ETP 2nd year

ETP: 2nd year in action 27th November 2012

30 March 2010: NEM was announced by YAB PM

25 October 2010: ETP Roadmap launched

TODAY

2 years have passed: Rigorous execution and monitoring,

Progress updates, Problem Solving Meetings

Quick recap of the ETP

Updates on NKEAs & SRIs

How our economy has performed

Challenges we have faced

1

2

3

4

Items we will go through today……

Low Income Lower Middle Income

Upper Middle Income

High Income

GNI per capita : USD 1,025 or less

GNI per capita : USD 1,026 – USD 4,035

GNI per capita : USD 4,036 – USD 12,475

GNI per capita : USD 12,476 or more

36 countries 52 countries 54 countries 69 countries

6.9% 5.4% 5.2%* 3.9%

Examples : • Mali • Bangladesh • Cambodia • Nepal • Tanzania

Examples : • Indonesia • India • Sri Lanka • Vietnam • Ghana

Examples : • Malaysia • China • Brazil • Turkey • Mexico

Examples : • Singapore • USA • Switzerland • Japan • Israel

World Bank classifies nation economies into 4 categories. 69 out of 212 countries (33%) are classified as high income

1 2 3 4

4

*Without China

Average GDP growth (Asian)

2020 GNI

Target

2009 GNI

Malaysia’s target of

becoming a

high income

nation by 2020

Nominal GNI (USD)

USD 15,000

USD 6,700

Recap of how GNI target was derived

1 Took World Bank’s current threshold for high income economy

US$12,476

2 World Bank’s published historical global inflation figure

2%

US$15,000 in 2020

RM 661 bil

RM 1,733 bil

RM billions Nominal GNI

RM 359 bil

2020 GNI

Target

Entry Point

Projects

(EPPs)

Growth in

other

sectors

RM 337 bil

2009 GNI Business

Opportunities

(BOs)

11 Sector NKEAs

1 2

RM 376 bil

3

There are many components that will contribute to

the growth of our economy

Source: NKEA Labs

SRIs SRIs

&

To Become A High-Income Nation, We Need:

We need “Drivers” to ensure focus on

high-impact areas

FOCUS

NKEAs

We Need “Enablers” To Ensure

Competitiveness

COMPETITIVENESS

51 Strategic Reform Initiatives 12 National Key Economic Areas

Two years of ETP = Vertical Take-Off

Comms Content &

Infra

11 Economic Sectors

+

Greater

Kuala Lumpur

Wholesale & Retail

Oil, Gas & Energy

Palm Oil & Rubber

Healthcare

Financial Services

Greater KL/Klang

Valley

Agriculture

Tourism

Education Electrical & Electronics

Business Services

141% (142%)

108% (81%)

118% (96%)

120% (91%)

151% (73%)

101% (92%)

109% (86%)

138% (86%)

119% (110%)

170% (106%)

98% (83%)

103% (76%)

123% (94%)

Note: YTD Oct 2012 % in brackets

NKEA

2011 FY % Achievement (2012 YTD% Achievement)

Quick recap of the ETP

Updates on NKEAs & SRIs

How our economy has performed

Challenges we have faced

1

2

3

4

SRI: Competition, Standards & Liberalisation

Competition Act Enforced on 1 January 2012

Remove Anti-Competitive Agreements

Remove Abuse Of A Dominant Position

X

Malaysia Has 6,260 Standards But Less Than 10% Are Enforced

6,260 328 3,759

Malaysian Standards Have Been Developed

60% Are Aligned With International Standards

5.3% Have Been Made Mandatory

But

SRI: Competition, Standards & Liberalisation

MS developed in 2012 as of 30 October 2012 is 347 MS

No. of MS made mandatory in 2012: 8 MS

SRI: Competition, Standards & Liberalisation

Liberalisation Of Sub-Sectors

Up to 100% foreign equity participation will be allowed

17 sub-sectors announced in Budget 2012 for liberalisation

15 sectors fully liberalised:

