ASEAN KEY DESTINATIONS
Malaysia's reform details hazy
The government starts public consultations this month on a new round of reforms, but there is growing resistance from voters and disappointment from investors over measures taken so far.
A government think tank has identified a dozen growth industries such as oil and gas, biotechnology and Islamic finance to focus on in a drive to double Malaysia's income per capita and propel it into the ranks of "developed nations" by 2020.
Prime Minister Najib Razak's record on reform is patchy - he shied away from big subsidy cuts and reversed tack on race-based preferential equity ownership rules for the majority ethnic Malay population under pressure from activists. "Earlier optimism that Najib will be able, and will be committed, to carrying out his plans for reforms has been replaced by resignation that Malaysia will not change course quite so quickly or easily," said Southeast Asia political risk analyst David Kiu.
Najib took office last year and promised investor forums that on reforms, he would "execute or be executed", after the National Front coalition that has now ruled this Southeast Asian country for 53 years stumbled to its worst ever election results in 2008.
In the past decade Malaysia has seen its dominant position as an investment destination in Southeast Asia crumble, its productivity gains lag and a worsening of its education rankings which mean it is less well equipped to meet its growth goals.
A survey last week by the World Economic Forum showed Malaysia slipped two places in its global competitiveness rankings to 26th spot out of 139 countries while neighbouring Indonesia surged 10 places to 44th spot. The quality of Malaysia's institutions, ranked 17th by the WEF five years ago, has plunged to 42nd place since then.
Under its "Economic Transformation Plan" to be unveiled this month, the government wants to galvanise RM2.2 trillion in investments over the 10 years to 2020 of which 92 per cent will come from the private sector.
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