Malaysia’s ‘road less travelled’ path to develop economy fruitful
KUALA LUMPUR: The government’s decision to choose the ‘road less travelled’ path in developing the economy since 2009 has been proved to be fruitful, says the Performance Management and Delivery Unit’s (Pemandu) chief executive officer, Datuk Seri Idris Jala.
He said by pursuing a mildly expansionary economic growth with private investments leading the way and implementing fiscal consolidation measures for sustainability, Malaysia has managed to stay in the ‘safe zone’ in terms of debt to gross domestic product (GDP) ratio and fiscal deficit level.
“You reduced the government borrowings by relying more on the private sector to be the engine of growth so you can keep your debt level low and have a sustainable fiscal position,” he said in his keynote address at the Public-Private Partnerships Roundtable Discussion here yesterday.
Idris said according to Boston Consultant Group, countries where the government’s debt was over 100 per cent of GDP while the fiscal deficit level was worst that eight per cent, that country belonged in the crisis zone.
“That is how Greece was quoted as a bankrupt country because debt level has been so high and to the point that its fiscal deficits were unsustainable,” he said.
Idris said Malaysia was among several countries that had set the level of its debt ratio to GDP at below 55 per cent.
Malaysia’s fiscal deficit was expected to narrow to 3.1 per cent of GDP by year-end from 3.2 per cent as at end- 2015, he said.
Meanwhile, Idris said, Malaysia was no long e r stuck in the middle income trap as it has consistently closed the gross nat i o n a l income ( GNI) gap, as set by the World Bank’s high-income threshold from 33 per cent in 2009 to 16 per cent in 2014. “The GNI grew from US$7,950 to US$ 10,760 ( US$ 1 = RM3.99) between 2009 and 2015, edging towards the high-income target of US$ 15,000 by 2020,” he said. He said the government was confident of closing the gap and achieving the target by 2020 set in the Economic T r a n s f o r mat i o n P r o g r a m m e. — Bernama