Speechs in the year

Tempat/Venue	:	PARLIMEN
Tarikh/Date	:	30/10/2003
Versi 		:	ENGLISH
Penyampai	:  	PM   

  Most  Gracious  and  Most
  Merciful,  with  great pleasure I  present  before  this
  distinguished House the following motion:

  `That this House,

  recognising   the   creditable   economic   growth   and
  achievement  of  our  socioeconomic  objectives  despite
  being  adversely affected by the volatile global economy
  during  the  first  three years of the  Eighth  Malaysia
  Plan;   acknowledging  and  endorsing   the   continuous
  efforts  of  the  Government  to  achieve  balanced  and
  sustainable  growth  during the remaining  Plan  period,
  2004-2005;  approves the Mid-Term Review of  the  Eighth
  Malaysia  Plan, which seeks to implement strategies  and
  programmes  and allocate funds designed to  achieve  the
  objectives and commitment of the National Vision  Policy
  as set out in Command Paper Number 30 of 2003;

  That    in   approving   the   Mid-Term   Review,   this
  distinguished House calls upon all Malaysians to  strive
  with  stronger determination and give continuing support
  to  the  Government  to build Malaysia  into  a  united,
  socially just, resilient and competitive nation.'

  With  your permission, Mr. Speaker, I now table the Mid-
  Term   Review   of   the  Eighth   Malaysia   Plan   for
  deliberation   by   the  Honourable  Members   of   this
  distinguished House.  This review is our way  to  ensure
  our plan is updated and will achieve its objectives.


  Two  months  ago we joyously celebrated the  forty-sixth
  anniversary  of  Merdeka.  If  we  look  back,  we  will
  realise  that we have come a long way from that historic
  Saturday in 1957 when we freed ourselves from more  than
  446  years  of  colonial  bondage.  At  that  time,  our
  country  was poor with a per capita income  of  only  US
  300  dollars.  The  people did  not  really  expect  any
  development and certainly not a better quality of  life.
  Many  of  the  people and foreigners believed  that  the
  different  races  would be against each  other  and  the
  Malays  who were in the majority would seize  power  and
  oppress  the  others.   With that  the  situation  would
  become   unstable   and   the  country   would   regress
  developmentally.    This  kind  of  situation   actually
  happened   in   many  European  colonies  which   became
  independent.  Allah be praised, this expectation  proved
  wrong.  Malaysia actually developed fast  until  it  has
  become the most developed of the developing countries.

  In  forty-six years, from a country which depended  only
  on  rubber and tin, we have become an industrial  nation
  and have gone on to become a sophisticated, information-
  based  industrial  nation.  The per  capita  income  has
  almost  reached USD 4000, with a literacy rate  of  94.1
  percent.   We  have also produced 94,320  professionals,
  including  13,869 doctors, 41,747 engineers  and  10,688

  Poverty  has been reduced from 52.4 percent in  1970  to
  5.1  percent in 2002.  About 92 percent of houses in the
  rural  areas  have been provided with electricity  while
  86  percent  received  water supply  in  2003.  Schools,
  clinics and roads are enjoyed by most of the people.

  At  the  same time the people have gained confidence  in
  themselves  so  much  so  that they  now  achieve  world
  records  such  as climbing Mount Everest,  sailing  solo
  round  the  world, parachuting over the North  Pole  and
  swimming   across  the  English  Channel.   Many   world
  records   are created such as pulling a 200 tonne  train
  with the teeth.

  Now  Malaysia is well-known throughout the world and has
  become  a model for other developing countries  and  the
  Muslim countries.

  Our  success  is  due to the new character  and  culture
  which  have been instilled among the people.  Malaysians
  are  responsible, moderate and love peace and  security.
  We  are more ready to share than to take everything  for
  ourselves.  In other words Malaysians are not greedy.

  We   reject  socialism  which  believes  that   if   the
  Government  takes  over all businesses  and  industries,
  Government will get 100 percent of the profits and  thus
  distribute  them equally among the people.   We  do  not
  seize  the businesses and private property.  We  believe
  that if the private sector is given the opportunity  and
  support,  they  are more likely to succeed  and  through
  paying more taxes which can be spent on the people.

  Today  the  world has accepted the view  that  socialism
  cannot    bring   economic   success   to   a   country.
  Corporations and industries owned by Governments  cannot
  achieve  success.   On the other hand  the  free  market
  system  is  more likely to earn profits and to  increase
  taxes  paid to the Government.  Actually at the time  of
  independence the total budget of the Government  was  RM
  1.0  billion  or 19.5 percent of GDP.  Today  it  is  RM
  112.5  billion  or  29.2 percent of  GDP.   Clearly  our
  choice  of  a regulated capitalist system is far  better
  than  to  nationalise all the businesses of the  private
  sector as promoted by socialists.

  In  1969 racial riots broke out.  We were successful  in
  putting  an end to this outbreak but we also  learnt   a
  lot   from  it.   The  Coalition  Government  which  was
  supported  by  all communities devised the New  Economic
  Policy  to  distribute the wealth of the  country  in  a
  fair  manner among the different communities.   Although
  we  have  not achieved our target but the fact  is  that
  the  economic  disparities between the races  have  been
  reduced.    Actually   the  relationship   between   the
  different races is far better today than at any time  in
  Malaysia's  history.  From owning only  2.4  percent  of
  the  wealth of the nation in 1970, the Bumiputeras today
  own  18.7 percent of a much bigger aggregate wealth i.e.
  from  RM  126  million in 1970 to RM 73,162  million  in
  2002, 581 fold increase.

  While  the  redistribution of wealth is being  made  the
  economy  grew fast.  If not for the attack by the  rogue
  currency  traders, the growth would achieve  an  average
  of  seven  percent per year.  But although  this  target
  was  not achieved, we still managed the recovery  faster
  than  others.   In  2003  we will  achieve  4.5  percent
  growth.   At  the same time our financial  situation  is
  sound.  The external debt is 48.2 percent of GDP,  lower
  than   the  level  considered  as  safe.   Our  external
  reserves  is  also  high  at RM 159.4  billion  or  41.9
  billion  US  Dollar as at end October 2003.   Our  trade
  shows a surplus for 70 continuous months.

  We  are  the  18th biggest trading nation in the  world.
  Our  total  trade is twice the size of our  GDP.   As  a
  trading  nation we must ensure the world  market.   This
  is  a difficult thing to handle because the wages of our
  workers  are  higher than our neighbours.  Yet  we  want
  our  workers  to enjoy increasingly higher standards  of

  The  earnings  of  the  workers  can  be  increased   by
  increasing  their productivity.  This  can  be  done  by
  improving  the skills and the knowledge of our  workers.
  It   can  also  be  done  through  investments  in  more
  sophisticated  systems  and  production  machinery   and
  through the use of automation and I.T.

  More effective than a raise in wages is the increase  in
  our  purchasing  power.  Actually our  Ringgit  has  the
  same  purchasing  power in our country as  the  American
  Dollar  in  America.  This means that  even  though  our
  earnings   is   low  compared  to  wages  in   developed
  countries  we  can  purchase goods  and  services  three
  times  more than the workers in the developed  countries
  earning  the same wages.  Because our wages are low  our
  production  cost  is also low and this makes  our  goods
  and services more competitive.

  We  will continue our cost of living through controlling
  prices  and  wages so that we can enjoy  a  good  living
  standard  while ensuring our exports remain competitive.
  It  is  no  use  to  raise incomes if  it  will  all  be
  swallowed  up  by the increased cost of  the  goods  and
  services  that  we  buy.  In other  words  increases  in
  income  which  is  followed  by  inflation  are  of   no
  benefit.  In addition the people who save will lose  and
  the  national economy will regress.  Because of this our
  approach  to handling our national economy and  finances
  will be maintained.

  Eighth Malaysia Plan

  In  April 2001, I presented the Eighth Malaysia Plan  to
  this  distinguished  House.  The Eighth  Plan  sets  out
  policies,  strategies  and  programmes  to  achieve  the
  National   Vision  Policy's  objective  of  building   a
  resilient  and  competitive nation.  The  focus  of  the
  Eighth  Plan  is  to raise the level of development  and
  generate  sustainable growth so that all Malaysians  can
  enjoy   prosperity  and  a  higher  quality   of   life.
  Economic growth is promoted alongside efforts to  narrow
  social,  economic  and  regional  imbalances.   As   the
  economy  needs to move to higher value added activities,
  the  strategy  under the Plan is to shift  from  labour-
  intensive  growth  strategy to one  that  is  knowledge-
  intensive.  Human  resource development  and  technology
  enhancement   are  given  priority.  The   Eighth   Plan
  emphasises  the  need  for  the  private  sector  to  be
  dynamic  and to spearhead economic growth.   The  public
  sector  is  to  continue  to provide  the  institutional
  framework   and   infrastructure  for   a   pro-business

  Macroeconomic Performance

  The  first  three years of the Eighth Plan  period  have
  been  exceptionally  challenging  for  Malaysia  due  to
  unforeseen  circumstances.  It began with  the  slowdown
  in  the global economy caused by the downturn of the  US
  economy and collapse in world electronics demand.   This
  was  aggravated by the September 11 incident in  the  US
  in  the same year.  After a short breather in 2002,  the
  events in the first half of this year, particularly  the
  invasion  of  Iraq and the outbreak of the Severe  Acute
  Respiratory   Syndrome  (SARS)  have  again   negatively
  affected economic recovery.

  By  the  Grace of Allah, the Malaysian economy was  able
  to  recover  with  growth this  year  estimated  at  4.5
  percent.    During  the  review period,  2001-2003,  the
  economy continued to expand and registered a real  Gross
  Domestic Product (GDP) growth of 3.0 per cent per  annum
  even though the external factors and the large share  of
  electrical  and  electronics goods, which  accounts  for
  around  70  per  cent  of  manufactured  exports,  still

  We  should take pride that our per capita income rose by
  2.4  per  cent  per  annum  from  RM12,843  in  2001  to
  RM14,324 in 2003. Measured in terms of purchasing  power
  parity,  the improvement in per capita income  would  be
  more  impressive, growing at an average rate of 3.9  per
  cent  per  annum  to  US$9,380  in  2003.   Growth   was
  achieved  in  an  environment of stable prices  and  low
  unemployment.   The  external  trade  position  of   the
  country  was  also strong as reflected by  the  sizeable
  surplus  in  the  current  account  of  the  balance  of
  payments  every  year.  In addition, the fiscal  deficit
  remained  within prudent limits despite the increase  in
  public expenditure as a result of the Government's pump-
  priming   efforts.   We  also  managed  to  reduce   the
  incidence  of poverty, provide better housing and  basic
  amenities,  particularly  to  those  in  the  low-income
  group   and   improve  the  quality  of  life   of   all

  To  mitigate the impact of the global economic  slowdown
  on  the Malaysian economy, the Government introduced two
  fiscal stimulus packages in 2001 and the Package of  New
  Strategies  in  May of this year.  This  contributed  to
  the  rapid expansion of public consumption by  12.1  per
  cent  and  public  investment by 9.6 per  cent.  Private
  consumption also accelerated from 2.4 per cent  in  2001
  to  5.2  per cent in 2003.  The growth in public  sector
  demand  and  private consumption helped  to  offset  the
  contraction  in private investment. With  the  improving
  economic  outlook,  private investment  has  now  turned
  around  as evidenced by the growth in loans and  private
  debt  securities.   Exports have also strengthened  with
  inroads being made into non-traditional markets.

