PUTTING THE CURVE IN BODY POLITIC

Malaysia 2017 | ECONOMY | INTERVIEW

TBY talks to Tan Sri Dato' Sri Abdul Wahid bin Omar, Former Minister in the Prime Minister's Department of Malaysia, on reducing oil dependency, boosting sustainable infrastructure, and preparing for rainy days.

Tan Sri Dato’ Sri Abdul Wahid bin Omar
BIOGRAPHY
Prior to his ministerial appointment in 2013, Tan Sri Dato’ Sri Abdul Wahid bin Omar served as the President and CEO of Maybank. During his tenure, he led Maybank to become a leading regional banking group and received the Asian Banker Leadership Achievement Award 2013 for Malaysia. He was made a Minister in the Prime Minister’s Department in June 2013.

From an economic and a policy perspective, what have been the most important achievements in the past year?

In 2015, we were concentrating on the preparing the Eleventh Malaysia Plan, which was approved by parliament in June 2015, seven months ahead of the implementation date. By January 2016, every government ministry and agency could focus on executing the plan. In terms of the global markets, we experienced a continued decline in the oil price: the average before 2014 was USD100 per barrel, dropping to about USD15 in 2015. That means there are more challenges for us but fortunately we have taken measures to reduce our dependency on commodities, particularly oil and gas. In terms of the commodity sector's contribution to GDP, including agriculture and mining, it was only 18% of total GDP. Government revenue coming from oil and gas activities went from 40% in 2009 to 30% in 2014. We were prepared for the worse; hence, when we started to implement GST in 2015, we were able to bring down the dependency to 19%. This has prepared us better to face the additional challenges from low oil prices. The third landmark event was the signing of the TPPA in February 2016

What will be the main impact of the Eleventh Malaysia Plan and how will it change business for investors coming to Malaysia?

The main theme of the Eleventh Malaysia Plan is anchoring growth on people, with emphasis on growing the economy. It is important to ensure that economic growth translates into real benefits for the people, meaning better business and employment opportunities, in turn translating into higher household income and enhanced wellbeing for the people. This is why we have chosen the theme of anchoring growth on people, for which we have outlined six strategic thrusts, namely: enhancing inclusiveness for an equitable society; improving well-being for all; accelerating human capital development for an advanced nation; pursuing green growth for sustainability and resilience; strengthening infrastructure to support economic expansion; and re-engineering economic growth for greater prosperity. In order to implement the strategies, we have also identified six game changers, namely uplifting B40 households towards a middle-class society; enabling industry-led technical and vocational education and training (TVET); embarking on green growth; unlocking the potential of productivity; translating innovation to wealth; and investing in competitive cities. This is in line with our New Economic Model (NEM), which aims to achieve developed nation status by 2020 with the three components of high income, inclusiveness, and sustainability.

As we embark on the last leg toward Vision 2020, what are the main challenges ahead?

The three core components of the NEM are high income, inclusiveness, and sustainability. To achieve a higher income for our households, we have embarked on the Economic Transformation Programme. This includes promoting and supporting new economic areas and sectors, and we have put in place catalytic projects to boost the growth of these sectors. Our main challenge is to translate economic growth into better living conditions. One of the initiatives is by embarking on a number of new infrastructure projects, such as the development of the Pan-Borneo Highway in Sabah and Sarawak, which will allow more Malaysians, especially in rural areas, to participate in economic development. This is the inclusiveness element. We also need to improve labor productivity. We have been relatively over-dependent on cheap foreign labor, which is not necessarily productive for the medium term. In terms of sustainability, Malaysia has been responsible in terms of managing its natural resources. As we move forward, we should follow through on our early commitments and look more into green growth and conserve our natural resources for future generations.