slow economic performance. Federal
Territory of Kuala Lumpur and Selangor were identified due to their relatively high median
household income and excellent economic performance.
1.1.1 Estimated Net Value Added by Bumiputera Ethnic Category
Figure 1: Estimated Net Value Added by Bumiputera Ethnic Category, 2014
Note Figure 4.26 SPV 2030
The steps used for the estimation of data were:

1 Compensation of Employees (CE) was directly taken from the Social Accounting Matrix
Report (SAM) in 2014.
2 Gross Operating Surplus (GOS) data was not available in SAM 2014; therefore MASA
decided to extract the GOS data from the Economic Census 2016. MASA was constrained
due to the unavailability of the ethnic breakdown of GOS data.
3 The percent of GOS from the Economic Census 2016 was extrapolated for use in estimating
the GOS in 2014.
4 MASA presumed that GOS Bumiputera included Government Linked Company (GLC). It
was estimated that 18 percent of Bumiputera GOS came from GLC.
5 To obtain the final estimate of Bumiputera GOS, 18 percent of GOS from GLC was deducted
from GOS Bumiputera.
11
Justification 1:
List of GLC as follows:
1. Axiata Group
2. Tenaga Nasional Berhad (TNB)
3. PLUS Expressways Berhad
4. United Engineers Malaysia Berhad (UEM) Edgenta
5. United Engineers Malaysia Berhad (UEM) Sunrise
6. Commerce International Merchant Bankers (CIMB) Berhad
7. Petroliam Nasional Berhad (Petronas)
The following equation was used to estimate the Bumiputera GDP:
𝐺𝑂𝑆 𝐵𝑢𝑚𝑖𝑝𝑢𝑡𝑒𝑟𝑎2 = 𝑉𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑 𝑆𝑀𝐸 −

𝑇𝑜𝑡𝑎𝑙 𝑎𝑛𝑛𝑢𝑎𝑙 𝑊𝑎𝑔𝑒……………………………………………………………………………...(5)
𝑅𝑒𝑎𝑙 𝐺𝑂𝑆 𝐵𝑢𝑚𝑖𝑝𝑢𝑒𝑟𝑎 = 𝐺𝑂𝑆 𝐵𝑢𝑚𝑖𝑝𝑢𝑡𝑒𝑟𝑎 − 𝐺𝑂𝑆 𝐺𝐿𝐶 3

…………………………………………………………………………………………………...(6)
𝐺𝐷𝑃 𝐵𝑢𝑚𝑖𝑝𝑢𝑡𝑒𝑟𝑎 = 𝐶𝑜𝑚𝑝𝑒𝑛𝑠𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝐵𝑢𝑚𝑖𝑝𝑢𝑡𝑒𝑟𝑎1 +

𝑇ℎ𝑒 𝑅𝑒𝑎𝑙 𝐺𝑟𝑜𝑠𝑠 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑆𝑢𝑟𝑝𝑙𝑢𝑠 𝐵𝑢𝑚𝑖𝑝𝑢𝑡𝑒𝑟𝑎 + (𝑠𝑢𝑏 − 𝑡𝑎𝑥)
…………………………………………………………………………………………….……..(7)
1
Compensation of employees Bumiputera extracted from Social Accounting Matrix (SAM)
2
GOS Bumiputera extracted from Economic Census 2016
3
GOS GLC estimated 18 percent of total GOS Bumiputera
The Bumiputera GDP data used the income approach to make assumptions of Bumiputera GDP.
The data used in formulating these calculations are retrieved from the Social Matrix Account
Report, 2014 and the 2016 census and the 2014 National Accounting Report.
Comparison of workers' compensation (CE) calculations is using data in the 2014 Social
Accounting Matrix (SAM) report that provides CE by ethnic group
The Gross Operational Surplus (GOS) calculation uses the percent composition of value-added by
organizations according to ethnic groups in the 2016 economic census report.
The amount of CE and GOS according to the above method, will produce the Bumiputera GDP.
For Figure 4.26 “Estimated Gross Domestic Product (GDP) by Bumiputera Ethnic Group” the data
was obtained from Social Accounting Matrix Report 2014, Economic Census 2016.”
12
1.2 The External Sector
The second macroeconomic indicator to be illustrated in this document is with regards to the
export, trade balance, net flow of foreign direct investment, and direct investment returns. It will
explain Figure 4.3, Figure 4.5, and Figure 4.6, from the Shared Prosperity Vision 2030 (SPV2030)
book, respectively.
According to the definition by the International Monetary Fund (IMF), the external sector is the
portion of a country's economy that interacts with the economies of other countries. In the goods
market, the external sector involves exports and imports. In the financial market, it involves capital
flows.
The definitions for the various components of the external sector are as follows and were defined
by DOSM6:
Table 1: Components of External Sector
Components of the external sector Description
Exports Goods (locally produced or manufactured

or imported for subsequent re-exports) are
regarded as exports when they are taken out
of the country. It is also termed as `general
exports.’
Trade Balance (formula) 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝑜𝑓 𝑇𝑟𝑎𝑑𝑒

= 𝐸𝑥𝑝𝑜𝑟𝑡𝑠 − 𝐼𝑚𝑝𝑜𝑟𝑡𝑠
Net Flow of Foreign Direct Investment Foreign direct investment is a category of

cross-border investment associated with a
resident in one economy having control or
a significant degree of influence on the
management of an enterprise that is resident
in another economy.
Net FDI inflows = FDI inflow – FDI

outflow
6
External Sector 2019, Department of Statistics Malaysia
13
FDI net inflows are the value of inward
direct investment made by non-resident
investors in the reporting economy.
Refer to Figure 4.5
Direct Investment Abroad Direct investment abroad as defined

according to the fifth edition of the Balance
of Payment Manual by the IMF7. Negative
values refer to net inflows.
For Figures 4.3, 4.5 and 4.7 the data was obtained directly from the DOSM8.
For Figure 4.6 the data was captured from a box article by Bank Negara Malaysia (BNM)9.
1.3 Research and Development (R&D) Expenditure to GDP
This subchapter will elaborate on the proportion of R&D spending to GDP. R&D comprises of
creative and systematic work undertaken to increase the stock of knowledge – including
knowledge of humankind, culture, and society – and to devise new applications of available
knowledge. It will serve to explain Figure 4.4.
According to the United Nations United Nations Educational, Scientific and Cultural Organization
(UNESCO)10, R&D expenditure is calculated as a proportion of GDP is the amount of R&D
expenditure divided by the total output of the economy. The formula is as below:
𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑅&𝐷 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒
R&D Expenditure to GDP = ……………………………..………(8)
𝑇𝑜𝑡𝑎𝑙 𝑜𝑢𝑡𝑝𝑢𝑡
For Figure 4.4 the data was obtained directly from the UNESCO.
7
OECD TiVA, Department of Statistic Malaysia, Bank Negara Malaysia Estimation & Annual, Sustainable
Monetary & Payment Sistem 2017, Bank Negara Malaysia
8
External Sector 2019, Department of Statistics Malaysia
9
Chart 1.8, Annual Report Bank Negara Malaysia 2018.
10
UNESCO Institute of Statistics 2018
14
1.4 Level of Technological Implementation (LoTI) in Manufacturing & Services Sector
This subchapter will illustrate the usage of technology in the manufacturing and services sector.
The level of technology utilization is determined by the ratio of research and development (R&D)
spending to its added value in the sector. It will serve to explain Figures 4.8 and 4.9.
Technology usage levels were calculated in the equation below:

𝑅𝑒𝑠𝑒𝑎𝑟𝑐ℎ & 𝐷𝑒𝑣𝑒𝑙𝑜𝑝𝑚𝑒𝑛𝑡
𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦 𝑈𝑠𝑎𝑔𝑒 𝑙𝑒𝑣𝑒𝑙𝑠 = ………………………………………….(9)
𝐺𝑟𝑜𝑠𝑠 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑
Currently, Malaysia does not classify the types of technological implementation in an industry
according to low, medium, or high technology. Therefore, MASA classifies the level of technology
use in the manufacturing and services sectors within Malaysia by referring to the Organization for
Economic Co-operation and Development (OECD) Taxonomy of Economic Activities Based on
R&D Intensity11 report, as follows:
Table 2: Classification of the level of technology use
Manufacturing Sector Services Sector
Low Technology Low Technology
● Vegetable and animal oils & fats ● Utilities

● Food processing ● Wholesale & retail Sale
● Tobacco products ● Food & beverage and
● Textile and wearing apparel accommodation
● Leather and wearing apparel ● Transport and storage
● Wood products ● Financial
● Paper products ● Insurance
● Printing and reproduction of recorded media ● Property/ Real estate
● Community, Social and
Personal Services
● Owner Occupied Dwelling
● Government Services
● Non-Profit institutions serving
households
● Domestic services of household
Medium Technology Medium Technology
● Refined Petroleum Products ● Business services

● Chemicals & Chemical products and
Pharmaceutical Product
● Rubber product
11
OECD Taxonomy of Economic Activities Based on R&D Intensity 2016, OECD
15
● Plastic product
● Non-metallic mineral product
● Basic metal products
● Fabricated metal products
● Furniture
High Technology High Technology
● Machinery and equipment ● Professional, scientific and

● Computers and peripheral equipment technical
● Electrical equipment ● Information and
● Electronic components & boards, communication
communication equipment and consumer
electronic
● Manufacture of medical, precision & optical
instrument, watches and clocks
● Motor vehicles and transport equipment
● Other manufacturing and repair & installation
of machinery and equipment
For Figures 4.8 and 4.9, MASA used the data provided by DOSM, which was then classified and
analysed according to the equation below:
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑠𝑢𝑏−𝑠𝑒𝑐𝑡𝑜𝑟
𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦 𝑢𝑠𝑒 𝑙𝑒𝑣𝑒𝑙 𝑓𝑜𝑟 𝑠𝑒𝑐𝑡𝑜𝑟 = ……………………..(10)
𝑡𝑜𝑡𝑎𝑙 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 𝑠𝑒𝑐𝑡𝑜𝑟 𝐺𝐷𝑃
Revision 2:
𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑜𝑓 𝑠𝑢𝑏
− 𝑠𝑒𝑐𝑡𝑜𝑟 𝑀𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑡𝑖𝑛𝑔 𝑣𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑 𝑏𝑎𝑠𝑒𝑑 𝑜𝑛 𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦 𝑢𝑠𝑒 𝑙𝑒𝑣𝑒𝑙
𝑉𝑎𝑙𝑢𝑒−𝑎𝑑𝑑𝑒𝑑 𝑜𝑓 𝑠𝑢𝑏−𝑠𝑒𝑐𝑡𝑜𝑟 𝑀𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔

