Economic Transformation Programme ( ETP )

The Malaysian government has launched the Economic Transformation Programme

in an effort to transform Malaysia into a high income economy by the year 2020.
Performance Management and Delivery Unit (PEMANDU), a unit under Malaysia's
Prime Minister Department, is in charge of managing it. It is a comprehensive
economic transformation plan that was unveiled on September 21, 2010, with the
goal of transforming Malaysia's economy into a high income economy. By 2020, the
initiative will increase Malaysia's gross national income (GNI) to US$523 billion and
increase per capital income from US$6,700 to at least US$15,000. This will allow
Malaysia to fulfil the World Bank's standard for high income countries. If GNI
increases by 6% annually, Malaysia is predicted to be able to meet its goals. 60% of
the investment in the strategy would come from the private sector, 32% from
businesses with ties to the government, and the remaining 8% from the
government. This investment is intended to revive Malaysia's private sector.

The ETP's core tenets are the 12 NKEAs. A driver of economic activity with the ability
to directly and significantly contribute to the Malaysian economy's quantitative
economic growth is referred to as an NKEA. Oil, Gas and Energy, Palm Oil, Financial
Services, Tourism, Business Services, Electronics and Electrical, Wholesale and Retail,
Education, Healthcare, Communications Content and Infrastructure, Agriculture, and
Greater Kuala Lumpur are the 12 NKEAs that were chosen. Because the NKEAs are
important drivers of future growth and are anticipated to contribute significantly to
GNI in 2020, Malaysia will be able to qualify as a high-income country thanks to their
contribution. Greater Kuala Lumpur was also chosen as an NKEA in addition to the
11 industry sectors through a different selection procedure. Currently, Kuala Lumpur
contributes around one-third of Malaysia's GDP. Cities are major drivers of growth,
and the health and performance of the economy as a whole depend much on Kuala
Lumpur. Depending on how various economic sectors perform over time, the NKEA
sector portfolio will change. Both the process of removing slow-growing industries
from the NKEA portfolio and the process of identifying potential new drivers of
development will be rigorous.
5 reasons why focusing on a relatively small number of sectors is important in
generating economic benefit for Malaysia.

 Coherent policy alignment

Delivering a cogent, unified policy agenda will be simpler if you have a
comprehensive understanding of the priority sectors.
 Avoid making little investments
The investment and other commitments made to a particular industry must be
meaningful in order to have a significant and long-lasting impact.
 Create a value proposition that is clear
A distinct national value offer that can be easily explained to investors is established
when there are only a few priority sectors.
 Establish a leadership focus
By having priority sectors, relatively little government leadership time can be directed
to the priority regions in a meaningful way.
 Make room for better monitoring
A smaller number of priority sectors increases the chance of an economic impact
because it is much simpler to analyse and monitor their performance.

Successful Implementation of Economic Transformation Programme

 The economy underwent considerable adjustments to resemble other

industrialized countries. - Over the same time span, the contribution of the
services sector increased from 58 to 65 percent.
 By 2020, the nation will have added more than 3.3 million new employment,
including in urban and rural areas.
 The nature of these new positions will cause a shift in pay scales toward middle-
and high-income groups.
 Greater Kuala Lumpur will be converted into a city of international renown.
 Through measures like increasing the capacity for the production of alternative
energy and protecting the environment to encourage ecotourism, growth will be
done in a sustainable way without harming future generations.