NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 3rd Floor, East Block, Perdana Putra Building Putra Perdana Block, East Floor, Department, 3rd Prime Minister’s 62502 , Centre, Administrative Government Federal Tel : +603 8872 7240 Fax : +603 8889 4428 www.pemandu.gov.my 2180-0340 Printing 2016 ISSN: Edition, First Copyright © 2016 First PERFORMANCE MANAGEMENT AND DELIVERY UNIT (PEMANDU) MANAGEMENT PERFORMANCE Symbolic of our growing nation, the children represent the future of Malaysia. Our Jalur Gemilang signifies patriotism and optimism that our country is very much grounded on. Hope, confidence, transparency, accountability and resilience ANNUAL - these transformational qualities will drive our nation forward. The 2015 National Transformation Programme Annual Report marks an occasion of reflection and REPORT 2015 a celebration of our progress towards achieving our 2020 goals. The Government Transformation Programme The Economic Transformation (GTP) is designed to provide all Programme (ETP) is a focused, access to improved public services inclusive and sustainable initiative irrespective of race, religion and region - that will transform Malaysia into helping us to achieve the ideals of 1Malaysia. a high-income nation by 2020. CONTENT

2 BUILDING SOCIO-ECONOMIC RESILIENCE AND SUSTAINABILITY

4 UNITY IS MALAYSIA'S FOUNDATION FOR THE FUTURE

6 GETTING OUR GROOVE BACK Malaysia: Five Years into the National Transformation Programme

22 GROWTH, CONFIDENCE AND RESILIENCE Year in Review 2015

30 THE NTP National Key Results Areas (NKRAs) National Key Economic Areas (NKEAs) Strategic Reform Initiatives (SRIs)

APPENDICES

266 EXPENDITURE BUDGET 2015

267 AGREED-UPON PROCEDURES BY PWC

268 NTP PERFORMANCE 2015 Key Performance Indicators

289 ACKNOWLEDGEMENT A NOTE FROM THE PRIME MINISTER

BUILDING SOCIO-ECONOMIC RESILIENCE AND SUSTAINABILITY

ach year since the National Transformation Programme Reflecting on the last six (NTP) was launched in 2010, the Government has E released two Annual Reports – the Government years, it is clear the NTP Transformation Programme (GTP) and the Economic Transformation Programme (ETP). has been an instrumental To present a more cohesive national transformation story to the nation, as well as to demonstrate the synergies between the catalyst in improving public GTP and ETP, I am pleased to present the NTP Annual Report 2015. This year's report combines both the GTP and ETP's achievements service delivery through and challenges in 2015, whilst also highlighting the impact of the various initiatives under the NTP since it started six years ago. the GTP and reshaping the When we launched NTP in 2010, I recall the sense of exhilaration and excitement many of us felt. We felt hopeful dynamics of public-private that a much-needed programme to jumpstart Malaysia's growth potential was about to unfold. Faced with a gargantuan task of sector collaborations delivering a country into the high income bracket by 2020, my foremost concern was whether we had the mettle to see through through the ETP. the implementation of these goals.

2 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Reflecting on the last six years, it is clear the NTP has been 2015 was a watershed year for the long-mulled Goods and an instrumental catalyst in improving public service delivery Services Tax (GST) that was finally implemented in April to introduce through the GTP and reshaping the dynamics of public-private a fairer taxation system in the country. The introduction of GST sector collaborations through the ETP. proved to be timely in creating financial buffers for the country as Thanks to concerted efforts from all parties, the Malaysian we grappled with dramatically dropping oil prices that affected economy fared well since 2010, registering favourable economic national coffers. growth on the back of rising private investments, structural The Human Capital Development SRI also landed an important reforms and the creation of new economic opportunities policy win in 2015 with the establishment of the National Human in the country. Capital Development Council, tasked to spearhead policies and In 2015, we learnt that some challenges are just beyond our initiatives that will facilitate the creation of a globally savvy work- control. Like us, many countries - both developed and developing force in Malaysia. - are in a state of flux, adjusting to the new normal of dropping In Malaysia's journey up the value-chain, the Government is consumer demand and fragile investor confidence against the cognisant of the struggles of the rakyat to cope with rising cost challenging backdrop created by uncertainties in large global of living. In this regard, the Cost of Living NKRA employs two economies, low commodity prices and trade competition. approaches in accomplishing its objective of providing relief to the Facing a perfect storm of both external and internal pressures rakyat. Targeted cash assistance is delivered through programmes that impacted the value of the ringgit, putting a strain on investor such as BR1M (Bantuan Rakyat 1 Malaysia), BB1M (Baucar Buku confidence, for Malaysia, it was a test of the effectiveness of the 1Malaysia), 1Malaysia Book Voucher Programme and BKAP1M transformation work done in the last six years. (Bantuan Khas Awal Persekolahan 1Malaysia). The Government Astute policy-making and disciplined implementation are also prioritises making affordable basic necessities such as K1M necessary considerations in these challenging times. And in that (Klinik 1Malaysia), KR1M (Kedai Rakyat 1Malaysia) and MR1M (Menu regard, the NTP has served Malaysia well in shoring up resilience Rakyat 1Malaysia) available and accessible. to deal with the current challenges. These achievements do not mean we can rest on our laurels. Leveraging upon measures both inclusive and sustainable, We must accept that the race for the best investments and an programmes under the NTP are in various stages of progress towards insatiable appetite for growth exists in most if not all countries. the realisation of goals required to deliver us at the doorstep of With constantly changing rules and new trade forces such as the our 2020 deadline. Trans-Pacific Partnership Agreement coming into play, the next The GTP, aimed at transforming the civil service, is no easy feat five years will be an uphill battle, but a battle I am convinced can to begin with. Having set ambitious targets for the GTP 2.0 in 2012 be won on the back of the very same effort and dedication that has (upon conclusion of the GTP 1.0 horizon from 2010 to 2012), I am taken us through the last six years. pleased to report that we have delivered big fast results over the As always, I wish to thank the civil service that has been tireless past three years, as evidenced in the NTP Country Report 2010-2015 in their efforts to move the needle in driving transformation, the within this publication. private sector for taking up the challenge to continue to collaborate Likewise, the ETP continues to deliver on the promise of with us in Government as well as the rakyat for your support towards spurring private sector participation in the economy through the programmes under the NTP. 12 National Key Economic Areas (NKEAs) and Strategic Reform Based on achievements so far, I can say with confidence that Initiatives (SRI) to create a favourable business environment come 2020, we will be exactly where we envisioned ourselves to to facilitate business growth. The public sector, working be - a truly developed country. hand in hand with private sector players continue to push the envelope to deliver on committed targets through intense monitoring of key performance indicators (KPIs) and a recursive problem solving approach. Registering a gross domestic product (GDP) growth of 5 percent for 2015, private sector continued to be a key driver through consumption and investment. This is very much in line with the aspirations of the ETP, to create an environment that encourages the YAB DATO’ SRI MOHD NAJIB TUN HJ. ABDUL RAZAK private sector to take up a key role in driving the economy forward. PRIME MINISTER OF MALAYSIA

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 3 A NOTE FROM THE DEPUTY PRIME MINISTER

UNITY IS MALAYSIA'S FOUNDATION FOR THE FUTURE

Moving forward into 2016, I am confident that the NTP will continue in its trajectory with conviction to deliver changes that touch and uplift the lives of Malaysians across all walks of life.

4 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 ational transformation is about embracing an impossible My hope for all Malaysians is that we continue to come endeavour. It requires courage and steely determination together as a united country, celebrating unity in diversity and N to accomplish. Moving into the last five years towards strengthen it further to preserve the harmony in our nation. We our 2020 aspiration of joining the ranks of developed nations, must safeguard the solid foundations upon which our nation the Government stands resolute in making it to the finishing line. has been built against everything that threatens our way of life. Through the National Transformation Programme (NTP), we Moving forward into 2016, I am confident that the NTP will have delivered impactful initiatives in sustainable and inclusive continue in its trajectory with conviction to deliver changes that ways to ensure nobody gets left behind in our country's pursuit touch and uplift the lives of Malaysians across all walks of life. towards high income status. Despite the many challenges, I am confident that we are on track There are initiatives aimed at benefitting the rakyat and towards achieving this national aspiration of attaining developed there are certain aspects of our work, such as reforms in public and high income status by 2020. finance that appears difficult to stomach but are critical towards our competitiveness and sustenance as a nation in the grander scheme of things. The Honourable Prime Minister and I as his deputy have pledged our commitment towards staying the course of transformation, taking into consideration the concerns voiced by all Malaysians. The demand for better public service delivery is ever growing YAB DATO' SERI DR. and the Government has been responsive to these calls to achieve DEPUTY PRIME MINISTER OF MALAYSIA stellar service levels and deliver transformational impact for the people. As the chair of the Government Transformation Programme (GTP) as well as my portfolio with the Ministry of Home Affairs, I will ensure that we will continue to institutionalise and embrace transformation in totality across areas relating to improved public service delivery and keeping peace in the nation. This will bode well for Malaysia. In addition to creating peace of mind amongst citizens, it will enhance our appeal to tourists and foreign investors, opening opportunities for job creation and better standards of living. Initiatives under the Reducing Crime NKRA have been implemented, contributing to a significant decrease in Malaysia's Crime Index by an average of 6.6 percent since 2010. However, incidences of crime persist within the fabric of our communities, contributing to public scepticism on the effectiveness of the Government's crime-fighting measures. When it comes to feeling a sense of security, we too believe in the need to uphold ourselves to the ideals of a crime-free society, a goal more utopian than practical but one that we must aspire to achieve. The rakyat have my pledge that the relevant agencies will work to this end.

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6 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 GETTING OUR GROOVE BACK MALAYSIA: FIVE YEARS INTO THE NATIONAL TRANSFORMATION PROGRAMME

DATO’ SRI MINISTER IN THE PRIME MINISTER’S DEPARTMENT ECONOMIC PLANNING UNIT

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nly mid-way into the 10-year to create a more diversified, resilient subsidies to ease citizen’s cost of living, NTP, Malaysia is evidently economy capable of weathering without having to overly tax a large O demonstrating signs of a volatile global economic patterns. base of the population. successful turnaround. 2015 presents the opportunity The Asian Financial Crisis in 1998 Research commissioned by to look back on the halfway mark of was a sobering reminder that without the staff of the World Bank Group the NTP and takes stock of progress sound fundamentals, continous through the Competitive Industries achieved thus far. high growth and exuberance is and Innovation Programme (CIIP) Strategically located between not sustainable. The nature of the titled “Doing, Learning, Being: A giants such as and , history downturn was swift and debilitating, Study of Malaysia’s Transformation reminds us that the Straits of requiring the Government to dig deep Programme”1 confirmed that once anchored bustling ports that into its coffers and reserves to combat transformative results are being received people from all over the world shocks and keep the economy afloat reaped as a result of methodologies plying the spice route and trading through pump-priming. used to implement the National merchandise in Malaysia. Against the backdrop of the Transformation Programme (NTP). Resource rich and capitalising on Global Financial Crisis (GFC) in 2009, With a series of labs and roadmaps increasing industrialisation as opposed Malaysia’s GDP shrank 1.5 percent for outlining key targets, enthusiastic to a predominantly agriculture based the first time since 1998’s 7.4 percent stakeholders comprising public and economy in the past, Malaysia enjoyed GDP contraction. private sector individuals as well as steady growth as a highly open upper- Saddled with an overhang of debt civil groups stood ready to implement middle-income nation with per capita and deficit from the 1998 recession, intricate ‘three-feet’ plans drawn up income rising 8.0 percent per year rising subsidy expenditure and weighed in a series of labs designed to identify between 1970 and 2010, reaching down by challenges such as gaps in and problem-solve prioritised national US$8,636 per capita. productivity and competitiveness, a ‘pain-points’. It is no surprise that under those diagnosis that Malaysia was stuck Multilateral agencies such as the circumstances, the nation was able within the middle-income trap ensued, International Monetary Fund and the to provide for its people amply, thus painting a desperate outlook of the World Bank, as well as international entrenching the practice of blanket country’s future. ratings agencies such as Standard & Poor’s, Moody’s and Fitch have commended the Government’s The New Economic Model commitment to introduce structural reforms that are able to boost the HIGH INCOME country’s economic resilience. Target US$ 15,000 Overall, the true north target of GNI per capita by 2020 the NTP is aligned to the goals of Malaysia’s New Economic Model (NEM) to enable the country to attain high income economy status NEW by 2020 through sustainable and ECONOMIC inclusive measures. Under the NTP, MODEL the Government Transformation Programme (GTP) was aimed at improving public service delivery and strengthening public institutions, INCLUSIVENESS SUSTAINABILITY Enables all communities to benefit Meets present needs without whilst the Economic Transformation from the wealth of the country compromising future generations Programme (ETP) was designed

¹ Doing, Learning, Being: A Study of Malaysia’s Transformation Programme by Professor Charles Sabel, Professor of Law and Social Science, Columbia Law School and Luke Jordan, a former World Bank development specialist, January 2015 (Source: https://www.theciip.org/sites/ciip/files/documents/ PEMANDU%20Study%20--Final.pdf)

8 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Rising Like a Phoenix Thus formed the impetus to craft Malaysia’s comeback strategy. The New Economic Model unveiled by the Prime Minister of Malaysia, YAB Dato’ Sri Mohd Najib Tun Hj. Abdul Razak in 2009 set the stage for plans that would turn Malaysia into a globally competitive, high income nation by 2020. Released at a time when the world Prime Minister YAB Dato' Sri Mohd Najib Tun Hj. Abdul Razak delivering a speech during the launch was grappling with the effects of the of the Government Transformation Programme Roadmap in January 2010. GFC tipped by the subprime meltdown Photo courtesy of Images in the US and further exacerbated by In turn, the Government unsustainable models in developed would be able to prioritise its ...the Government economies that hinged upon funding resources in delivering better growth through debt, the Malaysian would be able to prioritise living standards and safety nets Government chose a path that would to ensure that all Malaysians depart from that practice in securing its resources in delivering regardless of stature are able the country’s future. to benefit, and in so doing, better living standards Malaysia’s new growth model improve the entire public service would focus on a few key areas: and safety nets to ensure delivery mechanism and align Fiscal consolidation through it to standards worthy of a that all Malaysians progressively creating developed high income nation manoeuvring room by reducing regardless of stature To implement the above our debt and deficit levels stakeholders from Government, are able to benefit, and Mitigating the risk of the private sector, civil society and overdependence on Government members of the public were brought in so doing, improve the income from oil and gas by together in 2010, into a series of labs entire public service diversifying and restructuring that would pinpoint the problem areas the economy to encourage and identify solutions with clear three delivery mechanism innovation and productivity feet plans on how to implement and in key sectors and encourage move the nation closer towards its high and align it to standards the private sector to invest in income target. the top 12 areas of the economy These detailed plans were assigned worthy of a developed in order to drive economic as key performance indicators (KPIs) high income nation. growth. The Government could to relevant Government agencies who become a facilitator by creating would lead on implementing them, a favourable environment for working in collaboration with fellow businesses to thrive in this lab stakeholders to ensure success. country through reforms and Out of these labs emerged the GTP business reengineering process and ETP.

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The GTP comprised six National Key Result Areas (NKRAs) tackling BECOMING A HIGH-INCOME NATION areas with social underpinnings namely, Reducing Crime, Fighting Corruption, Assuring Quality Education, Raising Living Standards of Low Income Households, Improving FOCUS COMPETITIVENESS Rural Development, and Improving Urban Public Transport. A seventh NKRA was added a year later, 12 NKEAs Addressing Rising Cost of Living and in 2014, Public Service Delivery + 6 SRIs Transformation, which previously 7 NKRAs resided as one of the Strategic Reform National Key Economic Areas Strategic Reform Initiatives Initiatives (SRIs) under the ETP become National Key Result Areas the eighth NKRA. To prioritise top sectors of “DRIVERS” to ensure focus “ENABLERS” to ensure the economy that Malaysia had on high-impact areas competitiveness comparative advantages in and turn these into ‘hotspots’ for investment, the ETP featured 12 National Key companies to thrive, the ETP initially Economic Areas (NKEAs) namely introduced six SRIs in 2011 namely, Governance Oil, Gas and Energy (OGE), Financial Public Finance Reforms, Competition, structures were set-up Services, Palm Oil and Rubber Standards and Liberalisation, Human (POR), Wholesale and Retail (W&R), Capital Development, Narrowing within each key result area Agriculture, Tourism, Electronics & Disparity, Reducing Government’s Electrical, Communications Content Role in Businesses (Reducing GRiB)² to ensure effective and and Infrastructure, Healthcare, and Public Service Delivery3. efficient problem-solving, Business Services and Education. The Formulated from 37 policy Greater / Klang Valley measures recommended by the swift decision-making NKEA, is not a sector per se, but as the National Economic Advisory Council main economic hub of the nation holds (NEAC), the SRIs were the result of and win-win relationships plenty of potential to be explored. consultations held in six labs involving Governance structures were set-up 500 public and private sectors between Government within each key result area to ensure representatives in 2011. and the private sector. effective and efficient problem-solving, In this report, we share swift decision-making and win-win observations in key areas where the relationships between Government transformation ecosystem has yielded and the private sector. positive results, demonstrating that In bringing about reforms to increase change for the better has in fact ease of doing business and creating a occurred with positive outcomes more competitive environment for delivered for all involved.

2 In 2015, PEMANDU was tasked to review and recalibrate key performance indicators (KPIs) for the Reducing GRiB SRI, as divestment had been completed by the 33 companies that had committed to do so at the launch of the SRIs in 2011. Furthermore, as reported in the Economic Transformation Report 2014, “Government and state-owned companies have moved to institutionalise the process of divesting non-strategic assets in their operating models. Moving forward, any divestment programme will be driven solely by their respective governance processes.” 3 In 2014, Public Service Delivery SRI was reassigned to the GTP as Public Service Delivery Transformation to allow for greater focus and integration to effect faster delivery

10 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Article IV Mission to Malaysia4 that “the Sustainability and authorities have been able to maintain macroeconomic and financial stability, Resilience Critical to Growth while making significant progress in improving the foundations for sustained economic growth over the medium Topping the list of macroeconomic Well aware of the difficult term.” The article also commended concerns for the Government in 2010 dilemmas ahead, tough policy the implementation of GST, and subsidy was how vulnerable our economy decisions were made and Malaysia’s rationalisation as measures that helped was to global shocks due to the high fiscal consolidation was rolled out in the country weather economic shocks amount of trade occurring with the the last five years. since late 2014. rest of the world. Global markets are Two very important measures Likewise, ratings agencies such naturally beyond Government control, rolled out in that period were the as Fitch, Moody’s and Standard but more resilience could be built into rationalisation exercise to dismantle and Poor’s – all who were critical of the domestic environment. blanket subsidies and create targeted Malaysia’s fiscal position prior to 2013 One of the most crucial areas to safety nets as part of an effort to – have commended these reforms, as address would be the twin challenges streamline Government expenditure, well as efforts to reduce reliance on oil of mounting debt and deficit, which and the implementation Goods and and gas revenue through diversification would lead Government finances into Services Tax at 6 percent on 1 April 2015 into other economic sectors. an untenable situation if nothing as a broader-based, more effective and Malaysia has in the last five years was done. The Government was also fairer tax collection mechanism that is been able to meet its fiscal deficit painfully aware that the success of the ultimately meant to benefit Malaysians. target year on year (Exhibit 1) whilst NTP and the ability to maintain high In its assessment of where Malaysia also keeping a lid on debt below 55 income status thereafter hinged upon stands, the IMF highlighted in its 2015 percent (54.5 percent of GDP in 2015). getting its finances in order. Historically, some countries pursuing high-income status tended Still On Track To Fiscal Balance to overlook debt management whilst 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2020 pursuing growth, but this leaves the Government with little fiscal room to 2016 manoeuvre. Target The Government chose to be prudent and avoid over-borrowing -3.1% -3.0% -3.2% -3.1% to finance short-term growth and -3.4% -3.8% Balanced instead adopt a balanced debt-to- Budget -4.5% -4.3% -4.7% by 2020 equity model to stimulate economic -5.3% growth and reduce deficits.

Furthermore, Malaysia has a check -6.4% and balance in the form of a debt Global Financial ceiling at 55 percent of GDP under the Crisis Government Funding Act 1983 and the Source: Ministry of Finance Loan (Local) (Amendment) Act 2005. Exhibit 1: On track to Fiscal Balance by 2020

4 International Monetary Fund, 2015 Article IV Mission to Malaysia, 2016 https://www.imf.org/external/np/sec/pr/2016/pr1621.htm

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segments including oleo derivatives and Catalysing the Economy selected food and health based products has enabled key local oleochemical companies to increase their revenue share. This led to a CAGR of 9.2 percent for oleo derivatives exports from RM1.5 billion in 2008 to RM2.8 billion in 2014. To date, there are 18 projects under EPP6: Developing Oleo-Derivatives. With a focus to shift national production from basic oleo-chemicals to higher value oleo derivatives from 1 percent share in 2009 to forecasted 40 percent by 2020, it aims to capture 14 Pengerang Independant Terminals Sdn Bhd deepwater terminal, a private-public partnership percent of global demand for five key between Dialog Group Berhad, Holland's Royal Vopak N.V. and the State Government commenced operations in 2014 and was fully leased out within months products (agrochemicals, surfactants, bio lubricants, bio polyols and Simultaneously with creating These EPPs, time and again have glycerol derivatives), creating and macroeconomic stability, emphasis was shown good measure of resilience in impact of RM5.8 billion in GNI and placed in enabling the private sector to showcasing economic exuberance 5,900 local jobs. build stronger foundations to support especially in recent challenging times. Among other initiatives, the the nation's efforts towards achieving Under the ETP’s OGE NKEA, Business Services NKEA is also creating high-income status. developments in Pengerang deliver more value by attracting aerospace The 12 National Key Economic hope that the Government has original equipment manufacturers Areas (NKEAs) comprised selected been right to focus on growing the (OEMs) to catalyse this advanced sectors of economic opportunity for downstream industry. Despite a manufacturing industry in Malaysia. the private sector which will drive challenging economic outlook, the This subsector has significant multipliers Malaysia towards high-income continuation of projects such as the in terms of high value job creation and status. While Malaysia already Refinery and Petrochemical Integrated technology transfer through research & has a competitive advantage in Development (RAPID) within the development (R&D) initiatives. some sectors and the potential to Pengerang Integrated Petroleum Over the past five years, EPP7: carve a niche in others, the NKEAs Complex (PIPC) demonstrates the Making Malaysia The Hub For underscore Malaysia’s targeted private sector’s confidence in this move. Aerospace OEMs In South East approach to achieving sustainable Dialog Group Bhd’s deepwater storage has seen landmark deals including an economic growth. facility was fully leased out within RM830 million investment agreement Theses NKEAs receive prioritised months after it was first launched as a between Rolls Royce and UMW. The 25- Government support due to their result of low oil prices, and the company year agreement will see UMW M&E Sdn potential to enhance Gross National continues to expand by developing the Bhd and subsidiary UMW Aerospace Income (GNI). Pengerang Terminal Phase 2 Project. Sdn Bhd making fan cases for Rolls- To realise private sector-driven It is also important to note that this Royce’s Trent 1000 engines which power growth, each NKEA offers private downstream foray does more than just the Boeing 787 Dreamliner. sector involvement and investment offer a leg-up to generate greater value Large corporations are not the opportunities through Entry Point and investments from the oil and gas only one benefiting from the high Projects (EPPs). To-date, 149 EPPs sector. It also acts as a natural hedge transactional activity boom that leads have been announced, guiding the against volatilities that can be more to a higher income. Small traders’ development of the industry or sector challenging for the upstream industry. revenues under the Agriculture NKEA and were formulated through public The Palm Oil and Rubber NKEA also benefited from the transformation and and private sector consultations during witnessed a push to grow downstream integration of various small, randomly labs held in 2010. segment. A strong focus on finished situated outdoor markets into dedicated

12 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 community markets - recognised colloquially as Pasar Komuniti (PAKAR) RM billion 179.4 - with improved facilities that encourage 168.5 Public Private 2011-2015 CAGR 8.3% higher hygiene standards and a 151.7 comfortable shopping environment. 134.5 Starting out in 2012 with just one 2006-2010 CAGR 5.3% 110.9 101.3 98.7 100.5 92.4 92.4 95.8 94.8 85.6 85.1 PAKAR in Manjung, with total 81.6 80.2 83.0 74.1 77.8 sales of RM384,081, this initiative has 69.7 recorded encouraging growth over the Launch years. As of 31 December 2015, there of ETP are 10 PAKARs located in the states of , , , 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 th th Johor, and , having 9 Malaysian Plan 10 Malaysian Plan generated total sales of RM76.6 million Sources: Department of Statistics and Economic Planning Unit estimates (Constant 2010 prices) and created 2738 jobs. Between 2012 and 2015, the Government invested Exhibit 2: Realised private investment accelerated post-ETP RM52 million into this initiative. Meanwhile, in the Wholesale and Retail NKEA, 2216 mom-and-pop stores Public Private underwent improvement EPP2: Small 35% retailer transformation programme 43% 42% 40% 36% 44% 46% 48% 45% (TUKAR) from 2011 till 2015. A TNS 46% 64% 65% Study in 2013 revealed that 77 percent of 57% 58% 60% 54% 56% 54% 55% TUKAR participants experienced higher 52% revenues post transformation. Launch Overall, efforts to streamline these of ETP economic sectors and attract more 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 investments into these areas have 9th Malaysian Plan 10th Malaysian Plan yielded positive results. Realised investments have clearly Sources: Department of Statistics and Economic Planning Unit estimates (Constant 2010 prices) accelerated post-ETP as the period between 2011 and 2015 records a 8.3 Exhibit 3: Private sector dominates investment ratio percent compounded annual growth rate compared to 5.3 percent between 2006 and 2010 (Exhibit 2). RM million Additionally, over the last five PITA Export Duty Petroleum Royalty & Gas years, we have seen the gap between Petroleum Dividend Exploration (Oil & Gas MTJA) % Oil Revenue/Gov Revenue public and private investment widen 39.6% 41.3% as the private sector increasingly takes 36.8% 36.5% 35.4% 35.8% 33.7% 31.2% the lead in total investments into the 30.0% economy (Exhibit 3), in line with the 21.5% nation’s aspirations to see private 14.1% sector own up to 92 percent of total investments by 2020. More importantly, the Government 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Revised Budget has been able to reduce its dependence Estimate Estimate on oil and gas revenue over the last Source: Ministry of Finance five years (Exhibit 4) by focusing on developing other sectors of the economy. Exhibit 4: Government is less dependent on oil revenue

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People First, Performance Now

The introduction of the NTP has transformed how civil service approaches its work. Adopting more dynamic, responsive and robust problem solving methodologies, there has been a vast improvement in how the public service connects and responds to the needs of the rakyat. Much of this culture is embodied in the work that we see being done through NKRAs Anti-Corruption, Crime and Public Service Delivery Transformation (PSDT). In 2015, Malaysia jumped seven

points in the World Bank’s Open Photo courtesy of BERNAMA Images Budget Survey due to strengthened oversight of the Auditor General secretariat to the Putrajaya Inquisition PPPs have signed integrity pledges (AuG)’s Office, and the tabling of the for audit issues that go unresolved for with the Public-Private Partnership AuG Report to three times a year – more than a year. Unit (UKAS). both major initiatives under the Anti- Among other things the agency As one of the many key crime Corruption NKRA. Malaysia achieved monitors all feedback from the auditees reduction initiatives, NKRA Crime a score of 46 out of 100 on the overall on a quarterly basis and if necessary, introduced the Omnipresence/ Open Budget Index, slightly above the engages with them to resolve issues Residential Patrols initiative to global average of 45, aligned with the that are still pending. increase police visibility on the streets likes of India and the Ukraine, and Further, as testament to the and combat break-ins. Benchmarked ahead of , and Government’s commitment to plug against both of Seattle Police China. Malaysia’s score has been leakages in Government contracts by Department and Michigan Police gradually improving over time, from putting in place preventive measures Department’s Motorcycle Patrolling 35 in 2008 to 39 in 2010 and 2012. to curb corruption in the public sector, Units, over the last five years, the The Auditor General’s Office’s up to 2014, NKRA Anti-Corruption initiative resulted in the arrest of 2,111 Follow-Up Audit Division (BSA) saw 574,592 Integrity Pacts pledged suspects by the Urban Residential plays three major roles in overseeing under the initiative to implement Patrol units. Government departments that have comprehensive integrity pacts for Taking a leaf out of the Police been identified as having issues in the public-private partnerships (PPP) Performance Assessment League AuG Report. projects. This initiative is designed based Table in and Wales, the Balai BSA manages the AuG’s on a similar model by Transparency League Table initiative also under Dashboard which displays the latest International in recognising the need NKRA Reducing Crime promotes actions taken by auditees to the major to adopt an international standard to a performance-based culture in issues outlined in the Report, acts as strengthen public confidence on the the police force, and also further the secretariat for the AuG Report’s governance of public spending. As encourages local police stations to Action Committee (JTLKAN) and as a of 2015, all companies involved with reach out to local communities.

14 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 With an investment of between RM under NKRA PSDT to optimise patient Meanwhile, with total investments 900,000 to RM1.1 million, 788 police flow and improve patient waiting times worth RM1.29 million at Hospital stations are annually ranked into five through Healthcare PSDT initiatives Tengku Ampuan Rahimah Klang categories based on percentage achieved have been largely successful. (HTAR), patient flow at the Emergency in crime reduction and community With a total investment worth Department has been improved, outreach. As of 2014, the evaluation RM191,000 at Hospital Sultan raising by threefold the number of is jointly conducted by Royal Police Ismail Johor Bahru (HSIJB), the Green Zone (non-critical) patients Malaysia (PDRM) and the Malaysian waiting time for treatment at the that are treated and discharged in Crime Prevention Foundation (NGO). Orthopaedic Specialist Clinic and less than two hours from 18 percent Last year, the Muar Police Station Oncology Treatment Centre have seen to 70 percent. emerged tops in the list followed by significant reductions. Head and neck In addition, the medical ward Sungai Besi Police Station as the runner- cancer treatment waiting time was discharge process was improved up. For all five categories, the winners significantly reduced from 120 days allowing 100 percent of patients received cash incentives, certificates to 30 days, adopting the World Health to be discharged within four hours of appreciation, the BLT Trophy Cup Organisation’s standard. This has compared to 72 percent previously and a Study Visit for the Category A also allowed the number of patients and the medical ward bed capacity champions sponsored by the Malaysian treated at the centre to increase by 60 was increased by 42 percent, a Crime Prevention Foundation. percent, from 30 patients to 48 per testament of the improved services With the rapid pace of urbanisation, day. Besides that, waiting time at the and facilities at HTAR. it is imperative that our nation’s Orthopaedic Specialist Clinic has also Towards 2020, NKRA PSDT aims to healthcare facilities deliver services seen a significant reduction from 115 roll-out Healthcare PSDT initiatives to more effectively and efficiently. Efforts minutes to 62 minutes. all 133 Ministry of Health hospitals.

...the waiting time for various treatments have seen significant reductions. Cancer treatment waiting time has been significantly reduced from 120 days to 30 days, adopting the World Health Organisation’s standard. This has also allowed the number of patients treated by the clinic to increase by 60 percent, from 30 patients to 48 per day.

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18 sub-sectors were liberalised Creating a Business- in 2012, where the implementation process of these initiatives was done Friendly Environment in stages. 15 out of the 18 services sub- sectors were liberalised in 2013. The following year saw the liberalisation The true measure of competitiveness and maturity of of the remaining three sub-sectors as well as the removal of regulatory a nation’s economy really lies its ability to be trade openly burden in sectors such as construction, healthcare, professional services and in a liberalised environment. Malaysia has over the years tertiary education. In taking liberalisation further, undertaken a policy of progressive liberalisation. The Malaysia is now a member country liberalisation process is co-ordinated, monitored and guided in the Trans-Pacific Partnership Agreement (TPPA). Consistent with by the Malaysian Services Development Council (MSDC), national interests, the TPPA will further enhance the competitiveness of the chaired by the Minister of International Trade and Industry. country in regional and global markets. The Narrowing Disparity SRI - designed to further step-up capacity A robust range of policy measures The standards ecosystem in building for Bumiputera entrepreneurs designed to create the conditions for Malaysia has also been shaped to to result in improved representation competition has built a foundation ensure Malaysian businesses are able in market equity, high value-added for lasting growth. This is to facilitate to maintain their competitive edge occupations, and management the creation of a more efficient, through the adoption of standards in positions has also been successful in competitive and business-friendly their products and services. As of 2015, a the last five years. environment in Malaysia that will total of 6,204 Malaysian Standards were Between 2010 and 2015, the allow world-class, local champions developed by Standards Development Government’s Bumiputra Agenda to thrive and attract valuable Agencies (SDAs) that have been Steering Unit (TERAJU) has provided foreign investment. appointed by Standards Malaysia. Of RM63.39 billion worth of business A key development under these, 3,622 standards are on par with opportunities, financing and human the Competition, Standards and international standards. To further boost capital development through 23 Liberalisation SRI has been the standards compliance in Malaysia, programmes and initiatives for enactment of the Competition Act the National Standards Compliance Bumiputera entrepreneurs. 2010. The Malaysia Competition Programme (NSCP) was launched in Potential Bumiputera companies Commission (MyCC) was set up in 2014 by Standards Malaysia. have been provided facilitation and April 2011 to enforce the Competition The true measure of assistance for Bursa Malaysia listings. Act beginning 1 January, 2012 and its competitiveness and maturity of a These companies were given guidance responsibilities include receiving and nation’s economy really lies its ability to develop their respective IPO plan investigating complaints, issuing to be trade openly in a liberalised by TERAJU and Ekuinas to expedite decisions and undertaking market environment. For Services, Malaysia new Bumiputera listings on Bursa reviews to assess the nature and has over the years undertaken a policy Malaysia, as part of the Skim Jejak level of competition within industries of progressive liberalisation. The Jaya Bumiputera (SJJB) programme. To and sectors. liberalisation process is co-ordinated, date, 11 companies have been listed, The initiative has gained much monitored and guided by the Malaysian growing total market capitalisation traction as reflected in the number of Services Development Council (MSDC), of Bumiputera companies from complaints received by MyCC, which chaired by the Minister of International RM1.93 billion to RM5.62 billion as of grew from 8 in 2012 to 232 in 2015. Trade and Industry. December 2015.

16 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 A LINUS taskforce continuously Upholding Bahasa Malaysia and Sowing monitors and tracks the performance Strengthening the and students down to the individual (MBMMBI) policy. Seeds for levels. Students are screened twice Given the polarities that had to be a year to detect if any one is falling managed in implementing solutions Future Talent behind, upon which they will be to this problem, the Government supported through targeted training chose a ‘middle ground’ approach in remedial classes, allowing them and instead decentralised decision- The Government has taken great to catch up with other students in the making on adoption of these policies strides to enhance our labour pool mainstream classes. and empowered schools and parents since the inception of the NTP in 2010. Poor quality of English among to decide on whether to implement Efforts under NKRA Education, NKEA school students has been a matter these programmes. It is believed Education, and SRI Human Capital of national concern for a long time that this would be the best decision Development have borne fruits, and and after many careful deliberations, to move forward as the Government will continue to do so. a major breakthrough was achieved focuses on ensuring a conducive NKRA Education saw 132 High in 2015. learning environment. Performing Schools (HPS) in a span Upon the conclusion of a Ministry The decentralisation of decision- of five years, exceeding their target of of Education sponsored English making, giving power to schools and 100 schools under the GTP Roadmap Lab facilitated by the Education parents to decide on the best solutions 2.0, and in the process changing the Performance and Delivery Unit for students is a heartening move that lives of many students. (PADU) and PEMANDU introduced could be a precursor to more exciting With the focus now set on ensuring the Highly Immersive Programme developments in reforming Malaysia’s that existing HPS continue to maintain (HIP) and Dual Language Programme education system and aligning their standards and quality, the Ministry (DLP) for schools under the existing to become world-class. of Education will continue to handhold other potential schools to achieve “HPS” status. In aspiring towards 2020, we aspire for these schools to be the role model for other schools, painting a vision whereby other schools can strive to be similar to these world- class schools, as well as setting an international benchmark. What started as the Literacy and Numeracy Screening (LINUS) programme 1.0 which only included Bahasa Malaysia in 2010 has seen the inclusion of English in 2013, beginning LINUS 2.0. In ensuring that exiting Primary 3 students are competent in the components of English, Bahasa Malaysia and numeracy as its objective, the year 2015 saw 94.1 percent of English literate students, 98.6 percent of Bahasa Malaysia literate students and 99.1 percent being numerate.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 17 NATIONAL TRANSFORMATION PROGRAMME COUNTRY REPORT

Sustainable development required Inclusiveness that growth enablers must be delivered to all citizens whether they live in urban or rural settings. On that note, NKRA Rural Development has been hard at work in the far reaches of the nation to deliver an equitable standard of living for all Malaysians. Efforts under GTP 2.0 have resulted in 345,665 households nationwide now having access to clean and treated water, and 143,899 households having 24-hour electricity as of December 2015, under both the Water Delivery and Electricity Delivery initiatives. Both initiatives hope to cater to 99 percent of Malaysian households by 2020. In striving to remove the stigma associated with rehabilitated inmates and to reduce the rate of recidivism, NKRA Crime launched the Industrial Prison Programme in 2013, at the As we strive towards high-income and then meting out assistance, the inception of GTP 2.0. As of December 2015, status, there will inevitably be clusters e-Kasih database (which captures the 1,757 inmates have completed certified in society that will struggle to keep up. details of the households that require skills training under Sijil Kemahiran In a span of five years, the NKRA teams assistance) received the United Nations Malaysia (SKM-SLDN), Sijil Kecekapan Crime, Cost of Living, Low Income Public Service Award in 2012. Kemahiran (SKK-CIDB) and Program Households and Rural Development In May 2013, the Asian Development Pemanduan Kenderaan Perdagangan have implemented various to reduce Bank (ADB) acknowledged that (Metro). Aimed at upskilling inmates disparity, and bridging the divide Malaysia has the biggest reduction to increase their chances of finding between the economically well-off amongst other ASEAN countries on employment after their release, prisons and the disadvantaged. the percentage of population below are set up with “in-house” bakery Over the last five years the 1AZAM the poverty income line, recording a facilities with training provided. This Programme has helped many families 55.3 percent reduction. initiative has also introduced an element escape the hardships of poverty. Through The World Bank Report’s Economic of self-sufficiency, in which the bakery six 1AZAM Programmes such as AZAM Monitor 2014 calls Malaysia “a success produces is own bread to the prisoners. Tani, AZAM Niaga, AZAM Kerja, AZAM story in shared prosperity”, to mean This initiative emulates other Khidmat, AZAM Bandar as well as all households experience income prison programmes around the 1AZAM Sabah and 1AZAM Sarawak, growth, but growth is higher for world such as the Prison Industry which provide the means of generating those households at the bottom of Enhancement Certification Program in sustainable income, financial assistance, the distribution, a pattern that leads the , Prison Industries in skills training as well as motivation, the to lower inequality. In the report, the , and Prisons Industries Unit poverty rate fell from 3.8 percent in 2009 World Bank commended Malaysia for in the United Kingdom. to less than 1 percent today. drawing on its natural resources over In aspiring towards 2020, this As testament to the tremendous the last 40 years to nearly eradicate initiative hopes to see a greater efforts reaching out to the needy to absolute poverty, from 49 percent in percentage drop in recidivism, ascertain how they can be helped 1970 to 1 percent in 2014. a greater percentage increase in

18 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 inmates employed after release, and alternative grocery items of a more A total 185 KR1M5 stores have been an increase in the number of bakery affordable nature, compounded by a established nationwide. facilities set up as well as prisons that high quality. Meanwhile, the Klinik 1Malaysia are self-sufficient for food. With RM 86 million invested in (K1M) initiative was also launched, In efforts to cushion the effects of this initiative to date since 2011, items giving the rakyat access to RM1 for the rising costs of living, NKRA Cost are sold under the brand of Produk medical consultation or treatment. of Living launched the Kedai Rakyat Rakyat 1Malaysia in KR1M and non- There are 334 K1M6 operating 1Malaysia (KR1M) initiative to provide KR1M participating stores or outlets. nationwide.

of our very own MRT system under Kuala Lumpur: the Greater Kuala Lumpur/ Klang Valley NKEA. Liveable City 2020 Recognising the need to enhance the reach of urban rail in the Klang Valley, the Government invested RM As the nation’s main economic Given that the city is expected 32 billion into constructing the MRT hub, it is important to ensure that to be home to 10 million people in Line 1 project which extends from liveability in Kuala Lumpur is aligned 2020 from 6 million in 2010 creates Sungai Buloh to Kajang. Service will with that of other world-class cities. the need for a comprehensive and commence end 2016 and it will serve The Greater Kuala Lumpur/ Klang sustainable development plan that a corridor of up to 1.2 million people. Valley NKEA aspires to be among the can adequately address the challenges Construction of MRT Line 2 sees top economic and liveable cities in the of rapid urbanisation. the existing Sungai Buloh station pass world by 2020. In taking a leaf from cities such through Serdang and Putrajaya and is The Economist Intelligence Unit as and Taipei which are expected to serve a corridor of 2 million (EIU)’s 2015 Global Liveability Ranking characterised by their robust Mass people. Construction will commence places Kuala Lumpur in the 73rd spot Rapid Transits (MRT), Malaysia soon with completion targeted for the amongst 140 cities, up five places from undertook its biggest infrastructure second quarter of 2022. its 2010 ranking. project to date with the construction Both lines will significantly improve mobility in the GKL/KV area. With rail as the backbone of our integrated public transport network, efforts under NKRA Urban Public Transport have also further increased connectivity through initiatives such as the KTM Komuter, LRT Kelana Jaya and the LRT Extension Project (LEP). The KTM Komuter saw investments worth RM1.98 billion injecting 38 six-car sets into its service in March 2012, increasing its daily ridership by 46 percent compared to 2012. Frequency has improved to 15 minutes from one hour, as well as increasing train capacity, now catering 1,100 passengers per train set.

5 6 As at December 2015

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 19 NATIONAL TRANSFORMATION PROGRAMME COUNTRY REPORT

Meanwhile, LRT Kelana Jaya saw have continued to reinforce this. The launched the free city bus initiative, RM1.65 billion worth in investments year 2015 saw Malaysia’s first ever GO-KL. With its zero-fare rate and 15-20 launch 35 sets of LRT Kelana Jaya’s Bus Rapid Transit, the BRT Sunway minutes frequency, 40,000 passengers four-car train in March 2010, increasing operating with its intent of benefitting in a city of 1.7 million people enjoy its its daily ridership to 19 percent a population of 500,000 with 5.4km free service daily. compared to 2011. Frequency has since in Subang Jaya, taking a leaf from been improved to 2.5 minutes during densely-populated cities such as peak hour. Curitiba and . The backbone of our public As a learning from cities such as transport network is of course not Adelaide, Perth and Christchurch, the without its support, and bus initiatives NKRA Urban Public Transport also

Another challenge involves putting Sustaining Socio-Economic in place a good framework to govern political funding in Malaysia as part Development Efforts of efforts to ensure a level-playing field in Malaysian politics. Although recommendations have been made The remaining five years, as we executives and employees alike over as early as 2010, this initiative has not make the dash towards the 2020 the next five years. gained enough traction as politicians deadline will be a crucial stretch As markets liberalise and with from both side of the divide do not see that will require much effort from all the Trans-Pacific Partnership kicking the impetus to push for this reform. The factions including the private sector. into action, local businesses must to setting up of the National Consultative One of the reasons that Malaysia find ways to build top notch products Committee on Political Funding in was left behind in the race towards high and services that can stand the test August 2015 provides some assurance income by countries that started off on of competition with the best. On its but more work has to be done, and the same footing as us, South Korea part, the Government will continue support to be won to push for better for example was that Malaysia has not to facilitate and create a conducive regulation of political funding. This been able to hit the right markers in environment for businesses to thrive. effort continues. increasing productivity growth. There was not enough impetus for innovation or drive amongst local companies to Malaysian businesses must become more win it big in the global market like what brands such as Samsung and Hyundai globally competitive so there will be no need to quarrel have achieved. Malaysian businesses must become in a small market like ours. Companies must realise more globally competitive so there will that the Government can only facilitate a competitive be no need to quarrel in a small market like ours. Companies must realise that environment but it cannot be the driver of innovation. the Government can only facilitate a competitive environment but it cannot This has to happen at companies, driven by executives be the driver of innovation. This has to happen at companies, driven by and employees alike over the next five years.

20 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 On its part, the Government Staying is committed to see through the implementation of the NTP to the Course ensure relevance, sustainability and inclusiveness for all. The NTP is certainly yielding Ultimately, at the end of it all positive results five years into the when the programme reaches its 2020 programme, and Malaysians can deadline, Malaysians will be able to be confident that the country is on proclaim proudly that between 2010 the right track towards high income and 2020, the nation collectively status. Whilst taking comfort in the came together and united to support outcomes of the work done in the national transformation so that a better last five years, it is crucial that all Malaysia could be delivered to future parties stay the course to complete generations. commitments made through the GTP and ETP roadmaps.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 21 YEAR IN REVIEW 2015

GROWTH, CONFIDENCE AND RESILIENCE DATO’ SRI CHIEF EXECUTIVE OFFICER, PERFORMANCE MANAGEMENT AND DELIVERY UNIT

e began our two programmes have impacted transformational Malaysia. The 2015 edition of W journey by taking an PEMANDU's Annual Report interventionist approach, tackling illustrates Malaysia’s story of challenges needing big, fast results. growth, confidence and resilience Knowing that no Today, we have shifted gears to brought forth by transformation. sustain and institutionalise the This report is a testament of the journey is without changes. Since its launch in 2010, commitment of the civil service, our transformation initiatives have private sector and many Malaysians, its challenges, we progressed well according to plan, who have tirelessly contributed on the back of steady economic to the goal of taking the country step into 2016 from a growth year after year. to become a high-income and As Chief Executive Officer developed nation in 2020. position of strength, of the Performance Monitoring The report highlights a five- holding our heads and Delivery Unit (PEMANDU), year view of progress; a broad I have been tasked to oversee and insightful perspective of high and determined the progress of the Government transformation, featuring the good Transformation Programme (GTP) work done within that period and its as ever to keep going and Economic Transformation resultant impact on the rakyat. Programme (ETP). Together with The report also presents the till we reach 2020 the civil service, private sector and annual developments of the GTP and our fellow Malaysians, we have the ETP in 2015, staying true to our when we will become concluded our sixth year of national intent to be accountable to the public transformation. for the commitments that have been a high-income nation. For 2015, I would like to share made when we launched our GTP a holistic overview of how these and ETP Roadmaps in 2010.

22 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Those dwelling in the city can testify to investment and consumption from Sustainable the initial adjustments brought forth the private sector, in line with the by an infrastructure project of such an aspirations of the ETP to see increased Growth unprecedented scale in Malaysia. But participation of the private sector in today, we are at a concluding phase of driving the economy forward. The story of Malaysia has been Line 1 and very soon, the nation will In addition to growth, I would consistently anchored on growth. be able to feel the impact of such an like to point out that despite the This includes progress in Government, ambitious project. introduction of measures such as progress in the economy and progress These stories of progress the Goods and Services Tax (GST) and in society as a whole. highlighted throughout this report will the effects of subsidy rationalisation, The Government today is better stand up to any amount of scrutiny, inflation remained in check, with the positioned to deliver public services proving that the Government is Consumer Price Index (CPI) registering effectively, and it has continually serious about improving outcomes 2.1 percent in 2015 compared to 3.2 sustained the work of building better for all Malaysians. percent in 2014. standards of living for all. Contained All of them come under the banner When we prioritised growth in the within our annual updates that follow of sustained economic growth that economy, we worked hard to ensure in this report are stories of changed is private-sector-led. Coming in well that we had – and will always – take lives brought forth by the shared above global growth of 2.4 percent a mildly expansionary approach. This commitment to transformation. in 2015, Malaysia achieved a healthy measured and prudent strategy has I am heartened and privileged to Gross Domestic Product (GDP) growth built our capability to attain growth hear stories of hope and determination of 5 percent. Between 2010 and 2015, outcomes which have surpassed from some of our fellow Malaysians, GDP grew 30 percent from RM797.3 estimates. who witnessed to the remarkable billion to RM 1.13 trillion (Exhibit 5). It is clear that the measures taken by social and economic transformation It is encouraging to note this Malaysia between 2010 and 2015 to be in their midst. growth was fuelled by continued more fiscally resilient are bearing results. Chik Azmily from is one of them. A salary of RM500 a month as a daily labourer was not Growing Steadily With Low Inflation cutting it for him, as it just wasn’t GDP at Current Prices (RM bil) 2016 GDP FORECAST enough to support his family. Real GDP Growth Rates (%) Consumer Price Index (%) Through the 1AZAM Tani initiative, as 4.0%–4.5% RM billion % implemented by the good people from 1200 7.4 8 7 the Malaysian Agricultural Research 6.3 1000 6.0 and Development Institute (MARDI), 5.4 5.6 6 5.6 5 the 31-year-old managed to increase 800 5.2 5.0 4.7 3.6 4.8 4 his monthly income by an astounding 3.2 3.2 ten times to RM5,000, solidly boosting 600 3 2 his family out of hard-core poverty. 2.0 2.1 2.1 400 0.6 1.7 1.6 From individual stories of 1 0 200 Launch transformation, we also have of ETP -1 remarkable stories of infrastructural -1.5 0 -2 changes. One that really stands 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 out is the thousands of Malaysians 9th Malaysian Plan 10th Malaysian Plan coming together to bring the first Source: Department of Statistics Malaysia, using current Prices phase of the Klang Valley MRT Sungai Buloh–Kajang (SBK) line into reality. Exhibit 5

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 23 YEAR IN REVIEW 2015

Since 2013, Malaysia has remained in four percent of GDP or below (Exhibit 6). Meanwhile, Malaysia’s public the fiscal “Safe Zone”. The “Safe Zone” In 2015, fiscal deficit continued to debt stood at 54.5 percent of GDP, indicates the fiscal health of economies, be reduced according to target, at 3.2 remaining below the legislated debt requiring that public debt be below 75 percent of GDP compared to 5.4 percent ceiling of 55 percent of GDP. Debt percent of GDP while deficit is kept at in 2010. guaranteed by Federal Government was at 15.3 percent of GDP in 2015. Hence, even with all guaranteed Malaysia In The “Safe Zone” debt consolidated, the Government Public Debt (% of GDP) AS: Asia debt is below 70 percent, fulfilling AF: 250% EU: the requirements for the “Safe Zone”. Sovereign AS1 OC: Oceania Crisis Level SA: South America Many governments aspire to achieve this situation; but to get into 200%

EU8 this “Safe Zone”, tough and unpopular policy decisions had to be made. In 150% AS2 EU2 EU9 the past year, we continued to develop greater fiscal resilience by keeping on EU4 AS8 EU1 100% track with subsidy rationalisation EU3 EU5 EU6 EU11 EU7 and reducing non-critical spending 2009 2010 2011 2012 2013 2014 2015 SA1 EU10 on supplies and services and asset MALAYSIA 50% AS6 AS9 AS3 OC2 AF1 AS5 AS10 purchases. In April 2015, the GST

AS4 OC1 was implemented, helping to create AS7 Safe Zone 0% a buffer for Government revenue in -12% -10% -8% -6% -4% -2% 0% 2% the low-oil-price environment. Surplus/Deficit (% of GDP) Note: All figures are as of 2015 est. Countries markers are masked and coded for confidentiality Source: MOF; BNM; CIA World Factbook; PEMANDU Analysis

Exhibit 6

is one of the factors contributing to investments in the country, with the Confidence economic growth. remainder contributed by the public In 2015, private consumption, at sector (Exhibit 8). and Validation 52.4 percent of GDP, was four times Realised investments accelerated more than public consumption at between 2011 and 2015 at a compound In a recent note¹, Standard & Poor's 13.5 percent (Exhibit 7). Consumption annual growth rate (CAGR) of 8.3 Ratings Services (S&P) acknowledged as a whole now accounts for 65.9 percent, against 5.3 percent between that Malaysia will remain on a steady percent of the GDP. This trend, which 2006 and 2010. This space, too, is growth path, indicating that, "exports has persisted for the last five years, dominated by the private sector, of manufactured goods and growth in is supported by a flourishing private following the implementation of the private consumption and investment sector, increased investments, ETP in September 2010 (Exhibit 9). are likely to drive this expansion". stable labour market conditions, This is an excellent lead-up to the The recent private-sector and wage growth. aspiration of getting private-sector performance in the economy can lend Over the last five years of economic players to own the lion’s share of the evidence to this expected trajectory. transformation, the private sector has investments, targeted at 92 percent of We have confidence that the private also grown to own a significantly larger total investments by 2020. sector will continue to play its role in portion of the investment ratio. In 2015, It is absolutely necessary we do this, driving consumption, which in turn, it contributed 65 percent of the total in the interest of pursuing sustainable

¹ S&P Affirms Malaysia's Foreign And Local Currency Ratings. Source: http://www.bernama.com/bernama/v8/bu/newsbusiness.php?id=1229527

24 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 and responsible growth for Malaysia. If Private Consumption Increasingly Drives GDP Growth the private sector can take the lead in attracting investments into the country, Public Private 51.8% 52.4% 50.2% 51.4% the Government can instead focus on 48.8% 48.1% developing a conducive and business friendly environment to enable sectoral growth, whilst continuing to improve quality of life, the welfare of the rakyat and strengthening our institutions.

