Overview of Malaysias National

Transformation Programme
19th November 2014

Cheryl Lim
Associate Director, BFR Projects
Performance Management and Delivery Unit (PEMANDU)
Prime Ministers Department

PEMANDU 2014. This document is private and confidential. Not to be distributed.

Todays reality.

Governments around the

world have beautiful
plans and promises.
Todays reality.
Governments around the
world have beautiful
plans and promises.

However, the
main difficulties
we face is the
failure to
deliver.
 Todays reality.

This has
caused
unhappiness
amongst people
in many
nations
We have identified
4 main challenges
facing governments & public
administration.
First problem:

Not focused / unclear on the

overall direction that they
are heading
Second problem:

High level plans are not

understood by the
implementers
 Third problem:

Public demands and input are not

adequately heard / obtained
Fourth problem:

No accountability.
Growth from low to
middle income grew at a
very fast pace
9% p.a. in early 90s)
( Construction

Automotive Logging

Space Oil & Gas Palm Oil

In 1991, Tun Mahathir made it clear
for Malaysia to become a developed
Nation by 2020
However, GDP growth from What are we
missing?
2000 - 2010 was only 4.6%
15

%
10

Vision 2020
5 speech by
Tun Dr M

0
1990 2000 2010

-5
1997-1998 Asian Dot-Com 2008-2009 Global
Financial Crisis Bust, 9/11 Financial Crisis

-10
GDP Growth, 1990-2010
Source: Department of Statistics Malaysia, Ministry of Finance
Diagnosis #1 : We needed to
quantify our end goal.

USD 15,000

USD 6,700

2009 GNI 2020 GNI

Target

Nominal GNI (USD)

What have we achieved so far?

$15,000
(US$) $10,060
$9,928
$9,508
($9,700)
$8,126
($8,373)

$6,700
($7,059)

2009 2010 2011 2012 2013 2018 2020

GNI (USD mil) 198,219 239,357 281,912 293,063 301,267
Mid year
Population (mil) 28.08 28.59 29.06 29.52 29.95

* Bracketed figures are based on SNA 2008 after the rebasing exercise conducted in 2012
Source: Department of Statistics . Projections by PEMANDU team analysis
Diagnosis #2: We needed a
programme
How did we do it?
We took a
radical and
transformational
approach

The Big Fast

Results(BFR)
Methodology

We are the only Government who is doing

16 all of the above
 Multiple Cabinet retreats to ascertain
the direction needed

We are the only Government who is doing

17 all of the above
 Establish in detail what needs
We are the only Government who is doing to be done
18 all of the above
 Open Days / Townhall

GTP: 8,500 people

ETP: 13,000 people
SRI: 5,000 people
Subsidy: 2,500 people

We are the only Government who is doing

19 all of the above
We are the only Government who is doing
20 all of the above
 Setting KPIs for the whole Cabinet

We are the only Government who is doing

21 all of the above
 Problem solving, on the
ground implementation

PM / Minister Review

Annual Ministry
Review / Cabinet
Away Day

We are the only Government who is doing

22 all of the above
 External validation on
We are the only Government who is doing results achieved
23 all of the above
 Tell the people what we
We are the only Government who is doing have/have not delivered
24 all of the above
To become a
High-Income Nation, We Need:

COMPETITIVENESS & FOCUS

We Need Enablers To We need Drivers to

Ensure Competitiveness ensure focus on
high-impact areas

SRIs
SRIs NKEAs + NKRAs
Strategic Reform Initiatives National Key Economic Areas
National Key Result Areas
NTP : GTP + ETP

Focus Competitiveness
12 National Key 51 Strategic Reform
7 National Key Result Areas (NKRAs)
Economic Areas (NKEAs) Initiatives (SRIs)
Oil, Gas & Energy Competition, Standards &
Reducing Crime Liberalisation
Palm Oil & Rubber
Human Capital
Anti-Corruption Financial Services Development
Agriculture
Public Finance
Rural Development*
Communications Content & Infra
Public Service Delivery
Urban Public Transport Healthcare

Business Services Governments Role in

Low Income Household Business
Tourism
Narrowing Disparities
Education Education

Wholesale & Retail

Cost of Living
Electrical & Electronics

* Renamed from Rural Basic Infrastructure Greater KL

Connection between ETP & GTP..
1 2

12 NKEAs + 6 SRIs 7 NKRAs

Grow the economy Spend the revenue based
Increase revenue on rakyat needs
Increase job / income Distribute the revenue

We are doing both

Evidence of Success
Steady GDP Growth

850,000 (Real GDP Growth % Y-o-Y) 8.0%

7.4%

7.0%
800,000 6.3%
5.6% 5.6% 6.0%
5.1%
750,000 4.8% 4.7% 5.0%

4.0%
700,000

3.0%

650,000
2.0%

600,000 1.0%

0.0%
550,000
-1.5% -1.0%

500,000 -2.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013

GDP at constant 2005 prices(RM mil) Real GDP growth rates

Source: Bank Negara Malaysia

On track to achieve GNI target for 2020

$15,000
(US$) $10,060
$9,928
$9,508
($9,700)
$8,126
($8,373)

$6,700
($7,059)

2009 2010 2011 2012 2013 2018 2020

GNI (USD mil) 198,219 239,357 281,912 293,063 301,267
Mid year
Population (mil) 28.08 28.59 29.06 29.52 29.95