Accounting/Taxation; Courier; Dental Specialist; Departmental & Specialty Stores; Incineration; Int’l Schools; Legal; Medical Specialist; Private Hospital; Private Universities; Skills Training; Telco ASP; Telco NFP & NSP; Technical & Vocational Schools; Technical & Vocational Schools (for special needs students);

Approval of Construction Permits now

within 100 days (previously 260 days)

22 steps

10 steps

SRI: Public Service Delivery

92 Police Stations in Selangor,

Will be extended Nationwide

SRI: Public Service Delivery

Real Time Performance

Monitoring

Option 2: Send SMS to 15888

Option 1: Counter Rating

SRI: Public Service Delivery

Results: Real Time Performance

Monitoring

88.4% Very Satisfied

11.4% Satisfied 0.1%

Unsatisfied

0.1% Very

Unsatisfied

Total ratings: 102,919 (January – Oct 2012)

SRI: Public Service Delivery

Selangor Immigration

Centres

National Registration Department

Dewan Bandaraya

Kuala Lumpur

Perbadanan Putrajaya

Effective April 2012, rating services also available at the places below:

SMS Rating Available

Human Capital Development

Upskilling/Reskilling - NTEP

• The National Talent Enhancement Programme (NTEP) was launched covering 5 states/regions and 650 placements across Malaysia for E&E & BSvc (Green Tech)

• 347 trainees in companies • Accelerate development of skilled

workforce through partnership via industry attachment programmes

HR Management in SMEs

• 4,567 SMEs benefited from free tailored HR solutions via interactive HR portal

• 7,301 SMEs benefited from HR Capability Building Programme

Minimum Wage

• PM announced minimum wage of RM900/RM800 on 30 Apr 2012

• 6 months to implement post-gazette, 12 months for micro-enterprises

Employment Act 1955 (Phase 1 & 2)

• Phase 1 of Employment Act 1955 passed in Parliament includes 28 amendments to the current provisions, 17 new provisions and 2 provisions repealed

• Phase 2 in progress • Bill on raising minimum

retirement age to 60 passed on 28 June

Project Flip - O&G NOSS

• Leverage PETRONAS Skills Training (POSS) to develop National Skills Training (NOSS) in 7 disciplines

• Enable technical-vocational training centres to deliver up-to-date, industry relevant skills training

Up-skilling / Re-skilling – MyProcert • MyProcert programme launched on 11 Oct

2011 for BSvc & CCI • 11 partners to date including SAP, Huawei,

Oracle, iTrain, Scicom, SnT, National Instrument, Autodesk

• 1,250 professionals targeted, 946 enrolled • Catalytic to up-skill Malaysians to global

certification standards

NKEA Milestones

MRT Making Good Progress

Work Package Tender Status

Awarded In Progress To Be Called

53 (RM22.31b)

8

24

NKEA: Greater KL

ILLUSTRATIVE

Heavy Industry

Lig

ht In

du

stry

RAPID

6,500 ac

PETRONAS RAPID

RM60 billion

6,500 acres

Refinery

Petrochemicals

2016 commissioning

DIALOG-VOPAK

RM9 billion

500 acres reclaimed land

Petroleum Terminal

LNG Regasification Plant

2014 Phase 1 commissioning

500 ac

Heavy Industry

Potential Investor B

RM30 billion

4,000 acres

Refinery

Petrochemicals

4,000

ac

Potential Investor A

RM24 billion

2,000 acres

Refinery

Petrochemicals

(future phase)

2,000

ac

Total Potential

RM170+ billion of investment

22,000 acres of industrial area

Pengerang Integrated Petroleum

Complex (PIPC) Goes Beyond RAPID

NKEA: Oil, Gas & Energy

2020 GNI

impact:

RM17.7 Billion

Total job

creation

8,500

2020 GNI and Job creation from Oil

& Gas investment in Pengerang

Bio Gas for a Green Economy Capturing methane gas to generate electricity for a greener economy. This energy generated can be sold to the national grid or used by mills internally.

