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Sadiq Khan - Mayor of London
Prime Minister Datuk Seri Najib Razak delivering the keynote address at the 6th GSIAC-Khazanah Distinguished Lecture Series yesterday (May 17, 2016) in London.
Nation’s
success due to innovation, inclusivity, sustainability
This is the full text of Prime Minister
Datuk Seri Najib Razak's keynote address at the 6th GSIAC-Khazanah
Distinguished Lecture Series held at Shangri-La Hotel, At The Shard, London,
United Kingdom, yesterday. Najib was in the UK for a three-day working visit,
ending yesterday, and had inaugurated the Malaysia-UK Investor Showcase and
attended the Global Science and Innovation Advisory Council annual meeting.
A sustainable economy is one in which we take care of our environment, and we in Malaysia have placed great emphasis on striking the right balance in terms of socio-economic
development and environmental health, in particular, the conservation of biodiversity and ecosystems.
ROFESSOR Alice Gast, president of Imperial College
London, honourable ministers, your excellencies, ambassadors and high
commissioners, senior officials and business leaders, distinguished guests,
ladies and gentlemen,
I am delighted to be back in London, one
of the world’s great cities, and one for which I have a close personal
affinity. It is a pleasure to join you here at The Shard, a great addition to
the London skyline.
I was happy to receive the invitation to
speak here today, as it provides the chance to make a key point to the global
community — that due
to the implementation of our reform
agenda, Malaysia is on course to achieve our goal of becoming a high-income-status
nation by 2020.
Three weeks ago, I presented the
government’s National Transformation Programme’s report card, which showed we
had met or exceeded virtually all of our key performance indicators.
Despite the global economic turmoil and
the drastic fall in the price of oil, which affected the Malaysian ringgit,
growth last year alone was five per cent, making Malaysia one of the fastest-growing
countries in the region. The OECD (Organisation for Economic Cooperation and Development)
forecasts Malaysia to average that same rate — far higher than the global
average — over the next four years.
Between 2009 and 2015, gross national
income increased by nearly SO per cent, 1.8 million jobs have been created,
inflation kept low, while Foreign Direct Investment has been growing at 22 per
cent per annum.
We can see plenty of other signs that our
economic plan is working. Malaysia’s export growth in February 2016 rebounded
by 6.7 per cent to RM56.72 billion, or £10 billion. Imports, by comparison,
increased by 1.6% per cent to RM49.4 billion, or £8.3 billion.
The trade surplus widened to RM7.5
billion, or £1.3 billion, in February this year — the 220th consecutive month
of trade surpluses since November 1997. This achievement is particularly
encouraging, considering the challenges posed by low commodity prices, currency
fluctuation and the economic slowdown in China.
Other parts of Malaysia’s economy have
demonstrated similar resilience. In 201S, the capital market rose in value to
RM2.8 trillion, or some £400 billion, and stands at 2 1/2 times the Malaysian
gross domestic product — a 150 per cent increase since 2009.
As Bloomberg recently reported, “Overseas
inflows into Malaysia are the biggest in Southeast Asia” and “Kuala Lumpur has
the lowest volatility among the region’s markets”.
Some who ought to know better have been
talking Malaysia down. Indeed, they do know better because the data is
indisputable. But, don’t just take my word for it. Let me cite some of the
accolades that show the enthusiasm for and confidence in Malaysia.
They come from an array of respected
international bodies and demonstrate in no uncertain terms that when it comes
to competitiveness, Malaysia is now firmly ranked among the top nations around
the globe.
Last year, we rose to 18th among 140
countries in the World Economic Forum’s Global Competitiveness Report.
The International Institute for Management
Development, or IMD, ranked us 14th most competitive of 61 economies in its
survey.
And, the Global Manufacturing
Competitiveness Index, recently published by Deloitte, placed Malaysia at 17th
among the top 40 nations and predicts a rise to 13th place by 2020.
That report, based on a survey of over 500
leading corporate executives worldwide, sees the “Mighty Five” countries of
Malaysia, India, Thailand, Indonesia and Vietnam as an emerging Asian
powerhouse.
Together, said the report, we represent
what they call “a New China” in terms of low-cost labour, agile manufacturing
capabilities, favourable demographic profiles, markets and economic growth.
The World Bank ranked Malaysia the 18th
easiest place to do business out of 189 economies in 2015 and fourth in the
world for investor protection.
A recent study by ACCA (Association of
Chartered Certified Accountants) and KPMG on corporate governance ranked
Malaysia joint first among the developing countries they surveyed, and joint
fourth overall, just below the United Kingdom, the United States and
Singapore. And, we were ranked first in the Global Islamic Economy Indicator
list.
To quote the World Bank regional director
for Southeast Asia last December: ‘‘The international community continues to
have confidence in Malaysia. That’s why Malaysia continues to attract interest
from businesses, both domestic and foreign.”
It is a confidence shared by the
International Monetary Fund, which said in its most recent report earlier this
year: “Malaysia’s economy continues to perform well. The authorities have
been able to maintain macroeconomic and financial stability, while making significant progress in
improving the foundations for sustained
economic growth.”
