Most governments, and Malaysia is no exception, are seen as long on planning and short on implementation. What do you think you are doing differently to deliver on the high income ambition and winning the confidence of the investment community?
JALA: A lot of countries have many plans, but they have the problem where those plans are not drilled down to what I call, the “three feet level.” This means at the point where it is ready for execution. What we have done in Malaysia is we have made sure that our plans are supplemented by concrete programs, so the implementers of the projects know exactly what to do. This makes implementation very easy for us. When I describe the “three feet level”, I am describing details, implementations, timeline, and budgetary requirements. The program is implemented continuously and reported on a weekly basis.
How would you describe the progress to date of the Economic Transformation Programme and the Government Transformation Programme?
JALA: For the Economic Transformation Programme (ETP), we have stated three measures of true growth. The first one is Gross National Income. We want to become a high income nation. This means we will have fulfilled the minimum requirements, which is $15,000 per capita. Secondly, we want to make sure there is enough investment to propel that growth for the economy. Thirdly, we need to create jobs. These are the three measures which we would regard as true growth, and we will succeed in getting there.
For the first one, we set very ambitious targets. Last year, we were targeted to grow to MYR 797bn ($255bn), and we surpassed that in the first year. We matched MYR 830bn ($265bn) of Gross National Income, and that is a big number for us. Secondly, we were only expecting about MYR 83bn ($26.5bn) of private investment. After chasing both domestic investors and foreign investors, we managed to achieve MYR 94bn ($30bn). This is ahead of our original target. Thirdly, we did not quite reach the job targets. We intended to create an additional 330,000 jobs, and we came marginally short of that at 313,000 jobs. When I put it all together, and I refer to the three measures, we are very pleased with our progress so far. I liken this to a vertical takeoff, if you make the analogy to an aircraft, because in a short period of time we got to where we wanted to. We got the private sector excited, and we got the investors convinced that the program we are implementing for the Economic Transformation Programme is doable.
As for the Government Transformation Programme (GTP), we have made tremendous strides. The main example for this is education. We have seen an increased intake in preschools, and we had the best result for the final examinations for primary school students the last four years. For corruption, for the first time in our history, we introduced a whistle blower protection act. Also, we have now introduced other measures, such as the "naming and shaming". This is where the names and photographs of all the people who are convicted of corruption in Malaysia are posted on our website. We want to name and shame them. We also have integrity pacts that are signed by corporations. We work together with Transparency International to produce this. We are getting lots of companies in Malaysia, as well as government agencies, to sign these contracts. So far, 132,000 integrity contracts have been signed in the course of a year.
On rural infrastructure, in the last two years, we have built the most kilometers of rural road since independence. That is 1700 kilometers of rural road. The list of improvements is very long. In fact, we had approximately 4500 families that were extremely poor, meaning families who did not have enough food to eat. We reached out to every single one of them and managed to pull them out of extreme poverty. We have introduced many programs to help people in poverty. For urban public transport, we have introduced thirty-eight new LRT and KTM Komuter trains. We have opened new bus terminals and introduced new buses. We carried an additional 2.8m passengers last year. This is helping us to improve future mobility within Kuala Lumpur. I think some of the examples I have just given give us tremendous confidence in Malaysia moving forward in our program for the next eight years.
Are there certain targets as part of the ETP that you find non-negotiable, in which all effort will be made to ensure they will be achieved?
JALA: In my mind, there are two things that we must to keep an eye on. The first one, especially for the ETP and GTP, is that we must remain focused. Most countries suffer from excitement in the beginning and they lose focus. Then, they eventually want to do everything under the sun, and this is a recipe for disaster. We do not have an unlimited pot of gold here; we have limited resources. We must ensure that our money and our focus are put on areas where we are naturally endowed, and then we, as a country, can win in a global arena. The second non-negotiable element is competitiveness. We must create conditions for competitiveness to flourish in Malaysia so that Malaysian companies will become competitive. At the same time, foreign companies operating in Malaysia can also become competitive. I believe that these are the key challenges and are non-negotiable. Malaysia must remain focused in these areas. This is Olympic season. You cannot find an Olympic champion that wants to be champion in every field. You cannot do that. Therefore, Malaysia has identified twelve areas of focus for the economy. We must stay true to those because we believe we have the natural endowment as well as capability in those areas. At the same time, we must encourage competition.
There are two things that we must to keep an eye on. The first one, especially for the ETP and GTP, is that we must remain focused. Most countries suffer from excitement in the beginning and they lose focus. Then, they eventually want to do everything under the sun, and this is a recipe for disaster...The second non-negotiable element is competitiveness. We must create conditions for competitiveness to flourish in Malaysia so that Malaysian companies will become competitive.
The Prime Minister has begun to liberalize many sectors. In the last couple of years he has already announced seventeen sub sectors within the service areas that are fully liberalized. We did this because the more we receive from foreign companies, which are able to come here without hindrance or incumbencies, the more they compete with our local companies. This means our local companies must be on their toes to compete, and if they are good enough they can then compete externally. This is exactly what we are trying to do. The anti-competition or competition law was created simply because we want a level playing field. We do not want anti-competitive behaviors. We do not want monopolies. We do not want bid-rigging. This is because we want competitiveness to exist in our economy. I believe a country’s success, those countries that will be continuously successful, will be those that are constantly creating conditions for competitiveness to flourish. This is what Malaysia wants to do, and focus and competitiveness are non-negotiable.
Policy reforms are vital to any serious transformational agenda. How serious do you think the ministries and agencies are in making the hard, unpopular decision that are sometimes requires towards cutting bureaucracy, improving the process of the government, and making the country more competitive?
JALA: We are very serious about policy reforms in Malaysia, and there are many things that we are doing. For example, with competitiveness we are making many reforms in that area. Secondly, corruption is a very important point. When we speak with investors, all of them say we must improve the conditions in Malaysia and that we need to get rid of graft. We are doing a lot of work to ensure that this is being reduced. Thirdly, we need to have educational reform, from preschool to primary school to secondary school. This is important because a country cannot be successful unless they have the right talent to complement and supplement their work. Therefore, a lot of work in structural reform of education in Malaysia is being done. We are extremely positive about what we are doing. We are committed to this, and the results for two years show that we are clearly acting on our promises.