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,Manokaran Mottain: “We need to move the economy away from low-cost manufacturing to produce higher value-added products which would reduce the dependency on foreign workers.”

THE unveiling of the ambitious 12th Malaysia plan (12MP) filled the week with some optimism over the economic development of the country after the global economy faced a recession last year due to the Covid-19 pandemic.

Many economists and industry players in the country welcomed the long-waited five-year plan, which has allocated an historic RM400bil for government spending over the next four years.

But doubt has creeped in the mind of some Malaysians whether the aspirational targets can be achieved.

This is because some targets under the 11th Malaysia plan were not realised.

This includes the country’s gross domestic product (GDP) growth per annum, gross national income (GNI) per capita, share of compensation of employees, average monthly household income and Malaysia well-being index, according to the 12MP report.

Certainly, it was difficult to achieve the set target of average 4.5% to 5.5% GDP growth per year due to the pandemic that battered the global economic growth.

However, according to UOB senior economist Julia Goh, other targets of 11MP could not be achieved because of social-economic challenges and structural issues in the country.According to UOB senior economist Julia Goh, other targets of 11MP could not be achieved because of social-economic challenges and structural issues in the country.

“These issues include income and growth disparities, youth unemployment and industries stuck at the lower-end of the value chain that led to underachievement of these targets,” she says.

Nonetheless, the initial targets that were not accomplished have now become a tall order to fulfil in the next four years.

For instance, the target set for average monthly household income of RM8,960 in 2020, has now increased to RM10,065 by 2025.

It is worthy to note that the average monthly household income stood at RM7,160 last year.

Besides that, the government has set a high target for GNI per capita which measures the annual national income per person, to RM57,882 by 2025 from the initial target of RM47,720 in 2020. However, last year, GNI per capita stood lower at RM42,503.

Meanwhile, it is worth noting that the government has usually underspend on development expenditure in the previous plans, which means larger share of the its expenditure was allocated for operating expenditure, adds Goh.

For instance, in the 11MP, the original allocation for development expenditure was RM260bil, which was then revised down to RM220bil in the mid-term review.


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