……………………. (10)
𝑡𝑜𝑡𝑎𝑙 𝑜𝑓 𝑀𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔 𝑠𝑒𝑐𝑡𝑜𝑟 𝑖𝑛 𝐺𝐷𝑃
𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑜𝑓 𝑠𝑢𝑏 − 𝑠𝑒𝑐𝑡𝑜𝑟 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 𝑣𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑 𝑏𝑎𝑠𝑒𝑑 𝑜𝑛 𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦 𝑢𝑠𝑒 𝑙𝑒𝑣𝑒𝑙
𝑉𝑎𝑙𝑢𝑒−𝑎𝑑𝑑𝑒𝑑 𝑜𝑓 𝑠𝑢𝑏−𝑠𝑒𝑐𝑡𝑜𝑟 𝑆𝑒𝑟𝑣𝑖𝑐𝑒𝑠

…………………….. (11)
𝑡𝑜𝑡𝑎𝑙 𝑜𝑓 𝑆𝑒𝑟𝑣𝑖𝑐𝑒𝑠 𝑠𝑒𝑐𝑡𝑜𝑟 𝑖𝑛 𝐺𝐷𝑃
16
Figure 2: Technology Application Rate in Manufacturing and Services Sector, 2018
17
Figure 3: Rate of Technology Adoption in Output of Manufacturing Sector, 1987 - 2015
18
SECTION 2: MICROECONOMIC INDICATORS
Next, these technical notes will illustrate the microeconomic indicators since it helps us understand
the Malaysian socio-economy. This section will analyse labour productivity, educational
attainment, household income, and small-medium enterprise (SME) contributions.
2.1 Labour Productivity
This subchapter will illustrate the level of labour productivity in the Malaysian economy as an
aggregate. It will serve to explain Figure 4.13.
Labour productivity12 is defined as the ratio of input (hours worked) to output (value-added).
Productivity can be measured by various methods depending on the requirements and availability
of data. Labour productivity refers to the efficiency and effectiveness of each employee to generate
value-added or overall output.
For Figure 4.13 “Percent of Labour Productivity Growth”, the data was obtained from DOSM, and
the measure of employment productivity was calculated as follows:
Revision 3:
𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑
𝐿𝑎𝑏𝑜𝑢𝑟 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑…………………………………….(11)
The data for both Value Added and Hours Worked were acquired from DOSM13.
2.2 Labour Force by Skill Category
This subchapter will illustrate the classification in terms of skill level for a worker in the Malaysian
economy. It will serve to explain Figure 4.1.
Labour force by skill refers to occupational classification. Occupation is classified according to

Malaysian Standard of Classification of Occupation14 (MASCO) 2013 which was also based on
the International Standard Classification of Occupations 2008 (ISCO–08)15, but was improved in
12
Quarterly Labour Productivity Report 2019, DOSM
13
Ibid.
14
Malaysia Standard Classification of Occupations (MASCO) 2013
15
International Standard Classification of Occupations, 2008 ISCO–08
19
line with the transformation of work process and areas of specialisation as well as the complexity
and dynamics in skills and tasks. The classification of occupation based on MASCO 2013 is as
follows:
Table 3: Classification of Occupation
Skilled Semi-Skilled Low Skilled
I. Managers IV. Clerical support IX. Elementary

II. Professionals workers occupations
III. Technicians and
associate professionals V. Service and sales
workers
VI. Skilled agricultural,

forestry, livestock and fishery
workers
VII. Craft and related

trades workers
VIII. Plant and machine

operators and assemblers
For Figure 4.1 “Percent of Labour Force by Skill Category” the data was directly obtained
from the DOSM16.
2.3 Labour Force by Educational Attainment
This subchapter will elaborate on the classification in terms of educational attainment for a
worker in the Malaysian economy. It will serve to explain Figure 4.0.
Educational attainment is the highest level in which a person has completed schooling or is
currently attending school in a public or private educational institution that provides formal
education as defined by DOSM17 and is categorised as follows:
Table 4: Description of Type of Educational Attainment
Type of educational attainment Description
16
Labour Force Survey Report 2018, DOSM
17
Ibid.
20
No formal education Refers to persons who have never attended
school in any of the educational institutions
that provide formal education
Primary Refers to those whose highest level of

education attained is from Standard 1 to 6
or equivalent
Secondary Refers to those whose highest level of

education attained is from Form 1 to 5
(including remove class), General
Certificate of Education (GCE) O-Level or
equivalent. This includes basic skill
programmes in specific trades and technical
skills institutions with the training period of
at least six months.
Tertiary Refers to those whose highest level of

education is above Form 5.
For Figure 4.0 “Percent of Labour Force by Educational Attainment”, the data was directly
obtained from the DOSM.
2.4 Socioeconomic: Household Income
This subchapter will illustrate the levels of income attained by households in Malaysia. It will
serve to explain Figures 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20.
A household consists of related and/or unrelated persons who usually live together and make
common provisions for food and other essentials of living (DOSM18).
Detailed information on income was obtained from the household members who received income.
The concept and definition of income used in this survey are based on the Canberra Group
Handbook on Household Income Statistics, Second Edition (2011)19 published by the United
Nations. The sources of income comprise:
18
Report on Household Expenditure Survey Malaysia 2019, DOSM
19
Canberra Group Handbook on Household Income Statistics, 2nd edition United Nations
21
1. Paid employment (wage) which included cash bonuses and gratuities, commissions and
tips and other forms of profit-related payments
2. Self-employed is an income received by an individual as a result of their involvement in
self-employed jobs
3. Property and investment are defined as receipts that arise from the ownership of assets,
interest, dividends, and rent
4. The current transfer received is an income consist of cash, goods or services. Transfers
may be made between households, between government and households or between
households and charities. Receive may be both within and outside the country.
SPV2030 also articulated the disparity of household income between income groups. Cut-off of
monthly household’s gross income of a household group by income for Top 20 percent (T20), the
Middle 40 percent (M40) and Bottom 40 percent (B40) was referred to DOSM and is classified as
follows20:
Table 5: Level of Income cut-off for income strata between the urban and rural population
Income Cut-Off (RM)
Strata Bottom 40 percent Middle 40 percent Top 20 percent
Total < 4,360 4,360 – 9,619 ≥ 9,620
Urban < 4,930 4,930 – 10,509 ≥10,509
Rural <3,010 3,010 – 5,999 ≥6,000
For Figure 4.15 “Share of States to National GDP”, the data was extracted from the
“Socioeconomic State”, 2018 DOSM. The selection of states is based on the criteria of low per
capita in 2018 and low average household income in 2016 as well as low GDP contribution
compared to its land area in 2018. Kelantan, Kedah, Pahang, Sabah, and Sarawak were identified
due to their relatively low median household income and slow economic performance. Federal
Territory of Kuala Lumpur and Selangor were identified due to their relatively high median
household income and excellent economic performance.
For Figure 4.16 “ percent Household with Income Less Than Half the Median National Income by
States”, MASA utilized DOSM’s data and followed by OECD’s definition that the relative poor
were those with an income half of the median income level in the state. The equation used in
formulating the graph was:
Percent of relative poor in a state = ½ of median state household income …………… (12)
20
Household Income and Basic Amenities Survey Report 2016, DOSM
22
For Figure 4.17 “Median Household Income Disparities Value between Urban and Rural”, the data
was acquired directly from DOSM.
Figure 4: Percent of Household with Income Less Than Half of the State Median Income, 2014 and
2016
25% 21%
18% 18% 18%
20% 17% 17% 18%
17%
15% 15% 15% 15%
14% 13% 14% 14%
15%
11% 12%
11% 12% 12% 13%
13% 13%
10% 10% 11% 10%
8%7% 8% 9%
10%
5%
0%
Pelis
Melaka
Kedah
Kelantan
Terengganu
N.Sembilan
Sabah
Perak
Putrajaya
Sarawak
Selangor
Pahang
W.P. KL
Johor
Pulau Pinang
W.P. Labuan
2014 2016
Note: Figure 4.16 SPV2030
Figure 5: Median Household Income Disparities Value between Urban and Rural, 1989-2016
For Figure 4.18 “Average Household Income Disparity between T20-B40 Groups”, the data was
acquired directly from DOSM and analysed using the following formula:
23
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝐼𝑛𝑐𝑜𝑚𝑒 𝐷𝑖𝑠𝑝𝑎𝑟𝑖𝑡𝑦
∶ (𝑀𝑒𝑑𝑖𝑎𝑛 𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝐼𝑛𝑐𝑜𝑚𝑒 𝑜𝑓 𝑎 𝑇20)
− (𝑀𝑒𝑑𝑖𝑎𝑛 𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝐼𝑛𝑐𝑜𝑚𝑒 𝑜𝑓 𝑎 𝐵40)
………………………………………………………………………………………… (13)
Figure 6: Median Household Income Disparity Between T20-B40 Groups
24
For Figure 4.19 (from the SPV2030 book) “Median Income Disparity between Bumiputera and
Chinese Ethnic Household Groups”, the data was acquired directly from DOSM.
Figure 7: Median Income Disparity between Bumiputera and Chinese Ethnic Household Groups,
1989-2016.
25
For Figure 4.20 “Median Income Disparity between Indian and Chinese Ethnic Household
Groups”, the data was acquired directly from DOSM.
Figure 8: Value of Median Household Income Disparities by Indian and Chinese Ethnic Groups,
1989-2016
Note Figure 4.20 SPV2030
2.5 Non-Financial Asset Transaction in Primary and Secondary Market, 2018
A non-financial asset is an item that has its value determined by physical and tangible
characteristics. Examples include real estate, equipment, machinery, or a vehicle. The
classification of possessions as nonfinancial assets is vital to businesses as these items will appear
on the company's balance sheet.
In contrast, a financial asset has value based on a contractual claim, rather than a physical net
worth. Financial assets include stocks, bonds, and bank deposits. Financial assets are generally
easier to sell than non-financial assets because these assets trade on exchanges each business day.
Also, the value of a financial asset can be based on the value of an underlying nonfinancial asset.
For example, the value of a futures contract is based on the value of the commodities controlled
by that contract. Commodities are tangible objects with inherent value, while futures contracts,
which do not have inherent physical value and are an example of a financial asset.
26
For Figure 4.21 “Non- Financial Asset Transaction in Primary and Secondary Market” the data
was given to MASA directly by the National Property Information Centre (NAPIC)21.
2.6 Bumiputera in Certain Registered Professional Occupations, 2010 and 2014
According to the Department of Statistics Malaysia (DOSM)22, the term professional refers to
anyone who earns their living from performing an activity that requires a certain level of education,
skill, or training. There is typically a required standard of competency, knowledge or education
that must be demonstrated (often in the form of an exam or credential), as well as adhering to codes
of conduct and ethical standards.
There are many different types of professionals. Whether they are athletes or business people, there
are many categories and groups, which are listed below.
Types of professionals include:
● Accountant ● Psychologist
● Teacher ● Pharmacist
● Technician ● Dietitian
● Physical ● Research Analyst
● Commercial Banker ● Midwife
● Engineer ● Mechanic
● Lawyer ● Dentist
● Programmer ● Electrician
● Investment Banker ● Consultant
For Figure 4.22 “Bumiputera in Certain Registered Professional Occupations”, the data was
acquired directly from MEA23.
21
Database of the Ministry of Economic Affairs (MEA)
22
Database of DOSM
23
Database of MEA
27
2.7 The Distribution of Cement Production in the Construction Industry
The production share estimates the production of cement-based on the revenue as a referred at
Figure 4.25. The data was gathered from a report by Malaysian Competition Commissions
(MyCC) on the market review of building materials in the construction industry 2017.
2.8 Bumiputera SMEs
The new SME definition was endorsed at the 14th National SME Development Council (NSDC)
Meeting in July 2013. The definition covers all sectors, namely services, manufacturing,
agriculture, construction as well as mining and quarrying. Sales turnover and the number of full-
time employees is the two criteria used in determining the definition with the “OR” basis as
follows:
● For the manufacturing sector, SMEs are defined as firms with sales turnover not exceeding
RM50 million OR the number of full-time employees not exceeding 200.
● For the services and other sectors, SMEs are defined as firms with sales turnover not
exceeding RM20 million OR the number of full-time employees not exceeding 75.
For Figure 4.23 “Value-Add of Small Medium Enterprises” and Figure 4.24 “Contribution of
Bumiputera SMEs in 2015 Compared to Government Procurement for a Period of 20 Years” in
SPV 2030, the data was acquired from DOSM and SME Corporation Malaysia, 2015 & Centre for
Entrepreneur Development and Research (CEDAR). The data shows that SMEs have contributed
RM1.1 Trillion to government procurement for development, supply and services for 20 years. It
also stated that more than 50 percent of the estimated budget of the contract would be allocated to
Bumiputera groups in 20 years duration.
2. 9 Equity Ownership
A share is a security that represents a portion of the owner's capital in a business. Shareholders are
the owners of the business and share the success or failure of the business. The performance of the
business can often be measured by the number of dividends shareholders receive and by the price
of the share, quoted on the stock market.
Equity is found on a company's balance sheet and is one of the most common financial metrics
employed by analysts to assess the financial health of a company. Shareholder equity can also
represent the book value of a company. Equity can sometimes be offered as payment-in-kind to be
provided by the equity portion.
28
2.10 Value-Added of Small Medium Enterprises, 2015
This subchapter illustrates the value-added provided by Bumiputera and non-Bumiputera SMEs.
It will serve to explain Figure 4.23.
Gross value added is the value of output less the value of intermediate consumption; it is a measure
of the contribution to GDP made by an individual producer, industry or sector.
For Figure 4.23 “Value-Add of Small Medium Enterprises”, the data was acquired from DOSM24.
Figure 9: Value-Add of Small Medium Enterprises, 2015
Source: Department of Statistics Malaysia and Analysis by Institut MASA
SECTION 3: SHARED PROSPERITY VISION 2030 TARGETS
The Government of Malaysia has decided to develop an outcome-based national development

