The Twelfth Malaysia Plan & What it means to the Ordinary Malaysian

The Twelfth Malaysia Plan (12MP) 2021 - 2025, is a development plan aiming to reform Malaysia for the next 5 years to achieve a prosperous, inclusive, sustainable country based on the spirit of Keluarga Malaysia (Malaysia Makmur, Inklusif, Mampan).

The Twelfth Malaysia Plan (12MP) is the first half of the Shared Prosperity Vision 2030 (Wawasan Kemakmuran Bersama 2030 or WKB 2030), which will guide Malaysia’s development path over the next 10 years; with the focus on rejuvenating & repositioning the country in the global economy, following the challenging situation brought about by the COVID-19 pandemic.

The Twelfth Malaysia Plan (12MP) focuses on three key themes:

1. Resetting the economy (Menjana Semula Ekonomi)

2. Strengthening security, wellbeing and inclusivity (Memperkukuh Keselamatan, Kesejahteraan dan Inklusiviti)

3. Advancing sustainability (Melonjakkan Kemampanan)

Theme 1: Resetting the economy (Menjana Semula Ekonomi)

Theme 1 focuses on restoring the growth momentum of core economic sectors in Malaysia while also stimulating and propelling the growth of strategic and high impact industries, as well as Micro, Small and Medium Enterprises (MSMEs)

Target MSME contribution to the economy and digital adoption in 2025:

1. 45% Contribution of MSMEs to GDP

2. 25% Contribution of MSMEs to Total Exports

3. 90% MSMEs digitalise their business operations

In the coming 5 years, the focus will be placed on accelerating the development of strategic and high impact industries that includes:

1. Electrical and Electronics (E&E) - Market size by 2025: RM120b contribution to GDP

2. Global Services - Market size by 2025: RM89b Global Services Investment

3. Tourism - Market size by 2025: RM73b inbound tourist expenditure

4. Halal - Market size by 2025: RM56b Halal exports

5. Creative: - Market size by 2025: RM32b Creative industry contribution to GDP

6. Aerospace - Market size by 2025: RM30b Aerospace industry revenue

7. Biomass - Market size by 2025: RM10b Biomass industry investment

8. Smart Farming

Theme 2: Strengthening security, wellbeing and inclusivity (Memperkukuh Keselamatan, Kesejahteraan dan Inklusiviti)

The Twelfth Malaysia Plan (12MP) looks to enhance the security and wellbeing of Malaysians by providing quality healthcare and housing, addressing poverty, strengthening inclusivity, as well as achieving a decent standard of living and social justice.

Enhancing Healthcare Services through digitising healthcare services and fostering collaboration with the private sector by introducing a Healthcare System Reform Blueprint, which will include Public Healthcare Transformation, Private Healthcare Regulatory Reform and Sustainable Health Financing.

Increasing Supply of Affordable Housing with the allocated RM2.25 billion to provide an additional 500,000 affordable homes by 2025. The construction of affordable houses will be made a priority in the development of new townships and access to financing will be expanded e.g. by introducing a new financial model with more attractive loan packages.

Addressing Poverty and Narrowing Inequality by introducing new initiatives including a dedicated tax to finance poverty alleviation, establishing dedicated poverty units and integrating & centralising a database on poverty.

Optimising Regional Economic Potential with the focus on accelerating development based on key growth nodes and hotspot areas, attracting quality investment and improving the business ecosystem. Greater emphasis will be given to enhancing socio-economic development in Sabah and Sarawak by providing better infrastructure, for example, RM7.7 billion allocation to both states for the provision of broadband coverage and construction of digital infrastructure.

Developing Future Talent, with Equitable Compensation with the focus on developing future talent by realigning the labour market and further improving the quality of education by: (1) Promoting equitable compensation of employees and labour participation, (2) Strengthening the labour market support system & (3) Improving the technical and vocational education and training (TVET) ecosystem to produce future-ready talent.

Emphasis is also given to raising the quality of education and training programmes, strengthening governance, and leveraging emerging technology.

Theme 3: Advancing sustainability (Melonjakkan Kemampanan)

Focuses on:

1. Advancing Green Growth

2. Enhancing Energy Sustainability

3. Transforming the Water Sector

* Its main aim is to ensure that greater economic growth does not negatively impact the environment.

Key Performance Indicators:

1. Reduced GHG emissions intensity to GDP of up to 45% by 2030 based ib emissions intensity in 2005 (This is to fulfil Malaysia’s commitment to the Paris Agreement of the United Nations Framework Convention on Climate Change).

