KUALA LUMPUR: The government is confident it can achieve the annual gross domestic product (GDP) target of between 4.5% and 5.5% that has been set under the 12th Malaysia Plan (12MP).

       The 12MP is a roadmap that spans the country’s development from 2021 to 2025.

       Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said he was aware of critics calling the annual GDP target “too optimistic”.

       “We have received comments telling us that that number is a little too optimistic.

       “But I think with the reopening of the economy and interstate travel now being allowed, we can achieve a growth of at least 3% this year,” he said during a virtual fireside chat at Invest Malaysia 2021 yesterday.

       Mustapa added that Malaysia’s GDP has been forecast to grow 6% in 2022.

       “If we hit 3% this year and 6% in 2022, if you average it out, that makes 4.5% over a two-year period. Of course going forward, we cannot forecast with any degree of certainty what’s going to happen beyond 2022.

       “But in our view, we think it is realistic, given the performance this year and next year. Assuming it continues for the next two-to-three years beyond 2022, with the policies that have been put in place under the 12MP, we believe it will provide the needed push towards economic growth.”

       Mustapa is aware that Malaysia could still fall short of its GDP target, as was evident under the 11MP (2016 to 2020).

       “The 11MP concluded last year. But 2020 and 2021 were very tough years for Malaysia. Our GDP target was between 4.5% and 5.5%, but last year we achieved 2.7%. So, we underperformed.

       “Also, the unemployment rate target under the 11MP was 3.3%. But at the end of last year, it was up to 4.5%. So these are some examples of how we were not able to achieve our targets. But this was expected, given the pandemic.”

       Mustapa said what is key is to ensure proper execution and accountability with the 12MP targets.

       “Unfortunately, the situation in the country is that we’ve not been able to deliver 100%. To be fair, we’ve done well, but there are still some weaknesses that we need to address.

       “It needs to be approached holistically. We need to mobilise every ministry and get our friends in the private sector to be with us as well.”

       In terms of accountability, Mustapa said there were weaknesses and leakages that needed to be addressed.

       “The government is committed to ensuring we can address these leakages.

       “We need to be more committed in enforcing some rules and regulations. But we have learnt quite a bit in the last plan. We are wiser now and hopefully, we are in a better position to rectify issues that we failed to address in the past,” he said.

       Additionally, Mustapa acknowledged that Malaysia’s tax-to-GDP ratio had been declining over the years, compared with other countries in the region.

       ‘This is a cause for concern. On one hand, you have Malaysians aspiring to enjoy a better standard of living; while on the other hand, you have revenues that are not keeping up with the phase of growth in expenditure.

       “To look for additional revenue, there are two ways of doing it.

       “One is to make the tax collection machinery more efficient, which is a continuous process of course. The other is to diversify our revenue base. This is a work in progress,” he said.