plan. Setting clear targets and measurement indicators will be instrumental in determining the
success of Shared Prosperity Vision 2030. The NEP had set targets for Bumiputera equity
ownership and poverty eradication as determinants of its success. In addition, over the past
decades, Malaysia has put emphasis on the growth of the GDP as a national economic achievement
indicator. In light of this, it is imperative for Shared Prosperity Vision to set comprehensive targets
and indicators that will have a direct impact on the rakyat.
Shared Prosperity Vision is an outcome-based approach focusing on the country's achievements

beyond the economy. It is a holistic vision that encompasses all aspects of development, including
infrastructure, economy, government delivery system, environment, societal values, and
24
Economic Census 2016
29
education. All targets that will be used as Shared Prosperity Vision outcome-based indicators will
be matched with future strategies. The process of implementing, monitoring and measuring key
indicators of the vision will be undertaken through the creation of a detailed and dynamic
dashboard.
3.1 Target 1: Projected GDP
The first target of SPV2030 is on the Real and Current Gross Domestic Product in 2030. To achieve
a Nominal GDP of RM3.45 Trillion, a ten-year compounded annual growth rate (CAGR) was
used. A third-order autoregressive scheme AR (3) was employed.
The details of the modelling are described below:
Model Fitting / Model Specification

The selection of Autoregressive (AR) model is based on the guidelines provided by Gujarati (2003)
on the theoretical patterns of Autocorrelation (AC) and Partial Correlation (PAC) functions.25 The
Real GDP series (1960-2018) correlogram showed that AC declines geometrically or
exponentially, but the PAC cut-off after a certain number of lags26 at the first difference (see Table
1). Such a condition is also known as “AR signature”.27 Moving Average (MA) model will be
chosen if the opposite happens. ARMA should be chosen if both AC and PAC showed an
exponential decay pattern.
Table 6: Correlogram and partial correlogram, first differences of NGDP, Malaysia, 1960-2018.
Lag Autocorrelation Partial Correlation AC PAC
1 . |*** | . |*** | 1 0.455 0.455

2 . |*** | . |** | 2 0.481 0.346
3 . |**** | . |*** | 3 0.567 0.381
4 . |*** | . |*. | 4 0.474 0.159
5 . |*** | .|. | 5 0.373 -0.054
6 . |*** | .|. | 6 0.442 0.063
25
Gujarati. D. N. 2003. Basic Econometrics. McGraw-Hill Higher Education. p.844
26
In case of PAC, it values started to cut-off at the third lag; to be statistically not different from zero; at 95
percent confidence interval at +/- 2 percent standard error.
27
Robert Nau. n.d. Statistical Forecasting: Notes on regression and time series analysis. Fuqua School of
Business. Duke University. Available at https://people.duke.edu/~rnau/411arim3.htm
30
7 . |*** | .|. | 7 0.398 0.039
8 . |** | .|. | 8 0.313 -0.037
9 . |** | .*| . | 9 0.219 -0.201
10 . |** | . |*. | 10 0.336 0.081
11 . |** | . |*. | 11 0.304 0.146
12 . |*. | .|. | 12 0.213 0.018
13 . |*. | .*| . | 13 0.152 -0.194
14 . |*. | .*| . | 14 0.131 -0.203
15 . |*. | .|. | 15 0.092 -0.026
16 .|. | .|. | 16 0.034 -0.018
17 .|. | .|. | 17 0.064 0.024
18 .|. | .|. | 18 0.032 -0.026
19 .|. | .|. | 19 -0.022 0.040
20 .|. | . |*. | 20 -0.011 0.095
21 .|. | .|. | 21 -0.008 0.014
22 .|. | .*| . | 22 -0.045 -0.102
23 .|. | .|. | 23 -0.038 -0.047
24 .*| . | .|. | 24 -0.069 0.015
Given that the pattern for PAC significantly cut-off after the third lag, a third-order autoregressive
scheme (AR (3)) is employed. It means the previous three terms and the noise term contribute to
the output. The lag selection process could also be possibly derived based on model selection
statistics (Akaike Info Criterion (AIC) and Schwarz Criterion (SC)). Table 2 below shows that AR
(3) is the appropriate model, which has the lowest AIC result compared to the other three models.
Table 7: Search for the Best Model – Akaike and Schwarz Criterion.
Model AIC SC (BIC)

AR (1) 50.54701 50.61806
AR (2) 50.45041 50.55794
AR (3) 50.42604 50.57071
AR (4) 50.47949 50.66197
The autoregressive model, thus, can be mathematically expressed as follows:
NGDPt = β0 + β1NGDPt−1 + β2NGDPt−2 + β3NGDPt−3 + εt −1 < β < 1 …………… (14)
Where;
1. NGDPt denotes Nominal Gross Domestic Product time-series from the year 1960 to 2018.
2. NGDPt−1 is the NGDP at the time period t-i (i = 1, 2, 3)
31
3. Βi (= beta) is the coefficient of autocovariance at lag 3
4. εt is the stochastic disturbance term such that it satisfied
The standard OLS assumptions are 1) zero mean and 2) constant variance, namely:
E(εt) = 0 …………………………………………… (15)
var (εt) = σ2ε …………………………………………… (16)
The same process was applied to the Real Gross Domestic Product (RGDP). It also involved time-
series from the year 1960 to 2018 in 2015 price (100 = 2015).28
Preliminary Analysis: Unit Root Tests

In order to avoid a spurious result in the regression model, a unit-root test was first conducted by
including both intercept and trend terms through Augmented Dickey-Fuller (ADF) and Phillips-
Perron (PP) unit root tests before forecasting process to ensure stationarity of the variables (Table
3). Both variables of NGDP and RGDP suggest non-stationarity in level but stationarity at the
difference.
Table 8: Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) Unit Root Tests at Level and
First Difference
Level First Difference

Variables ADF PP ADF PP
NGDP 5.114 5.567 -8.258* -8.237*
RGDP (100 1.826 1.923 -7.216* -7.208*
=2015)
Note: * denotes significance at 1 percent
28
RGDP series of 1960-2018 was calculated using GDP deflator derived by World Bank. In case of Malaysia,
the base year is 2015. The data is available here https://data.worldbank.org/indicator/NY.GDP.DEFL.ZS.
32
Estimation Results
The estimation results of the AR (3) model for each NGDP and RGDP are shown in Equation 4
and Equation 5 below (* indicates significance at 1 percent level, ** indicates significance at 5
percent level and *** indicates significance at 10 percent level):
NGDPt = 6.240 + 0.5936*NGDPt−1 + 0.2340NGDPt−2 + 0.3009**NGDPt−3 ………… (17)
RGDPt = 4.720 + 0.9712*RGDPt−1 – 0.1119RGDPt−2 + 0.1994RGDPt−3 …………….(18)
Figure 1 and Figure 2 showed the forecast results for NGDP and RGDP, respectively, using AR
(3) estimation output as derived above.
Figure 10: AR (3) Forecast, NGDP, 2019-2030, RM Trillion
33
Figure 11: AR (3) Forecast, RGDP, 2019-2030, RM Trillion (100 = 2015)
NGDP is forecasted to be at RM3,453,563,608,251 by 2030 and a 95 percent confidence range

forecast of RM3,790,000,000,000 to RM3,110,000,000,000 (+/- 2 percent standard error). The
point estimate for RGDP by the year 2030 stood at RM2,402,738,648,314 with a range of forecast
of RM2,630,000,000,000 to RM2,180,000,000,000.
Diagnostic Tests
Table 4 shows that the models perform reasonably well with the adjusted R2 to be higher than 0.65
and significant overall F-statistics. We find that the error terms to be normally distributed by the
Jarque-Bera (JB) statistics, non-autocorrelated by the LM autocorrelation statistics, and the white
test showed that the error term is homoskedastic or the variance is constant.
Table 9: Diagnostics Statistics
Coefficients NGDP RGDP

