KUALA LUMPUR, Sept 29 - Cabinet minister Datuk Seri Idris Jala refuted Tun Dr Mahathir Mohamad’s warning today that Vision 2020 would most likely fail if the government continues to rely on foreign direct investment (FDI) to drive economic growth.
The minister in the Prime Minister’s Department in charge of the Government Transformation Programme (GTP) expressed confidence that Vision 2020 would be achieved because of the Economic Transformation Programme (ETP).
“I believe that we can achieve Vision 2020 by 2020,” said Idris(picture) in a question and answer session after Dr Mahathir’s speech at a CEO Forum organised by the Perdana Leadership Foundation today.
“I agree with you (Dr Mahathir) that we must change the strategy. That’s why the Economic Transformation Programme is necessary,” he added.
The former premier said that chasing FDI worked well in the past but that the strategy was no longer viable as “much more attractive” investment destinations have since emerged in Asia.
Dr Mahathir urged the Najib administration to focus instead on encouraging domestic direct investment (DDI) to drive expansion from within and possibly achieve Vision 2020 that way.
Idris echoed Dr Mahathir's view and said that a focus on domestic investments was crucial to transform Malaysia to a high-income nation within 10 years.
“I agree that we must change to domestic investments,” said the Performance Management & Delivery Unit (Pemandu) CEO.
Idris pointed out that more than 70 per cent of the ETP's 131 entry point projects (EPPs) were funded by local investors.
“73 per cent of the EPPs are coming from local investors,” he said.
Pemandu has said it had identified investments worth RM1.38 trillion over 10 years, of which 60 per cent would come from the private sector, 32 per cent from government-linked companies and eight per cent from government.
The investment aims to double per capita income and push Malaysia into the ranks of “developed” nations by 2020, rebalancing Asia’s third most export-driven economy towards domestic demand and the service sector.
DAP advisor Lim Kit Siang, however, has slammed the ETP for its “unrealistic targets” and its failure to address existing government policies which have resulted in the country being caught in a middle-income trap.
The plans in the ETP ranged from a new mass transit system to relieve congestion in Kuala Lumpur, to building a huge oil storage facility next to Singapore to form a regional oil products trading hub.
A casino project in Sabah is also being considered.
Today, Idris said that the government needed to focus on quality FDI following Dr Mahathir’s criticism of the country’s dependence on FDI.
“Now, we must look at FDI that has quality,” he said.
The country’s fourth prime minister said earlier that Malaysia was “addicted” to FDI and depended too much on low labour cost to pull in investments.
Dr Mahathir pointed out that East Asian powerhouses Japan and Korea had not relied on FDI to power their rapid progress but instead set up and financed local companies utilising technology acquired from foreign sources to build indigenous capacity.
Unveiled in 1991, Vision 2020 laid out the government’s 30-year ambitious plan to make Malaysia a fully developed nation by the year 2020 by boosting GDP and per capita income.
Although there is no single definition, advanced nations are usually identified by their high per capita income and developed service and knowledge industries, coupled with high life expectancy and quality of education.
Idris Jala / Wednesday, October 6, 2010 /
Idris Jala is the current Minister without Portfolio in the Prime Minister's Department and CEO of the Performance Management and Delivery Unit (PEMANDU) - unit monitoring for implementation of the Key Performance Indicator (KPI) initiative.