  During the review period, the economy experienced broad-
  based  growth with increasing contribution  coming  from
  the  services sector. Growth in the finance,  insurance,
  real  estate  and  business services  was  supported  by
  increased  collection  of insurance  premiums  and  bank
  lending  activities.  The transport  and  communications
  subsectors  saw  a  strong expansion in  air  cargo  and
  trade-related and transhipment activities undertaken  in
  Port  Klang and Port of Tanjung Pelepas (PTP).  Earnings
  from  travel,  tourism and education  rose  from  RM19.0
  billion  in  2000  to RM22.9 billion  in  2003.  Private
  institutions of higher learning attracted an  increasing
  number of foreign students, particularly from China  and
  Indonesia;  and the private healthcare industry  catered
  to  a  growing number of people from Brunei,  Indonesia,
  Saudi Arabia and Singapore.

  In   the  manufacturing  sector,  the  domestic-oriented
  industries  benefited from fiscal stimulus packages  and
  low  interest rates and became the main contributors  to
  growth  in  the  sector.  The transport equipment,  food
  processing,  fabricated  metal and  construction-related
  industries  recorded  a strong performance.   Among  the
  export-oriented  industries,  the  electronics  industry
  turned  around  in  2002  with the  improvement  in  the
  global  demand  for  semiconductors.  The  manufacturing
  sector  progressed  by moving up the  value  chain  into
  high  technology and knowledge-intensive  activities  as
  we  can  no  longer compete in low-wage labour-intensive
  industries.  The agriculture sector also improved  as  a
  result  of the increased output of food crops, fisheries
  and livestock as well as better commodity prices.

  During  the  review period the current  account  surplus
  was   maintained  and  remains  large.   The   narrowing
  deficit in the services account arising from the  higher
  surplus  in  travel,  which  includes  education,   also
  contributed to the current account surplus.  By the  end
  of  2003, the current account surplus is expected to  be
  about 10 per cent of GNP.

  The  expansionary fiscal stance of the Government  aimed
  at   cushioning   the  global  economic   slowdown   and
  offsetting  the  lacklustre performance of  the  private
  sector  resulted in a significant increase in  operating
  and  development expenditure.  The control of Government
  deficit  is  more  difficult.  Clearly  high  Government
  expenditure cannot be continued.  Expansionary  packages
  can  only  be sustained for a short period.   We  cannot
  use   expansionary  packages  as   a   way   to   create
  opportunities  for those who regard them  as  windfalls.
  Having gained opportunities from the package, they  must
  return to the usual opportunities.

  Issues and Challenges

  Although  we  expect the global economic environment  to
  improve  during the remaining Plan period,  we  must  be
  prepared  to  meet  new challenges that  will  test  our
  resilience,     productivity,    resourcefulness     and
  innovative capabilities. The external environment,  both
  politically  as well as economically, will  continue  to
  be of key concern.

  Although  the  invasion  of  Iraq  was  short  and   its
  immediate  impact  on the economy  was  limited,  it  is
  becoming   apparent  that  it  will  have  longer   term
  implications.   As we have witnessed,  the  invasion  of
  Iraq has been followed by a series of attacks on the  US
  interests  and those of its allies in several  parts  of
  the   world.   This  could  be  very  destabilising  for
  economies  and  could affect economic recovery.   As  we
  have  seen  previously, it is bound to shatter  consumer
  and  business  confidence and dampen  global  trade  and
  investment.  The cost of doing business will  inevitably
  increase  due  to added risks from these  uncertainties.
  While  we  have  to acknowledge that these  developments
  are   beyond  our  control,  we  need  to  continue   to
  undertake measures to strengthen the resilience  of  the
  economy,  so  that  we can withstand  and  mitigate  the
  impact  of  these  external shocks, should  they  occur.
  While  we  acknowledge that globalisation can contribute
  towards  increasing  trade  and  capital  flows   across
  countries,  its present interpretation will benefit  the
  rich  countries more because the stress is on free trade
  and  not fair trade.  The stress on competitiveness will
  also benefit their giant corporations.

  We  will  try to change the globalisation agenda through
  the  WTO  but in the meantime we must prepare to compete
  in  an  inequitable environment.  If Malaysians want  to
  continue  to  succeed they have to find  a  niche  where
  they  can  achieve  world quality.  They  have  also  to
  improve their marketing skills so as to gain a place  in
  the value chain.

  We  are also going to see increased competition from new
  players  in  the  global  market,  including  China  and
  India.  These economies are fast emerging as  attractive
  centres  for investment in the production of  goods  and
  services  with high technology.  Low wages,  industrious
  work  force  and  a big domestic market will  give  them
  competitive edge.

  Malaysian  businesses  must identify  areas  which  they
  must  concentrate the efforts and capital to ensure  our
  competitiveness would increase.  But we must  not  again
  make  the  mistake  of  depending  too  much  on  a  few
  businesses as we did before with rubber and tin.

  Policy Focus of the Mid-Term Review

  The  policy  thrusts  of the Third  Outline  Perspective
  Plan  and  the Eighth Plan will be continued to  address
  these  challenges.   In addition,  the  Mid-term  Review
  will   build   upon  the  Package  of   New   Strategies
  introduced  in May 2003, address critical problem  areas
  and  sources of vulnerabilities as well as tackle longer
  term  and  structural issues to restore the dynamism  of
  the  economy. With this, the policy focus  of  the  Mid-
  Term Review will be to:

       - reinforce macroeconomic fundamentals;
       - bolster  economic resilience to better withstand
       - retool    the   economy   to    enhance    its
       - reactivate  private  investment  in  particular
         local  sources to assume   its role as  the  engine
         of growth;
       - venture into new areas of growth;
       - accelerate  the transition from  low  technology
         and  labour intensive economy to one that  is  high
         technology and knowledge-based;
       - increase  supply of quality human  resources  to
         meet  the  demands of an economy that is moving  to
         higher value added activities;
       - develop  a  more  equitable  society  to  ensure
         everyone benefits from development;
       - promote  an  exemplary value  system  compatible
         with high achievement by all communities; and
       - enhance    international    cooperation    for
  Strengthening Macroeconomic Performance

  The   Government   will   continue   to   pursue   sound
  macroeconomic  policies to ensure  strong  fundamentals,
  such  as  low inflation rate, adequate savings,  healthy
  balance  of  payments, stable exchange rate and  prudent
  fiscal position.  In addition, efforts will be taken  to
  strengthen economic resilience to enable the economy  to
  withstand  shocks, including by broadening the  economic
  base,  developing a more efficient financial sector  and
  capital market as well as improving risk management  and
  corporate governance.

  The  macroeconomic prospects for the next two years  are
  expected  to  be  promising.  Real GDP is  projected  to
  grow  at  an  average  rate of 6.0 per  cent  per  annum
  consistent  with the long-term potential output  of  the
  economy.  This rate of growth will put us back on  track
  to  realise  the  development targets  set  out  in  the
  National  Vision Policy and Vision 2020. Based  on  this
  rate  of growth, per capita Gross National Product (GNP)
  would  increase by 4.4 per cent on average  to  RM15,600
  and  in  terms of purchasing power parity will be faster
  at 5.5 per cent and will reach US$10,400 in 2005.

  Growth  is  expected to be supported by strong  domestic
  demand  and  sustained  growth  of  the  world  economy.
  Consistent  with our policy of encouraging  the  private
  sector  to  spearhead  economic growth,  private  demand
  will be the driving force of the Malaysian economy.   We
  expect  private investment to turn around  and  grow  at
  about  12 per cent per annum in response to the improved
  domestic  and  external demand.  Small- and medium-scale
  enterprises (SMEs) will be used as the catalyst to  spur
  domestic  investment. We would like to see SMEs  playing
  a  bigger  role in the economy as in countries  such  as
  Japan,  Taiwan and South Korea. To increase the dynamism
  of  SMEs,  concerted  efforts will be  made  to  upgrade
  their  technological capability, promote  greater  usage
  of  information and communications technology  (ICT)  as
  well  as  increase their ability to innovate and develop
  new products with own brand names. Efforts will also  be
  taken  to  improve  the  access of  SMEs  to  financing,
  including customising the financing facilities  to  suit
  their needs.

  While  we  will also continue to promote foreign  direct
  investment  (FDI) more attention will be paid  to  local
  sources of investments.  Agriculture, especially  cattle
  farming,  goat  rearing, fresh and marine  acquaculture,
  mixed  farming  provide good potentials.   Investors  in
  these  areas  will  be  supported and  given  incentives
  especially  those intended for export.   Similarly  with
  metal  fabrication  and infrastructure  skills  exports.
  The    Government   will   cooperate   with    Malaysian
  contractors to get and implement projects abroad.

  Private  consumption is expected to  remain  robust  and
  grow  at  7  per  cent  per annum  basically  driven  by
  improving  consumer confidence and increasing disposable
  income.  The  favourable fiscal and  monetary  policies,
  brighter  employment  prospects,  recovery  in  external
  demand, better commodity prices and the positive  wealth
  effect  from a buoyant stock market will promote private
  consumption.  Our policy to maintain low interest  rates
  and   increase  accessibility  to  financing   is   also
  expected to increase demand for consumer durables.

  The  Government,  however, will  reduce  the  growth  in
  public  investment to a more sustainable  level  in  the
  next  two  years commensurate with the expected recovery
  in  private sector investment and the strong  growth  in
  public consumption.

  With   better  prospects  in  world  trade,   Malaysia's
  exports  are expected to increase and grow  at  7.4  per
  cent  per  annum.  Given the robust export  performance,
  the   surplus  in  the  merchandise  account  that   was
  sustained  during  the  review  period  is  expected  to
  continue.  The deficit in the services account  will  be
  reduced   because  of  higher  inflows   from   tourism,
  education,  transport, finance, health and  professional
  services.  For  the remaining Plan period,  the  current
  account is expected to remain in surplus at 10 per  cent
  of GNP in 2005.

  The manufacturing and services sectors will continue  to
  be  the major contributors to growth.  The manufacturing
  sector is expected to return to the high growth path  of
  7.8  per  cent  per annum. Growth will result  from  the
  electronics  and electrical subsector and the  transport
  equipment subsector. The services sector is expected  to
  grow at 6 per cent per annum, contributed mainly by  the
  finance,  insurance, real estate and business  services;
  the  wholesale and retail trade, hotels and restaurants;
  and transport, storage and communications subsectors.

  Enhancing Competitiveness and Resilience

  As  I mentioned in the 2004 Budget speech, according  to
  the  World  Competitiveness Yearbook 2003,  Malaysia  is
  now  ranked as the fourth most competitive nation in the
  world among countries with a population of more than  20
  million.   This is a major improvement in the  country's
  competitiveness ranking from its tenth position in  2001
  and  sixth  position  in 2002.   In  terms  of  economic
  performance,     government     efficiency,     business
  efficiency,  and  infrastructure, Malaysia  ranks  among
  the top ten countries.