13.6% 13.6% 13.8% 13.6% 13.5% Many initiatives are now visibly 12.6% in place to enhance confidence in our public sector institutions. We have

2010 2011 2012 2013 2014 2015 charted some progress in the Anti- Note: Figures used are in constant prices Corruption NKRA, which expanded Source: BNM the Corporate Integrity Pledge into Exhibit 7 the Corporate Integrity System Malaysia, as well as introduced Private Sector Dominates Investment Ratio reforms into the way the Auditor-

Public Private General’s Reports are tabled and acted upon, while educating the younger

35% generation about the consequences 43% 42% 40% 36% 46% 44% 46% 48% 45% of condoning corrupt practices.

64% 65% We also have strengthened the 57% 58% 60% 54% 56% 54% 52% 55% Reducing Crime NKRA which focuses on reducing index crime, especially Launch of ETP street crime. The scope of the NKRA has been reviewed to reinforce the 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 prevention of vehicle theft, house 9th Malaysian Plan 10th Malaysian Plan break-ins and address the issue of Sources: Department of Statistics and Economic Planning Unit estimates (Constant 2010 prices) criminal recidivism through the upskilling of inmates. All this is done Exhibit 8 to ensure that the rakyat feel safe and secure in their own country. Realised Investment Accelerated Post-ETP The Public Service Delivery Transformation (PSDT) NKRA has RM billion 179.4 168.5 Public Private 2011-2015 CAGR 8.3% also been continually building on 151.7 the capabilities of the civil service, so 134.5 that it can deliver high-quality services 2006-2010 CAGR 5.3% 110.9 101.3 98.7 100.5 efficiently and effectively to the people, 92.4 92.4 95.8 94.8 85.6 85.1 81.6 80.2 83.0 74.1 77.8 as well as to build public confidence 69.7 and trust of the rakyat when they witness such progress. Launch of ETP Partnerships have been formed with various ministries, and their key 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 workflows have been examined and 9th Malaysian Plan 10th Malaysian Plan appraised. We have been recording Sources: Department of Statistics and Economic Planning Unit estimates (Constant 2010 prices) early successes in many such Exhibit 9 transformational initiatives.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 25 YEAR IN REVIEW 2015

highest-ranked developing Asian Malaysia's Position in Competitiveness Rankings economy (Exhibit 10). The World Bank’s Ease of Doing World Bank Ease of IMD World WEF Global Business 2015 Report was also positive Doing Business Report Competitiveness Yearbook Competitiveness Report in its assessment of Malaysia, noting an improved business environment over the past year, placing the country among the top 20 global economies, and first among emerging East Asian economies 18/189 14/61 18/140 on the ease of doing business. 2016 2016 2015 2015 represented another first in the transformation calendar as Malaysia played host to the inaugural Exhibit 10 Global Transformation Forum. Over 3,000 delegates from 70 countries During the Gym1Malaysia are underway to scale this successful comprising iconic transformational transformation, for instance, the pilot project to all hospitals nationwide. leaders and individuals from both project recorded a six-fold improvement With well-placed policies, public and private sector shared in the number of visitors. In the effective programmes and progressive their transformational experiences ‘DBKL lift breakdown’ transformation economic transformation, the story of from personal, organisational and project, the pilot managed to decrease Malaysia has been the focus of various national perspectives. breakdown times by 50 percent. international studies and evaluation, a Malaysia’s ability to compete globally These efficiency-improving pilot clear indication of confidence and the is a result of our capabilities to respond projects were commenced with the country’s gradual foray into the world’s proactively to economic consequences intention of scaling them up nationally. economy as a global player of influence. brought forth by global volatility. One of them is Healthcare PSDT, an In September 2015, the World Economic Geopolitical tensions, and currency effort to reduce patient waiting times Forum ranked Malaysia among the and commodity price fluctuations, and improve patient experience in 20 most competitive countries in the have been said to have dampened global Government hospitals under the world in its Global Competitiveness economic recovery. But the Malaysian Ministry of Health. Dedicated healthcare Report 2015-2016. At 18th position, story of growth and confidence offers an officers have successfully reduced Malaysia’s obtained its highest ranking alternative and assuring perspective of waiting times in 16 hospitals and plans since 2005, apart from also being the how resilient the nation can be.

demand patterns, as larger economies In addition, like many other Building like the US, the Eurozone and China countries with depreciating currencies worked on strengthening their own versus the US dollar, Malaysia is not Resilience economies. unique in being impacted by this As a result of underlying global externality. In 2015, our Gross National for the Future economic trends, we expect the high Income (GNI) per capita as calculated income threshold, as calculated based using the Atlas method, is estimated to It is without a doubt that 2015 on the World Bank Atlas Method, to drop to US$10,110 in 2015, compared to was a hotbed of challenges. The decline in 2015 because of significant US$10,760 in 2014. This was due to the value of the ringgit was affected, just depreciation of the Euro and Yen average exchange rate in 2015 that also like many other global currencies, vis-à-vis the US$. From US$12,735 in factored in the currency devaluation from the ill effects of the dramatic 2014, we estimate the threshold to be against the US dollar in the second drop in oil prices and shifts in global reduced to US$12,303². half of the year.

2 PEMANDU estimate based on World Bank’s GNI per capita calculation using the Atlas Method

26 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Notwithstanding, as the ringgit On top of market corrections and Government coffers from being overly continues to strengthen and reflect improving external conditions, we affected by lower oil royalties and its true fundamentals in the coming also have seen growth in Government taxes due to the severe drop in Dated months, and as Malaysia’s economic revenue. Rising to RM165.4 billion for Brent Crude from US$100 per barrel transformation continues to deliver 2015, 0.8 percent higher than collection to US$50 per barrel. results, we remain confident that our in 2014, the increase is attributed to Analysis also reveals the CAGR high-income target will be achieved GST collection, estimated to be at for tax revenue between 2011 and by 2020. RM27 billion in 2015, thus buffering 2015 expanded 8.6 percent compared to 6.3 percent between 2006 to 2010, a positive sign that the Government is Government Revenue Increasing on the right track with consolidation

RM million measures to further strengthen our Direct Taxes Indirect Taxes fiscal resilience (Exhibit 11).

Tax Revenue CAGR 2011-2015:37,462 8.6% 53,670 Greater diversification in NKEA 35,429 34,706 sectors has also tremendously Tax Revenue CAGR 2006-2010: 6.3% 32,643 decreased the Government’s dependence on oil revenue. In 2015, 30,507 30,760 28,129 25,772 Malaysia’s oil revenue dropped to an 25,058 estimated 21.5 percent as oil prices

126,742 plummeted drastically to below US$50 116,937 120,523 111,771 per barrel for Dated Brent Crude, a far 102,242 82,138 cry from what the Government used to 69,396 78,375 79,009 61,572 receive prior to 2010 (Exhibit 12). Had we not carried out the ETP to

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 further develop and attract investments Revised Estimate into the economic sectors in which Malaysia had competitive strengths, Source: Ministry of Finance this would be an alarming situation. Exhibit 11 However, as can be seen from (Exhibit 13), Malaysia’s GNI structure is well- Government is Less Dependent on Oil Revenue diversified, with contributions coming in from other NKEAs to offset the hit RM million taken from low oil prices. PITA Export Duty Petroleum Royalty & Gas

Petroleum Dividend Exploration (Oil & Gas MTJA) % Oil Revenue/Gov Revenue

39.6% 41.3% 36.8% 36.5% 35.4% 35.8% 33.7% 31.2% Malaysia’s ability 30.0% to compete globally 21.5% is a result of our capabilities to respond proactively to economic

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Revised Estimate consequences brought Source: Ministry of Finance forth by global volatility. Exhibit 12

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 27 YEAR IN REVIEW 2015

NKEA SECTOR GNI Value at current prices (RM billion)

Agriculture 64.5

Palm Oil/Rubber 61.0

Oil, Gas & Energy 171.1

Electric & Electronic 53.0

Wholesale & Retail 168.6

Education 9.0

Healthcare 9.8

Communication Content & Infrastructure 51.0

Tourism 67.1

Financial Services 62.7

Business Services 46.2

Other Industries 360.8

TOTAL GNI 1,124.7

Exhibit 13

It is important to note that despite resilience will also be a narrative that Over 7.1 million Malaysians have the need to review the country’s is inclusive. Priority for people living received Bantuan Rakyat 1Malaysia Budget 2016 and take precautions in the rural areas and low-income (BR1M) assistance in 2015, of which to buffer ourselves against the households remains paramount, in approximately 4.6 million households possibility of a global recession, the our efforts to ensure that they enjoy have been receiving BR1M in 2014 and Government is not cutting back on in our nation’s development and 2015. BR1M has been increased on an capital development projects and economic bounty, and that the rising annual basis from its introduction at will continue to stay the course in costs of living do not unduly burden RM500 per household (with a monthly this regard. the rakyat, especially the bottom 40 income of RM3,000 and below) to Some of the larger projects percent of the income pyramid (B40). RM950 as of 2015. in the country, such as the MRT Our transformation journey has By channelling lesser resources development and the Pengerang worked towards a commitment for towards more targeted groups, we were Integrated Petroleum Complex, a more targeted and coordinated able to channel resources to create continue unhindered even in the face social benefits system. Towards this greater impact and at the same time of a slowing economy. end, BR1M, a targeted direct cash making our subsidy bill more efficient. The Government also remains assistance for households earning This is to ensure that nobody gets left committed to ensure that the Malaysia less than RM4,000 per month, has behind in our national transformation story of growth, confidence and been assisting those who are in need. journey towards high income.

28 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 in global markets with competitive, Keeping world-class products and services. The public sector must not waver in Focus and its pursuit of refining and improving on the quality of service delivery, whilst Staying on being accountable and transparent in their delivery. I cannot stress enough the Track importance of maintaining the momentum that has been built in the There is no doubt that 2016 will last six years in order for us to attain be a challenging year for our country high-income status in inclusive and due to the challenging global economy. sustainable ways. Like all other nations, Malaysia will be Knowing that no journey is without affected but we can take comfort that its challenges, we step into 2016 from even in these trying times, instead of a position of strength, will to succeed experiencing a contraction, Malaysia’s and determination to keep going till economy registered a modest growth we reach 2020 when we will become of 5 percent in 2015, with external a high-income nation. agencies such as World Bank, IMF, Moody’s and others commending the Government for having taken the right The work does measures to diversify the economy and build fiscal resilience. not stop here. With The hard work carried out and four more years tough decisions taken in these last few years since the beginning of the left to the reach NTP is yielding positive results. We can sustain growth. We continue to the NTP’s finishing command confidence. We are resilient line by 2020, the in the face of global challenges. The work does not stop here. With Government, together four more years left to the reach the NTP’s finishing line by 2020, the with the private Government, together with the private sector, must remain resolute, stay sector, must remain the course and remain committed resolute, stay the to seeing this programme to its completion in 2020. course and remain One of the areas of priority in these next few years would be to nurture committed to seeing more ‘Malaysian champions’. Local this programme to its companies must continue to step up innovation to be able to thrive completion in 2020.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 29 THE NTP

30 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 THE NTP

NATIONAL KEY RESULTS AREAS (NKRAs)

32 Addressing the Rising Cost of Living 38 Improving Rural Development 46 Improving Urban Public Transport 56 Raising Living Standards of Low-Income Households 64 Assuring Quality Education 78 Reducing Crime 88 Fighting Corruption 96 Public Service Delivery Transformation NATIONAL KEY ECONOMIC AREAS (NKEAs)

106 Greater Kuala Lumpur/Klang Valley 124 Oil, Gas and Energy 134 Financial Services 144 Wholesale and Retail 152 Palm Oil and Rubber 164 Tourism 172 Electrical and Electronics 180 Business Services 190 Communications Content and Infrastructure 198 Education 212 Agriculture 220 Healthcare STRATEGIC REFORM INITIATIVES (SRIs)

232 Competition, Standards and Liberalisation 244 Public Finance Reform 250 Narrowing Disparity 256 Human Capital Development

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 31 THE NTP – NATIONAL KEY RESULTS AREAS Addressing The Rising Cost of Living

DATO' SERI DR. DEVELOPING AHMAD ZAHID HAMIDI BETTER AND DEPUTY PRIME MINISTER OF MALAYSIA Addressing the Rising Cost of Living (COL) NKRA continues to be FOCUSED SOCIAL a priority area for the Government; namely, by alleviating the economic burden of a society adjusting to the SAFETY NETS nation’s transition towards high- income status by 2020. The COL NKRA is notably IS KEY distinct from the other six NKRAs. It addresses the concerns of the rakyat through continual reactive measures – social safety net initiatives delivered on a needs-basis in response to market conditions – to safeguard the welfare of Malaysians, in particular the bottom 40 percent (B40) in economic terms. Through this NKRA, short-term and immediate relief is delivered to vulnerable segments of society, helping them cope with the rising cost of living and better managing their households’ expenditures. Reflecting on 2015, a few important milestones were achieved to help the government arrive at a more efficient and less burdensome public expenditure

32 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 BB1M helps to somewhat reduce my financial burden as a student, since I prefer to purchase original, first-hand model for our safety nets. In a bid to dismantle inefficient blanket textbooks where possible. subsidies, and create a more — Rachel Ruran Leong targeted system to benefit those Universiti Malaysia Sarawak student most in genuine need, subsidy rationalisations were carried out. In addition, the introduction of the 6 percent Goods and Services Tax (GST) in April – a more effective and broad-based tax – channels more funds to the government to help alleviate the rakyat’s cost hrough the NTP, the Government has introduced a number of INSIDE THIS NKRA burdens. targeted initiatives to cushion The introduction of GST and T Direct Assistance the B40 group against economic 1 to Those In Need subsidy rationalisation activities, uncertainties and to support them to while important, have indirectly become more financially resilient. contributed to the increase in The COL NKRA takes two Increasing Accessibility 2 to Basic Amenities prices for goods and services, approaches in accomplishing its objective of providing immediate relief which places additional pressure to the rakyat. Firstly, by providing on the rakyat. Acknowledging the targeted direct cash assistance through importance of these measures programmes such as BR1M (Bantuan in strengthening the country’s Rakyat 1Malaysia), BB1M (Baucar Buku long-term financial resilience, 1Malaysia) and BKAP1M (Bantuan the government will continue Khas Awal Persekolahan 1Malaysia). to mitigate such price impacts Secondly, through the increase of the availability of (and accessibility and stay focused in rolling out to) affordable basic necessities and COL NKRA initiatives to support services such as K1M (Klinik 1Malaysia), Malaysians in need for as long KR1M (Kedai Rakyat 1Malaysia) and as necessary. MR1M (Menu Rakyat 1 Malaysia).

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 33 THE NTP – NATIONAL KEY RESULTS AREAS Addressing The Rising Cost of Living

1 Direct Assistance to Those in Need NUMBER OF STUDENTS RECEIVING BKAP1M

Through programmes such as The BKAP1M initiative aims to BR1M, BB1M and BKAP1M, targeted ease the burden of parents preparing groups of Malaysians are provided with for their children’s schooling expenses. 2015 direct cash assistance, enabling them In 2015, a total of 5.13 million students to better manage the costs of basic and have benefited from this initiative. 5,127,222 educational necessities. Since 2014, an amount of RM100 The BR1M initiative is a targeted has been provided to all Malaysian direct cash assistance for households students from Primary One to Form earning less than RM4,000 per month. Five in both public and private schools. The amount of BR1M provided has To ease the burden of education 2014 been increased on an annual basis expenses of purchasing books, a 5,153,811 from its introduction at RM500 per total of 1.3 million tertiary education household (with a monthly income students (including those in Form of RM3,000 and below) to RM950 Six) have received RM250 in book as of 2015. In 2015, under the vouchers under the programme. BR1M BB1M 2013 initiative, a total of 7.1 million Introduced in 2013, this initiative also Malaysians (including households and aims to foster interest in reading 5,202,778 individuals) received BR1M assistance, among Malaysians. of which approximately 4.6 million households have been receiving BR1M in 2014 and 2015.

PARENT APPRECIATES BKAP1M ASSISTANCE

s a beneficiary of the BKAP1M school expenses,” she says. “However, initiative, mother Alliene Ong with the rising cost of goods presently, for A is quite appreciative of the its true impact to be really felt, I suggest Government’s efforts to cushion the that the aid amount per student should be impact of school necessities on her budget. raised to RM300 per year. Still, any aid is “I have a daughter who is 16 years old this better than none, and I am not personally year. She is in Form Four, and has been aware of any other country that has such receiving the BKAP1M assistance for the an initiative in place, so I gratefully accept past three years now. The RM100 that the the BKAP1M aid, and am thankful that the Government hands out at the start of every government provides such assistance to year has been quite helpful in terms of the people who need it most.” preparing for her studies,” she elaborates. Alliene believes that the government’s Alliene uses the RM100 from BKAP1M move in giving this aid to the rakyat, to buy her daughter’s school stationeries. as well as other COL NKRA initiatives, “With my limited monthly household demonstrates its commitment to lighten income and other expenses to budget the rakyat’s burden. “Although the KR1M, for, BKAP1M has helped to somewhat for example, is out of my way so I do not reduce the financial stress during the shop there so frequently, the concept is Alliene Ong with her daughter, Aina Kamalia beginning of the year caused by all the still a good one,” she explains.

34 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 UNIVERSITY Daniel Darnas Rachel Ruran Leong Swinburne University Universiti Malaysia STUDENTS of Technology Sarawak Sarawak student BENEFIT FROM BB1M PROGRAMME

niversiti Malaysia Sarawak stationery, for instance, I was able to that certain name brands are slightly student Rachel Ruran Leong buy other things that helped with cheaper in the KR1M, but when I'm U is in her final year of a four- my courses that I otherwise could back visiting my kampong (village), the year programme, and has been a not have.” KR1M means that we no longer have to beneficiary of BB1M for the past three Both Rachel and Daniel agree that travel all the way to town to purchase years since she started her course. the amount of the BB1M vouchers our daily necessities.” She believes that she is one of the few should not be increased. Rachel Daniel, meanwhile, thinks that who use it for its intended purpose believes that trying to help all students the existing initiatives are helpful. He of purchasing textbooks, although purchase brand-new books for the believes that the Government should she’s heard of others using it to buy entire year would not be the most amplify their communications on stationery, hard disks or even shoes, efficient use of the funds required. these initiatives so that more people the latter two especially during the first Daniel in turn feels that this initiative can benefit from them. few years it was introduced. is supposed to be supplementary aid, “I’m a very old-fashioned person; not full-fledged financial assistance. I like using physical books, and my “Though I feel there could be By using the university mostly uses international a rebalancing of the amount of textbooks from Pearson, Cambridge distribution over two semesters in a BB1M to buy textbooks and the like, which can be expensive. year, RM125 for each half, for example. and stationery, for BB1M helps to somewhat reduce my Having the voucher valid for three financial burden as a student, since I months only forces students to finish instance, I was able prefer to purchase original, first-hand the whole RM250 in a single semester. to buy other things textbooks where possible, and each It does not encourage good planning textbook can cost RM200-RM300,” and budgeting amongst students,” that helped with my Rachel explains. he adds. Daniel Darnas, who was on a study Nevertheless, Rachel likes BB1M. courses that I otherwise loan which covered his tuition and “It is a very good start, and I am happy could not have. allowances at Swinburne University with the BB1M initiative as it stands,” — Daniel Darnas of Technology Sarawak, shared that she explains. She is also very happy BB1M helped cushion his savings. “By with yet another COL NKRA initiative, using the BB1M to buy textbooks and the KR1M. “While on campus, I find

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 35 THE NTP – NATIONAL KEY RESULTS AREAS Addressing The Rising Cost of Living

a reasonable cost in terms of rental, 2 Increasing Accessibility logistics and infrastructure. Through the 334 K1M clinics to Basic Amenities nationwide, Malaysians are provided access to affordable basic medical services at just RM1 per visit (senior A key focus of the COL NKRA is to products at lower prices. Available citizens are exempted from any ensure that people in less-developed in all KR1M stores, Produk Rakyat payment). With qualified nurses and areas, as well as the urban poor, have 1Malaysia brands locally-produced medical assistants sporting at least access to lower-cost basic amenities, and generically-branded grocery five years of experience, K1M clinics necessities and healthcare. Through goods are usually sold at 15 percent-30 are able to carry out minor surgeries, initiatives such as K1M, KR1M and percent lower than similar premium- stitching, wound cleaning and MR1M, the COL NKRA aims to deliver brand goods. Spanning a total of dressing, as well as treating illnesses essential goods and services such as 234 types of goods, Produk Rakyat like cough, flu, fever, diabetes and groceries, healthcare and food at prices 1Malaysia brands are now more hypertension. Strategically located that are affordable to all layers of the accessible to the general public, as in various housing areas, there are rakyat, thus helping the rakyat retain they are stocked by 569 other stores. between three and four K1M clinics more of their disposable income. In 2015, the set-up of KR1M outlets fell available across each state. Since its 185 KR1M stores nationwide short of its target, due to implementation inception in 2010, K1M clinics have provide Malaysians the option challenges such as the inability to carried out more than 21.87 million of purchasing basic household secure strategic business locations at basic treatments.

(Top left) Services provided at K1M are no longer confined to outpatient care. Selected K1M now offers Maternal and Child Health.(Right) A food stall serving MR1M dishes located at a Rest and Recreation area (R & R) in Rawang. Photo courtesy of BERNAMA Images. (Bottom left) KR1M outlet operates on a mini market format that offers various basic necessities under the Kedai Rakyat 1 Malaysia (KR1M) label and sold up to 50 percent cheaper compared to other brands in the market

36 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

n 2015, the Malaysian economy The implementation of the GST, faced economic volatilities from while important in transforming the I the external environment, which taxation system to be more efficient, saw the decrease in oil-based revenues has indirectly increased the cost of some to the government and the Malaysian goods and services. The Government has ringgit’s slide in value. These, amongst ensured that basic necessities such as other factors such as demand for rice, sugar and cooking oil are zero-rated imported goods and services and the (untaxed), and that hospital services are strengthening US dollar, reduced the exempted from GST. This is to ensure strength of our currency and affected that the needy will not be burdened by our purchasing power, particularly of the impact of the GST. imported goods. Noting such challenges, the COL In achieving greater fiscal discipline, NKRA has been cognisant of the the Government has also been rakyat’s pressing needs, especially required to make the difficult decision for vulnerable households that lack to restructure the country’s subsidy the financial capacity to weather the models; in particular by rationalising impact of such challenging economic how subsidies are distributed. The times. As such the government removal of fuel subsidies - whilst adding maintains its commitment in pressure on transport and logistics sustaining initiatives within this NKRA costs - was an essential move to ensure to ensure that assistance reaches those products & services reflect their actual most in need. production costs and remain competitive in the long run.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 37 THE NTP – NATIONAL KEY RESULTS AREAS Improving Rural Development

DATO’ SRI CREATING MINISTER OF RURAL AND REGIONAL DEVELOPMENT SUSTAINABLE In our journey towards becoming a developed and high- RURAL income nation, our national development has continued to emphasise being inclusive to COMMUNITIES address the needs of the rakyat in urban and rural areas. The concerns of our fellow Malaysians living in the rural parts of Malaysia continue to be a priority. Since we started the NTP journey in 2010, our focus has been to enhance and equip the rural areas with the provision of basic amenities, and to transform rural areas into thriving and sustainable centres of commerce. Over the past 6 years, the initiatives under the Improving Rural Development NKRA (RD NKRA) have impacted the lives of over 5.567 million Malaysians in the rural areas, through the delivery of roads, clean/treated water, housing and 24-hour electricity to improve standards of living. From 2010 to 2015, the RD NKRA targeted 139,061 houses to be supplied with 24- hour electricity, but by the end

38 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Over 5.567 million more Malaysians living in rural areas today enjoy the same access to basic utilities like water, of 2015, 3.5 percent more than the target (143,899 houses) had been electricity, and road connectivity supplied with such. This ensures that no one is left as those in the cities. behind in the fast changing world of national transformation. If the villages have all the facilities of modern infrastructure, we will be able to reverse the trend of rural- to-urban movement. The rural landscape can then support more nclusive development to create INSIDE THIS NKRA high-value economic activities. successful and sustainable rural communities has been the With better job prospects & I Providing Universal Access aspiration of the RD NKRA since the opportunities in their villages, 1 to Basic Amenities Through beginning of Malaysia’s transformation Inclusive Development people who moved out to the cities journey. First established as the Rural may consider returning to revitalise Basic Infrastructure (RBI) NKRA in Building Rural Economies their communities. 2010, its main purpose was to ensure 2 Malaysians in rural areas were provided with basic infrastructure such as roads, water, electricity and housing. Today, the majority of rural areas have such as eco-tourism and premium access to basic infrastructure, through fruit farming have enabled various initiatives that bring development in economic activities to be innovated, rural areas, for the rakyat to enjoy further empowering entrepreneurs amenities that are readily available in to be more independent, as well as urban areas. provide better access to markets and Sustainability beyond the provision business opportunities. Malaysians in of basic amenities was the premise of these communities have since been the RD NKRA’s 21st Century Village encouraged to remain in their villages (21CV) programme that came into and still be part of the nation’s growth being in 2012. Since then, initiatives and successes.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 39 THE NTP – NATIONAL KEY RESULTS AREAS Improving Rural Development

In terms of improved road 1 Providing Universal Access connectivity, some highlights in 2015 include areas such as Batang to Basic Amenities Through Padang, Perak, where an 11km road development has helped improve Inclusive Development the economy of the villages around the regions that the road connects, contributing to the increase in property value among the villages and neighbouring areas. This stretch of infrastructure has also enabled broader access to markets for rural palm oil farmers/producers in the kampung (village). In Kulim, Kedah, a 3km road has opened access to several new residential areas around. This has broadened and improved the relationships and network between the neighbouring villages. From 2010 – 2015, a total of 24,004 households have been relocated in newly-built housing, while 57,645 households benefitted from the refurbishment of their houses within the same time period. Road maintenance works at Jalan Madrasah Lebai Che Will, Wakaf Bharu, Kelantan These improvements came about after overcoming several challenges in As compared to 2010, over 5.567 have running water, with 345,665 2015. Malaysians living in rural areas million more Malaysians living in rural households covered throughout East are mostly not accustomed to having areas today enjoy the same access to and West Malaysia. 143,899 additional to pay for these basic amenities. basic utilities like water, electricity, and households now get 24-hour access to Some of this is due to habit and road connectivity as those in the cities, electricity. Under the Program Bantuan lack of education (e.g. on the health proving that Malaysia’s transformation Rumah (PBR) housing initiative, over benefits of clean running water). journey can be less lopsided and city- 82,472 households were built and Others prefer to maintain a simpler centric. In this manner, the rural-urban restored for families that could not lifestyle without them. In this regard, migration can be reduced. It is hoped afford them. early and frequent engagements that through this, population density Solar hybrid systems, using both with the local stakeholders helped can be kept at a more comfortable level. solar panels and a diesel generator to smooth out matters, making them People can then live and work where backup, were introduced in Semporna, aware of what was to happen within they were born and bred, supported by Sabah in 2015. The success in Semporna their vicinity and addressing their (and supporting) their families, friends as well as in Bario, Sarawak, was a key concerns. Infrastructural development and neighbours. factor in deciding to bring the solar challenges, such as building roads There has been tremendous hybrid systems into other rural areas. deep in rural areas, often face climate sustainable growth in rural villages from Their usage is expected to cover most and geographical constraints. There 2010 to 2015. 2.71 million Malaysians remote areas in Sabah and Sarawak are also land entitlement issues; now have access to new and improved next year. This will help increase hence, all land issues are now ironed roads (5,286.25km as of December 2015). business activities, foster economic out prior to the tendering process by During the same time, approximately growth and also provide villagers with identifying and resolving the land 1.73 million more Malaysians now information technology. with issues.

40 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 2 Building Rural Economies

(Left) One of the attractions in Kampung Semelor, Perak is the village jetty under the Desa Lestari initiative (Right) Cabin chalets constructed at some of the 10 villages under the Desa Lestari programme to encourage ecotourism

Major projects within the 21st harm the future of Malaysia’s resources. Under the implementation of Desa Century Villages (21CV) programme Programmes under 21CV have Lestari, two iconic projects have been were the main focus of the RD NKRA successfully transformed rural areas into introduced; namely, stingless bee since 2012. Their successes have vibrant and attractive places to live, work farming project and the construction of increased confidence that building and visit. The ‘Large Scale Fruit/Vegetable cabin chalets to spur the development successful rural economies in Malaysia Farms’ Entry Point Project is one of the of homestay programmes. A total of is an attainable goal. Residents in initiatives under 21CV that offers job 28 villages ventured in the stingless Desa Lestari villages under the 21CV opportunities to the rural people. Farms bee farming project, achieving yearly programme are enjoying higher of over 200 acres in size are planted with incomes between RM10,000 and incomes and economic growth. different kinds of premium export-quality RM19,000. Meanwhile, 10 villages Additionally, Rural Business Challenge fruits. Tonnes of pineapples, bananas, have participated in the construction (RBC) winners are beginning to set papayas and melons are marketed within of cabin chalets as part of ecotourism precedence for Malaysia’s youth in the country and abroad, reaching as far activities that generate between reversing urban migration. All of this as Korea and . RM18,000 and RM54,000 per annum. is part of the effort to narrow disparities by building sustained, high-income, and value-added rural economies. The 21CV programme was designed to boost rural economies and make them more attractive to the youth in the community. Desa Lestari, part of the 21CV programme, aims to promote village communities to take up high-value industries, create skilled occupations and promote ‘green’ tourism. This way, the villages can position themselves to be more sustainable, as well as serve to be Ecotourism activities have improved the livelihood of the rural people at Kampung Lonek, unique tourist destinations that do not Negeri Sembilan

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 41 THE NTP – NATIONAL KEY RESULTS AREAS Improving Rural Development

Kampung Bukit Bulat in Melaka winners have set up the ‘Persatuan her home in Sungai Petani immediately and Kampung Lonek in Negeri Usahawan RBC Malaysia’ (Malaysian after graduation to start up her own Sembilan are frontrunners of this RBC Entrepreneurs Association). It venture. According to her, this was initiative. Kampung Bukit Bulat caters exclusively to RBC programme due to the abundance of business villagers boast expertise in dealing with winners, so that they can help each opportunities available in Kedah. stingless bee farming and crop farming. other further develop their ventures She started her own chocolate-making The villagers also generate additional and diversify into other business business that has since seen her income by packaging tourist activities opportunities. The association aims to brand “Hazleen Chocolate” expand (nature tourism) with honey-hunting kick-start its long-term goals of having nationwide with offices in Sungai expeditions, as well as promoting at least one RBC Mart and RBC Bistro in Petani, Klang and Kuantan. honey products as organic, by virtue of every state commencing 2016. zero chemicals used during harvesting. Since 2012, RBC has awarded Their successes Both Kampung Bukit Bulat and RM59.07 million worth of grants to Kampung Lonek generate about 77 aspiring young entrepreneurs who have increased RM40,000 a year, with consistent year- were running their businesses in the on-year increases in revenues. These rural areas. 2012 and 2013 winners confidence establishments also provide homestay (31 of them) have provided 213 job that building chalets, tour-vans, commercial opportunities and created 180 new activities, and traditional games/ entrepreneurs. The average increase successful rural activities packages for tourists. of income for 2012 winners in 2014 was The RBC is also a key component 171 percent; for 2013 winners in 2015, economies in of the 21CV Programme. The RBC is the average increase was 106 percent. Malaysia is an aimed at encouraging rural youth For instance, Hazleen (one of the entrepreneurship. Over the years, RBC winners of the RBC) returned back to attainable goal.

Another iconic Desa Lestari project - stingless bee farming

42 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 TRANSFORMING BUSINESSES THROUGH THE RURAL BUSINESS CHALLENGE

One of the Rural Business Challenge (RBC) production operations with larger-size participants in 2013, 36-year-old Syuhaini Abdul machines and equipment, expand the number Rahman attributes her success in winning the of sales and marketing channels, and design Challenge to her meticulous preparations her packaging technology. “Today, thanks to the throughout the entire year, as well as closely RBC, I have increased my annual gross income sticking to the requirements of the Challenge to RM1.5 million,” she discloses. of developing rural areas and bringing benefits According to Syuhaini, most rural to the rural community. entrepreneurs focus on production, and not Syuhaini operates FBC Resources, a factory so much on marketing or developing their producing bakery goods, pies and cakes. “Prior sales channels. However, this means that to winning the RBC, my business was making their products were not getting the necessary RM960,000 in revenues yearly. I was renting exposure. “It would be good if the government the upper floor of a shophouse, I was operating provided support to rural businesses on their small-scale machines, and the product sales and marketing strategies; that way, they packaging was pretty plain,” she elaborates. can keep on focusing on what they do best in She came to know about the RBC via terms of production,” she suggests. the Malaysia Agriculture, Horticulture and As for people in the rural community who Agrotourism International Exhibition (MAHA) 2012, would like to go into business for themselves, and decided to enter the Challenge. “Winning the Syuhaini advises them to look at the resources RBC has changed my business tremendously,” she available out-of-town, and use them as a said. Using the RBC grant, she has been able to start to their business. “There is a demand start construction on a 10,000 square-foot factory, for countryside products in towns and urban and apply for HACCP and halal certification. centres, so they should consider selling and She has also been able to scale up her marketing those goods,” she clarifies.

HARNESSING RURAL TREASURES

The RD NKRA’s various initiatives are aimed by trade, his oyster farm has been the result volunteers help him with agitating oyster cages, at improving the economic prospects of rural of a knowledge transfer process courtesy of cleaning the cages and sorting the oysters by communities, and demonstrating that high- Universiti Sains Malaysia’s (USM) Associate size, amongst other chores. income opportunities are available to them, if Professor Dr. Aileen Tan Shau Hwai from the Ultimately, Ridzwan believes that it is they are willing to take the chances and put in School of Biological Sciences. The university, possible for the ecotourism potential to be the effort. Mohd. Ridzwan Ishak from Bujang together with Ministry of Science, Technology economically rewarding for a villager like him. Valley in Kedah is a sterling example of such a and Innovation (MOSTI) and Ministry of Higher man, whose hard work and perseverance has Education (MOHE), provided research funding to paid off handsomely. both operate the knowledge transfer, as well as A born-and-bred resident of Kampung open an oyster hatchery in Balik Pulau, . Sungai Batu Besi, which is situated along Sungai One of two such hatcheries in Southeast Asia, Merbok, the 45-year-old Ridzwan is the owner- this hatchery is the source of Ridzwan’s oysters. operator of an oyster farm (of which there are The oyster farm, which cultivates only only 10 in Peninsular Malaysia). Despite its food oysters (as opposed to the pearl oysters remote location and limited accessibility, the cultivated by most farmers in Sabah, for farm nonetheless receives anywhere between instance), also plays host to a steady inflow of 60-100 tourists a year. He cultures up to 60,000 conservation volunteers (many of whom are oysters, harvesting 1,000-3,000 every month. regulars) who wish to see how clean aquaculture However, Ridzwan was not always an works. According to Ridzwan in an interview with aquaculture aficionado. A former fisherman the English daily publication , these

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 43 THE NTP – NATIONAL KEY RESULTS AREAS Improving Rural Development

REALISING DREAMS THROUGH OPPORTUNITIES

At 27 years of age, Sharol Hafizi requirements of the Challenge, and support to the increase in size and capabilities of Jamaludin of Agro Highlands Enterprise from family and friends. my business.” is very grateful to the RD NKRA and the With a grant of RM2 million, Sharol Sharol believes RBC is a great Ministry of Rural and Regional Development has transformed his business to one that platform to reduce or eliminate rural- for their efforts in growing the rural economy is still moving with an upward trajectory. urban migration by the youth. “Mostly, via the Rural Business Challenge (RBC). “I now have 32 room units in the midst of this migration is due to low income jobs/ Sharol’s Cameron Highlands business a strawberry field, catering for up to 100 opportunities. But through business, you focuses on growing strawberries and people, complete with seminar/meeting can earn similar figures as urban jobs; thus, providing chalet accommodation for agro- room and a dining hall. I now earn revenues the youth will do this if there is support for tourism. Prior to winning the RBC, he could of between RM30,000-RM60,000 a month. rural businesses. They only need space only provide eight room units; sufficient for Sharol currently hires 11 employees and opportunity, which RBC and similar 40 people. “My revenues then were about and provides steady business to three initiatives can provide. RM10,000-RM15,000 a month. I could only entrepreneurs. “For example, the dining “I am thankful to the Ministry of Rural hire two to three employees – a small scale hall has an external caterer running it. I and Regional Development for the RBC. It operation by any measure.” also have online sales agents who get paid a has changed my life – my vision, which was Sharol believes that he won the commission, as well as external tour guides only a dream, has become a reality. Without Challenge in 2013 due to three major factors; which I source for his guests. So basically, RBC, all my achievements would still be providence, the project itself nicely fitting the there is an economic multiplier effect due unrealised dreams.”

Tiered strawberry fertigation above the Agro Highlands chalets

44 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

oving forward, Malaysia’s these aspirations. The outcome of the rural economy will projects under the Communications M continue to play an Content and Infrastructure (CCI) increasing role in the overall country’s National Key Economic Area (NKEA) development. The results of the RD – and their benefits – must be brought NKRA must include the benefits from into the rural areas as well as the growth being equitably distributed, suburban ones. decent job opportunities being Better broadband penetration and made available to everyone, and quality (via the High Speed Broadband natural resources being sustainably 2 and Sub-Urban Broadband projects), managed. On a macroeconomic scale, as well as multi-modal connectivity agricultural productivity must increase with urban centres, are not solely sustainably, strengthening agricultural aimed at making country living even markets that contribute to food security more attractive, but also to provide and proper nutrition for all. rural Malaysians the facilities to While higher targets for current increase their economic output and initiatives, as well as improved quality choice of business opportunities, of supply (e.g. cleaner water, better while staying right where they are. roads) have been set, the RD NKRA is By doing so, they, too, can become now focused on developing improved part of Malaysia’s next-generation and more forward-looking goals to fulfil people economy.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 45 THE NTP – NATIONAL KEY RESULTS AREAS Improving Urban Public Transport

DATO’ SRI MAKING PUBLIC MINISTER OF TRANSPORT TRANSPORTATION Enhancing and developing our urban public transport system is all the more necessary, given that A CHOICE Malaysia is in a crucial phase of transition, particularly in the urban transportation ecosystem as one of the seven National Key Results Areas (NKRAs) under the Government Transformation Programme (GTP). We are committed to deliver efficient, cost-effective, reliable, comfortable and safe public transportation services to the people especially within high-density locations like the Greater Kuala Lumpur/Klang Valley (GKL/KV) area. We are on track to establish a world-class urban public transport system with heightened convenience and reliability. Vision 2020 demands nothing less than a city fully equipped with an efficient and accessible public transport system. The introduction of the LRT Line Extension Project (LEP) Phase 1 and the Sunway Bus Rapid Transit (BRT) in 2015 are the latest chapters in our transformation journey.

46 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 We are on track to establish a world-class UPT system with heightened

Daily ridership and customer convenience and reliability. satisfaction continues to record tremendous improvements from our 2010 baseline. More so as we move forward with the completion of larger transportation projects like the LEP and Monorail that are aving public transport INSIDE THIS NKRA currently in progress, with the KL- become the preferred choice Klang BRT being planned. H for GKL/KV commuters Improving Connectivity underlines the efforts to transform the We are very pleased to announce 1 and Accessibility city's transport system. The Improving the launch of the completed LEP in Urban Public Transport (UPT) NKRA 2016 – Kelana Jaya and Sri Petaling aims to create a reputable, reliable Customer Satisfaction 2 is a Critical Success Factor to Putra Heights – will have a service that enables one to easily significant impact on the urban reach all city destinations. Work is landscape and become an avenue being done to improve connectivity Adoption of Public Transport and accessibility, with a focus on 3 Key for Rapid Urbanisation for the rakyat to rely on urban public transport demand and customer public transport. satisfaction, as well as overcoming Certainly, there will be some rather unique obstacles in project Large-scale infrastructure projects challenges in achieving this noble implementation. have been carried out to add capacity aspiration. What is of utmost The GKL/KV region covers the to the public transportation network. priority is that all Government business and administrative capitals Initiatives also focused on improving and non-governmental bodies of Malaysia. It is expected to reach a the efficiency and reliability of population of 10 million people by existing services. Ultimately, making involved in the transportation 2020. Catering to the transportation public transport more attractive is the ecosystem collaborate with more needs of that magnitude requires a ultimate goal, so as to further reduce cohesiveness and focus for the significant upgrade of the region's overall traffic congestion in the built-up benefit of the rakyat. public transportation infrastructure. areas of GKL/KV.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 47 THE NTP – NATIONAL KEY RESULTS AREAS Improving Urban Public Transport

and the future Kelana Jaya LRT 1 Improving Connectivity lines. Unlike traditional stage bus services that have to compete with and Accessibility normal traffic, the BRT frequency is predictable; commuters can expect a bus every four minutes during peak hours, and eight during off-peak hours. With this service, commuters can pre-plan their journey and arrive at their desired destinations on time. Phase 1 of the LRT Ampang Line Extension Project (LEP) began operations in 31 October 2015, with the opening of four stations in Awan Besar, Muhibbah, Alam Sutera and Kinrara BK5. The Ampang LEP benefits residents of Bukit Jalil, Projek Perumahan Rakyat Muhibbah, and Bandar Kinrara in Puchong, increasing the Ampang Line daily ridership to 196,000 and providing them with comfortable access to the LRT, and by extension, the rest of the integrated public transport network. The Klang Valley Stage Bus Network Revamp project that

Newly completed Awan Besar Station of the LRT Ampang Line Extension Project (LEP) kicked-off in December 2015 was targeted at upgrading bus services Significant amounts of investment, drive in and out of Greater KL every day, that were previously inconsistent time and effort have been spent to facing traffic woes (especially during due to unpredictable frequency and ensure the successful implementation peak hours). at times, unannounced no-shows, of high-impact public transport Malaysia’s firstBus Rapid Transit especially in low demand areas. This projects in the Greater KL/ Klang (BRT) system was completed and initiative aims to serve a total of 241 Valley area. These projects, which launched in June 2015. The 5.4km- routes compared to 182 routes before promote improvements in terms long Sunway BRT is strategically its implementation. Commuters will of connectivity and accessibility of located throughout the busy suburbs enjoy wider coverage and accessibility public transport modes, are part of of Sunway and Subang Jaya, serving a to stage bus services. The streamlining Malaysia’s economic and sustainable population of approximately 500,000. exercise will also introduce a bus route development objectives. The BRT enjoys convenience features numbering system that is standardised Reforming Greater KL’s similar to those of a light rail transit across all operators. This system aims to transportation network is a top-priority (LRT) system, with the usage of help passengers familiarise themselves to meet the need of Malaysians to travel dedicated lanes, environmentally- with the destination routes of each bus to their desired destinations with ease friendly buses as well as customer- service by reading its number alone. Still and convenience. All commuters want friendly infrastructure. Currently in the early stage of implementation, to save on travel time and to feel safe incorporating seven stations and one the Land Public Transport (SPAD) is and comfortable during their commute; Park & Ride facility, the Sunway BRT currently refining the implementation through the delivery of high-impact also has terminal stations that serve plan of the streamlining exercise and projects, the UPT NKRA aspires to as interchange stations, connecting improving the communications of its alleviate the burden of Malaysians who the service to both the KTM Komuter plans to the public.

48 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Shamsul Rizal FIRST BUS RAPID COO, BRT Sunway TRANSIT IN MALAYSIA COMMENCES SERVICE

hile the full benefits of more affordable than rail, as it is Shamsul sees the BRT as going the BRT Sunway line merely a normal road with no track, through the inevitable teething W have not been realised electrification, or signalling, and uses problems of any new operation. yet, it has shown positive signs while standard buses as ‘rolling stock’. The However, the existing ridership being actively trialled during its first BRT would work equally well at-grade can be improved through better two months. However, BRT Sunway’s (on ground level), which would reduce dissemination of information with Chief Operating Officer Shamsul Rizal the costs tremendously.” The use regards to its benefits, including reckons its true impact will only be of all-electric buses also helped cut the ability to plan one’s travel and felt once various other projects come costs, as they run very quietly and did fare discounts. “I was speaking to online. “Aside from the full phase of the not require the construction of noise a woman who said she had to catch LEP (scheduled for mid-2016), mixed barriers or soundproofing. the bus at six in the morning, because and commercial developments such as Shamsul highlights that capacity if she caught it any later, the traffic Sunway Geo and the expansion of the could be easily increased via the usage jams would make her run late. When Medical Centre will also contribute to of articulated buses or running buses I told her that the buses on the BRT making the BRT a preferred mode of more frequently (or both). Currently, run every four minutes at peak, and transport,” he adds. at peak hour, the BRT can already that they could make the full loop in With a population of 500,000 transport 1,000 passengers per hour 32 minutes, I never saw her that early served by three major highways (NPE, per direction. again,” he laughs. LDP, KESAS), the busy township of Sunway faces massive congestion in the morning, as it also hosts several tourist attractions. “The BRT aims to help alleviate congestion and enable Sunway residents to commute beyond Sunway safely, conveniently and comfortably, through connectivity with the rest of the public transportation network (LRT, KTM Komuter and bus),” Shamsul explains. The decision to adopt the BRT system, which is relatively new to Malaysia, was mostly due to its cost- efficiency. “Building a fully-elevated guideway was expensive, but it was

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 49 THE NTP – NATIONAL KEY RESULTS AREAS Improving Urban Public Transport

DEVELOPING A TRULY INTEGRATED PUBLIC TRANSPORTATION NETWORK

Mohd. Azharuddin Mat Sah CEO, Land Public Transport Commission (SPAD)

ith the UPT NKRA’s aim to encompassing upgrade of the existing from Sungai Buloh to Kajang in 88 drive up the modal share Ampang (LRT1) and Kelana Jaya (LRT2) minutes. Already, the MRT is having W of public transportation Lines, and when fully completed, will positive economic impacts on areas within GKL/KV to 40 percent of all provide for end-to-end connectivity like Balakong and Sungai Buloh (for commutes by 2030, it is necessary that for both lines via the Putra Heights more information, refer to the KVMRT the public transportation network is interchange station. “We are also – All Set To Go sidebar under the GKL/ integrated, convenient, accessible, taking the opportunity to upgrade our KV NKEA chapter). easy to use and affordable when existing infrastructure, rolling stock, Meanwhile, SPAD is also looking compared to driving. signalling systems and everything else, into improving all other modes of Within GKL/KV, the public especially on the Ampang line, which public transportation for first- and transportation master plan states that has been in existence for 20 years,” last-mile connectivity, including bus rail service is the backbone of such he elaborated. and taxi services. an integrated network. Throughout Already, the first phase of the LEP The Bus Network Revamp (BNR) 2015, the UPT NKRA has seen both has seen an average daily ridership of is one such initiative put in place in the addition of much-needed capacity 4,000 since it opened in end-October December 2015. Its objectives are to to existing rail services, as well as 2015. “Our Park ‘n’ Ride facilities are increase bus area coverage by up to the construction of large-scale rail constantly full, taking around 2,000 17 percent (including previously under- infrastructural projects. These are cars off the roads,” Dato’ Zohari served routes), increase frequencies, as starting to come online, with the first enthuses, pointing out that such a well as enhance operator performance Klang Valley MRT line scheduled to response from the residents of the and bus network efficiency. begin operations by the end of 2016, surrounding areas implies they found “We’ve allocated specific routes and the full LEP to begin in mid-2016. the LRT more convenient than driving. to each operator, with a view to As Prasarana Rail and The Klang Valley MRT promises to improve their services, and we Infrastructure Projects Sdn. Bhd. be equally advantageous to residents intend to monitor them better,” (PRAISE) CEO Dato’ Ir. Zohari of Klang Valley, initially offering a SPAD CEO Mohd. Azharuddin Mat Sulaiman points out, the LEP is an all- comfortable, state-of-the-art journey Sah explained.

