The latest iteration of Malaysia’s five-year development plan targets transformative reforms to enhance its global competitiveness in its journey towards becoming a high-income nation with high-growth and high-value industries.
Bait Al-Amanah research director Benedict Weerasena said for Malaysia to achieve this vision, it is imperative to explore alternative development pathways through the 13MP.
He said breaking through barriers to medium and high-end manufacturing requires “more than ambition”.
“It demands the strategic consolidation of existing resources, investment in cutting-edge research and development (R&D), and a concerted effort to harness and scale competencies,” he told FMT.
“We should consider prioritising the creation of domestically embedded large-scale businesses capable of commanding export dominance on the regional and global stages,” he added.
Efficiency of execution
Weerasena said while Malaysia has developed “exceptional masterplans” for national development, the efficiency of their execution requires urgent review.
“A critical reform lies in empowering our parliamentary democracy by allocating greater resources to enable both government backbenchers and opposition lawmakers to actively contribute to lawmaking, policy development, and governance oversight.”
Furthermore, he said, the Madani government under Prime Minister Anwar Ibrahim must persist in its commitment to streamlining regulations, accelerating approval processes and fostering an environment that benefits the public, businesses and investors alike.
“By addressing these priorities, Malaysia can unlock its full potential and ensure impactful, effective governance,” he added.
To strengthen public service delivery, he said Malaysia must intensify efforts outlined in the 12th Malaysia Plan by cultivating a “high-performing civil service” and enhancing the effectiveness of project implementation.
The government has already undertaken various measures toward this end. On Aug 16, Anwar announced the revised Public Service Remuneration System (SSPA) to motivate civil servants and enhance the efficiency of public service delivery.
In addition, the government plans to introduce the Iltizam (commitment, determination and will) public service initiative in the first quarter of 2025 as part of efforts to enhance civil servants’ performance.
Reforming healthcare subsidies
Weerasena said another critical area of reform lies in the restructuring of healthcare subsidies. He added it is imperative to bring to life the ideas outlined in the Budget 2025 speech and the Health White Paper, tabled in June 2023, through the 13MP.
The urgent priority is revising the fee structure in public healthcare facilities to ensure payments align with the ability to contribute. He said Malaysia must make the transition to a more progressive healthcare financing model, where higher-income groups contribute proportionately more.
“It is illogical and unsustainable that middle- and upper-income households pay as little as RM1 for outpatient care in public hospitals – less than the cost of a glass of teh tarik.”
Leveraging centralised databases such as MyKad records, tax data and social welfare registries would provide the foundation for an “equitable and data-driven system”, he suggested.
He said this same principle of progressive financing underlying the government’s targeted subsidies approach should be extended to primary and secondary education as well in the near future.
He said the additional funds collected can be used for infrastructure improvements and to enhance the quality of education.
Economy minister Rafizi Ramli said the government is working towards finalising the 13MP by April 2025 and presenting the draft to Parliament by next July.
He added the 13MP is crucial as it marks Malaysia’s transition towards becoming a high-income nation.
The government is also seeking views from the public, with Malaysians encouraged to contribute innovative ideas and solutions at rmk13.ekonomi.gov.my to help shape a prosperous and future-ready Malaysia.