KUALA LUMPUR – Prime Minister Ismail Sabri Yaakob on Monday (Sept 27) tabled the 12th Malaysia Plan – the first major policy introduced by his administration that could prove to be a litmus test for the bipartisan cooperation between his government and the opposition in Parliament.
With RM400 billion (S$129 billion) allocated for new and existing projects, it is the country’s biggest five-year road map – 54 per cent bigger than the 11th Malaysia Plan unveiled in 2016 that had set aside RM260 billion.
The new plan, which has been delayed by more than a year due to the Covid-19 crisis, aims to turn Malaysia into a high-income economy by 2025, eradicate abject poverty and increase the contribution of small businesses to the total economic output.
Datuk Seri Ismail said on Monday that several key goals of the 11th Malaysia Plan, which ended last year, had not been met due to the coronavirus’ impact on the economy in 2020.
The new plan with the theme “Prosperous, Inclusive and Sustainable Malaysia” will have nine main areas of focus. Key among them is putting the economy back on a growth trajectory following the negative impacts of Covid-19.
The plan also pays special attention to closing the income gap and development in some of Malaysia’s least-developed states, such as Sabah and Sarawak in Borneo.
“The average annual growth of gross domestic product (GDP) under the 11th Malaysia Plan was 2.7 per cent, lower than what was targeted, due to the contraction in 2020,” Mr Ismail said.
Malaysia’s economy contracted by 5.6 per cent last year, the worst contraction since the 1998 Asian Financial Crisis.
Malaysia’s central bank last month revised the country’s 2021 GDP growth forecast to a more modest 3 per cent to 4 per cent, compared with a 6 per cent to 7 per cent growth initially targeted by the government at the start of the year.
As part of the goals for a high-income economy, the premier has set a target for the average household income to reach about RM10,000 a month by 2025 – an increase of around 40 percent over the current average of RM7,160.
His administration is also targeting to increase the contributions of micro, small and medium-sized enterprises to 45 per cent of GDP, up from 38.2 per cent last year.
Mr Ismail said the government’s policies will continue to be geared towards recovery this year and next, with economic growth expected to be back on track from 2023.
The plan is expected to be voted upon on Oct 7, after a week of debates and replies from the relevant ministries.
It was tabled just more than a month after Mr Ismail was sworn in as Malaysia’s ninth premier and its third in just three years.
It also comes two weeks after Mr Ismail signed a historic bipartisan agreement with the main opposition bloc Pakatan Harapan to carry out certain reforms, with the coalition committing to not block major legislation in Parliament such as the upcoming federal budget.
Mr Ismail leads a loose alliance of 114 MPs on the government bench, giving him only a four-seat majority in the 222-seat Parliament, where two seats are vacant.
He leads the same government as his predecessor Tan Sri Muhyiddin Yassin, who resigned last month after several MPs pulled their backing for him, resulting in him losing his single-digit majority.
The 12th Malaysia Plan was supposed to be tabled in August last year by Mr Muhyiddin’s administration, but was delayed by more than a year as the country’s initial success in dealing with Covid-19 withered away.
Malaysia has only just started opening up in stages after spending close to four months this year in various stages of lockdowns that have done little to slow the Covid-19 spread.