50 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 According to him, operators For Azharuddin, it is no longer Throughout 2015, can concentrate their efforts and business as usual for taxis. “The expenditures on more buses, reduce industry has to evolve more cohesively, the UPT NKRA waiting time and provide better with streamlined services, clear service quality to the rakyat through guidelines and regulations to govern has seen both the dedicated routes. “We hope that over them,” he said. time, the bus operators will up their With this in mind, SPAD addition of much- game and make buses a good choice commissioned a taxi lab in December needed capacity for first- and last-mile connectivity 2015, which focused on strategically between rail and other public realigning the industry to meet today’s to existing rail transport hubs, and for direct services demands. These included discovering within GKL/KV where the rail services the optimal business model for the services, as don’t reach,” he added. industry, increasing service availability well as the Similarly, taxis play a big role in during peak times and other low-supply defining first impressions of how good situations, improving driver competency construction of an urban public transport system and behaviour, ensuring vehicles are is. SPAD envisions the taxi services in top condition and encouraging the large-scale rail provided within GKL/KV to be best- uptake of technological innovations. infrastructural in-class within ASEAN. “The business “Competition needs to be seen as model for the taxi industry needs to a stepping stone and not a stumbling projects. be transformed,” Azharuddin said. block to allow the best services to Current and upcoming technologies, be enjoyed by the rakyat. We are consumer preferences and legislative deliberating the various factors issues present a strong impetus including elements of innovation for the industry to embrace new and competition in this matter in the service paradigms. interest of all parties,” he added.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 51 THE NTP – NATIONAL KEY RESULTS AREAS Improving Urban Public Transport

different rail services, incorporating a 2 Customer Satisfaction standardised ticketing system (i.e. LRT, Monorail and ERL). Meanwhile, the is a Critical Success Factor Automated Fare Collection (AFC) system for KTM Komuter is currently being upgraded and targeted for completion Improving commuters’ confidence have seen an increase in the satisfaction by end Q2 2016. by providing a reliable and regular index from 48 percent (2010) to 74 Public transport demand has public transport system is a key percent (2015). According to the survey, improved tremendously after the component of the UPT NKRA from the commuters are most satisfied with injection of 38 new six-car trains to the the beginning. On-time performance rail services i.e. LRT, KTM and ERL. The KTM Komuter service since March 2012, is one of the major factors that feedback shows that improvements improvements to the peak frequency affect customers’ satisfaction; this in rail services in becoming more of the LRT since 2014, and provision has continued to improve despite reliable and efficient are appreciated of additional capacity through the KL challenges faced by public transport on the ground. Rail services today Monorail Capacity Expansion project operators. The Customer Satisfaction are the cheaper alternative to private which is currently on-going. Commuters Survey for public transport is transportation as well as offering enjoy the increased frequency from conducted yearly to reflect this demand enhanced safety and comfort. Another 30-45 minutes (before 2012) to every and captures public feedback. major contributing factor to commuters’ 15 minutes (as of 2015) on the KTM The Customer Satisfaction Survey satisfaction is the convenient interchange Komuter, with a 95 percent morning results, conducted by SPAD in 2015, and interconnecting system between peak on-time performance, and reliable service for the LRT with a three- minute frequency during peak hours. The improved efficiency of rail services has strongly contributed to the rising Customer Satisfaction Survey results every year. Stage buses and budget taxis which serve as supporting services to the rail system are also important in addressing the demand and satisfaction for public transport. These initiatives have room for further improvements and are currently being addressed. Utilisation of stage buses in GKL/KV ensures that effort is focussed on addressing the increase in public transport demand, better connectivity to rail services, and improved efficiency of bus services for commuters. This demonstrates the amount of work that has gone into the UPT NKRA. It also shows that the commuters notice and appreciate the myriad improvements to urban public transportation. The new monorail four car set train, which doubles the capacity, and of which five have been in service as of end December 2015

52 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 strategies are designed to make private 3 Adoption of Public Transport Key vehicle usage a less attractive form of transport into the city. for Rapid Urbanisation On the supply side, major infrastructural improvements have been achieved towards boosting the carrying capacity especially during peak times via the delivery of 38 new six-car sets for the KTM Komuter service, 35 four-car sets for the LRT Kelana Jaya Line and an additional 14 new car sets to support the LRT Line Extension Project for Kelana Jaya Line to be delivered soon. The free GoKL bus service has also been introduced for four routes within the Central Business District (CBD). Station interchange facilities have been built to provide seamless transfers between separate rail lines. Several Park ‘n’ Ride facilities in various locations provide up to 10,000 parking bays and fulfil the objective to facilitate first-mile connectivity. Instead of driving all the way into the CBD, commuters can opt to drive to these facilities and park their cars safely instead, relying on the public

KTM Komuter six-car-set train transportation network to bring them the rest of the way without hassle. The UPT NKRA, through its expand even further upon the launch Furthermore, passengers can concerted efforts over the years, has of MRT Line 1 in 2017. now transfer smoothly from the always been focused on transforming As with most other industries, Kuala Lumpur Sentral Monorail public transport into an attractive public transportation is both supply- station to Stesen Sentral Kuala alternative mode of travel for urban driven and demand-driven. Aside Lumpur via a covered link-bridge commuters. The modal share of urban from addressing the supply side of through the Nu Sentral Shopping public transport has risen from 10 the equation, the UPT NKRA also has Centre. Another significant milestone percent in 2009 to 20 percent by the provisions to look into the demand side. that has been accomplished is the end of 2015, despite facing various A combination of both ‘pull’ and ‘push’ approval for the delayed Integrated implementation challenges along strategies is essential in ensuring the Transport Terminal (ITT) Gombak the way. Evidently, these figures people embark on the paradigm shift to commence construction in June indicate that a higher percentage of towards embracing public transport as 2016. This terminal will cater for the public has been opting to use a way of life. ‘Pull’ strategies revolve express buses servicing the Eastern public transport during the peak-time around making public transport Corridor. More than 400 buses will be morning commute, a “public transport options more attractive and viable removed from entering the CBD after mind-set” that is anticipated to for the public. Meanwhile, ‘push’ ITT Gombak is operational.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 53 THE NTP – NATIONAL KEY RESULTS AREAS Improving Urban Public Transport

CREATING GREATER ACCESS TO AN INTEGRATED TRANSPORT NETWORK

he long-awaited Gombak The ITTs were the outcome of a One of our key Integrated Transport Terminal, UPT lab held in 2009, with the aim of initiatives under T or ITT Gombak, is well on its decongesting the CBD from express way to become a reality. According to buses coming in from other parts the UPT NKRA is to Veejendran Ramdas, Head of the UPT of West Malaysia. “We are looking NKRA at the Ministry of Transport at Puduraya as our model, because ensure the rakyat (MOT), construction is scheduled to Puduraya is central in the town, start mid-year 2016. “We estimate it and it is also connected with the benefit from better will take about two years to complete; monorail. It also caters to taxis, and after which we should be able to move the KTM Komuter is not far from it, connectivity and 400 East Coast buses from the Hentian so that model was used to spur the Pudu and Pekeliling terminals to ITT development or construction of more greater convenience. Gombak,” he said. terminals,” Veejendran points out. ITT Gombak will be the second of three planned ITTs, with the first one which caters to Southern buses having started operations in Bandar Tasik Selatan, and known as Terminal Bersepadu Selatan (TBS) in 2011. The site for ITT Gombak was chosen based on its easy multi-modal accessibility, especially to the LRT Gombak station. “We don’t want to merely create a terminal for buses; people must have access to other modes of transportation as well. They should have taxis, buses, rail services,” Veejendran asserted. Another ITT is being planned at Sungai Buloh, which will cater to Northern buses. “One of our key initiatives under the UPT NKRA is to ensure the rakyat benefit from better connectivity and greater convenience," Veejendran said.

54 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

n 2016, the UPT NKRA aims Klang BRT from Pasar Seni to Bandar by allowing public transport users to to deliver other high-impact Klang via Federal Highway for wider have access to real-time information I public transport infrastructure coverage, better connectivity and on arrival times, exact positioning projects that are currently ongoing higher public transport capacity of vehicles and service disruption in order to improve public transport along the corridor; and semi-overhaul information. These projects are coverage, capacity, connectivity of KTM Komuter Class 83 for higher targeted to be fully operational by the and accessibility. Completion of railway capacity. end of 2016. the full-phase LEP is targeted to be The Integrated Cashless Payment To address the first-mile completed in July 2016 with 25 new System (ICPS), a common payment connectivity to most KTM Komuter stations, servicing new areas such as system for urban rail and bus networks, stations, the Parkway Dropzone Bandar Kinrara, Puchong, Subang is also targeted to be operational by project, currently in progress at the Kg. Jaya, USJ and Putra Heights. As part January 2018. Under ICPS, all relevant Dato' Harun Petaling Jaya, Serdang and of the Greater KL/KV NKEA under the operators’ ticketing systems will be Batu 3 Shah Alam Komuter stations, Economic Transformation Programme, integrated with a central back-end is scheduled to launch in the middle the first phase of Line 1 (Sungai Buloh system which allows passengers to of 2017. Finally, the fundamental – Semantan) for the Mass Rapid Transit enjoy an uninterrupted journey across issues faced by the taxi industry (MRT) network will be completed by all lines. The current paper ticketing are currently under focus by SPAD, Dec 2016, with full completion by system used by KTM is not able to which has conducted labs to see how July 2017. MRT Line 2, which was be integrated with other lines, thus taxi services can be improved. The approved by the Government in completion of the KTM Automated outcomes of the Taxi Transformation October 2015, will further transform Fare Collection System is important Lab are to be tabled to the Government the public transport network. The to ensure that it will be able to be for approval, with the expectation to KL Monorail capacity expansion is integrated with ICPS. roll out implementation by 2016. slated to add greater capacity to the For better monitoring of public These are exciting times for urban current service by introducing 12 sets transport performance, critical public transport. With large-scale of four-car trains; five of which have areas include the completion of the investments being put in place to been commissioned. Performance Monitoring Hub System encourage more citizens to switch Many issues are on the table to be (PMhS) and Centralised Taxi Support to using public transport, we look resolved in 2016 onwards. Currently System (CTSS) that will serve as a forward to the day when we can realise in progress, the UPT NKRA will platform to monitor all stage buses and our target of 40 percent modal share focus on fully commissioning and taxi services in the GKL/KV area. The for urban public transport, hence completing delayed projects such as Journey Planner App that is currently resulting in less congestion on urban the KL Monorail capacity expansion, ongoing development will better roads and improved mobility and implementation of the 34km-long KL- enhance the passengers’ experience quality of life.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 55 THE NTP – NATIONAL KEY RESULTS AREAS Raising Living Standards of Low-Income Households

DATO’ SRI ALLEVIATING MINISTER OF WOMEN, FAMILY POVERTY PART AND COMMUNITY DEVELOPMENT In transforming Malaysia into a high-income developed nation by 2020, we will not leave the OF INCLUSIVE most vulnerable groups behind, through our efforts that are both socially responsible and targeted PROGRAMME to Malaysians living below the poverty line. Over the last six years, the national poverty level has been steadily dropping; from 3.8 percent in 2009 to 0.6 percent in 2014. This accomplishment is the result of the combined initiatives from both private and public sectors. These efforts should not be underestimate because the reality is that it has not been the easiest road to travel. Some of our lowest- income households live in the most remote parts of Malaysia, requiring the use of waterborne and airborne transport to get to them. Prior to our inclusive NTP work, many Malaysians lived in areas without basic utilities like running water, electricity, and roads. I applaud and respect the dedication of our civil servants, Participants at the 1AZAM Training Centre, Kuching

56 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Prior to our inclusive NTP work, many Malaysians lived in areas without basic utilities like running water, as well as NGO personnel and volunteers who have changed electricity, and roads. this landscape for good. They selflessly risk their lives, making long, dangerous journeys to deliver food, dental and medical services to these locations anyway. The multi-pronged 1AZAM (Akhiri Zaman Miskin) s the nation transitions INSIDE THIS NKRA programme, delivered in tandem towards high income status, policies and initiatives that with NGOs that know the ground A Optimal Resource Allocation provide safety nets for vulnerable better, continues to eradicate 1 Malaysians, particularly low income poverty by addressing the groups, are an imperative. different requirements to do this This NKRA focuses on lending Economic Empowerment sustainably, as we have learnt these truly-needy low-income 2 that there is no ‘one-size-fits- households a helping hand by all’ model. In 2015 alone, over empowering them to become self- Initiating Rural Transformation sustaining. That way, they can lift 193,390 people have benefitted 3 themselves up out from poverty. Our from it, contributing to the total of objective is to reduce a reliance on 85,866 people who have increased direct cash assistance by instead their income by at least RM600. embracing the value of “teaching I commend the implementing them how to fish”. Over the years, ministries, agencies and local there have been many cases of those government offices and their NGO who have made it out of poverty, who in turn reach out and help to mentor and corporate partners, as well as others to do the same. Ultimately, the people themselves who have these are sustainable programmes seized this opportunity to better to help eradicate absolute poverty in their lot in life. Malaysia for good.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 57 THE NTP – NATIONAL KEY RESULTS AREAS Raising Living Standards of Low-Income Households

As a first step, the Implementation is the 1AZAM programme, which is welcomed the participation of non- and Coordination Unit (ICU) designed to be flexible to cater to all governmental organisations (NGOs) established the e-Kasih database the different groups, and hence is and private sector partners to help fund that hosts the details of all low- divided into several focus areas. and support programmes that relieve income households in the country. Winning the fight against poverty poverty. These programmes are partner- This database is the key driver for all is best done in a holistic fashion and driven; the NKRA implementation the other initiatives that aim to raise in collaboration with other parties teams, with the necessary support, the living standards of the registered who are similarly involved. Therefore, are there to set up governance individuals. One of the initiatives the government has enlisted and and reporting frameworks.

Connecting with the bottom 40 1 Optimal Resource Allocation percent, and going down on the ground to understand the many different circumstances that are all categorised under poverty, plays a big role in ensuring optimal resource allocation. Civil servants that go down on the ground to accomplish this have for many years risked their lives in the process. The information they gather is crucial in identifying the needs of these targeted and vulnerable groups. To get to low-income families located in deep, remote areas in Sarawak, for instance, would take a journey through Bario and Pa'tik to reach the destination in two days. Once these families are connected with, meeting their differing needs would include the use of direct cash assistance, provision for equipment or resources. This process has been documented through the e-Kasih database, which houses all the information of low- income households nationwide, reporting that the dynamics of each family or individual are different, and it takes an officer who is on the ground to understand and identify their needs. Nonetheless it is this vital information that is shared that enhances the effectiveness of initiatives that, when implemented, ensure the biggest impact for their participants.

58 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 2 Economic Empowerment

AZAM Tani focuses on agricultural and agro-based activities by providing training, farming equipment, and financial assistance to aspiring farmers or livestock breeders

Meeting the NKRA’s main objectives training, farming equipment, and implementing all the other AZAM means properly equipping low- financial assistance to aspiring channels listed above. income households so that they can farmers or livestock breeders. AZAM The 1AZAM Programme has moved earn a good living while contributing Niaga provides support for potential to the Beyond 1AZAM programme, as productively to the economy. To entrepreneurs with business coaching its aspiration is to have all 1AZAM implement the initiatives effectively, and micro-lending. AZAM Kerja helps participants enter into a sustainable the appropriate initiatives must be with job matching and placement, as programme via microfinancing properly channelled to their intended well as teaching applicants how to opportunities. 1AZAM participants recipients. Since its inception in 2011, better present themselves to appeal who have received material assistance e-Kasih has connected its beneficiaries to hiring managers for their desired and training, and have successfully with the right 1AZAM focus areas. Aside jobs. AZAM Khidmat gives training moved out of poverty into the lower- from government agency programmes, for the services industry and the middle-income group, will be further 1AZAM also features projects from self-employed, as well as microloans assisted through this programme. In NGOs. Once 1AZAM recipients have and equipment. AZAM Bandar this phase, material aid is no longer found their feet, the Beyond 1AZAM concentrates on activities which needed. However, participants are still programme kicks in for selected benefit the urban poor. given all the support they need in terms high-achieving individuals to further In East Malaysia, 1AZAM Sabah of training, mentorship, coaching and enhance their capabilities and increase and 1AZAM Sarawak are separately other such help to ensure they obtain a their earning potential. operated by their respective minimum 50 percent increase in their AZAM Tani focuses on agricultural autonomous state governments. income from existing 1AZAM projects and agro-based activities by providing They are the ones responsible for for three months or more.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 59 THE NTP – NATIONAL KEY RESULTS AREAS Raising Living Standards of Low-Income Households

SUSTAINABLE LIVELIHOOD THROUGH 1AZAM

AZAM initiatives have impacted his farming, as well as start farming Kelantan, who joined the initiative in the lives of many low-income kelulut/stingless bees for their honey. 2012. The 64-year-old Tiu was similarly families, especially those in He intends to expand his agricultural assisted with agricultural equipment 1less-developed areas. For example, activities by renting abandoned/ and inputs, which he put to full use 31-year-old (as of 2015) Chik Azmily unused plots of land. He also plans on a 1-acre piece of land. In addition, Che Abdul Aziz, who hails from to sell the produce on his own in Tiu has gone into kelulut farming as Kampung Beoh Gunong in Kelantan, nearby farmers’ markets, rather than well. This has enabled him to double was earning RM500 a month as a daily go through the wholesalers. his monthly income from RM500 to labourer hired to look after the home 1AZAM Tani has also benefitted Tiu RM1,000, despite the fact that the crops gardens of others, as well as harvest Hock Tong of Kg. Pasir Parit, also in are not harvested round-the-year. oil palm fruits. Through the 1AZAM Tani initiative as implemented by the Malaysian Agricultural Research and Development Institute (MARDI), which Che Azmily participated in from 2013, he was provided agricultural equipment and inputs (seeds, fertiliser and herbicides/ insecticides). Meanwhile, his wife was provided sewing machines to help her with her tailoring work. This enabled him to plant short-term seasonal cash crops such as cucumbers, tubers, leafy vegetables and watermelons, which he then sells to wholesalers. Meanwhile, his wife has been awarded a contract to tailor batik shirts from the owner of a batik factory. Che Azmily had managed to increase his monthly income by an astounding 1,000 percent (or 10 times) to RM5,000, solidly boosting his family out of hardcore poverty. 1AZAM Tani has allowed him to start constructing a house using materials Chik Azmily (top) and Tiu Hock Tong (bottom) experience an increase in monthly incomes with he bought with the proceeds from assistance from 1AZAM Tani

60 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Tim has been a participant in the 1AZAM Niaga channel since 2014, before which, he was using his house as an ad hoc sundry shop. Following his participation, he was able to obtain a proper business licence and expand his retail space. This has in turn enabled him to rearrange his products in a more ordered fashion.

LIH NKRA initiatives, particularly the 1AZAM programmes, are especially appreciated in East Malaysia, where they are run by the autonomous state Governments of Sabah and Sarawak. The proportion of low-income households is higher in various groups there, and they benefit more from these initiatives. One such beneficiary is Sidi Tuba from Sungai Liuk, Mukah in Sarawak. Prior to 2010, when he joined the 1AZAM Tani channel, Sidi’s total household income was RM450. Under the Department of Agriculture Sarawak (Jabatan Pertanian Sarawak), Sidi started planting corn and other vegetables on his 3.6-hectare plot of land. The harvest is then sold at the Mukah market and all around the village. His income has increased by a staggering twenty-fold to over RM9,000 a month, well over the median income for all Malaysians, an achievement that he and his family can smile proudly about. The Department has also assisted Tim Kawen of Kampung Rejoi in Siburan, Sarawak. Tim has been a participant in the 1AZAM Niaga channel since 2014, before which, he was using his house as turn enabled him to rearrange his provide his family a more comfortable an ad hoc sundry shop. Following products in a more ordered fashion. home, and with his sundry shop his participation, he was able to He has since more than quadrupled operations, his fellow villagers are obtain a proper business licence and his income from RM600 to RM2,800 able to purchase their daily supplies expand his retail space. This has in a month. He has also been able to without going down to town.

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together to eradicate poverty at the 3 Initiating Rural Transformation lowest level where the NGO operates has seen some good results. From 2014 to end-2015, the Government, In 2013, as part of GTP 2.0, 1AZAM Some low-income households, NGOs and private sector companies expanded to include other vulnerable especially those in remote areas or have successfully collaborated groups. 1AZAM has also partnered with from communities facing high levels on 80 projects. NGOs and the private sector to expand of poverty, benefit from non-1AZAM Since 2014, 123 community or its range and funding of initiatives, thus initiatives such as the food basket group-based programmes have creating enabling environments for programme that enables households been implemented to benefit those other programmes. The 1AZAM projects to save on basic commodities. Other not registered in e-Kasih. These are in collaboration with NGOs and the forms of direct cash assistance, as groups or communities who live corporate sector have consistently well as basic access to healthcare and in unique areas that require more achieved their year-on-year KPIs, and dental service, improved connectivity immediate and robust forms of the willingness of NGOs to collaborate and access to basic utilities, and programmes focused on their specific with government agencies in delivering childcare services for their children, demographics. These programmes the 1AZAM programme have been are part of the effort to provide them have received good cooperation in most beneficial. NGOs have come to with economic enablers. rural areas as compared to urban realise the value and the impact of the NGO listings consist of areas due to their nature of being programme to their recipients even beneficiary groups so that resources relevant to the targeted groups. though the selection is very strict by can be allocated efficiently when the implementing agencies. delivering this assistance. Working

(Left) Build capacity through training - sewing skills to generate income (Right) KPWKM’s visit to Tasputra, a centre for handicapped children

62 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

hile the overall out to the bottom 40 percent (B40) Meanwhile, existing 1AZAM incidence of poverty households in Malaysia. recipients will benefit from being able W has dropped, the Orang The NKRA will collaborate with to register themselves under a local Asli in Peninsular Malaysia and Bank Negara’s Credit Counselling crowdsourcing portal (orang.e.com) set Bumiputeras in Sabah and Sarawak and Debt Management Agency up by the Ministry of Urban Wellbeing, still face relatively high poverty rates, (Agensi Kaunseling dan Pengurusan Housing and Local Government especially in rural and remote areas. Kredit) in order to introduce financial (KPKT). The free-for-life portal Given the limited budget for 2016, the debt management services to B40 increases the visibility and supply of NKRA will therefore move forward households, which tend to take out Malaysian talent, and provides 1AZAM by aligning itself with all poverty personal loans to support their daily recipients to expand into new markets eradication programmes under the expenses. As at 2014, households for their products. 11th Malaysia Plan, which focuses on earning RM3,000 a month and below By complementing the Poverty further improving the people economy had an indebtedness level of seven Line Income (PLI) measurement with while ensuring the capital economy times their annual household income. the Multidimensional Poverty Index continues to flourish. The adoption of ICT will be (MPI), additional insights into the In this instance, the people economy accelerated, increasing access to true nature of poverty in the country is rakyat-oriented, covering the top information in various fields, and will be gained, and the NKRA can priorities and interests of the rakyat, such expanding business and income- better streamline the support that as the rising cost of living, household earning opportunities. The eRezeki B40 households get, thus enhancing incomes, education and employment programme, launched in June 2015, the delivery of the appropriate opportunities, entrepreneurship, aimed to raise the B40 households’ programmes to the appropriate as well as an adequate social safety average income. This programme people. Amongst other things, this net. NKRA initiatives in line with the will be further expanded by providing means that the current collaboration people economy include provision of basic ICT training before matching with the private sector will continue, financial debt management services participants with relevant jobs such by tapping on CSR programmes to for the poor, accelerating the adoption as data entry, price monitoring and reach out to eKasih participants and of Information and Communications document translation. These micro- ensuring that assistance is given to the Technology (ICT), and enhancing tasks can be accomplished from home right target groups. programme delivery systems that reach or the Pusat eRezeki centres.

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DATO’ SERI MINISTER OF EDUCATION

In a world that is becoming smaller through greater accessibility and connectivity, we have to ensure the Malaysian education system provides our children with the foundation to be globally competitive and prepared for the challenges of the future. To this end, we have focused on initiatives that raise the quality RAISING of our educational system and have over the last six years moved towards putting a performance- QUALITY oriented culture of learning and academia in place. Our National Transformation THROUGH Programme (NTP) initiatives are a subset of the Malaysia Education PERFORMANCE- Blueprint (MEB), which provides guidelines on how to improve Malaysia’s educational system in DRIVEN support of our nation’s goals. Our objective here is to lay a robust foundation to deliver quality CULTURE education to our children and ensure the sustainability of its delivery over time.

64 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Delivering quality education to students requires the four parties of principals, teachers, In the long run, our objective is to have a holistic and flexible parents and students to education system that takes into consideration every student’s work together and make specific needs. This will ensure that the nation is equipped their schools great. with a high-quality skilled and productive workforce, able to contribute immensely to the country economically, scientifically and culturally. he Assuring Quality Education National Key Results Area INSIDE THIS NKRA (EDU NKRA) has focused on T Access to Early Education improving the quality of education 1 delivered to students by our educational system. Ad hoc measures are neither enough to fix systemic issues, nor set Raising the Bar to Meet the proper foundations for sustainable 2 Learning Standards improvements in student learning environments. Hence, thorough Raising the Prestige of planning and multi-dimensional 3 a Humble Profession implementation on all fronts was required. This resulted in initiatives that sought to instil a performance- driven academic culture. They included raise school standards and provide programmes that were designed to effective learning environments, and ensure students are provided with enhance the prestige of teachers, as the proper head start with access to well as support them, so that teaching quality education at an early age, becomes a profession of choice.

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But education is not solely focused on employability of the graduates. Malaysian youth have to be equipped to become productive and contributing members of the society to which they belong. This is why many non- governmental organisations (NGOs) and the private sector see education as a social good that everyone can contribute to. Some of the initiatives by the NGOs include the Malaysia Collective Impact Initiative and the introduction of crowdfunding platforms such as give.my and 100% Project. Ensuring that everybody has equal opportunities to become successful is the reason why the NKRA also has a

A solid foundation provides the impetus to develop skills for future employability special focus on students with special education needs. To do this, a number of challenges Almost all of the lowest-performing These and other initiatives will had to be tackled. All students in both schools in the country have leveraged continue into 2016, which is the start urban and rural areas, must have equal themselves upward. of Wave 2 of the MEB. The theme opportunities and equitable access to However, there remain challenges for Wave 2 is “Accelerate system high-quality early education. School to be addressed. A high-income improvement”, which will build on principals and teachers must be developed nation needs a steady supply Wave 1 programmes and take them upskilled and re-motivated to provide of skilled labour, and an educated to the next level. Wave 2 will see the a consistent delivery of education that workforce, so that local recruits can rolling out of new school curricula, will be of high standards. The teaching fill the country’s needs. Employers further improvement in English ecosystem had to be enhanced; high- and Human Resources recruiters proficiency amongst Malaysian performing graduates have to see have said that Malaysian graduates students, strengthening the teaching teaching as an attractive career option. don’t always have the skillsets that and learning of Science, Technology, At the same time, students from pre- employers look for. Proficiency Engineering and Mathematics (STEM) school all the way to secondary in the English language, still the subjects, and other structural and higher education must have world’s lingua franca and language changes to improve the delivery similar levels of educational support, of science, and the development of of education. regardless of which schools they attend. critical thinking and problem-solving Building future generations of Several notable achievements skills, are areas which the NKRA aims Malaysians with a performance- have been made. More children have to prioritise. The introduction of the driven and outcome-based culture will access to pre-school education and Dual Language Programme (DLP) and require a holistic education system that childcare, and financial assistance has Highly Immersive Programme (HIP), to ranks amongst the top third globally, been given to those who cannot afford be implemented in 2016, has proved comprehensively covers all levels it. The benchmarks set by our High that the Government is serious in and types of education, and remains Performing Schools (HPS) have made tackling the shortcomings in English accessible to all regardless of age, them exemplars for others to follow. proficiency amongst our students. gender or economic status.

66 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 those from low-income households. 1 Access to Early Education Meanwhile, much work has been done to address the lack of pre-schools in the country. 417 new private pre- Pre-school initiatives, which aim to pre-school operators to help them open schools have opened nationwide in improve access to good quality early up new centres. It has also enforced and 2015, of which 252 new private pre- education for all Malaysians, have enhanced the regulatory framework schools received launching grants to seen an increase in enrolments into governing pre-schools, as well as help them on their way. In total, 555 pre-schools, with more geographical monitor students' progress as they public and private pre-schools have locations benefitting from them. Early move through to primary education. been opened to improve access to pre- childhood education is essential to It is heartening to note that pre- school education. children’s academic development school enrolments have increased But high accessibility alone is not in their later years. The EDU NKRA to 84.63 percent in 2015 (from 67 enough. The education the children follows global best practices guidelines percent in 2009). 32,772 students have receive must be of good quality as in having this as a focus area. Hence, received fee assistance to encourage well. An enhanced Standard Kualiti it has focused on providing financial continued access to education at Prasekolah Kebangsaan (National assistance to students, and also to the the earliest ages, especially for Pre-school Quality Standard) has been created in the form of an online instrument to assess the quality of pre- schools. Subsequently, pre-schools that are below-par can be provided support for continual improvement. There is also a national benchmarking framework put in place. Once the students move into primary education, the revamped Literacy and Numeracy Screening programme, LINUS 2.0, aims to ensure 100 percent of Primary Three students have basic mastery in Bahasa Malaysia (BM) and English literacy. LINUS 2.0 also targets 100 percent achievement in numeracy by that age as well. At the moment, 94.1 percent of Primary Three students are English- literate, 98.6 percent are BM-literate and 99.1 percent are numerate. This goes to show that LINUS 2.0 has made great strides to ensure that by the end of Primary Three, a higher percentage of students are literate and numerate. More efforts will be undertaken by the Ministry of Education (MOE) to ensure that all students are literate by the end Lifelong learning begins with the proper training at the very foundational stages of Primary Three.

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(HPS) programme. A total of 132 HPS 2 Raising the Bar to Meet have been identified to date. The programme aims to elevate the quality Learning Standards of Malaysia’s best schools. These schools are expected to perform well at the international level. HPS push the In increasing and converging the compared to those in lower-income boundaries of student excellence by standards and quality of schools across communities. Hence, programmes creating an environment that facilitates the nation, previously low-standard that encouraged and supported learning. The programme not only schools have been challenged to good schools to become better, as looks at academic excellence, but at become more performance-driven. well as seeing to the improvement of the school culture and attitudes of both In the past, student outcomes have underperforming ones, were put in students and teachers. By doing so, it varied to some degree between place. This is a part of the effort to raises the bar for other schools in the states, districts, even individual ensure more equal opportunities and system. HPS-identified schools receive schools. Parents in more affluent improve student outcomes. various incentives to help maintain communities could see to it that their This was accomplished firstly their standing. In return, they have children attended better schools, as through the High Performing Schools been working on bringing surrounding schools upwards in ranking, through teacher coaching and networking. Meanwhile, the School Improvement Programme (SIP) supports all schools, especially the lower-performing ones. One of the key thrusts of the SIP is to raise all schools out of the lowest bands (Bands 6 and 7), while having more schools in Bands 1 and 2. Remarkable progress has been made on both ends. The percentage of schools in Bands 6 and 7 has dropped from 6.98 percent in 2010 to 0.95 percent (95 out of 10,010 schools nationwide). 36.8 percent of all schools are now in Bands 1 and 2, up from 19.4 percent in 2010 and 31 percent from 2014. The SIP allows MOE to focus efforts and resources towards underperforming schools. These schools can then start closing their performance gap with their higher-performing counterparts. With the SIP in place, schools now are more aware of their performance, making them more driven to climb up the ranks. The complete and ongoing turnaround and transformation of SK Lemoi is a SIP success story that merits mention. A rural school in the deep jungles of Pahang, SK Lemoi A conducive learning environment plays a key role in determining student performance caters exclusively to the indigenous

68 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Orang Asli. It was in the lowest school band in 2010 and only 8 percent of the students passed their UPSR. With the support of MOE, private foundations DEVELOPING SKILLS FOR and the community, coupled with strong school leadership, the SIP was BRIGHTER PROSPECTS able to work a minor miracle there. In a short three years, the school climbed up three bands to Band 4 and achieved a 92 percent pass rate he Employment Transition job training. Once they have turned 16 from an abysmal 0 percent in the Programme, part of the or older, the school also discusses the UPSR English subject. The school T Special Education Needs (SEN) students’ prospects with their parents, also achieved an overall 60 percent initiative, has experienced some success who may be able to connect the school pass rate in the UPSR examinations. in the short time it has been operating. with other business owners. At the same time, schools with Sekolah Menengah Kebangsaan (SMK) One of the beneficiaries of this Special Education Needs (SEN) students Jalan Reko, one of the schools taking programme is Ahmad Hudzeir and facilities are seeing changes part in the programme, has had a SEN Mohamadiah. An alumnus of SMK to how their needs are being met. class running since 1995, and in terms Jalan Reko, Ahmad is a barista who also Several pilot programmes under the of physical accessibility, has installed prepares food at Aneka Selera Restaurant SEN segment have been successfully ramps and ensured that SEN classrooms at Bandar Baru Bangi. The school had implemented under the Public- are on the ground floor. SEN students here arranged for him to undergo training at Private Partnership (PPP) model include those with both physical as well Kagumas Culinary Arts College in culinary along with NGO support. The SEN as learning disabilities, and the school and hospitality skills. Employment Transition Programme assesses their specific requirements before His employer, restaurant owner Zul saw its implementation in five schools putting them in the appropriate levels. Azwan, commends Ahmad as one of his across East and West Malaysia. Out of The school’s principal, Wan Roslan top employees, despite his shyness and 129 students who participated in the Wan Yaakob, believes that SEN students lack of social and communication skills. industrial attachment component, 56 of should be capable of becoming self- He makes up for it with his skillfulness them (43.4 percent) went on to full-time sufficient and living independently in food presentation. Zul has been hiring employment. In Sabah, the programme of their parents. In order to provide workers with disabilities for 11 years, and was carried out as a consortium with these students with the opportunities believes that with prior training before 17 other schools in collaboration to do so, SMK Jalan Reko works with entering the workforce, and a great deal of with Kumpulan BTC, a local catering the Kagumas Culinary Arts College, patience when teaching them the ropes, company. The programme is now Tesco Kajang and various restaurants they can become dedicated, reliable and undergoing the process for nationwide in Bangi to provide skills and on-the- competent employees. implementation. Another programme, the Buddy Club initiative, sees SEN students integrating with their mainstream students from pre-school all the way through to college. The pilot programme debuted with the use of football and tandem cycling as the unifying platforms, and has succeeded in bringing students from both streams together. In 2015, 800 students from 18 schools were involved in the Buddy Club initiative. The programme will expand to another 30 schools in 2016.

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GROUNDING WORLD CLASS EDUCATION ASPIRATIONS WITH PERFORMANCE

he EDU NKRA’s efforts to foster schools of international quality T has been paying off over time. In 2012, SABK Imtiaz Yayasan Besut (Imtiaz) became part of Cohort Two of the High Performing Schools (HPS) initiative. Since then, this Terengganu-based religious school has become one of the best schools in the state – and indeed, the country. The brainchild of Dato’ Sri (now Minister of Higher Education), Imtiaz started out as a privately-funded institution, with an initial intake of seven students in 1999. At present, it has over 2,000 students across seven campuses religious grounding, the students socioeconomic backgrounds, although throughout Terengganu. Imtiaz were encouraged to be holistic in their poor students are given priority. derives from the word for studies; to take up the soft skills that Abdul Wahab is very thankful for ‘excellence’; hence its vision of being the country needs, to be multi-lingual, the MOE’s initiatives aimed at improving a best-in-class Islamic school. and to be multidisciplinary, as well both students and school. “Every new According to its principal, Haji as to build their character. “We also development or initiative that MOE Abdul Wahab bin Mohd. Arshad, Imtiaz took on the MOE's Virtual Learning comes up with, I try to take up and adapt has excelled in many international Environment initiative (1BestariNet) for use in the school. For example, we competitions, including becoming and made it part of the school ethos,” use the School Improvement Partners gold and silver medallists at the Abdul Wahab explained. (SIP+), which we find to be quite Kaohsiung International Invention Imtiaz also inculcated higher-order useful, and School Improvement and Design EXPO 2015. It has also thinking skills as well as problem- Specialist Coaches (SISC+) as well. been collaborating with Cambridge solving skills in the students, using We’re currently implementing the DLP, University since 2013, enabling its current world affairs as a teaching which is designed to improve student students to sit for the International aid. “We want our students to have proficiency in English.” General Certificate of Secondary encyclopaedic knowledge as well, so “I’m glad to have the opportunity Education (IGCSE). For both the Form that they can compete at a global level.” to introduce the school to a wider Three PT3 assessment and the SPM, it Having become a government audience, and we hope to make this the was the best-scoring school in the state. school in 2007, Imtiaz is open to best school in Malaysia. We’re planning Imtiaz blended studies from students across Malaysia, with only 60 to further develop the Imtiaz brand multiple syllabi, and was the first (and percent enrolment from Terengganu, to into higher education; hopefully, in thus far only) smart religious school increase students’ exposure to the rest 2020, we will have Imtiaz colleges and in Malaysia. Aside from a thorough of the nation. Students come from all universities as well.”

70 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 expect to be fast-tracked and achieve their 3 Raising the Prestige full potential sooner. Underperforming ones will be given remedial training, of a Humble Profession coaching and mentoring. If they do not improve, they will be redeployed into non-teaching roles that may suit Both school leaders and teachers continuous professional development them better. Educators can also freely have access to new performance- (CPD) opportunities throughout a career move between various career choices; linked career and remuneration that is both exciting and fulfilling. In whether as teacher, leader or subject packages, in an effort to ensure that 2015, 69,530 SPM leavers applied matter specialist. teaching is viewed as a high-status, to join Teacher Training Institutes If English proficiency is important well-paying profession. This is in line (Institut Pendidikan Guru), of which for students, it is even more important with UNESCO’s statement¹ that quality 2,924 were accepted after the screening for their English teachers. The teachers are the most important factor and interview processes. The selected Professional Upskilling for English in student learning. Ensuring that the candidates were from the top 30 percent Language Teachers (ProELT) is a large- teaching profession attracts excellent of the SPM leavers. scale teacher proficiency improvement and high-quality candidates is key This starts with a look at the programme. By the end of 2015, three towards improved educational levels, remuneration and compensation English teacher cohorts (a total of and therefore, boosting productivity packages for both school teachers and 15,502) have attended this programme. and prosperity. leaders. Principals and head teachers For Cohort Two, 87 percent of B1 Despite its importance in shaping are covered under the New Deals (Intermediate) teachers have improved at and nurturing generations of students initiative. New Deals reward high- least to B2, while 43 percent of B2 (Upper who will become future leaders and the performing (and improving) school Intermediate) teachers have improved workforce of the nation, the teaching leaders with financial and career to at least C1. With the upskilling of profession faces unfair perception incentives. In addition, a revised career the English teachers’ proficiency in the challenges. This is a worldwide package for principals has been created. language, the teaching and learning of phenomenon; a 2006 study by the Processes have also been put in place English in the classroom are expected (NZ) MoE² pointed out to streamline succession planning for to improve significantly. that teachers in NZ were not respected school leaders approaching retirement. as a group, nor seen as high-status Teachers can also look forward professionals, as did a 2014 poll³ in the to greater attention on their career By 2025, teaching USA, which had respondents report a development. Previously, five different is envisioned to become decline in trust and respect between performance evaluations were in use. In a profession of choice, teachers and students. The perception 2015, a single Unified Instrument (UI) to gap must be addressed to ensure that evaluate both teachers and principals open only to the top teachers are motivated to deliver quality were rolled out (as part of a pre- 30 percent of school education to Malaysian students. implementation testing process) among The EDU NKRA, therefore, is 410,000 teachers. Implementation leavers. Teachers focused on turning around this system shortcomings were identified and will be provided with and mindset. This is to be done by remedied in preparation for the full continuous professional supporting teachers and focusing on nationwide roll-out in 2016. their core skills. The MEB has even loftier In 2016, the UI will be used to assess development (CPD) goals. By 2025, teaching is envisioned teachers’ performance in place of the opportunities throughout to become a profession of choice, open Laporan Penilaian Prestasi Tahunan only to the top 30 percent of school (Annual Performance Assessment a career that is both leavers. Teachers will be provided with Report). High-performing teachers can exciting and fulfilling.

¹ http://unesdoc.unesco.org/images/0023/002347/234755E.pdf ² http://www.educationcounts.govt.nz/publications/ECE/2535/5971 ³ http://www.theatlantic.com/education/archive/2014/01/poll-teachers-dont-get-no-respect/283318/

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TEACHERS Fadzli Mohd Saleh BM Teacher, Sekolah Kebangsaan PLAY A Bandar Utama Damansara (4) CRITICAL ROLE

ikgu Fadzli Mohd Saleh, Year Fadzli also feels that today’s that they become proper members Six Coordinator and BM teacher students still respect teachers, if of society, and not just feeding them C at Sekolah Kebangsaan Bandar somewhat differently. “They think facts. Parents and the community at Utama Damansara (4), has always felt of teachers more as their peers, large should realise this.” that teaching was his vocation. “I was rather than as their elders. This is Cikgu Zakaria bin Muhammad, the one educating and taking care of something each teacher has to be headmaster of the school, agrees. my younger siblings, because both my clever in handling. Parents also play “Teachers play a critical role and parents were working,” he explains. an important role in determining carry an amazing responsibility; our Even as a younger teacher in an how their children treat teachers,” efforts and achievements should be urban area, Fadzli was still regarded he elaborates. appreciated by the society. This is why highly. Teachers were assumed to be Furthermore, Fadzli believes that those who want to become teachers all-capable, so he was called in as a teaching is becoming a profession of must have a true vocation or calling. community exemplar whenever there choice. “From my experience in this Without it, they will find it difficult to were larger-scale events happening. school, many if not most teachers enter cope with the challenges we face on a “I thought that as I get older, and the profession because they wanted to. daily basis.” move to different places, that would Some are using it as a stepping-stone But it is all worth it in the end. “As change – but even 20 years later, the towards other careers in the profession a Muslim, the teaching profession community’s respect for me has not (such as becoming a lecturer or a is an extremely honourable one. dimmed; still I’m called ‘Teacher’ subject-matter expert); others want Worldly riches cannot compare to the instead of by name.” to continue as school teachers.” gratitude, blessings and well-wishes While appreciation for the teaching However, there is a need to of my students because I have taught profession may have declined, Fadzli make people perceive being a school them well,” Fadzli notes. believes it depends on the individual teacher as seemingly reputable as Fadzli appreciates the MOE’s teachers and how they play their role private-sector jobs such as becoming initiatives to develop more highly- in the community. “If the teacher can a doctor or an architect. “More and skilled teachers and increase the fulfil the high expectations that the more, teachers are being called upon appeal of the profession. “These community places on him or her, then to be educators as well. This also initiatives – increasing the various respect will be accorded.” entails disciplining the students, so District Education Offices’ (Pejabat

72 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Pendidikan Daerah, PPD) autonomy, achievements of their students, and the SISC+ programme, CPD and so forth can recall many occasions where – are extremely beneficial for teachers. their students call out to them in the Of course, we have to avail ourselves of marketplace or other public areas. all these opportunities to improve our “The percentage of students who own careers.” do this may not be very high, but Zakaria is amongst the many having just one who remembers and quality school headmasters who appreciates what we did is enough for are in line to benefit under the New us because we have impacted the lives Deals initiative, which provides high- of our students,” Zakaria says. calibre school leaders and teachers with various incentives. He notes that such leaders usually demonstrate their capabilities through the high performance of the schools under their care, further incentivising principals and headmasters like him to improve Teachers play a critical their schools' performance, which is also good for the schools. role and carry an amazing “This adds to the motivation of the schools to improve themselves. responsibility; our efforts This school, for instance, has shown continuous improvement in the UPSR and achievements should be results for three years running, and we’re confident we will reach HPS appreciated by the society status in the next few years to come.” Both Cikgu Fadzli and Headmaster Cikgu Zakaria take pride in the

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BUILDING TALENT CAPACITY WITH GREATER LANGUAGE PROFICIENCY

oth High Immersion to support it through the creation of resource readiness in terms of teaching Porgramme (HIP) and Dual events, activities, English programmes, capacity and capability to teach B Language Programme (DLP) teaching and learning; the students Mathematics and Science in English, are optional programmes under the to take charge of their own personal (3) parental agreement (parents have to Memartabatkan Bahasa Malaysia & development and learning; and also the sign a consent form should they want Memperkukuh Bahasa Inggeris (Uphold parents and the community to provide their children to learn Mathematics Bahasa Malaysia & Strengthen the additional support such as financial aid, and Science in English) and finally, English Language) policy, which is corporate social responsibility (CSR) (4) for the school to meet or exceed the meant to improve students’ English activity implementation and expertise. national average pass rate for BM. For proficiency. These programmes are HIP will be rolled out in phases the first DLP cohort in 2016, schools are initiatives introduced as a result of to all primary and secondary schools benchmarked against the 2014 UPSR BM an English Lab held by MOE, and are in Malaysia by 2018. It will begin with Comprehension and Writing national optional for schools. approximately 94 schools in February average of 1.85 for primary schools or HIP aims to codify best practices 2016 and expand to a total of 1,200 the 2014 SPM BM national average of of school leaders and scale them up schools by end 2016. 4.55 for secondary schools. to all schools via sharing, learning Meanwhile, there will be Once a school qualifies as a DLP and support. Through HIP, schools approximately 300 schools piloting school, it must have a minimum of 15 will be provided a toolkit including the DLP in 2016. DLP will see Science, students to have a class implementing a self-assessment tool and a best Technology, Engineering and the teaching and learning of practices guidebook on how to improve Mathematics (STEM) subjects in these Mathematics and Science in English. the English proficiency of students schools being taught in English. DLP This must be verified with the written through increased language immersion will begin for Primary One, Primary and signed consent of parents. This and usage. HIP aims to create a peer Four, and Form One, beginning with flexible approach will empower schools, learning and sharing environment Mathematics and Science subjects. district and state education offices within schools, between schools and These qualifying schools were to customise the needs of students with the community. selected on the basis of four different according to the wishes of parents. This involves the principal in criteria: (1) the readiness of the school With DLP, a bottom-up approach is leading the initiative; the teachers leadership to implement DLP, (2) introduced with the element of “choice”

74 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 for schools and parents, in accordance chairman Datin Noor Azimah Abdul Rasidah Kasim, Group Chief Human with Shift Nine of the MEB. Rahim points out. Resource Officer at Affin Hwang Capital, There is no need for all schools It has been acknowledged shares the same opinion. “In my 25 years to participate in DLP, as DLP is an that English proficiency is critical, of experience in HR, I’ve conducted optional programme to prepare and especially in the 21st Century and in many job interviews with graduates ready ALL Malaysian school children the face of both the Asean Economic who, on paper, were incredibly bright. to have the ability to master a second or Community (AEC) and the Trans- CGPAs of 4.0, made the Dean’s List, third language besides BM. For schools Pacific Partnership Agreement (TPPA), you name it – but when it came to which did not meet the criteria set further exposing Malaysia into the analysing case studies or even just out by MOE, schools can write to the larger regional and global markets. answering standard questions during Ministry for it to make preparations Human Resource (HR) specialists the interview, in English especially, to be evaluated as a DLP school in in particular are clear about the need they were unable to give voice the following year. However, these for fresh graduates to be fluent in to their ideas.” potential schools can begin with the English. Anthony Raja Devadoss, Eventually, it is hoped that both implementation of HIP first. Asia Pacific Vice President of Kelly the HIP and the DLP will ensure that By using English as an alternative Outsourcing & Consulting, points students become fluently bilingual medium of instruction for these out that employers are looking for in both Bahasa Malaysia (BM) and specific subjects, and by increasing language proficiency skills. English. The Minister of Higher the amount of extracurricular time “The business language today Education, Dato’ Seri Idris bin Jusoh, spent conversing in English, it is hoped is still English,” he explains. “Are is confident of Malaysians’ capabilities that students are exposed to English for you able to demonstrate your skills along those lines. more than 20 percent of the time while – something as simple as delivering “I have met a number of people from at school. "International research an elevator pitch? Probably only 30 Timor Leste () who spoke five indicates that students cannot achieve percent of all workers can do that. If languages. I don’t see why Malaysians operational proficiency through the everyone has the same skillsets, all can’t do something similar. So I believe 15-20 percent English hours that are things being equal, the one who can there is no problem: it is just a question currently offered in classrooms," articulate best has the highest chance of making ourselves used to the idea Parent Action Group for Education of being hired.” of being multi-lingual.”

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 75 THE NTP – NATIONAL KEY RESULTS AREAS Assuring Quality Education

MOVING FORWARD

any of the forthcoming an optimal educational strategy highly proficient in English will initiatives under the EDU that works to everybody’s best find it easier to find employment, M NKRA are positioned interests. Also on the agenda are the communicate with international to implement the MEB Wave Two’s revised curricula for primary and business partners better and have policies spanning the years from secondary education in 2017, as well greater access to knowledge and 2016 to 2020, which are designed to as revamping student assessments academic resources. Malaysia will carry out structural changes aimed at to emphasise Higher Order Thinking also benefit; it will be easier to accelerating the pace of change in the Skills (HOTS) such as critical thinking conduct business and more foreign education system. and problem solving. investments will likely be the result. The EDU NKRA will intensify Enhanced English proficiency is At the same time, MOE will work to its focus on increasing English a top priority for the government, ensure that new teachers exit training proficiency throughout Malaysia. It as English remains the global with the minimum standard required will also work to further empower business language, as well as the for English proficiency and that current school leaders, teachers, parents language of the scientific community teachers undergo training to improve and students alike in formulating internationally. Students who are their current standing.

76 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 accelerated learning pathways will These initiatives also be explored to allow high- performing students to complete their are examples of how schooling faster. In overhauling the curricula for delivering quality both primary and secondary schools, more emphasis will be given to the education to students STEM-type subjects. In particular, requires the four the provision of ICT infrastructure will be critical in providing students parties of principals, with first-hand experience of an always-connected world, as well as teachers, parents to empower the delivery of online and students to work educational sessions and classes. Teachers and educators will also together and make their be provided the necessary training in order to familiarise and immerse schools great. 2016 will themselves in the digital age as well. therefore see greater Indeed, the integration of ICT into the schools’ pedagogical and decentralisation of instructional methods is essential in ensuring that students are able to decision-making pick up HOTS, as questions requiring and empowerment the development of such skills will be increased progressively in the of schools and national assessments. These initiatives are examples parents, extending of how delivering quality education to students requires the four parties from work already of principals, teachers, parents and carried out in 2015. students to work together and make The revision of the primary school their schools great. 2016 will therefore curriculum, and the introduction see greater decentralisation of of a new secondary curriculum, decision-making and empowerment are to prepare students with the of schools and parents, extending knowledge, skills and values needed from work already carried out in in the global economy of the future. 2015. MOE and PADU, together with Rolling out in 2017, these new and PEMANDU, will continue to monitor revised curricula will have non- the education system closely to priority content removed, while solve problems, as well as uncover skills and competencies identified new ways and means to continue as critical for success will be fully enhancing it, in alignment with Wave embedded in it. Aside from allowing Two of the MEB. the schools some flexibility in terms of timetables (as long as the learning and content outcomes are achieved),

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 77 THE NTP – NATIONAL KEY RESULTS AREAS Reducing Crime

DATO’ SERI DR. AHMAD ZAHID HAMIDI DEPUTY PRIME MINISTER OF MALAYSIA AND FIGHTING MINISTER OF HOME AFFAIRS

CRIME FOR While Malaysia’s Index Crime has been consistently trending downward since the beginning of A SAFER our NKRA initiatives in 2010, the larger picture concerns the right of every Malaysian to be safe and to MALAYSIA feel safe, whether he is in his own home or walking along the streets of his neighbourhood. With a focus on ensuring the former, we also sought to strengthen the latter by introducing the Perception of Crime Indicator (PCI) in partnership with Universiti Sains Malaysia (USM) in 2015. The PCI would measure how safe Malaysians feel today and to understand the factors that drives a person’s fear of crime. The results reminded us that efforts in communicating and building trust with the rakyat must continue in tandem with other initiatives in reducing overall crime today. We are determined to continue the initiatives that have contributed to the overall decrease in Index Crime since 2009, whilst also introducing the Modern Policing initiative to transform (PDRM) via four enablers - Service, Technology,

78 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Empowerment and Process (STEP) - in our aspirations to become a Modern Policing world class policing force by 2020. Policing is everyone's shared is critical in our efforts responsibility and the communities know best on how to carry out to transform PDRM into crime prevention activities in their areas. More “Talk to Us” becoming a world-class programmes will be organised with local communities at all policing force by 2020. police stations. We encourage you — Dato’ Asri bin Yusuff to take part actively in making your Deputy Commissioner of Police (DCP) neighbourhood and our nation safe and secure. Ensuring our critical infrastructure’s resilience is vital to oth actual crime rates, as well as the rakyat’s perception INSIDE THIS NKRA Malaysia’s security landscape. We of crime rates, have to be are working with private sector and B Modern Policing Initiative Designed addressed and improved in order to government partners at all levels 1 to Transform PDRM into a World fully achieve a higher standard of Class Police Force by 2020 to develop an effective, holistic, living by 2020. All levels of Malaysian critical infrastructure protection society have to be fully engaged in this Maintaining Vital Police move towards curbing crime, just as 2 Logistics to Improve and resiliency plan that centres Efficiencies on continued investments in the relevant government departments and agencies have also been working business, technology, civil society, PCI: Bridging Perception and coordinating to achieve through 3 and Reality government, and education. various crime reduction initiatives The government will continue since 2010. to invest in the nation's most Initiatives such as the Safe City pressing short- and long-term Programme (built on Crime Prevention security needs, including Through Environmental Design or CPTED principles), the Omnipresence modernising our 209-year-old programme (especially at crime ‘hot police force, strengthening security spots’), and the Community Policing along our borders and allocating Programme have significantly reduced critical resources to address the Index Crime by 45 percent from 2010- threats of terrorism. 2015. Incidents of car theft have also The threats to the public safety further decreased by 10 percent in 2015, and security of Malaysians today following a major 20 percent reduction in 2014 as a result of a focused move to are real. We must be ever-vigilant cripple major car theft syndicates, which and strive towards responsible, broke a 5 year rising trend (2009 - 2013) dedicated and effective crime – proving that it is possible to achieve prevention and policing. what was previously unthinkable.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 79 THE NTP – NATIONAL KEY RESULTS AREAS Reducing Crime

The rakyat’s expectations of under GTP 2.0 that include strategies factors causing the rakyat’s fear of PDRM’s service delivery to keep to become a community-oriented crime is a start towards identifying improving and for law enforcement force, and carrying out intensive potential solutions. PDRM had officers to be more customer- communication efforts to change previously been engaging with the oriented, are increasing. Hence, the rakyat’s disbelief of its safety on public throughout the GTP via the NKRA initiatives have also evolved the streets. International Liaison Unit (ILU), a to meet those expectations; from Today, the rakyat’s perception of special unit that looks after expats purely focusing on crime reduction, its personal safety plays an integral and tourists, and open days at improvement of the criminal justice role in its level of acceptance the local police stations/district system, and increasing the public’s on whether the crime situation police headquarters. These public satisfaction with frontline police has improved or worsened. The engagement initiatives assisted in services in GTP 1.0 between 2010 to formulation of the Perception of providing greater public confidence 2012, to the 2012 to 2015 initiatives Crime Indicator (PCI) to gauge the towards the work PDRM is doing.

