Overview of Malaysia’s NationalTransformation Programme

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

Cheryl LimAssociate Director, BFR Projects

Performance Management and Delivery Unit (PEMANDU)

Prime Minister’s Department

19th November 2014

Today’s reality….

Governments around the world have beautiful plans and promises….

Governments around the world have beautiful plans and promises….

Today’s reality….

However, the main difficulties we face is the

failure to deliver….

Today’s reality….

This has

caused unhappiness amongst people in many nations…

We have identified

4 main challengesfacing governments & public administration….

First problem:

Not focused / unclear on the overall direction that they are heading

High level plans are not understood by the implementers…

Second problem:

Public demands and input are not adequately heard / obtained

Third problem:

No accountability….

Fourth problem:

Growth from low tomiddle income grew at a

very fast pace

(9% p.a. in early 90’s)

Oil & Gas

Construction

Palm Oil

Automotive Logging

Space

In 1991, Tun Mahathir made it clear for Malaysia to become a developed Nation by 2020

However, GDP growth from 2000 - 2010 was only 4.6%

-10

-5

0

5

10

15

1990 2000 2010

GDP Growth, 1990-2010

1997-1998 Asian Financial Crisis

Dot-Com Bust, 9/11

2008-2009 Global Financial Crisis

Source: Department of Statistics Malaysia, Ministry of Finance

Vision 2020 speech by Tun Dr M

%

What are we missing?

2020 GNI Target

2009 GNI

Diagnosis #1 : We needed to quantify our end goal.

Nominal GNI (USD)

USD 15,000

USD 6,700

198,219 239,357 281,912 293,063 301,267

28.08 28.59 29.06 29.52 29.95

2009 2010 2011

$15,000

20202012GNI (USD mil)

Mid year Population (mil)

$8,126($8,373)

$9,928

$9,508($9,700)

$6,700($7,059)

(US$)

2013

$10,060

What have we achieved so far?

* Bracketed figures are based on SNA 2008 after the rebasing exercise conducted in 2012

Source: Department of Statistics . Projections by PEMANDU team analysis

2018

Diagnosis #2: We needed a programme

16

We took a radical and transformational approach…

We are the only Government who is doing

all of the above

The Big Fast Results(BFR)

Methodology

How did we do it?

17

We are the only Government who is doing

all of the above

Multiple Cabinet retreats to ascertain

the direction needed

18

We are the only Government who is doing

all of the above

Establish in detail what needs

to be done

19

We are the only Government who is doing

all of the above

GTP: 8,500 people

ETP: 13,000 people

SRI: 5,000 people

Subsidy: 2,500 people

Open Days / Townhall

20

We are the only Government who is doing

all of the above

21

We are the only Government who is doing

all of the above

Setting KPIs for the whole Cabinet

22

We are the only Government who is doing

all of the above

Problem solving, on the

ground implementation

PM / Minister Review

Annual Ministry

Review / Cabinet

Away Day

23

We are the only Government who is doing

all of the above

External validation on

results achieved

24

We are the only Government who is doing

all of the above

Tell the people what we

have/have not delivered

SRIsSRIs

&

To become aHigh-Income Nation, We Need:

We need “Drivers” to ensure focus on

high-impact areas

FOCUS

NKEAs + NKRAs

We Need “Enablers” To Ensure Competitiveness

COMPETITIVENESS

Strategic Reform Initiatives National Key Economic AreasNational Key Result Areas

NTP : GTP + ETP

7 National Key Result Areas (NKRAs)

Focus Competitiveness

12 National Key Economic Areas (NKEAs)

51 Strategic Reform Initiatives (SRIs)

Reducing Crime

Anti-Corruption

Rural Development*

Urban Public Transport

Low Income Household

Education

Cost of Living

Oil, Gas & Energy

Palm Oil & Rubber

Financial Services

Agriculture

Communications Content & Infra

Healthcare

Business Services

Tourism

Education

Wholesale & Retail

Electrical & Electronics

Greater KL

Competition, Standards & Liberalisation

Human Capital Development

Public Finance

Public Service Delivery

Government’s Role in Business

Narrowing Disparities

* Renamed from Rural Basic Infrastructure

• 12 NKEAs + 6 SRIs• Grow the economy• Increase revenue• Increase job / income

• 7 NKRAs• Spend the revenue based

on rakyat needs• Distribute the revenue

Connection between ETP & GTP..

