Prime Minister Dato' Sri Najib Razak presented the 11th Malaysia Economic Plan (MEP) for 2016-2020 to the Parliament on 21 May 2015. This plan is titled Anchoring Growth on People. Essentially, this 5-years plan envisages that per capital gross national income (GNI) will expand to RM54,000 (US$15,690) from RM36,937 in 2015 in current price. In order to achieve this target, Malaysian government has set an annual growth rate of 5-6%. The anticipated result will make Malaysia as a fully developed nation by 2020, which is defined as per capita GNI above US$15,000. The target is consistent with the goal set forth in Vision 2020 launched in 1991. The projected annual growth rate over the next 5 years is realistic and achievable if all ingredients prepared for the growth menu are fully utilized.
Having said that, however, the economic strength of Malaysia in terms of per capita GNI is and will continue to be far behind Singapore. Assuming 5-6% is the potential growth rate, Malaysia may achieve a higher growth rate, say at 7% annually until 2030. Let also assume that Singapore's economy will growth at 2.1% (the projected annual growth rate of developed nations in the 11th MEP). Per capital GNI in 2013 for Malaysia and Singapore was $10,430 and $54040, respectively. By 2030, Malaysia will have a per capita GNI of $32,946, whereas a Singaporean national income will reach $76,940--2.3 times higher.
If convergence hypothesis applies to these two countries, in order for Malaysian per capita GNI to converge to the same level of Singapore by year 2030, Malaysia's annual growth rate would have to set at 12.5% for the period between 2013-2030. This is indeed a herculean task, if not an impossible mission!!
Having said that, however, the economic strength of Malaysia in terms of per capita GNI is and will continue to be far behind Singapore. Assuming 5-6% is the potential growth rate, Malaysia may achieve a higher growth rate, say at 7% annually until 2030. Let also assume that Singapore's economy will growth at 2.1% (the projected annual growth rate of developed nations in the 11th MEP). Per capital GNI in 2013 for Malaysia and Singapore was $10,430 and $54040, respectively. By 2030, Malaysia will have a per capita GNI of $32,946, whereas a Singaporean national income will reach $76,940--2.3 times higher.
If convergence hypothesis applies to these two countries, in order for Malaysian per capita GNI to converge to the same level of Singapore by year 2030, Malaysia's annual growth rate would have to set at 12.5% for the period between 2013-2030. This is indeed a herculean task, if not an impossible mission!!
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