2015 saw the introduction of the 1 Modern Policing Initiative Designed Modern Policing initiative, which the aspires to transform PDRM through to Transform PDRM into a World the STEP enablers that will transform PDRM's command-and-control culture Class Police Force by 2020 to a more service-and community- oriented force, and ultimately building greater trust with the rakyat to feel safe under its watch. Phase One of the Modern Policing Initiative involved the Balai Transformation project which was piloted at three police stations – Brickfields (KL), TTDI (KL), Trolak (Perak). These pilot police stations were selected, based on their localities, to represent a good cross-section of the Malaysian community’s demographics, from the typical urban residential area to the typical rural residential area. The pilot project of six months aimed to review existing process flows in these stations, identifying gaps or weaknesses to be improved. As a result, a series of reporting process improvements under the Police Reporting System (PRS) was PDRM's Talk to Us initiative at Jalan Berhala, Brickfield implemented

80 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 PDRM's Talk to Us program will be rolled out nationwide at all police stations in 2016

By eliminating redundancies, community, such as suggestions to From a nine-step reporting this will ensure a speedier and patrol certain areas more often at night, process to a five-step better reporting experience for and other unconventional ones such reporting process crime victims, with the intention of as improving their friendliness and increasing rakyat satisfaction towards approachability. With such a positive Auto feeding personal info at police and boosting productivity outcome, the “Talk to Us” programme the PRS entry page via linkage amongst the police station personnel. will be rolled out nationwide at all to the National Registration To build trust with the public, police stations in 2016. Department (JPN) and in line with the foundations of a Symplifying incident community-oriented Modern Policing, reporting in the PRS the “Talk to Us” pilot programme was also launched at Balai TTDI and Balai Aligning the PRS workflow Brickfields to enhance public service by dispensing with manual satisfaction. These engagements documentation and record- have elicited valuable feedback keeping to online tracking from the public on how the police can improve performance for the Process improvements recorded during Phase 1 of Modern Policing

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 81 THE NTP – NATIONAL KEY RESULTS AREAS Reducing Crime

TRANSFORMING ROYAL MALAYSIAN POLICE INTO A WORLD-CLASS FORCE

hile the incidence of Index S.K.K. Naidu, from the Brickfields entails changing the mindset of the Crimes has dropped by Residents’ Association, agrees that a police from being law enforcers to being W 45 percent since the sense of distance between police and community-and service-oriented; beginning of the GTP in 2010, the the communities they serve makes law equipping the officers with the latest public’s perception of crime rates has enforcement more difficult, pointing in mobile and ICT technologies to help not improved. Between 90 percent out that when both parties work them fight crime more effectively; (based on a Frost & Sullivan study together, they can take advantage of devolving authority to the balais and conducted in 2013) and 96 percent synergistic effects in curbing crime giving them greater autonomy in (based on a USM study conducted in through Community Policing. “When decision making; and simplifying both, 2015) of Malaysians surveyed believe we held ‘Talk to Us’ sessions at our public facing and backend processes that crime rates have not dropped. local pasar malams (night markets), the to improve efficiency and make the Deputy Commissioner of Police community was incredibly supportive experience of visiting the balai more (DCP) Dato’ Asri bin Yusuff, who and provided PDRM with a great deal pleasant,” he explains. is PDRM’s Deputy Director of of information. The same thing is true The pilot project is designed to Management (Service/Personnel) at of our joint patrols with PDRM, because showcase an example of the modern Bukit Aman, believes that this is in large residents can point out various spots frontline PDRM as a proof-of-concept part due to the disengagement between of concern to them,” Naidu explained, that the Balai Transformation the community and the police force who adding that while there is a lot that still project works to better fulfil the serve and protect them. He aims to have needs to be done, he believes that the needs of the rakyat, as well as to act this, along with other systemic issues, transformation of PDRM via Modern as a benchmark for the full rollout addressed by the Modern Policing Policing will have a profound effect on nationwide in the near future. DCP initiative. “Modern Policing is critical the ground. Asri also hopes that the pilot project’s in our efforts to transform PDRM into Modern Policing starts off with success will serve to create a blueprint becoming a world-class policing force the revamping of police stations (or or model for future stations. by 2020. It is the only way we can make balais) under the Balai Transformation Modern Policing will further see ourselves flexible enough to address the project. DCP Asri believes that the first more police in specific roles moved ever-increasing security demands of the step in this process is to strengthen down from the district headquarters 21st Century.” the underlying STEP enablers. “This to the stations. In particular, the

82 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Dato’ Asri bin Yusuff Deputy Director of Management Modern Policing is critical in (Service/Personnel), PDRM, Bukit Aman our efforts to transform PDRM into becoming a world-class policing force by 2020. It is the only way we can make ourselves flexible enough to address the ever-increasing security demands of the 21st Century.

investigating officers of crime and to potential criminals to sheer away. a significant amount of effort. “It traffic incidents will be placed in the “There is a balance that has to be requires the IGP and our top cops to stations. “Previously, these officers struck; too much police presence push the initiatives through, as well as were located at the district HQ, which sends a different kind of message, for the new generation of police officers meant that even after you’ve made but no doubt PDRM will know how to be trained into the proper mindset,” your report, you would still have to get it just right.” Naidu opines. to wait for the investigating officer. Both DCP Asri and Naidu are of “While this is a big and heavy task, With Modern Policing, they will be the opinion that such a fundamental we have to do it to meet the expectations right there in the balai, making the transformation of PDRM will entail of the rakyat,” DCP Asri says. whole process more comfortable for the rakyat,” DCP Asri elaborates. In the long run, DCP Asri sees PDRM itself being transformed from being a force that polices the public to one that facilitates public policing. “We will engage the community more closely, encouraging them to create their own Police Volunteer Reserve forces; also, we will support developers of new residential projects to create auxiliary police forces where possible. Both forces will be provided on-duty uniforms, and will have full police powers when they are on duty.” Naidu agrees that having an increased uniformed presence on the streets has a significant crime deterrent impact, sending a message

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 83 THE NTP – NATIONAL KEY RESULTS AREAS Reducing Crime

2,000 PDRM personnel mounting 2 Maintaining Vital Police Logistics motorcycle patrols daily, with over 200,000 suspicious individuals to Improve Efficiencies questioned and 260,119 residential houses visited annually. This has resulted in another 2,111 arrests nationwide in 2015. Street Crime numbers are still being tracked, well beyond the GTP 1.0 timeframe. While the index demonstrated a significant drop in the number of incidents reported during the early years of KPI implementation, there is a need to remain vigilant. Resources are still being deployed to ensure that this decreasing trend continues. In fact, 2015 resulted in a drop in street crime of 16.9 percent, which was an improvement over the KPI target of 15 percent. Under the Omnipresence programme, personnel were redeployed at street crime hotspots, i.e. popular shopping streets and Prisons Department - Industrial program where inmates received practical training and technical skillsets in order for them to find employment upon release tourist havens. Beyond that, under the Safe City Programme, the local Initiatives geared at reducing PDRM has recorded a drop of 10.1 councils (such as DBKL) carried Violent and Property Crimes have percent for Index Crime against a KPI out ‘rejuvenation’ activities using shown themselves to be effective over target of 5 percent annually. A big the CPTED principles at black spot time. These initiatives not only target part of this reduction is the decline in locations. the actual incidence of such crimes, car theft (a reduction of 1,358 cases). Maintaining vital police logistics but also some of the causes behind This is the 2nd consecutive year that – especially their vehicles — is critical these crimes (e.g. drug addiction). such decline has been recorded. towards ensuring police response Gang robberies, street crimes, house Additionally, 14,450 crackdowns on car and crime-fighting activities can be break-ins, and car theft have been theft syndicates via Ops Lejang were carried out effectively and efficiently. reducing at a steady pace. This has carried out this year. This has resulted An internal budget reallocation largely been due to intensive and in 5,857 arrests and the charging of 17.4 exercise was carried out in 2015 to targeted PDRM operations to cripple percent/1,022 suspects (Jan – Oct 2015). assist the PDRM in this respect. As a criminal syndicates. The number PDRM has also reported a drop result, the PDRM managed to replace of criminal re-offenders have also in house break-ins of 6.3 percent, 1,200 MPVs out of the 3,541 which dropped, thanks to concerted efforts though not achieving its KPI target of have reached their 8-year lifespan. to up-skill ex-convicts and increase 10 percent. Despite this, 10,848 house Another 500 are expected to be job opportunities upon release break-in operations (Ops Pintu) were replaced in 2016 and the eventual from prison. Upon completion of conducted nationwide with 3,527 replacement of all vehicles by 2020. rehabilitation programs, drug addicts arrests. Another special house break- Although the prison recidivism rate are further monitored and supported in initiative is the Motorcycle Patrol in Malaysia is one of the lowest in South to ensure they ‘stay on the wagon’. Unit (URB). Nationwide, the URB has East Asia (8.7 percent), agencies such

84 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 as the Agensi Anti-Dadah Kebangsaan (AADK) and the Prisons Department continue to perform a crucial function in rehabilitating ex addicts and former inmates. Most street crime perpetrators THREE-PHASE CRIMINAL are addicts looking for easy money hence the involvement of AADK under REHABILITATION PROGRAMME this NKRA. After a major revamp of their internal criteria measurement of ‘staying clean’, AADK introduced a new he Malaysian Prisons Department recidivism has been reduced by 100 KPI in 2015 to measure the percentage has put in place a three- percent in those who have undergone the of Orang Kena Pengawasan (OKP) who T phase criminal rehabilitation two focused courses as of 2015. In fact, the are rehabilitated drug addicts who programme (Pelan Pembangunan first batch of bus-driving course-takers have stayed clean for a minimum of one Ihsan) aimed at minimising recidivism, are fully employed, while 80 percent of year. As of December 2015, the agency or ex-convicts re-entering a life of crime the second batch are also fully employed has achieved 37 percent against their after serving their sentence. Where Phase with Maju Express Bhd, earning between KPI target of 57 percent which is still One is a disciplining programme, and RM2,000 – RM4,000. quite a substantial achievement of Phase Two involves character building, “With nationally-accepted 5,980 OKPs remaining clean for a year. Phase Three provides properly-repentant certifications assessed by DSD, we see As for the Prisons Department, prisoners with skills training. that the stigma of accepting ex-convicts inmates are given practical training ACP Hj. Wan Ramzan, head of this as employees is gradually shrinking; the and technical skillsets to find gainful particular NKRA initiative, points out companies involved in inmates’ practical employment which in turn will reduce that since 2012, the Prisons Department training have seen the results, and are the likelihood of going back to a life has provided skills training in 47 fields happy to hire them. Therefore, when of crime. As of December 2015, 1758 (including high-tech areas). “As audited prisoners come out from prison, they inmates have completed certified skills by PwC, we have achieved our KPI target are not only equipped with the skills training under Sijil Kemahiran Malaysia of 1,500 prisoners undergoing skills they need to improve their lives, but (SKM-SLDN), Sijil Kecekapan Kemahiran training,” he pointed out. sometimes also with a job offer in hand. (SKK-CIDB) and Program Pemanduan Two of the courses that the Prisons Their parents are happy, because their Kenderaan Perdagangan (Metro). Department has focused on include children are working proper jobs and even Following the establishment of a the baking skills and commercial sending money (up to RM1,500 a month) bakery-cum-training facility in Kajang driving. Baking skills are taught in back to them. The prisoners themselves Prison in 2012, an additional facility three institutions; Kajang, Tapah and appreciate this initiative to improve was commissioned in Kluang Prison Kluang. As a six-month certificate themselves and their employability,” last year. The completion of the second course, when prisoners are released, Wan Ramzan discloses. bakery decreased the training time for they can either become an entrepreneur inmates, ensured more prisons are or work in bakeries. “The prisons are self-sufficient in producing their own now self-sufficient in bread throughout bread as a cost cutting measure as Peninsular Malaysia, and from North and well as provided a commercial return Central regions alone, the costs savings by supplying bread at local bakeries is RM1.2 million annually,” Wan Ramzan and grocery stores. highlights. Meanwhile, two batches have graduated the commercial vehicle (bus) driving courses; 23 in the first, and 40 in the second (completed in December 2015). While data is not available for all 1,500 prisoners across all training courses,

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 85 THE NTP – NATIONAL KEY RESULTS AREAS Reducing Crime

Dato’ Seri Dr. Ahmad Zahid Hamidi in 3 PCI: Bridging Perception and Reality collaboration with the Malaysia Crime Prevention Foundation was held in November 2015 to have an open and In 2015, the Perception of Crime Improving these indicators is a constructive discussion on issues of Indicator (PCI) was developed using shared, collaborative effort involving crime and security under the United the four indicators of ‘signals’, ‘my all parties. For example, fixing broken Against Crime banner. Leveraging on space’, ‘amplifiers’ and ‘service’. Based streetlights requires that the relevant MCPF’s long history as one of the most on the PCI baseline results in Dec 2015, authorities such as the local council active crime prevention NGO in the Malaysians still don’t feel safe and the to be informed that they were broken. country, a series of Crime Roundtable level of their fear of crime is quite high, Neighbourhood watches, organised sessions will be held nationwide in 2016 at around 80 percent. by the various Rukun Tetangga to maintain the initiative of obtaining The formulation of the PCI is and Residents’ Associations are yet valuable and honest feedback from aimed at providing clearer insights another thing the public should do / the rakyat. The NKRA also collaborated into the causes of the rakyat’s fear of continue to do. with Safer Malaysia, a committee under crime and clarifying the gap between The engagement approach in 2015 the Bar Council established to become reported and perceived crime rates to improve public perception was a focal point for the communities to that exists today. The PCI will also aid focused on opening the conversation share solutions on fighting crime and in formulating the actions needed to on crime. The conversation took place specifically on educating children be undertaken in order to improve the via monthly crime opinions published in that crime does not pay. Finally, in public’s understanding of the true newspapers on topics ranging from car partnership with Astro Radio, a series crime situation in Malaysia such as: theft to crime prevention and quarterly of public service announcements on radio features on BFM and Lite FM crime prevention and safety tips were Cleaning up the negative featuring local crime fighting NGO, aired across three major radio stations environmental and human signs MARAH and top PDRM brass discussing (Lite FM, MY FM, Sinar FM). i.e. drug addicts, Mat Rempits on Modern Policing, Amanita and the By taking the above actions to address (motorcycle hooligans), poor/ Tidak Apa Attitude of Malaysians. In these indicators in 2016 and continuing broken lighting, dirty streets addition, a Crime Roundtable Session the conversation on crime, the NKRA aims Educating Malaysians to stop the officiated by YAB Deputy Prime Minister, to see better public perception as a result. ‘Tidak Apa Attitude’ (Doesn't Matter Attitude)when witnessing a crime

Empowering PDRM to ensure optimal response time to crime incidents

Intensifying communications on crime reduction efforts and successes as well as continual reminders to not share unauthenticated crime incidents, and

Simplifying the reporting process and ensuring a customer oriented experience at police stations through the MCPF's Roundtable on Crime Prevention "Towards a Safer Malaysia" held at the Sime Darby Modern Policing initiative. Convention Centre on 3 Nov 2015

86 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

rime today is no longer on processes, technology, introducing evidence-gathering and serves as a an issue with purely local a “ruler” to determine the manpower check-and-balance mechanism. C implications. It has taken on requirements at a station and also In addition, concerted efforts will national security aspects, including addressing the equipment needs of be made to communicate Modern the threats of domestic terrorism, the personnel at the station. Policing within the force itself and transnational criminal activities The processes which will be looked externally to the rakyat. In order for and cyber-crime as well. Some of at will be the criminal investigation, PDRM’s over 100,000- strong men and the consequences of physical/blue- traffic investigation and also forensic women personnel to get on board, the collar crimes pale in comparison to processes. The objective is to Modern Policing message needs to be what white-collar and digital crimes improve the efficiency of the relevant tailored according to their interests and could cause. Borderless crimes of this investigation personnel and to support demographics. Externally, PDRM will nature also affect Malaysians locally, them with technology. also be looking at ways to project its especially the threat of ISIS recruiting Among the technological image externally to the public. This people domestically and the setting up improvements under Phase Two to will also include obtaining the support of home-grown terror cells. look out for include the introduction and participation of the public as this In addition to retaining the of an integrated control centre at police is vital to ensure the success of this successful crime prevention initiatives stations for quicker response. This will initiative via intensive community from 2010, this NKRA will have its scope be complemented by police personnel engagements. expanded to include border security equipped with body-worn cameras. Transforming the force to achieve and the Eastern Sabah Security Zone Other technological tools to be world class policing status by 2020 will (ESSZONE), as well as cybersecurity introduced are a resource management be a challenging journey, but with full and terrorism. The first phase of system (which will allocate resources support and commitment from both this expansion programme will be according to needs and crime rates), the government and rakyat, PDRM can to review all measures concerning and also a mobile system for ease of transition from traditional policing to a border security with a lab which will making on-the-spot police reports. thoroughly modern police force, ready be conducted in March 2016 with the The introduction of the body worn to tackle 21st-century crime. aim of strengthening our borders. cameras (which has been implemented Phase Two of Modern Policing will in other countries such as Singapore, commence in early 2016 with a focus Australia, UK, etc) also assist in

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 87 THE NTP – NATIONAL KEY RESULTS AREAS Fighting Corruption

DATUK MINISTER IN THE PRIME MINISTER’S DEPARTMENT

The Government remains committed to fight corruption under the National Key Results Area (NKRA). For a country like Malaysia that is on a firm path towards high income status, corruption is like a malignant cancer that undermines optimum decisions, supports abuses and denies opportunities for healthy growth. It is a regressive practice that robs society of the standards of living that we should BREAKING be aspiring towards. Amongst the NKRAs, corruption is one of the toughest THE VICIOUS problems to tackle because it involves breaking long-entrenched practices that exist across CYCLE OF many levels within businesses, Government and society. A fundamental problem with CORRUPTION corruption lies in the fact that as long as there is a giver, there will be a taker and vice versa. The culture of tolerance towards corruption needs to be reversed, while each and every one must take ownership of the fight against corruption by making a definite stand that “we are the solution and not the problem.” Combating corruption, and upholding good governance and

88 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 integrity must be made through effective law enforcement as well Fighting corruption remains as preventive measures. Many of at the forefront of the Government’s our initiatives under this NKRA are aimed at strengthening and priorities, and the relevant parties are institutionalising anti-corruption mechanisms within every continuing to work in a holistic and Ministry and agency; establishing ownership and accountability integrated fashion in order to see that starting from the Minister-in- charge and the Chief Executive. Malaysians can live in a culture that This has led to the establishment of the Governance embraces integrity in every sphere. and Integrity Division (BITU) in the Prime Minister’s Office under my basis during the implementation working towards incorporating the purview, which is taking the lead in of each major project to improve Corporate Liability Provision into implementing all NKRA initiatives early detection of fraud and the MACC Act and encouraging through a national framework corruption. We have also taken corporate entities to strengthen formed under the Integrity and steps to ensure Government their own internal anti-corruption Governance Committee (JITU). procurement processes become processes and guidelines. JITU is represented by more transparent to the rakyat. Willingness to report corruption Secretary Generals, integrity Malaysia is ranked 54th in is increasing significantly, but units, and top officials from the 2015 Corruption Perception convictions can only follow with the Malaysian Anti-Corruption Index (CPI) with a score of 50 clear evidence. We have to build Commission (MACC) and Auditor out of 100, highlighting the need reliability and trust into the General’s (AuG’s) Office. Covering for all parties to 'walk the talk' system, and recognise that there both federal and state agencies, and expedite adoption of anti- is a lot more work to be done. its primary purpose is to create a corruption reforms that have been For example, the channel for culture of transparency, honesty, proposed by the Government whistleblowing is currently under and integrity within the civil since 2010. Our current ranking review for improvement – ensuring service. The integrity units were is not one that we are proud of, strict compliance to accountability established to monitor compliance and we must strive harder to and confidentiality. to integrity standards by high- improve our standing especially In the end, one of the strongest value projects and border control when foreign investors judge us weapons our country has against security agencies. based on CPI. corruption is the rakyat standing Furthermore, changes in One of the most significant up and speaking out about the the way the AuG’s Report is initiatives, improving the injustices seen. One has to decide presented and used have directly political financing framework, to be neither a giver nor a taker to resulted in the early detection and is now being undertaken by the make fighting corruption work. subsequent reduction of blatant National Consultative Committee It is everyone’s business to stop the corruption incidents. Auditors on Political Funding. In relation vicious cycle of corruption if we conduct audits on a real time to the private sector, we are still want a better future for Malaysia.

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fforts to fight corruption are at public agencies can be seen as an the forefront of national reform effort to curb corruption at the source. INSIDE THIS NKRA agendas all over the world. Its core functions – amongst others – E Institutionalsing Anti-Corruption They are among the highest national are to strengthen internal controls in 1 Measures priorities in order to establish a good managing governance and integrity and trust-worthy governance structure. issues within organisations, and Curbing corruption in a holistic manner ensure that proper identification Private Sector Must Eliminate requires systemic elimination of both and verification of offences are being 2 Opportunities for Corruption the givers and takers, which is why the conducted in a timely manner, and NKRA initiatives target both the public also implement of follow-up actions Building the Foundation and private sector. including reporting to the relevant 3 for Integrity The transformation of the enforcement agencies. AuG Report tablines process in BITU, under the PM’s Department, Parliament has been one of the is headed by Minister Senator Datuk biggest achievements in GTP 2.0, and it Paul Low Seng Kuan. It oversees continues to produce positive outcomes and coordinates programmes across commencement of a new anti- in reducing leakages and wastages in different ministries and agencies to corruption syllabus in primary government procurement procedures. ensure successful implementation. and secondary school textbooks is We have also seen an increase in private In 2015, the National Conference for underway after multi-stakeholders sector participation, from signing the JITU was held three times (February, engagements started a few years Corporate Identity Pledge (CIP) to May and December) as a platform to ago. In addition, effort to engage implementing measures in conjunction gather inputs from Integrity Officers at with students has been renewed; for with the Corporate Integrity Systems all levels and propose remedial actions. instance, BITU has been associating Malaysia (CISM) framework. Realising the importance to with the Youth for Integrity movement The establishment of Integrity sensitise young Malaysians towards under the Empowering Youth Units (IUs) in all government and integrity and accountability, the Endeavours NGO.

1 Institutionalising Anti-Corruption Measures

Changes made in the frequency to the MyProcurement portal have transparency and accountability, each of the AuG Report being tabled also increased transparency into tabling of AuG’s Report was followed at Parliament, coupled with the governmental procurement details. by a media briefing by the Chief convening of the Report's Action Public Private Partnership Unit (UKAS) Secretary to the Government and Committee, the AuG Online Dashboard has also issued circular to made signing related ministries' Secretary-Generals. revamp, as well as the Putrajaya of Integrity Pacts mandatory for all In addition to highlighting remedial Inquisition, are efforts to tackle the public-private partnership projects. actions taken, statistics on punitive leakages and wastages in government Since 2014, in line with actions taken against corrupt officials procurement. Enhancements made government’s commitment to increase were also shared during these media

90 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 engagement sessions to raise overall of power, fraud, mismanagement Over the last three years, despite awareness of the Government’s effort of funds and negligence. exploring several possible options to weed out corrupt practices. Initiatives were also put in place including a proposal to amend the Version 2.0 of the AuG’s Online to make government procurement Societies Act, this initiative has so Dashboard was launched on 26 exercises more transparent. The far failed to gain traction due to March 2015. The revamped Dashboard MyProcurement portal was upgraded entrenched political resistance. In provides an enhanced online channel to allow for publishing the results of August 2015, against the backdrop for the rakyat to access the AuG’s direct negotiation deals and other of sensational issues on political Report in a timely manner. It is government procurement details. financing, the PM announced hoped that it would help promote Quotations and tender-related the formation of the National transparency, add pressure to expedite documents were made available to the Consultative Committee on Political taking effective action to resolve issues, public in the interest of transparency. Funding to propose a regulation and also to improve public perception Since the inception of GTP 2.0, the structure for political financing of actions resulting from the AuG’s NKRA team has iterated on various within a year. report. In addition, it serves as an occasions the need to institutionalise The committee is expected to information-sharing platform with a more transparent political financing make some headway into building Action Committee members (Auditor system to tackle the problem of grand momentum in addressing political General's Office (AuGO), MACC, corruption head-on. The governance financing. The secretariat has been Attorney General's Chamber (AGC), framework would have included three meeting local stakeholders, political Royal Malaysian Police (PDRM), mandatory elements; donations to parties, civil society groups like Majlis JPA and MoF) enabling them to be made in the party’s name, all Belia Malaysia, Solidariti Anak Muda take the appropriate actions against donations to be immediately receipted, Malaysia, and members of the Youth wrongdoers quickly, for example to and records of all sources of funding Parliament to obtain their views and expedite action for cases of abuse to be audited externally. support on the initiative.

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IMPROVING BUDGET Datuk Juhari Haron Director, TRANSPARENCY SCORE Follow-Up Audit FOR MALAYSIA Division (BSA)

he strengthened oversight as having issues in the AuG Report. Already, the BSA has seen a of the AuG’s Office, and the “Firstly, the BSA manages the AuG’s significant amount of progress in the T increased tabling of the AuG Dashboard, which displays the latest way audit issues are being handled. Report to three times a year – both major actions taken by auditees to the “Most government bodies are now initiatives under the Anti-Corruption major issues outlined in the Report. more proactive in providing regular NKRA - were primary contributors to Every quarter, the BSA will monitor status updates, and to ensure that Malaysia’s 7-point jump in the World all feedback from the auditees and if their KPIs in terms of resolving Bank’s Open Budget Survey. The survey necessary, engage with them to resolve audit issues in the AuG Report are measures how central governments issues that are still pending (with achieved,” Datuk Juhari points out. provide adequate public access to yellow or red statuses). He also said that these government national budget information and “Secondly, it acts as the secretariat bodies were more co-operative and opportunities to participate in the for the AuG Report’s Action Committee open to meet together with BSA to budget process and is aimed at aimed (JTLKAN). The BSA identifies issues resolve any outstanding issues. at assessing and promoting more open that require punitive action by the Nevertheless, BSA is preparing and accountable budgeting, relevant enforcement authorities, so a proposal for the AuG to expand its A total of 102 countries worldwide that the JTLKAN can deliberate over scope and allow it to conduct forensic were ranked based on the degree of them and make the final decisions. audits. “Various government bodies their respective governments’ budget “Thirdly, it also acts as the have formed Internal Audit units, transparency, public participation and secretariat for the Putrajaya Inquisition, which monitor the feedback given oversight. In 2015, Malaysia achieved if there are any audit issues that have by auditees and report them back to a score of 46 out of 100 on the overall gone unresolved for more than a year. BSA to ensure checks-and-balances Open Budget Index, an improvement Following a review and engaging with in status updates,” Datuk Juhari says. from 35 in 2008 and 39 in 2010 and the auditees to identify and resolve “This proposal will allow us to directly 2012. This is slightly above the global the bottleneck, if the matters are still perform forensic audits on government average of 45, aligned with the likes of unable to be resolved, the cases will be bodies that are red-flagged, based on India and the Ukraine, and ahead of brought before the Inquisition.” the analysis of JTLKAN issues. Thailand, Vietnam and China. The Follow-Up Audit Division (BSA) of the AuG’s Office is the main source of that strengthened oversight, and is tasked with handling issues that have been brought up by the AuG Report. Datuk Juhari Haron, the Director of the BSA, explains that it plays three major roles in overseeing government departments that have been identified The AuG Dashboard is accessible online at https://agdashboard.audit.gov.my/#/

92 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 PROMOTING INTEGRITY Dato' Sri Mustafar Haji Ali, Deputy Chief Commissioner (Prevention), TO FOSTER PUBLIC Malaysian Anti-Corruption Commission CONFIDENCE

ccording to Dato’ Sri result of negligence, or if they occurred Mustafar Haji Ali, Deputy due to irresponsible management, the All sectors A Chief Commissioner corporation itself can be prosecuted (Prevention) of MACC, the CISM is a and punished or sanctioned. It will benefit from the best practice to nurture a framework be used to determine the extent to of integrity in the private sector. By which a corporation as a legal person CISM, though adopting the CISM, Dato’ Sri Mustafar is liable for the acts and omissions of says, private-sector companies can the natural persons it employs,” Dato’ organisations that rely proactively show their interest in Sri Mustafar explains. on investments from fostering a corporate culture that With the CLP in place, MACC hopes shuns corruption. “All sectors benefit to see a more competitive market the public in terms of from the CISM, though organisations and more responsibility by private that rely on investments from the companies towards their customers deposits or shares may public in terms of deposits or shares and stakeholders. “By having a (i.e. listed companies and financial competitive market, we should benefit more, since the institutions) may benefit more, since see government tenders providing the implementation of CISM is a maximum benefits at optimal cost to implementation of CISM confidence-builder,” he added. the taxpayers, while the companies’ At the moment, CISM shareholders can look forward to more is a confidence-builder. implementation is based on the effective and efficient management of good-will of the signatories and resources; hence, more profit,” Dato’ driven by their self-regulation. There Sri Mustafar points out. are no statutes or other compliance He is also confident that the measures that require CISM CLP will be beneficial to the public signatories to abide to any proposal in general. “Currently, the issue or recommendation from MACC. This of integrity has been the focus of is set to change with the inclusion of various debates among the rakyat; the CLP into the MACC Act. thus, the successful implementation “CLP will examine the legal of CIP, CISM and CLP will increase responsibility of a corporation for public confidence in the government criminal actions (or inaction, in some and our economy as a whole. By cases) performed by the company's taking this positive and proactive employees. If such were done for the approach, investor confidence will benefit of the company, or were the also be bolstered.”

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2 Private Sector Must Eliminate Opportunities for Corruption

The CIP and CISM have been voluntarily sign a CIP. In addition, the the MACC to prosecute companies taken up by many private companies formation of the recently established engaged in corrupt practices and hold interested in weeding out corrupt CISM Framework empowers them accountable as legal entities practices within their organisations. companies who have signed the CIP in their own right. In 2015, a draft While benchmarking exercise and to operationalise it as part of their was prepared by the MACC based stakeholders engagements have been everyday routine. It is the only NKRA on benchmarking on both the US’s conducted, passing the Corporate initiative currently implemented Foreign Corrupt Practices Act and the Liability Provision (CLP) into the MACC which relies solely on the private UK’s Anti-Bribery Act 2010. The NKRA Act is still in progress. sector. This initiative will complement will now move forward by engaging For GTP 1.0 and in the wake of the CLP. with the new AuG on the next steps various scandals, corporate entities The CLP itself is the stick that to be taken, and set a new target date in the private sector were invited to suppose to explicitly empowers for CLP insertion.

3 Building the Foundation for Integrity

Much work has been done to school textbooks will take effect in been established in teachers’ training establish greater communication on 2016 to instil moral responsibility at institutions since 2009. the principles of integrity to combat an early age. This was an initiative In 2015, a total of 15,136 new business-as-usual practices that may to combat the fact that 67 percent recruits into the PDRM undergone an involve corruption without intent. of university students confessed integrity test before being accepted to A total of 140 individual MPs have they would bribe in order to obtain first a round of interviews. Effectively, participated in nine various engagement desired outcomes. Engagement with this has enforced a culture of sessions over the course of two years. stakeholders in education institutions trustworthiness and honesty within The insertion of an anti-corruption have also been guided by the 27 anti- PDRM to serve the public. syllabus into primary and secondary corruption secretariats that have

94 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

oving forward, closer The Committee is slated to propose Act as soon as possible, engagement working relationships said regulatory framework and draft with relevant stakeholders in this M with PDRM and AGC, as legislature by August 2016. matter is essential. well as NGOs will drive continual In terms of the MACC’s Fighting corruption remains at implementation of this GTP initiative, incorporation of the CLP into the the forefront of the Government’s thereby bringing forth the transparency MACC Act, matters are progressing priorities, and the relevant parties are of Government procurement as well as with the new AuG to cement the next continuing to work in a holistic and institutionalising integrity measures steps to be taken to make this a reality, integrated fashion in order to see that within the public service. New and to establish a proper timeline for Malaysians can live in a culture that KPIs will be introduced to track the the private sector to prepare towards. embraces integrity in every sphere. progress of draft legislation to regulate The mooting of the CLP in Parliament political financing and reporting as a needs to be expedited, as legislation follow up from the establishment of is key in institutionalising integrity the National Consultative Committee within the private sector. In order to get on Political Funding. the provision passed under the MACC

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TAN SRI DR. ALI HAMSA CHIEF SECRETARY TO THE GOVERNMENT

Public Service Delivery Transformation (PSDT) projects benefit from the fact that they begin as agile initiatives that are rakyat-centric. The projects are generally highly-focused, process- driven improvements that are able to yield big, fast results. Many successes have been achieved in the short time frame since the PSDT NKRA commenced in late 2013. A total of 21 projects have been completed; 10 having been closed in 2015. These successes CHAMPIONING serve as proofs-of-concept that the successful implementation of PSDT projects will see a marked PUBLIC SERVICE improvement in the efficiency and effectiveness of public services for the rakyat. Following from these DELIVERY AS early successes the PSDT's primary aim moving on is scalability. There were 57 on-going projects EXEMPLARS OF throughout 2015, with 45 having been initiated during the year itself. Of the 16 ministries that have EXCELLENCE participated in the PSDT NKRA so far, 50 percent have opened more PSDT projects upon completion of their first pilot project.

96 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 KPIs were instituted so that, progress was objectively measurable and therefore we could see the improvements. For example, the Ministry of Health — Datin Dr. Nor Akma binti Yusuf, is implementing a portfolio of PSDT Deputy Director of Hospital Management Services Unit projects across both primary and secondary healthcare. As we move into 2016, the situation with the economy is challenging, as the government is being extra prudent. This presents ample opportunity for the public he Public Service Delivery service to look for avenues to Transformation (PSDT) INSIDE THIS NKRA optimise costs while extending NKRA aims to accelerate T Improving Efficiency, Expediting the Government’s efforts to become high quality services to the rakyat. 1 Client-Oriented Services Delivery We look to continually more efficient and facilitative in providing public services. It also aims strengthen the delivery of to transform the country’s 1.3 million Continuous Innovation Key for Effective public services to the rakyat civil servants into a motivated, high- 2 Public Service Delivery whilst addressing emerging performing workforce. This area of needs resulting from Malaysia’s focus taps on individual projects Piloting Projects for Effectiveness transformation into a high- within a particular ministry’s public 3 income economy. service to focus on process and quality improvements. A total of 21 small-scale initiatives have yielded positive results and emphasis is being placed to have driven – leverages the vast expand these process and quality expertise and experience of the civil improvements on a larger and systemic service, thus increasing the likelihood level. However, many successes have of their success on the nationwide been achieved in this short time frame. level. Through the wide-scale adoption Therefore, these pilot initiatives are of PSDT projects, the government likely to expand beyond their original agencies involved will be better able to trials and pilot status. meet the ever-increasing expectations The expansion of these pilot of the rakyat in terms of both service projects – and the innovations they quality and quantity.

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Hospital Putrajaya, Hospital Sungai 1 Improving Efficiency, Expediting Buloh and Hospital Selayang. Altogether, in 2015, the EDs of Client-Oriented Services Delivery these hospitals treated 44 percent more patients due to improved patient flow, thus saving an estimated RM5.3 Efficiency improvements in As part of the PSDT NKRA, MOH million per annum. The medical wards, public service delivery aims to focused on improving service delivery, meanwhile, had increased their bed eliminate waste, save time and cost, by thoroughly examining existing capacity by 5 percent through ward and improve government services processes and eliminating redundancies levelling and an improved discharge to the rakyat. Given the successful to improve work processes. process, avoided around RM235 million. implementation of the Healthcare In 2015, a batch of 15 hospitals saw Under this initiative, processes PSDT as a pioneering initiative in 2014 a transformation in patient flow and have been streamlined and made at Hospital Tengku Ampuan Rahimah work processes at their Emergency more efficient. Issues which may and Hospital Sultan Ismail, Johor, the Department (ED) and medical cause delays were identified and Ministry of Health (MOH) decided to wards. These included the 12 General worked around or eliminated where roll this out in all 133 government Hospitals from all states and federal possible. The target outcome was to hospitals nationwide. territories excluding , as well as see more efficient and effective use

The main impetus behind any PSDT MOH gave HSI full discretion to choose SUCCESSFULLY REDUCING NKRA pilot project is to demonstrate its the areas of improvement based on its WAITING TIMES IN 16 ‘proof of concept’ and iron out the bugs prevailing patient demand and challenges. before the implementing Ministries and/ HSI opted for the pilot to be implemented HOSPITALS NATIONWIDE or government agencies go ahead with in the Orthopaedic Specialist Clinic a larger-scale project. The Healthcare and Oncology Treatment Centre. The PSDT programme, an effort to reduce improvement in waiting times for both patient waiting times and improve patient areas had a significant impact, and all experience in government hospitals under the stakeholders were happy with the MOH, is a sterling example of how PSDT outcome. Following the success at HSI, NKRA projects have transitioned from pilot the Minister of Health, Dato’ Sri Dr. S. projects to nationwide implementation. Subramaniam, requested his Ministry But initially, when deciding which and the PSDT NKRA team to see if processes within MOH should be similar improvements can be made at the transformed, hospital services were not Emergency Department (ED) in Hospital the top items on the agenda. As Datin Dr. Tengku Ampuan Rahimah (HTAR), Klang. Nor Akma binti Yusuf, Deputy Director of “The ED of any hospital is its Hospital Management Services Unit under frontline, and subsequently, the patients MOH’s Medical Development Division are mostly sent to the medical wards if describes it, the decision to move forward their condition is deemed to warrant with Healthcare PSDT was mutually arrived admission,” Dr. Nor Akma explained. at after a period of intense brainstorming Hence, the expanded pilot moved on to and discussion with the PSDT NKRA team. deal with waiting times in the ED Green “The very first LEAN pilot project was Zone and medical wards at HTAR. at Hospital Sultan Ismail (HSI) in JB. While Dr. Nor Akma explains that along it was located quite far from Putrajaya, the with the LEAN principles, KPIs were hospital director was very positive about also instituted; with that, progress was it, and the consultants who were called in actually measurable – it was objective, were based in JB,” Dr. Nor Akma recalls. not subjective – and therefore you Datin Dr. Nor Akma binti Yusuf, Deputy Director of Hospital Management Services Unit under MOH’s This pilot project in HSI became could see the improvements. “There Medical Development Division a learning experience for all involved. was nothing really massive or budget-

98 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 of resources to achieve the desired or optimum quality of delivery while meeting stakeholder expectations; in this case, improving waiting times and expediting patient flow. Improving Bantuan Orang Tua (BOT) ‘application-to-notification’ waiting times is a new 2015 pilot initiative from the Ministry of Women, Family and Community Development. Administered by Jabatan Kebajikan Masyarakat (JKM), BOT provides RM300 per month to senior citizens age 60 and over who have no other sources of income. The original waiting time between applying for BOT and being informed whether the application Senior citizens are amongst those feeling a positive impact from PSDT projects. The BOT went through was 30 working days. transformation project means their application is processed and approved within just 1 day

intensive happening; mostly it was small a form of knowledge transfer, in that the their respective states. Ophthalmology improvements to existing processes, but teams who are already familiar with the and Orthopaedics specialist clinics are they all added up,” she adds. The results LEAN principles can go on and train other the next two areas earmarked to be rolled were soon apparent – and so were the teams, and spread the ‘seed’ that way.” out nationwide using the ‘Agile’ approach. benefits. Patients benefitted the most – As these hospitals internalise LEAN “The Healthcare PSDT concept focuses waiting times had decreased, and they within their EDs and medical wards, on improving efficiency, and it is vital that got beds faster – but because the work it is hoped that when MOH deploys it everybody is on the same page. When we became more efficient, medical staff were to all government hospitals, as it has first started, nobody knew what ‘LEAN’ also happier. begun to do, the initial 16 hospitals can meant; today, everybody understands the MOH’s approach in its nationwide be mentors to the other hospitals within tool,” Dr. Nor Akma points out. deployment is predicated upon using the ‘Agile’ method of deployment introduced by the PSDT NKRA team, starting with HTAR. With the lessons learnt and appropriate THE AGILE APPROACH procedures/guidelines formulated as a result of LEAN implementation in HTAR’s Sequential Approach Agile Approach ED and medical wards, the ministry then went into 12 state hospitals and three major No. of hospitals No. of hospitals hospitals within Klang Valley. The learnings 6 6 133 133 from these 16 hospitals, including HTAR, 5 will be subsequently used to rollout LEAN 4 to the remaining 117 hospitals in batches 3 of 20 hospitals. 2 15 LEAN, and the philosophy behind the 1 1 ‘Agile’ approach, has seen tremendous Months Months uptake in the hospitals involved. HSI, 6 12 18 24 30 36 6 12 18 24 30 36 for instance, on its own initiative, has started training up other departments Going to 117 hospitals nationwide in 2 years. to implement LEAN, and these other Total 133 LEAN-led hospitals in 3 years. departments are beginning to show improvement. “It’s not just a project, but

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The objective to reduce this to 5 and workshops, the project team office whenever the head was absent. working days and this was achieved revisited the current BOT workflow The project further introduced a cut- by the pilot project. using process mapping. It identified off window for certain work processes The JKM Melaka Tengah office was bottlenecks and their root causes, and performed during day-to-day operations. chosen as the pilot site. The project brainstormed potential solutions for Through these and other measures, involved several government agencies the issues identified. the target was successfully met. within the Ministry aside than JKM, A key opportunity for transformation This resulted in potential savings such as Institut Sosial Malaysia (ISM), identified in this project included the of RM126,000 per annum from this Department for Women’s Development review of BOT applications only once pilot phase alone, and the increased (JPW), National Population and Family every 24 months, upon which the availability of 26 staff (saving 14,976 man Development Board (LPPKN), NAM continuation of the aid would only be hours per year, or RM112,320 per annum Institute for the Empowerment of either approved or rejected. The roles of lost productivity). The savings from a Women (NIEW), and representatives of staff and officers involved in the nationwide rollout to all JKM branches from the Ministry as well as the Central BOT applications were restructured. would therefore be quite substantial. Malacca District Social Welfare Office Authority to approve applications was Meanwhile, the shorter times led to (PKMDMT). Over several discussions granted to the deputy head of the district increased customer satisfaction.

Efficiency is half the picture 2 Continuous Innovation Key for Effective when it comes to improving public services delivery. Effectiveness is the Public Service Delivery other half. Processes cannot simply be fast and automatically efficient. They also have to work and be seen to work by the rakyat. Improving the effectiveness of various government initiatives is the key thrust of the projects outlined below.

IMPROVING EFFECTIVENESS OF KNOWLEDGE TRANSFER PROGRAMMES Under the auspices of MOHE, two Knowledge Transfer Programme (KTP) pilot projects were initiated. These KTPs were, firstly, the use of eco- friendly photo-catalyst technology to produce good indoor air quality (IAQ) in Malacca General Hospital, and secondly, the recycling of municipal organic waste via vermicomposting at Melaka Sentral. The first KTP project aimed

The IAQ level in Melaka Hospital (chosen as piloted site as a PSDT project) has improved with bacteria, fungus and primarily at protecting IAQ; in this volatile organic compounds having been eliminated after the spraying of TiO2 nano solution case, at the Malacca GH pilot site.

100 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 This was done via the use of nano titanium dioxide (Nano-TiO2). Its secondary objectives were to create awareness regarding IAQ, monitor and teach best practices to control IAQ, formulate a model that can be easily replicated in other states, and facilitate the technology transfer of Nano-TiO2 use. Essentially, the Nano-TiO2 solution was sprayed on walls, floors & ceilings. Through catalytic oxidisation reactions, the compound has been proven to kill bacteria & inhibit viral infection, eliminate volatile organic compounds (VOCs), self-sanitise itself and prevent odours. Measurements of IAQ at six different locations in Malacca GH were made by an expert. It was then discovered IAQ in most of the locations were within Gym 1Malaysia at the Youth and Sports Ministry building at Putrajaya. Photo sourced from the acceptable range. This indicated Gymnasium Rakyat KBS Facebook page Nano-TiO2’s excellent photo-catalytic efficacy against indoor pollutants. infrastructure was to put in place registration and appointment The second KTP project was better gym management at the pilot processes, enable patients’ personal the use of worms to speed up the site; namely, the Kompleks Rakan and medical records to be securely and creation of compost (vermicompost) Muda Larut Matang & Selama in privately shared across all connected from organic waste. This waste was Taiping, Perak. By redesigning the clinics, and empower patients to collected from the Pasar Besar wet site layout and equipment based on self-monitor certain critical illnesses market at Melaka Sentral. Based on user feedback, as well as developing like hypertension and diabetes. this pilot project, it was estimated that improved policy and maintenance MOH can use the system for real- 70 percent of waste on average was guidelines, this initiative was able time data mining & intelligence converted to mature compost in three to bring in over six times the original analysis during critical emergencies rounds of harvesting. Each round number of visitors every month. This like dengue outbreaks. lasted a month. Depending on the demonstrates the need to listen to the Through TPC-OHCIS, MOH stands conversion yield, the economic value rakyat in order to optimise effective to gain major cost savings in terms of created was calculated to be between delivery of public services. system development, deployment RM168 and RM321 per tonne of waste. and maintenance. This is because the EFFECTIVE DATA MANAGEMENT FOR system uses fully-local technology EFFECTIVE USAGE OF PUBLIC GYMS PUBLIC HEALTHCARE SERVICES and is vendor-neutral. Average Meanwhile, the Ministry of Services at dental and health administrative time per patient has Youth & Sports (KBS) has been clinics will soon get a boost, thanks been shown to come down from 16 busy with its Gym1Malaysia to a collaborative effort between mins to less than three mins, an 81 transformation project. This initiative MOSTI & MOH. They are developing percent improvement. The system sought to transform both hard a unified Teleprimary Care and Oral passed User Acceptance Testing (UAT) and soft infrastructures. The hard Health Clinical Information System in August 2015. Its basic dental features infrastructure transformation was (TPC-OHCIS) application using were successfully showcased at Klinik of the gym’s physical infrastructure MIMOS’s Open Innovation Platforms. Pergigian Mantin (Mantin Dental through renovation, whilst the soft The TPC-OHCIS will ease patients’ Clinic) in November.

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Dr. Azni highlights. “As it is, this is TRANSFERING KNOWLEDGE unsustainable over the long term.” Separation of waste at source is FROM ACADEMIA TO IMPROVE already a reality in various states; however, reduction of waste at source PEOPLES' LIVES remains an issue for households due to human habits. “It is much easier to change the way businesses manage solid waste at source. Hence, we targeted businesses, and wet markets (and other grocery shops) generate tonnes of waste every day,” Dr. Azni points out. In total, fruit and vegetable waste comprise 20 percent of solid waste heading to the landfill. Hence, the use of vermicomposting to reduce organic waste from fruits and vegetables matter. “Vermicomposting is more convenient and cost-effective compared to bacterial composting, as it produces little to no odour, and The KTP - Vermicomposting project at the Melaka Sentral wet market is one of the more successful pilots under the compost produced is very high in PSDT NKRA. Not only has it resulted in reduced organic solid waste, it is also economically beneficial fertiliser content. It is also a sustainable activity, since the worms reproduce he purpose of the Knowledge With vermicomposting, there is very themselves, and there is no shortage Transfer Programme (KTP) is little needed in the way of facilities of inputs.” Tto take new research ideas and or infrastructure; the input is literally Ismail bin Che Din, Landscape knowledge from institutions of higher rubbish (organic waste from fruits and Architect and Senior Assistant learning (via MOHE) and use it to solve vegetables), and it can easily be scaled Agricultural Officer at MBMB, was pressing national issues for the benefit up from a single bin. involved in implementing this initiative of the Malaysian society. In other words, Vermicomposting has been at the Pasar Besar in Melaka Sentral. KTP aims to put academic research used elsewhere as a form of solid “I’ve always had an interest in organic ideas to work in the real world. Once waste management. According to technology, and I love nature. Also, the initial ideas have been proven to Senior Professor Dr. Azni Idris of MBMB has already been producing be of practical value, the next step the Department of Chemical and our own compost from tree-pruning would be to commercialise them for Environmental Engineering in University waste, having won the Malacca State the benefit of the rakyat. In the case of Putra Malaysia, the lead implementer of Government Innovation Award (Non- the KTP – Vermicomposting project, the this KTP project, solid waste is a much- ICT Category) in 2013.” pilot beneficiary was the Malacca City discussed issue to this day. Much of the challenge encountered Council (MBMB). “Traditionally, we the rakyat during the trial project was simply KTP projects are selected based is used to letting the local councils coping with the vagaries of human on their potential for success, their handle waste management issue; nature, and had very little to do with positive impact to beneficiaries and this is to be expected, but as waste the technical aspects of it. “It was quite their surroundings, and their alignment generators, we must do our part difficult to educate the public at the to national interests. These projects as well. The government recently market not to simply throw away their usually last about two years, with initial announced that RM2 billion is spent organic waste. Separation of organic funding provided by the Government. every year on waste management,” and non-organic waste also remains an

102 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 PORTAL REVAMP IMPROVING THE RELIABILITY FOR JOBSMALAYSIA OF LIFTS IN PUBLIC HOUSING issue; people tended to throw everything The Ministry of Human Resources DBKL continues its efforts to in the one compartment, and we had (MOHR)’s efforts to revamp the improve lift maintenance in its public to segregate the organic waste out for JobsMalaysia 2.0 job portal are still housing developments. Last year’s the worms. And then, when the waste ongoing. The current portal is outdated, successful pilot project at PPR Batu Muda managed to improve response was separated out, irresponsible people having been introduced more than 14 times to within 30 minutes and reduce came and "stole" the organic waste years ago. The portal’s pages are too customer complaints by half. DBKL has to feed their chickens. In a way, it’s a cluttered & lengthy. It exhibits slow & since decided to roll out to five of the top good problem, but it does mean that erratic performance – loading time per occasionally, there is a shortage of food 10 public housing developments, which page takes more than three seconds. supply for the worms. Before this, people were chosen because half of DBKL's The portal revamp would therefore just didn’t bother about the waste at all,” total lift maintenance costs covering deal with these issues and more. This he recounts. 53 public housing development were will make it more efficient for both Ismail agrees with Dr. Azni that spent on them. Despite the financial employers and employees to use. The vermicomposting is a good project. and coordination challenges involved, original plan called for it to be ready “It is very easy to do, a convenient DBKL was still able to reduce the lift way of reducing organic waste and in 2015. However, the revamp will only breakdown time by 60 percent, easily if very beneficial economically as complete in Q3 2016. meeting its KPI targets for 2015. well as environmentally. I also find it a very educative one, and I would like to suggest this project be started up in primary schools; and from there, to every household or public community. Since there are quite a number of "garden communities" under MBMB jurisdiction as a result of the NBOS programme, this kind of vermicomposting project should not be a problem to start up at any time.” While the project is still around a year away from its formal handover to MBMB, Dr. Azni reiterates that given its success to date, it is ready to be expanded to other markets in Malacca. “From this one market alone, our calculations suggest that if the full amount of organic waste (five tonnes a day) is turned into compost, MBMB will realise up to RM800,000 a year in economic benefits. Imagine what the benefits would be like if it was taken state- wide,” he adds. Ismail believes that the project has also helped to educate the public to care for the environment. “I think people are more sensitive to what they throw to the rubbish bin; they are more aware now that even waste has value,” he explains. Photo courtesy of BERNAMA Images

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117 remaining hospitals have adopted 3 Piloting Projects for Effectiveness Healthcare PSDT. Last year’s DBKL Road Maintenance Transformation pilot PSDT projects usually start out implement it in all 133 government involved improving turnaround small. They are first tried out in one (or hospitals nationwide. The findings from times on road repairs to MRR1. For at most a few) pilot test sites or cases. all 16 hospitals (including HTAR) have small potholes measuring three meter Once they have been proven successful been collated and studied. From this, squared, they were repaired within two to achieve their stated aims, they are MOH has designed ‘ideal’ templates for hours. For larger potholes, the repair then rolled out in stages. They will both ED and medical wards. time was within two days. Because of gradually expand to cover the entire This template will be rolled out to the success it had with MRR1 repair area under the responsible party’s all the other hospitals in batches of times, DBKL decided to expand it in jurisdiction. 20. As each batch adopts and adapts 2015 to over 20 main and protocol We have seen this with Healthcare the templates, their experiences will roads. It used the same KPIs as before, PSDT and such is also the case be used to update the templates. The and was able to achieve 100 percent with the DBKL Road Maintenance next batch of 20 hospitals will in turn of its targets. This in turn benefitted Transformation programme. adapt the updated templates. Their approximately 2.1 million motorists Given the positive results from experiences will then be incorporated using those roads. Healthcare PSDT, MOH will now into the templates, and so on, until all

PSDT projects usually start out small. They are first tried out in one (or at most a few) pilot test sites or cases. Once they have been proven successful to achieve their stated aims, they are then rolled out in stages. They will gradually expand to cover the entire area under the responsible

DBKL's Road Maintenance Transformation programme in 2015 saw it expand beyond the MRR1 to 20 main and party’s jurisdiction. protocol roads, while still achieving 100 percent of its repair time targets carried over from before

104 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

n 2016, Healthcare PSDT will By the end of 2016, DBKL will focus on moving the EDs and have fully rolled out its improved lift I medical wards at more hospitals maintenance programme to 64,000 to be graded as ‘efficient’. The initiative residents in 14,494 units of the top 10 will also seek to shift hospitals already public housing developments. It will considered ‘efficient’ to have even also reapply for increased funding better service management and people to ensure its 2016 road maintenance engagement to meet the rakyat’s improvements targets are met. perceptions and expectations. Additionally, it will reconsider the The next step for the TPC-OHCIS scope of the project to fit within the application is its full pilot introduction currently-approved funding levels. at 12 clinics in Negri Sembilan. Eight are combined health and dental clinics; the other four are split evenly between standalone health and dental clinics. The datacentre will be located at MAMPU’s main office in Putrajaya.