Our achievements have been based on three
solid, inter-related principles: innovation, sustainability and inclusivity.
After independence, we embarked on a
series of ambitious programmes in nation-building and sustainable
socio-economic development.
Thanks partly to our friends in the UK,
Malaysia has long been a powerhouse in the cultivation of oil palm and rubber.
Rubber was introduced by an Englishman, Henry Wickham, from the Amazon.
Similarly, oil palm was brought to our country from West Africa.
Through research and development,
particularly in plant breeding and agronomy, Malaysia is today a top producer
of rubber and oil palm, commodities that have helped reduce rural poverty
dramatically.
In more recent years, we have successfully
moved beyond an economy based on agriculture to one built on manufacturing and
services as well. Our challenge now is to move to the next step: to grow
through innovation, increased productivity and the more effective use of
knowledge for greater economic and social development.
We need to find better ways of producing
goods and services, and delivering them more effectively and at lower cost to a
greater number of people.
For Malaysia to become a developed,
high-income- status nation, able to compete with the best, regionally and
globally, we need the transformative power of science and technology, and we
need the dynamism of entrepreneurs, innovation and creativity to propel
both public- and private- sector performance.
This is what motivated our decision to
launch the Science 2 Action, or S2A, initiative in 2013. Its goal is to
intensify the application of science and technology for the development of
industry and the wellbeing of the people.
We want to reinvigorate all aspects of
science in Malaysia so that it contributes to generating the new ideas and
game-changing strategies that will create sustainable wealth and jobs for our
people.
Part of the S2A initiative was the
establishment of the Newton-Ungku Omar Fund, a joint initiative between the
Malaysian and British governments.
It has already created new opportunities
to enhance our bilateral relationship, and for scientists from both countries
to work together on potentially life-changing research and innovation
initiatives.
Since the fund was started in 2014, seven main collaborative programmes have been
established, looking at the areas of human capital development, research and
development and — most importantly — the translation of research outputs from
the laboratory to the market.
Researcher Links and Institutional Links
programmes have already started building strong network linkages between
Malaysia and the UK. We look forward to further developments and successes
from this farsighted partnership.
A sustainable economy is one in which we
take care of our environment, and we in Malaysia have placed great emphasis on
striking the right balance in terms of socioeconomic development and environmental
health, in particular, the conservation of biodiversity and ecosystems.
This is particularly important to us,
since Malaysia is officially recognised as one of the world’s 17 megadiverse
countries. Our rainforests harbour an enormous range .of plants and animals,
with massive trees towering more than 80m above the forest floor.
Our seas teem with an extraordinary
diversity of marine life. Our coastlines are fringed with productive mangroves
and spectacular coral reefs. All these help maintain the health of our natural
environment and represent incalculably valuable ecosystems.
In the past, the forest clearing that was
required in order for us to develop was not always done with sufficient respect
for our environment. Forest fragmentation posed
a threat to the conservation of our biodiversity.
In response,
Malaysia is embarking on a national initiative, called the Central Forest Spine. The initiative will
link four main forest complexes around the central mountain range in Peninsular Malaysia.
This long-term plan aims to conserve and rehabilitate
small forest fragments, and increase their connectivity with the main forest
to ensure species survival.
It is estimated that the Central Forest
Spine will cover 5.3 million hectares in all — that’s some 40 percent of the
area of Peninsular Malaysia – and 80 per cent of it will be designed as
Permanent Forest Reserves.
In East Malaysia, the Borneo states of
Sabah and Sarawak are well known to tourists who go to see orangutans,
proboscis monkeys and pygmy elephants in their natural habitats.
These, too, must be preserved, and
Malaysia, Indonesia and Brunei have come together in the "Heart of Borneo”
Initiative to conserve approximately 200,000 square kilometres of forest,
about 30 per cent of which is in Malaysia.
We have set a target of recycling 40 per
cent of our waste by 2020. We have also pledged to reduce our national carbon
emissions by 40 per cent by the same year, although I am told that by the end
of 2015, we had already achieved a reduction of 35 per cent.
We take these targets seriously, and this
shows the work that goes into meeting them.
Sustainability not only makes environmental
sense. It also makes economic sense. It is a driver of new technology, of
innovation and of a sector that is becoming increasingly important worldwide.
We have seen the results in Malaysia.
Our Green Technology Financing Scheme has
successfully supported 188 projects, which have not only saved the equivalent
of 2.31 million metric tonnes of carbon emissions, (but) they have also helped
to create nearly 4,000 jobs.
So, this is why we have introduced tax
incentives to encourage industries to adopt green technology, set targets for
installed capacity of renewable energy and made green growth an integral part
of the 11th Malaysia Plan, which will guide us over the next four years.
The government also encourages the
financing of socially beneficial and sustainable ventures, such as the
Sustainable and Responsible Investment Sukuk framework, introduced by the
Securities Commission, and the Environmental, Social and Governance, or ESG,
Index launched by Bursa Malaysia.
In addition, Malaysia continues to develop
new financial assets, such as carbon credit-based solutions based on the
principles of Islamic finance.