Adj-R2 0.9975 0.9985
F 0.0000 0.0000
JB 4.1128 (0.1279) 4.096 (0.1289)
LM (1) 0.1013 (0.7502) 0.5931 (0.4412)
LM (2) 0.6675 (0.7162) 0.5932 (0.7434)
White test 5.6947 (0.4582) 14.075 (0.1197)
34
Findings of the SPV2030 target
Thus, throughout the course of SPV 2030, the Real Gross Domestic Product (RGDP) is expected
to grow at 4.7 percent per annum to reach the forecasted amount of RM3.45 trillion. The
calculation for the RGDP growth is as follows:
𝑌
𝑙𝑛( 𝑡 )
𝑌0
𝐶𝐴𝐺𝑅 = ………………………………………………………………………… (19)
𝑡
Y0 = RGDP in 2020
Yt = RGDP in 2030
t = period
Revision 4:
3.1 Target 1: Projected GDP
The first target of SPV2030 is on the Real and Current Gross Domestic Product in 2030. To
achieve a Nominal GDP of RM3.45 Trillion a ten-year compounded annual growth rate (CAGR)
was used. A third-order autoregressive scheme AR (3) was employed.
The details of the modelling are described below:
Model Fitting / Model Specification

The selection of Autoregressive (AR) model is based on the guidelines provided by Gujarati
(2003) on the theoretical patterns of Autocorrelation (AC) and Partial Correlation (PAC)
functions.1 The Real GDP series (1960-2018) correlogram showed that AC declines geometrically
or exponentially but the PAC cut-off after a certain number of lags1 at first difference (see Table
1). Such a condition is also known as “AR signature”.1 Moving Average (MA) model would be
chosen if the opposite happens. ARMA should be chosen if both AC and PAC showed an
exponential decay pattern. None of these required AC or PAC trend for MA or ARMA emerged
from Table 6, hence the selection of AR model instead of MA or ARMA model.
Robert Nau. n.d. Statistical Forecasting: Notes on regression and time series analysis. Fuqua School of
Business. Duke University. Available at https://people.duke.edu/~rnau/411arim3.htm1
35
Table 6A: Correlogram and partial correlogram, first differences of NGDP, Malaysia, 1960-2018.
Lag Autocorrelation Partial Correlation AC PAC
1 . |*** | . |*** | 1 0.455 0.455

2 . |*** | . |** | 2 0.481 0.346
3 . |**** | . |*** | 3 0.567 0.381
4 . |*** | . |*. | 4 0.474 0.159
5 . |*** | .|. | 5 0.373 -0.054
6 . |*** | .|. | 6 0.442 0.063
7 . |*** | .|. | 7 0.398 0.039
8 . |** | .|. | 8 0.313 -0.037
9 . |** | .*| . | 9 0.219 -0.201
10 . |** | . |*. | 10 0.336 0.081
11 . |** | . |*. | 11 0.304 0.146
12 . |*. | .|. | 12 0.213 0.018
13 . |*. | .*| . | 13 0.152 -0.194
14 . |*. | .*| . | 14 0.131 -0.203
15 . |*. | .|. | 15 0.092 -0.026
16 .|. | .|. | 16 0.034 -0.018
17 .|. | .|. | 17 0.064 0.024
18 .|. | .|. | 18 0.032 -0.026
19 .|. | .|. | 19 -0.022 0.040
20 .|. | . |*. | 20 -0.011 0.095
21 .|. | .|. | 21 -0.008 0.014
22 .|. | .*| . | 22 -0.045 -0.102
23 .|. | .|. | 23 -0.038 -0.047
24 .*| . | .|. | 24 -0.069 0.015
Given that the pattern for PAC significantly cut-off after the third lag, a third-order autoregressive
scheme (AR (3)) is employed. It means the previous three terms and the noise term contribute to
the output. The lag selection process could also be possibly derived based on model selection
statistics (Akaike Info Criterion (AIC) and Schwarz Criterion (SC)). Table 2 below shows that AR
(3) is the appropriate model, which has the lowest AIC result compared to the other three models.
36
Table 7A: Search for the Best Model – Akaike and Schwarz Criterion.
Model AIC SC (BIC)

AR (1) 50.54701 50.61806
AR (2) 50.45041 50.55794
AR (3) 50.42604 50.57071
AR (4) 50.47949 50.66197
The autoregressive model thus can be mathematically expressed as follows:
NGDPt = β0 + β1NGDPt−1 + β2NGDPt−2 + β3NGDPt−3 + εt −1 < β < 1 ………………… (11)
Where;
1. NGDPt denotes Nominal Gross Domestic Product time-series from the year 1960 to 2018.
2. NGDPt−1 is the NGDP at the time period t-i (i = 1, 2, 3)
3. Βi (= beta) is the coefficient of autocovariance at lag 3
4. εt is the stochastic disturbance term such that it satisfied
The standard OLS assumptions are 1) zero mean and 2) constant variance, namely:
E(εt) = 0 …………………………………………… (12)
var (εt) = σ2ε …………………………………………… (13)
The same process was applied to the Real Gross Domestic Product (RGDP). It also involved time-
series from the year 1960 to 2018 in 2015 price (100 = 2015).1
37
Table 8A: Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) Unit Root Tests at Level and
First Difference
Level First Difference

Variables ADF PP ADF PP
NGDP 5.114 5.567 -8.258* -8.237*
RGDP (100 1.826 1.923 -7.216* -7.208*
=2015)
Note: * denotes significance at 1 percent
Estimation Results
The estimation results of the AR (3) model for each NGDP and RGDP are shown in Equation 4
and Equation 5 below (* indicates significance at 1 percent level, ** indicates significance at 5
percent level and *** indicates significance at 10 percent level):
NGDPt = 6.240 + 0.5936*NGDPt−1 + 0.2340NGDPt−2 + 0.3009**NGDPt−3 …. (14)
RGDPt = 4.720 + 0.9712*RGDPt−1 – 0.1119RGDPt−2 + 0.1994RGDPt−3 ………. (15)
Figure 1 and Figure 2 showed the forecast results for NGDP and RGDP, respectively, using AR
(3) estimation output as derived above
38
Figure 10A: AR (3) Forecast, NGDP, 2019-2030, RM Trillion
Nominal GDP (RM Trillion)

4.0
3.5
3.0
2.5
2.0
1.5
1.0
19 20 21 22 23 24 25 26 27 28 29 30
Nominal GDP_forecast Year ('20)

± 2 Standard Error (S.E.)
Figure 11A: AR (3) Forecast, RGDP, 2019-2030, RM Trillion (100 = 2015)
RGDP (RM Trillion)

2.8
2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
19 20 21 22 23 24 25 26 27 28 29 30
Year ('20)
Real GDP_forecast
± 2 Standard Errors (S.E.)
NGDP is forecasted to be at RM3,453,563,608,251 by 2030 and at a 95 percent confidence range

forecast of RM3,790,000,000,000 to RM3,110,000,000,000 (+/- 2 percent standard error). The
39 at RM2,402,738,648,314 with a range of forecast
point estimate for RGDP by the year 2030 stood
of RM2,630,000,000,000 to RM2,180,000,000,000.
Diagnostic Tests
Table 4 shows that the models perform reasonably well with the adjusted R2 to be higher than 0.65
and significant overall F-statistics. We find that the error terms to be normally distributed by the
Jarque-Bera (JB) statistics, non-autocorrelated by the LM autocorrelation statistics, and the white
test showed that the error term is homoskedastic or the variance is constant.
Table 9A: Diagnostics Statistics
Coefficients NGDP RGDP

