ALTHOUGH this important development plan has been postponed several times, finally the 12th Malaysia Plan (RMK-12) for the years 2021-2025 has been tabled. Overall, the direction of the 12MP, which is based on the concept of a prosperous, inclusive and sustainable Malaysian Family, is in tandem with Malaysia’s various development strategies over the years. Every Malaysia Plan must ensure that every citizen enjoys the best benefits and is not left out of the country’s development.
I have some observations that may be taken into account by the Government in realizing this 12MP.
First, the plan only has 4 years to implement. The government should explain how the 12MP will be funded. A good plan will only produce the best impact with sustainable funding. In a situation where the country’s revenue has been severely affected by the pandemic, the country’s debt has almost reached 65 per cent of GDP and growth has been stunted over the past two years, the success of the 12MP is highly dependent on its funding. Transparency on how the plan will be funded, will make the 12MP not only realistic but feasible.
Second, it is crucial for the Government to take into account that the impact of the pandemic has removed the various status quo in the economic achievements and life of our society. Malaysia has lost almost two productive years, in addition to the extraordinary decline of the middle class, the doubling of the absolute and hardcore poor, the loss of competitiveness of various economic sectors as well as clear loopholes in various health, education and social systems. Therefore, this plan must be implemented taking into account all these declines. It must be aligned with a recovery strategy to restore the status quo of Malaysia before a leap is appropriately targeted. On my rough estimate, Malaysia has experienced a depreciation of development value of 5 to 8 years back in the worst case scenario. For example, middle wages and wages that take into account the effects of inflation declined more than 5 years back as a result of the current economic crisis. Can Malaysia make up for all these losses in the next 4 years?
Third , strategies to reduce the economic gap in the country are very important. Various states and regions in Malaysia have very significant gaps. Therefore, the development strategy for Sabah and Sarawak should be more radical. It is a region that contributes a large yield to the country and has a very wide geographical area and a very critical existence gap. Yet it also has tremendous potential especially in terms of economy and natural resources. With double investment and allocation, Sarawak and Sabah can become ‘the new economic powerhouse’ for Malaysia. The 12MP is still with the usual paradigm in its planning for Sabah and Sarawak.
Fourth , the provision of infrastructure continues to be an important strategy of the 12MP. The emphasis on various digital infrastructures is very timely. However, no new mega -scale infrastructure projects have been introduced in this plan. The development of various modes of mega -scale national rail system should be introduced as various districts and regions in Malaysia are still not connected to high speed transport. Major cities such as Johor Bahru and Penang are still not connected to Kuala Lumpur and Singapore via the high -speed rail system. Advanced infrastructure will be the foundation of a modern economy and a developed society. Mass financing in this sector is very strategic.
Fifth, in terms of healthcare, the modernization of the country’s health sector should go beyond physical infrastructure investment including the construction of more hospitals as well as upgrading the quality of national hospitals. In addition, the Government needs to allocate more funds to redouble specialist training, introduce a sustainable health financing system, enable various health research and intensify disease prevention strategies. Ultimately, the health sector should be the basis of priority in every national planning and budget. The well -being of Malaysian families will only be realized when the health of its citizens becomes a national priority.
Sixth , the 12MP does not give due and important emphasis to the agriculture, livestock, marine and food sectors of the country. It should be a document that sparked an agricultural and fisheries revolution that Malaysia desperately needed. The potential of Malaysia’s agricultural and maritime sector is not on the radar of important national development priorities while Malaysia has large and rich natural resources. The national food security agenda should be strengthened by driving FELDA as a leader in smart agriculture and national food production, while reducing dependence on the oil palm industry. Exploration of the maritime economy should be a priority because the source of wealth of the South China Sea is so large that it has become a field of territorial disputes of various countries because of its wealth.
And finally , in terms of the country’s fiscal position, the 12MP should implement fiscal consolidation efforts, especially by 2024 and 2025. This is important because the fiscal balance to GDP in 2020 of -6.2% is far from the 11MP target of 3.0%. In the medium term as the country’s economy recovers, the government needs to be committed to tax reform. This includes broadening the tax base by considering re -implementing the consumption tax by designing a more progressive GST tax.
The COVID-19 pandemic and the ensuing economic crisis have affected the country’s socio-economic growth trajectory. As a result, only one of the six multi-dimensional socio-economic development goals of the 11MP has been achieved. Therefore, for the 12MP, every Malaysian must work together and do their best to return the country to the path of sustainable socio-economic development, in order to realize the dream of ‘Malaysia Utuh, Masyarakat Kukuh’.
DATO SERI UTAMA MOHAMAD HASAN