The New Industrial Master Plan (“NIMP”) is pivotal for Malaysia’s industrial development. Malaysia’s manufacturing sector has to accelerate the Fourth Industrial Revolution, taking advantage of smart technologies.
The manufacturing sector remains one of the primary engines of growth (2022: 24.1% of gross domestic product or GDP: 84.2% of total exports and 16.8% of total employment) and had expanded at steady rate of 4.8% per annum in 2015-2022 (4.9% per annum in 2011-2015).
Source:
https://www.bernama.com
The NIMP targets to increase the manufacturing sector’s value-added by 6.5% per annum to RM587.5bil by 2030 (RM364.1bil in 2022); employment growth of 2.3% per annum to 3.3 million in 2023 (2022: 2.7 million persons); while median salary will increase by 9.6% per annum to RM4,510 in 2030 (2021: RM1,976).
The country has prematurely de-industrialised since early 2000s, mainly due to increased global competition and slow progress in moving up the value chain.
Malaysia’s Economic Complexity Index ranking (24th in 2021), which indicates the productive capability of an economy, was lagging behind advanced economies (first for Japan, fourth for South Korea and sixth for Singapore); other developing regional peers are fast catching up (29th for Thailand); and labour productivity growth has moderated and stagnated (2.3% per annum in 2013-2022).
Our regional peers are receiving more foreign direct investment (FDI) inflows in recent years. During the period 2017-2022, Malaysia registered FDI inflows of US$9.4bil per year compared to US$96.4bil per year for Singapore, US$20.9bil per year for Indonesia and US$15.8bil per year for Vietnam. The Philippines is catching up fast (US$9.2bil per year) while Thailand’s FDI has dwindled to US$7.1bil per year.
The NIMP maps out a comprehensive industrial direction, strategies and enablers with the aim of positioning Malaysia for new growth catalytic sectors and industries in the decades ahead. The NIMP 2030 calls for a “Whole-of-Nation” approach and adopts a mission-based approach to drive the manufacturing transformation in four ways:
• Advancing economic complexity,
• Tech-up for a digitally vibrant nation,
• Pushing for the net-zero target, and
• Safeguarding economic security and inclusivity.
The master plan will chart a new generation of sustainable industrial policies, underpinned by four enablers, 20 strategies and 56 action plans.
Domestic manufacturing industries have to strengthen their resilience and competitiveness to counter operational challenges caused by geo-economic conflicts that disrupt supply chains, resource scarcity that threatens energy and utilities security, and adverse climate change disruptions.
The identified five pivotal sectors are:
• Electrical products and electronics,
• Chemical and chemical products,
• Advanced materials,
• Aerospace, and
• Healthcare (including medical devices and pharmaceuticals).
The key is implementation. Plans can be beautiful but if the Ministries and individuals are not subscribing (buy-in) to the Plan, it becomes purely an academic exercise. Trust me, I have been there before.
The other resources, like the right people, skills, talent are they available? Do we encourage STEM? Will the Education Ministry recalibrate their Blueprint? I know I sound like a cynic, but forgive me for my doubts!
Reference:
NIMP sets the breakthrough agenda, Lee Heng Guie, The Star, 5 September 2023
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