  While  we can compliment ourselves for this achievement,
  we  cannot afford to feel comfortable and begin to  rest
  on  our  laurels. We must bear in mind  that  we  are  a
  global trading nation and want to remain so in the  true
  sense  of  the  word.  This  is  because  a  very   high
  percentage  of  our  exports  and  imports  are  due  to
  foreign  investors.  Their contribution to our  earnings
  is  not  as big as the size of their trade.  Because  of
  this  we  will  stimulate and give emphasis  to  locally
  owned  industries  which  contribute  more  towards  the
  economic  growth  of the country.  Our  capabilities  in
  industries    have    increased    and    become    more
  sophisticated.   We are now able to produce  almost  all
  the  products we export and more than that, Japan, Korea
  and  China bought or learnt foreign techonology and have
  their  own industries.  And they succeeded.  We  can  do
  the  same.   While  we  continue  to  encourage  foreign
  direct  investments, we have to try  to  increase  local

  For  this  the  Government  will  take  initiatives   to
  provide  a more business-friendly environment which  can
  help  promote  wealth creation.  We will try  to  reduce
  the   cost  of  doing  business,  review  the  incentive
  structure, improve the market and ensure the  supply  of
  manpower  in  keeping with the technology and  needs  of
  the market.  We have also to improve the utilisation  of
  the  existing  infrastructure much more to increase  the
  skills  and  economic  productivity  in  a  wider  area.
  Where  necessary  the Government will also  provide  new
  and up-to-date physical infrastructure.

  As  announced in the Package of New Strategies in May of
  this  year, the Government is committed to reducing  the
  regulatory  burden  and improving the  delivery  system.
  It  will  improve  the facilitation of investment,  fast
  track   approvals   at  all  levels  of  administration,
  streamline   procedures,   strengthen   human   resource
  capacity  and capability, expand the use of ICT,  ensure
  compliance   to  the  client's  charter   as   well   as
  strengthen management integrity and governance.

  Although  we  are committed to shifting from  an  input-
  driven  growth strategy to a productivity-driven  growth
  strategy,  progress  towards  achieving  this  strategic
  shift  will  take  time. During the review  period,  the
  contribution of total factor productivity (TFP)  to  GDP
  growth  was  25.5  per  cent while  labour  and  capital
  inputs contributed the rest. It must be emphasised  that
  in  the  medium to long-term, improvements  in  TFP  are
  more  important in driving sustained growth than  higher
  investment rates.

  A  recent assessment of productivity at firm level found
  an   enormous   variation  in  productivity  performance
  across  industries. Higher TFP was recorded among  firms
  that   were   large,  technologically   more   advanced,
  involved   in   exporting  and  having  foreign   direct
  investment.   It  was  also found that  the  firms  with
  higher   productivity   grew   faster.   Firms   should,
  therefore,   give  greater  importance   to   increasing
  productivity  and efficiency.  They must  upgrade  their
  technological   capability,   innovate   and   undertake
  research    and   development   (R&D),   increase    the
  application  of  ICT  in  their  internal  and  external
  operations,  reduce  production  cost  and   raise   the
  quality   of   their   product   or   service.    Labour
  productivity   will   need  to  be   increased   through
  continuous   skill  upgrading  as  well   as   improving
  entrepreneurial and managerial skills.  Firms will  also
  need to migrate to a productivity-linked wage system.

  Continuing Distribution Agenda

  Prior  to  the  New  Economic Policy, the  incidence  of
  poverty in Malaysia stood at 52.4 per cent in 1970.   In
  fact, when I first presented the Mid-Term Review of  the
  4th  Malaysia Plan in 1983, the incidence of poverty was
  still  high at about 21 per cent.  Now, I am pleased  to
  report  that  the incidence of poverty has  declined  to
  5.1  per cent in 2002 and we expect to totally eradicate
  poverty  in  2005.  As for household  income,  the  mean
  household  income  of all Malaysians grew  almost  three
  fold  from  RM1,098 per month in 1983  to  RM3,  011  in
  2002.  This increase is not seen in any other country.

  From  these  figures  it is clear  that  the  Government
  development  plans  have succeeded  in  achieving  their
  objectives.   But  when poverty has been  eradicated  we
  have  to  raise  the  criteria  for  poverty  so  as  to
  increase the income of those below this new level.

  The  Government  will  therefore  intensify  efforts  by
  continuing  the  implementation of the Skim  Pembangunan
  Kesejahteraan  Rakyat  (SPKR) through  income-generating
  projects.  But  the  people  must  complement  this   by
  acquiring  skills  and knowledge and by  working  harder
  and  with determination.  Among the programmes that will
  be  continued include Program Pembangunan Bersepadu Desa
  Terpencil,  Program  Pembangunan  Minda  Insan,  Housing
  Assistance Programme and Skim ASB-Sejahtera.

  A  special  household income survey is being  undertaken
  to  determine the state of poverty, income level and the
  quality  of life of Bumiputera minority groups in  Sabah
  and  Sarawak.  The  first phase of the  survey  covering
  nine   minority  groups  has  been  completed   and   it
  indicates  that  the  incidence of  poverty  is  highest
  among  the  Rungus, Sulu and Orang Sungei in  Sabah  and
  the   Penan,  Kenyah  and  Kajang  in  Sarawak.  In  the
  Peninsular the Orang Asli are among the poorest.   Based
  on  the  findings  the  Government is  formulating  more
  focussed  programmes  to alleviate poverty  and  improve
  the  quality  of  life  of  the  people  living  in  the
  interior and remote areas of Sabah and Sarawak  and  the
  Orang Asli in the Peninsular.

  To  complement the efforts of the Government in  poverty
  eradication,   the  non  -  governmental   organisations
  (NGOs)  and  the  private sector should  further  expand
  their  activities  and coverage of their  programmes  in
  assisting the poor.

  The    most   important   thing   is   to   create   job
  opportunities,  to  provide  education   and   training.
  Providing  subsidies  will  erode  self-confidence   and
  undermine   the   creation  of  a  resilient   Malaysian
  society.   The  Government  will  reduce  subsidies   in

  The  issue of income imbalance between and within ethnic
  groups,  income  groups, regions and  states  will  also
  continue  to  be addressed.  Presently the disparity  in
  the  income  of the highest and the lowest paid  in  the
  Government   has   been  reduced.   At   the   time   of
  independence   the  highest  ranking  officer   of   the
  Government  was paid 78 times the salary of  the  lowest
  ranking employee.  It is the same with the disparity  in
  the  pay  of  the  highest and  lowest  in  the  private
  sector.   Now the highest paid officer in the Government
  is only 29 times the salary of the lowest.

  With  regard to the restructuring of society, all ethnic
  groups  recorded  an  increase  in  ownership  of  share
  capital  during the review period.  Bumiputera ownership
  of  share  capital  based on par  value  increased  from
  RM63.0  billion  in  2000  to RM73.2  billion  in  2002,
  recording  a  growth  rate of 7.8 per  cent  per  annum.
  However,  Bumiputera share of equity decreased  slightly
  from  18.9  per cent in 2000 to 18.7 per cent  in  2002.
  Bumiputra  companies  are  still  too  friable  and  are
  easily  adversely affected by factors  such  as  turmoil
  and  low  economic growth.  Chinese ownership  of  share
  capital  increased to RM159.8 billion in  2002,  growing
  at  11.2  per  cent per annum during the review  period.
  Meanwhile,  the Indian equity increased to almost  RM6.0
  billion in 2002, with a growth rate of 7.6 per cent.

  The   Government  is  aware  that  efforts  to  increase
  Bumiputera  equity ownership during the  remaining  Plan
  period  will  become more challenging particularly  with
  globalisation and greater market liberalisation.  Hence,
  more  effort will be needed to provide opportunities  to
  Bumiputera  in  selected sectors if  the  target  of  at
  least  30 per cent Bumiputera equity ownership  by  2010
  is  to be met. Towards this end the Government will  set
  up   a  new  investment  institution,  Dana  Harapan  to
  attract  and  mobilise Bumiputera resources.  This  will
  enable   the  introduction  of  innovative  unit   trust
  products  and  further  expand investment  opportunities
  for  Bumiputera.  In addition, the Government will award
  at  least 60 per cent of procurements and contract works
  in  Government  projects to responsible,  competent  and
  capable Bumiputera.

  As  part  of  our restructuring efforts,  attention  was
  also  given to the restructuring of employment to ensure
  that  the  pattern  of  employment reflects  the  ethnic
  composition   of   the   nation.    We   have    noticed
  improvements in the participation of Bumiputera  in  the
  professional,    managerial   and   other    high-income
  occupations.     In    eight    selected    professional
  occupations,  namely, accountants, architects,  doctors,
  dentists, veterinary surgeons, engineers, surveyors  and
  lawyers,   the   proportion  of  Bumiputera   registered
  increased  from 35.5 per cent in 2000 to 37.2  per  cent
  in 2002.

  Education   and  training  will  remain   an   important
  strategy    to   meet   the   employment   restructuring
  objectives.  Assistance  will  be  given  to   qualified
  Bumiputera  students  to study  in  public  and  private
  institutions   of   higher  learning,  particularly   in
  science,  ICT and professional courses.  Moral education
  and  good  values will be propagated so that  a  culture
  suited  to  achieving  success  will  be  developed  and
  practised.     Steps    to    increase    non-Bumiputera
  participation  in the public service will be  continued,
  especially  in professions in which they  are  not  well
  represented, such as teaching, nursing, police  and  the
  armed  forces. We note that non-Bumiputera  are  already
  well represented in other professions.

  The  Government will also continue to implement  various
  programmes  and provide support to develop a competitive
  and   resilient  Bumiputera  Commercial  and  Industrial
  Community  (BCIC).  Packaged  programmes  such  as   the
  Vendor  Development Programme, the Franchise Development
  Programme  and the Venture Capital Scheme that emphasise
  quality   management,  efficiency  and   good   business
  practices   will   be   promoted   to   facilitate   the
  development of BCIC.

  Accelerating  Transition to a Knowledge-Based  and  High
  Technology Economy

  Knowledge   is   becoming  increasingly  important   for
  generating   sustainable  economic  growth,  maintaining
  competitiveness   and   transforming   the    way    the
  administration,  the  industries  and  the   individuals
  manage.   We embarked on efforts to move from an  input-
  driven  to  a knowledge and productivity-driven  economy
  in the mid-1990s.

  We  started  to lay the foundation for a knowledge-based
  economy  with the formulation of the National IT  Agenda
  and  the establishment of the Multimedia Super Corridor.
  The  Third  Outline Perspective Plan in 2001  reiterated
  the  Government's  commitment to  take  a  comprehensive
  approach to effect the transition to an information  and
  knowledge-based  economy. We went on  to  formulate  the
  Knowledge-based  Economy  Master  Plan  in  2002   which
  includes  all  aspects that needed to  be  addressed  to
  effect  this transition including in the areas of  human
  resource,  physical  and  institutional  infrastructure,
  science  and technology capability as well as the  issue
  of  digital  divide.   The pressure  to  accelerate  the
  process  has  now intensified as a result  of  increased
  global competition.

