Five-year plan a test of Abdullah's leadership 

Malaysia-today.net – 27/3/2006

Prime Minister Abdullah Badawi unveils the Ninth Malaysia Plan on Friday, a political milestone for him. Our Malaysia Bureau examines its key thrust areas in a three-part series. Over the next five years, Malaysia aims to pump RM30 billion (S$13 billion) into agriculture, spend RM10 billion on developing Johor and build up its railway links.

These are among key projects under the Ninth Malaysia Plan (9MP) that will be unveiled by Prime Minister Abdullah Badawi on Friday, officials say. The 2006-2010 plan is like the roll-out of a five-year Budget and is widely awaited for its projects. It will also showcase the vision of the Premier, who took over 18 months ago.

The plan's RM200 billion budget is about 25 per cent higher than the Eighth Malaysia Plan (2001-2005). The RM30 billion for agriculture, from public and private-sector funds, aims to cut food imports and raise rural incomes. For the construction industry, which has complained of a drought in big projects, a massive development of Johor is on the cards, along with a high-speed train linking KL and Singapore.

The government also plans to extend the light-rail network in Kuala Lumpur and its suburbs. But as well as building infrastructure, the Prime Minister wants to emphasise developing a more competitive workforce. As the five-year blueprint is also a political document, there will be deep interest in how he pushes the economic privileges of bumiputeras.

There has been disquiet that the government is quietly pushing a plan to get foreign-owned retail companies to restructure their businesses by taking on Malay partners. More than the programmes and projects, the 9MP is important to Datuk Seri Abdullah on two fronts. First, it lets him indicate where he wants to lead the country.

'The Plan is significant for him as it is his first five-year plan, and he would want to successfully implement what is laid out,' said Mr Khoo Kay Peng, executive director of the Socio-Economic Development and Research Institute.

Tun Dr Mahathir Mohamad, in his 22 years as premier, turned Malaysia from an economy based on tin and rubber into a top manufacturer of electronics and the 18th-largest trading nation.He built Putrajaya, the Petronas Twin Towers, the F1 Circuit, the Kuala Lumpur International Airport, fast highways and huge ports. Some say he overbuilt. Now Datuk Seri Abdullah is laying out the next step for Malaysia to become a developed nation by 2020.

Said Mr Ikmal Ismail, chairman of Umno Youth's education bureau: 'This is PM Abdullah's baby and will be the base to propel us to 2020. More than just infrastructure, improving our human capital will be as important.' 

Second, the Prime Minister must also show a viable path to continued economic health at a time when foreign investors are flocking to China and India. And this is why he wants agriculture to be the third engine of growth.

Said Mr Wan Suhaimi Saidi, economist at AmResearch: 'Agriculture growth can help the economy as there is much potential, while manufacturing or services will remain as the two biggest sectors.'

The 9MP will dish out incentives in areas where there is great potential. These include bio-technology with the growth of biofuel; attracting more business process outsourcing outfits; and enlarging the pool of small and medium-sized industries. Poverty eradication will be a theme for the rural areas and will be tied to growth in agriculture.

There are 1.3 million farmers and agriculture-sector workers in Malaysia, or 12 per cent of the workforce. Many rural Malays form the backbone of UMNO voters, which is why boosting rural incomes is also politically wise. There is a plan to cast farmers as agro-entrepreneurs, with the aim of attracting youths, including the 18,000 jobless undergraduates, to the sector.

'Malaysia wants to be a net food exporter by 2010 and we need this young energy in droves to help us,' said an Agriculture Ministry official. The government wants farmers to think big, along the lines of Leong Hup Holdings, which grew in 40 years from a backyard operation to a farm that produces 2.5 million chickens a month.

ECONOMIC PROFILE 

Population: 26.6 million.

Labour force: 10.5 million (1.3 million in agriculture).

Income: US$5,110 (S$8,280) per capita (Singapore, US$27,300).

GDP growth: 2004: 7.1 per cent; 2005: 5.3 per cent; 2006: forecast 6 per cent.

Poverty:
1995: 8.7 (per cent of population).
1997: 6.1.
1999: 7.5.
2002: 5.1.

Broadband: 8 per cent (Singapore, 52 per cent).