Examples Of Completed Biogas Plants Biogas Development at Mills YTD 2012

Mills Completed

Under Construction

Planning Stages

NKEA: Palm Oil & Rubber

57

15

149

Expediting growth in food and health based

segment – Tocotrienols and carotenes

*FY2011 + YTD2012

NKEA: Palm Oil & Rubber

2 10 R&D grants approved for clinical

trials on palm phytonutrients

Business proposals approved to-date on tocotrienol and carotenes

production

• Tocotrienols has been known to reduce cholesterol, lower blood pressure, reverse arterial blockage, protect

against heart injury, anti-cancer, suppress tumors and many others.

• Carotenes are natural antioxidants and are known for their pro Vitamin A properties.

Worth

RM29.2mil

Worth

RM24.3mil *FY2011 + YTD2012

Sukuk – Malaysia is still ahead!

NKEA: Financial Services

70% of total global sukuk

issuance are from Malaysia!

(Total Middle East:

approximately 25%)

2 of 4 largest global IPOs in 2012 listed in Malaysia

Facebook Japan Airlines Felda Global Ventures IHH Healthcare

IPO (USD Billion)

16.0

8.5

3.3

2.0

Source: News reports, ECM Analytics

1

3

4

2

NKEA: Financial Services

E&E is moving into higher value R&D activities

all along the value chain

NKEA: Electrical & Electronics

Assembly Manufacturing Research and Development

These will enable the E&E industry to achieve RM90 billion in GNI

by 2020 and contribute an additional 157,000 jobs

Higher quality of jobs and higher GNI contribution for Malaysia!

NKEA: Electrical & Electronics

EPP Assembly Manufacturing

Activities R&D Activities Remarks

1 Wafer fab Infineon opened a new plant in Kulim. Silterra and MIMOS

actively involved in R&D

2 Advanced packaging Infineon and On-Semiconductors are expanding their R&D

activities

3 IC Design 5 companies are expanding operations and 3 new companies

are setting up

4 Substrates Penchem is heavily involved in R&D of advanced polymers.

Ibiden is expanding their facility with Phase 2

5 Solar silicon producers Tokuyama is involved in manufacturing polysilicon substrates

6 Solar cell & wafer

producers

TS Solartech and Panasonic involved in manufacturing and R&D of solar cells and wafers

7 Solar module producers HBE Gratings, Panasonic and Solartif involved in

manufacturing and R&D activities

8 LED front-end

operations Osram is expanding their LED wafer fabrication plant

9 Packaging & equipment Philips Lumileds expanded R&D and manufacturing facilities

10 Local SSL champions 6 local companies participating in a programme with SME

Corp to penetrate regional / global market

11 Test & measurement Agilent launched vendor development programmes with 3

local companies to develop local capabilities

12 Wireless

communications

Smartag implemented an RFID tagging system with Royal Customs

13 Automation equipment 9 companies have obtained approvals to expand / diversify

their operations via automation

14 Transmission &

distribution Tenaga Switchgear is setting up a high power testing lab

15 Electrical home

appliances

Pensonic is setting up a manufacturing hub and expanding their international distribution network

More manufacturing and R&D activities

Before After

Improving the Livelihood of more than 1000 Sundry Shop Owners - TUKAR

1,077 shops transformed

since 2011 (519 in 2011 + 558 YTD in 2012)

NKEA: Wholesale & Retail

~30% average revenue growth within several months

post transformation of stores!

Quick recap of the ETP

Updates on NKEAs & SRIs

How our economy has performed

Challenges we have faced

1

2

3

4

Items we will go through today……

Steady Growth!

2009 2010 2011 9M 2012

Real GDP Growth % (YoY)

Real GDP Growth % (YoY)

-1.6

7.2

5.1 5.3

Source: Department of Statistics

Country Q3 yoy

APAC consensus for Malaysia (in Jan 2012)

3.8

Thailand 3.0%

Singapore 1.3%

South Korea 1.6%

Taiwan 1.0%

Hong Kong 1.3%

Public Investment Private Investment

9M 2011

9M 2012

Target 2012

RM52.7b

RM66.1b

RM89.5b

RM112.2b

Note: Based on current prices

25.4%

Encouraging total investment growth until September 2012

25.5%

RM100.0b

RM127.9b

Private Outpacing Public Investment

0

20

40

60

80

100

120

2009 2010 2011 9M 2012 2012F

Public (RM b) Private (RM b)