  While  Malaysia is already well poised to receive global
  knowledge,  local inventiveness is still  lagging.   The
  innovative   and   technological   capability   of   our
  industries  is  generally low. Many  of  our  industries
  merely   use  existing  or  modified  technology.    The
  success  of the rubber and palm oil industries resulting
  from  research  and development has not  spread  to  the
  manufacturing  industry.  If the manufacturing  industry
  continues  to wait for inventions by other people,  they
  will  certainly be left behind and they will  fail.  The
  Government   is   committed  to  introduce   appropriate
  incentives  to  promote and improve S&T  and  innovative
  capability  so that more Malaysian firms  can  make  the
  technological transition to become inventors.

  This  year  the  Government  launched  the  Science  and
  Technology Policy II so as to prepare the framework  for
  this  move.    The policy introduces new dimensions  and
  emphasises    the   strengthening   of   research    and
  technological       capacity       and       capability,
  commercialisation of research outputs, developing  human
  resource,  nurturing  a culture of  science,  innovation
  and  entrepreneurship  as well  as  ensuring  a  greater
  diffusion  and application of technology. To  boost  the
  commercialisation  of  R&D findings,  measures  will  be
  taken  to  increase  the rate of diffusion  of  research
  findings  generated by public research institutions  and
  universities  as  well as enhance public-private  sector
  collaboration.  I would like to urge the private  sector
  to  support government initiatives by investing  in  R&D
  and  to collaborate with institutions of higher learning
  and research institutes.

  To   ensure   adequate  supply  of  quality  S&T   human
  resource,   high  achievers  among  students   will   be
  encouraged   to   pursue  studies  in   pure   sciences,
  including   at   the  post-graduate  and   post-doctoral
  levels.  Additional  scholarships  and  other  forms  of
  financial assistance will be provided for this  purpose.
  We  will  also  continue  to relax  procedures  for  the
  hiring  of  highly skilled foreign workers in technology
  intensive sectors.

  Biotechnology  has been identified as  one  of  the  key
  technologies  that  will contribute  towards  Malaysia's
  transformation  to  a  developed  nation  by  2020.   To
  support  the  development of the biotechnology  industry
  in   Malaysia,  three  interim  laboratories  have  been
  established,  namely,  in the  fields  of  genomics  and
  molecular biology in UKM, agricultural biotechnology  in
  MARDI     and     nutraceutical    and    pharmaceutical
  biotechnology  in  UPM.   In  addition,  the   strategic
  partnership   with   the  Massachusetts   Institute   of
  Technology  (MIT) under the Malaysian-MIT  Biotechnology
  Partnership  Programme will provide  the  foundation  to
  spur  the  development of domestic  R&D  capability  and
  capacity in biotechnology.

  Malaysia  holds  great promise to be  developed  into  a
  regional  as  well  as  global ICT and  multimedia  hub.
  During  the review period, the Government has undertaken
  concerted  efforts towards realising this  goal.  Policy
  adjustments have been made to liberalise and  promote  a
  competitive  and  dynamic environment  for  the  healthy
  growth  of  the  ICT  and multimedia industries.   These
  initiatives  were successful in stimulating  the  growth
  of  many advanced value-added services, including voice,
  data  and text-based applications as well as the  market
  for  electronic-based contact and data  centres  in  the

  Our  investments in ICT and high quality  infrastructure
  have also increased the attractiveness of Malaysia as  a
  preferred  location  for  MNCs  to  set  up  operational
  headquarters,    international   procurement    centres,
  regional   distribution  centres,  integrated   logistic
  centres,  and R&D centres. To accelerate the development
  of  Malaysia as an ICT hub during the review period, the
  National  ICT  Roadmap will be prepared while  expanding
  telecommunications infrastructure.

  The  Multimedia Super Corridor, which was launched  just
  seven  years  ago, has been successful  in  accelerating
  the  development of ICT-related industries.  At the  end
  of  August  2003,  919 companies have been  awarded  MSC
  status,  including  59  world-class  companies  and  273
  foreign-owned  companies. The total sales of  MSC-status
  companies  rose from RM3.93 billion last year to  RM5.83
  billion this year.

  We  have  also  put in place world-leading framework  of
  cyberlaws  and  established Cyberjaya and  Putrajaya  as
  world-leading  intelligent cities.  During  the  seventh
  International  Advisory Meeting held recently,  the  MSC
  received  endorsement and praises from its  members  and
  they  recognised  that  it  has  progressed  beyond  all
  expectations.  During the second phase, which will  last
  until  2010,  the  MSC will be linked  to  other  global

  While  the  country forges ahead in ICT development,  we
  have  been  conscious of the need to reduce the  digital
  divide  across  locations and communities.  This  is  to
  ensure that those in rural and remote areas do not  lose
  out  in this transformation process. The Government  has
  intensified  efforts  to  provide  ICT  facilities   and
  Internet  access  to the underserved  groups,  including
  establishing  16  Internet Desa and 15 InfoDesa  centres

  To  intensify our efforts to bridge the digital  divide,
  the  National  Framework  on  Digital  Divide  will   be
  formulated    to   provide   guidelines    on    project
  implementation  and avoid redundancies. The  mastery  of
  English  and the teaching of science and mathematics  in
  English will contribute towards this objective.

  Human Resource Development

  Human  capital  is  the key to our future.   Creating  a
  globally    competitive   workforce    is    undoubtedly
  fundamental to enhancing competitiveness and  attracting
  new   investments.   In  this  regard,  human   resource
  development  will  focus  on three  dimensions,  namely,
  developing  knowledge, acquiring skills and  inculcating
  positive values.  Developing highly educated and  multi-
  skilled  workers  does  not  necessarily  ensure  higher
  productivity as it is equally important for  workers  to
  internalise good work ethics at all levels.

  The  success  or failure of a nation is closely  related
  to  its  culture including the totality  of  the  values
  held   and  practised.   As  such  the  Government  will
  endeavour  to  forge a Malaysian system of  values  that
  stresses   positive   attitude  to   work,   discipline,
  diligence  and  a  sense  of responsibility.   If  these
  values  are internalised, all Malaysian, be they in  the
  rural  our  urban areas, or from whatever ethnic  group,
  will  be  able  to  enjoy a better and more  comfortable

  Accordingly   training  and  educational  centres   will
  include in their curriculum teaching of culture and  its

  We  recognise that Science and Mathematics are important
  in  effecting technological change.  Therefore,  greater
  emphasis   and  prominence  will  be  given   to   these
  subjects.   Apart from using English as  the  medium  of
  instruction,   the  teaching  and  learning   of   these
  subjects  in  schools will be made more  interesting  by
  using electronic course ware with local orientation  and
  placing greater emphasis on practical work in science.

  Our  aim is to further improve the quality of the labour
  force.   By 2010, about 35 per cent of the labour  force
  will  have tertiary level qualification, that is, double
  the  present level of 17.1 per cent.  The target set for
  2010,  is  still  low compared with the  current  levels
  achieved  by some developed countries such as  Japan  at
  36  per  cent, the United States at 41 per cent, Ireland
  at 43 per cent and Finland 36 per cent.

  To  meet  the increasing demand for tertiary  education,
  especially  in  technical fields, besides expanding  the
  capacity   of   existing  universities,  we   have   now
  established   university  colleges.   These   university
  colleges  are  focusing  on engineering  and  technology
  related  areas of study and are emphasising  a  hands-on
  experience  using the experiential and  action  learning
  approach.  We  have  found  that  the  first  batch   of
  graduates  from  an  university  college  were  able  to
  secure jobs quite easily.

  As  the  capacity of the public sector is  limited,  the
  private  sector  must further expand its involvement  in
  the  provision of education and training.   The  reduced
  interest  rate  and revised repayment  schedule  of  the
  Perbadanan   Tabung  Pendidikan  Tinggi  Nasional   loan
  announced  under  the  2004  Budget  will  enable   more
  qualified  candidates to pursue tertiary  education.  An
  additional  allocation of RM500 million  has  also  been
  provided  to the Skills Development Fund to enable  more
  candidates  to  pursue skills training.  The  guidelines
  on  the  provision of loans have also been  reviewed  to
  ensure effective utilisation of the Fund.

  The  slowdown  in  economic  growth  during  the  review
  period  has  resulted in the increase in the  number  of
  unemployed  graduates.  To mitigate  the  situation  and
  take  advantage  of the lull in the labour  market,  the
  government  launched  specific  training  programmes  in
  2001  to  further enhance the knowledge  and  skills  of
  these  graduates.  Under the Package of  New  Strategies
  and  the 2004 Budget, additional funds for training  and
  tax  incentives on cost incurred by employers for hiring
  these  graduates has been provided.  To further  enhance
  the   employability   of   their   graduates,   tertiary
  institutions will intensify efforts to equip  them  with
  the  necessary  soft skills such as communication,  team
  work and problem solving.

  In  almost every country fluency in English is  regarded
  so  important so much so that learning this language  is
  given  priority.  If we wish to compete to get jobs,  we
  too  have  to  do  so.  Because of  this  the  study  of
  English,  and science and mathematics will  be  stressed
  and  taught in English.   Mastery of other languages  is
  also  encouraged.  In this age anyone wishing to succeed
  must be fluent in at least two languages.

  Workplace training will be made an integral part of  the
  training  delivery system to ensure skills training  are
  more  market-oriented.  The implementation of  the  dual
  training  approach, adapted to the local  context,  will
  ensure  skills  and knowledge of workers are  constantly
  updated   to   match   the  modern   and   sophisticated
  production  processes utilised by firms.  This  training
  approach,   which   involves  training   at   both   the
  institution and the work place, will contribute  to  the
  increase  in  training opportunities for school  leavers
  and workers.

  Education has been identified as an export industry  and
  important source of foreign exchange earning.   In  this
  regard,  private institutions of higher learning  should
  create  their  own  niche areas in  specific  fields  of
  study  and  leverage on the promotion of Malaysia  as  a
  regional  centre  of  educational  excellence.  We  will
  introduce  appropriate measures to  promote  competition
  among  local  institutions of higher  learning  so  that
  they    emerge   as   premier   and   highly   reputable
  universities  at par with Cambridge in England,  Harvard
  in   America  and  Waseda  in  Japan.   Four   education
  promotion  offices  have  been  established  to  support
  private sector initiatives in getting foreign students.

  Increasing Effectiveness of Public Sector Expenditure

  The  Government will continue to adopt a prudent  fiscal
  policy   during   the  remaining  Plan  period.   Fiscal
  discipline  will  be  enhanced by applying  strict  cost
  control.  This is to prevent cost escalation and  ensure
  that  development  projects  give  returns  commensurate
  with   the   value  of  money  spent.  The  purpose   of
  implementing  development projects is to  bring  benefit
  to  people.   While  it  can give good  profits  to  the
  contractors it should not cause a loss to the people  as
  in the case of the science laboratories.

  In   this  connection,  the  Government  will  not  show
  leniency  to  contractors  who  fail  to  deliver  their
  projects  on  time  and in accordance  with  the  agreed
  quality.  The Government will not hesitate to  terminate
  the  contracts  of  these errant contractors,  blacklist
  and  prevent them from participating in future  tenders.
  This  will  ensure  that  only  those  with  good  track
  record,  credible  and  able to deliver  are  given  the
  chance to bid for Government contracts.

  As  a  move  to  cap  the  rising  cost  of  development
  projects, the Government has decided that there will  no
  longer   be  direct  negotiations  for  projects  unless
  absolutely    necessary   and   only   in    exceptional
  circumstances. Contracts for development  projects  will
  be  awarded either based on open or restricted  tenders,
  because  there are now many good Bumiputera  contractors
  and  they must compete with each other.  To control cost
  all  projects  must be referred to the Sub-Committee  on
  Standards and Cost.