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DATUK SERI UTAMA TENGKU ADNAN TENGKU MANSOR MAKING MINISTER OF FEDERAL TERRITORIES GREATER The Greater Kuala Lumpur transformation journey towards becoming a world class city has KUALA just reached its midway point. We are still very much on course towards achieving our aspirations LUMPUR/ to transform Greater Kuala Lumpur into a truly world class urban setting that citizens can be proud KLANG to call “home” by 2020. Assessing the many achievements and challenges from VALLEY our current vantage point since we began our journey in 2010, our collective vision for Greater Kuala WORLD Lumpur is coming into clearer focus with each passing year. We have been resolute in implementing our CLASS initiatives and I strongly believe we are well on our way to achieve our twin goals of becoming one of the top economic and liveable cities by the year 2020. 2015, on reflection, has indeed been a successful year for the Greater Kuala Lumpur/Klang Valley (Greater KL/KV) NKEA. With the impending completion of the first phase of Malaysia’s first ever Mass Rapid

106 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 As the country’s main growth centre, this region is critical for the nation, and requires a comprehensive and Transit line in December 2016, strong interest from around the sustainable development plan globe for the launch of a High Speed Rail connection between that can adequately address the Kuala Lumpur and Singapore, and our continuing efforts to transform challenges of rapid urbanisation. the Klang and Gombak rivers into a glittering attraction for Kuala Lumpur, we stand on the brink of some of the biggest game changers this city has seen. reater Kuala Lumpur/Klang INSIDE THIS NKEA Enhancing liveability for all Valley (KL/KV) aspires to be a competitive world-class citizens in the form of quality living, G On Track Towards Game-Changing, metropolis, boasting top standards in 1 World-Class Infrastructure well maintained recreational parks business infrastructure and liveability. and accessibility to amenities are NKEA Greater KL/KV initiatives all part of our continued efforts to are geared to ensure that identified Enhancing City Liveability make Greater Kuala Lumpur both an Entry Point Projects play an integral 2 attractive hub for residence as well role in transforming Malaysia into a high income nation by 2020, with a as business and investment within Greater KL: Business and targeted GNI impact of RM391.6 billion 3 Investment Hub of the Region the burgeoning ASEAN region. and creation of 553,000 jobs. The tremendous momentum Efforts have reaped results, as gained so far is a result of Kuala Lumpur is ranked 73rd amongst collective efforts between various 140 cities in the Economist Intelligence Government agencies and private Unit (EIU)’s 2015 Global Liveability 10 municipalities, including the city of sector companies working hand Ranking. The city is up five places Kuala Lumpur itself. from its 2010 ranking. In the World As the country’s main growth in hand to deliver targets. I look Bank Group’s Ease of Doing Business centre, this region is critical for the forward to working with you to Report, Kuala Lumpur also moved up nation, and requires a comprehensive achieve all that we can in taking five spots from 2010 to rank 18th in 2015. and sustainable development plan that our capital city and her citizens The Greater Kuala Lumpur can adequately address the challenges towards greater heights. metropolitan area encompasses of rapid urbanisation.

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Contractor was regularly reviewed. 1 On Track Towards Game Changing, The works required to ensure timely completion were constantly discussed World-Class Infrastructure and agreed with the contractor. There were some challenges in meeting the completion of structural work for 12 stations and tracks laid for Phase 1 of the project. As some sections of the viaduct and station were experiencing delays, labour and resources were increased on site to mitigate this. This has resulted in all train tracks for Phase 1 to be successfully laid out in good time. In terms of the Accident Frequency Rate, the Project Delivery Partner has increased site supervision teams, carrying out weekly site safety and environment inspections. Work Package Contractors (WPCs) have also been more responsive to safety initiatives. The first phase of the MRT Line 1 (Sungai Buloh – Semantan) is expected to be operational by end December 2016, while the full line (Sungai Buloh – Kajang) is expected to be operational by July 2017. Seven stations will be constructed along the 9.5km underground allignment of the MRT Sungai Buloh-Kajang Trains along the 51km of MRT Line line, starting from KL Sentral. Above is the last underground MRT station at Maluri. Photo courtesy of Mass Rapid Transit Corporation Sdn Bhd 1 with 31 stations, are expected to run at an interval of 3.5 minutes during peak In 2015, the combined population INTEGRATED URBAN MASS hours. Each train will have four coaches, of Kuala Lumpur and was RAPID TRANSIT SYSTEM with a capacity of 1,200 passengers, and 7.87 million, entailing 25 percent The Mass Rapid Transit (MRT) the daily ridership is projected to reach of the country’s population of 31.1 system is a game-changer in the 400,000 passengers. The line will also million residents. ongoing effort to increase mobility, be integrated with the existing KTM This, along with the concentration productivity and quality of life. It Komuter, LRT and ERL rail systems at of businesses and commercial activities was proposed to ease congestion and various locations e.g. Sungai Buloh, KL in the city, presents the need to improve provide commuters to the city centre Sentral, Kajang, Pasar Seni and Maluri. connectivity on a large scale to ensure with an efficient and environmentally As for the MRT Line 2 (Sungai Buloh the city does not end up grinding to a sustainable mode of transportation. - Serdang - Putrajaya), announced by halt as a result of overcrowding and For 2015, KPIs under the MRT the Prime Minister during the tabling poor connectivity. construction are on track, within of the 2015 Budget, Government Living pressures due to the timeline and without cost overrun. approval was obtained in October high cost of urban living must be At the Sungai Buloh Depot, 24 trains 2015 to proceed and the first call for alleviated, and there needs to be good were delivered and tested on schedule, tenders will begin in January 2016. recreational facilities within the city. At exceeding its original target of delivering MRT Line 2 (Sungai Buloh - Serdang the same time, these solutions must merely 15 trains. Besides that, progress - Putrajaya) will further transform be sustainable and help to improve for the handing over of tunnels and the public transportation network in long-term city livability. station trackway to the System Works Greater KL/KV.

108 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 REVITALISING KL’S RIVERS Drainage (DID) and are targeted Cathedral, Panggung Bandaraya, The River of Life (ROL) project is at lifting water quality of the Masjid Jamek, Leboh Pasar Besar, aimed at revitalising the Klang and Klang and Gombak rivers from Bangunan Sultan Abdul Samad, Gombak rivers to open up economic the current Class III – V (unfit Central Market, Dayabumi opportunities leveraging on our for contact) to Class IIb (safe for and Pasar Seni LRT. (see River heritage and culture, whilst enhancing recreational activities) by 2020. Beautification Progress for 2015) liveability in the heart of Greater Kuala These projects range from water The third component of the Lumpur. The river water will have to treatment plants and sewage River of Life project involves be safe for recreational use, whilst treatment plants to the installation recouping returns from the the river banks will undergo a major of devices that trap rubbish and RM4.4 billion investment into transformation. The year 2015 has not waste flowing into our rivers (see the River of Life project through only seen the completion of various River Cleaning Progress for 2015). land development projects in the infrastructure as several pivotal River Beautification works along vicinity of these rivers. (See Land projects kicked-off bringing us closer the Klang and Gombak rivers will Development Progress for 2015) to the project’s goal. take place along a 10.7km stretch Upon completion of the ROL project River cleaning initiatives are that flows through the city centre in 2020, Kuala Lumpur will be on par divided into 67 packages (45 are from Gombak to Brickfields. This with other global cities like Singapore completed and 22 are on-going) is led by Kuala Lumpur City Hall. and Seoul that have also undertaken which are pioneered by the In the year 2015, works can be similar projects to clean their rivers and Department of Irrigation and seen in the vicinity of St Mary's develop their water fronts.

RIVER CLEANING PROGRESS FOR 2015

Completion of the Waste Water Treatment Plant (WWTP) at the Pasar sewerage outlets (CSOs). This is to ensure water quality of the Klang Borong Selayang – the largest for Kuala Lumpur, with a capacity of River that flows through the city centre maintains Class IIb standard 1,300 cubic meters per day that is safe for recreational use. Construction is at 40 percent and will be completed in the second quarter of 2016 Commencement of construction for the Bunus and Jinjang Kepong regional sewage treatment plants, expected to be completed by Another component of the River Cleaning initiative entails the public 2018 with the capacity to treat 750,000 population equivalent (PE)1 outreach program to create awareness on river conservation. In of sewage respectively 2015, two programmes were held at Keramat and Chow Kit Areas. Spearheaded by DID, the outreach programme is expected to impact A flood mitigation pond and other treatment facilities have been thousands of residents along the Bunus and Upper Klang River basins built and installed at Kolam Seri Segambut and Kolam Kampung Benteng with 46 gross pollutant traps2, two automatic trash rakes and two static screens3

Under the Drainage and Stormwater Management Master Plan, the DID installed 52 gross pollutant traps2, one trash rake, one log boom and one river water treatment plant to mitigate water quality and flow issues for Gombak River. A total of 32 gross pollutant traps2, two trash rakes, and one automatic trash rake were installed at the Kerayong River that flows from Pandan Indah to Pantai Baru

To prevent food waste from ending up in the river, DBKL installed Pasar Borong Kuala Lumpur WWTP cleans water discharge from the wet market 44 communal grease traps4 in 10 public food courts around into class IIB Kuala Lumpur 1 Population equivalent (PE) refers to the equivalent in terms of a fixed population of a varying or transient population or other activity, for example industrial or The first phase of the interceptor drainage system began construction commercial contributing to flow to the sewerage treatment system in 2015 along the Klang River that flows through Kuala Lumpur’s 2 A total of 528 gross pollutant traps have been installed since 2011 Heritage Quarter that is in the Masjid Jamek vicinity. The interceptor 3 Key Initiative 5 Package 1 and 2: Benteng Flood Retention Pond (Kolam system has four plants and will be able to clean 200 litres/second Takungan Banjir Benteng) (treatment capacity) volume of water and will manage 24 combined 4 A total of 98 communal grease traps have been installed since 2012 by DBKL

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 109 THE NTP – NATIONAL KEY ECONOMIC AREAS Greater Kuala Lumpur / Klang Valley

HIGH SPEED RAIL The next big milestone for the Kuala Lumpur-Singapore High Speed Rail Project (HSR) is the signing of a Bilateral Agreement between the Governments of Malaysia and Singapore. The signing of the agreement continues to reinforce the strong commitment by both Governments, and is to seek views on project viability, MyHSR, working closely with the expected to capture key decisions of commercial structure, procurement relevant State Governments, has since the project, as it advances into the approach and regulatory support confirmed and finalised almost 50% of construction phase. considerations. The exercise received the project’s alignment on the 330km Both Governments have continued overwhelming interest and the corridor along the west coast of the to work on identifying and defining feedback has been incorporated into Peninsular Malaysia between Kuala the technical, commercial, security the bilateral discussions. Lumpur and Nusajaya. This enabled the and regulatory characteristics Domestically, the Malaysian commencement of the subsequent set of of the project, leveraging on the Government established a special activities namely detailed environmental experiences of HSR projects globally purpose vehicle, MyHSR Corporation impact assessment and social impact while adapting to the Malaysian and Sdn Bhd (MyHSR) to be responsible assessment. These assessments are Singaporean requirements. for project delivery. Its scope of important to ensure that the social and The Governments had in 2015, work entails project development environmental impact arising from consulted the market through a from the current design stage up the project are properly monitored Request for Information (RFI) exercise to project operations. and managed.

RIVER BEAUTIFICATION LAND DEVELOPMENT PROGRESS FOR 2015 PROGRESS FOR 2015

Phase 1 of construction had commenced in 2014 and is focused in Precinct 7 or the Heritage Quarter - a location which encompasses important historical landmarks of Kuala Lumpur. Though construction work is expected to be fully completed at the end of 2016, progress has been slower than expected as construction was hampered by utility infrastructure. Construction progress was 36.5 percent versus the targeted 50 percent

Additionally, there were also interface issues with the Light Rail Transit (LRT) lines that run along one side of the river as well as unanticipated interface risk in the construction site of the Countdown Clock. Significant delays in the construction and completion of the Countdown Clock have also caused Artist impression of Putra World Trade Centre and its a five month delay in the river beautification works at the Pitcher Plant area surrounding areas at night near St. Mary's Cathedral In 2012, the Government had frozen many parcels of land situated along the Klang River that flows through the Federal Territory of Kuala Lumpur with the plan to recoup project development cost through the future development of these land parcels at higher expected valuations

In 2015, DBKL concluded a Market Study to seek the most feasible development model to generate capital from the 108 parcels of Government-owned A community wall stensiled with The River Of Life land along the 10.7km riverfront corridor

110 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 2 Enhancing City Liveability LAND DEVELOPMENT PROGRESS FOR 2015

Trees planted have been tagged using global positioning system (GPS) technology which will enable DBKL to easily identify the location of these trees for future maintenance. A total of 84,9385 trees were tagged since 2014 and the aim is to ensure the trees that are planted survive beyond 2020, contributing towards improving the city’s long-term environmental climate and beautification efforts.

Volunteers doing their bit by planting trees at the parks of Kuala Lumpur

5 NKEA Trees = 45,566 Non-NKEA Trees = 39,372

Initiatives under this NKEA A GREENER KUALA LUMPUR ranks Kuala Lumpur at number 26 out adopt a holistic approach towards DBKL’s Department of Landscape of 50 cities. This points to a need for urban development by factoring in and Recreation Development aims to more efforts to be geared at improving environmental impact and the well- increase green space in the city to soften scores in the areas of people and planet being of KL-ites to improve liveability. the city-scape and improve liveability. in enhancing city liveability. These efforts include the revitalisation As of 31 December 2015, 171,097 For 2016 to 2020, the Greener KL EPP of iconic landmarks, such as the trees have been planted in the past four is leaning towards mobilising the private Gombak and Klang Rivers that run years by the local authority, public and through the city, to increase community private sector under this initiative6. sector and NGOs to drive greening interest in heritage sites as well as to Arcadis’s Sustainable Cities initiatives in the city by adopting more ensure public amenities are able to cope Index 2015 - which benchmarks cities idle spaces as green parks as well as with the increase in population. according to people, planet and profit - planting and maintaining more trees.

6 EPP 6 Greener KL

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SHOWCASING KL’S RICH HERITAGE SITES In a bid to modernise Kuala Lumpur and bringing it up to par with other global cities, there is a need to preserve historical and iconic landmarks. Under the Greater Kuala Lumpur/Klang Valley NKEA of EPP7: Iconic Places, a network of heritage trails were developed along the corridors of famous landmarks and walkways of KL. Three heritage trails have been developed since 2011. Heritage Trail 1 starts at Masjid Negara passing through Jalan Hishammuddin and Dataran Merdeka, and ends at Medan Pasar. Heritage Trail 2 begins at the junction of Jalan Tun Perak and Jalan Melaka heading towards Jalan Gereja to arrive at Bukit Nenas. Finally Heritage Trail 3 starts from Medan Pasar through a portion of Jalan Hang Kasturi then turning into Jalan Petaling and Lebuh Pudu. The bus stop in front of Bangkok Bank has been closed and the area has been upgraded with a café in the center of the square. Infrastructure and roads along these routes have been upgraded or

refurbished to feature the significance Medan Pasar has been extensively renovated of these buildings and roads that have stood through years of development. two new businesses for 2015 to achieve is located at the junction of Jalan Raja Extensive renovations had been seven by end year. Laut and Jalan Parlimen. The project made in the Medan Pasar area to With the Heritage Trail 5 phase 1 was scheduled for launch on 31st make it another centre of urban plan approved, a contractor has been August 2015 but missed the deadline activity in the heritage core of the appointed in December 2015 and civil due to several technical hurdles on site. city centre. Several events including works are scheduled to be carried The project’s progress as 31 December a “Raja Band Competition”, “KL out in 2016. Heritage Trail 5 starts 2015 was at 87 percent and members Street Jam”, “Buy Nothing Day” and from Bulatan Dato Onn and connects of the public can look forward to the a “Malam Wayang” have been staged to Jalan Parlimen heading to the CDC finally being completed in 2016. at the venue, making it a centre of Parliament building. Moving forward, a pipeline attraction for tourists and citizens Some areas with room for of new heritage trails have been alike. Businesses have responded well improvement include the 2020 proposed and plans are underway to to these developments, taking a keen Countdown Clock (CDC). The CDC, increase the visibility of these trails to interest to be based at the area, driving which will feature a digital clock encourage the public to discover and Medan Pasar to surpass its target of projected onto a water curtain, explore them.

112 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 A COMPREHENSIVE NETWORK the functional performance and and another 31 STPs were upgraded to OF PEDESTRIAN WALKWAYS effectiveness of sewage treatment ensure effluent compliance to Standard The upgrading and improving processes and related facilities. Once A as stipulated in the Environmental of 48.87km of pedestrian walkways completed, the five regional STPs in Quality (Sewage) Regulations 2009. in Kuala Lumpur has enhanced city Kajang, Southern Klang, Langat, and At the same time 99 km of new connectivity. Upper Kerayong7 will be equipped with pipelines have been constructed to Over 80 percent of pedestrian future capacity to serve up to 1,369,000 divert sewage to regional STPs. For walkway users who participated in a population equivalent (PE)8 - in line the year 2015, Jabatan Pengurusan survey by the Malaysian Institute of with projected population growth. Sisa Pepejal Negara (JPSPN), the Transport (MITRANS) reported high The Sewerage Services Department agency responsible for solid waste satisfaction levels. Key contributing has been successful in managing the management in this country was factors include the installation of implementation and delivery of the tasked to design a Leachate Treatment anti-climb fences across a majority packages under the Sewerage Non- System in Taman Beringin. The system of the pedestrian walkways and the River Programme. As of 2015, two will address the issue of leachate levelling of uneven walkways that out of five regional STPs have been outbreak from a nearby closed landfill were unsafe. Pedestrians felt a sense completed while a total of 43 STPs by preventing it from flowing into the of increased comfort level and agreed were successfully decommissioned nearby water body. that this could lead to KL becoming a walkable city. The second phase of pedestrian walkway upgrades in Kuala Lumpur is planned to start after the completion of KL's Pedestrian walkway Master Plan in 2018.

SANITATION AND SOLID WASTE MANAGEMENT As the economic hub for the nation, Greater KL will continue to experience rapid urbanisation and population growth. This phenomenally increases public demand for basic services and amenities, including sanitation and solid waste management. Under the Greater KL / KV – Sewerage Non-River programme, a total of RM 3.3 billion has been approved to improve the sewerage infrastructure. This funding is to provide necessary capital for the construction of regional sewage treatment plants (STPs), sewer networks and refurbishment / upgrading of the existing sewerage facilities. These programmes are deemed vital to make good and enhance A dedicated wastewater treatment plant at Jalan Kelang Lama wet market

7 There will be two STPs for Upper Kerayong 8 Population equivalent (PE) refers to the equivalent in terms of a fixed population of a varying or transient population or other activity, for example industrial or commercial contributing to flow to the sewerage treatment system

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 113 THE NTP – NATIONAL KEY ECONOMIC AREAS Greater Kuala Lumpur / Klang Valley

As the economic hub for the nation, Greater KL will continue to experience rapid urbanisation and population growth. This will increase public demand for basic services and amenities, including sanitation and solid waste

Leachate holding pond, part of the Taman Beringin Leachate Treatment Plant. (Inset) Leachate sump management.

Additionally, in ensuring a Recommending options to In the pipeline, a Delivery Management holistic approach in managing solid alleviate the Government’s Office (DMO) will be set up to monitor waste issues in the country, a lab was financial burden in ensuring and implement lab outcomes. More held from 27 May till 17 June 2015 sustainable solid waste emphasis will be given towards the focusing on: management and public inclusion of industry players into the cleansing activities solid waste management framework Improving the execution such as the establishment of the and implementation of The lab outcomes will be National Food Waste Plan and a waste management (3R, implemented nationwide and framework for the Catchment Area Recovery, Treatment and with a clear intent of achieving Needs Statement (CANS), which will Disposal) in Malaysia the national target of 40 percent assist efforts to facilitate more private waste diversion from landfills, as Addressing governance sector investments in the solid waste well as 22 percent recycling rate by issues in relation to solid management industry. the year 2020. Following the lab, waste management a Separation At Source programme Proposing structural and to promote the separation of garbage policy adjustments including from households was launched in enablers that will ensure September 2015 in all states adopting longer term viability of solid Act 672 including Kuala Lumpur, waste management and Putrajaya, Pahang, Negeri Sembilan, public cleansing initiatives Melaka, Johor, Kedah and Perlis.

114 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 For 2015, InvestKL was successful 3 Greater KL: Business and in attracting 10 multinational corporations (MNC) to Greater KL, Investment Hub of the Region meeting its set target. These MNCs will be setting up regional headquarters, regional centres of excellences and Sitting in the heart of the fast- global city in Southeast Asia. Greater principal hub operations. growing ASEAN region, with access KL is also ranked second in the With a total of 51 MNCs that have to a 630 million population and a emerging Market Cities and fourth in set up regional offices in Greater rapidly growing regional economy its Business Friendliness according KL since inception in 2011, 24 are makes Greater KL a strategic business to the Financial Times (UK)’s Foreign European, 16 are from the Americas and investment hub. Its ongoing Direct Investment report 2014. and the remaining 11 are from the Asia- transformation into a world class city Greater KL has clearly emerged as Pacific region. provides for an even more compelling a favorite to multinational companies; Main sectors include engineering case to market the city as a hub within with an increasingly mature support services, business services, oil and gas the region. ecosystem, an efficient cost structure, services, global commodities trading and large pool of high skill talent and an the supply chains of aerospace, logistics INVESTMENTS CONTINUE ever increasing ease of doing business. and industrial products multinationals. TO BE CHANNELED INTO THE GREATER KL/KV REGION According to the Economist Intelligence Unit’s (EIU) report, Hot spots 2025: Benchmarking the Future Competitiveness of Cities, Greater Kuala Lumpur is ranked against 120 other cities as the second most competitive

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GETTING OUR TALENT top foreign talent, particularly & Retention (STAR) initiative, 1,019 STRATEGY RIGHT in areas of skill shortages and Government-funded scholars, In order for Malaysia to maintain optimise on home-grown Malaysian including engineering, science and its attractiveness as a regional professionals including promoting accounting students, graduating from business and investment hub, Talent diversity and inclusion. both local and overseas universities Corporation Malaysia (TalentCorp) has To enhance graduate such as from the UK, US, and been partnering leading companies to employability, TalentCorp continued Japan served their bond of service by address the issue of talent availability to provide tax incentives on expenses working with private sector employers. in key sectors driving Malaysia’s incurred by companies in hosting The World Bank in a June economic growth. Towards this 17,967 undergraduates for structured 2015 report concluded that the end, a wide-range of initiatives have internships; and co-funded training Returning Expert Programme been introduced to enhance the programmes with the industry to (REP) has succeeded in attracting employability of Malaysian graduates, upskill 7,153 fresh graduates to meet overseas Malaysians with the skills engage global Malaysians to return industry requirements in 2015. Under that Malaysia needs. In 2015, 616 or contribute from abroad, facilitate the Scholarship Talent Attraction experienced Malaysian professionals working abroad were approved for the REP incentives. In line with the World INVESTKL SPOTLIGHT Bank’s report recommendations, TalentCorp has increasingly Between 2011 and 2015, InvestKL square feet of office space, and generating worked with employers to connect has attracted 51 MNCs with approved / an annual rental of RM40 million. This experienced Malaysians abroad with committed investments totalling more than initiative is on track to reach its target of job opportunities in Malaysia. RM5.9 billion and regional jobs totalling attracting top 100 MNCs by 2020. TalentCorp continues to enhance more than 7,100. Out of this, RM 1.9 billion Also encouraging is increased the ease of entry for highly skilled of investment has been realised and more investments by MNCs who have already than 4,700 regional jobs are on payroll. made Greater KL their regional base such expatriates, particularly in areas of skill These investments have also generated as Schlumberger, International SOS, Service shortages in Malaysia. The Immigration a multiplier effect in the office space rental Source and Linde as they experienced the Department and TalentCorp’s newly sector with the MNCs taking up over 570,000 advantages of operating from Malaysia. opened Malaysia Expatriate Talent Service Centre (MYXpats Centre) achieved a 71.5 percent success rate in 2015 of processing employment passes within its five-day client charter. The Residence Pass-Talent (RP-T), an initiative by TalentCorp and the Immigration Department, was assessed by the World Bank in 2015 to be an effective tool in retaining top foreign talent in areas of skills gaps. In 2015, 1,113 expatriates were approved the RP-T. In 2015, TalentCorp also worked closely with 20 leading employers to adopt flexible work arrangement as a key strategy to retain women in the workforce and helped 256 women return to the workforce under KL Mayor with Ambassadors the Career Comeback programme launched last year.

116 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

aking stock of the progress project, with both Prime Ministers along the Gombak and Klang Rivers recorded last year, 2016 is being fully committed in ensuring that flow through Kuala Lumpur will T set to be both an exciting and that the project will come to fruition. be awarded in 2016, with construction challenging one for the Greater KL/ SPAD is spearheading this project on expected to reach an overall target of KV NKEA, as several major projects the Malaysian end and will be the lead 20 percent within that year. record important milestones this year in formulating the Terms of Reference With the establishment of a DMO in realising our vision of becoming a for the Bilateral Committee to be set to monitor and ensure implementation world class city. Even so, more needs up by end 2016. of measures to move the Solid Waste to be done to assure momentum The river cleaning component of Management lab outcomes forward, it amidst the backdrop of global the River of Life initiative will continue is expected that the Taman Beringin economic headwinds. to progress. Some highlights are the pre-treatment system and upgrading All trackwork installation works commencement of construction of of the Leachate Treatment System will for the Sungai Buloh – Kajang MRT the Jinjang-Kepong Regional Sewage be completed. This would prevent Line will be completed, and the first Treatment Plant in 2016. 11 percent leachate outbreak into nearby water phase of the MRT Line 1 (Sungai Buloh of construction is expected to be bodies and prevent the foul smell of – Semantan), will be operational by completed in the same year. The leachate from affecting the residents end 2016. construction of the Bunus Regional living close to the landfill. For the High Speed Rail, project Sewage Treatment Plant that is Overall, the Government is structure discussions are still currently progressing ahead of confident that with initiatives yielding ongoing. Both governments are schedule will be 60 percent completed delivery being implemented according still in the process of negotiating a by end of 2016. to plan, Greater KL/KV is well on track bilateral agreement to govern the The remaining seven beautification towards achieving its world-class city construction and operations of the work packages for the 10.7km stretch aspirations by 2020, if not sooner.

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Marcus Karakashian Dato’ Haji Haris Project Director, Fadzilah Hassan MRT Sungai Buloh-Kajang Line, Commercial and Land MRT Corp Management Director, MRT Corp

completed according to schedule, and the reasons for this include its efficient working relationship with the Project ALL SET TO GO Delivery Partner (PDP) MMC-Gamuda KVMRT Sdn Bhd, both extensive First Phase of MRT Line 1 on and consistent engagement with its stakeholders as well as the strict schedule for commencement governance system executed by the MRT Executive Committee, chaired by the Chief Secretary to the Government, of service end 2016 Tan Sri Dr Ali Hamsa. MMC-Gamuda is entrusted to hen the first phase of the predictability with trains arriving every ensure the delivery is on time and Klang Valley MRT Sungai 3.5 minutes during peak hours people within cost, failing which a penalty will W Buloh – Kajang (SBK) to plan their travels more effectively. be imposed. Hence, it is in the PDP’s line begins operation at the end of According to Mass Rapid interest to push for timely delivery 2016, residents of Klang Valley who Transit Corporation Sdn Bhd (MRT within cost. are constantly at the mercy of traffic Corp)’s Project Director for the MRT The MRT Exco, which comprises jams can expect a game-changing Sungai Buloh-Kajang Line Marcus representatives from ministries, transportation experience in the Greater Karakashian, this efficient train system government agencies including Kuala Lumpur/Klang Valley area. will be supported by a regular feeder State Governments is a platform The public can look forward to a bus service that plies residential and where all inter-agency issues are clean, modern, fast and comfortable commercial areas, providing first to last discussed. “Since it is chaired by the transportation system that allows them mile connectivity to commuters. Chief Secretary to the Government to travel from Sungai Buloh to Kajang The Klang Valley MRT is one of the of Malaysia, Tan Sri Dr Ali Hamsa in 88 minutes. Also, the luxury of very few mega projects that is being and represented by senior officials,

118 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 most issues are resolved quickly,” wanted us to reduce the noise during According to MRT’s Commercial Karakashian said, adding that the welding works as she had a wedding and Land Management Director, Dato’ mandate from the top to support function at home that day, and we did Haji Haris Fadzilah Hassan, many are the project has also helped expedite it. In cases where we had the right to beginning to see the bounty that MRT project delivery. acquire the land, the company instead brings including the increase in real Stakeholder engagement, an opted for a mutual agreement to estate value, new businesses and initiative that has been a priority since develop the land." development projects. the beginning of the project in 2011, is He added that with the help “We have witnessed the economic another reason why the MRT project, of the PDP, contractors are held to rejuvenation of a number of areas which had faced quite a bit of public high standards. They are expected like Balakong, Sungai Buloh, Sungai opposition in the beginning, managed to respond to complaints within 48 Buloh's Kampung Selamat, which to garner considerable support. hours and with these complaints are attracting the new investments According to Karakashian, MRT being copied to the senior management via development projects and new Corp’s philosophy is anchored on from MRT Corp, compliance was not businesses,” he said, adding that the fact that MRT work should not an issue. though the project is within Klang inconvenience others and there The extensive stakeholder Valley, the multiplier effects extends was a need for a strong stakeholder engagement efforts as well as the beyond city boundaries. engagement team. The team constantly complaint and response mechanism meets residents and residents’ has to a large extent helped MRT associations to build relations Corp win over its detractors. “In the by creating awareness, seeking beginning, we had strong opposition compromises and finding solutions. from many who refused to have the “We take into account all MRT lines in their neighbourhood complaints and whenever possible we and now we have lots more people accommodate requests by residents. wanting the MRT near their homes,” For example, we had an individual who Karakashian said.

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Doreen Ho Manager Planning and Design, MRT Corp

into a vibrant and liveable water front with high economic value, which also ENGINEER RETURNS contributes to elevating Kuala Lumpur into one of the top liveable cities in the world, like Melbourne and Singapore, HOME TO SUPPORT by the year 2020.” “It was also a project which initially drew quite a bit of scepticism NATIONAL and negativity; to some the idea of turning what they thought was a TRANSFORMATION huge monsoon drain into something beautiful was incredulous.” She, however, pointed out that fter more than 10 years of the River of Life Project,” said Doreen, as the project progressed, people living and working as an who started working with US-based began to see the big picture, that it A engineer in Auckland, Kuala consultancy firm AECOM as a Senior was indeed possible to transform Lumpur-born Doreen Ho decided that Engineer in 2012. the once forgotten river into a space it was time to head back to Asia where AECOM was the consultancy worthy of celebration. the tempo was picking up in terms of engaged to spearhead the RM1 billion The engineering graduate infrastructure development. River Beautification project and who worked in two international “I came to know about a job transformation of 10.7km of the Klang consultancies in Auckland and opportunity in Kuala Lumpur via and Gombak Rivers. came back home under TalentCorp’s a friend and applied for it. After a “I was even more excited to Returning Expert Programme, found telephone interview, I was offered a discover that the River of Life project the transition from working life in New position in an international consultancy, was part of the Greater KL/KV put in Zealand to Malaysia much harder than which I later found out was working on place to transform the Klang River she had anticipated.

120 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 “I would say that the first six River of Life works to beautify and MRT development is currently the months were really tough - having reactivate the Heritage Quarter of country's largest infrastructure project to adjust with a new working culture Kuala Lumpur, whilst conserving the and the biggest work package tendered and lifestyle, whilst being a part of heritage values of the area. "It was a out for Line 2 is for the underground a high profile project with a short challenging project as being in the portion. The excitement of delivering delivery deadline.” oldest part of the city, we were working an MRT project that is going to further "I may have been born here but with numerous stakeholders and improve the traffic congestion of Kuala being away for years and with the public landowners on land matters and Lumpur keeps the team on our toes in big changes that had taken place in utility providers on managing works achieving this EPP project.” Kuala Lumpur, it was no longer the around a web of old and unknown Doreen takes great pride in the place I once related to. Hence, for underground utilities and drainage work she is doing to support national me the transition was not a smooth systems. Additionally, the project’s transformation and has no regrets ride. However, it was good to have KPI also included raising the bar of coming back to Malaysia for it was a support in the form of friends and current standards to produce a high move that provided her opportunities work colleagues who had similar quality design and specifications in an to work on large scale projects experiences of returning home to industry that is only currently catching of great impact. work. A word of advice to all returning up with international standards.” Malaysians is that you have to set a After three and a half years realistic expectation about what at AECOM, Doreen took up a new you’re going to be walking back into, challenge at Mass Rapid Transit before moving home." Corporation Sdn. Bhd. (MRT Corp). Doreen was part of the pioneering She is presently Manager of Planning team in AECOM for the River of Life and Design (Civil and Structural) for project and was involved in the the Line 2 underground team. beautification work in Precinct 7, the “As our CEO mentioned in the New first of eleven Precincts of the overall Straits Times on 23 February 2016, the

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RIVER OF LIFE PUBLIC OUTREACH PROGRAMME (ROL-POP)

s part of the key initiatives for POP programme is heavily geared participation so they can have a better Entry Point Project 5 (EPP5) towards the active participation of the understanding of the programme and A River of Life, the River of local communities. its aims. Via indirect methods, there Life Public Outreach Programme As a civil science programme, at is media coverage to allow for a wider (ROL-POP) aims to address river water the initial stage, it consists of creating audience to be reached. pollution through non-structural awareness. At the implementation stage, The second stream, training and measures by educating the public on it focuses on imparting knowledge and workshops is carried at different the need to collectively care for the river skills to the community. Finally, the community levels to enhance their and its water quality. The initiative also actions of the community are driven skills and knowledge in managing promotes a sense of ownership towards in line with basin community needs. river water quality. the river, and creates a long-term and The ROL-POP achieves its objective The third stream maintains sustainable behavioural change in the via three streams. The ROL-POP momentum for on-going public towards preserving the rivers. campaign and talks which make programmes and activities to sustain The Department of Irrigation and up the first stream, brings the local stakeholder commitment via ROL Drainage (DID) initiated this project community closer through direct outreach programmes. with the involvement of 26 government agencies and departments across four Ministries, two states and three municipalities which are the Ministry of Federal Territories, Ministry of Natural Resources and Environment (MoNRE), Ministry of Urban Well-being, Housing and Local Government (KPKT) followed by the states of Selangor and the Federal Territory of Kuala Lumpur and finally, the municipalities Dewan Bandaraya Kuala Lumpur (DBKL), Majlis Perbandaran Selayang (MPS) and Majlis Perbandaran Ampang Jaya (MPAJ). Despite this, the ROL-

122 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Dr K Kalithasan RIVER Care Programme Coordinator, Global Environment Centre

CONNECTING PEOPLE TO THE RIVER OF LIFE

Working hand in hand with DID on one of the ROL-POP initiatives is Dr K Kalithasan, coordinator of the RIVER Care Programme for the Global Environment Centre (GEC) who affirms that river rehabilitation will not work if the human factor is not addressed effectively. "People are both the source of the problem as well as the solution, and unless there is a change in mind set and behaviour, a permanent solution remains elusive." Dr. Kali asserts that the first move in mobilising people to care for the river is to reconnect people with the river and make them realise that they are both part of the river basin and the beneficiaries of the river, especially those who are living within its immediate vicinity. “Once they are connected to the river, ownership and responsibility come naturally. This bottom-up or/and ‘heart’ approach (soft approach) works more effectively in changing behaviours and mind-sets than the hard approach or/and top-down instructions to take care of the river.” “In 20 years of doing outreach programmes, our greatest All photos courtesy of Dr K Kalithasan and the Global Environment Centre achievement is the shift in the way people looked at river and river basin and re-connect, which I term as adopting the right picture of the river and river basin.” People are both the source Via ROL-POP, he shares that communities have started adopting river reserves and monitoring water quality. Some have transformed of the problem as well as river reserves into vegetable and herb gardens as seen in AU2 with the support of the Department of Irrigation and Drainage (DID) Malaysia, the solution and unless and community river centres in the Melawati Area and Taman AU3 community are planning to set up parks. there is a change in mindset Overall, the ROL-POP shows that public participation is vital and should be the key element in future efforts for sustainable river basin and behaviour, a permanent management in Malaysia, he says. solution remains elusive.

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DATUK SERI PANGLIMA DR. ACCELERATING MINISTER OF ENERGY, GREEN TECHNOLOGY AND WATER INDUSTRY The Oil, Gas & Energy (OGE) National Key Economic Area (NKEA) is designed to be robust RESILIENCE over various business cycles. The current low oil price scenario creates an opportunity for industry rebalancing and evolution to ensure best possible returns on capital invested, as opposed to merely surviving the downturn. With oil majors adjusting to this ‘new normal’ and a shrinking pie in terms of work within the industry, competition has naturally intensified. Thus, Malaysian Oil & Gas Services and Equipment (OGSE) companies must consider exploring consolidation opportunities within the fraternity to increase their competitiveness and place the industry in good stead when the global oil market recovers. I believe that local OGSE companies must increase their competitive advantage by investing and working to become owners of technologies, rather than agents of technologies. Photo courtesy of UMW Oil & Gas Corp Bhd

124 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 ...the industry and the players are better positioned to face uncertainties, having In the energy sector, the Government continues to introduce built competency and policies geared towards ensuring energy security, efficiency and capacity over the years. accessibility whilst encouraging the use of cleaner energy sources. However, the current low oil and coal price might be a challenge to alaysia’s push towards these efforts. high income status by 2020 INSIDE THIS NKEA Nonetheless, in our efforts to continues to place the Oil, M Maintaining the Sustainability Gas and Energy (OGE) sectors in critical mitigate climate change and global 1 of Domestic O&G Production warming, we must continue to light to propel the economy forward. As a net energy producer, the Oil decarbonise our economic growth & Gas (O&G) industry has consistently Malaysia: Asian Hub by shifting away from conventional contributed about one third of 2 for Oilfield Services fossil fuel and increasing our use Government revenue. Although the of renewable resources. Government continues to reduce its Oil Price Contango income dependence on this sector 3 Spurs Storage Demand by developing other economic areas, world class competency and The Road to capabilities developed over the 4 Energy-Efficiency years through national oil company Petroliam Nasional Bhd (PETRONAS) should not be dismissed. There remains much value to be gained in maintaining competitive advantage as For upstream ventures, this is a we forge ahead. time for correction. With oil prices In 2015, OGE sectors contributed predicted to drop to a record low in 2016 17 percent to the country’s Gross on the back of a global supply glut, Domestic Product (GDP). Revenue now is a time for deep introspection contribution to Government was at 21.5 and action to set right excesses and percent (MOF Budget Estimate-2015). prepare for the upcycle once it occurs.

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It is also important that we diversify An equally encouraging started to introduce the Euro 5 diesel Malaysia’s energy mix to mitigate development in the energy policy in selected stations in the Klang Valley dependence on non-renewables space has been the adoption of the as well as in Southern Johor. such as oil and gas, and coal among fuel standard in the form of Euro 4M Fuelled by the need to ensure others. The Government’s move to RON97 nationwide in September. This relevance of the OGE sectors against implement Net Energy Metering and kick-starts a series of game-changing the backdrop of shifting industry Large Scale Solar as announced in reforms in fuel-standards to reduce the dynamics, we highlight below the key 2015 this year, will be good catalysts in negative impact of low standard fuel areas where OGE NKEA’s efforts were encouraging the take-up of renewables on the environment. Seeding from this directed in 2015. in the country. development, oil companies had also

1 Maintaining the Sustainability of Domestic O&G Production

Continuous volatility in crude oil price impacted the industry in different forms and led to changes in the landscape in many ways. As part of good business and commercial practice, PETRONAS and other International Oil Companies (IOCs) operating in Malaysia increased scrutiny on their projects and staffing levels. It appears that the era of “easy oil” is now over. With dipping oil prices, some O&G projects ceased to be lucrative, or even commercially viable. Higher technologies and investments are required to extract oil from less- than-favourable field conditions. The prolonged low oil price environment inevitably caused some projects to be shelved while those that do go through are expected to rake in lower margins. In anticipation, oil majors in and outside Malaysia have announced various measures to trim their capital expenditure and jobs.

126 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 2015 IN REFLECTION: landscape namely Bank Negara and technology development in Malaysia, RHB Bank, SME Bank the following areas: Subsurface MPRC, along with Malaysia and Societe Generale, among Technology (UM), Marine External Trade Development others – to explore financing Systems (UTM), and Topside Corp (MATRADE), intensified for the OGSE firms as well Process Engineering (UTP). efforts to bridge business as to raise awareness on the opportunities in key ASEAN Moving forward, as the pie in this OGSE landscape in Malaysia markets in the run up to the industry shrinks and domestic jobs ASEAN Economic Community As part of the technology plateau, domestic competition will (AEC) which took effect at end- development agenda for local intensify. Malaysian OGSE companies 2015. A total of 33 Malaysian OGSE companies in the 11th should start exploring opportunities OGSE companies were led on Malaysia Plan, MPRC has to enhance competitiveness and three Specialised Marketing entered three memorandums of prepare for the next upcycle upon Missions (SMMs) to , understanding with Universiti recovery. and Vietnam Malaya, Universiti Teknologi The current changing landscape and challenges have the potential to MPRC also actively assisted Malaysia and Universiti Teknologi act as a catalyst for OGSE companies MATRADE on five other Petronas. These collaborations to explore opportunities for SMMs – to Azerbaijan and pave the way to the consolidation within the fraternity Kazakhstan, Kuwait, , establishment of three research and step up on investing and Abu Dhabi, and Saudi Arabia and development clusters to form industry-academia partnerships working towards becoming owners MPRC hosted its second Oil & that will support the growth of technologies, rather than merely Gas Financial Forum (OGFF) agents of technologies, to increase of Malaysian technologies in June 2015 to improve local their competitive advantage. and talents in OGSE sector OGSE firms’ access to funds. Current trends focus on three The OGFF connected oil and gas The three clusters, also known technology clusters namely services and equipment (OGSE) as Oil & Gas Innovation and subsurface, marine and topside. Apart companies with key players in Technology Clusters (OGITeC) from these are system integration and Malaysia’s financial services will be advancing innovations challenges in extending the life of existing assets which cut across all three clusters. These areas provide high technical content and high value added work, skills and competence. Nudging local players to become competent in these areas will also bode well in shaping Malaysia to become a regional O&G hub capable of meeting the needs of investors. There are many existing facilities

Dato’ Sri Idris Jala delivering a to encourage technology development. keynote address at MPRC Oil & MPRC advocates and facilitates Gas Financial Forum 2015 (OGFF 2015). The OGFF convened increased participation in oil and gas influential leaders from the technology development between financial and O&G sectors for a day of networking and exciting Government agencies and industry conversation on trends and players and will continue to work with development in the Oil and Gas Services and Equipment PETRONAS to identify incentives to (OGSE) industry, and financing encourage consolidation among OGSE strategies for OGSE companies in the current market downturn companies in the market.

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There was increased interest 2 Malaysia: Asian Hub for Oilfield Services among MNCs in 2015 to set up a regional base in Malaysia. These included companies like engineering Since 2011, Malaysia has set out To address this, MPRC, along procurement firm McDermott, oil on a journey to become the hub for with relevant Government agencies, services firm Hilong Holdings and Oil and Gas Services and Equipment have been toiling to ensure the O&G exploration and production (OGSE) activities. implementation of initiatives that will (E&P) training firm Harness Energy. With our extensive experience in help local OGSE companies compete These investors are primarily the O&G market compared with other and survive in this tough environment. guided by long-term considerations countries in Asia-Pacific, we are well- MPRC actively promotes the on the global O&G landscape. placed to achieve this vision. development of O&G focused training Establishing a base at the heart of However, in order for Malaysia to and development centres within the the world’s fastest growing economic become a thriving hub, OGSE firms in country. Internationally recognised region – Asia, will put them in a well- Malaysia need to be more competitive. institutions such as Aberdeen Drilling positioned spot to take advantage OGSE firms in Malaysia are also School, UMW-INSTEP Drilling Academy, of the future rebound in oil prices now competing in a smaller and Harness Energy, The Welding Institute and resulting OGSE activities. It is more challenging market due to low and OPITO BOSIET Training centres necessary for Malaysia to develop the oil prices and market liberalisation. have been established in Malaysia. right environment for this to thrive.

(Top) MPRC team at the Aberdeen Drilling’s Malaysian Well Control Training Centre launch. (Bottom ) MPRC team with key players at the grand opening of the new Hi-Force Malaysia premise on 29 October 2015

128 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 facilities in Malaysia. The committed 3 Oil Price Contango capacity for both oil and LNG reached 1.25 million cubic metres, Spurs Storage Demand far exceeding the 2015 target of 0.83 million cubic metres. Dialog Group Bhd, the lead joint venture partner In 2015, the glut in oil supply purchase oil today and sell futures at in the Pengerang Independent pushed oil prices into a contango, a higher price. Deepwater Petroleum Terminal where front-month contracts were In turn, the contango spurred (PIDPT), also saw a surge in demand at a discount to longer-dated futures storage demand globally. Similar for storage. Total planned storage contracts. The wide price discount trends were seen at the oil and capacity at PIDPT is for five million enabled customers and traders to liquefied natural gas (LNG) storage cubic metres by 2020.

4 The Road to Energy-Efficiency

RENEWABLE ENERGY To diversify and increase the INCREASING SHARE OF RENEWABLES IN THE nation’s Renewable Energy (RE) capacity, the Government aims to ENERGY MIX implement Net Energy Metering (NEM) and Large Scale Solar (LSS). The Government has announced Additional initiatives will be plans to implement Net Energy implemented to complement existing Metering (NEM) and Large Scale Solar (LSS) in Malaysia. initiatives, such as the Feed-In The Sustainable Energy Tariff (FiT) mechanism, to improve Development Authority Malaysia utilisation of indigenous RE resources. (SEDA Malaysia) working in The goal of these initiatives is to ensure collaboration with various agencies national electricity supply security including KeTTHA, the Energy Commission (ST) and power utilities and sustainable socio-economic such as Tenaga Nasional Bhd (TNB) and Sabah Electricity Sdn Bhd (SESB) as development. well as, the photovoltaic (PV) industry are presently developing frameworks to Malaysia’s FiT mechanism, facilitate the implementation of these initiatives. introduced in 2011, has to date resulted NEM allows electricity generated from solar PV systems to be consumed in approximately 350MW additional situ (self-consumption) thus reducing the purchase of electricity from the grid. installed RE capacity connected to In Malaysia, where peak electricity demand coincides with the electricity generated by solar PV systems, the widespread deployment of net energy metering the grid, falling below the original for residential and commercial buildings will help utilities to reduce generating target of 985MW by 2015. The lag peak electricity which is expensive. is brought about by the inability to Additionally, the LSS will also provide a formidable alternative for power kick-off non-PV resources due to generation. Traditionally confined to smaller capacities, the trend of LSS continue issues concerning feedstock, grid- to gain traction. Over the long term, introducing more renewables into the energy mix is connection, permitting and finance. expected to reduce reliance on imported fuels and boost energy security in the Although PV is by far the most easily country. Additionally, given that these are clean energy generators, the NEM and executable mechanism, further quota LSS will also bode well in mitigating climate change concerns. expansion is impeded by high FiT rates for PV which would be likely to drain the RE Fund.

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On target, the Euro 4M RON97 standard was successfully implemented in September 2015 by all oil companies in Malaysia. Preparations to implement the Euro4M RON95 has started, with key stakeholders –such as the Economic Planning Unit (EPU), Ministry of Finance (MOF), Ministry of Natural Resources and Environment (NRE), and Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) – looking at different areas of readiness such as standards and pricing. On 1 December 2015, the NRE approved and gazetted the new Euro 5 fuel standards in the Environmental Quality (Control of Petrol and Diesel Properties) (Amendment) Regulations Kumpulan Melaka Berhad's 5 Mw solar farm 2015 to be implemented in Malaysia. With the regulation now in place, oil Funding source for the FiT is limited Adoption of these global standards companies are obliged to supply fuel in to the surcharge imposed on the bills will ensure that fuel sold in Malaysia the Malaysian market by using standards of electricity end-users, currently at contain lower benzene and sulphur imposed by NRE as a guideline, moving 1.6 percent. The quota cap is essential – in short, greener fuel producing towards the implementation of Euro 5 to ensure adequate RE Funds for FiT less emissions and pollutants into fuel standards starting with Diesel payments to RE generators. the environment. in September 2020, as scheduled. The introduction of both NEM and LSS will help improve the overall contribution of RE to the energy industry moving forward. The Ministry of Energy, Green Technology and Water (KeTTHA) had announced the implementation of NEM and LSS in 2015.