Adj-R2 0.9975 0.9985
F 0.0000 0.0000
JB 4.1128 (0.1279) 4.096 (0.1289)
LM (1) 0.1013 (0.7502) 0.5931 (0.4412)
LM (2) 0.6675 (0.7162) 0.5932 (0.7434)
White test 5.6947 (0.4582) 14.075 (0.1197)
SPV2030 Target
Thus, throughout the course of SPV 2030, the Real Gross Domestic Product (RGDP) is expected
to grow at 4.7 percent per annum to reach the forecasted amount of RM2.40 trillion. In nominal
term, the Nominal Gross Domestic Product (NGDP) will be at RM 3.45 trillion in 2030.
3.2 Target 2: Contribution of SMEs and Micro Business to GDP
The second target of SPV2030 is on the contribution of SMEs and Micro Businesses to GDP. In
2018, they contributed 38.3 percent to the GDP. However, to achieve the goals of SPV2030, a ten-
year compounded annual growth rate (CAGR) was used. This results in the sector contributing
RM1.23 Trillion in the current term to GDP. To achieve this target, SME needs to grow at a rate
of 12 percent compared to the 9.9 percent rate of business as usual (BAU) growth.
40
Figure 12: Projection of SME Contribution to GDP
The data for these projections were based on: Small and Medium Enterprises National Account 2010-
2018, Department of Statistic Malaysia and 11th Malaysia Plan (RMKe-11) revised.
3.3 Target 3: Bumiputera Enterprise
The third goal of SPV2030 aims at the Bumiputera enterprise to contribute 20 percent to GDP. In
2014, they contributed only 7.32 percent to the GDP. However, to achieve the goals of SPV2030
of 20% of Bumiputera GOS, using the compounded annual growth rate in 10 years period (2010-
2020), the aggregate GOS needs to grow at 6.2 percent per annum.
The formula for projecting the monthly median wage in 2030 is as follows:
𝐺𝑂𝑆𝑡
𝑙𝑛( )
𝐺𝑂𝑆0
𝐶𝐴𝐺𝑅 = …………………………………………………………………………… (20)
𝑡
GOS0 = Gross Operating Surplus in 2010
GOSt = Gross Operating Surplus in 2020
t = period
41
Revision 5:
The third goal of SPV2030 aims at the Bumiputera enterprises to contribute 20 percent to GDP.
In 2014, they contributed only 7.32 percent to the GDP. With issues of limitation of available data,
MASA utilizes mixed-income as a proxy for Bumiputera enterprise growth rate projection. The
growth rate is only 5.6% annually. The mixed-income data is extrapolated from the Social
Accounting Matrix (SAM) 2004 and 2005.
𝑀𝐼𝑡
𝑙𝑛( )
𝑀𝐼0
𝐶𝐴𝐺𝑅 = ……………………………………………………………………… (20)
𝑡
MI0 = Mixed Income in 2004
MIt = Mixed Income in 2005
t = period
3.4 Target 4: Decent Standard of Living
The fourth goal of SPV2030 is to achieve a decent standard of living (DSL). The reported target
for DSL as per the SPV2030 book is not justifiable. Therefore, MASA has taken the initiative to
calculate a more accurate and realistic value to reflect the real situation.
3.5 Target 5: Ethnic Monthly Median Wage
The fifth target of SPV2030 is on the monthly median wage by ethnicity in Malaysia. The current
monthly median wage ratio of Bumiputera to Chinese is 0.88:1, while that of Indian to Chinese is
0.82:1 in 2016. These ratios reflect that wage disparities among ethnic groups persist and need to
be equalized.
The goal of SPV 2030 to equalize the targeted median wage ratio between Bumiputera, Chinese
and Indian to 1:1:1 in line with the principle of SPV, which is equitable distribution. To achieve
the goals of SPV2030, an eight-year compounded annual growth rate (CAGR) was used.
To achieve the target, the compounded annual growth rate in 8 years period (2010-2018), the rate
of median growth for the various ethnic group were as follows:
o Bumiputera: 5.6 percent
o Chinese: 3.9 percent; and
o Indian: 6.1 percent.
42
The formula for projecting the monthly median wage in 2030 is as follows:
𝑊
𝑙𝑛( 𝑡 )
𝑊0
𝐶𝐴𝐺𝑅 = ………………………………………………………………………………(21)
𝑡
W0 = Monthly Median wage in 2010
Wt = Monthly Median wage in 2018
t = period
The data for the Figure above was retrieved from the Household Income and Basic Amenities
Survey 2016.
Justification 2:
The fifth target of SPV2030 is on the monthly median wage by ethnicity in Malaysia. The current
monthly median wage ratio of Bumiputera to Chinese is 0.88:1, while that of Indian to Chinese is
0.82:1 in 2016. These ratios reflect that wage disparities among ethnic groups persist and need to
be equalised. MASA decided to utilise the median as a target for wage because the median
wage is fit to portray a better picture distribution compare to mean. The only source to
project the median wage is Salaries and Wages Report by DOSM. The used of CAGR is the
same method to project the number of informal sector worker as referred to gig workers in
Malaysia: A review of definition and estimation by DOSM. To create a more sophisticated
model, we have issues on limitation data with existing data only have eight observation.
To achieve the target the compounded annual growth rate in 8 years period (2010-2018), the rate
of median growth for the various ethnic group were as follows:
o Bumiputera: 5.6 percent,
o Chinese: 3.9 percent; and
MASA estimated the median household wage needs to increase as follows to achieve the target
based on the target ratio of 0.9:1:1:
o Bumiputera: 7 percent,
o Chinese: 6 percent; and
o Indian: 7 percent.
3.6 Target 6: Monthly Median Household Income Ratio
The sixth target of SPV2030 is on the household median wage of the 3 ethnic groups. In 2016,
income disparities between Bumiputera and Chinese at a ratio of 0.74:1 and Indian to Chinese at
the ratio of 0.81:1. These ratios reflect the household income disparities among ethnic groups
persist and need to be equalized.
43
SPV 2030 targeted Median Household Income ratio between Bumiputera, Chinese and Indian were
0.9:1:1 to fulfil the principle of SPV on equitable distribution. The target in 2030 was derived from
CAGR of a period of 7 years (2009 – 2016) per annum.
The formula for projecting the monthly median household income in 2030 is as follows:
𝐻
𝑙𝑛( 𝑡 )
𝐻0
𝐶𝐴𝐺𝑅 = ………………………………………………………………………(22)
𝑡
H0 = Monthly median household income 2009
Ht = Monthly median household income 2016
t = period
The compounded annual growth rate for 7 years (2009-2016), the median rate of growth for
household income are as follows:
o Chinese: 8.8 percent and
Revision 6:
The compounded annual growth rate for 7 years (2009-2016), the median rate of growth for
household income are as follows:
44
Figure 13: Ratio of monthly median household income by ethnicities (Bumiputera: Chinese)
RM25,000
to achieve the target,
Bumiputera monthly
RM20,000
median household
Income need to grow
RM15,000 by 11% per annum
RM10,000
RM5,000
RM-
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Chinese What's Needed
Figure 14: Ratio of monthly median household income by ethnicities (Indian: Chinese)
RM25,000
Indian monthly
RM20,000
median household
Income need to grow
RM15,000 by 9.6% per annum
RM10,000
RM5,000
RM-
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Chinese What's Needed
45
Revision 7:
Figure 2A: Ratio of monthly median household income by ethnicities (Bumiputera: Chinese)
Figure 3A: Ratio of monthly median household income by ethnicities (Indian: Chinese)
Projection of Median Household Income India relative to Chinese

2030
Indian monthly median
RM25,000 household Income need to
grow by 9.8% per annum
RM20,000
RM15,000
RM10,000
RM5,000
RM-
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Chinese What's Needed I:C
3.7 Target 7: Ratio of Return to Financial Assets Per Capita by Ethnicities
The seventh target of SPV2030 is on the ratio of return to financial assets per capita of by
ethnicities. The targeted ratio of return to financial assets per capita of Bumiputera to Chinese is
0.6:1, while Indian to Chinese is 0.8:1. This is to address the existing wealth disparities between
Bumiputera and Chinese at the ratio of 0.5:1 and Indian to Chinese at the ratio of 0.7:1.
Bumiputera’s income from property and investment needs to grow at 18.0 percent to achieve the
targeted ratio. The annual growth rate was based on 4 years of CAGR (2012-2016).
46
The formula for projecting the return to the financial asset in 2030 is as follows:
𝑅
𝑙𝑛( 𝑡 )
𝑅0
𝐶𝐴𝐺𝑅𝑖 = ………………………………………………………………………(23)
𝑡
R0 = Return to financial assets 2012
Rt = Return to financial assets 2016
t = period
i = Bumiputera; Chinese; Indian.
Revision 8:
Bumiputera’s income from property and investment needs to grow at 12.8 percent to achieve the
targeted ratio. The annual growth rate was based on 2 years of CAGR (2014-2016).
This target can be achieved among with the following strategies:
o Scale-up SME Bumiputera in the vendor development program will increase Bumiputera
corporate equity ownership.
o Scale up Bumiputera ownership in residential and commercial will increase the
participation of the Bumiputera in property investment.
The formula for projecting the return to the financial asset in 2030 is as follows:
𝑅
𝑙𝑛 (𝑅𝑡 )
0
𝐶𝐴𝐺𝑅𝑖 =
𝑡
R0 = Return to financial assets 2014
Rt = Return to financial assets 2016
t = period
i = Bumiputera; Chinese; Indian.
47
Justification 3:
The selection of the 2014-2016 period as a point of reference for CAGR of income from property
and investment is to avoid the inclusion of period 2012-2013 where there is a sudden jump in term
of median house price from RM170,000 in 2012 to RM250,000 in 2013. The growth rate of
median house price then remained stable at on average 2.9% per annum from 2013 to 2018 (Figure
14B). A similar situation was also observed by looking at Malaysia House Price Index (MHPI).
The index started to increase from 7.6% in 2010Q4 tremendously and peaked at 13.4% in 2013Q1.
The MHPI quarterly growth remained high at 12.4% in 2013Q3 period. It then began to slow down
to 6.5% in 2016Q4 and further slowed down to 1.4% in 2018Q4 (Figure 14C).
Figure 14B: Median House Price (RM) and Annual Changes (%), 2010-2019Q3, Malaysia
350,000 45%
38.6%
40%
300,000
35%
250,000 30%
25%
200,000
20%
150,000
15%
100,000 10%
9.0% 5%
7.7%
50,000 4.3% -2.0% 0%
3.0%
0.9% 1.7%
0 -5%
2013
2010
2011
2012
2014
2015
2016
2017
2018
2019Q1
2019Q2
2019Q3
Median House Price (RM) (LHS) Annual Changes (%) (RHS)
Source: National Property Information Centre (NAPIC). 2019. The Residential Price Quarterly
Update: Q3 2019. Valuation and Property Service Department, Ministry of Finance Malaysia
48
Figure 14C: Malaysian House Price Index (MHPI) and Quarterly Changes (%), 2009Q1-2018Q4, Malaysia
(2010=100)
250 16%
13.4% 14%
200
12%
10%
150
8%
100
5.1% 6%
4%
50
2%
0 0%
2012Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
2017Q3
2018Q1
2018Q3
Malaysia House Price Index (MHPI) (2010=100) (LHS) Annual Changes (%) (RHS)
Source: National Property Information Centre (NAPIC). 2019. Malaysian House Price Index
(MHPI): Q3-Q4 2018. Valuation and Property Service Department, Ministry of Finance
Malaysia
3.8 Target 8: CE to GDP
The eighth target of SPV2030 is on the share of Compensation of Employees to GDP. In 2018, the
CE to GDP was 35.7 percent indicating that wealth was not well distributed between employees
and capital owners. The target in 2030 is for CE to achieve a share of 48 percent of GDP. CE needs
to grow by RM83.67 Billion per year in 10 years. The estimation of CE requires 13.8 million
employees to earn an average monthly salary of RM9,813.
49
Figure 15: Projection of Compensation of Employees SPV 2030
CE to GDP targeted at 48 percent in 2030, which is equivalent to the other high-income countries.
According to SPV 2030, CE estimated using a 10-year CAGR from 2010 to 2020. The CAGR
formula is as follows based on the Midterm Review of the 11th Malaysia Plan.
𝐶𝐸0
𝑙𝑛( )
𝐶𝐸𝑇
𝐶𝐴𝐺𝑅 = …………………………………………………………………………(24)
𝑡
CE0 = Compensation of Employees 2010
Yt = Compensation of Employees 2020
t = period
• In light of these trends, CE Growth from 2021 to 2030 needs to increase by 10.5 percent annually
to reach 48 percent CE.
• This increase will require 13.8 million workers (Malaysian + Non-Citizen) by 2030 (10.7 million:
2019) with an average salary of RM9,905 per month (RM2,841: 2018)
Sources
• National account Gross Domestic Product: Income approach 2010,2018
• 11th Malaysia Plan (RMKe-11) revised
50
• Labour Force Survey report, Department of Statistics Malaysia
Revision 9:
The eighth target of SPV2030 is on the share of Compensation of Employees (CE) to GDP. In
2018, the CE to GDP was 35.7 percent indicating that wealth was not well distributed between
employees and capital owners. The target in 2030 is for CE to achieve a share of 48 percent of
GDP. The estimation of CE requires 13.8 million employees to earn an average monthly wage of
RM9,947 which increase from RM5751 in 2018.
Figure 15A: Projection of Compensation of Employees SPV 2030
51
• In light of these trends, CE Growth from 2021 to 2030 needs to increase by 10.5 percent
annually to reach 48 percent CE.
• This increase will require 13.8 million workers (Malaysian + Non-Citizen) by 2030 (10.7
million: 2019) with an average salary of RM9,947 per month (RM5751: 2018 based on an
average of CE per-capita worker). Ministry of Economic Affairs suggests the CE should be
targeted at 45% because 48% of CE seems too optimistic.
• In achieving CE 45%, the CE needs to grow 9.8% annually with an average CE per-capita
worker of RM9,377 per month. The difference between target 48% and 45% does not seem
much different only RM570 per month.
3.9 Target 9: Regional Development Targets
The ninth target of SPV2030 is on the regional GDP disparity. In 2018, regional GDP disparity
ratio between the Central region and the Northern, East Coast, Southern, Sabah, and Sarawak
region were 2.1:1, 2.7:1, 1.7:1, 2.6:1, 1.3:1. These ratios reflect the egregious development
disparities between various regions in Malaysia that persist and need to be equalized.
Regional projections based on state GDP reference in 2016,2017 and 2020 in the state GDP report
for 2016 and 2017 and 2020 projections referenced in the 11th Plan of Budget (REVISED).
The regions were newly classified by MASA into 5 regions, namely:
52
Table 10: SPV2030 Definition of Regions
Regions (as defined in SPV2030) States