  85.   Projects will only be implemented on a fast  track
  basis  if time is of the essence. The number of projects
  that  will be undertaken using this approach is expected
  to  be reduced as we improve our planning capability and
  implement  two  year  budgeting  system.  For   projects
  undertaken   using   the design and  build approach,  we
  will  now  require separate consultants for  the  design
  and different contractors for the construction.

  During  the  first  three years of the  Eighth  Malaysia
  Plan,  as I mentioned earlier, the Government was forced
  to   take  counter-cyclical  measures  to  cushion   the
  effects  of  the global economic slowdown  and  sluggish
  private   sector  activities.  As  a   result   of   the
  expansionary  fiscal  stance,  99.3  per  cent  of   the
  original  Eighth  Malaysia Plan development  expenditure
  ceiling  of RM110 billion would have been spent  by  the
  end of this year. The Government, therefore, intends  to
  increase the development ceiling of the Eighth  Plan  by
  RM50  billion to RM160 billion. The increase means  that
  for   the   next  two  years,  the  average  development
  expenditure  will be RM25.4 billion per year,  that  is,
  equivalent   to   the   annual  level   of   development
  expenditure prior to the economic slowdown.

  During  the  review  period,  the  fiscal  deficit   was
  maintained at 5.5 per cent of GDP. We were fortunate  to
  have  the  fiscal  flexibility to be  able  to  adopt  a
  proactive fiscal stance to soften the impact of  adverse
  external  conditions. This is because of our strong  and
  prudent   economic  management.  The   Government   will
  continue  to  maintain  its  deficit  and  debt   within
  sustainable  levels. The fiscal deficit is  expected  to
  decline  to 1.8 per cent of GDP by the end of  the  Plan

  To  optimise  growth  that can  be  generated  from  the
  remaining   allocation,   in   undertaking   development
  projects,   the  Government  will  require  that   these
  projects  maximise  the  use  of  local  materials   and
  components,  thus  reducing leakages from  the  economy.
  Projects  that  are selected will be  those  that  bring
  maximum  benefits  and  have strong  linkages  with  the
  domestic  economy  so  as  to  maximise  the  multiplier

  Of  the total revised allocation of RM160 billion,  more
  than  80 per cent is for the economic and social sector.
  Education   and  training  will  receive   the   highest
  allocation,  accounting for 25 per  cent  of  the  total
  development expenditure. The health sector will  receive
  5.9   per   cent,  housing  3.9  per  cent   and   local
  authorities  and  welfare services 5.0  per  cent.   The
  major  portion of the allocation for the economic sector
  is for the development of infrastructure and utilities.

  Enhancing Infrastructure to Support Economic Activity

  The  development  of infrastructure and  utilities  will
  continue  to  focus on enhancing accessibility  to  less
  developed,  recreational  and  potential  growth  areas.
  During   the  review  period,  the  Government  expended
  RM10.79  billion for the building of roads  and  bridges
  projects.   This   included  the  Titi   Karangan-Kupang
  section  of the Second East-West Link Road and  the  Pos
  Blau-Kampung  Kuala Betis section of the Simpang  Pulai-
  Gua  Musang-Kuala  Betis  Road. Several  road  upgrading
  projects  were  also  completed such  as  the  Brinchang
  Lojing  Road, the Beaufort-Sindumin Road and the Betong-
  Kayu   Malam  Road.  Consequently,  the  national   road
  network increased by 2,140 km to 75,160 km.

  During the remaining Plan period, additional funds  will
  be  allocated to expedite the completion of  major  road
  projects,  including the Simpang Pulai-Gua  Musang-Kuala
  Berang  Road,  Bentong-Kuala Lipis Road,  Trans  Eastern
  Kedah  Hinterland Highway, Kuching-Serian Road,  Nangoh-
  Kanibongan  Road, Sepulut Kalabakan Road  and  Sipitang-
  Tenom Road.

  During  the  review period, efficient traffic management
  systems  were  instituted to improve  traffic  flows  in
  urban   centres,  including  the  Integrated   Transport
  Information System in Kuala Lumpur and Klang Valley.  In
  addition,  various measures were taken  to  improve  the
  efficiency,  convenience  and  reliability   of   public
  transport  as well as encourage its use. The  Government
  also  intensified  efforts to create a more  integrated,
  efficient  and  multimodal urban transport  system.  The
  number  of  passengers using light rail transit  systems
  in  Kuala Lumpur increased during the review period.  In
  addition,  the  KL  Monorail,  which  provides  an   8.6
  kilometre   intra-city  light  rail  network,  commenced
  operations in August 2003.

  For  the remaining Plan period, the Government will give
  priority  to ensure accessibility and seamless  transfer
  between   the   various  modes  of   public   transport,
  especially  in  the  Klang  Valley.  Multimodal   public
  transportation  will be enhanced with the  operation  of
  integrated   transport   terminals.   Construction    of
  integrated  terminals  at Bandar  Tasik  Selatan,  Jalan
  Ipoh  and  Gombak  at the fringes of Kuala  Lumpur  will
  commence.  The Sentul integrated Station will  be  built
  with  private  sector participation  and  the  Putrajaya
  Monorail  Line  1 will be completed. A Public  Transport
  Authority  will also be established to plan,  coordinate
  and  implement  public transportation  system  in  major
  cities   as   well   as   ferry   and   other   riverine

  During  the  review  period, the Government  focused  on
  promoting  increased  usage of local  ports,  especially
  Port Klang and PTP by expanding capacity, upgrading  and
  increasing  facilities of ports  as  well  as  improving
  efficiency and productivity. Efforts were also taken  to
  improve  other supporting maritime-related  services.  A
  number of port related projects were completed, such  as
  additional berths at PTP, new basin at Kuantan Port  and
  additional  container berths and yards at West  Port.  A
  third  LNG  jetty  was completed at  Bintulu  Port.  The
  Cabotage  Policy  was  also reviewed  with  the  aim  of
  encouraging  the use of local ships to ferry  passengers
  and  cargo  between  two  or more  destinations  in  the

  For  the  remaining  Plan period,  the  Government  will
  intensify  its efforts to promote Port Klang as  a  mega
  hub  and distripark as well as PTPand Senai air and  sea
  freight  transhipment centres.  At the  same  time,  the
  Government  will  also enhance the  safety  of  maritime
  navigation  and reduce marine pollution by  establishing
  a  Malaysian  Maritime Enforcement  Agency.  A  maritime
  training  centre  will  also  be  constructed  at  Pulau
  Indah,  Port Klang to complement the Malaysian  Maritime
  Academy.    Other  measures  that  will  be  implemented
  include    the    installation    of    the    Automatic
  Identification  System to monitor  vessel  movements  in
  the Straits of Malacca.

  During  the review period, airport capacity was expanded
  with  the  commercial operation of two new  airports  in
  Tawau  and Bintulu and completion of upgrading works  on
  several  existing  airports.  Flight  safety  was   also
  enhanced  with  the  installation of navigational  aids.
  During  the  remaining Plan period, the Government  will
  continue  to focus on measures to increase the usage  of
  existing  facilities, expand capacity in specific  areas
  as  well  as improve the efficiency of services. Efforts
  will  be intensified to promote KL International Airport
  (KLIA)  as  a  regional aviation hub. This will  include
  attracting more international airlines to KLIA  as  well
  as  encouraging  existing  airlines  to  increase  their
  frequency.  In addition, the international  airports  of
  Kuching  and  Kota  Kinabalu  as  well  as  airports  in
  Labuan,  Alor  Setar, Pulau Pangkor and Melaka  will  be
  upgraded.  A  new airport will also be  built  in  Pulau
  Tioman  to support its development as a duty-free island

  In  respect  of  rail transport, efforts were  taken  to
  improve quality, efficiency and safety to passenger  and
  freight  services during the Review period.  During  the
  remaining  Plan period, the Rawang-Ipoh Double  Tracking
  Project   will  be  completed  and  this   will   reduce
  passenger  train travel time from Kuala Lumpur  to  Ipoh
  from  three  and  a  half  hours  to  two.   The  double
  tracking  from  Ipoh  to Padang Besar  and  Seremban  to
  Johor Bahru is also expected to begin before the end  of
  the  Plan  period.   Keretapi Tanah Melayu  Berhad  will
  further  improve  its freight service to  enable  it  to
  become  a  major  regional intermodal  transporter  with
  land, sea and air connectivity.

  As  for  electricity, its generation capacity  increased
  from  14,291  megawatt  in 2000 to  18,562  megawatt  in
  2003.  This  was to meet the growth in peak demand.  The
  rural  electricity  coverage also  improved  during  the
  review  period, with coverage for Sabah increasing  from
  67.1  per cent in 2000 to 69.8 per cent in 2003 and  for
  Sarawak  from  66.9 per cent to 77.3 per cent  in  2003.
  For  the  remaining  Plan period, the  energy  subsector
  will  focus  on ensuring sufficient and reliable  supply
  of  electricity  as well as optimal fuel  mix  in  power
  generation.   The  accumulated  installed  capacity   is
  expected  to  increase to 20,267 megawatt by  2005.  The
  rural  electrification programme will be continued  with
  the  implementation  of about 850  projects.  This  will
  increase  the  rural electricity coverage  in  Sabah  to
  72.8  per  cent and in Sarawak to 80.8 per cent  by  the
  end of the Plan period.

  During  the review period, the Government also continued
  to  take  measures  to  ensure efficient  management  of
  water  supply.  Several source work  projects  including
  the  Sungai  Selangor  Dam, Teluk  Bahang/Batu  Feringgi
  Water  Supply Project in Pulau Pinang, Kuala Jelai Phase
  II  and Sungai Terip Phase III water treatment plants in
  Negeri   Sembilan   were  completed,  increasing   total
  national water production capacity by 12 per cent.

  To   ensure   sustainability  of   water   supply,   the
  Government  will undertake efforts to improve efficiency
  and  rehabilitation  of existing water  supply  systems,
  and  construct new source works. For this  purpose,  the
  Federal  Government  with the agreement  of  the  states
  will  assume  a  more active role in planning,  managing
  and   coordinating  water  resource  programmes  in  the
  country.  The  development of water  resources  will  be
  undertaken  with  emphasis  given  to  Integrated  Water
  Resources  Management. A management  information  system
  will  be set up to integrate the databases of all  water
  supply  authorities.  In addition, the  construction  of
  the  Pahang-Selangor Interstate Raw Water Transfer  will
  begin   before   the  end  of  the  Plan   period.   The
  multipurpose  Beris Dam, in Kedah and  the  Jus  Dam  in
  Melaka  will be completed in 2004 while the  Chereh  Dam
  in Pahang will be completed in 2005.