HIGHER FUEL STANDARDS In 2014, the Government announced the roadmap for the implementation of higher retail fuel standards nationwide – the Euro 4M RON97 is to be introduced in September 2015, Euro 4M RON95 in October 2018, Euro 5 Diesel in September 2020, and Euro 5 RON95 and RON97 in September 2025.

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ooking ahead, it is clear that Amidst various challenges, in stronger foundations for the country’s 2016 will be one marked 2016, the Government, in partnership energy security fostering greater L with challenges for the O&G with the private sector must ensure economic security, prosperity and industry, with a slower progress in the Malaysia’s energy infrastructure well-being. upstream sector. And yet, this industry remains robust. At the COP 15 in Copenhagen, is no stranger to trying conditions, Efforts to diversify the country’s our Prime Minister announced that having gone through a similar cycle sources of energy and the move Malaysia would voluntarily reduce its when oil prices went down below USD10 towards a market-based pricing greenhouse gas emissions intensity per barrel back in 1998. The difference for energy continues to shape the of Gross Domestic Product (GDP) by this time around is that the industry and agenda of what we want to achieve up to 40 percent based on 2005 levels, the players are better positioned to face in this space. by 2020, conditional on technology uncertainties, having built competency The Government will be focusing transfer and financial assistance by and capacity over the years. on getting the necessary framework developed countries. Energy efficiency As an upside, the current situation in place for Third Party Access (TPA) and green technology will also be focus creates a stronger impetus for O&G as well as pushing for rationalisation areas for 2016. players to take measures that will and subsequently deregulation of gas inevitably strengthen their operations prices. TPA will pave the way for the and help them create resilience liberalisation of the gas market in against volatilities and unexpected Peninsular Malaysia. The advent of industry developments. We must market liberalisation will facilitate remember never to downplay the the entry of new industry players, breadth and experiences of our local encourage more efficient utilisation, firms and leverage on all these to and benefit consumers by enabling create competitive differentiation competitive gas pricing. At the same in the industry. time the TPA will contribute towards

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here are currently 3,613 local Oil and Gas Services PROMOTING T and Equipment (OGSE) companies operating in Malaysia registered with state oil company INFORMATION PETRONAS. Thus, when the Malaysian Petroleum Resources Corporation (MPRC) introduced the MPRC100 TRANSPARENCY in June last year, the report was very much welcomed by investors, bankers and industry players alike, THROUGH MPRC100 TO says MPRC's executive director Dr Shahreen Madros. The MPRC100 is a list of the SPUR OGSE INDUSTRY Top 100 Oil and Gas Services and Equipment (OGSE) companies in Malaysia ranked based on their DEVELOPMENT revenue. It maps industry segments where the MPRC100 companies are operating in, and provides industry commentary featuring an aggregated view of the OGSE industry in Malaysia, and supplemental analysis.

132 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Syed Azlan Syed Ibrahim Ir Dr Shahreen Madros Senior Vice President, Executive Director, MPRC Industry and Market Enabler, MPRC

Madros adds that the report was companies abroad, and industry MPRC recognises the need for produced in line with MPRC’s stance players in their strategic alliance. more thought leadership documents to promote information transparency In preparing the report, he explains to help the industry grow and achieve as part of its mandate to develop that MPRC started with the database of as well as maintain its position as a and promote Malaysia’s O&G companies registered with PETRONAS regional OGSE hub and foresees services industry. and procured financial information publishing more such documents in “We see information transparency (based on audited accounts) from the the near future. as a market enabler and believe Registrar of Companies (ROC). The 2012 in maintaining a very transparent and 2013 data were published in the and systematic process so that all first half of 2015 and with 2014 data information can be verified.” published in January 2016. We see information Having such information and Other than the MPRC100, MPRC value-added analysis neatly packaged published two other documents - transparency as a is undeniably useful to many Malaysia OGSE Catalogue (the 2016 market enabler and stakeholders, given that information edition features 154 companies) and on non-listed companies can be Malaysia Oil and Gas R&D Catalogue. believe in maintaining notoriously hard to uncover, he says. Essentially, through these reports, MPRC100 has proven to be useful to the agency aims to generate more a very transparent and investors in identifying the industry’s interest, analysis and discussions systematic process potential and risks of the companies to build capacity and further uplift featured, bankers in gauging how the Malaysia's OGSE sector, in line with so that all information industry is performing overall, trade the Government’s goal to see Malaysia agencies in promoting Malaysian become the OGSE hub of Asia Pacific. can be verified.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 133 THE NTP – NATIONAL KEY ECONOMIC AREAS Financial Services

DATO’ SERI AHMAD HUSNI MOHAMAD HANADZLAH ROBUST MINISTER OF FINANCE II FINANCIAL The global economy faced numerous challenges in 2015. SERVICES Among the main challenges were uncertainties from the impending monetary policy normalisation CRITICAL FOR in the United States, the ripple effects of China’s economic rebalancing, sharp and prolonged GROWTH decline in commodity prices and shaky investor confidence owing to an uncertain domestic political climate. Despite the challenges, I am pleased to report that the Financial Services National Key Economic Area (NKEA)’s KPIs for the year have been met, thanks to the collective efforts across the various agencies involved. With the ASEAN Economic Community (AEC) gaining headway in facilitating trade between member nations, the ASEAN banking integration framework was concluded and announced by the region's Central Bankers and Finance Ministers in 2015. This brings us closer towards realising the goal of becoming a formidable economic block trading with the rest of the world once the AEC picks up full momentum.

134 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Funding remains a significant challenge holding smaller Moving into 2016, the businesses back from realising their full growth potential. As focus of the Financial Services part of efforts to offer alternative sources of funding for small NKEA will be to further enhance businesses and entrepreneurs, Securities Commission Malaysia the resilience of our financial launched the Equity Crowdfunding (MyECF) framework in 2015 and systems, domestic economy and eventually approved six equity crowdfunding operators out of ensuring continuous sustainability 27 applications for the year. In improving and strengthening of financial services industry. the Islamic financial market, several Islamic Finance industry players jointly established the Investment Account Platform (IAP) which was 015 was a daunting year for launched in February 2016. IAP is the global financial industry INSIDE THIS NKEA a centralised multi-bank platform and Malaysia was not spared. Islamic Finance Remains that aims to facilitate investors 2Bracing against a series of external 1 on Solid Footing investing in viable ventures or and internal challenges, our country’s projects including SMEs. macroeconomic management in 2015 focused on strengthening the resilience Strengthening Development With oil prices hitting record of the economy, managing the impact of 2 Financial Institutions lows in January and prompting external vulnerabilities and safeguarding the Prime Minister to announce a the well-being of the rakyat. Creating Sustainable Funding Budget Recalibration to adjust, it is The shifting dynamics of global 3 Platforms to Support Growth to be expected that some sectors will economic conditions have given rise to be affected, creating a ripple effect increased uncertainty for economies, particularly in two aspects - growth The Private Retirement Scheme on the financial services sector. and financial stability. 4 (PRS) as a Wealth Creation Platform Nevertheless, with the sound Given that the Malaysian economy Gains Encouraging Traction fundamentals put in place by the and financial system are highly open, Government to strengthen the uncertainties from the impending Supporting Regional Economic Integration Through the ASEAN resilience of our economy and monetary policy normalisation 5 Banking Integration Framework banking system over the last few in the United States, faster than years, I am confident we will face expected slowdown in some emerging economies, sharp and prolonged these challenges from a position decline in commodity prices, as well of strength and continue to put in as increasing volatility in financial place safeguards that can take us markets were the main near-term through these challenging times. downside risks.

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Some emerging economies expectations of an interest rate hike. 2015, foreign funds have pulled a net including Malaysia experienced slower This led to significant portfolio outflows 11.7 billion ringgit (USD3 billion) of the growth as advanced economies began from emerging and regional financial nation’s shares. recovery. This is in addition to the markets, impacting the performance In spite of heightened volatility in global oil supply glut coupled with the of regional bourses including Bursa global financial markets, the domestic overall weakening of global demand Malaysia. financial system remains resilient and that took its toll on commodity prices. Internally, the economy was tested continues to have ample liquidity to During the first eight months of by a barrage of negative investor support real sector activities. The 2015, regional currencies including sentiments primarily caused by tensions banking system remains sound the ringgit had depreciated by 16.5 in Malaysian politics prompting an and well capitalized with the key percent as the US dollar strengthened exit of hot-funds investors reacting capital ratios well above the required on improving economic activities and to short-term concerns. As of August regulatory minimum levels.

1 Islamic Finance Remains on Solid Footing

Malaysia has remained a key marketplace for global sukuk issuance with 52.6 percent market share (USD34.8 billion issued by Malaysia out of total USD66.1 billion). Malaysia's market share of global sukuk outstanding stood at 54.3 percent (USD174.41 billion out of total USD321.15 billion). With its fourth issuance of a US dollar denominated sovereign global sukuk amounting to USD1.5 billion in April 2015, Malaysia reinforced its position as a global leader. Established expertise in the sukuk market offers opportunities for domestic financial players and professional service firms to profile and enhance their global capabilities in providing Islamic financial advisory and services at the international level. Leveraging its role as the lead issuer in sukuk, Malaysia remains well placed to Bursa Malaysia won ‘Best Islamic Exchange 2015’ for Bursa Suq Al-Sila’ performance at The Global make further strides in Islamic Finance. Islamic Finance Awards in Bahrain

136 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 2 Strengthening Development Financial Institutions

Amendments to the Development As of 31 December 2015 the following achievements were recorded by the six Financial Institutions Act 2002 (DFIA), DFIs under BNM's purview: aimed at enhancing the regulatory and supervisory framework for the Of the total financing outstanding above, lending to businesses prescribed Development Financial accounted for 41 percent or RM55.74 million of which 26.6 percent Institutions (DFIs) was successfully or RM14.8 million were given to approximately 93,000 SMEs, with completed in 2015. almost 80 percent benefitting 80 percent micro entrepreneurs The review was essential to ensure that DFIs will be well positioned and able to withstand challenges given the changing financial and operating environment, with focus to further enhance capacity and capability in providing continued financial services to strategic economic sectors. Overall financing outstanding stood at The total deposits amounted The review not only focused on RM135.58 million to RM117.25 million comprehensiveness of the regulatory (representing 2.73 million accounts) and supervisory framework but also the distinctive and unique characteristics and mandated roles of each DFI. The draft Bill was tabled and As of 31 December 2015, three DFIs (namely Bank Simpanan, Agrobank and approved by and Dewan Bank Rakyat) offer agent banking services and recorded the following outcomes Negara on 17 June 2015 and 1 July 2015, since the introduction of the services in 2012: respectively. The smooth progression of the amended Act was attributed to the strong support and commitment The current total of given by all key stakeholders and 6,452 backbenchers of the Parliament during the engagement sessions held. This DFI Agents includes supportive feedback during make up 93.5 public consultation with various levels percent of total agents of key stakeholders in finalising the draft Bill. Transaction volume: 62 million or 98.7 percent of total transactions conducted via agents

RM4.55 million or 79 percent of total agent banking transactions (RM5.7 million)

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operator’s board of directors to be fit and 3 Creating Sustainable Funding proper and have the ability to operate an orderly, fair and transparent market. Platforms to Support Growth The Guidelines on the Regulation of Market has since been superceded with the release of Guidelines on Malaysian businesses are the cogs LAUNCH OF THE EQUITY Recognised Markets Operator issued that keep the wheels of the economy CROWDFUNDING PLATFORM BY on 11 December 2015 and effective well-oiled and turning. When the SECURITIES COMMISSION MALAYSIA 15 December 2015 to operationalise economy is in turmoil, depending on Following the development of their platforms by the first the assets and reserves accumulated a conceptual regulatory framework quarter of 2016. many businesses get cut at the knees for Equity Crowdfunding (ECF) and Consequently, on 10 April 2015, and struggle to survive. the issuance of a public consultation SC invited prospective operators Amid current challenging paper in 2014, Securities Commission interested in establishing and economic scenarios, the Government Malaysia (SC) had on 10 February 2015 operating ECF platforms to submit is committed to ensure that businesses published Guidelines on Regulation of their application by 11 May 2015. A total with sound plans have continued Markets under Section 34 of the Capital of 27 applications were received. On 11 access to funding options so they are Markets and Services Act 2007 (CMSA) June 2015, SC announced and granted able to pursue growth. to introduce requirements for the six equity crowdfunding platform A centralised multi-bank platform registration of ECF platform operators operators Recognised Market Operator has been established to operate IAP and and the governance arrangements for (RMO) status to operationalise their and was launched on 17 February 2016. such operators, including requiring the platforms by the first quarter 2016.

138 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 INTRODUCING ALTERNATIVE FUNDING PLATFORMS TO SUPPORT ENTREPRENEURSHIP AND GROWTH OF MALAYSIAN BUSINESSES

SC Chairman Dato' Seri Ranjit Ajit Singh (third from left) with the six ECF operators

Malaysia became the first ASEAN country to legislate Equity FinTech in the country. Crowdfunding (ECF) when the Capital Market and Services Act With the aFINity@SC, the regulator seeks to drive a network 2007 legislative amendments to facilitate ECF came into force on of FinTech stakeholders to accelerate growth and innovation in this 15 September 2015. industry. In September 2015, the SC released a call for participation Two ECF platforms have officially launched to date: CrowdPlus. to generate response and expressions of interest from relevant Asia platform was launched by Propellar Crowd+ on 13 November stakeholders, including innovators, entrepreneurs, established 2015 and Crowdo was launched on 11 January 2016. businesses, investors and other authorities to chart the FinTech Besides ECF, Securities Commission Malaysia (SC) is keen to agenda together for Malaysia. facilitate development of Financial technology (FinTech) within the aFINity@SC aims to provide regulatory clarity by facilitating Malaysian capital market. discussions between FinTech businesses and relevant authorities to FinTech has significant potential to disrupt the business model ensure that potential regulatory and risk concerns are appropriately of incumbents and appeal to a wider audience by promising user- taken into consideration. friendly services that transcend demographic, geographical and The SC has indicated that it will introduce a framework for Peer- infrastructure barriers. Recognising this, and the crucial need to to-Peer (P2P) lending in 2016, in line with growing interest in this guard against the potential risks, the SC launched the Alliance of area. P2P lending has grown significantly in big markets such as FinTech Community or aFINity@SC at the World Capital Markets the United States, China, the United Kingdom and India. Symposium 2015 in September, to catalyse the development of

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4 The Private Retirement Scheme as a Wealth Creation Platform Gains Encouraging Traction

The SC has created a safeguarded The PRS was first introduced in As at 31 December 2015, it has 180,651 environment to ensure that the November 2012 under the leadership of members (40.1 percent growth from 2014) interests’ of Private Retirement Scheme Securities Commission Malaysia (SC). and RM1,171.97 million AUM (63.7 percent (PRS) members remain at the fore. Though still at its nascent stage of growth, growth from 2014). In implementing the private retirement the PRS has in the past two and a half There are currently a total of 11 framework, the SC has applied years shown a promising and strong start Schemes with 50 retirement funds under internationally renowned principles both in terms of Asset Under Management eight PRS providers. Islamic PRS funds to uphold the quality of PRS providers. (AUM) and number of members. account for 32 percent of the total AUM.

PRIVATE RETIREMENT SCHEME INDUSTRY’S AUM HIT THE RM1 BILLION LANDMARK

Malaysians to supplement their retirement savings in order to ensure a level of sustainability and security for their future. As the PRS embodies inclusiveness, individuals are given sufficient RM mil ,000 opportunities to share in wealth creation through an additional avenue PRS Providers 1,400 200 8 180 provided by the capital market. The PRS has been designed to be 11 PRS Schemes 180 accessible, affordable and sustainable whilst empowering all members 1,200 of the Malaysian public to achieve financial security based on what they 160 50 Retirement Funds can afford. In this regard, one of the key features of the PRS is its flexibility. 1,000 140 Conventional Funds 128 30 TOTAL ASSET UNDER MANAGEMENT (AUM) 120 AND NUMBER OF MEMBERS SINCE INCEPTION 20 Islamic Funds 800 The increased participation in PRS can be attributable to early efforts 100 focused on investor education. Since the launch of PRS, the SC and PRS 74% 600 1,172.0 All 80 administrator, Private Pension Administrator Malaysia (PPA) have been Participation from States in Malaysia Employed Segment are Reached 64 proactively embarking on a series of education and public engagement 60 400 campaigns to embed a higher level of awareness on the need for secure 716.1 13% 49% retirement planning. 40 Self-Employed Female Members 200 22 Specifically, the PPA together with all PRS Providers contributed 299.8 20 towards the RM5 million Industry Development Fund (IDF) to launch the

64.4 PRS awareness campaign. The IDF is a three year commitment by PPA and 13% 51% 0 0 Students, Homemakers Male Members the PRS Providers to raise awareness for PRS. The IDF will also be used to & Retirees AUM No. of Accounts intensify education and public engagement campaigns across the country. The role of tax incentives has been critical in driving the development As Malaysia transforms from an emerging economy into a developed of PRS. In the 2012 Budget, the Government announced a tax relief of nation, the need for a comprehensive multi-pillar pension system RM3,000 for contributions made by individuals to PRS approved by the becomes increasingly essential. Global institutions like the World Bank SC. This tax relief will be provided for a period of 10 years, from 2012 to acknowledges the importance of a multi-pillar pension system which 2021. Employers will also be given tax deductions on contributions to PRS serves to support the retirement needs of a country’s population. In this made on behalf of their employees up to 19 percent of the employees’ context, the PRS complements Malaysia’s mandatory pillar. remuneration. To cultivate a retirement savings culture amongst the The function of the PRS is one of utmost importance at a time younger demographic, the Government in the 2014 Budget announced where the adequacy of retirement savings is neither sufficient nor a one-off PRS incentive of RM500 to contributors aged between 20 and sustainable in an environment where rising living standards and higher 30 who participate in the PRS scheme with a minimum cumulative age expectancies continue to prevail. Keeping the nation’s needs and investment of RM1,000 within a year. This incentive is valid from aspirations in mind, this voluntary pillar is a critical platform for all 1 January 2014 for a period of five years.

140 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 greater market access, and operational 5 Supporting Regional Economic flexibilities consistent with those of domestic banks in the respective Integration Through the Asean host countries. The implementation of the Framework will be accompanied Banking Integration Framework by the strengthening of home- host regulatory and supervisory cooperation arrangements to As the ASEAN Economic the potential for a meaningful presence support the effective surveillance Committee (AEC) comes into fruition, across ASEAN countries. The ABIF and supervision of QABs. As ASEAN the conclusion of the ASEAN Banking accords priority to the outcome of moves closer to the realisation of the Integration Framework (ABIF) which promoting financial development AEC, ABIF will strengthen the other was endorsed by the ASEAN Central and higher regional economic growth, initiatives under the ASEAN Financial Bank Governors represents a critical and is anchored in principles that Integration Framework to provide an milestone for ASEAN towards emphasise inclusiveness, transparency important enabling mechanism for achieving greater financial and and reciprocity. ASEAN countries to accelerate the economic integration. With the finalisation of the pace of regional financial integration, The immediate objective of ABIF is Framework by all ASEAN central bank increase cross border trade and to achieve a more integrated banking governors, any two ASEAN countries investment flows and thus harness market, spearheaded by Qualified may enter into reciprocal bilateral the growth potential of the region. ASEAN Banks (QABs) that now have agreements to provide QABs with

The ASEAN CAP 10 CEO Summit provided CEOs with actionable parts to prosperity as ASEAN moves to becoming a single market place

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 141 THE NTP – NATIONAL KEY ECONOMIC AREAS Financial Services

MARKET INDICATORS

MALAYSIA MARKET GROWTH FROM JANUARY 2009 THROUGH 31 DECEMBER 2015 Market Foreign Foreign Outflow 2014 FBM KLCI Market Capitalisation ADV Shareholdings - to date RM26.0 bil +1.4 +93% +155% +76% 2010 to 2013 Percentage Points Total Foreign Net Inflow: RM34.2 bil

MALAYSIA MARKET GROWTH FROM YTD 31 DECEMBER 2015 Market Foreign Foreign Outflow 2014 FBM KLCI Market Capitalisation ADV Shareholdings - to date

-4% +3% -3% -2.0 RM19.7 bil Percentage Points

2015 BURSA MALAYSIA’S MARKET PERFORMANCE

SECURITIES MARKET ground was lost in the second RM1,651.17 billion at the end of DERIVATIVES MARKET Apart from the increase in half of the year as sentiments 2014. The year saw a total net In 2015, higher volatility geopolitical tensions of - were dampened by the external foreign outflow of RM19.7 billion, in commodity prices and the Ukraine, the Islamic State crisis in and domestic concerns. Market however this was supported by FBMKLCI continued to benefit the Middle East and more recently downtrends were somewhat the net inflow of RM23.8 billion the Derivatives Market. During North Korea’s nuclear push mitigated by Malaysia’s continued from domestic institutions. the year, the total volume of and the Turkey-Russia political strong economic fundamentals In the more volatile market, contracts traded registered a 12.8 tension, the overall 2015 market and diversification of the there was a reduction in the total percent growth from 2014 volume condition was challenging due to economic sectors represented funds raised which decreased with an average daily contract other external factors. Global and on the Exchange. from RM24 billion in 2014 traded of 57,157 contracts in regional factors including China’s The FBM KLCI started at to RM21 billion in 2015. The 2015 compared to 50,654 in 2014. economy slowdown, depressed 1,761.25, reached its highest number of IPOs were 14 in 2014 Notably, the growth in volume global oil and commodity prices closing level for 2015 at 1,862.80 as compared to 10 in 2015 which was attributed by the increased in and uncertainty surrounding on 21 April 2015 and finished corresponded in a lower level of FCPO and FKLI contracts due to the USD interest rate have the year at 1,692.51 points, funds raised at RM3.9 billion in higher volatility in Crude Palm Oil contributed to the challenging posting a marginal erosion of 2015 compared to RM5.9 billion (CPO) prices and the FBMKLCI. market condition. On the 3.9 percent year-on-year. In in 2014. Meanwhile, fund raising domestic front, the weakening terms of trading activity, average activity in the secondary market ISLAMIC MARKET Ringgit and implementation of daily market transacted volume remained robust with a total of For the Islamic Capital Market, the GST have also shaped market and average market transacted RM17.1 billion raised in 2015, a the average daily value of Bursa conditions. value decreased by 4.8 percent slightly lower level than in 2014 Suq Al-Sila’ (BSAS) rose 120.8 Against this landscape, and 2.9 percent year-on-year, at RM18.4 billion. The robust percent to RM15.2 billion in 2015 the local securities market has respectively. Market capitalisation secondary market was driven compared to RM6.9 billion in 2014. remained resilient for the year. saw positive movement with by major corporate exercises, Strong growth in BSAS trading The FBM KLCI saw a steady RM1,695.17 billion posted as at including rights issues, special was driven by the conversion of upward trend which began at the 31 December 2015, an increase issues and private placement by Murabaha deposits and growing start of the year, however some of 2.7 percent compared to our PLCs. interest in tenor based pricing.

142 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

hallenges confronting the time improving their banking participants against contagion risks economy in 2015 are expected system in compliance with the latest and excessive leverage. This initiative C to persist in 2016. In particular, BASEL requirements. will be completed by 30 June 2018. heightened volatility in financial On the regulatory front, in 2016, The SC is currently also developing a markets, declining commodity prices, BNM will continue to facilitate comprehensive Blueprint for Malaysia's strengthening of the US dollars, and transitional arrangements to allow Islamic Fund and Wealth Management the slowdown in China, are anticipated for an orderly conversion of convert industry. The Blueprint, targeted to be to have direct and indirect impact on Composite Insurance and Takaful ready by end 2016 will chart the medium the Malaysian economy, primarily Licenses into a single licence under and long-term strategic direction for the through trade and financial channels. pursuant to the Financial Services Act industry as well as map out strategies A strong impetus will have to be forged 2013 and Islamic Financial Services and recommendations to strengthen the to safeguard the Malaysian financial Finance Act 2013. This will be done country's competitive edge. services industry which forms a in a course of three years up to 2018. The Financial Services NKEA is also backbone supporting the nation’s Under this initiative, life and general dedicated to exploring and pushing for economic growth. businesses of insurers, and family and more innovative and creative solutions Moving into 2016, the focus of the general business of Takaful operators for the financial sector to enhance and Financial Services NKEA will be to will have to be carried out under improve consumers’ experience in the further enhance the resilience of our separate entities due to the different long term. financial systems, domestic economy risk characteristics and nature of these 2016 is not going to be any less and ensuring continuous sustainability businesses. The exercise is being carried challenging for the Malaysian financial of financial services industry. out to strengthen the institutional services industry compared to last year. This will include working with structure of financial institutions Our financial system will be stress- DFIs to ensure they continue serving to ensure adequate safeguards for tested against the full brunt of an their mandates whilst at the same insurance policyholders and Takaful unfolding global economic uncertainty.

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DATO’ SERI HAMZAH ZAINUDIN REVOLUTIONISING MINISTRY OF DOMESTIC TRADE, CO-OPERATIVES MALAYSIA’S AND CONSUMERISM For the past five years we have been breaking new grounds CONSUMER in retail concepts to enhance Malaysia’s consumer experience through several initiatives in the EXPERIENCE wholesale and retail sector. The sector has grown 5.9 percent in 2015 compared to 2014, contributing close to 13.8 percent to the overall country’s GDP. Malaysia's rank in the AT Kearney Global Retail Development Index rose from 17 in 2010 to 9 in 2015 proves steady ground for retail investment in the country. Whilst working at modernising, globalising and revolutionising this sector, we strive to ensure that no one gets left behind, by providing even small retailers the competitive edge through assistance and training. Apart from determining opportunities to amplify the programme moving forward, we will also clarify sporadic criticisms towards the TUKAR programme. Some participants

144 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 he retail landscape in Malaysia has undergone tremendous T transformation over the past few years. Retailers are increasingly positioning shopping as an intrinsic part of a desired consumer lifestyle and as such, have been aligning their businesses to match consumer expectations. There has also been a have complained of significant significant rise in the presence of online stores with the same lifestyle appeal. losses and inability to settle their With a focus on pushing mall loans, with these stories being retailers up the value chain, making sensationalised in the media. virtual malls the new high street, Regardless, the programme has and breaking new grounds through seen many success stories, with innovative retail concepts, the participants having reported a rise wholesale and retail sector has in income and growth in business continued to grow through the support of the National Key Economic Areas post-transformation. (NKEA) initiatives. INSIDE THIS NKEA Wholesale and retail is an As a result, over the course of the important contributor to the last six years, the wholesale and retail Meeting Consumer Needs by nation’s economy. Capitalising sector has reversed a slump and turned 1 Striking a Balance Between Large Format Stores and Small Retailers on rising purchasing power in the around to achieve RM1007 bil of sales value in 2015, a significant rise from Asian region, the more players are Making Virtual Malls RM622 billion in 2009. equipped to compete in meeting the 2 the New High Street The baseline volume index of demands of this sector, the closer wholesale trade from 99.8 points at we get to provide a heightened the end of 2009 had risen to 146.2 Breaking New Grounds Through 3 Innovative Retail Concepts consumer experience. points at the end of 2015, while Malaysia sits in a region that retail trade grew from 103.6 points is a hotbed of retail activity and to 133.6 points over the same period. competes with other cities such as This growth, albeit pressured by its highest ranking since 2007, before neighbouring competition, as well as the NTP. The Malaysian market was Singapore, Jakarta, Bangkok and the challenging global and domestic also described as strong and stable to become one of the economic landscape, which saw a due to its high income per capita preferred shopping experiences. decline in the number of tourists and young population. The country’s We must run this race to rise above and the tightening of household ranking puts it among the 10 most and shine in this space to capture lending credits, is attributed to the attractive countries for retailers consumers’ imaginations and focused initiatives in the wholesale and makes it the only other country and retail sector. in Asia Pacific, apart from China, encourage greater spending. Further demonstrating resilience, in the top 10. the sector rose above weakened This sector is expected to consumer sentiment in 2015 and continue contributing significantly contributed 13.8 percent to the to the Malaysian economy in serving country’s GDP in 2015. domestic demand, whilst also AT Kearney ranked Malaysia 9th in encouraging tourist spend with the its 2014 Global Retail Development country recognised as a top shopping Index, up four places from 2013 and destination globally.

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2015. These include stores such as Giant, 1 Meeting Consumer Needs by Mydin, Econsave and The Store run by local players, as well as Tesco, Carrefour Striking a Balance Between Large and AEON from the foreign front. Abu Dhabi based retailer Lulu Format Stores and Small Retailers Group is scheduled to set up 10 hypermarkets across Malaysia with an initial investment of RM885 million (US$200 million) in the first five years from 2016. The group will be partnering with FELDA and aims to capture 20 percent of the retail market share.

PUSHING SMALL RETAILERS UP THE VALUE CHAIN TUKAR or the Small Retailer Transformation Programme (Transformasi Kedai Runcit) initiative under EPP 2 was formulated to help smaller retailers modernise and turn around their businesses by implementing critical changes in areas such as human capital, equipment, expertise, standard operating procedures, product display and inventory tracking. The transformative effect of TUKAR A refurbished interior of a small format store under the TUKAR initiative not only provided store owners a lease of life but also a fighting chance against The Malaysian retail market Large format stores need large superstores and hypermarkets, by has seen significant growth of consumer bases to sustain their helping them to evolve in order meet hypermarkets, superstores and business and as such cannot operate current consumer needs. departmental stores since the large everywhere. They are further limited by Retail advisors for this programme format retail sub-sector was liberalised the need for heavy infrastructure and include big players like Mydin, in 1995. The presence of these large large funding. This creates a need for Carrefour, Malaysian Cooperative format stores bring quality, product smaller stores to service the gaps left Commission, Tesco, Giant (GCH availability, choice, cost reduction, by hypermarkets. Retail Sdn Bhd), Aeon, Econsave and new retailing technology and skills to Cash & Carry. the sector. LARGE FORMAT STORES 302 small time retailers have However, even with the rise of ON GROWTH TREND been transformed, bringing the total hypermarkets and superstores, the Six new hypermarkets and nine number of stores transformed by the NKEA works at striking a balance superstores were set up throughout TUKAR programme to 2016 since it was between promoting large format Malaysia by foreign and local players launched in 2011. stores and equipping small format as a result of efforts under Entry Point A sum of RM30 million has been stores with the skills and technology Project (EPP) 1. There are now 36 allocated under this programme and necessary to compete. hypermarkets and 44 superstores as of for those who take up the TUKAR

146 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 offer, Bank Kerjasama Rakyat The TUKAR programme remains at of 188 automotive workshops all over Malaysia Berhad (Bank Rakyat) heart an entrepreneurship programme Malaysia in 2015. This brought the total provides loans between RM20,000 that requires participants themselves number of stores transformed by the and RM80,000, with an annual to take an active role in ensuring the ATOM programme to 764 since it was interest of three percent based on a viability and success of their own launched in 2011. reducing balance. businesses. Innovation plays a key The programme provides funding In the past year, the Steering role in ensuring the sustainability of for tools and equipment to enable Committee has also agreed to allow TUKAR participants. It is therefore vital workshops to improve the quality of further financing for successful TUKAR that shopkeepers remain savvy and their services as well as expand their participants to either expand their responsive to consumer needs to achieve range of expertise and services in existing stores or open new branches. business growth. repair and maintenance. With the introduction of GST in Another transformation programme 2015, various efforts were put in place to which has made a positive impact on ensure that the sustainability of a TUKAR small time players is the Transforming participant - including GST-focused Automotive Workshop (ATOM) under training and business refresher courses. EPP4 which aided in the transformation

A transformed sundry shop under the TUKAR initiative

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products to be carried. Virtual malls 2 Making Virtual Malls such as AmaxMall are an online replication of brick and mortar the New High Street hypermarkets, primarily serving as an online presence for local small- and medium-sized retailers and to The online shopping segment the largest e-commerce markets in draw in customers. In its inaugural is growing at an exponential rate in Southeast Asia, generating almost year of operation, AmaxMall has Malaysia, with almost all products and half of total online retail sales in this attracted 212 small and medium online services ranging from travel, apparels, region. Retail E-commerce has been retailers on its e-commerce platform to books to grocery shopping being acknowledged as the fastest growing offer their goods and services. There sold virtually. segment in this sector, with traditional is growth to be had in this segment, This segment has produced hyper-marts such as Tesco by having with total internet sales projected to successful Malaysian based an online shopping platform. The reach RM12 billion by 2020, enhancing e-commerce platforms like Lazada, e-commerce market size in Malaysia this sector’s appeal to attract more Zalora and Lelong, and has also drawn is estimated to be at RM7 billion for online entrepreneurs. in traditional retailers like Tesco, Presto both products and services. With the While encouraging the setting up and MPH. With the ongoing rollout of increasing penetration of smartphones of virtual malls, the Government is high speed broadband as well as the and other mobile devices, this number exploring ways to ensure that consumer extreme popularity of smartphones is expected to rise at an exponential interest, such as e-transaction safety is and other mobile devices, this number rate. protected so as to not impede on the is expected to increase further. The setting up of a virtual malls growth of online retail. According to Euromonitor, under EPP 7 of the wholesale and retail Malaysia and Singapore represent NKEA will allow for a wide range of

AmaxMall has attracted 212 small and medium online retailers on its e-commerce platform to offer their goods and services

148 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Bazaar and a Tesco hypermarket. 3 Breaking New Grounds through Construction of other components such as the Auto City, (a large shopping Innovative Retail Concepts area for automobiles) remain on track, with an LRT extension to service the area underway. Failure to innovate is fatal in the anchored by numerous category stores Also in the pipeline, are linkages retail industry. Innovation very often including hypermarkets, furniture from the LRT to various components results in concepts that enthral and superstores, digital products and of the development and surrounding draw consumers who are always on electronics equipment malls as well areas. Covered walkways and walking the lookout for new experiences. as toy and sporting goods stores, large bridges are designed to provide comfort The Oasis Damansara Big Box automotive showrooms, textile centres, and accessibility. Boulevard developed by Sime Darby garden and hardware superstores. The Makan Bazaar is a innovative - Brunsfield, is an example of an The retail areas – spanning 26 concept, leveraging upon the how we innovative retail space promising hectares - will also feature food and enjoy the diverse choices of Malaysian a novel shopping experience. The beverage outlets, convenience stores, food. The mission is to create iconic integrated retail development located and liquor and tobacco retailers. food outlets that combine the best in Ara-Damansara is fashioned after As of 2015, the partly completed Big hawkers at one large premium food similar outlets that have been successful Box Boulevard comprises the already centre supported by other established in Europe and United States. It will be operational Oasis Square Makan eateries such as family restaurants, quick-service restaurants, cafes, bars and fine dining restaurants. The food centre will also provide attractions like sensory gardens, games and an arena for events and playgrounds, as well as retail outlets like convenience stores and news agents. The Makan Bazaar is designed to be approximately 9,000 square metres in size, catering for 3,500 people. Apart from Oasis Square, another operational Makan Baazars is located at the Medini Mall in Nusajaya. A total of 10 Makan Bazaar outlets will be built by 2020 in major cities in Malaysia. The Oasis Square Makan Bazaar has proven to be a successful idea. It has expanded past the dedicated space of 9,104 sq metres to more than 27,871 sq metres of F&B space, offering a wide array of food from famous local cuisine to international cuisine.

(Top) Oasis Square Makan Baazar at Ara-Damansara (Bottom) Tesco is one of the players under the Large Format Stores initiative

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OASIS PIAZZA: MAKAN BAZAAR GOES PREMIUM

mack in the middle of Oasis attract not only locals but also to draw in and employment opportunities to all Damansara, the Oasis Piazza multinationals and expatriates to set up Malaysians. As Oasis Square is also S is indeed a little food oasis offices and homes in Oasis Square. “We beginning to become a tourist hot spot developed with the Makan Bazaar wanted to create a commercial hub which and we are committed to doing more concept, which is aimed at creating cohesively integrates a safe and healthy to support tourism and retail industry iconic food and beverage (F&B) living environment, a bustling business growth. Oasis Square is increasingly destinations. It has become a defining centre, a lively entertainment hub and a also attracting tourists and we are feature of Oasis Square, as an integrated place of leisure - where people feel safe committed to further encourage this commercial campus which is co-created to congregate and enjoy themselves with trend in supporting tourism and retail by Sime Darby Property & Brunsfield family and friends.” industry growth. International Group. According to Mohamad Hassan, the Moving forward, Sime Darby Offering a wide array of Malaysian existence of an attractive and exciting Brunsfield Group is also expanding and international cuisine, the 27,900 food hub in Oasis Damansara has not this F&B retail hub to include a food sq metres enclave has created a buzz only brought in the crowd but also court, which offers hawker fares in a in Kuala Lumpur’s food and beverage doubled property value. All units of comfortable and hygienic environment. (F&B) scene, not only because of the serviced apartments are sold out “Besides that, while attracting a multiple its food but also the attractive cozy and office spaces are occupied by local range of premier tenants both locally and ambience, featuring the water fountains, and multinational companies such as internationally and providing a greater shimmering pools and lights, making it PR1MA Corporation, Hilti (America), BDA opportunity to small medium enterprises a visually attractive dining destination, Architect (Australia), Malindo Airways (SMEs), it will generate healthy returns especially in the evenings after sunset. and many other organisations. to the community and the stakeholders Brunsfield International Group, The Oasis Piazza has huge potential towards establishing quality standard Executive Director, Mohamad Hassan in becoming a revenue generator hub to of living and contemporary lifestyles,” Zakaria says that Oasis Piazza is a both the Selangor State and the Federal he explained. premium F&B destination developed to Government while providing business

(Left) Mohamad Hassan Zakaria, Executive Director of Brunsfield International Group (Right) The Oasis Piazza at Oasis Damansara, surrounded by residential and commercial high-rise buildings

150 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

ith five years to go before Also in the pipeline is a plan to foreign companies preferring instead 2020, an impact study consolidate the Unified Malaysia Sales to choose licensing agreements, which W will be conducted to with Malaysian Mega Sale by Ministry have lesser risks and lower cost. Since ascertain the effectiveness of the of Tourism and Culture (MoTAC) for 2011, only three foreign brands have TUKAR and ATOM programmes and even greater retail impact. In light of been acquired by local companies what can be done to further improve increasing diversity within Malaysia's – Parkson’s acquisition of PT Tozy on outcomes. This will enable us to retail market, The Ministry of Domestic Sentosa and Odel Plc as well as Bonia’s review effectiveness of the programme, Trade Cooperative and Consumerism acquisition of JECO Pte Ltd – prompting retailers, changing trends of consumers will also be working closely with for an internal review and subsequent and to safeguard possible contractions Ministry of Tourism and Culture to termination of this initiative. within the marketplace. All these provide additional marketing value The wholesale and retail sector components will assure sustainability to the consolidated sales event. treads into 2016 being cognisant of of these programmes. The 1Malaysia Mall initiative under challenges presented by a slowing Renewed emphasis will be placed EPP6 and EPP8, which was aimed at economy on the back external on awareness and education on the assisting local businesses to acquire headwinds. Domestic consumption TUKAR programme to ensure retailers stakes in foreign retail businesses is expected to moderate amid a rise in are aware of requirements. Outreach have stalled due to external factors cost of living and a more challenging initiatives to create greater awareness such as the soft economic climate and operating environment for businesses. and understanding will also be aimed the weakening ringgit, companies are Regardless, the government will work at youth entrepreneurs to encourage less inclined to venture overseas to with the wholesale and retail industry participation in TUKAR programme. establish such projects. Additionally, to continue featuring innovative To further develop internet due to the locale abroad, facilitation and attractive value propositions to based retail marketing, work under efforts and intervention by the spur domestic consumption given this EPP7 will also be focused on Government will be severely limited. the integral role it plays in driving expanding the current seller base For EPP8, local companies have economic growth. for existing Virtual Malls. been less inclined to acquire interest in

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DATO’ SRI AMAR MINISTER OF PLANTATION INDUSTRIES PRIORITISING AND COMMODITIES

PEOPLE, In 2015, we continued the strategic measures introduced to further develop downstream PLANET, activities and also boost productivity upstream. Our mission here is to strengthen the PROFITS earning power of these sectors by creating long-term recurring income for both the nation and bottom 40 percent involved in these sectors. By developing a strong chain of downstream activities and a sustainable supply upstream, we also strengthen these sectors’ resilience to the current economic upheaval. All our measures to increase resilience and revenue are anchored on sustainability. This is to ensure that at all times, profit does not override the interest of the society and the environment. The Palm Oil and Rubber National Key Economic Area has been key in maintaining the sustainability of the upstream sector while accelerating the

152 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 A more robust downstream integration has helped the sectors weathered through the ongoing volatility of move towards downstream since its inception. It ensures a smoother palm oil prices and low natural transfer in economic focus from upstream to the downstream sector rubber prices that would have via the strategic and deliberate allocation of resources coupled otherwise caused major setbacks with other forms of necessary assistance extended towards in the plantation industry. downstream players.

he Palm Oil & Rubber NKEA aims to hit the triple bottom INSIDE THIS NKEA line which encapsulates the T PEOPLE: Creating Recurring Revenue theme of People, Planet and Profit. It 1 Streams to Uplift Communities and is underscored by the need to balance Industry Players as a Whole progressive growth and sustainability in pursuing people-centric initiatives. PLANET: Pushing for Sustainability Bright sparks have emerged 2 Through Innovative Solutions and Meaningful Investments despite the ongoing challenges in the palm oil and rubber sectors. These PROFITS: Going Downstream challenges prompted both sectors to 3 Improves Sectoral Resilience begin unlocking new value dimensions and Sustains Growth through intensifying downstream efforts as well as improving upstream production efficiency. Malaysian palm oil has experienced while that of prices and export revenue a high degree of instability of late, declined. Average CPO price was down ranging from its peak of approximately by 9.6 percent to RM2,153.50 compared RM3,800 in 2011 to its trough of around to RM2,383.50 in 2014. Major price RM1,800 in August 2015 (BEPI website). swings were caused by lower demand The year 2015 saw a mixed performance from its major importers which resulted of the Malaysian oil palm industry. in higher inventory, reaching a peak of Compared to 2014, oil palm planted area, 2.7 million MT in August 2015, due to crude palm oil (CPO) production, import, weaker demand coupled with higher export and closing stocks increased, levels of production.

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Total exports of oil palm products China. This spurred the invention volatility of palm oil prices and low increased marginally in volume by of specialty rubber such as the natural rubber prices that would have 1.0 percent to 25.33 million MT but epoxidised natural rubber (Ekoprena) otherwise caused major setbacks in declined by 5.5 percent in terms of and deproteinised natural rubber the plantation industry. export revenue in 2015. In 2015, among (Pureprena) that can be used in This is one of the steps taken by the top three importers of palm oil, green tyres and high-performance both the palm oil and rubber sectors China recorded a decline of 16.2 engineering product respectively. in diversifying their respective percent from 2.8 million MT. However, Such innovation and impetus activities, strengthening resilience by India and European Union recorded to move downstream has also been departing from a deep reliance on the an increase in volume of 13.6 percent seen in the palm oil sector. Value- commodity market. The shift in focus and 0.9 percent respectively. added products including oleo towards the downstream sector, along Natural rubber prices, similar derivatives and phytonutrients for with the various public and private to palm oil, have also been drifting foods and supplements, continued initiatives which were introduced lower amidst the fear of slowing into 2015. A more robust downstream to smoothen the transition process, economy and lower demand from integration has helped the sectors continue to be built upon the Triple Ps major consumer markets such as weathered through the ongoing as the underlying foundation.

independent small holders. The 1 PEOPLE: Creating Recurring Revenue scheme which also includes replanting of oil palm in private land ensures a Streams to Uplift Communities and sustainable supply of the commodity to downstream palm oil operators within Industry Players as a Whole and outside the region. A sum of RM1b has been allocated under the scheme via RMK-10 and The Palm Oil and Rubber NKEA Planting of Oil Palm, was achieved will be continuously disbursed to involves a number of Entry Point Projects despite Malaysian Palm Oil Board applicants until 2017 when the final (EPPs), which includes replanting and having only 300 field staff to implement batch of 2015 completes its three-year new planting programmes for the this EPP. New processes were phase. Monetary assistance is provided smallholders, the development of new introduced, such as mobilising the staff for the clearing of land, the supply of and high value phytonutrients, and of Sarawak Agricultural Department high quality seedlings as well as farm efforts to improve upstream productivity. to assist MPOB with land verification, maintenance for two years. Efforts are focused to support the which made a marked difference in As part of an ongoing effort replanting of palm oil and rubber trees the implementation of this scheme in to increase revenue stream of to revitalise the upstream production Sarawak. With this, MPOB is on track smallholders in the palm oil sector, pipeline through replanting and to achieve its original 2020 target of efforts under EPP1 will be extended to new planting. planting 115,000 ha despite facing include non-palm oil revenue through In the last five years a total major challenges such as land issues, crop integration which includes of 97,421 hectares of palm oil has primarily in Sarawak. more than eight types of crops such been newly planted or replanted by The government-led scheme as pepper and banana, whereas for independent smallholders, which under this EPP is a proactive initiative livestock integration, cattle and goats is 85 percent of the total 2020 target pushing for optimum production are covered. Although both methods of 115,000ha. by replacing aged palms that are of integration are not new concepts, This effort initiated under EPP1: 25 years and older with younger they are being introduced as a palm Accelerating the Replanting and New high yielding palms by farmers and oil sector KPI for the first time.

154 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 IDENTIFYING HEALTHY SEEDLINGS

To further boost productivity and strengthen revenue of smallholder, Suresawit kits were distributed to assist with the efforts to filter out of low yielding clones, so that production targets are met.

A plantation worker collecting Fresh Fruit Bunch (FFB) at an oil palm plantation

The underlying aim is to provide Continuous efforts under the EPP tonnes of rubber to support domestic smallholders with early income in includes identifying initiatives for downstream activities. the first three years of replanting/ these cooperatives to remain relevant The government has encouraged new planting while they are waiting and boost business performances. the replanting and new planting efforts for their palm oil plants to fully mature. Targeted total FFB sold to mills by by farmers through implementing Among the efforts under EPP2: all coops in 2015 was 26,800MT, agencies such as Rubber Industry Improving Fresh Fruit Bunch Yield with achievement of 39,330.38MT Smallholders Development Authority is to create clusters of independent (146.8 percent). Targeted number (RISDA), Lembaga Industri Getah smallholders, which allow them of new coops to commence selling Sabah (LIGS), Department of to achieve economy of scale, of FFB to mills in 2015 is five, which Agriculture Sarawak (DoA), Federal strengthening their bargaining power was achieved. Land Development Authority (FELDA) in terms of pricing for their produce. For rubber, the aim of EPP9.1: and Federal Land Consolidation and This is done through cooperatives, Ensuring Sustainability of the Rehabilitation Authority (FELCRA). which have become an efficient Upstream Rubber Industry, is to reverse In 2015, the Government continued platform to raise awareness on better the declining rubber plantation area to provide grants for the replanting farming methods and harvesting in Malaysia to ensure that there is of old and unproductive trees by technologies to raise national sufficient production upstream that is smallholders. For the period to 2012- average yields. able to support domestic downstream 2015, a total allocation of RM830.5 Since the start of this NKEA, 30 activities. In 2000, the total rubber million has been provided for cooperatives with a membership plantation area in Malaysia was 1.4 replanting and new planting of 196,891 of 29,000 smallholders have been million hectares, which reduced hectares of rubber planted area. established with the help of MPOB drastically to 1.02 hectares in 2010. Efforts under this EPP also includes and this has allowed smallholders Efforts under this EPP is aimed at the use of high yielding clones in to enjoy a bulk discount in procuring maintaining planted areas at 1.2 million the replanting and new planting agricultural inputs and receive better hectares, of which one million hectares programme, with the potential to pricing for their produce sold to palm are harvested. With yields expected increase production to 2,000kg a year oil mills. Fifteen of these cooperatives to reach 2,000kg/ha, Malaysia is per hectare, also increasing the income are currently operating nationwide. likely to produce two million metric of smallholders.

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A by-product of palm oil 2 PLANET: Pushing for Sustainability production is Methane and EPP5: Developing Biogas Facilities at Palm Through Innovative Solutions and Oil Mills is seeking to utilise the gas as an alternative source of energy, with Meaningful Investments the potential to create RM3.3 billion in yearly revenue on a sustainable basis (assuming the bioCNG is valued at RM40/MMBTU (one million British Thermal Units) and about 2,000 jobs by 2020. Palm oil mill effluent (POME) is the waste water discharged from the sterilization process, crude oil clarification process and cracked mixture separation process. POME produced huge amount of methane gas from its anaerobic process and has 21 times Global Warming Potential (GWP) compared to the other gases. However, there is a solution to this. This by-product can be utilized as fuel for power generation and cogeneration and presents a value- adding opportunity, as methane is a EFB Mulching to control weeds, maintain moisture and prevent soil erosion huge source of renewable energy. This has the potential to create a viable The NKEA’s approach to the In August 2015, RM53 million revenue stream for the mills through development of both palm oil and was allocated to assist oil palm energy production, while addressing natural rubber sector is a holistic one smallholders in obtaining the newly environmental and regulatory concerns. with sustainability at its core. implemented Malaysian Sustainable Compressed biogas would enable Responsibly cultivated palm oil not Palm Oil (MSPO) certification within mill owners to fully monetise the only benefits the planet but also has the next five years. The MPSO provides potential of biogas as every single flow the power to push past the numerous small holders a fighting change of biogas will be quantified and scaled allegations of environmental in the highly competitive palm oil to price per MMBTU basis. End users of destruction that clouds over the market as well as the opportunity bio-Compressed Natural Gas (bioCNG) abundant benefits of palm oil. to increase revenue. not only benefit in terms of cost when Currently, one of greatest challenge Efforts under EPP2: Improving compared with fuels such as diesel, in the upstream segment of this sector Fresh Fruit Bunch Yield has resulted medium fuel oil, light fuel oil and liquid is to push for sustainability especially in the growing certification of the 5.6 petroleum gas but can also leverage on among small holders, many whom do million hectares of palm oil plantation the sustainability labelling of green fuel not have the financial means to meet the land in Malaysia, of which about 1.4 when marketing products overseas. sustainability criteria for certification. million hectares of plantation land The original 2020 target under The growing demand for sustainability owned by smallholder farms and EPP5 was to have 500 mills with when sourcing for supplies especially plantation companies have been biogas facilities. However, following among major palm oil users such as certified. In 2015 alone, 486,775 a feasibility test, it was discovered Unilever, P&G, Starbucks and Dunkin hectares were certified against that this was not possible due to Donuts creates a greater need for the target of 220,000 hectares, structural challenges and the need certified sustainable palm oil (CSPO). achieving 194.7 percent. to set in place a proper incentive

156 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 scheme to encourage mills to take Commodities (MPIC) Datuk Amar For the natural rubber up the initiative. Following this Douglas Uggah Embas officiated the sector, initiatives under EPP11.1: discovery, a bucketing exercise was launch of the world’s first Bio-CNG Commercialising Ekoprena and done between MPOB-TNB for mills in commercial production plant at FELDA Pureprena in working towards a Peninsular Malaysia whereby different Sungai Tengi palm oil mill in Selangor - preferential shift among consumers action steps would be tailored for a joint venture effort between Malaysia from synthetics to renewable natural each depending on their capacity, Palm Oil Board (MPOB), Felda Palm rubber also presents commercial progress and geographical location. Industries Sdn Bhd and Sime Darby potentials worth capitalizing on. Action steps include installing Offshore Engineering Sdn Bhd. This The emphasis on sustainability biogas facilities, connecting mills commercial Bio-CNG plant is expected has helped the Malaysia to with existing biogas facilities to the to produce 80,000m3/year of CNG for capitalise on the growing number grid, installing a pilot Bio-CNG plant, industrial users, with some off-take of environmentally conscious applying gas for internal use and the agreements already signed. consumers who have moved biogas avoidance route, with trapping The development and promotion from synthetic to natural and and flaring as the minimum option. of bio-gas as an alternative fuel renewable material by pioneering As of 2015, 83 bio gas facilities source will also be an emphasis the development on specialty green have been constructed, nine are under moving forward. This includes efforts rubber Ekoprena (epoxidised natural construction and 145 more are under to facilitate the connection to the rubber) and Pureprena (deproteinised the planning stage. power grid. This will be done through natural rubber). Both can be used in In October 2015, Minister of targeting specific mills in Malaysia, green tyre and high performance Ministry of Plantation Industries and following a prioritization exercise. engineering products.

