PETALING JAYA: The 12th Malaysia Plan (12MP) will focus on rejuvenating the economic sectors by boosting productivity.
This will be through accelerating technology adoption, expanding market exports, strengthening the effectiveness of the financial intermediation ecosystem, enhancing the role of industrial estates, as well as improving governance and policy.
“These concerted efforts will be undertaken to ensure that the growth momentum is restored,” said the 12MP report.
The economic sectors will also require a major shift in approach and implementation mechanism that will transform the sectors and improve the performance of the economy.
The report pointed out that the economic sectors, namely services, manufacturing, agriculture, mining and construction, served as the drivers of economic growth, creating jobs for the rakyat and generating export earnings.
During the 11MP, the services sector continued to be the biggest sector in the economy in 2020, contributing 58% to total gross domestic product (GDP).
The manufacturing sector contributed 23% to GDP, mining 7%, agriculture 7% and construction 4%.
“In general, these economic sectors face challenges in terms of low productivity, uncompetitive firms, rapid changes in the financial landscape and imbalanced industrial development between regions,” the report said.
There are also challenges arising from ineffective implementation mechanisms and governance in some sectors.
The Covid-19 pandemic has slowed down the growth of all sectors, impacting production, supply chain, trade, investment and productivity, the report added.
Under the 12MP 2021-2025, to boost productivity growth, emphasis will be given to strengthening the planning, evaluation and monitoring mechanism, moving up the value chain and strengthening financial capability.
In addition, measures will be undertaken to scale up successful initiatives of the Productivity Nexus. It noted that green practices will also be scaled up in managing resources and environmental issues.
On expanding the export markets, the report said a stable and healthy market is important to stimulate sectoral growth and achieve sustainable economic development.
“In this regard, the role of government-linked companies (GLCs) will be enhanced while a more fair and healthy competitive environment will be encouraged to improve market efficiency for the private sector to expand into domestic and international markets.
“Measures to expand domestic and export markets will focus on improving market efficiency, empowering the role of industry players and strengthening trade facilitation,” it added.
Efforts will also be undertaken to position Malaysia as a regional logistics hub, capitalising its advantage of good connectivity in the Asia-Pacific region to improve on its market efficiency.
The 12MP is also looking at strengthening the effectiveness of the financial intermediation ecosystem.
The report said this is particularly critical as countries, including Malaysia, respond to and recover from the economic and social impact of the global health crisis and other adverse shocks.
The launching of the third capital market masterplan and the new blueprint for the financial sector will serve to steer the direction of the overall financial system over the next five years.
“Emphasis will be on transforming the financial ecosystem to meet future economic needs, enhancing resilience and governance, as well as promoting a sustainable and inclusive financial system,” added the report.
The 12MP is also looking at the development of industrial estates and dedicated food production areas which have been recognised as one of the important platforms in attracting investments, especially high-tech investments.
Focus will be given on enhancing the role of industrial estates as growth catalyst and achieving a more balanced industrial development.
Hence, initiatives will be intensified to improve the attractiveness and investments in these areas.