51.7%

48.3% 43.0%

57.0% 22.5% 9M 2012

12.2% FY 2011 Average 6.7%

2000-2010

Source: Department of Statistics, at constant prices

56.1%

43.9%

62.9%

37.1%

Investment Growth

2009 2010 2011 2015** target

2020 target

6.6% 5.6%

4.8%

3% 0% / Neutral

As percentage of GDP (rebased figures) * forecast **2015 Target as per 10th Malaysia Plan

4.5% 4%

2012* 2013 target

Gradual Reduction in Fiscal Deficit…

Sovereign

crisis

levels

Safe zone

Public debt (% of GDP), 2009*

Greece

United Kingdom

Spain USA

India

Japan

Singapore

Hong Kong

Indonesia

Thailand

-15 1 -14 -13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0

50

100

150

200

Surplus / deficit (% of GDP), 2009*

Malaysia

2009

Malaysia

2010

Malaysia

2011

Malaysia is moving closer to the “Safe Zone”

Source: EPU, MOF, BCG analysis, Economist Intelligence Unit

Notes: 1. Malaysia’s figures are for 2009, 2010, 2011 2. Position of other countries in 2010 and 2011 will move, but not

shown in the chart above

Target for

Malaysia

2012

Market capitalization is up at RM1.46 trillion Bursa Malaysia hit historical high on 1 Nov 2012

FTSE Bursa Malaysia KLCI

RM 1.46 trillion 1st November 2012

30% RM340 billion

RM 1.12 trillion Aug 2010

Market Capitalisation 1 Nov 2012:

1,675.69pts

What Do The External Validators Say About Our Economy?

Consumers Remain Optimistic

81

87

96 95 98 99

103

107 105

110

101 101

107 110

101

70

75

80

85

90

95

100

105

110

115

120

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

Source: Nielsen Consumer Confidence Index

FDI Confidence Rising

.

Source: AT Kearney Foreign Direct Investment Confidence Index®, 2012

World Bank Doing Business Report

Getting credit: #1 (unchanged) Protecting investors: #4 (unchanged)

Getting electricity: #28 from #59 Registering property: #33 from #59 Paying taxes: #15 from #41 Trading across borders: #11 from #29 Dealing with construction permits: #95 from #113

Ahead of Sweden, Taiwan, Germany, Japan & Switzerland

2010 (n=183)

2011 (n=183)

2012 (n=183)

#18

#23 #23

2013 (n=183)

#12

World Bank Doing Business 2013

#14 out of 59 countries globally #4 amongst 13 Asia Pacific countries #5 of 29 economies with more than 20 million population #2 after Taiwan among 29 economies with GDP per capita less than US$20,000 Ahead of Australia, UK, South Korea, Japan & France

Institute for Management Development World Competitiveness Yearbook 2012

IMD World Competitiveness Yearbook

2010 (n=58)

2011 (n=59)

2012 (n=59)

#14

#10

#16 #18

2010 (n=57)

World Economic Forum Global Competitiveness Report 2012 #25 out of 144 countries globally

#8 amongst Asia Pacific countries

#2 in ASEAN Upgraded to transition stage between efficiency-driven towards innovation-driven Ahead of Israel, Ireland & China

WEF Global Competitiveness Report

2009 (n=133)

2010 (n=139)

2011 (n=142)

#21

#24

#26

2012 (n=144)

#25

#4 ranked in the World by CNN

#2 amongst Asia Pacific after Japan

3 of the world's 10 largest malls are in Kuala Lumpur Scored a maximum 10 on Value (Bargain opportunities, such as sale seasons and average prices) Ahead of Paris & Hong Kong

Our initiatives in Tourism and Greater KL are working!