A pilot biogas plant capable of supplying compressed natural gas to commercial entities began at the Sungai Tengi mill, which belongs to Felda Global Group, in Q4 2015. This mill is the pioneer in Malaysia to install a commercial scale bioCnG facility. BioCNG is a more viable and lucrative alternative to feeding the electricity converted from methane to the national grid, which proves to be a challenge for mills located further away from power stations

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Though Ekoprena was developed Among the efforts which started 80 buses. Eight hundred Ekoprena types some years ago, commercialisation has in 2014 is initiating a trial project will be used in the project. Following the yet to take place in a big way. with Prasarana Bhd to test the trial project with Prasarana Bhd to test To accelerate the journey towards Ekoprena tyres on Rapid buses in the the Ekoprena Tyres, 10 RapidKL buses commercialisation, at the initial Klang Valley. on the Cheras Selatan route have begun stages, collaborative trials with In August 2015, Prasarana using these tyres since August 2015. private and public sector parties will Malaysia Bhd (Prasarana) signed a Felda is planning to use them for be conducted, with the Malaysian memorandum of understanding with their fleet of transport from January Rubber Board acting as the facilitator. Malaysian Rubber Board (LGM) to use 2016. For the commercial trial with The purpose of these trials is to ensure Ekoprena tyres on its RapidKL buses in Felda Transport Services Sdn Bhd that sufficient data is collected which a RM 1.7 million trial project, funded (FTSB), 16 vehicles will be used can then be translated into a strong by the Ministry of Plantation Industries across a total of four trials, covering value proposition for the product. and Commodities. the Pahang and Johor areas. Collaborative research activities Ekoprena tyres will be used on the There is also the intention to will cover products such as tyres, buses plying six regional routes within promote Ekoprena via other creative retreads, shoe soles for boots, auto Klang Valley. In the first phase, tyres means such as collaborations with parts, industrial hoses and other non- will be used on 10 buses, in the second renowned car makers or through automotive products. phase - 30 buses, and the final phase - sponsorship platforms.

Malaysia's palm oil and rubber 3 PROFITS: Going Downstream sector is working to realise the full potential of existing downstream Improves Sectoral Resilience opportunities. The future of these sectors lie in the strengthening of and Sustains Growth downstream activities, thus reducing its vulnerability to uncertain market and fluctuating prices. Downstream production provides a more lucrative per unit revenue at about 50 percent higher than the output from the upstream sector. The move downstream is part of the Eleventh Malaysia Plan (11th MP) from 2016 to 2020, as a follow-on from the Tenth Malaysia Plan (10th MP). During the 10th MP, RM504 million worth of grants was committed in the downstream sector, with RM3.16 billion worth investment committed by local palm oil players in the production of high-value oleo-chemicals and palm- based phyto-nutrients. Under the 11th MP, a further RM280 million is allocated Research on downstream processing has intensified in Malaysia since the launch of the ETP to continue supporting the initiative.

158 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 From the laboratory to commercialisation, downstream processing requires significant capital input. Towards this end, EPP8 commercialisation grants are available for the private sector to promote more downstream ventures

Efforts under the NKEA to promote EPP6 Developing Oleo-derivatives RRM179 million, which is 23 percent downstream are two Entry Point project fund. It will be setting up of total investment valued at RM789 Projects (EPPs): its plant in Masai, Johor to produce million. Firstly, the development of Oleo medium chain triglyceride (MCT) EPP8 has a two-prong focus. First, Derivatives, efforts under EPP6: powder and powdered stearic acid, to push for commercialisation projects Developing High Value Oleo Derivatives which are used in functional foods, and at the same time provide support and Bio-Based Chemicals have been supplements and pharmaceutical towards R&D work via providing successful in spurring high-value products. Its processes will comply grants towards clinical trials. The downstream activities which continued with Current Good Manufacturing commercialisation arm allows for through 2015. This resulted in continued Practice (CGMP), which will enable it commercialising of palm-based diversification and growing sphere of to export to more countries with stricter phytonutrients by providing financial value addition through both Government regulations such as Europe and Japan. support to companies for the acquisition grants and investments by plantation In order to boost activities in the of technology and plant construction. companies. RM2.5 billion worth of downstream segment of palm oil- A successful recipient of the EPP8 investments has been committed by based food and health-products, the commercialisation grant includes EPP6 grant recipients, with 55 percent government has committed RM157.2 Carotino, which completed building realised to date. million worth of grants under EPP8: its plant at Pasir Gudang, Johor in In 2015, Lipidchem Sdn Bhd Expediting Growth in Food and Health- early 2013 and had since then started became the first SME company to Based Segment. To date, this has commercialising its products, carotene receive a grant from the NKEA POR brought in realised investment worth and tocotrienols.

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Also, 11 out of 14 clinical trial percent by 2020, by ensuring an annual In order to boost projects are ongoing and at the analysis growth rate of 13 percent to maintain stage. Recently approved 2015 projects dominance as the world’s leading rubber activities in the includes a study on Age-Related gloves producer. Macular Degeneration which will be Malaysia is home to the world’s downstream conducted at Harvard Medical School, leading rubber glove producers who and a study investigating the effects collectively are a key employer and segment of of mixed tocotrienols which will be revenue generator in the country. palm oil-based conducted at University Sains Malaysia The Ringgit has depreciated by 22.8 (USM). At the close of year 2015, grants percent in 2015 as compared to 2014 food and health- drawn down stood at 36.5 percent of on an annualised basis, contributing the RM52 million committed. positively towards increased revenue products, the The push to develop value-added and profit for latex product exporting government product downstream in the rubber companies. Total export revenue of sector is an effort under EPP9.2: Increase Malaysian latex products, of which has committed World Market Share of Latex Gloves to 65 latex gloves is a major contributor, percent by 2020. Among its key effort is was recorded at RM14.5 billion for the RM157.2m worth scaling up Malaysia’s market share of the year, exceeding the annual target of of grants under global natural rubber gloves market to 65 RM13 billion. EPP8: Expediting THE TOCOTRIENOL ADVANTAGE Growth in Food and Health-Based Palm oil is also one of the most abundant natural sources of Segment. To date, tocotrienol, which has unique neuro protective properties. It is also one this has brought of the richest sources of natural carotenoids, which is converted into in realised vitamin A in our bodies. Other nutrients include palm phenolics, phytosterols, investment worth squalene and Coenzyme Q. A growing number of researches RM179m, which are pointing towards to the role of palm oil’s naturally-occurring tocotrienol in protecting brain cells during stroke. Tocotrienol is 23 percent of is an antioxidant. In the case of ischemic stroke, tocotrienol protects the neurons from dying by modulating the chemical signals, making a marked difference in the outcome and recovery total investment process. These findings have intensified the commercialisation effort especially in developing valued at RM789 high value nutraceutical products as well as fortifying existing products with palm oil derived nutrients. million. Efforts to create widespread awareness of tocotrienol and its significant pharmaceutical and nutraceutical benefits are being done to break the perception barrier created by palm oil detractors. There are increasing studies being published on the advantages of consuming tocotrienol, ranging from its skin-enhancing properties, anti-aging properties, anti-cancer and anti-diabetes abilities, to liver protection from drug-induced injury.

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ith the projection of an El show incremental improvements Nino phenomenon on the on an increase in demand for tyres W way and reduction in the from Japan, the United States and stockpile, there is a lot of optimism Europe. There has also been a over the local palm oil industry. growing diversification of activities According to Minister of MPIC, in the industry, moving from rubber Dato’ Sri Amar Douglas Uggah product manufacturing such as gloves Embas, Malaysia must continue towards the production of Ekoprena to have an effective mechanism to and Pureprena. reduce the stockpile domestically Moving forward, the initiatives with measures within its own control. under this NKEA which encompasses The best mechanism for this lies with the entire value chains of palm oil and the Palm Oil NKEA initiatives through rubber will remain holistically centred the downstream diversification. on People, Planet and Profits. For the rubber sector, the Malaysian Rubber Board has expressed confidence that rubber prices may

Ripirian buffer zones (pic, left of river) are important for conserving freshwater ecosystems and provide habitat for land-based animals

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THE COOPERATIVE Haji Sharif Azib WAY TO GREATER Chairman, Koperasi Penanam Sawit INCOME Mampan Termeloh (KPSMT)

People need to see that we are different from previous cooperatives and I believe that we are already making inroads because we have an increasing number of non-members selling their produce to our palm oil collection centre.

aji Sharif Azib’s greatest “The numbers may be small but members as dividends and incentives. challenge is to prove to these are dedicated members who truly We also ensure that everything is above H smallholders in Termeloh, believe that we can make a difference,” board and transparent.” that collective actions through said Haji Sharif, who pointed out KPSMT also encourages small cooperatives have greater potential in that transparency and effective holders to adopt better farming increasing income than working in silos. management are very important when methods and harvesting technology to The 57-year-old chairman of the running a cooperative. raise yield and produce better quality Koperasi Penanam Sawit Mampan “People need to see that we are fruits with higher oil extraction rate. Termeloh (KPSMT), has been facing an different from previous cooperatives According to Haji Sharif, unlike older uphill battle to win over smallholders and I believe that we are already cooperatives dominated by much older who are disillusioned by numerous making inroads because we have an members, KPSMT embraces young failed cooperatives in the past. increasing number of non-members farmers who are more open to new Nevertheless, he is unfazed as he selling their produce to our palm oil ideas in farming and management. believes that the eventual success of collection centre.” “Apart from having young blood KPSMT will dispel the apprehension He said the KPSMT cooperative on board, we are also supervised by over cooperatives. collection centre not only allows MPOB who constantly advises us on KPSMT, which was established smallholder to save transportations the best methods,” he said. in September 2011, is open to all costs to the mills but also buys their smallholders with palm oil plantation produce at market rate. "As opposed to of 100 acres and below in the district of other independent collection centres, Termeloh. It currently has 64 members we only take 18 percent for cooperative owning a total of 400 acres. profit, which will be channelled back to

162 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING Lia Ah Kau TOWARDS Smallholder GREATER YIELD

It would have taken It has been a year now since countless challenges and my siblings replanting and there is another year to preferred more comfortable jobs in us a much longer to replant go before he can expect a harvest of at bigger towns.” least 30 percent more than previously. Due to the demand for palm oil, without such assistance, and “It would have taken us a much it is a job that provides good income longer to replant without such said Lia, however, he is concerned that cost us more than RM7,500 per assistance, and cost us more than that his children may not be interested hectare including seedlings, RM7,500 per hectare including in taking over from him. “Despite the seedlings, fertiliser, pesticides, the assistance and encouragement from fertiliser, pesticides, the rental for tractor and labour,” said Lia the government, it is not a vocation who owns a total of 20 hectares of oil many young people are interested rental for tractor and labour. palm plantation. in pursuing.” He said the older the trees According to him, the biggest ia Ah Kau 39, would have produces lesser fruits and because challenge facing plantation owners needed to save for more than these trees are very much taller both big and small are skilled workers L two years to replace his 40- than younger ones, harvesting especially fruit harvesters. "Harvesting year- old oil palm trees if it were not becomes a problem. “We need skilled is a highly skilled job, you must know for the government assistance, which harvesters to do this and there aren’t how to harvest without damaging the included the provision of high yielding many around.” fruits. The local young labour force is seeds and financial assistance for He also pointed out that not interested in learning this skill as clearing and replanting efforts. government assistance enabled him to they prefer to leave to bigger towns for This assistance is part of the mechanise his clearing and replanting other jobs." Government scheme under EPP1 efforts which took him a month for “Unlike what is commonly pushing for the replacement of aged two plantations of 10 hectares each. perceived, working in the oil palm palms that are 25 years and older Without mechanisation, this labour plantation is not so hard; most times with younger high yielding trees by intensive effort would have taken him I work half a day only and I make a farmers and independent smallholders almost a year to complete. decent living. Young people prefer to ensure a sustainable supply of the Of all his siblings, Lia was the only bigger town because there is more commodity to downstream palm oil one who was willing to take over his entertainment there. Here in Termeloh, operators within and outside the region. father’s plantations. “It is a job with there is nothing to do at night.”

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DATO' SERI MOHAMED NAZRI BIN ABDUL AZIZ TOURISM’S MINISTER OF TOURISM AND CULTURE RESILIENCE The year 2015 was Malaysia’s Year of Festivals and the Ministry of Tourism & Culture (MOTAC) A WELCOME worked with its many partners to create a calendar full of festivities to celebrate Malaysia’s unique and STRENGTH diverse offerings. The year also saw continued international recognition of Malaysia in the tourism sector with various industry accolades such as Best Golf Destination in Asia for a second year running by the World Golf Awards 2015, World’s Top 10 Food Destinations by CNN and Georgetown, Penang one of the Top 10 Best Travel Destinations for 2016 in the Lonely Planet. Despite various challenges, tourism remains a resilient sector, and it is one of the economic pillars that can assist Malaysia’s economic recovery. We will take this opportunity to promote affordable travel to international and domestic tourists. The initiatives under the Economic Transformation Programme (ETP) and also the

164 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Despite various challenges, tourism remains a resilient sector, and it is one of the economic pillars Malaysia Tourism Transformation Plan (MTTP) have been instrumental that can assist Malaysia’s in driving towards our ambitious targets of achieving 36 million economic recovery. tourists and RM168 billion tourism receipts by 2020. Given that we are now at the halfway mark of the ourism is an important programme, it is timely to review economic sector in Malaysia INSIDE THIS NKEA and enhance the implementation and remains pivotal to the T Malaysia’s Tourism Grows via nation’s economic transformation. of some of the existing initiatives, 1 Private Sector Endeavours and and encompass any new ideas Despite global economic and sectoral Collaborations challenges, the tourism sector and potential game-changers. improved its position from fifth in Tourism Industry Growth Supported With these ongoing efforts, I am 2014 to third highest Gross National 2 by Strategic Government Initiatives confident that the tourism sector Income (GNI) contributor for 2015. In will continue to achieve greater terms of tourist receipts, it decreased heights going forward. by 4.0 percent from RM72 billion to RM69.1 billion in 2015. Tourist arrivals Malaysia’s competitiveness as a recorded a decline of 6.3 percent from leading tourism destination in the 27.4 million in 2014 to 25.7 million in region was recognised via numerous 2015. The drop in tourist arrivals and awards in 2015 with India’s leading receipts can be attributed to the global luxury and travel magazine ‘Travel economic slowdown and challenges + Leisure’ crowning Malaysia as the such as the worst floods in 30 years “Best International Destination – Food which affected several states in and Drinks 2014” in April 2015. The Malaysia in early 2015 and earthquakes country’s attractiveness as a shopping in Ranau, Sabah in June 2015, regional haven continued to increase and it travel advisory for the coastal areas of was ranked the second most popular Southeastern Coast of Sabah as well as shopping city in the world for Muslim the lingering effects of the MH370 and tourists by the Muslim Travel Shopping MH17 incidents. Index (MTSI) 2015.

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Malaysia became the ever to win in June 2015, a total of 755,399 visitors Asia in May 2015, namely the Mitsui the Best Golf Destination in Asia visited the Malaysia Mega Biodiversity Outlet Park KLIA Sepang housing 127 two years in a row at the World Golf Hub (MMBH) sites in 2015. This brands. It managed to attract over one Awards. The country also continued to achievement is highly commendable million visitors since its opening up to gain momentum in the high-yielding given that full repair and recovery of the end of 2015. Malaysia undoubtedly Meetings, Incentives, Conventions and the infrastructure at the sites concerned remains poised to identify further Exhibitions (MICE) category, moving up has yet to be completed, particularly at initiatives and improvements in its five places to 30th in the world in the 2015 Kinabalu Park where only part of the efforts to stay ahead of the game to International Congress and Convention trek was reopened in September 2015. attract more tourists. Association (ICCA) rankings for the full The industry remained resilient year of 2014. with notable developments, In spite of the negative impact particularly from the private sector. due to the year-end floods in 2014 , One significant highlight is the opening and Sabah’s devastating earthquake of the largest outlet mall in Southeast

Tourist spend on shopping 1 Malaysia’s Tourism Grows via Private picked up momentum in 2015, with total spend on shopping rising by Sector Endeavours and Collaborations 0.2 percent to RM21.63 million and shopping representing 31.3 percent of the total tourist spend in Malaysia. The Shopping Secretariat Malaysia (SSM) also stepped up efforts to engage with the retail industry and held multiple sessions during the year. The Government promoted smart partnerships via collaboration with various private sector players, including shopping malls, shopping associations and retailers. Outlet centres for premium items continue to grow in popularity. Malaysia became the first country to have a Mitsui outlet outside of Japan in 2015 and home to the largest Mitsui outlet to-date. Mitsui Outlet Park KLIA Sepang (MOP KLIA) is unique in that it offers amenities tailored to transit travelers such as free shuttle buses to KLIA and KLIA2, baggage storage Minister of Tourism and Culture YB Dato’ Seri Mohamed Nazri giving the welcome address at facilities and flight information the Malaysia 19th Tourism Awards 2014/2015 which serves to acknowledge industry and media boards. The strategic location and partners for their efforts throughout 2014 and 2015 in enhancing Malaysia’s image as a premier destination in the world customer-friendly services have

166 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Quantum of the Seas during its maiden call on 14 June 2015 alongside two other concurrent cruise calls at Bousted Cruise Center (BCC), Port Klang. This Royal Carribean International vessel is the largest cruise ship to call at any Malaysian port, berthing at both BCC and Swettenham Pier, Penang in 2015 appealed to shoppers as evidenced on land amalgamation. The Malaysia Schiff by Tui ships also gave BCC its by the encouraging footfalls with sales Eye is expected to be completed in 2016, first overnight call. Growth looks set exceeding expectations. and the International Cruise Jetty is on to continue in 2016 with a focus on In 2016, SSM will work to ensure its track for completion by end 2017. improving destination coordination, efforts abroad will yield the targeted The Malaysian cruise industry particularly for high-value calls. Return on Investment (ROI), which continued its upward growth trajectory A major new Dedicated may be a combination of the value from in 2015 with a marked 50 percent Entertainment Zone (DEZ) – TREC packages sold and also any PR value increase in total cruise passengers KL - opened in 2015 in Kuala Lumpur from the campaigns. From a tactical to 523,272 passengers from 352,322 with Zouk KL, Asia’s largest super perspective, campaigns will also put passengers in 2014. A total of 487 club, as its anchor tenant. Zouk offers more emphasis on the experiential calls were made in 2015 compared 10 new rooms across 106,000 sq. ft. element of shopping in Malaysia. to 356 in 2014. Almost all the key call and was named one of the world’s SSM will also be looking to spread ports in Malaysia saw growth, in spite Top 100 Clubs by the international the BBKLCC Tourism Association of Star Cruises’s commercial decision DJ Magazine publication. The club model by encouraging other shopping to capitalize on the rapidly growing continues to offer free entry to tourists precincts in the country to form their Chinese market and reposition the via its special designated lane and this own associations. 1,480 passenger Superstar Libra, which is expected to be a boost to Malaysia’s Following the endorsement of previously home berthed in Penang to tourism landscape. Apart from Zouk, two new integrated developments the Chinese market. TREC also has the Electric Boulevard, in Melaka and Rawang in the form The cruise industry saw a number an eclectic international selection of the Melaka Gateway and Project of prominent developments in 2015. of lifestyle outlets which is aimed at TWO, efforts in 2015 were focused One key highlight is the maiden attracting both locals and foreigners. on facilitating the progress of these calls of the Quantum of the Seas The successful opening of TREC projects. The first phase of the Melaka at Swettenham Pier, Penang, and is a culmination of both private Gateway project experienced some Boustead Cruise Center (BCC), Port sector investment and Government delays as the developer KAJ Sdn. Bhd. Klang. This 4,180 passenger vessel is facilitation. It was endorsed as an opted to postpone the completion of the the largest Royal Caribbean Vessel to be EPP project in 2014 involving private Malaysia Eye by several months to focus deployed in Southeast Asia. The Mein investments of about RM130 million.

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students at spa establishments upon 2 Tourism Industry Growth Supported graduation. They are required to have student placement pre-arrangements by Strategic Government Initiatives with potential employers. MOTAC has also continued efforts to regulate the spa industry and as part of Government incentives and were stepped up to rebrand the spa these efforts, 240 spas nationwide have programmes continue to play a industry. With these efforts, 255 been rated. Up to end 2015, 91 of these major role in developing the tourism local spa therapists were trained in spas were rated 3-star, 66 spas rated industry. Coupled with the relevant 2015 by the COEs. The total number 4-star, and 32 spas were rated 5-star. supporting policies and facilitation, of spa therapists trained since the As part of efforts to create a more the Government has endeavoured to commencement of the Spa Therapist structured and systematic aviation ensure a conducive environment for Training Programme in 2011 is 820. industry, the Government established a the industry to grow. Following the successful completion Malaysian Aviation Commission in July The Investment Tax Allowance of the course, these therapists 2015. The Commission will undertake encouraged the opening of more 4- will be placed in 3-5 star rated spa policy and planning functions to manage and 5-star hotels in 2015, including the establishments for 18 months. capacity and competition via licensing, luxury Kempinski-branded 5-star hotel Two new COEs - Geomatika route allocation and streamlining of by the KSK Group in Kuala Lumpur University College and YTL Academy airports according to hierarchy. which will commence construction in – were added to the existing four The Malaysia Convention & 2016. Notable completed new hotels COEs further boosting capacity to Exhibition Bureau (MyCEB) continued include The Light Hotel and G-Hotel meet industry demand. The COEs to serve as an effective platform for Kelawai in Penang, The Waterfront are carefully selected and must be growth in the hosting of world-class Hotel in Kuching and Sipadan Mangrove registered with the Skills Development events. MyCEB’s Malaysia Major Resort in Sabah. The total number of Department to conduct the National Events (MME) unit and the Business new completed 4- and 5-star hotel rooms Occupational Skills Standard (NOSS) Events (BE) unit contributed towards a in 2015 was 4,597 rooms, bringing the Level 3 for Spa Therapists using the vibrant events calendar with 245 events total to 19,823 new 4- and 5- star hotel National Dual Training System. COEs supported throughout the year. rooms since the start of the Economic are required to submit reports to MOTAC Highlights in terms of major events Transformation Programme in 2010. on a regular basis pertaining to training include Ironman 70.3 Putrajaya 2015 Efforts by the Government together schedules, the progress of students, with 2,272 participants and the Jon Bon with the Centers of Excellence (COEs) curriculum updates and placement of Jovi “Because We Can: The Tour” concert which attracted 18,168 attendees. These efforts enabled MME to record a total number of 67,400 international tourists at supported events. On the MICE front, Malaysia hosted the Congress of the Asia Pacific Society of Respirology 2015, and the 18th ASEAN Federation of Endocrine Societies (AFES 2015), both of which had more than 2,000 delegates in attendance. Major bids secured in 2015 include the ISI World Statistics Congress (ISI) 2019, General Assembly of the International Co-operative Alliance (ICA 2017) and the Congress of the Asian-Australian Malaysia Convention & Exhibition Bureau (MyCEB) and the Malaysian Association of Convention & Association of Animal Production Exhibition Organisers & Suppliers (MACEOS) held the 2nd edition of the rAWr Awards, in an effort to provide recognition to excellence within the Business Events Industry. Societies (AAAP) 2018.

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he Government remains was timely to review the existing steadfast in achieving its initiatives and identify new product T ambitious targets of 36 offerings including incorporating million tourists and RM168 billion the recommendations of the recent tourist receipts by 2020. Given that studies embarked by the Ministry. 2015 represents a halfway mark This would be done by way of an for the Economic Transformation NKEA Tourism and Culture Lab. The Programme and to take on board the recommendations of the Lab will be dynamic landscape of the tourism geared towards propelling the tourism sector, MOTAC has decided that it sector towards greater heights.

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ith an estimated 250 Mitsui Fudosan is a major real REDEFINING THE outlets by year 2021, estate developer in Japan and holds W Mitsui Outlet Park KLIA a 70 percent stake in MOP KLIA with Sepang (MOP KLIA) has the potential Malaysia Airports holding the rest. FACTORY to be the largest factory outlet in The airport operator helped in terms South East Asia. For the first seven of facilitation and communication months of 2015 that the outlet mall with local authorities as well as OUTLET has been in operation, MOP KLIA has providing market intelligence on also managed to exceed its projected local expectations. sales targets. “While Mitsui Fudosan fuels SHOPPING MALL MOP KLIA is part of The KLIA the Mitsui Outlet Park KLIA Sepang Aeropolis development which aims with global operational expertise, to transform the KLIA area into a Malaysia Airports is the backbone BUSINESS multimodal and multifunctional that facilitates with the local needs. enterprise and which will eventually Together, we intend to redefine the IN MALAYSIA become a diversified Airport City factory outlet shopping mall business promoting employment, shopping, in Malaysia,” said Cheah. trading, exhibition, logistics facilities, Several other government agencies business and leisure. were also instrumental in making MOP “Malaysia and Kuala Lumpur has KLIA Sepang a success said Cheah, been recognised globally as a shoppers’ such as the Ministry of Culture and haven hence, the factory outlet concept Tourism, Ministry of Domestic Trade, will further strengthen and provide a Co-operatives and Consumerism larger spectrum of choices for locals Malaysia, PEMANDU and the Ministry as well as foreigners alike while of Works. Local authorities such as complementing the development of an the Sepang Municipal Council and airport city,” said MOP KLIA Deputy BOMBA were also involved in the Managing Director TJ Cheah. success of MOP KLIA.

170 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Malaysia and Kuala Lumpur has been recognised globally

T.J. Cheah, as a shoppers’ haven hence, Deputy Managing Director, Mitsui Outlet Park KLIA the factory outlet concept will further strengthen and provide a larger spectrum of choices for locals as well as foreigners alike while complementing the development of an airport city.

“These agencies and authority bodies supported in terms of rendering business advice, facilitation and providing tax incentives,” said Cheah. “The authorities had internalised our business model and rendered the necessary support to ensure our aspirations were delivered as scheduled.” MOP KLIA boasts many facilities for airline transit passengers such as airline check-in kiosks and free baggage storage facilities. Cheah said that while numbers for passengers on transit are increasing steadily, most patrons to MOP KLIA are shoppers from within Klang Valley. There were 128 outlets in MOP KLIA at the end of 2015, spanning across a commercial space of 24,000 sq m. Future expansion of the outlet park has been planned for Phase 2 and Phase 3, which are scheduled to start operations by 2018 and 2021 respectively. By year 2021, commercial space in MOP KLIA will increase to over 44,000 sq m.

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DATO’ SRI MOVING MINISTER OF INTERNATIONAL TRADE AND INDUSTRY TO HIGHER The Electric and Electronics (E&E) industry continues to be a key driver of Malaysia’s industrial VALUE-ADDED development and contributes significantly to GDP growth, export earnings, investment, and ACTIVITIES employment. In 2015, 93 E&E projects with investments worth RM8.9 billion were approved, exceeding our annual target of RM6.0 billion. Of this, 26 projects were new projects with investments of RM2.1 billion while 67 were expansion/diversification projects with investments amounting to RM6.8 billion. Foreign investments continued to dominate overall investment, accounting for RM8.2 billion (92 percent) of total investments as compared to RM0.7 billion (8 percent) of domestic investments. Overall, a total of 455 projects, valued at RM45 billion have been approved for the period of 2011 to 2014, where 78 percent or 356 projects valued at RM35 billion have been realised thus far. Exports of E&E products rose by 8.5 percent to RM277.92 billion

172 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 YB DATUK SERI PANGLIMA MADIUS TANGAU MINISTER OF SCIENCE, TECHNOLOGY AND INNOVATION

in 2015 versus RM256.14 billion The E&E industry has remained NanoMalaysia’s in 2014, the highest export value as Malaysia’s economic mainstay commercialisation frameworks, since 2007 and accounted for since the 1970s . The Ministry, namely iNanovation and 35.6 percent of total exports. together with its agencies such as National Graphene Action Plan This was driven by continued MIMOS, SIRIM and NanoMalaysia 2020, leverage on and maximise demand for new applications of Bhd have been playing an active utilisation of existing infrastructure internet of things (IoT) for wireless role in re-energising this sector. and talent, further strengthening communications and wearable In 2015, MIMOS undertook the the public private partnerships. devices. Major E&E export task to train more than 500 E&E During the year, we also destinations with significant engineers and students. As a result, launched the National Internet of increase (exceeding RM1 billion) more than 150 companies directly Things (IoT) Strategic Roadmap. for 2015 include Singapore, USA, benefited from the programmes The main objective of this roadmap Thailand, Republic of Korea, offered through its Advanced is to create a national ecosystem Germany, Japan and India. Shared Facilities. that enables the proliferation of use Since inception, the NKEA The Nanotechnology and the industrialisation of IoT as E&E has achieved 78 percent of Semiconductor Technology Centre a new source of economic growth. its Roadmap’s target at end-2015, (NSTC) at MIMOS, launched in In 2015, Malaysia’s total export and is on track to meet its overall July 2015, provides complete E&E for E&E products was RM277.92 targets by 2020. ecosystem support in the areas of billion. With new breakthrough The signing of the Trans Pacific nanoelectronics, graphene and discoveries in nanotechnology Partnership Agreement (TPPA) semiconductor microelectronics. and the rise of IoT, we have the on 4th February 2016 is expected The Ministry is fully committed potential to increase our export to benefit the E&E industry as a in supporting the adoption of by 2020. whole, as it will provide Malaysian nanotechnology in Malaysia, as companies, particularly SMEs, it is a game-changing innovative the opportunities to export their technology with amazing potential to products to TPPA member countries, energise the growth of our industries which collectively account for 40 through the creation of more high- percent of global GDP. value local products and solutions.

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lectrical and electronics ecosystems of semiconductors, (E&E) is the leading and the solar and Light emitting diode (LED) INSIDE THIS NKEA most liberalised industry technologies. E Delving into Downstream Industries in Malaysia's manufacturing Semiconductors are expected to 1 sector. Since the establishment of the continue spearheading the growth first semiconductor plant in Penang of the E&E industry in Malaysia and in 1972, Malaysia has become a major will continue to benefit from growing Turning on LEDs global manufacturing hub for the E&E global demand in the usage of mobile 2 industry. Four decades on, Malaysia devices (smartphones, tablets), continues to be a preferred E&E storage devices (cloud computing, Harnessing the Power of the Sun investment destination. data centres, personal data drives), 3 E&E products have been the largest optoelectronics (photonics, fibre traded items for Malaysia for several optics, LEDs) and embedded decades since the industry inception technology (integrated circuits, Expanding the Electrical in the 1960s. The industry evolution PCBs, LEDs). 4 & Electronics Industry until today has turned Malaysia as one The growth trends achieved of the leading points in the global E&E during the year reflect a concerted, value chain. industry-wide effort to shift from low As Malaysia moves forward, the value-added activities to high-value E&E segment is focused on deepening operations to remain competitive in a and strengthening the three major globalised economy.

1 Delving into Downstream Industries

Strong expansion in downstream American company to manufacture industries boosted the E&E Gross multi-sensor and heat-assisted National Income (GNI) to RM53 billion magnetic recording devices; a new in 2015 versus RM46.5 billion in 2014. project by a wholly Malaysian- In 2015, the Malaysia Investment owned company with investment Development Authority (MIDA) of RM71 million to undertake the has already approved total E&E activities of die preparation at investments of RM8.9 billion, wafer level for photonics integrated exceeding the full-year target of RM6.0 circuits (IC); and two new solar cell billion. The bulk of investment was and module manufacturing plants from foreign investors. They include owned by Chinese firms worth a RM2 billion investment by an RM600 million.

174 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Of the cumulative RM45 billion EPP14: Transmission and The timing of introducing the worth of investments approved in distribution (T&D) equipment EESC could not be better as it will 2011-2014, RM35.2 billion or 78 percent manufacturers (1) identify the gaps in the E&E ecosystem was realised. This exceeded the target and establish sub-working groups EPP17: Mobile devices of 65 percent. to address specific needs for the companies (1) In 2015, MIDA approved 11 high industry to move forward in the impact projects in the NKEA, under– Business opportunity (BO) 5: next five years. Over the years, local companies have been impacted by the EPP1: Semiconductor Network storage solution rising cost of doing business, such as fabrication plant (1) technology hub (1). the implementation of the goods and EPP2: Advanced packaging (2) On 25 June 2015, the Electrical services tax (GST), impact of a weak and Electronics Strategic Council ringgit on import costs, lack of local EPP3: Integrated circuit (EESC) was set up with the aim of talent and stiff competition from (IC) design firms (1) providing strategies to raise the lower-cost competitors in China. All EPP4: Substrates manufacturer (2) nation’s E&E industry to the next level these have further capped the growth of capabilities and competitiveness. of local E&E companies. EPP6: Wafer and cell The EESC, chaired by the Minister of producers (1) International Trade and Industry, will EPP7: Solar module act as an advisory platform for the E&E manufacturers (1) industry over the next five years.

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chain of other local players in the 2 Turning on LEDs LED industry. In addition, it will complete the LED ecosystem in Malaysia, and make the country Malaysia is now gaining to construct a new LED chip plant in more conducive for the deployment prominence as a production Kulim, Kedah. Construction will likely of high-technology projects. hub for LED manufacturers. The kick off in the first quarter of 2016. Whilst the industry has had a development and production of The plant is set to be the largest and good run in 2015, there are some new LED clusters in the country cover latest six-inch LED chip production challenges especially for the local LED semiconductor devices for LED, site in the world. It is part of the manufacturers. LED lamp testing is wafer fabrication, lighting products group’s €3 billion new investment costly and takes a long time (6,000 and solutions. LED applications that will transform it into a global hours) due to new standards (MS include vehicle lighting, backlights semiconductor player. 62722-2-1) imposed by Europe and the and displays. This project will be beneficial to US. This has delayed the penetration Osram Opto Semiconductors is Malaysia in terms of jobs creation of newly certified LED products into investing €1 billion (RM4.67 billion) and further strengthens the value international markets.

P-Plus Sdn. Bhd., a company under the Green LED/SSL Programme showcasing Malaysian made LED/SSL products at SME Corp Malaysia's closed door business linkages event

176 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 3 Harnessing the Power of the Sun

First Solar launched its TetraSun technology-based production line at its PV manufacturing complex in Kulim Hi-Tech Park, Malaysia

As at December 2015, Malaysia Meanwhile, JinkoSolar’s solar cell Anti-circumvention duties of 53.4 is home to a total of 16 solar and module manufacturing facility percent and anti-subsidy duties of 11.5 manufacturing plants, with a commenced production of highly- percent now apply to Chinese solar PV production capacity of 2.6GW of cells efficient cells and multi-crystalline panels and cells shipped from Taiwan and 5GW of modules per year. modules in May 2015, providing the and Malaysia to the EU. To mitigate the During the year, the Northern company with an additional capacity impact of this on the local industry, Corridor Economic Region (NCER) of 500MW for solar PV cells and 500MW the Ministry of International Trade welcomed two new solar panel players, for modules annually. and Industry (MITI) is putting in place JA Solar Holdings Co Ltd and JinkoSolar While the growth of the solar panel measures in the approval of Chinese Holdings, to Penang. JA Solar Holdings industry is evident, it is not without its companies setting up manufacturing Co Ltd, one of the world’s largest challenges. In May 2015, the European facilities in Malaysia to ensure high manufacturer of high performance Union (EU) launched an investigation value activities are conducted in solar power products, invested RM300 into Taiwanese and Malaysian solar Malaysia and local companies are part million in October 2015, to establish its panel manufacturers after Chinese of the supply chain. first manufacturing facility outside exporters were accused of evading China. This factory’s output would anti-dumping levies by shipping represent 10 percent of the company’s solar panels to the EU respectively total production capacity globally. through Taiwan and Malaysia.

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Valley, Malacca, Pahang, Penang and 4 Expanding the Electrical Sarawak. Among the parties GreenTech Malaysia is working with is Eclimo & Electronics Industry Sdn Bhd, a Malaysian-owned electric vehicle company manufacturing electric motorcycles and lithium ion battery High value Research and The prototyping of an electric bus and packs. Eclimo has supplied 450 electric Development activities are crucial as lithium-ion (Li-ion) batteries for electric scooters to the Women Peace Police the nation moves up the value chain and hybrid vehicles – a collaboration Squad (Amanita), KFC, Penang council, within the E&E industry. between the Malaysia Automotive Institute Penang Island City Council, Penang During the year, Penchem (MAI), University of Wollongong and Botanic Gardens and the state of Melaka. Technologies Sdn Bhd developed University Technology Sydney, AutoCRC In addition, Universiti Teknologi graphene conductive inks that have Ltd and Swinburne University – were also PETRONAS (UTP), in collaboration conductivity levels suitable for printed completed during the year. The prototype with local LED/ Solid State Lighting electronic applications. This is significant e-bus was revealed at the ASEAN Auto (SSL) designer Hans System Design as printed electronics is crucial in Show 2015. Commercialisation and mass Sdn Bhd, developed a copper-carbon many downstream applications such production are expected to start in the nanotube (Cu-CNT) nanocomposite as wearable devices and flexible second half of 2016. substrate for thermal management in electronics, as well as key enablers of The Malaysian Green Technology LED applications that improves lighting various Internet of Nano-Things (IoNT) Corp (GreenTech Malaysia), a government performance. During the year, the solutions. To date, Penchem has signed agency under the purview of the Energy, company upscaled and commercialised agreements with various partners to Green Technology and Water Ministry, the technology in LED lighting use the developed graphene inks for is pushing for electric-powered mobility. application. This technology has various application development, namely in They aim to install 300 charging other electronics applications that can radio-frequency identification (RFID), stations nationwide by 2016 with more be adapted and licensed to players in sensors and printed electronics. than 70 already installed in the Klang various industries.

MIMOS'S SHARED SERVICES FACILITIES USEFUL FOR MARKET PLAYERS

MIMOS Nano-Semiconductor Technologies Sdn Bhd, for example, relies years of experience in providing technical Technology (NST) provides analytical on these shared services and facilities – services to manufacturers in a wide shared services and facilities, with the they have become part of its processes, range of industries, including consumer aim of becoming a major catalyst for the and a channel to market its products, electronics and information technology development of electrical and electronics provide demonstrations and introduce new equipment. Prior to the setting up of (E&E) sectors in Malaysia and the region technologies. The facilities also enable its MIMOS’ shared services and facilities, by offering a flexible engagement model, engineers to acquire hands-on experience Fintexs had sometimes used some of its short turnaround time and integrated and develop new techniques. The facilities customers’ facilities but these came with value-added services at competitive prices. had indeed helped Fintexs innovate and many constraints. Using MIMOS’ facilities Among the services offered are failure evolve to meet its customer demands. had helped Fintexs save time and costs by analysis/material analysis, reliability Fintexs is a trading company that up to 30 to 40 percent, on average. testing, wafer and integrated circuit (IC) provide sales as well as after-sales support Having benefited from MIMOS’ shared testing, IC design, wafer prototyping, and including installation, training, application services and facilities, Fintexs now actively hands-on industrial upskilling programme. support, and commissioning. Over the markets them to its customers as well. Software and testing tools are years, it has also specialised in turnkey expensive. As such, MIMOS’ facilities had projects for Infineon China, Silterra, X-FAB, become invaluable to companies that do etc to set up failure analysis and reliability not have their own facilities or tools. Fintexs testing. The people behind Fintexs have 20

178 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

nnovation is the key in achieving rebrand the country as the hub for high It is believed that once the Trans- the national agenda of moving technology activities, particularly in Pacific Partnership Agreement (TPPA) I up the value chain as the research and development (R&D) and comes into effect, Malaysian exporters nation progresses from a middle- design and development (D&D), and will gain competitive advantage over income economy to a high-income is encouraging the setting up of more regional competitors in exporting one. In sustaining Malaysia’s technical support centres and Centres products, such as our electrical economic growth and enhancing its of Excellence (COEs). and electronics sector. This will be competitiveness, it is crucial that the In the 11th Malaysia Plan (2016- advantageous to the entire E&E value Government focuses not just on the 2020), MIMOS will champion a chain from the aspect of GNI, jobs as investments’ absolute value but also common integrated circuit (IC) design well as investments by giving us better the quality. platform to enable both local IC design access as it eliminates or reduces tariff The Government has adopted an firms and universities realise as well and non-tariff barriers between its ecosystem approach to attract and as commercialised their ICs designs member countries. generate quality investments that into various E&E applications. What is are of high technology, high value- required now is a sustainability model add, knowledge- and skills-intensive, to ensure that local IC design firms, export oriented, capital-intensive, and and indeed all local E&E firms, can design- and R&D-intensive. The goal is stand up on their own feet without full to have projects with high GNI impact funding from Government agencies. and strong linkages with domestic Further studies need to be done on industries. MIDA is also striving to what it takes to move into that phase.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 179 THE NTP – NATIONAL KEY ECONOMIC AREAS Business Services

DATO' SRI RICHARD RIOT ANAK JAEM BUSINESS MINISTER OF HUMAN RESOURCE SERVICES I am very pleased to see the continued growth of the Business Services NKEA, as it is a critical SECTOR component of our transformation journey. The NKEA helps Malaysia move up the services value TAKES OFF chain by attracting higher value investments that enhance the knowledge economy, have a global outlook, and create skilled jobs for Malaysians. The continued growth of business services means that more and more high skilled employees will be required. Witnessing the shared services and outsourcing industry creating over 16,000 jobs this year is indeed assuring and illustrates that the programme is on the right track. We will continue to work with companies and educational institutions to ensure Malaysia produces the best industry- ready graduates.

180 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 he business services sector continued its expansion in T 2015, generating RM46.2 billion in GNI. This represents a 9.7 percent growth over 2014, and Business Services remains one of the fastest growing NKEAs. This also means that Business Services is on track to achieve the 2020 target of RM78.7 billion in GNI. The governance of the Malaysia is a regional leader in the business services sector and is well Business Services NKEA will positioned to move up the value chain transition from the Ministry of and increase its export of services. The Human Resources (MOHR) to the aim is to be globally competitive and Ministry of International Trade and ultimately transition Malaysia to a Industry (MITI) in 2016. I strongly knowledge-based economy supported believe that this move aligns by a deep and diverse range of high- very well with MITI’s agenda to value services. The country is now a key global player in the fields of develop the services industry. I shared services and outsourcing am confident that through close (SSO) and aviation maintenance, collaboration between various repair and overhaul (MRO), and is INSIDE THIS NKEA government ministries and also experiencing significant growth in the data centre, green technology agencies, the industry will achieve Sustained Growth Acceleration its 2020 target Gross National and pure-play engineering fields. 1 of Strategic Services Sectors Notable developments this year Income (GNI) of RM78.7 billion include the opening of another global and creating 43,000 jobs. support centre by Schlumberger, a 2 Developing Future Growth Segments landmark deal for UMW to manufacture aero-engine fan cases for Rolls-Royce and the creation of a one-stop solution centre for engineering design and prototyping by Malaysian engineering since 2010 to MITI, leveraging on firm DreamEDGE. existing governance platforms such Competition for investment, as the Malaysia Services Development however, remains stiff and the Council (MSDC) and the newly revived uncertain global economic climate Malaysian Aerospace Council (MAC). has given cause for many potential The implementation of individual business outsourcing clients to hold Entry Point Projects (EPPs) however back. Technology also continues will continue to be led by their to evolve, necessitating the need to respective agencies and ministries such constantly review policies to ensure as Ministry of Energy Green Technology the country can take advantage of the and Water (KeTTHA), Multimedia latest developments. Development Corporation (MDeC) and In 2016, this NKEA will move Malaysian Industry-Government Group from under the purview of MOHR for High Technology (MIGHT).

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1 Sustained Growth Acceleration of Strategic Services Sectors

The launch of the Malaysia Aerospace Industry Blueprint 2030 by YAB Prime Minister

MAKING MALAYSIA signed between Rolls-Royce and in October 2015. The centre has AN AEROSPACE HUB UMW. Under the deal, UMW will employed 70 people and is one of The aerospace industry, which manufacture and assemble aero- only five such Airbus locations around is one of the priority sectors in the engine fan cases for Rolls-Royce’s the world, providing major aircraft 11th Malaysian Plan, hit several Trent 1000 engines which power engineering and repair design services notable milestones this year. There the Boeing 787 Dreamliner. This to customers globally. was the launch of the Malaysian agreement signifies the confidence A new EPP8 was also launched to Aerospace Industry Blueprint 2030, that world-renowned companies have develop SMEs in the global aerospace the revival of the Malaysian Aerospace in Malaysia’s capabilities, and opens manufacturing industry. This project, Council, and the establishment of the door for even more opportunities led by SME Corp, will further enhance a dedicated National Aerospace to be realised in technology transfer, Malaysia’s attractiveness as an Industry Coordinating Office (NAICO) human capital development and investment destination for leading under MITI. SME development. aerospace multinationals, as well In terms of investments, a In addition, Airbus officially as help upskill the talent pool landmark RM830 million deal was launched its customer service centre within Malaysia.

182 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 POSITIONING MALAYSIA AS A sourcing decisions due to economic an increasingly larger share of the WORLD CLASS DATA CENTRE HUB uncertainty. country’s Gross Domestic Product The new state-of-the-art Sedenak Challenges in the cost of doing (GDP). Iskandar Data Hub was officially business were even more pronounced Shifting technology trends are also announced during the year. The 700- this year. Connectivity costs remain straining current regulatory structures, acre site in the Iskandar Region will be uncompetitive, and while power rates particularly involving cloud-based equipped with advanced infrastructure, are still low relative to the rest of the services and data analytics. To cater high-capacity power and reliable region, they face upward pressures for these shifts, regulators will need connectivity, and has been earmarked for from impending tariff revisions. A to review old policies, while service local and global data centre companies. more strategic review must be done providers will have to strengthen This hub, together with key to further catalyse Malaysia’s digital data security measures to retain data centre investments by leading economy, particularly as it generates customer confidence. companies such as Huawei and VADS Bhd (a TM subsidiary), further establishes Johor as Malaysia’s second location for data centres after Cyberjaya. Nevertheless, the slowdown in the global market impacted the confidence of buyers towards outsourcing their data centre activities. This led to EPP3 revenues falling just short of the 2015 target, and this trend is expected to continue into 2016, as customers delay their VADS's new US$130 million data centre in Iskandar Puteri, Johor

2 Developing Future Growth Segments

JUMP-STARTING THE GREEN In line with this, the Green Tech TECHNOLOGY INDUSTRY Financing Scheme (GTFS) has been In the green technology space, extended to 31 December 2017 with a solid waste management remains a fund of RM1.2 billion. It allows eligible national challenge, particularly when companies to obtain a two percent it comes to the current over-reliance on government subsidy on the loan landfills. More must be done to build interest and a 60 percent guarantee sustainable ecosystems. Nevertheless, on the risk of the loan via Credit KPI achievement for 2015 was at Guarantee Corporation. 106 percent of the target, reflecting the continued growth of the green technology industry.

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DEVELOPING SMEs IN THE GLOBAL AEROSPACE MANUFACTURING INDUSTRY

The aerospace industry in Malaysia began with the establishment will receive business and technical advisory services aimed at of MRO operations in the 1970s, and has progressed into the enhancing their business potential. manufacture of aerospace parts and components and assembly To further support this EPP, the state of Perak announced the of light aircrafts. 81-hectare Green Asia Aerospace Technology Park in Seri Iskandar, As the Asia Pacific region is set to be the largest market for as part of the state’s five year Perak Development Plan. The project new commercial aircraft, with orders expected to reach almost will be led by local aircraft composite parts company Admanco, 13,000 units by 2032, demand for MRO services and manufacturing and will also house US-based materials firm Hexcel, Singapore of aerospace parts and components is also expected to increase. Aerospace Manufacturing and Malaysian precision tooling company To map out Malaysia’s aspirations for this industry, the All Star Fortress. Upon full maturity, the park is targeted to house Malaysian Aerospace Industry Blueprint 2015-2030 was up to 135 companies and create 10,000 new jobs. launched at the Langkawi International Maritime and Aerospace The aerospace industry requires high upfront capital investment, Exhibition (LIMA). In conjunction with this launch, a new EPP8 as well as numerous certifications and approvals. Therefore, SMEs was also launched to develop small and medium enterprises require constant support and assistance in building capabilities and (SMEs) in the global aerospace manufacturing industry. capacity, especially at the early stages. This project, led by SME Corp, is targeted to contribute RM258 million It is clear that for these aerospace SMEs to thrive, collaborations in GNI, 4,108 jobs and RM88 million in investments by 2020. with those commanding industry expertise must be enhanced to develop In 2015, five SMEs were assessed and approved within SME a more holistic SME development programme, one that includes Corp’s Business Accelerator Programme. This programme enables benchmarking, training, consultation, marketing and business matching SMEs to be assisted through an integrated approach with guidance, activities. This will be done by leveraging on NAICO's governance including strengthening their core business, building capacity platforms (e.g. Malaysian Aerospace Council, Technical Working Groups) and capability, and facilitating access to financing. Applicants to ensure continuous integration with all levels of the supply chain.

184 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

oving into 2016, within The coming year will also see the all the aerospace related continued implementation of the M EPPs, there will be Sedenak Iskandar Data Hub, and an increased coordination between all increased focus on developing Sarawak these EPPs and initiatives through as a data centre location, as the state NAICO. This office looks to consolidate contains some natural advantages representation of all private-and public- such as its large available land mass, sector stakeholders. Ultimately, inter- abundant hydroelectric supply and low agency alignment and public-private risk of natural disasters. collaboration is crucial, as Malaysia remains a relatively small player on the global stage. It is imperative that the industry tap the broader base of expertise available in the country.

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Dato’ Yasmin Mahmood, MDeC CEO

he Shared Services and Outsourcing (SSO) sector has BUILDING GLOBALLY T been one of the standouts of Malaysia’s economic story over the years. Not only has Malaysia been consistently ranked as one of the top three most COMPETITIVE attractive destinations for business shared services and outsourcing by global management consulting firm AT SHARED SERVICES Kearney, but the sector has outperformed job creation targets as well. Describing this sector as “Malaysia’s jewel in the crown”, MDeC AND OUTSOURCERS CEO Dato’ Yasmin Mahmood reflected that “the cluster formerly known as SSO has recently been renamed Global Business Services (GBS) to better reflect the changing nature of the global outsourcing market, and the strengths Malaysia can play to.” A key highlight, Yasmin said, was that the target for new job creations for 2020 was met in 2015. “And these are high income jobs too,” Yasmin noted. “It’s not just about the number of jobs, it’s also about the value of the jobs.”

186 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 The industry veteran said that She stressed that this commitment By elevating this while the ICT industry's average at the highest level was of enormous monthly salary in Malaysia is value to global investors. specific EPP2 to about RM3,500 per month, the GBS “It builds mega trust banks,” said industry average salary in Malaysia the MDeC CEO. a national ETP is about RM6,400. And salaries at the She added that an agency like higher end of the GBS value chain, MDeC was also important for investor level, we have i.e. Knowledge Process Outsourcing confidence. told the world (KPO), are even higher at about “Investors appreciate that there RM8,400 per month. is an agency to support them so that that the whole Yasmin said a major factor in the their businesses are successful and can success of the sector was government thrive in Malaysia,” said Yasmin. of Malaysia is commitment. This commitment Moving forward, new policies committed to helped gain the trust of investors in and amendments to existing policies, Malaysia as a top GBS location. as well as regulatory reforms, may delivering this “By elevating this specific EPP2 be needed to ensure Malaysia’s to a national ETP level, we have told competitiveness. trust to the world. the world that the whole of Malaysia “There are global changes is committed to delivering this trust happening, specifically in the legal, to the world,” said Yasmin. “That healthcare, and Islamic financial areas, we have access to the very highest which may call for some changes,” powers in the country, that we have said Yasmin. “MDeC looks forward to the mandates to help them grow, working with the relevant authorities and that we will make the required to make these changes when required.” changes at a national level to support them when required.”