North Perlis, Kedah, Penang, and Perak
East Coast Kelantan, Pahang and Terengganu
Central Federal Territory of Kuala Lumpur,
Putrajaya & Selangor
South Johor, Melaka, and Negeri Sembilan
East Malaysia Sabah and Sarawak
The equation used to derive the GDP Per capita by region is as follows:
𝑅𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 𝐺𝐷𝑃

𝑅𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝐺𝐷𝑃 𝑃𝑒𝑟 𝐶𝑎𝑝𝑖𝑡𝑎 = 𝑅𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 ………………(25)
The 2030 ratio for this target reduced to illustrate the development gap.
Justification 4:
Regions (as defined in RMKe-11) States

North Perlis, Kedah, Penang, and Perak
East Coast Kelantan, Pahang and Terengganu
Central Federal Territory of Kuala Lumpur,
Putrajaya, Selangor, Melaka, and Negeri
Sembilan
South Johor,
East Malaysia Sabah and Sarawak
Institut MASA would like to maintain the recommended Definition of Regions as per Table 10
above. This Definition of Regions has been calibrated and agreed during the following meetings:
1. 20 January 2020: Meeting with YBrs. Dr. Zunika Mohamed TKSU(M) Kementerian Hal
Ehwal Ekonomi (MEA).
2. 23 April 2020: MASA CEO, En. Mohd Nizam Mahshar meeting with YB Dato' Sri
Mustapa bin Mohamed, Minister in the Prime Minister’s Department, Economy with the
presence of En. Wan Muhammad Najib Wan Ab. Karim, Director of WKB2030 Project
Management Office, EPU.
53
3.10 Target 10: GINI Coefficient
The last target of SPV2030 is on the income inequality in Malaysia. In 2020, the Gini Coefficient
was expected to be at 0.385. The target in 2030 was derived from CAGR of a period of 11 years
(2009 – 2020) at negative 1.227 percent per annum.
The formula for projecting the Gini coefficient in 2030 is as follows:
𝐺
𝑙𝑛( 𝑡 )
𝐺0
𝐶𝐴𝐺𝑅 = ………………………………………………………………………………(26)
𝑡
G0 = Gini coefficient 2009
Gt = Gini coefficient 2020
t = period
54
APPENDIX I - DATA CHAPTER 4:
SITUATIONAL ANALYSIS
55
4.0 Percentages of Labour Force by Educational Attainment, 1982 - 2018
Year No education Tertiary
1982 16% 6%
1983 15% 6%
1984 15% 6%
1985 14% 7%
1986 13% 7%
1987 13% 8%
1988 12% 8%
1989 11% 8%
1990 10% 9%
1992 9% 10%
1993 8% 10%
1995 9% 11%
1996 8% 12%
1997 7% 13%
1998 7% 13%
1999 7% 13%
2000 6% 14%
2001 5% 15%
2002 5% 17%
2003 5% 17%
2004 5% 18%
2005 5% 19%
2006 4% 19%
2007 4% 20%
2008 4% 21%
2009 4% 23%
2010 4% 23%
2011 3% 24%
2012 3% 24%
2013 3% 24%
2014 3% 26%
2015 3% 27%
2016 3% 28%
2017 3% 28%
2018 3% 29%
Sources: Labour Force Survey Report, Department of Statistics Malaysia
56
4.1 Percentage of Labour Force by Skill Category, 1982 – 2018
Year Skilled Semi-Skilled Low Skilled
1982 9% 62% 29%
1983 9% 61% 30%
1984 9% 62% 28%
1985 10% 63% 28%
1986 10% 63% 27%
1987 10% 64% 27%
1988 9% 64% 27%
1989 10% 61% 29%
1990 10% 59% 31%
1992 11% 54% 35%
1993 12% 54% 34%
1995 13% 53% 34%
1996 14% 53% 34%
1997 14% 51% 35%
1998 15% 53% 33%
1999 15% 53% 33%
2000 15% 52% 33%
2001 24% 65% 11%
2002 26% 63% 11%
2003 26% 63% 11%
2004 26% 63% 11%
2005 26% 63% 11%
2006 26% 63% 11%
2007 26% 62% 11%
2008 27% 62% 11%
2009 28% 60% 11%
2010 28% 61% 11%
2011 26% 62% 12%
2012 25% 62% 13%
2013 24% 63% 13%
2014 25% 62% 13%
2015 26% 61% 14%
2016 27% 60% 13%
2017 28% 60% 13%
2018 27% 60% 12%
Sources :Labour Force Survey Report, Department of Statistics Malaysia
57
4.2 GDP by Selected Countries and Regions, 2000-2018
Year Malaysia People's Europe & East Asia & Latin
Republic of Middle Pacific America &
China East ( (excluding Caribbean
excluding High
high Income
Income Nation)
Nation)
'00 8.9 8.5 8.0 7.5 3.8
'01 0.5 8.3 2.6 6.7 0.7
'02 5.4 9.1 5.5 7.9 0.2
'03 5.8 10.0 6.6 8.7 1.4
'04 6.8 10.1 8.4 8.9 6.3
'05 5.3 11.4 7.2 9.7 4.3
'06 5.6 12.7 8.2 10.8 5.4
'07 6.3 14.2 7.7 12.2 5.7
'08 4.8 9.7 4.4 8.4 4.0
'09 -1.5 9.4 -6.0 7.7 -1.9
'10 7.4 10.6 5.1 9.8 6.0
'11 5.3 9.6 6.0 8.5 4.4
'12 5.5 7.9 3.7 7.5 2.7
'13 4.7 7.8 4.0 7.2 2.7
'14 6.0 7.3 2.2 6.8 1.0
'15 5.1 6.9 0.8 6.5 -0.1
'16 4.2 6.7 1.7 6.4 -0.5
'17 5.9 6.8 4.0 6.5 1.7
'18 4.7 6.6 2.8 6.3 1.4
Sources :
● National Account Malaysia, Department of Statistics Malaysia
● Database, World Bank
58
4.3 GDP Growth Rate and Trade Balance (%)
Year GDP Growth rate Trade balance Growth
2010 7.4
2011 5.3 12.90909091
2012 5.5 -22.70531401
2013 4.7 -25.72916667
2014 6 15.70827489
2015 5.1 11.03030303
2016 4.2 -3.820960699
2017 5.9 10.55618615
2018 4.7 23.71663244
Sources: National Account Gross Domestic Production Malaysia, Department of Statistics

Malaysia
4.4 R&D Expenditure to GDP 2016

Country % to GDP
South Korea 4.2
Japan 3.5
Taiwan 3.1
Singapore 2.1
People's Republic of China 2
Malaysia 1.4
Sources: Institute of Statistic UNESCO, 2018
59
4.5 Net Flow of Foreign Direct Investment (RM Billion)
Yea Net Flow of Foreign Direct Investment (RM Years Net Flow of Foreign Direct Investment
rs Billion) (RM Billion)
1970 289 1995 14,585
1971 302 1996 18,358
1972 320 1997 17,788
1973 421 1998 10.6
1974 1,373 1999 14.8
1975 842 2000 14.4
1976 969 2001 2.1
1977 999 2002 12.2
1978 1,158 2003 9.4
1979 1,255 2004 17.6
1980 2,033 2005 15.4
1981 2,913 2006 22.2
1982 3,262 2007 29.5
1983 2,925 2008 23.9
1984 1,869 2009 5.1
1985 1,725 2010 29.2
1986 1,262 2011 37.3
1987 1,065 2012 28.5
1988 1,884 2013 38.2
1989 4,516 2014 35.6
1990 7,061 2015 39.4
1991 11,117 2016 47.0
1992 13,088 2017 40.4
1993 14,778 2018 32.6
1994 12,016
Source: Database, Ministry of Economic Affairs Malaysia
60
4.6 Direct Investment Returns 2010-2017 (%)
Sector Direct Investment Abroad Foreign Direct Investment
Agricultural 3.2 5.7
Mining 9.5 25.5
Manufacturing 4 13.8
Construction 0.7 6.8
Services 3.7 10
Overall value 5.2 12.6
Sources :OECD TiVA, Department of Statistics Malaysia, Bank Negara Malaysia Estimation &
Annual, Sustainable Monetary & Payment System 2017, Bank Negara Malaysia
61
4.7 Export Values of Main Products, 1989, 1998 and 2018 (%)
Items 1989
Agricultural Goods 28.4%
Manufacturing Goods 53.9%
Mining Goods 17.0%
Others 0.7%
Amount 100.0%
Items 1998
Beverages & Tobacco 0.3%
Miscellaneous Transactions & Commodities 0.9%
Food 2.2%
Crude Material Inedible 3.2%
Chemicals 3.5%
Mineral Fuel, Lubricants & etc 6.2%
Animals & vegetables oil & fats 7.5%
Manufactured Goods 8.3%
Miscellaneous Manufactured articles 8.7%
Machinery & Transport Equipment 59.2%
Items 2018
Beverages & Tobacco 0.4%
Miscellaneous Transactions & Commodities 0.9%
Crude Material Inedible 2.5%
Food 3.1%
Animals & vegetables oil & fats 4.7%
Chemicals 8.5%
Machinery & Transport Equipment 43.9%
Miscellaneous Manufactured articles 11.2%
Mineral Fuel, Lubricants & etc 15.7%
Manufactured Goods 9.2%
Sources: Database Ministry of Economic Affairs Malaysia and Ministry of International Trade
and Industry
62
4.8: Technology Application Rate in Manufacturing and services Sector
Level of Technology Manufacturing Services
Low and Medium 63 80
High 37 20
Source: UNIDO Classification