  Development  efforts  in the sewerage  subsector  during
  the  review period focused on improving services through
  the  construction  of  new  infrastructure  as  well  as
  upgrading   and  rehabilitation  of  existing   systems.
  Capital  and  refurbishment  works  were  undertaken  to
  improve  the quality of effluent discharged into surface
  water  bodies,  thereby improving the  environment.  The
  capital   development  programme   for   sewerage   will
  continue   during   the  remaining  Plan   period.   The
  construction works for Phase 1 of the National  Sewerage
  Project  will commence while the tendering  process  for
  Phase  2  will be initiated. The projects under Phase  1
  will  provide an additional sewerage treatment  capacity
  of  979,000 population equivalent (PE) when completed in
  2005.   The   Sanitation   Commission   will   also   be
  established   to   formulate   economic    and    safety
  regulations to safeguard public interest and to  promote
  the development of sewerage and solid waste management.

  The  country  has come a long way in the development  of
  its  infrastructure, which is now  almost  at  par  with
  many  developed  countries. The installation,  operation
  and maintenance of these facilities do not come free  of
  charge.  They come at a cost.  This cost has to be  paid
  either  by the Government or the private sector.   Truly
  the  Government does not have the funds to build all the
  infrastructure for the people from taxes  collected.  If
  we  wait  until  the Government has the funds,  then  it
  would  take  a long time for the infrastructure  to  the
  built.  Because of this the private sector will have  to
  invest.   They  will  not  invest  unless  they  get   a
  reasonable return.  Users must therefore be prepared  to
  pay   a   reasonable  fee  for  the  services  rendered.
  Nevertheless the Government will support to  the  extent
  that   it  can.   In  fact   the  payment  by  Malaysian
  consumers  is very much lower than is paid by  consumers
  in  other countries.  For the good of everyone consumers
  must  accept the concept of "user pays".  It is  grossly
  unfair  if  people  who do not use  are  forced  to  pay
  through several taxes for the good of the users.

  Developing  New  Sources of Growth in the  Manufacturing

  The manufacturing sector will continue to face  new
  challenges  arising  from  increased  competition   from
  emerging  economies.  Despite being  adversely  affected
  by  external  factors since the Asian financial  crisis,
  this  sector  has remained critical to economic  growth.
  In  2003,  this  sector will contribute about  30.6  per
  cent  of  GDP, 83.0 per cent of total exports  and  27.8
  per  cent  of  total employment. The Government  adopted
  various  measures  to  minimise the  adverse  impact  of
  external  conditions  on  the  sector  through  stimulus
  packages.   The stimulus packages introduced during  the
  review  period assisted this sector by improving  access
  to  funding,  providing  tax  incentives  and  enhancing
  human  resource development.    Funds for  training  and
  retraining  were  established to raise the  productivity
  and efficiency of the workforce.

  Taking   into  consideration  the  external  challenges,
  there  is a need to strengthen the manufacturing  sector
  and   accelerate  the  shift  to  high  technology   and
  knowledge-based  industries. With  regard  to  this  the
  Government  will  focus on reducing red tape,  reviewing
  work processes and streamlining procedures, in order  to
  create a business-friendly environment.

  Several  areas  in  the manufacturing sector  have  been
  identified as having potential to be developed into  new
  sources   of   growth.   The  marine   industry   offers
  opportunities  in building and repairing  ships,  boats,
  vessels,  ferries,  leisure  crafts,  yachts   and   the
  development   of   other   ancillary   industries.   The
  machinery   and   equipment  as  well   as   the   metal
  fabrication  industry  will also be  further  developed.
  The  Bio-Valley project will be implemented  to  attract
  investment  in  biotechnology-related  activities.   The
  aerospace  industry will be further developed  with  the
  implementation  of  the  National  Satellite  Programme.
  The  food-processing industry will focus on  new  market
  segments  including  convenience food,  halal  food  and
  nutritional food in line with the changing lifestyle  of
  consumers. Manufacturing-related services such  as  R&D,
  distribution, marketing, packaging, branding,  designing
  and  prototyping  that are important to  increase  value
  added  to  the  manufacturing  products  will  also   be

  To  increase  industrial productivity,  including  SMEs,
  the   Government  will  support  the  establishment   of
  trading companies ala Japanese "sogo shoshas" to  become
  the  conduit  for  the marketing of  Malaysian  products
  abroad.   Local  companies must be  prepared  to  pay  a
  reasonable commission for this service, while the  "sogo
  shoshas" should provide the best service to the  markets
  and buyers abroad.

  To  raise the capacity and capability of SMEs,  a  broad
  range  of programmes will continue to be implemented  to
  ensure   that  they  are  reliable  suppliers  to   lead
  companies  and their worldwide operations. In line  with
  the  Small  and Medium Industry Development  Plan,  SMEs
  will  continue to be provided with financial, managerial
  and  technical  know-how. On their part,  however,  SMEs
  must  give  up their lackadaisical attitude of business-
  as-usual  and  take  conscious steps  to  enhance  their
  competitiveness and productivity.

  Revitalising Agriculture

  The  agriculture sector will be given a  more  important
  role  in  the national economy. The sector grew  by  1.5
  per  cent  during  the  review period  as  a  result  of
  increased  output  of  palm oil  and  food  commodities.
  Agricultural  export earnings rose by 26  per  cent  per
  annum  from  RM  23 billion in 2000 to RM29  billion  in
  2003  supported by the higher prices of primary and food
  commodities.  The  improvement in  the  export  of  food
  commodities  was a result of increasing  investments  in
  large  scale food production and improvements in quality
  undertaken   in   the  context  of   the   Ministry   of
  Agriculture  Incorporated approach.  While  the  country
  has  yet to reverse its position as a net food importer,
  it  has  achieved self-sufficiency in poultry  and  eggs
  and near sufficiency in fisheries.

  In  the  next  two  years,  the  agriculture  sector  is
  expected  to grow at a higher rate of 2.7 per  cent  per
  annum.  The  growth of this sector will be derived  from
  the   increased   output  of  industrial   crops,   food
  production and the contribution from new activities.

  Fish  farming  or  aquaculture has  been  identified  as
  having  great  growth  potential.  The  Government  will
  intensify   efforts   to  develop  new   infrastructure,
  improvement  in  skills  and  technologies  to   promote
  modern  aquaculture.  This involves the  breeding  of  a
  variety  of  marketable  and highly  demanded  fish  and
  crustaceans.  To support commercial scale fish  fry  and
  related   downstream   fish  farming   activities,   the
  Government  will  accelerate the implementation  of  the
  National   Seedling  Programme  and  Action   Plan   for
  Hatchery Development.  In addition, the Government  will
  provide  support  services to encourage  investments  in
  the  tuna  industry by establishing four  Tuna  Regional
  Development  Centres in Johor, Pulau Pinang,  Sabah  and
  Labuan.   Other activities that will be promoted include
  large-scale   commercial  cultivation  of  seaweed   and
  production of ornamental fish.

  The  government will also intensify efforts  to  develop
  the  potentials  of  biomass and biotechnology  products
  for  domestic and export markets. Programmes to  develop
  speciality  natural products such as herbs,  spices  and
  medicinal  plants on an integrated and commercial  basis
  will   be   accelerated.   In  addition,  the   National
  Botanical  Garden  project  will  be  developed   as   a
  showcase  for  new  investment  opportunities   in   the
  agriculture sector, apart from being a recreational  and
  tourist site.

  In  order  to  boost  developments  in  the  agriculture
  sector,  more  effective enabling technologies  will  be
  promoted.  Among  these will be the  extensive  use  and
  applications  of ICT related technologies  and  adoption
  of   e-commerce.   In  this  regard,   the   Agriculture
  Technology-Industry-Government-Electronic Revolution  or
  the  AgriTIGeR,  aimed  at  enhancing  productivity  and
  increasing  competitiveness in the  agriculture  sector,
  will  be  extended  to  more areas including  Sabah  and
  Sarawak.  Under AgriTIGeR, a cost-effective business-to-
  business  supply  chain  management  application  and  a
  portal  called  Agribazaar will  be  further  developed.
  The  Agribazaar will function as an exchange gateway for
  agricultural  communities and traders to conduct  online

  Apart  from  sustaining  Malaysia's  competitiveness  in
  palm  oil  vis-.-vis other oils and fats  in  the  world
  market,  efforts  are  underway to develop  the  country
  into  a  competitive  food  exporter.  For  this  to  be
  successful,  it  would  need to be  underpinned  by  the
  development   of  strong  support  services,   including
  access  to  business-related information  and  efficient
  distribution channels.

  The  processing of local agricultural produce should  be
  made  into  a  big industry.  There is a need  for  this
  sector  to  move  up  the  value chain  through  greater
  utilisation of knowledge and high-technology.

  Labour  out  migration from the agriculture  sector  has
  resulted  in an aging agricultural workforce. To  inject
  dynamism   back  into  the  sector,  more   technicians,
  professionals  and  entrepreneurs  will  be  trained  in
  modern  agricultural practices and skills. The  National
  Agricultural Training Centre will be entrusted to  plan,
  coordinate  and evaluate skill-training programmes.  The
  provision  of  agricultural professionals such  as  soil
  scientists,   microbiologists,   biotechnologists    and
  nutritionists  will  be  addressed.   This  productivity
  improvements  will  be  achieved  by  promoting  greater
  mechanisation  and automation, and adoption  of  labour-
  saving technology.

  Venturing  into  New Sources of Growth in  the  Services

  The  services sector continued to expand at  an  average
  rate  of  4.7  per cent during the review  period.   The
  strong  growth was largely contributed by the transport,
  storage  and  communication subsector  as  well  as  the
  finance,  insurance, real estate and  business  services

  Education,  tourism, Islamic finance, health, transport,
  professional and consultancy as well as ICT-related  and
  manufacturing-related   services   will    be    further
  exploited  to realise their full potential so that  they
  can   drive   economic   growth  and   contribute   more
  significantly  to export earnings. The growth  of  these
  service  industries are poised to accelerate given  that
  most  of  the  related infrastructures  are  already  in
  place.   In  an  effort to promote these  services,  the
  Government    will   undertake   more   effective    and
  coordinated promotion programmes.

  Over  the  last  few  years,  tourism  has  increasingly
  contributed to foreign exchange earnings and the  growth
  of   the  other  sectors.  In  2001  and  2002,  tourist
  arrivals  surpassed the targets set. In 2001, the  total
  number  of  tourist arrivals was12.8 million,  exceeding
  the  target by 6.5 per cent. In the following year,  the
  number  of  tourist arrivals increased to  13.3  million
  and  exceeded  the target by 10.8 per cent. Nevertheless
  because  of  the  invasion of Iraq and the  outbreak  of
  SARS,  tourist arrivals dropped by 31 per  cent  in  the
  first  half  of this year. However, I am happy  to  note
  that  in  the past few months, we are already witnessing
  an upward trend in tourist arrivals.

  To  realise the full potential of the tourism  industry,
  the   Government  will  undertake  measures  to  promote
  domestic   and   international  tourism  and   intensify
  initiatives   in  tourism  product  development.   Among
  others,  education,  health,  sports,  agro-  and   eco-
  tourism  will  be  further  developed  to  maximise  the
  potential  of  the  tourism industry. Malaysia's  unique
  cultural   heritage   will   be   emphasised   in    the
  implementation  of these measures.  To promote  cultural
  and  natural heritage sites, efforts will be  undertaken
  to  include  Taman Negara in Peninsular  Malaysia,  Niah
  Caves  in Sarawak and the Maliau Basin in Sabah as  well
  as  the Historic Inner Cities of Melaka and Pulau Pinang
  as  World Heritage Sites. Domestic tourism will also  be
  intensified through attractive value-for-money  packages
  in  cooperation  with the country's  airlines.   At  the
  same  time,  workers  in the tourism  industry  will  be
  trained  and equipped with the necessary skills to  meet
  the varied demands and expectations of the tourists.