CNN World's 10 Best Shopping Cities

KL ranked #2 in Asia Pacific by the Globe Shopper Index due to a large number and variety of shops

ETP Progress since October 2010

+ = 110 Projects

Investment: RM179.2 b GNI in 2020: RM129.5 b

Jobs: 313,741

39 Projects Investment: RM32.8 b GNI in 2020: RM8.1 b

Jobs: 97,151

149 Projects Investment: RM212.0 b GNI in 2020: RM137.6 b

Jobs: 410,892

2011 2012 Total

Source: Department of Statistics, Ministry of Finance

100%

Target = RM884 billion

Target = RM127.9 billion

GNI (nominal figure)

Private Investment

RM436 bil (49%) (Q2)

RM112.2 bil (88%) (Q3)

2012 Results Benchmarked Against Targets

2011 GDP Growth: 5.1% 2011 GNI per capita: $9,500 Note: 2009 GNI per capita: $6,700 Figures are before rebasing by BNM/MoF (2011 GNI after rebasing: $9,700)

45

Countries from all around the world

requested to learn our methodology

BFR Seminar 21 – 24 November 2011

14 Countries, 52 participants

Tanzania 4 – 5 August 2012

Russia 9 August 2012

Upcoming

proposed visits

Sierra

Leone

Egypt

Brunei 4 Sept 2012

46

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

Not available for distribution or download

Title: Economic Transformation:

All About Focus, Competitiveness, and

Execution

Published: November 2012

Author: Prof Diego Comin/Ku Kok Peng

Quick recap of the ETP

Updates on NKEAs & SRIs

How our economy has performed

Challenges we have faced

1

2

3

4

Items we will go through today……

The ETP Scorecard KPIs

48

The Traffic Light Approach

<50%, Underperformed

Achieved 50% or more

100% or Exceeded Targets

NKEA Education – Educity @ Iskandar

What happened? • Target student enrolment not met due to immigration issues and scholarship dependencies

(115 Actual 2011 Versus 1,600 FY Target)

Actions Initiated: • Collaboration between relevant agencies eg. IRDA, MOHE, PEMANDU, Immigration,e tc • A paper was tabled to Cabinet to assist Marlborough College Malaysia to resolve issues related to

work visas for foreign teachers and enhance ease of daily commute across the Singapore-Malaysia border

• JPA and MARA scholarship students for Newcastle University Medicine (NUMed)

And Now: • Marborough College Malaysia exceeded target student intake in 2012 (350 students) • Education Malaysia Global Services (EMGS) set-up as a one-stop-centre for processing of student

visas as well as to promote Malaysia as an education destination for international students

For further information, please refer to page #167 of the ETP Annual Report 2011

NKEA Palm Oil & Rubber – Accelerating Replanting and New Planting

What happened? • FY2011 target plant area was 126,500 ha but achieved 103,000 ha (approx

1.5 times Singapore)

Actions Initiated: • On-going monitoring, tracking and boost replanting and new planting

efforts with grant from Federal Government for the period 2011-2013 And now:

• Growth on track despite highest average CPO price in past 3 years • Current hectares planted (YTD 0ct 12) is 96,396 ha versus FY2012 target of

130,000 ha

For further information, please refer to page #89 of the ETP Annual Report 2011

Other Challenges

We’ve also announced several other projects that have received some

media attention. Here, we will share you the updates of these projects.

Karambunai

52

What happened? • Delay of a year in the implementation of the first phase due to the many appeals

against the Housing Developers Act requirements • Knock on delays in the re-approval of development permits due to business plan

changes • Construction set backs We are: • Ensuring that both federal and state government bodies provide full support in

facilitating the progress of the project • Awaiting Project Owners to review the development plans for the Golf Waterfront. And now: • RM4.9 Million Restaurant – operational Oct 2012 • Beachfront Resort Residences - approved for development March 2012 • Master Land Use Plan – approved July 2012

This initiative is a part of EPP5 (Eco-Nature Integrated Resort Development) under the Tourism NKEA

TriCubes

53

What happened? • Low adoption rates for My Email We are: • Working to educate the public on an authenticated, secure email service and

other advantages of e-services And now: • Company has invested more than RM5mil in 2011, created 20 jobs, growing

user base of more than 22,000 active users. • New eServices: JPJ's Driving License, Road Tax Reminders, and eBilling • PDRM to pilot MySOS mobile application in IPK KL

