'Good start for country looking to achieve high-income status by 2020'
PETALING JAYA: Economists view the results of the Economic Transformation Programme (ETP) as encouraging, saying it was a good start for the country looking to achieve the high-income status by 2020.
MIDF research chief economist Anthony Dass said the government would be pushing the ETP to drive or accelerate multiplier effects in the domestic growth as the global economic outlook remained uncertain.
"Domestic demand would be catalyst for growth and public investment would also play an important role," he said.
"Private investment has to remain buoyant. Only then will confidence from private consumption remain.
"So, public investment would encourage private investment which, in turn, drives private consumption."
Dass said revenue from exports would complement these three areas.
He described as "encouraging results" private investments surpassing the target set under the ETP by 13 per cent to reach RM94 billion, and the increase in Foreign Direct Investment (FDI) of 12.3 per cent to reach RM32.9 billion.
On criticism that the ETP did not embody proper reforms to the economy, Dass perceived the government was doing more of a "balancing act" rather than reforms.
"The question is whether it is the correct time to do it," he said.
Reforms such as the alleged removal of subsidies and introduction of Government Service Tax (GST) would result in a repercussion which would probably have a negative spiralling effect.
"There is a lot of uncertainty in the global outlook. The numbers in United States might look good today but in three months, it could be totally different.
"The government might be shooting themselves in the foot if they were to implement proper reforms now. The balancing act is appropriate currently," he said.
Ram Holdings group chief economist Dr Yeah Kim Leng said both the Government Transformation Programme (GTP) and ETP had showcased encouraging results since being launched several years ago.
"The progress of both programmes has been tangible," he said.
"Also, the improved standing of the country in terms of global competitiveness and ease in doing business is consistent with the achievements reported."
Yeah said the increase in private investments and foreign direct investments (FDI), resulting in the highest record of Gross National Income of RM830 billion, was a good start for the country heading towards becoming a high-income nation by 2020.
On the sustainability of the results achieved under the ETP, Yeah said economists lookd to the competitiveness of a country in the world economy as a foundation to achieve a highly sustainable growth over approximately 10 years.
"So we need to raise overall productivity and competitiveness of the economy," he said.
"Some of the initiatives under the GTP and ETP can only produce tangible results in a few years."
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