We are doing both

1 2

Evidence of Success

Steady GDP Growth

Source: Bank Negara Malaysia

5.6%

6.3%

4.8%

-1.5%

7.4%

5.1%

5.6%

4.7%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

500,000

550,000

600,000

650,000

700,000

750,000

800,000

850,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

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

(Real GDP Growth % Y-o-Y)

198,219 239,357 281,912 293,063 301,267

28.08 28.59 29.06 29.52 29.95

2009 2010 2011

$15,000

20202012GNI (USD mil)

Mid year Population (mil)

$8,126($8,373)

$9,928

$9,508($9,700)

$6,700($7,059)

(US$)

2013

$10,060

On track to achieve GNI target for 2020

* Bracketed figures are based on SNA 2008 after the rebasing exercise conducted in 2012

Source: Department of Statistics . Projections by PEMANDU team analysis

2018

31

63,108 66,414 68,353 71,697 72,44584,867 85,448

79,070 79,111 73,23186,699

95,836

116,850132,781

2007 2008 2009 2010 2011 2012 2013

Private sector investment in the economy

grew 5X more post-ETP

Source: BNM

Investments (RM million)

Public

Private

2010-2013

CAGR: 15.3%

2007-2010

CAGR: 3.1%

32Source : MIDA

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012 2013

111.3

148.9137.0

104.9 105.6

154.6167.8

216.5

10MP ANNUAL

TARGET RM148B

ET

P

LA

UN

CH

RM (billion)

Approved / pipeline investments (MIDA)

Gradual Reduction in Fiscal Deficit

2009 2010 2011

2015

target*2020 TARGET

6.6%5.6%

4.8%

3%4.5%

3.9%

2012 2013

0% /

Neutral

Under Act 637 of the Loan (Local) Act 1959, and Act 275 of the Government Investment Act 1983:

Combined loans raised domestically should not exceed a ceiling of 55% of the nation's GDP.

Act What it says

Malaysian National Debt is Governed by Various Laws

34

Malaysia is moving further into the “Safe Zone”

Note : Malaysia’s figures are for 2009 – 2013, whilst other countries are 2012 figures

Source : EPU, MOF, BCG analysis, Economist Intelligence Unit, CIA fact book

Surplus / deficit

(% of GDP)

Public debt (% of GDP)

Increased in World Bank’s “Ease of Doing

Business” Rankings

Country 2014 2013 2012

Singapore 1 1 1

Hong Kong 2 2 2

New Zealand 3 3 3

United States 4 4 4

Denmark 5 5 5

MALAYSIA 6 12 18

South Korea 7 8 8

Georgia 8 9 16

Norway 9 6 6

United Kingdom 10 7 7

Australia 11 10 15

Thailand 18 18 17

Germany 21 20 19

Japan 27 24 20

France 38 34 29

Ranking

23(2010)

18

8

6

(2012)

(2013)

(2014)

Category 2014 2013 2012

Starting a business

16 54 50

Construction permits

43 96 113

Getting electricity

21 28 59

Registeringproperty

35 33 59

Getting credit 1 1 1

Protecting investors

4 4 4

Paying taxes 36 15 41

Trading across borders

5 11 29

Enforcing contracts

30 33 31

Resolvinginsolvency

42 49 47

Source: World Bank

36

Other international recognition of our commitment

to a more competitive Malaysia

IMD World

Competitiveness

Yearbook 2014

WEF Global

Competitiveness

Report 2014/15

Malaysia ranked

12th in the world

Malaysia ranked

20th in the world

ahead of Australia,

France, Ireland and

South Korea…

A.T. Kearney’s

FDI

Confidence Index

Malaysia ranked

15th in 2014

(25 in 2013)

Countries from all around the world requested to learn our BFR methodology

BFR Seminar21 – 24 November 2011

14 Countries, 52 participants

Tanzania24 people on the ground

India (Maharashtra)

South Africa

37

• Agriculture• Education• Energy• Resource Mobilization• Transport• Water

“Water for All”• Water source and

conservation• Agriculture• Domestic and Industry

• Marine Transport and Manufacturing

• Offshore Oil and Gas exploration

• Aquaculture• Marine governance and

protection services

38

Case studies on ETP & GTP in

Ivy League Universities

Title: TYING PERFORMANCE MANAGEMENT TO

SERVICE DELIVERY:

PUBLIC SECTOR REFORM IN MALAYSIA, 2009 –

2011

Published: July 2011

Author: Deepa Iyer

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

Not available for distribution or download

Title: Economic Transformation:

All About Focus, Competitiveness, and

Execution

Published: November 2012

Author: Prof Diego Comin/Ku Kok PengTitle: MAPPING A TRANSFORMATION JOURNEY:

MALAYSIA’S STRATEGY DEVELOPMENT. 2009 -

2010

Published: August 2014

Author: Elena Lesley

International recognition of PEMANDU

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.com/news/2014-09-

08/most-influential-50-are-the-bankers-

investors-who-move-markets.html

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.org/press/releases/new-

report-bloomberg-philanthropies-nesta-highlights-

20-leading-government-innovation-teams-around-

globe/

Thank You