National Account Gross Domestic Product Malaysia, 2018
4.9 Rate of Technology Adoption in output of Manufacturing sector, 1987 - 2015

Years Low Medium High
1987 40% 34% 26%
1988 38% 34% 28%
1989 33% 34% 32%
1990 31% 32% 37%
1991 27% 32% 41%
1992 27% 31% 42%
1993 28% 29% 43%
1994 26% 28% 46%
1995 26% 28% 46%
1996 24% 27% 49%
1997 23% 28% 49%
1999 22% 26% 52%
2000 21% 29% 50%
2001 22% 29% 50%
2002 20% 32% 48%
2003 20% 35% 46%
2004 19% 38% 43%
2005 20% 39% 41%
2006 20% 40% 40%
2007 18% 42% 40%
2008 20% 45% 35%
2009 20% 43% 37%
2010 20% 44% 32%
2012 19% 45% 36%
2014 22% 40% 38%
2015 20% 41% 39%
Source: UNIDO Classification

National Account Gross Domestic Product Malaysia, 2018
63
4.10: Compensation of Employees to GDP, 2010-2018
Years Compensation of employees Gross Operation Subsidy/
Surplus Tax
2010 31.7 64.6 3.7
2011 32.1 65.5 2.5
2012 33.2 64.9 1.8
2013 33.9 64 2
2014 34.3 62.8 3
2015 34.8 60.4 4.8
2016 35.3 59.5 5.2
2017 35.2 60 4.8
2018 35.7 61 3.4
Sources : National Account Gross Domestic Production : Income Approach, Department of

Statistics Malaysia
4.11: Compensation of Employees to GDP by Selected Country, 2018

Compensation of Employees to GDP
German 51.5
United Kingdom 49.4
Australia 47.1
South Korea 45.7
Singapore 39.7
Malaysia 35.7
Source :
● National Account Gross Domestic Production : Income Approaches, Malaysia
● Database, OECD
● National Account Gross Domestic Production : Income Approaches, Singapore and
South Korea
64
4.13: Labour Productivity Growth Malaysia
Years Labour Productivity Growth, %
1985-1996 3.9%
2000-2007 3.6%
2011-2016 2.5%
Sources : Khazanah Research Institute and Labour Force Survey, Department of Statistic
Malaysia
4.14: Share of State to national GDP,2018

State Share of States to National GDP (%),
2018
W.P Kuala Lumpur and Selangor 39.8
Selected 5 States (Kelantan, Kedah, Pahang, Sabah & 25.2
Sarawak)
Sources: State Socioeconomic Malaysia 2018 Department of Statistic Malaysia
4.15: Average of Household Income by Selected State 2016

State Average Household Income, RM
Sabah RM 5,354.00
Sarawak RM 5,387.00
Pahang RM 5,012.00
Kedah RM 4,971.00
Kelantan RM 4,214.00
KL & Selangor RM 9,974.00
Sources : Household Income and Basic Amenities Survey 2016, Department of Statistics
Malaysia
65
4.16 Percentage Household with Income Less Than Half the Median National Income by
States, 2014-2015
State Relative Poverty
National 15.4% 15.7%
Johor 10.2% 13.8%
Kedah 15.1% 16.7%
Kelantan 21.3% 17.6%
Melaka 8.8% 10.2%
N.Sembilan 12.8% 15.4%
Pahang 15.2% 8.3%
Pulau Pinang 12.0% 11.4%
Perak 18.4% 14.1%
Perlis 13.1% 12.0%
Selangor 10.6% 11.0%
Terengganu 14.5% 10.1%
Sabah 17.5% 17.1%
Sarawak 18.2% 16.9%
W.P. KL 13.1% 12.6%
W.P. Labuan 14.0% 11.7%
Putrajaya 7.8% 7.3%
Malaysia
4.17: Median Household Income Disparities Value between Urban and Rural 1989-2016
Year Urban - Rural
1989 419
1995 838
1997 1,081
1999 997
2002 1,293
2007 1,435
2009 1,599
2012 1,866
2014 2,033
2016 2,389
Malaysia
66
4.18 :Mean Household Income Disparity between T20 - B40 Groups 1989-2016
Disparity T20 - B40 Income Group T20 Income Group B40
1989 1,935 2,368 433
1999 4,083 4,957 874
2009 6,569 8,009 1,440
2012 7,943 9,796 1,853
2014 8,981 11,610 2,629
2016 10,148 13,148 3,000
Malaysia
4.19: Value of median household income disparities by Bumiputera and Chinese, 1989-2016
Disparity Household Income Household Income
Income Bumiputera - Chinese Chinese Household
Bumiputera
1989 497 1,176 679
1999 1,063 2,486 1,423
2009 1,109 3,643 2,534
2012 1,361 4,643 3,282
2014 1,494 5,708 4,214
2016 1,736 6,582 4,846
Malaysia
4.20: Value of median household income disparities by Indian and Chinese, 1989-2016
Disparity Household Income Household Income Household
Income Indian - Chinese Indian
Chinese
1989 286 1176 890
1999 517 2486 1969
2009 790 3643 2853
2012 967 4643 3676
2014 1081 5708 4627
2016 1154 6582 5428
Malaysia
67
4.21 Non- Financial Asset Transaction in Primary and Secondary Market, 2018
Primary market
Column1 Bumiputera Non-Bumiputera
Resident 6,205 6,558
Commercial 163 848
Industry 8 100
Secondary Market
Column1 Bumiputera Non-Bumiputera
Resident 16,846 32,263
Commercial 1,058 7,509
Industry 95 1,509
Sources : National Property Information Centre, (NAPIC) and Database of Ministry of Economic
Affairs Malaysia
4.22: Bumiputera in certain registered Professional occupations, 2010 and 2014

2010 2014
Accountant 7 8
Architect 38 39
Doctor 48 46
Dentist 51 51
Veterinarian 42 45
Engineer 32 36
Quantity 53 50
Surveyor
Lawyer 39 41
Source : Database Ministry of Economic Affairs Malaysia
68
4.25: Distribution of Cement Production in the Construction Industry 2016 and 2019
Distribution of Production, 2016
Syarikat A 32
Syarikat B 22
Syarikat C 21
Syarikat D 8
Syarikat E 7
Syarikat F 6
Syarikat G 5
Distribution of Production, 2019

Syarikat A 53
Syarikat B 22
Syarikat C 8
Syarikat D 7
Syarikat E 6
Syarikat F 5
Source : Final Report: Market Review of Building Materials in the Construction Industry, 2018
4.26: Estimated Gross Domestic Product (GDP) by Bumiputera Ethnic Group, 2014
CE GOS GDP
Bumiputera 228 81 313
GLC 0 125 131
Malaysia 379 694 1106
Sources:
● National Account Gross Domestic Production, 2014
● Census Economic, 2016
● Social Accounting Matrix, 2014
69
4.27 Percentage of Malaysian Corporate Sector Equity Ownership
1970 1990 2008 2011 2015
Foreign 63.3 25.4 37.9 37.2 45.3
Non- Bumiputera 34.3 46.8 36.7 34.9 30.7
Bumiputera 2.4 19.3 21.9 23.4 16.2
Nominees 8.5 3.5 4.5 7.8
4.28 Value and Percentages of Malaysia Corporate Sector Equity Ownership

2008 2011 2012 2013 2014 2015
Bumiputera 127,408 211,530 140,530 143,201 152,242 158,982
Non-Bumiputera 213,356 314,458 246,916 261,247 273,091 300,533
Foreign 220,531 335,178 342,023 369,490 398,416 444,520
Nominees 20,547 40,957 65,313 70,426 80,961 76,470
Total 581,841 902,123 794,782 844,364 904,710 980,505
Sources: Database, Ministry Economic of Affairs Malaysia
70
APPENDIX II – DATA CHAPTER 8:
TARGETS AND MEASURES OF
SPV2030
71
1.0 Gross Domestic Product 2021-2030
Year Gross Domestic Product (RM.Billion)
2021 1,807
2022 1,943
2023 2,089
2024 2,245
2025 2,413
2026 2,593
2027 2,785
2028 2,992
2029 3,215
2030 3,453
2.0 Contribution of Small and Medium Enterprise to GDP 2020-2021

Business as usual What's needed
(RM.Million) (RM.Million)
2020* 556,583
2021 611,685 11,688
2022 672,242 25,936
2023 738,794 43,166
2024 811,934 63,860
2025 892,316 88,574
2026 980,655 117,942
2027 1,077,740 152,688
2028 1,184,436 193,643
2029 1,301,695 241,754
2030 1,430,563 298,100
72
3.0 Median of Wage 1:1:1
Year Bumiputera - Chinese Indian- Chinese Chinese
2021 0.9 0.9 1
2022 0.9 0.9 1
2023 0.9 0.9 1
2024 0.9 0.9 1
2025 0.9 0.9 1
2026 1.0 0.9 1
2027 1.0 0.9 1
2028 1.0 1.0 1
2029 1.0 1.0 1
2030 1.0 1.0 1
Year Bumiputera - Chinese Indian- Chinese Chinese

2021 1.0 0.9 1
2022 1.0 0.9 1
2023 1.0 1.0 1
2024 1.0 1.0 1
2025 1.1 1.0 1
2026 1.1 1.0 1
2027 1.1 1.0 1
2028 1.1 1.1 1
2029 1.1 1.1 1
2030 1.1 1.1 1
4.0 Median Household Income by Ethnicity 1:1:1