These assets are sustainable and
reward-generating to investors; they+ are underpinned by real economic
activities and they are end-to-end syariah-compliant and can be sold to the
world’s carbon buyers.
We want to encourage this further, and we
will consider providing incentives to companies that offset their carbon footprint with Malaysian
rainforest credit.
These examples all show how sustainability
and green growth are not just about doing what is right — protecting one of
our greatest assets, our spectacular land and seascapes, which are not just our
natural heritage, but are also at the heart of our thriving tourist industry.
But, sustainability also makes financial sense. Conserving and recycling save
money, and new green business offer huge and growing opportunities.
Ensuring our people have the right skills,
investing in training, making sure that basic foodstuffs, housing, healthcare
and other necessities are available at low prices — these are all policies that
we have enacted and are still working on.
The results have been good. We have
virtually eliminated absolute poverty to less than one per cent. The income of
the bottom 40 per cent of households has increased by a compound annual growth
rate of 12 per cent, substantially higher than the national average of eight
percent, since 2009 when I took office.
In our efforts to alleviate poverty,
Malaysia introduced the Federal Land
Development Authority scheme, or Felda, in 1956, opening up the jungles
to establish rubber and oil palm smallholdings for those living in the
countryside.
In fact, the story of Felda started with the dream of
one man, my late father, Tun Abdul Razak Hussein, the second prime minister of
Malaysia. His aspiration was that there would be “land for the landless” and “jobs
for the jobless” to eradicate the poverty prevalent in the rural sector then.
In Malaysia, we realised early on that the only way
for people to break free from the vicious circle of poverty was for planned
and coordinated development to ensure that economic development went hand in
hand with social development.
But, we are always striving to do more to continue to
raise income levels so that all share in the fruits of our success and are able
to cope with rising costs of living.
Through the implementation of the minimum wage
legislation, the government has lifted 2.9 million people immediately out of
absolute poverty.
Next, we have to reduce our dependence on cheap
foreign labour. In particular, we need to be very
serious about raising the level of education and
skills in our country so that growth and higher wages come from increases in
productivity.
We need a real focus on research and development, and
on better processes in industry. We need a focus not just on innovation, but
(also) on commercialising innovation. And, we need a focus on being at the
forefront of using and inventing new technology so that we gain and maintain a
long-term competitive edge.
These are big tasks, and they cannot all just be a
matter for the government. The private sector must play its part, including in
training at all stages of life. The government will continue to assist and
support, of course.
But, we need to form a new partnership so that all
significant actors in our economy are united in making Malaysia the
destination for investment. And, that means our citizens being empowered by
having the skills and aptitude to adapt to a world in which standing still is
not an option.
Making sure that no one is left
behind is not just a matter of our duty to our fellow
citizens. It also benefits the whole economy if as many people as possible live
useful, productive lives.
When I talk about global competitiveness and Malaysia,
I must mention our role as a gateway to the region and beyond. Asean, the Association
of Southeast Asian Nations, of which we were a founding member, is already a
market of 625 million people, with ever freer trade.
It is a region expected to have a middle class
numbering 400 million people by 2020, and the world’s fourth largest economy by
2050 — although one forecasts Asean to reach that mark as early as 2030.
Asean is also the gateway to the Regional
Comprehensive Economic Partnership being negotiated with Australia, China,
India, Japan, South Korea and New Zealand.
And, Malaysia is a gateway to the Trans-Pacific
Partnership, which will give exporters preferential access to a market of 800
million people with a combined GDP of US$27.5 trillion.
A study by
PricewaterhouseCoopers predicted that the TPP would see Malaysia’s GDP
almost double to US$211 billion between 2018 and 2027, and that the country
would realise additional investment of between US$136 . billion and US$239
billion.
Where there are opportunities for free trade, Malaysia
wants to be part of them. Under any such system, of course, there will be
winners and losers. But, those ready to innovate and improve will reap the
advantages.
There are external factors which we cannot control.
For every US$1 drop in the price of oil, for instance, our government loses
revenue of RM300 million, or roughly £50 million. And, for every one per cent
slowdown in the Chinese economy, ours shrinks by 0.4 per cent since China is
our biggest trading partner.
But, we are nimble and timely in our responses. This
is why we recalibrated the (2016) Budget earlier this year to take account of
changing circumstances, to ensure the economy remains on a strong growth tra
jectory and to safeguard the welfare and wellbeing of
the people.
We have an economic plan that has worked and continues
to do so. It is a plan that works for the benefit of Malaysians not just today,
but (for) the years and decades to come.
The challenges of sustainable economic development
and growth in an ever more competitive global economy will test Malaysia, and
cannot be met without political will and a commitment to cooperation, to invest
the needed time and resources.
But, I believe we will do it. I believe in both
Malaysia’s potential and its ability to find well-balanced, sustainable growth
models that create opportunities for all.
Over the past decades, great change has come to
Malaysia, but even greater change awaits. By choosing to work together, by honing
our competitive edge, while looking not for dividing lines but for common
ground, we can ensure that change brings better lives for our people and better
futures for our countries.
Thank you.
Source:
New Straits Times / Wednesday / May 18, 2016
/ Comment (page 12, 13 and 15)
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