  Marketing  and  promotional activities will  concentrate
  on  expanding  the  tourism market share  by  sustaining
  existing   markets   and  developing  newly   identified
  markets.    In   this  regard,  we  will  send   tourism
  promotion  missions to markets such as the  Middle  East
  countries  as  well as China, India,  Japan  and  United
  States.   The  unique  selling  points  of  the  tourism
  industry will continue to be marketed based on  the  tag
  line  "Malaysia  Truly  Asia". To  further  enhance  the
  attractiveness  of  Malaysia as a shopping  destination,
  entrepreneurs will be encouraged to increase efforts  to
  obtain  agency and dealership rights of new and emerging
  international  consumer products and  brand  names.   In
  addition,   the   possibility  of  establishing   direct
  international  flights  from  selected  cities  will  be
  explored  to  facilitate access to  duty  free  shopping
  destinations in the country.

  As  part  of efforts to increase tourist arrivals,  more
  event-related activities will be organised  and  quality
  tourism  products and services provided,  based  on  the
  uniqueness   and   strength  of  niche   products.    In
  addition,  the  Blue Flag and Green Globe certifications
  will  be  introduced to tourist sites. The Blue Flag  is
  awarded  to  beaches  that meet international  standards
  while  the  Green Globe certification is given  to  eco-
  tourism  sites  that adhere to environmental  protection
  and improvement.

  Eco-tourism,  agro-tourism and  rural  tourism  will  be
  further  developed to fully capitalise on the  beautiful
  scenery,  peaceful  countryside  and  flora  and  fauna.
  Existing  accommodation and attractions will be upgraded
  and    new    ones   developed.    In   addition,    the
  implementation  of  the  "one  district  one   industry"
  programme  will  increase  the  participation  of  local
  communities  through  handicraft  industries   and   the
  supply of handcraft products for tourists.

  To  promote  the  cruise industry, we will  continue  to
  develop  cruise centres in various parts of the country.
  Towards  this  end, marinas will be built  at  strategic
  locations  such  as  in  Pulau  Pinang,  Pulau  Pangkor,
  Klang,   Port  Dickson,  Melaka  and  Muar,  and  cruise
  terminals  at Pulau Pinang and Melaka will be  upgraded.
  This  will allow cruise ships and leisure boats to  sail
  to  different  sites  of  interest  as  well  as  enable
  tourists  to engage in more activities and stay  longer.
  In  addition,  existing jetties and passenger  terminals
  will  be  upgraded  to  ensure  comfort  and  safety  of
  passengers  especially in areas where  riverine  is  the
  main means of transportation, as in Sabah and Sarawak.

  The   availability  of  a  sophisticated  and  efficient
  health  care  delivery system, alternative therapies  as
  well   as   an   attractive  natural   environment   has
  positioned  Malaysia  as  an  emerging  health   tourism
  centre.   In  this  regard, special tour  packages  with
  health   components  will  be  introduced.   To  further
  promote  edu-tourism,  efforts  will  be  undertaken  to
  encourage  private  institutions of higher  learning  to
  improve  education facilities and services,  expand  the
  curricula   and  enhance  their  teaching  capabilities.
  Promotional efforts will be intensified to attract  more
  foreign  students to pursue their studies  in  Malaysia.
  As  sports  tourism offers vast potential in  attracting
  tourists  to  the  country, we  will  continue  to  hold
  sports events and promote new sports for this purpose.


  As  part of the efforts to encourage and finance tourism
  operators  to  provide various tourism-related  products
  and  services, the Government launched the Special  Fund
  for  Tourism and Infrastructure in October 2002 with  an
  allocation   of  RM  400  million.   In  addition,   the
  stimulus  package announced on 21 May 2003 had increased
  the  allocation for the Tourism Infrastructure Fund from
  RM  200 million to RM 700 million to further enhance the
  effectiveness of tourism programmes.  Among the  tourism
  development  strategies  that will  be  pursued  in  the
  remaining  Plan  period  include  engaging  in   product
  development  and  promotion;  enhancing  human  resource
  development  in  the tourism industry;  and  encouraging
  and facilitating domestic tourism.

  Retail and Wholesale Businesses

  Strategic   steps  will  be  taken  to  accelerate   the
  development  of the retail and wholesale  trade  sector.
  Local   institutions   of  higher   learning   will   be
  encouraged to offer courses in distributive trade  while
  the  Government will conduct specific courses in  retail
  trade  at  its skills development and training  centres.
  At  the same time, consumer education will be continued.
  The  Consumer Claims Tribunal will be established in all
  states  during  the  remaining Plan  period.  An  agency
  dealing   with  the  public  as  well  as  the   service
  providers  and traders will be established at the  state
  level  to address complaints filed by consumers  against
  service providers and traders.

  Fair  trade  practices policy and  legislation  will  be
  formulated  to promote healthy competition  and  prevent
  anti-competitive  behaviour such as  collusion,  cartel,
  price-fixing  and  abuse of market power.  This  policy,
  while  increasing  productivity  and  efficiency,   will
  promote   the   entry   and   participation   of   small
  enterprises  into  the distributive trade  sector.   The
  proposed  policy and legislation will be implemented  in

  Hypermarkets  will  be encouraged  to  work  with  local
  producers  to  source  locally produced  goods  of  high
  quality  at  competitive prices. This will also  provide
  an  avenue  for  domestic firms, particularly  SMEs  and
  handicraft   producers    to   market   their   products
  domestically and overseas.

  Bumiputera  participation  in  the  distributive   trade
  sector   will   be   enhanced  by  conducting   training
  programmes  on  product  quality  standards,  packaging,
  branding   and  marketing.  This  will  ensure  products
  produced  will  be of export quality and  meet  consumer
  demand.   Further efforts will be undertaken to  improve
  the  programmes  and  activities of  PROSPER.   In  this
  context,    business   plan   workshops   and   business
  consultancy  clinics will be conducted to assist,  guide
  and  provide  strategic  direction  to  participants  to
  enhance   the   effectiveness  of  the  programmes   and
  activities  of PROSPER. In this regard, the  development
  of   concept  shops  for  lighting,  laundry   and   dry
  cleaning,  home  d.cor,  mini market,  sports  shop  and
  automotive  workshop  for  future  replication  will  be
  considered  for implementation.  Whether all these  will
  succeed  depends  on the willingness of  Bumiputeras  to
  participate in this field.  If they refuse then  no  one
  should  complain  why there are no  Bumiputeras  in  the
  urban areas in Malaysia.

  Since  the introduction of Islamic banking twenty  years
  ago,  we have made great strides in expanding its market
  share   of   banking  assets,  deposits  and  financing,
  reflecting  its  increasing prominence, consistent  with
  the  Government's  efforts to promote  Islamic  banking.
  This  has  given  the clients, whether  Muslim  or  non-
  Muslim  to choose what system they prefer.  At  the  end
  of  June  2003,  the  market share  of  Islamic  banking
  assets  rose  to  9.4  per cent  of  the  total  banking

  Islamic  finance, including Islamic banking and  capital
  market,  will  be  developed as strategic  niche  market
  segments.   We  will  introduce  more  competitive   and
  innovative  Islamic products as well  as  diversify  the
  product   base  through  the  mobilisation  of  untapped
  Islamic  assets.  Initiatives will also be  directed  at
  developing mutually beneficial strategic alliances  with
  other   major   Islamic  capital   markets   to   create
  opportunities  for  both Malaysia and  its  partners  by
  enhancing  the  matching of the global pool  of  funding
  sources  from Islamic communities with Syariah-compliant
  investment opportunities.

  Sustainable Development

  The  path to sustainable living is a three fold process,
  one that promotes the economic vigour of the country  to
  maintain higher living standards, another to ensure  the
  promotion of social justice and cohesion, and finally  a
  process  that  monitors and protects the environment  to
  prevent  degradation.  Accordingly, we will continue  to
  pursue   sound   management  and  development   of   our
  environment   and   natural  resources   in   order   to
  strengthen  the  long-term  growth  of  the  nation  and
  achieve     sustainable    development.      Sustainable
  development  is  an  essential condition  for  long-term
  economic growth and lasting improvements in our  quality
  of  life.   It may be seen as a need to create  win-win-
  win  opportunities  to simultaneously achieve  economic,
  social and environmental objectives.

  It  is  also important to remember that it is not enough
  to  improve the quality of people's lives today; we have
  to  ensure that today's gains do not come at the expense
  of  constrained  opportunities for  future  development.
  Fortunately,    as   Malaysia   built    its    economic
  foundations,   the  concern  for  the  environment   and
  sustainability was firmly rooted. Not only  were  a  set
  of  guiding principles established to maintain a healthy
  environment for human habitation, but also the  need  to
  preserve  natural  heritage and take  into  account  the
  impact  of  population growth and industrialisation  was
  clearly  recognised.  By  the  mid-1980s,  environmental
  protection was already a key factor in the equation  for
  national  progress.  Among the many efforts  to  sustain
  both  economic and environmental soundness were  actions
  to  minimise the impact of human activities  related  to
  deforestation,  urbanisation  and  tourism;  emphasising
  prevention  through  conservation  instead  of  curative
  measures;  and incorporating environmental  planning  in
  development projects.

  The  last  decade has been characterised by the adoption
  of  the  concept  of balanced development,  where  apart
  from  economic growth, the protection of the environment
  and   Malaysia's   natural  resource  base   was   given

  The  rakyat,  the  private sector, NGOs  and  community-
  based  organisations  have  a  critical  role  in  these
  efforts as partners and advocates, and in ensuring  that
  the  nation's  environmental and natural resource  goals
  are reached efficiently.

  Improving Quality of Life

  A  major  yardstick in judging progress of a  nation  is
  the  improving  quality of life of the  people.   We  in
  Malaysia  recognise that the people have  the  right  to
  benefit  from  development and the  Government  has  the
  responsibility  of ensuring the overall  conditions  for
  socio-economic growth.

  We   have   concentrated  our  efforts  in   eradicating
  poverty,  improving  the condition of  the  lower-income
  group,  providing  opportunities for  higher  levels  of
  income,  investing  in education,  health,  housing  and
  other  amenities,  ensuring improved working  conditions
  and  protecting  the environment.   There  is  truly  no
  reason  for  anyone to be poor in Malaysia.  Whoever  is
  prepared  to  seize  the  opportunity  provided  by  the
  Government  and God's abundant generosity should  surely
  enjoy  a  good life and earn a good income.  But  if  we
  ignore   God's  bounty  and  all  the  efforts  of   the
  Government then outsiders will enjoy all the benefits.

  The   Malaysian  Quality  of  Life  Index,  a  composite
  measurement  based on 11 areas comprising 41 indicators,
  registered an upward trend. This shows that the  quality
  of  life  of all Malaysians further improved  in  almost
  all   aspects   following  the  Government's   continued
  efforts  to  implement  programmes  to  increase  income
  levels  and  improve  the provision  of  and  access  to
  social  services.  But the Government will  continue  to
  ensure  that  all  Malaysians  enjoy  the  benefits   of
  development  through  the  provision  of  adequate   and
  quality social services.