* Bracketed figures are based on SNA 2008 after the rebasing exercise conducted in 2012
Source: Department of Statistics . Projections by PEMANDU team analysis
Private sector investment in the economy
grew 5X more post-ETP
Investments (RM million)
2010-2013
CAGR: 15.3%

2007-2010
CAGR: 3.1%

132,781
116,850

95,836
86,699
79,070 79,111 73,231
Private

84,867 85,448
Public 63,108 66,414 68,353 71,697 72,445

2007 2008 2009 2010 2011 2012 2013

Source: BNM 31
Approved / pipeline investments (MIDA)

RM (billion)
250

216.5
200
167.8
10MP ANNUAL 154.6
148.9 TARGET RM148B
150 137.0
111.3 104.9 105.6
100

LAUNCH
ETP
50

0
2006 2007 2008 2009 2010 2011 2012 2013

Source : MIDA 32
Gradual Reduction in Fiscal Deficit
2015
2009 2010 2011 2012 2013 target*
2020 TARGET
0% /
Neutral
3.9% 3%
4.8% 4.5%
5.6%
6.6%

Malaysian National Debt is Governed by Various Laws

Act What it says
Under Act 637 of the Loan (Local) Act Combined loans raised domestically
1959, and Act 275 of the Government should not exceed a ceiling of 55% of
Investment Act 1983: the nation's GDP.
 Malaysia is moving further into the Safe Zone
Public debt (% of GDP)

Surplus / deficit
Note : Malaysias figures are for 2009 2013, whilst other countries are 2012 figures (% of GDP)
Source : EPU, MOF, BCG analysis, Economist Intelligence Unit, CIA fact book 34
Increased in World Banks Ease of Doing
Business Rankings
Ranking
Country 2014 2013 2012 Category 2014 2013 2012

Starting a

6
Singapore 1 1 1 business
16 54 50

Hong Kong 2 2 2 Construction

43 96 113
permits
New Zealand 3 3 3
Getting
21 28 59
(2014) United States 4 4 4 electricity
Registering
Denmark 5 5 5 35 33 59
property

MALAYSIA 6 12 18 Getting credit 1 1 1

Protecting

8 South Korea 7 8 8 4 4 4
investors
Georgia 8 9 16 Paying taxes 36 15 41
(2013) Trading across
Norway 9 6 6 5 11 29
borders
United Kingdom 10 7 7 Enforcing
30 33 31
contracts
Australia 11 10 15
Resolving

18
(2012)
Thailand
Germany
18
21
18
20
17
19
insolvency
42 49 47

Japan 27 24 20

23 France 38 34 29

(2010) Source: World Bank

Other international recognition of our commitment
to a more competitive Malaysia
WEF Global IMD World A.T. Kearneys
Competitiveness Competitiveness FDI
Report 2014/15 Yearbook 2014 Confidence Index

Malaysia ranked Malaysia ranked Malaysia ranked

20th in the world 12th in the world 15th in 2014
ahead of Australia, (25 in 2013)
France, Ireland and
South Korea

36
Countries from all around the world
requested to learn our BFR methodology
Tanzania
24 people on the ground Agriculture
Education
Energy
Resource Mobilization
Transport
Water
BFR Seminar India (Maharashtra)
21 24 November 2011 Water for All
Water source and
conservation
Agriculture
Domestic and Industry

14 Countries,
52 participants South Africa Marine Transport and
Manufacturing
Offshore Oil and Gas
exploration
Aquaculture 37
Marine governance and
protection services
Case studies on ETP & GTP in
Ivy League Universities
Title: Economic Transformation:
All About Focus, Competitiveness, and
Execution
Published: November 2012
Author: Prof Diego Comin/Ku Kok Peng
Not available for distribution or download
Title: TYING PERFORMANCE MANAGEMENT TO
SERVICE DELIVERY:
PUBLIC SECTOR REFORM IN MALAYSIA, 2009
2011
Published: July 2011
Author: Deepa Iyer
Title: MAPPING A TRANSFORMATION JOURNEY:
MALAYSIAS STRATEGY DEVELOPMENT. 2009 -
2010
Published: August 2014
Author: Elena Lesley
For download:
http://www.princeton.edu/successfulsocieties/content/focusa
reas/CS/policynotes/view.xml?id=160
http://www.princeton.edu/successfulsocieties/content/data/p
olicy_note/PN_id250/Policy_Note_ID250.pdf
38
International recognition of PEMANDU
The Bloomberg Markets
50 Most Influential list
Dato Sri Idris Jala, Minister and
CEO of PEMANDU, has been
listed among the most influential
policy makers. He shares this spot
alongside amongst others George
Osborne, Chancellor of the
Exchequer; Janet Yellen,
Chair,U.S. Federal Reserve and
Jason Furman Chairman, White
House Council of Economic
Advisers
http://www.bloomberg.com/news/2014-09-
08/most-influential-50-are-the-bankers-
investors-who-move-markets.html
Bloomberg Philanthropies and Nesta
Highlights 20 Leading Government
Innovation Teams around the Globe
PEMANDU recognised as one of the 20
leading government innovation teams
Publication Provides Key Findings from
Yearlong Research Effort and
Recommendations for Mayors and
Ministers to Create Their Own Teams
Press Release Date: 30th June 2014
http://www.bloomberg.org/press/releases/new-
report-bloomberg-philanthropies-nesta-highlights-
20-leading-government-innovation-teams-around-
globe/
Thank You