4.1 Bumiputera and Chinese
Years What's Needed (RM) Chinese (RM)
2021 1869 10035
2022 1854 10918
2023 1817 11878
2024 1756 12924
2025 1665 14061
2026 1539 15298
73
2027 1371 16645
2028 1156 18109
2029 885 19703
2030 549 21437
4.2 Indian and Chinese

2021 1451 10035
2022 1510 10918
2023 1567 11878
2024 1623 12924
2025 1675 14061
2026 1723 15298
2027 1766 16645
2028 1803 18109
2029 1831 19703
2030 1849 21437
74
4.1 Bumiputera and Chinese
2021 2070 9874
2022 2124 10709
2023 2170 11614
2024 2207 12595
2025 2233 13660
2026 2245 14814
2027 2240 16066
2028 2215 17423
2029 2166 18896
2030 2090 20493
4.2 Indian and Chinese

2021 1212 9874
2022 1197 10709
2023 1170 11614
2024 1128 12595
2025 1069 13660
2026 989 14814
2027 886 16066
2028 756 17423
2029 595 18896
2030 398 20493
5.0 Income from Investment and Property

Years Bumiputera - Chinese Indian - Chinese
2021 0.5 0.8
2022 0.5 0.8
2023 0.5 0.8
2024 0.5 0.8
2025 0.5 0.8
2026 0.6 0.8
2027 0.6 0.8
2028 0.6 0.8
2029 0.6 0.8
75
2030 0.6 0.9
5.0 Income from Investment and Property

Years Bumiputera - Chinese Indian - Chinese
2021 0.5 0.8
2022 0.5 0.8
2023 0.5 0.8
2024 0.5 0.8
2025 0.5 0.9
2026 0.6 0.9
2027 0.6 0.9
2028 0.6 0.9
2029 0.6 0.9
2030 0.6 1.0
6.0 Contribution of Compensation of Employees to GDP 2020-2030

Year Business Usual Activities What's needed (RM.Million)
(RM.Million)
2020* 611,807
2021 666,258 9,789
2022 725,555 21,348
2023 790,129 34,928
2024 860,451 50,812
2025 937,031 69,315
2026 1,020,427 90,797
2027 1,111,245 115,658
2028 1,210,146 144,352
2029 1,317,848 177,386
2030 1,435,137 215,330
76
Year Business Usual Activities What's needed for SPV
2020* 611,807
2021 663,811 RM9,177
2022 720,235 RM23,417
2023 781,445 RM40,280
2024 847,878 RM60,139
2025 919,948 RM83,411
2026 998,143 RM110,568
2027 1,082,986 RM142,141
2028 1,175,039 RM178,725
2029 1,274,918 RM220,992
2030 1,383,286 RM269,695
Year Business Usual Activities What's needed for EPU Projection

2020* 611,807
2021 663,811 RM7,953
2022 720,235 RM17,362
2023 781,445 RM28,427
2024 847,878 RM41,372
2025 919,948 RM56,449
2026 998,143 RM73,940
2027 1,082,986 RM94,162
2028 1,175,039 RM117,469
2029 1,274,918 RM144,256
2030 1,383,286 RM174,967
77
7.0 Current Ratio and Regional Development Targets
Region 2017 2020 2030

Northern 2.0 2.1 1.6
East Coast 2.5 2.7 2.0
Centre 1.0 1.0 1.0
Southern 1.7 1.7 1.4
Sabah 2.5 2.6 1.5
Sarawak 1.3 1.3 1.2
7.0 Current Ratio and Regional Development Targets
Region 2020 2030

Northern 0.5 0.8
East Coast 0.4 0.6
Centre 1.0 1.0
Southern 0.6 0.6
Sabah 0.4 0.4
Sarawak 0.8 0.8
78
APPENDIX II – DATA CHAPTER 8: TARGETS AND
MEASURES OF SPV2030
1.1 Nominal Gross Domestic Product (NGDP) per Capita, 2021-2030
Year NGDP Per Capita (RM)
2021 52,790
2022 56,023
2023 59,469
2024 63,102
2025 66,989
2026 71,135
2027 75,564
2028 80,294
2029 85,343
2030 90,735
1.2 Population Projections 2021-20301

Year Projected Population (‘000)
2021 34,238
2022 34,692
2023 35,143
2024 35,586
2025 36,023
2026 36,453
2027 36,869
2028 37,276
2029 37,674
2030 38,062
79
Figure 14B: Median House Price (RM) and Annual Changes (%), 2010-2019Q3, Malaysia
Year Median House Price (RM) Annual Changes (%)
2010 158,000 -
2011 165,000 4.3%
2012 170,000 3.0%
2013 250,000 38.6%
2014 270,000 7.7%
2015 295,402 9.0%
2016 298,000 0.9%
2017 303,000 1.7%
2018 296,944 -2.0%
2019Q1 268,000 -
2019Q2 280,000 -
2019Q3 290,000 -
80
Figure 14C: Malaysian House Price Index (MHPI) and Quarterly Changes (%), 2009Q1-2018Q4,
Malaysia (2010=100)
Year Malaysia House Price Index (MHPI) (2010=100) Annual Changes (%)
2009Q1 92 -
2009Q2 94 -
2009Q3 96 -
2009Q4 97 -
2010Q1 97 5.1%
2010Q2 100 6.3%
2010Q3 102 6.5%
2010Q4 104 7.6%
2011Q1 106 9.0%
2011Q2 109 8.4%
2011Q3 112 9.4%
2011Q4 116 10.6%
2012Q1 120 11.9%
2012Q2 124 12.6%
2012Q3 127 12.4%
2012Q4 133 13.4%
2013Q1 133 10.4%
2013Q2 138 10.9%
2013Q3 144 12.4%
2013Q4 145 8.9%
2014Q1 147 9.7%
2014Q2 152 9.6%
2014Q3 156 8.5%
2014Q4 158 8.3%
2015Q1 160 8.8%
2015Q2 163 6.9%
2015Q3 167 6.7%
2015Q4 168 6.3%
2016Q1 172 7.0%
2016Q2 174 6.9%
2016Q3 179 6.6%
2016Q4 179 6.5%
2017Q1 183 6.5%
2017Q2 186 6.6%
2017Q3 190 6.3%
2017Q4 191 6.2%
2018Q1 191 4.2%
2018Q2 193 3.6%
2018Q3 195 2.7%
2018Q4 194 1.6%
81

Macroeconomic and Microeconomic Indicators of Malaysia

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Macroeconomic and Microeconomic Indicators of Malaysia

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CONTENTS

LIST OF ABBREVIATIONS ................................................................................................ 5

REVISION NOTES (COMPULSORY READING) ............................................................ 6

SECTION 1: MACROECONOMIC INDICATORS .......................................................... 9

1.1 Gross Domestic Product (GDP) ............................................................................ 9

1.1.1 Estimated Net Value Added by Bumiputera Ethnic Category ........................ 11

1.2 The External Sector .................................................................................................. 13

1.3 Research and Development (R&D) Expenditure to GDP ......................................... 14

1.4 Level of Technological Implementation (LoTI) in Manufacturing & Services Sector15

SECTION 2: MICROECONOMIC INDICATORS .......................................................... 19

2.1 Labour Productivity .................................................................................................. 19

2.2 Labour Force by Skill Category................................................................................ 19

2.3 Labour Force by Educational Attainment ................................................................. 20

2.4 Socioeconomic: Household Income ......................................................................... 21

2.5 Non-Financial Asset Transaction in Primary and Secondary Market, 2018............. 26

2.7 The Distribution of Cement Production in the Construction Industry ...................... 28

2.8 Bumiputera SMEs ..................................................................................................... 28

2. 9 Equity Ownership .................................................................................................... 28

2.10 Value-Added of Small Medium Enterprises, 2015 ................................................. 29

SECTION 3: SHARED PROSPERITY VISION 2030 TARGETS .................................. 29

3.1 Target 1: Projected GDP ........................................................................................... 30

3.2 Target 2: Contribution of SMEs and Micro Business to GDP .................................. 40

3.3 Target 3: Bumiputera Enterprise............................................................................... 41

3.4 Target 4: Decent Standard of Living ........................................................................ 42

3.5 Target 5: Ethnic Monthly Median Wage .................................................................. 42

3.8 Target 8: CE to GDP................................................................................................. 49

3.9 Target 9: Regional Development Targets ................................................................. 52

3.10 Target 10: GINI Coefficient ................................................................................... 54

APPENDIX I - DATA CHAPTER 4: SITUATIONAL ANALYSIS ................................ 55

APPENDIX II – DATA CHAPTER 8: TARGETS AND MEASURES OF SPV2030 .... 71

Figure 10: AR (3) Forecast, NGDP, 2019-2030, RM Trillion 33

ADF Augmented Dickey-Fuller

AIC Akaike Info Criterion

CAGR Compounded Annual Growth Rate

FDI Foreign Direct Investment

GDP Gross Domestic Product

GLC Government Linked Company

MASA Institut Masa Depan Malaysia

NGDP Nominal Gross Domestic Product

i. Verbal – includes revision required on the definition of terminology, typing error,

e. Please refer to the Revision Table below for reference –

No Page Para. Category Revision Description Box

1 5 ABB. Verbal REPLACED the word Production to Product in Gross -

REPLACED the word Corporation to Company in

ADDED abbreviation for Million, i.e. MIL

2 9 1.1 Verbal REPLACED the word Production to Product in Gross -

3 10 1.1 Quantitative ADDED GDP calculation based on Expenditure Revision 1

5 11 1.1 Verbal REVISED the justification of selecting Federal -

6 11 1.1.1 Verbal REVISED Estimated GDP By Bumiputera Ethnic -

7 11 1.1.1 Verbal REVISED Figure 1: Estimated Gross Domestic -

8 11 1.1.1 Verbal ADDED the word Report in point #1. Compensation of -

9 11 1.1.1 Verbal REPLACED the word Corporation to Company in -

11 12 1.1.1 Verbal REPLACED the word Account to Accounting at Social -

12 12 1.1.1 Verbal REVISED the Matrix Account Social Report 2014 to -

13 14 1.2 Verbal DELETED the definition of Direct Investment Returns -

16 19 2.1 Quantitative REPLACED Employment Productivity Formula with Revision 3

17 21 2.3 Verbal REVISED the Description of No Formal Education in -

18 22 2.4 Verbal REVISED the justification of selecting Kelantan, -

19 22 2.4 Verbal REVISED the justification of selecting Federal -

20 24 2.4 Verbal REPLACED Average to Median in Figure 6 -

21 29 2.10 Verbal REPLACED Figure 4.23: SPV2030 to Department of -

22 35 3.1 Quantitative REVISED calculation of SPV2030 Target 1: Projected Revision 4