  Health   promotion  and  disease  prevention  programmes
  continued  to be accorded high priority.  The programmes
  take  into  account the increasing affluence of  society
  and  its  sedentary  and  stress-filled  lifestyles  and
  emphasised the promotion of a healthy lifestyle,  better
  nutrition, immunisation, safe drinking water  supply  as
  well  as  food  quality  and safety.   As  part  of  the
  preventive and promotive health programme, the  thematic
  lifestyle  campaign focused on the practice  of  healthy
  behaviour  and food safety.  The coverage and  scope  of
  the   childhood  immunisation  programme   was   further
  improved.   The National Food Safety Policy and  a  Plan
  of  Action  were  formulated to ensure the  quality  and
  safety  of  locally  produced and  imported  food.   The
  environmental health programme was also strengthened  to
  ensure a safe and healthy environment.

  The   health  programmes  has  resulted  in   the   life
  expectancy  at  birth  for males to  improve  from  70.3
  years in 2001 to 70.5 in 2003 and that for females  from
  75.2  years to 75.4.  The infant mortality rate improved
  further  from 6.3 per thousand live-births  in  2001  to
  5.7 in 2003.

  During  the  review period, the provision of  urban  and
  rural  services  was expanded to ensure that  a  greater
  proportion  of  the  population had access  to  enhanced
  facilities  for economic and social activities,  and  an
  improved  living environment.  Housing and other  social
  services  continued  to be accorded priority.   Measures
  were   taken  to  increase  accessibility  to  adequate,
  affordable  and  quality houses for all  income  groups.
  Priority  was accorded to the development  of  low-  and
  low  medium-cost houses. The Government's  Housing  Loan
  Scheme  was reviewed to enable the low-income  group  to
  own   houses   by   increasing  the   amount   of   loan
  eligibility.   But  we  must remember  that  it  is  not
  possible  for  everyone to own a  house  and  they  will
  continue to rent their houses.

  A  total of 615,000 units of houses was targeted  to  be
  built by both the public and private sectors during  the
  Plan  period.  At  the end of the review  period,  three
  quarters  of  the total units targeted for  construction
  were  completed.  Of this total, 339,854 units  or  73.6
  per  cent  were  built  by the private  sector  and  the
  balance  by  the  public sector. In the  low-  and  low-
  medium  cost  housing categories,  a  total  of  177,253
  units or 48.8 per cent of the target was completed.

  The  issue  of  solid waste collection and  disposal  is
  becoming  increasingly important with  the  increase  in
  population.  The Government recently completed  a  study
  on   a   comprehensive  approach  towards  solid   waste
  management.  In  addition, the  privatised  solid  waste
  management  scheme was expanded with an additional  nine
  local   authorities  being  included  for  the   interim
  collection of waste. A solid waste transfer station  was
  built  in Kuala Lumpur to enhance the implementation  of
  an  integrated waste management system. In this  regard,
  the  National  Campaign  on Recycling  was  launched  in
  2001,  and  has  been extended to 67 local  authorities.
  To   avoid   living  in  a  mountain  of   rubbish   the
  cooperation  of  everyone  is  needed.   The   cost   of
  treating waste must be borne by the Government  and  the
  people.  If we wish to have the living standards of  the
  developed  nations we must accept a reasonable standard.
  Do  not  demand  a  standard that  is  higher  than  the
  developed countries while refusing to pay for the same.

  Landscape  development activities  were  intensified  to
  provide  additional leisure and recreational  space  and
  to   beautify   the   environment.   Local   Authorities
  constructed 20 new public parks, while the 179  existing
  parks were upgraded. Landscaping master plans were  also
  completed  for  six  local  authorities,  namely,  Johor
  Bharu,  Kuantan,  Labuan, Langkawi,  Seremban  and  Shah
  Alam.  During  the review period, a million  trees  were
  also  distributed to all states for planting to  enhance

  Government  can provide the services and  support.   But
  in  the end the people themselves will determine whether
  what is provided will benefit the people or not.  It  is
  for  this  reason  that an awareness  campaign  entitled
  "Family  First: Bring Your Heart Home" was  launched  at
  the  national and state levels.  To assist  families  in
  coping  with the challenges and demands of daily  living
  as  well  as to improve family life, the Government  has
  approved   the   establishment  of  29  Kompleks   KASIH
  Keluarga.   Recognising  that   the   family   forms   a
  fundamental   unit   towards  the   development   of   a
  progressive  and caring society, emphasis will  continue
  to be given to strengthening the family unit.

  The  role  of  women has become wider because  of  their
  willingness  to  acquire knowledge  and  to  work.   But
  their  role  in  bringing  up their  children  is  still
  important.    Lately  we  have  been  witnessing   moral
  collapse  among  school children.  There  may  be  other
  reasons but poor upbringing at home must be one  of  the
  reasons.  Because many mothers work a way must be  found
  for  the  mothers to still play a role in the upbringing
  of  their  children.  Fathers too must play  a  role  in
  this  and  must show good examples.  We do not  want  to
  see  the  moral  collapse in the west  spread  into  our

  National Unity and Patriotism

  Let  me now move to an issue which is very important  to
  us.   Ours  is  a  multi-ethnic  nation  annd  this  can
  destablise   our   social,   political   and    economic
  environment  and affect the development of our  country.
  Incidentally  there are not many opportunities  for  the
  different   races   to  mix  and  interact   to   enable
  friendship to be formed.  Their separation is  increased
  by  the  activities of extremist groups.  If this  trend
  is  not  dealt  with  the peace and  well-being  of  the
  nation  will be undermined.  Because of this  Government
  has  introduced the vision schools which will  have  the
  National  Schools,  the Chinese schools  and  the  Tamil
  schools  on  one  campus,  so  that  the  students   can
  participate  in co-curriculum activities together.   The
  Government  will also undertake various  initiatives  to
  heighten the unity and understanding between the  people
  of different communities, cultures and traditions.

  The  Government has initiated various measures  such  as
  Rukun   Tetangga  Programme  for  example   to   promote
  harmonious  living  and caring.  The  concept  of  Rukun
  Tetangga  has been changed from neighbourhood  watch  to
  community  outreach.   Its scope has  been  expanded  to
  include   social  outreach  efforts  that   focused   on
  specific  target  groups such as  the  disabled,  single
  mothers  and  rehabilitated drug addicts  with  emphasis
  given   to  capacity  building,  thereby  enabling   the
  community  to become self-reliant. Community empowerment
  through   the   involvement   of   more   professionals,
  corporate  citizens, government officers and  pensioners
  is being encouraged.

  Mega  Unity Programme was launched in May 2003  to  help
  bring   communities  together  during  the  Unity  Week.
  Additional  programmes  will be implemented  to  further
  enhance    national   integration   between   Peninsular
  Malaysia, Sabah and Sarawak.

  In  2004 National Services will be introduced so that  a
  number  of Malaysian youths can be brought together  and
  undergo  military  training  and  social  service.    We
  believe  that the youth of different ethnic  groups  can
  live  together, train together, serve together and  play
  together.  This will enable them to be exposed to  their
  respective cultures and they will better understand  the
  similarities  and differences between them.   With  this
  there   should  be  less  misunderstanding  and  tension
  between  them  which  can  threaten  the  stability  and
  progress of the country.


  The  success  or  otherwise of a nation depends  on  the
  citizens  of that nation.  If the citizens are diligent,
  disciplined,  in  control  of  their  feelings  and  are
  prepared  to  face challenges and overcome  obstructions
  then  that  nation would be successful.  The  colour  of
  the  skin, racial heritage, or natural resources are not
  the   most  important  factors,  and  certainly   cannot
  determine  success.   What  determines  success  is  the
  culture  or  the  value  system which  is  accepted  and
  practised.   That is why different races living  on  the
  same  country do not show the same success  or  failure.
  Sometimes their achievements are extremely different.

  In  an  increasingly interdependent world we  cannot  be
  alone.    We   have   to  acknowledge  that   increasing
  competition  will  be  a permanent  feature,  especially
  competition  by  countries with lower costs,  which  can
  erode  our  strength in our traditional fields.   In  an
  environment which is continuously changing, we  have  no
  other    choice    other   than    to    increase    our
  competitiveness,   strengthen   our   resilience,    and
  increase our productivity and creativity.

  The  private sector must venture into new markets.  This
  requires  a  change  in mindset from  being  comfortable
  with  traditional  markets and to one that  regards  the
  world  as  the  market.   We should  make  Malaysia  the
  gateway  for products and services from other  parts  of
  the   world  to  the  countries  in  this  region.    In
  competing for the global market, we have to ensure  that
  our   management  practices  are  up  to   the   highest
  standards   and   we  must  uncompromisingly   benchmark
  ourselves  against the world's best.  We have to  ensure
  that  our  products  and services  are  of  the  highest
  quality  and  must be recognised by the  world  over  as
  such.   For  this  we need to brand  our  products.   We
  would  like to see more Malaysian branded products  sold
  in  overseas markets.  We want Malaysian firms  to  give
  this aspect of marketing the utmost priority so that  we
  can  gain  from being active participants in the  global

  We   must  never  forget  that  national  unity  is  our
  greatest  asset.  In  fact, it is the  only  asset  that
  makes it possible for us to enjoy the other assets  that
  the  Almighty  has showered on this land  in  abundance.
  National  unity  in our multi-ethnic and multi-religious
  country  can  only  be  maintained and  strengthened  if
  there  is  a high level of understanding, tolerance  and
  mutual  respect  amongst our diverse  peoples.  We  have
  seen  how many other multi-ethnic societies have  failed
  because  each race places its own interest first  before
  the  interest of the nation.  If we are not  careful  we
  too will fail and be destroyed.

  We  have to constantly and tirelessly work to strengthen
  national  unity  and  take  immediate  action  to   curb
  tendencies   that  could  work  against   the   national
  interest.   No one should have a narrow view  point  and
  accuse  the Government of trying to destroy the  culture
  and  language  of any race.  In reality it  is  only  in
  Malaysia   that   the  interests  of   all   races   are
  safeguarded and financed by the Government.

  We  must  be prepared for any challenge that  comes  our
  way.   The  Government  on its  part  will  provide  the
  leadership  and  the  requisite  resources.    It   will
  conduct    extensive   consultations   in    formulating
  strategies  to face new challenges as, or  even  before,
  they  arise.   The  people, on their part,  must  remain
  united  and  fully supportive of all measures  that  the
  Government   undertakes.   It  has  been   my   pleasant
  experience  during my tenure as Prime Minister  to  find
  all  Malaysians  rallying together  in  the  face  of  a
  crisis.  This uniquely Malaysian characteristic must  be
  maintained  at all costs and should never be  sacrificed
  in   the  interest  of  expediency  of  parochial  self-
  interest  or  political opportunism.  As I  retire  from
  the  nation's highest elected office, I call upon  every
  Malaysian   to  rise  to  the  occasion  to   face   the
  challenges    as   they   emerge   and   shoulder    the
  responsibilities of citizenship. If we  do  this,  there
  is  no  reason  why we cannot continue to be  successful
  and  make this country a model for the world to  emulate
  Malaysia Boleh.

   Sumber : Pejabat Perdana Menteri