2. 31% Renewable Energy target of total installed capacity by 2025.

Initiatives to move towards a low-carbon nation:

1. Developing enabling instruments for climate action including a nationally determined contribution roadmap specifying emissions needed to be reduced from key emitting sectors, feasibility study on carbon pricing, carbon tax, an emission trading scheme and payment for ecosystem services including carbon offset.

2. Sustainable Energy and Electricity For All by streamlining existing energy-related policies with the formulation of a comprehensive National Energy Policy, increase renewable energy installed capacity, adoption of better energy storage systems and repositioning the petrochemical and gas industry to be more competitive (by introducing a chemical industry roadmap and liberalising the gas market).

3. Other initiatives including Conservation of Natural areas, 120 cities & districts to achieve sustainable status by 2025, Supporting Electric Vehicles (EV) and Increasing Green Procurement to 25% by 2025.

Accelerating transition to the circular economy - Increased focus on integrating the Sustainable Development Goals (SDGs) and ESG principles:

1. Improving design and processes of products and services by setting a minimum content of recycled materials and sustainable sourcing standards.

2. Waste Management by implementing the extending producer responsibility (EPR) policy approach where producers are held responsible for the treatment and disposal of post-consumer products.

3. Increase Recycling Rate of household waste to 40% by 2025 from 30.7% in 2020.

4. Phasing Out Vehicles in a sustainable manner by conducting a study to identify suitable mechanisms.

Increasing Resilience against Climate Change and Disasters:

1. A number of projects amounting to RM16 billion will be implemented for (1) Flood mitigation, forecasting and warning, (2) Integrated river basin management and (3) Coastal erosion control.

2. New developments in high-risk, flood-prone and environmentally sensitive areas will be strictly regulated with existing building codes reviewed and critical infrastrcuture retrofitted.

How will it Impact the Ordinary Malaysians?

At first glance, the Twelfth Malaysia Plan may not seem relevant to the ordinary Malaysian as it deals with high-level policymaking. However, it provide us a greater sense of strategic direction in terms of the government’s broad spending plans and its importance to the ordinary Malaysian are:

1. The plan will be a litmus test for how the government responds to the multiple socio-economic challenges facing Malaysia today.

2. The plan will have an impact on bread and butter issues, such as cost of living, affordable housing, transport and social security, so we will know what’s in it for us.

3. The plan can also be a document for Malaysians to hold the government accountable on its plans for the nation. Its one thing to present a policy, it’s another to see through it fully.

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Will the Twelfth Malaysia Plan be effective?

With all effort designing the Twelfth Malaysia Plan, the plethora of fancy goals & targets and political instability, it begs the question of whether the plan shows promise to do better than its predecessors?

The Malaysian Government only achieved 32% (38 out of 120) of the targets planned in the Eleventh Malaysia Plan (11MP) and the poorest performing area was on targets related to governance, integrity & accountability, public finance management and public service delivery.

All things considered, blueprints remain blueprints if it's not executed effectively and getting enough buy-ins from relevant stakeholders. Looking at the Malaysian government past track records including being short-sighted and constantly looking for quick wins instead of long term policy continuity, it will not be surprising for us to see another plan staying as a plan and restraining Malaysia’s potential as an economic powerhouse in the region.

References

Twelfth Malaysia Plan,2021-2025. Available at: https://rmke12.epu.gov.my/en

12th Malaysia Plan (2021-2025): sector highlights. Available at: https://www.ey.com/en_my/take-5-business-alert/12th-malaysia-plan-2021-2025-sector-highlights

The Twelfth Malaysia Plan (RMK-12) Overview. Available at: https://www.pwc.com/my/en/publications/2021/centre-stage-rmk-12-overview.html

Highlights of the 12th Malaysia Plan. Available at: https://www.theedgemarkets.com/microsite/12-malaysia-plan

12th Malaysia Plan: Key highlights in the five-year development plan. Available at: https://www.straitstimes.com/asia/se-asia/12th-malaysia-plan-key-highlights-in-the-five-year-development-plan

The 12th Malaysia Plan (12MP) is coming up. why is this important to me? Available at: https://www.linkedin.com/posts/research-for-social-advancement_%3F%3F%3F-%3F%3F%3F%3F-%3F%3F%3F%3F%3F%3F%3F%3F-%3F%3F%3F%3F-activity-6847011690236801024-O4XT