This initiative is a part of EPP6 (Deepening E-Government) under the Communications Content & Infrastructure NKEA

What happened? LFoundry's was planning to relocate its European operations to Malaysia. Several months after its commitment to construct five wafer fabs including the pilot facility, the parent company filed for bankruptcy. When it was clear that there were no players to forward the project in its original form, we removed the committed investment from the total sum of committed investment in 2011. We have: • Organically growing our existing capabilities and infrastructure throughout the

country

And now: • Seven existing FABs throughout Malaysia producing 78k wafers per month • Establishment of The Semiconductor Fabrication Association of Malaysia to

enable FABs to collaborate, optimize resources and knowledge sharing to increase overall production.

LFoundry

This initiative is a part of EPP1 (Mature Technology Fabrication) under the Electrical and Electronics NKEA

Our nation is heading towards the right direction

The ETP is an Evolving

Document

ETP started out with 131 EPPs in 2010

In the past 2 years, some EPPs have been dropped, and some

new ones were added.

Today, we have 152 EPPs with 149 projects

announced to date.

EPPs : Entry Point Projects

Source: Department of Statistics Projections: PEMANDU team Analysis

2009

We are on track to achieve GNI target for 2020

2010 2011

$15,000

$6,700

$7,455

$8,200

$8,100

$9,500

2020

$15,000

21%

17%

2018

Source : Bank Negara 2011 Figures (rebased)

We also need to encourage more Malaysian

businesses to invest overseas!

GNI

Net Factor

Income

From

Abroad

RM 664.7b

- RM 44.6 b

GDP

CONSUMPTION

INVESTMENT

TRADE

INVENTORY

RM 709.3b

RM446.9b (63%)

RM166.5b (23%)

RM92.6b (13%)

RM3.2b (1%)

• World's second-largest hospital group by market capitalisation;

• Hospitals present in many countries including China, India, Hong Kong, Turkey, Vietnam and Brunei

• Consortium consists of SP Setia, Sime Darby, EPF

• Gross Development Value of RM50 billion (£8 bil)

10 point evidence of success:

ETP is catalytic to the Malaysian economy

Currently there are 152 EPPs with 149 projects already announced with total committed investment of RM212 billion, RM137 bil GNI in 2020, creating 410,892 jobs

Healthy GNI increase From only US$6,700 in 2009 to US$9,700 in 2011 (45%)

Strong GDP growth during global economic slowdown

7.2% in 2010, 5.1% in 2011, 5.3% up until Q3 2012. By comparison for Q3 year on year; Singapore is 1.3%, Thailand 3.0%, South Korea 1.6%, Taiwan 1.0%, Hong Kong 1.3%

Record GDP/GNI ensured record Govt revenue

Ensured Govt achieve highest revenue in history (RM185 bil in 2011)

Record private investment 10-year high

RM111.8 bil private investment , RM36.6 bil FDI, 2012 on track to achieve better results

1

2

3

4

5

Continued…..

10 point evidence of success:

Healthy domestic consumption growth

7.3% growth in 2011 and 8.5% growth in 2012

Record stock market performance

FTSE Bursa Malaysia KLCI market capitalisation scaled a new historic high on 1 November of 1,675.69 points (RM1.12 trillion market cap)

Reducing fiscal deficit 6.6% in 2009, 4.8% in 2011, while Govt strive to constantly reduce the deficit further

Recognition from external parties

World Bank’s Ease of Doing Business ranking (18 to 12); AT Kearny FDI Confidence Index (21 to 10), IMD World Competitive Ranking (16 to 14)

NKEA KPIs met/surpass targets

123% achievement in 2011, currently stands at 94% (2012 YTD)

6

7

8

9

10

We’ve made a lot of progress together. Let’s keep the momentum!

THANK YOU • www.etp.pemandu.gov.my • www.businesscircle.com.my • www.kopitiamekonomi.com • www.facebook.com/etpmalaysia • @etp_roadmap • http://etp.pemandu.gov.my/form_how_to_participate.aspx