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alaysia’s emergence as a regional aerospace hub M is crucial for the nation’s TALENT DRIVES ambitions to be a high-income economy by 2020. Zulfikri Osman, Chief Operating Officer (COO) of M-AeroTech GROWTH IN said that the growth of the aerospace sector represents our transition as a country to a high-income economy. AEROSPACE “As an industry, aerospace is high- value and focuses heavily on human capital development,” he said. “It is VENTURE important to diversify the nation’s economy, making it less reliant on traditional sectors such as the oil and gas sector, especially in the current economic climate.” Zulfikri added that Malaysia must recognise the importance of developing its most important resource: its people. M-AeroTech was set up by Majlis Amanah Rakyat (MARA) in 2014 to lead its ventures into aerospace. It is also

188 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Zulfikri Osman, COO, M-AeroTech As an industry, aerospace is high value and focuses heavily on human capital development. It is important to diversify the nation’s economy, making it less reliant on traditional sectors such as the oil and gas sector, especially in the current economic climate.

championing the Business Services said Zulfikri. “With a unified plan, EPP7 - Making Malaysia a Hub for and unified goals under the ETP, we Aerospace OEMs in Southeast Asia. are able to synergise better, and have Zulfikri said that the push into better connectivity and coordination aerospace has yielded great benefits with other stakeholders in the and innovations in human capital Government.” development to MARA, which supplies Moving forward, Zulfikri said that 30 percent of the nation’s workforce. there needs to be enhanced human “This will pave the way to a capital development led by the Malaysian workforce which is ready for industry itself. He said M-AeroTech will the challenges of modern high-value continue to play a pivotal role in this industry,” he said. area, by engaging industry to enhance The COO noted that M-AeroTech’s the human capital development involvement in the aerospace capabilities in MARA. industry, and its working together He added that SMEs need to be with PEMANDU to implement the further developed so that they are Economic Transformation Programme, capable of entering the aerospace have given it invaluable experience industry. on how to participate in a high-value “This is important for completing industry and in high-quality human the supply chain, and to ensure the capital development. country gains the maximum benefits “This helps us fulfill ETP goals from the growth of aerospace,” said such as high-value job creation,” Zulfikri.

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DATUK SERI PANGLIMA DR. MOHD SALLEH TUN SAID KERUAK ENHANCING MINISTER OF COMMUNICATIONS AND MULTIMEDIA CONTENT AND 2015 was another exciting year for the Communication Content & Infrastructure NKEA, CONNECTIVITY as it continued to build on the momentum of existing projects and refine initiatives. One such initiative, The Film In Malaysia Incentive or FIMI experienced a phenomenal growth in 2015. We saw a 40 percent increase in terms of production investment worth over RM457 million. Of this amount, 98 percent was foreign led, and this means we should continue to promote Malaysia as a global film location and to faciliate the ease of making films here. Another initiative, the Content Malaysia Pitching Centre launched in 2015 provides the creative industry a platform to produce world class content to compete in the global market. It was a missing cog in the industry wheel, as well as a game changer at large, as it caters to both budding movie making entrepreneurs such as producers and seasoned script writers, hair and make up stylists, visual effects teams, directors amongst others.

190 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 The Film In Malaysia Incentive experienced a phenomenal growth in 2015, seeing a 40% increase in terms We also made continued progress in high impact projects of production investment worth to deliver high speed broadband and expand coverage to rural areas. over RM457 million. This is part of our promise of better — Datuk Seri Panglima Dr. Mohd Salleh Tun Said Keruak, service delivery and seamless Minister of Communications and Multimedia connectivity for all in a bid to make broadband access inclusive. I remain optimistic of 2016 and will ensure that we continue he Communications Content to grow this sector, with focus and Infrastructure (CCI) INSIDE THIS NKEA on developing the creative sector spans a wide ecosystem T Catalysing Growth in the covering creative content, network industry human capital , creative 1 Content Industry content, as well as to enhance our applications, services and devices. The growth of the CCI industry is marketing and communications key to other National Key Economic Pushing Boundaries infrastructure. Areas (NKEAs) such as Electrical and 2 in e-Government Electronics (E&E), Financial Services, Tourism, Healthcare, Business Services Enhancing the Foundation and even Education, which rely on 3 and Access to Connectivity communication infrastructure to further boost economic potential. As we head towards 2020, the sector is undergoing a paradigm shift up to become a core function and it from providing infrastructure and is expected to become a significant access for Malaysians to providing economic contributor, with continued applications and content that will support and participation. Malaysia enable a knowledge-based economy. is making a name for herself as a This is the critical and catalytic quality destination for filming. This role the CCI NKEA will play in the confidence is mirrored by interest from development and sustainability of a global and established film producers high-income economy. such as Marco Polo Productions Asia Within this sector, Malaysia’s Sdn Bhd, Netflix, The Weinstein creative content ecosystem is shaping Company and production companies.

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Additionally, it is evidenced with the technology into Government services. has been declared by the Human opening of the renowned Pinewood This is to improve the various services Rights Council of the United Nations studios in Iskandar Johor which is the accessed by the general public. as a basic human right to enable people location of productions by Fremantle Successful implementation will to exercise and enjoy their rights to Asia, Turner Broadcasting System Asia result in 90 percent of transactions freedom of expression as well as to Pacific amongst others. being completed online with only 10 facilitate economic development. In In addition, attractive financial percent completed with face to face addition, with the advancement of incentives drew nearly half a billion engagements. Within the government technology, there is a bigger data in ringgit in film spending just last year, system, there has been an ongoing the system and with that comes the with 98 percent of it from abroad. This effort to go paperless by 2020 and need for better connectivity. This is in turn also stimulated local demand this will ensure less incidents of because businesses are accessing for supporting goods and services such documents going astray, easy retrieval data and information, consumers are as catering, transportation, clothing, of documents and proper records using apps, online portals and social construction and carpentry. being kept media. Essentially with more and more A critical piece of this NKEA looks The right to Internet, otherwise Malaysians going online, ubiquitous at expanding the adoption of the latest referred to as the right to broadband, connectivity is a necessity.

The Content Malaysia Pitching 1 Catalysing Growth Centre launched in 2015 will connect the creative industry to funding and in the Content Industry buyers. Its main purview is to review commercial viability, vet pipelines of eligible content and to maintain accountability of funds. Additionally, the centre provides the industry with a physical facility where they can gather to attend workshops and master classes, participate in industry and community events, and interact with the right buyers and distributors of their content. Since April 2015, 72 projects have been approved to receive funding from various pitches during the year. Currently, both local and foreign productions in Malaysia enjoy a 30 percent rebate on production spending in Malaysia through the Film In Malaysia Incentive (FIMI). As a result of FIMI, a total of 16 companies, comprising of 13 foreign and 3 local companies qualified for this policy over The Licensing Expo 2015 in Las Vegas - the meeting place for the global licensing industry where the course of 2015. Collectively, these companies will be able spot trends, build strategic partnerships or secure promotional tie-ins through finding the right partners or opportunities to expand their businesses have contributed the sum of RM457

192 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Marché du Film de Cannes attracts an estimated 10,000 participants who uses this event to debut and discover almost 4,000 films and projects in 34 screening rooms. Creative Content Association Malaysia, an industry-led and government-supported association of leading content creators in Malaysia participated in Marché du Film 2015 to assist in promoting various local films million in production investments. into Malaysia which translates to a and extras. This increase in demand Amongst these productions are Indian Return on Investment (ROI) of 3.27 has enabled good scriptwriters to earn Summer Series 2, Asia’s Got Talent, times. In addition, the total spending in excess of RM15,000 per month, Lost in the Pacific and the animated on Malaysian good and services while an extra could command a fee feature, Supa Strikas. by these companies on rental & of RM4,500. All this simply augurs In addition to competitive leasing; construction and carpentry; well for the industry and the people incentives (FIMI) and production accommodation; food and beverage, that work within. In addition, there facilitation, the opening of Pinewood etc. was RM406.2 million. is the Creative Industry Lifelong Iskandar Malaysia Studio with its state FIMI-supported production Progamme (CILLP) that aims to of the art facilities also reinforced has also generated RM156.2 million develop and up skill creative talents Malaysia’s position as an attractive in employee compensation in from script writers to directors to destination for filming. The top two Malaysia, including MYR82.8m any Malaysian with an interest in highest production investments at of direct employee compensation the creative industry. They would Pinewood Iskandar were Marco Polo (i.e., Malaysian cast and crew) and have to be accepted to a recognised Season 2 estimated at RM194 million RM73.4 million of multiplier effects programme in an institution and followed by Indian Summers Season on employee compensation in apply for funding through the CMPC. 2 estimated at RM47 million. supplier industries. Finally, FIMI- To-date, 310 Malaysians have received Apart from encouraging skills and supported production has generated funds and are undergoing courses in knowledge transfer to locals working 5,679 Full-time Equivalent (FTEs) of local or international institutions. within a production crew, FIMI also employment in Malaysia, including stimulates local economies by creating 2,542 FTEs of direct employment of a demand for goods and services Malaysian cast and crew and 3,137 such as catering services to prop FTEs of multiplier effect employment making services to car rental services in supplier industries. in order to fulfill the production With a thriving and growing requirements. FIMI brought in RM893 creative industry, there is now a million of production investment greater demand for production talents

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DDMS is seen by the agencies to 2 Pushing Boundaries in e-Government improve the convenience, efficiency and transparency of their services to the rakyat and is also convenient for E-Government is the use of CCI target number of 18. The encouraging trade facilitation. technology to enhance the access to and adoption rate by the Government was The DDMS fulfils the objective of delivery of Government services to the prompted by the need for a solution getting the Malaysian government to rakyat and businesses. E-Government based approach towards minimising go paperless. Spearheaded by MAMPU, will foster a better business environment, waste and to operationalize the DDMS also aims to increase the strengthen good governance, broaden government’s stance of reducing the accessibility, speed, and transparency public participation and improve country’s carbon footprint. In turn, of Government services. the productivity and efficiency of Government agencies. One of the main initiatives in pushing the e-Government agenda in Malaysia is the Digital Document Management System. This is a cloud- based system that is designed to manage the creation and maintenance of electronically created documents of the Malaysian public sector agencies. Some 31 ministries and agencies adopted the Digital Document Management System (DDMS) as of last School children utilising the Pusat Internet 1 Malaysia facilities after school hours for information year, a number which far exceeds the seeking and educational purposes

3 Enhancing the Foundation and Access to Connectivity

An ideal nationwide premise to in 2015 to allow local communities (HSBB 2) and the Sub-Urban Broadband provide connectivity to all Malaysians is in underserved areas to attain basic Project (SUBB). Both projects will see on-going. To deliver this ambitious plan, Internet access and ICT training. TM roll out a last mile access network a focused approach is deployed to ensure Furthermore, 51 Communications to homes and businesses utilising fibre- that both accessibility and connectivity Towers were also established and to-the-home (FTTH), Ethernet-to-the- meets the expectations of the users. this allows communities mobile home (ETTH) and VDSL2 technologies. To enable that and cater for these phone coverage in their local area. Under this project, 95 additional demands, there is a committed budget These towers are built by the various exchanges will be made HSBB ready, and clear priority on infrastructure telecommunication companies in providing access to 390,000 premises development. In 2015, 611 villages Malaysia to ensure their customers have in priority economic areas including around Malaysia were able to access access anytime, anywhere in Malaysia. state capitals and selected major towns the internet through the Kampung In December 2015, Telekom by 2017. In addition, some 420,000 Tanpa Wayar 1Malaysia initiative. Malaysia also announced the signing premises in sub urban and rural areas This initiative provides free wireless of two public private partnership (PPP) will benefit from the SUBB project by access to selected villages across agreements with the Government of 2019. Ultimately more Malaysians the country. In addition, 99 Pusat Malaysia for the implementation of the will have better and greater access to Internet 1Malaysia were established High Speed Broadband Project Phase 2 broadband, come 2020.

194 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

n 2016, the focus of this NKEA savvy stakeholders to enhance will be to review and challenge knowledge and understanding on I the KPIs of projects that were technical projects to ensure faster significantly overachieved in 2015. turnaround time in problem solving This is to encourage effort by project and delivery. owners to go above and beyond and Finally, in the coming year, we realise purposeful results. In addition, will work to ensure that there is a we intend to work closely with continuity of government policies stakeholders and project owners on and implementation such as the High their budget expenditure. This close Speed Broadband 2 and Suburban monitoring of spending will ensure Broadband Film in Malaysia Incentive optimal use of funds available in a (FIMI). This is to ensure that everything challenging economic climate. that has been set out in the roadmap We will also work towards is managed effectively, implemented increased engagement with technical- and achieved come 2020.

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CHECKING IN WITH LAGISATU he Malaysia-based app his team could succeed. “We worked “Being part of such initiatives LagiSatu aims to tap into during the day on our own platform brings a certain structure to your T the Muslim travel market by and technology and during the night business, which helps especially in offering a search engine for hotels on freelance jobs to fund our business the beginning stages of starting a that cater to those looking for Muslim- in the early stages,” said Faeez. company,” said Faeez. friendly hotels. Support from various parties and The app’s users have so far “We love travelling, but at the same stakeholders including hotel chains, consisted of both Malaysians and non- time we do not want to compromise national tourism organizations Malaysians, with the majority coming our beliefs and customs while doing and government institutions was from Southeast Asia, the MENA (Middle so,” said LagiSatu’s Co-Founder Faeez also crucial. Faeez noted that the East and North Africa) and Europe. Fadhillah. LagiSatu differentiates itself Malaysian government currently “To our surprise we also receive from other solutions in the market in has many initiatives for start-ups many bookings from non-Muslims, that its hotels have a Muslim-friendly and business owners. LagiSatu which shows that it does not have to rating and all of its tours and activities also benefits from being an MSC be an exclusivity criteria to offer Muslim- are suitable for Muslim travellers. status company which gives it friendly products,” said Faeez. Faeez said that at the beginning, access to education programmes LagiSatu’s revenue has increased not many people thought that he and and funding initiatives. rapidly since the launch of the app

196 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Faeez Fadhillah Co-founder Lagisatu

To sell travel products to people is a privilege, since it is usually the best time and most longed for in a year for every person and we take this promise to offer the best holiday products to our users very seriously.

and it also enjoys a high month-on- month growth. Faeez said that it was also even more important that LagiSatu continues to improve its services to its users on a regular basis and to measure its success on the quality of products and services. “To sell travel products to people is a privilege, since it is usually the best time and most longed for in a year for every person and we take this promise to offer the best holiday products to our users very seriously,” he said. LagiSatu was founded in 2013 and currently has over 350,000 hotels in its database. Their website can be accessed at www.tripfez.com.

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DATO’ SERI IDRIS JUSOH NURTURING MINISTER OF HIGHER EDUCATION OUR TALENT Public-Private Partnerships (PPP) have become a crucial tool in helping to increase the POOL employability of graduates. Leveraging on the private sector’s expertise, the Government is able to inject new experiences, methodologies and resources into the Malaysian education system, creating a highly marketable pool of talents in line with the Malaysia Education Blueprint 2015-2025 (Higher Education). Excellent talent within higher education will also enable Malaysia to continue improving its education offerings and strengthen its position as a regional education hub and an attractive education destination.

198 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 The main driver of the DATO’ SERI MAHDZIR KHALID Education NKEA is undoubtedly MINISTER OF EDUCATION Public-Private Partnerships (PPPs) as both the Government The private sector remains the key contributor to the quality and the private sector are and accessibility of pre-school education for our children. The natural partners in human Ministry will strengthen its collaborative efforts with the capital development. private sector in developing high quality pre-school education that he quality and capacity lays a strong foundation for the of talent pool is a critical INSIDE THIS NKEA creation of a highly capable talent component in Malaysia’s T Malaysia Continues to Focus pool. This includes enhancing transformation effort, more so when 1 Efforts on Becoming an the skills and qualification of the economy shifts towards high value- Education Hub of Choice educators in this sector. added manufacturing and services, in which technology and innovation play Public-Private Partnerships Public-Private Partnerships a huge part. 2 for Capacity Building will also be used to push for Hence, efforts to create a pool of support for initiatives like the quality talent to match the demand Focusing on Clusters to Elevate promotion of the English language generated by economic transformation 3 the Quality of Malaysian and Special Education Needs continue to be the focus in 2015 Education Offerings (SEN). For SEN initiatives, private and beyond. higher learning institutions, For this purpose, the Ministry of Higher Education (MoHE) has been industry players and the working closely with the Ministry of industry as well as ensuring that our government have come together Education (MoE) and other ministries education offerings meet the needs of to provide more opportunities for to improve the quality and enhance a high-income and globally competitive youths with special needs. the national human capital pool. economy. It is also the enabler that The Ministry is also working closely feeds talent into the rest of the NKEAs with the private sector to reduce the to ensure that we have sufficient human mismatch between talent and jobs. capital in place to sustain the growth The Education NKEA will continue and development of our Malaysian driving the growth of our education economy.

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EduCity, an initiative under EPP11, 1 Malaysia Continues to is a unique concept of a self-contained, multi-varsity education hub that Focus Efforts on Becoming enables students to study, live and play within a single geographical location. an Education Hub of Choice In 2015, the student enrolment in EduCity institutions saw 43 percent increase, from 2,822 students in 2014 The Education NKEA covers the managing applications, processing to 4,022 students in 2015. entire spectrum of education in the and renewals of international There are ongoing efforts by EduCity country ranging from early childhood student visas to HLIs, skills training to continuously improve service delivery care and education (ECCE) to institutions, language centres and through multiparty-partnerships. professional skills training. Leveraging eventually to private and international A taskforce was set up in the first on Malaysia’s strategic location and schools. quarter of 2015, comprising EduCity accessibility throughout Southeast Asia, EMGS, an initiative under (Entry management and the institutions initiatives under the NKEA also seek Point Project) EPP12, continues its within EduCity with the MoHE as a to position the country as a regional enhancements as a one-stop centre facilitator. This taskforce ensures that education hub, to optimise revenue for international students in order shortcomings and challenges that arise generation potential for this sector. to create a pleasant and welcoming within EduCity are addressed as a The International Student experience for the students and has collective responsibility by its members. Taskforce chaired by the Minister of stepped up its marketing efforts to This was also a move to strengthen the Higher Education is one of the many attract more international students to partnership among the stakeholders in platforms that promotes consultative study in Malaysia. the effort to drive and fully maximise process with relevant parties in the In 2015, there were over 140,420¹ EduCity’s growth potential as an public and private sectors in a move international students, of which 113,711 international education hub. The to strengthen Malaysia’s position as a were in higher learning institutions, education institutions continuously successful education hub. 26,709 in private and international problem solve and collaborate to ensure Ongoing efforts in creating a hub schools. ETP’s target is to achieve an that students get top quality education has resulted in more international enrolment of 200,000 international and an excellent student experience students coming to Malaysia not students by 2020. during their time at EduCity. only for tertiary education but also for basic education and programs on technical and vocational training. In 2015, a total of 140,420¹ international students were admitted into the country for numerous courses in public and private higher learning institutions (HLI), skills training institutions as well as private and international schools, surpassing the target set for the year by 3.1 percent. Education Malaysia Global Services (EMGS), a company incorporated under MoHE, is the key entity in not only marketing the More international students are coming to Malaysia for basic and tertiary education and programs on Malaysian Education Brand but also technical, vocational education and training

¹ Based on data verified by PwC in the Agreed Upon Procedures (AUP). Refer to the "Agreed Upon Procedures by PwC" chapter on the AUP process.

200 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 of study, and 15 Malaysia students transferred to Edinburgh for one to two years of studies. The Malaysian government will continue to encourage student mobility and transfers between the main campus and its branch. To this end, the government has relaxed the medical screening requirements for mobility/transfer students coming from the main campus to study in the branch campus in Malaysia. HWUM is highly regarded for the professional relevance of its degrees and the employability of its graduates. From 2014 to 2015, the university launched 24 new courses in its Malaysian campus for the undergraduate and postgraduate degrees in fields such as Engineering, Actuarial Science, Construction, Accounting and Business Management. These are key areas of importance to the Malaysian economy and supports

Heriot-Watt University is a new state-of-the-art campus strategically located in the modern city of Putrajaya the ETP’s initiative to transform Malaysia to be a high-income nation. This EPP aims to be a human Malaysia (USMC). In addition, Xiamen With these new additions, HWUM capital feeder to Malaysia’s industries University from China has also set up now has 25 courses and is looking at as well as becoming a key contributor its branch campus in Malaysia, with its increasing the number to 28 by 2020. to Iskandar Malaysia and the national first intake expected in February 2016. Its student population is targeted to economy’s growth. Some of the programmes to be offered grow to 4,000 by 2020, with a staff As a result of efforts under EPP15, by Xiamen University Malaysia include force of 300. As of 2015, HWUM has Malaysia now has the largest number Bachelor of Arts in Chinese Studies and 1,010 students, of which 20 percent of branch campuses in the world. Traditional Chinese Medicine. are international students and a staff This EPP capitalises Malaysia’s These branch campuses have been force of 150. attractiveness as a destination for working endlessly to offer new courses HWUM also works with industry business and education to draw the and programmes for students as well partners to produce graduates with establishment of branch campuses of as ramping up its marketing efforts to well-developed career related skills foreign universities. recruit students not only from Malaysia and a real competitive edge; optimising In the past couple of years, but from all over the globe. their employability in their chosen four world-class branch campuses In the case of HWUM, with the same field, be it in Malaysia or abroad. The have set up in Malaysia under the programmes offered at the Edinburgh, university’s current industry partners Education NKEA initiative, namely Dubai and Malaysia campuses, include Shell, Schlumberger, Loh Heriot-Watt University Malaysia students have the opportunity to & Loh, YTL Corporation, MNRB (HWUM), Newcastle University of transfer between campuses and benefit Holdings, Malaysian Rubber Export Medicine Malaysia (NUMed), the from the international experience. Promotion Council and Great Eastern, University of Reading Malaysia (UoRM) In 2015, 30 Edinburgh students thus creating potential employment and the University of Southampton transferred to Malaysia for one year opportunities for graduates.

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The establishment of these branch as compared to 57 in 2010, surpassing neighbouring Association of Southeast campuses would allow students to the Government’s initial target of Asian Nations (ASEAN) nations and receive the same quality education in 87 schools by 2020. The number of attract multinational companies to Malaysia as in the main campus at a students enrolled in international establish and grow their regional lower fee. This would assist Malaysian schools for 2015 is 50,581². Of this base in Malaysia. This new campus students that want to attain world- number, 28,797² are local students is expected to create a GNI impact of class education at a fraction of the cost and 21,784² are international students. RM14.2 million by 2020. and furthermore increase Malaysia’s Enrolment for international The National Association of attractiveness as an education hub due schools are expected to increase to Private Educational Institutions to the lower cost to study in Malaysia. 75,000 in 2020, and to cater to this rise, (NAPEI) together with the Private MoHE regularly receives a number the initiatives under EPP3, include the Education Division in MoE have held of applications for the establishment up-grading and expansion of existing marketing and promotional activities of branch campuses, however with international schools and attracting in key targeted countries, including the existing moratorium on the new international school operators Vietnam and Indonesia, to attract more establishment of new private higher to Malaysia. international students to Malaysia. education institutions (PHEI), this The International School of Kuala The establishment of these schools EPP will see little traction for the Lumpur soon to be constructed RM350 are usually done via partnership with next couple of years. The purpose million state-of-the-art campus, is local property developers. Examples of the moratorium is to prevent an aimed at attracting 2,500 international include Tropicana Group Berhad and oversupply of seats and programmes and returning Malaysian students. St Joseph’s Institution International and at the same time, allow PHEIs The new campus in Ampang Hilir, School, SP Setia Berhad Group and to focus on rationalization and Kuala Lumpur, will incorporate Tenby Schools Group, Perdana consolidation of the private education environmentally sustainable concepts, ParkCity Sdn Bhd and Brighton sector. This will also enable PHEIs to cutting-edge technology and world- Education Group as well as the improve the delivery and quality of class science, language, humanities, recently announced collaboration programmes offered. sports, theatre, music and art facilities. between YTL Berhad and the British There are a total of 140 international Schools such as this will enable Council to set up a new international schools in the country as of 2015, Malaysia to compete successfully with school in Sentul West.

The International School of Kuala Lumpur soon to be constructed RM350 million state-of-the-art campus will incorporate environmentally sustainable concepts, cutting-edge technology, world-class science, language, humanities, sports, theatre, music and art facilities

² Based on data verified by PwC in the Agreed Upon Procedures (AUP). Refer to the "Agreed Upon Procedures by PwC" chapter on the AUP process.

202 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Mohd Yazid Abd Hamid Chief Executive Officer, Education Malaysia Global Services (EMGS) CREATING A GLOBAL EDUCATION HUB IN MALAYSIA alaysia currently ranks as the 12th preferred of 151,979³ international students, in both institutions of higher education destination, by international higher learning (IHL) and international schools. This marks M students and Kuala Lumpur ranks as the number a 12 percent increase from 135,502 students enrolled in 2014. one most affordable city in the world for students. Despite Out of the 151,979³ students, 80.3 percent of them enrolled the favourable rankings, due to the growing competition in in IHL with 41 percent in degree programmes, 40 percent the region, it is critical for Malaysia to enhance her presence in diploma programmes and nine percent in postgraduate and relevance as an international education hub, said Mohd programmes. “The ratio of international to local students in Yazid Abd Hamid, Chief Executive Officer, Education Malaysia 2015 is 12:100 as opposed to 5:100 in 2002.” Global Services (EMGS). Towards enhancing international student safety and “EMGS, is not only entrusted to create a global presence security, EMGS together with the Ministry of Home Affairs for the Malaysian Education brand but also provide holistic and the Immigration Department introduced the i-kad, an international students’ services.“ identity card for international students in 2014. With this, “Malaysia needs to constantly stay ahead of her regional students no longer needed to carry their passports around, competitors and for this purpose, we have intensified our reducing the risks of passports getting misplaced, lost or international marketing and promotional initiatives, as well stolen. In 2015, EMGS introduced a mobile app, making it as global industry engagements.” easy for law enforcement officers in the field to verify the In 2015, EMGS ran 34 international promotional events validity of the students’ i-kad, via a smartphone. across 22 countries. Events included international education According to Yazid, moving forward, EMGS is looking exhibitions, Education Malaysia solo roadshows as well as at building greater presence in the Middle East, Asia, South cluster engagement initiatives with student recruitment America, South Korea and Japan. agents and international student sponsors. EMGS also “We will continue our efforts on B2B platform, and G2G collaborated with higher education institutions to initiate initiatives for government-sponsored students, as well as focus and promote student mobility programmes. on greater international student engagements in Malaysia, be it “In 2015, we had advertising campaigns run across 12 through social or Corporate Social Responsibility (CSR) projects. countries to support our marketing initiatives, and apart from This would invoke a sense of belonging and help international expanding presence in our key markets such as Asia, South students assimilate with the local multicultural society.” East Asia, Middle East and Africa, we have also reached out In 2016, EMGS hopes to open International Student Centres at to new markets, namely, Brazil, Turkey, Morocco, “ said Yazid. entry points, namely Kuala Lumpur International Airport (KLIA) He added that aggressive campaigns by EMGS have and KLIA2. “Through these centres, we would be able to welcome resulted in a steady year on year increase in the number of students more effectively as well as provide first timers relevant international student enrolment. 2015 saw the total enrolment briefings to help them navigate their stay and studies in Malaysia.”

³ Final international students enrolment obtained only after AuP exercise by PwC was completed

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Professor Bob Craik Provost and Chief Executive Officer of Heriot-Watt CREATING TALENTS University Malaysia (HWUM) TO MATCH DEMAND

mployers these days are knowledge to analyse and solve establish Malaysia as an international looking beyond academic problems which are skills required hub for higher education." said Craik E qualifications for graduates by employers. HWUM currently offers foundation, with good communication, analytical The Higher Education sector is well undergraduate and postgraduate and problem-solving skills as well as developed in Malaysia and there is a courses in Engineering (Chemical, the ability to work in teams. wide range of good universities, said Petroleum, Mechanical, Electrical and "Employers come with all sorts Craik. However, many institutions still Civil Engineering), Quantity Surveying of different needs. Some are only tend to focus on traditional learning, Construction, Business, Accounting, interested in graduates who can which values facts and knowledge, Actuarial Science and Psychology. The be productive on day one without so not all graduates are prepared for university, which started operations considering the skills necessary to global employment. in 2013, presently has approximately adapt as business needs change. Other As information becomes freely 1,000 students and plans to grow to companies, particularly multi-national available on the internet, the focus is some 6,000 students in the longer term companies, focus more on skills that now moving towards helping students under Phase 2. are useful in the long term and provide to apply knowledge and skills when HWUM recently launched Go support for graduates at the start of solving a problem. All universities Global which is a new initiative their career.” are moving in this direction but to encourage students to transfer “A university education that does some are slower than others. These between campuses. There are not impart these general skills along changes take time and benefit from currently 15 Malaysian students who with sound technical knowledge will similar changes to be taking place in are spending 2015 in the UK and 30 not create talented graduates who schools,” Craik added. UK students who are currently at the are successful in the global market,“ The presence of well-ranked Malaysian campus. These numbers said Professor Bob Craik, Provost and foreign universities in Malaysia, are expected to grow as students Chief Executive Officer of Heriot-Watt such as HWUM, allows Malaysian spread the word about the exciting University Malaysia (HWUM). students to experience high quality opportunities of studying overseas HWUM, which was established UK education without leaving the without the problems associated with in Putrajaya in September 2012, is a country. As a university that operates changing institutions. branch campus of the almost 200- year- globally, HWUM produces graduates “Ongoing improvement old Heriot-Watt University based in with the same knowledge and skills include the review of curriculum to Edinburgh in the United Kingdom (UK). irrespective of the location in the world. incorporate new teaching methods According to Craik, the UK and Employers who tend to be large multi- and the use of technology to support Australian universities in Malaysia national companies know and trust the learning. In Phase 2 of our expansion, have adopted a style of learning that graduates from Heriot-Watt. we will be building extensive research has less emphasis on the learning of "Foreign universities are also facilities as well as extending the facts and more emphasis on using attractive to foreign students and help portfolio of programmes.”

204 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 the 97 percent national enrolment 2 Public-Private Partnerships target for pre-school and 25 percent national enrolment target for childcare for Capacity Building for 2020 can be achieved. 417 new private pre-schools and 222 new private childcare centres The main driver of the Education partnership with industry players. 85 were established in 2015, bringing the NKEA is undoubtedly Public-Private students from the first cohort, since the total number of private preschools to Partnerships (PPPs) as both the PPP was initiated, had graduated in 7,157 and private child care centres to Government and the private sector October 2015. To continue this initiative, 3,286. The year also saw the rollout of are natural partners in human RM80 million has been committed to the enhanced online self-assessment capital development. Leveraging establish a Tourism Academy in Kota system for public and private pre- on the expertise of private sector, Kinabalu. The initiative under the schoolers by tailoring its scoring the Government is able to inject Tourism Blueprint is aimed at building system to be relevant and balanced new experiences, methodologies as a world-class workforce for the tourism for both public and private pre-schools. well as resources into the Malaysian industry in Sabah. The emphasis for the year has public school system, therefore, Getting a head-start in education been on improving the quality of pre- increasing access to quality education has been proven to have a significant schools, through the development of for students nationwide. long term impact on students, leading a more robust self-assessment tool Towards bolstering the country’s to higher achievements in school, and increasing the participation of global reputation as an education better quality human capital, and pre-schools in the self-assessment hub, the Ministry continues with its earning power. Hence, ramping up programmes. It is hoped that these effort to push for PPPs in improving ECCE under EPP1 would benefit improved tools and training will education offerings and drawing Malaysia socially and economically, sufficiently guide under-performing in more investments, both locally while providing an opportunity to schools to meet the necessary standards. and internationally. attract private sector participation. To ensure that all children have PPPs have been an on-going effort There is a huge business access to quality preschool education, since 2011 and examples include fee opportunity in Malaysia for high the government will continue the fee assistance for pre-school children from quality ECCE due to the rapidly assistance programme for children lower income group and the training for growing demand for high quality from low to middle income families. 21,000 private pre-school teachers from preschools. 426,246 students aged The Government is also pushing for the 2010 to 2011, to upgrade the quality of four and five have enrolled in regulation of unregistered pre-schools pre-school teachers. In 2015, MoE rolled private pre-schools thus far, which by urging them to register with MoE out a revised PPP framework to guide contributes to 50.75 percent of total and contribute towards the growth of private sector players in establishing pre-school enrolment in the country. the sector. partnerships with the Government. It is a market with opportunities, with PPPs are also being used to boost Under the Langkawi Tourism the national enrolment rate currently the quality of the educators who Blueprint launched in 2011, a at 84.63 percent against a target of specialise in ECCE - an initiative under successful PPP collaboration between 97 percent by 2020 and ECCE has the EPP2. A lack of accredited teachers in the Langkawi Community College and potential of creating a GNI impact of private ECCE institutions remains a Taylor’s University was forged where RM 2.4 billion and 78,000 jobs by 2020. concern. The absence of a regulatory the Community College underwent a The public sector’s role in further requirement for formal qualifications transformation in terms of curriculum developing ECCE is capped by limited is one of the major causes for ECCE development, lecturers’ upskilling, resources, hence the private sector has educators not to pursue the higher upgrading of infrastructure and been urged to play a greater role so that Diploma certification.

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In an effort to address this issue, the that there is industry training to equip this would increase the employability MoE studied extensively the possibility these TVET students with the skills and of graduates, allowing them to receive of introducing a new policy on the competency demanded by the industry. better employment options, higher minimum qualifications requirement Vocational training, which was compensation and improve their for preschool teachers. This involves once considered an option of last career mobility. engagement sessions with various resort, is now highly sought after. A As for local students, the target is Ministries, agencies and the private strong TVET workforce with high- to increase participation from 39,153 sector. A Cabinet decision is expected value and specialised skills will in 2015 to 70,000 by 2020 especially to be reached in 2016. improve innovation and productivity in the Malaysia Skills Certificate In an effort to increase the number of industries and this is integral to (Sijil Kemahiran Malaysia, SKM) 1 of qualified ECCE professionals, an Malaysia’s transformation into a high- and 2, capturing larger proportion of ECCE hub, a PPP initiative with the income nation by 2020. underserved segments and increasing SEGi Education Group is currently There has been considerable proportion of students taking higher being developed. When completed, the growth in the TVET sector in the past level SKM. For this purpose, the integrated ECCE hub in Kota Kemuning, years. As of 2015, there are a total of Government has allocated more Selangor will house all the necessary 102,045 students enrolled in the skill- than RM1.17 billion from 2011 to 2015 facilities to provide necessary education based programs, of which, 2,539 are to the Skills Development Fund or and training for ECCE professionals. international students. The 2020 target Perbadanan Tabung Pembangunan Among the more significant for international student enrolment in Kemahiran (PTPK). achievement in the PPP initiatives TVET is 16,000, through efforts of the In the efforts to develop students is the effort to develop and promote Government, the private skills training with SEN, 40 seats were secured at the Technical and Vocational Education institutions and EMGS. Berjaya University College of Hospitality and Training (TVET) for students who There are also ongoing efforts to in KL and Asian Tourism International are less inclined towards academic strengthen linkages between public (ATI) College in Sabah, to conduct education as well as for students with and private TVET institutions with training programmes in Hospitality. special needs. companies to promote industry These programmes have been lauded The participation of the private oriented workplace training under by both parents and industry partners sector in TVET is not only to the National Dual Training System. as a positive move that have resulted complement the Government’s effort This would involve work-based in placement of students with SEN in to enhance the quality and quantity of learning programmes in actual employment with Starbucks, Krispy TVET programs offered but to ensure industry setting and efforts such as Kreme, Deli , KFC among others.

(Left) Under EPP5, the Government has allocated more than RM1.17 billion from 2011 to 2015 to the Skills Development Fund (Right) Technical and Vocational Education and Training students learning basic skills that meet industry needs and are able to contribute effectively to society

206 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 3 Focusing On Clusters to Elevate the Quality of Malaysian Education Offerings

International Islamic University Malaysia (IIUM) President, Tan Sri Dr Rais Yatim (left) sharing a light moment with participants after officiating the International Council of Islamic Finance Educators (ICIFE) 2nd Annual General Meeting. Also present were IIUM Rector, Prof Datuk Seri Dr Zaleha Kamaruddin (second, right) and ICIFE Founding President, Professor Dr Khaliq Ahmad (right). Photo courtesy of BERNAMA Images

The Education NKEA is also the International Council of Islamic education, primarily due to the lack developed around discipline clusters Finance Educators (ICIFE), a globally- of consensus on standard education which shape the ETP’s human capital recognised professional association for curriculum for Islamic finance. needs in accordance with global Islamic finance educators. Launched This EPP also aims to increase industry requirements and trends. a year ago, ICIFE‘s objective is to student enrolment in Islamic finance These clusters include Islamic finance standardise the quality of Islamic education to 54,000 students by and business (EPP7), health sciences finance education worldwide 2020. In 2015, 16,293 Islamic finance (EPP8), hospitality and tourism (EPP9), and is supported by Bank Negara students were enrolled, an increase game development (EPP15) and Malaysia, MoHE and all local higher of approximately 19 percent from the accounting (EPP17). The development education institutions. previous year. GNI impact targeted by of these clusters is also part of an on- EPP7’s main aim was to develop 2020 is RM1.2 billion, along with the going ETP effort to create regional Malaysia into one of world’s leading creation of 4,300 jobs. and global education hubs in these Islamic finance and business education EPP8’s Health Science Education specialised areas. hubs. Despite being positioned as a Discipline Cluster is gaining traction A notable achievement in the leading centre for Islamic finance, again with the construction of the Islamic finance and business education Malaysia lags behind as a provider UCSI University Teaching Hospital clusters was the establishment of of Islamic finance and business in Bandar Springhill, Port Dickson.

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Dato' P. Kamalanathan, Deputy Education Minister I (left) officiating the launch of Politeknik Merlimau as MyCenTHE and fifth cluster leader while Dato' Peter Ng, founder of UCSI University and champion of EPP10 (most right) and YB Datuk Wira Hj. Yunos bin Husin, State Exco for Education, Higher Education, Science and Technology, Green Technology and Innovation (middle) look on

The 1,000-bed teaching hospital will Blood Pressure Control research Led by the Malaysia Centre for push new paradigms in the training with London School of Hygiene Tourism and Hospitality Education and practice of medicine, elevating the and Tropical Medicine funded by (MyCenTHE) working in partnership quality of healthcare in Malaysia. It will the Newton Ungku Omar Fund with the Malaysian Association of be the first private teaching hospital in Hotels (MAH), this EPP focuses on The Effects of the Haze on Malaysia, with a public wing. the growth of hospitality and tourism Human Health research project The UCSI University Teaching education. The aim is to increase the with several leading Universities Hospital is exploring collaborations share of graduates with diplomas and with some of the world’s best in Indigenous Health Matters degrees from 13 percent of the number medicine. These partnerships will also research project with a of people employed in the industry as act as a catalyst in the development of consortium involving Australia, of 2010 to 50 percent by 2020. the health science education cluster. New Zealand, Canada and The aspiration of this EPP is to The UCSI hospital is expected to lead Malaysia governments. support the elevation of service levels many ground breaking initiatives The total planned investment within the tourism industry. This including the establishment of a for Phase 1 (130 beds) is RM285.9 will do more in retaining existing hospital-linked retirement village. million and the total investment for customers and attracting new ones Apart from the discussions to set the whole project is expected to be as opposed to resorting to price war of up a centre for precision medicine, RM773.9 million. hotels and organisations (employers) there are also cross border global The focus of EPP10’s Hospitality at the expense of wages and salaries of research initiatives in the pipeline in and Tourism Cluster is to accelerate employees. The move in this direction the following areas: the development in the Tourism NKEA is more in line with the nation’s Epidemiologic Transition by addressing matters pertaining to aspiration of becoming a premier in low and middle income human capital development, such as tourism destination. countries to be supported low wages, low skills and the influx of There is a positive spill-over effect by research funding low-skilled foreign labour. from tourist spending from both new

208 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 and returning tourists to Malaysia that This mindset is what MyGameDev, private and public HLIs, government will benefit businesses in the country an initiative under EPP14, seeks agencies and the private sector, aims and therefore, Malaysia must be at to change. Launched in 2012, to produce top-calibre video game the forefront of the service industry MyGameDev's main mission is to creators by creating a sustainable to ensure the growth of the tourism nurture talent for this fast growing eco-system for the industry to thrive. sector. With better qualified graduates field among students in public MyGameDev has intensified efforts in the industry, there are more upward secondary schools, universities post- on its outreach programme in schools, opportunities for talent which will graduates student, while creating following the success of events such as also improve the job attractiveness awareness on Malaysia’s own game TableTop2014, which promoted board in this industry. development industry, which is on par game design among students aged 15 to The work-based-learning (WBL) with global standards. The EPP, with a 17 years, as well as other initiatives to model promoted by MyCenTHE group of cluster members consisting of win over educators and parents. involves industry placements and real- time industry learning experience, to enhance student education and the graduate’s employability. Efforts under the EPP are expected to be intensified to ensure that the annual output of tourism graduates would hit the 50,000 per annum target by 2020 as compared to 20,000 in 2009. The global games market is estimated to jump from US$$83.6 (RM367.74) billion in 2014 to US$$91.5 (RM402.44)billion in 2015, according to the 2015 Global Games Market Report released by research firm Newzoo. While South East Asia video games market represents only approximately 4 percent of global consumption, it is the fastest growing market of any geographical region and expected to grow at a CAGR of 30 percent between 2015 and 2018. The growth here is also driven by the rapid rise in internet access and ownership of ICT devices. Malaysia, sitting in the heart of South East Asia, has a potential to grow its involvement in the game development industry but there is a need to overcome the perception barrier regarding this industry. Game development, despite it being a lucrative source of income is perceived more as a hobby than a career path, especially (Top) 3D Character Modeling by Andrejo Chong Carreon (Bottom) MyGameDev Table Top Board among educators, school guidance Game Competition with students from various High Schools in Melaka posing with the Industry judges and teachers. This event was hosted at University Teknikal Melaka (UTeM) in collaboration counsellors and parents. with MyGameDev and KDU

4 Based on exchange rate of US$$1 = RM 4.39

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The newly launched MyGameDev’s In an effort to increase the Game Development Online portal, number of professional accountants, has created a platform that brings a collaboration between Sunway TES together investors, game developers, Sdn Bhd and local universities has universities and enthusiasts. This created an avenue for students to portal is expected to play an important pursue professional qualifications role in establishing Malaysia as a while completing their degree - a regional provider of game development much quicker way to becoming a talent to international studios, while qualified accountant. creating a much-needed visibility for To increase the number of its future initiatives. bumiputra accountants, scholarships Under this EPP, efforts to are also being offered by Yayasan encourage private investments were Peneraju Pendidikan Bumiputera also intensified in 2015. Drawing (Peneraju) to encourage and support in investments into this cluster is bumiputera students in pursuit crucial, as it has the potential to of professional qualifications create numerous revenue streams as for accountancy. well as high value job opportunities in In 2015, 480 graduates with line with the Malaysia’s aspiration of professional accounting qualifications becoming a high income nation. were produced by Sunway TES, which Target for 2020 is RM500 million in is leading this EPP. By 2020, this EPP revenue generation, RM150 million in is expected to produce 7,000 new intellectual property, and 4,000 game professional accountants via several related new job opportunities. professional education providers in Creating an accountancy hub this cluster. under EPP17 is one of the vital measures in the effort to boost foreign direct investment and lure multinationals to use Malaysia as a base to expand regionally. The availability of a strong ecosystem of professional support services like accountancy will provide a much needed value to the country’s position as a regional operational hub. Furthermore, market deregulation and the convergence in financial reporting standards worldwide have created opportunities in which accountancy has become a service that can be exported. Therefore, creating an urgent need to increase the number of qualified accountants and quality of accountants, as well as to the development of specialised skill sets in areas such as international taxation, forensic accounting and carbon Creating an accountancy hub under EPP17 is one of the vital measures in the effort to boost foreign accounting to tap future growth areas. direct investment and lure multinationals to use Malaysia as a base to expand regionally

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s the nation’s transformation of TVET institutions and streamlining this would increase the employability goals approach a crucial the sector to achieve focused growth. of graduates, allowing them to receive A midway point, it is imperative The branding and promotion of better employment options, higher that the Education NKEA continues to TVET will be stepped up, including compensation and improve their deliver on its targets and contributes advocating for skills training and skills- career mobility. to the overall objective of the National based careers to be accepted by society Both MoE and MoHE will be Transformation Programme. as the career of choice, which promises working closely in addressing issues Moving forward, TVET, identified brighter prospects. with project owners to ensure strong as a key growth area and integral to Efforts for TVET is not only aimed economic growth and development the country’s aspiration to become at producing both quantitative and within Malaysia’s Education sector. a high-income nation, continues qualitative results. To create quality Both MoE and MoHE are now holding being the focus of the NKEA. Under graduates, efforts under EPP13, will joint Steering Committee (SC) meetings the 11MP, TVET has been recognised also include the promotion of work- to ensure proper management of as the most important avenue for based learning programmes in actual stakeholders and to prevent silos in increasing Malaysia's skilled human industry setting via strong linkages the implementation and management capital base and much emphasis has between skills training institutions, of initiatives. been placed on supporting the growth HLIs and companies. Efforts such as

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DATO' SRI TRANSFORMING MINISTER OF AGRICULTURE & AGRO-BASED AGRICULTURE TO INDUSTRY (MOA) The agrofood sector plays an important role in Malaysia’s economic development, providing AGRIBUSINESS employment and uplifting incomes. Because of the large number of people dependent on it, the sector also has a social importance. The growing global demand for agricultural products provides great potential to expand the sector’s contribution to GNI. Our aim is to transform agriculture into agribusiness, moving towards a model which is inclusive but simultaneously anchored on market-centricity, economies of scale, and value chain integration. Beyond that, the sector contributes to the security and sovereignty of the nation by ensuring self-sufficiency of one of the most strategic resources, namely food. History has proven, in times of war or peace, the sovereignty of a nation could be easily crippled by its over- dependency on foreign or imported sources of food.

212 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 he Agriculture NKEA focuses on transforming the nation’s INSIDE THIS NKEA traditionally small-scale T Capitalising Malaysia’s production-based sector into a large- 1 Competitive Advantages scale agribusiness industry that contributes to economic growth and sustainability. Under the 11th Malaysia Tapping Premium Markets Plan, agro-food gross domestic 2 product (GDP) is projected to achieve This is especially true in times RM36.2 billion in 2015 and the figure Ensuring Food Security Objectives is estimated to reach RM46 billion in of economic uncertainties which 3 are Consistent with Increasing GNI the year 2020, which translates to 42.4 affect the value of ringgit and our percent of total Malaysian GDP in 2020. buying power. The increasing 16 Entry Point Projects (EPPs) have four key sectors chosen to pilot the deficit in Malaysia’s balance of been identified to spur growth in this use of sensors. trade in the agro-food sector, from sector and help achieve the National Various stakeholders have come RM11 billion in 2009 to RM17 billion Agro Food Policy’s targets such as together to develop IoT pilot projects in 2014, is of concern. food security, high value agricultural and there are ongoing R&D efforts by development, and private investment the research institutions that work Moving forward, the Ministry as a catalyst for the transformation closely with the private sector and will look into institutionalising of modern agriculture. To date, the government agencies to bring products the export-centric mind-set in its NKEA has recorded RM9.224 billion and services to market within Malaysia policy and strategy to improve our in committed GNI, 28,645 additional and to other countries. trade balance. This will put the jobs and RM7.7 billion in committed MIMOS has created several solutions sector in a more strategic position investment. that cater to agricultural development. To further boost the sector’s For example, its Mi-MSCAN TpH sensor to contribute to the diversification productivity and rise up the value has multisensory capabilities to collect of Malaysian economy and ensure chain, Malaysia has been exploring environmental data, such as soil stability of Ringgit. the use of Internet of Things (IoT) nutrient. MIMOS has also developed technologies within the industry. In an agricultural framework that links fact, Malaysia is leading the region in agricultural producers, traders and the use of IoT in agriculture. suppliers together in a unified system The Government has identified IoT powered by IoT. as one of the key technology areas to MIMOS believes that when IoT enhance productivity in key sectors is fully integrated in the agriculture under the 11th Malaysia Plan (2016- sector, production could rise to US$319 2020) and agriculture is among the million by 2020.

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1 Capitalising Malaysia’s Competitive Advantages

High-value herbal products unlock a tremendous value dimension in the agricultural sector. The Herbal Cluster Programme, like the one pictured above in Negeri Sembilan, is one of the initiatives championed by the Department of Agriculture and Herbal Development Division to encourage more players to get involved and capitalise on this growing market

The high-value herbal products RM3.85 million in sales. The sales for now, given that the nutraceutical EPP is on track to meet its end-2020 CAGR for herbal products rose to 6 products are still in the development target of producing 10 nutraceuticals percent during the period of 2012-2013, process, there is little demand for and cosmeceuticals products derived compared to 5.4 percent over 2008-2012. these premium herbs. Therefore, the from 18 identified herbs, amongst Since the inception of this EPP, farmers are not motivated to plant all which are Tongkat Ali, Kacip Fatimah, prices of herbal materials have these 18 herbs but are more inclined to Misai Kucing, Dukung Anak, and increased, benefiting the local farmers. only plant herbs that are in demand, Hempedu Bumi. As at December 2015, For instance, fresh tongkat ali was sold including several lower-value herbs. there were 27 such herbal products in for as low as RM 2/kg in 2014. In 2015. Moving forward, the DoA will the product development stage – 10 in it increased to RM 5/kg. streamline the planting of the clinical trials, 17 in pre-clinical trials. This EPP has the potential to identified herbs, once the products During the year, the herbal cluster produce better results focusing on the have completed clinical trials and projects accumulatively generated 18 identified high-value herbs. But as are ready for the market.

214 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 FIRST MALAYSIAN HERBAL PRODUCT HEPAR-P UNDERGOES CLINICAL TRIAL

Nova Laboratories Sdn Bhd’s Hepar-P market value by a whooping tenfold! Having Capsule is the first Malaysian herbal product valid scientific claims backing the product will to undergo clinical trials under EPP1. The also make it more marketable globally. first clinical trial was completed in January Clinical trials are very expensive and can 2015, involving 50 subjects (25 on Hepar-P sometimes be beyond the means of the local and 25 on a placebo). The trial was a companies. The first trial for Hepar-P, for multi-centre (eight hospitals nationwide), example, came up to around RM2.2 million. randomised, double-bind, placebo- With the EPP providing dedicated funding controlled trial to determine the efficacy for R&D and clinical trials, Nova hopes that and safety of Hepar-P for the treatment of many of the challenges facing the local non-alcoholic fatty liver disease (NAFLD). herbal industry today would eventually be Nova now awaits the green light from the overcome, allowing Malaysia to manufacture NKEA to start the second clinical trial. and export high-quality nutraceuticals and The Hepar-P contains standardised botanical drugs. extract derived from a local plant known as Nova, established on 17 March 1989, is Phyllanthus niruri or dukung anak, mainly a research-based company that discovers, used as a liver protection agent. It is approved develops, manufactures, and markets novel as a traditional product by the Ministry of phytopharmaceuticals derived from local Health and has been in the market since 2005. botanical plants for the prevention and Successful clinical trials proving the efficacy treatment of human diseases. It has more than and safety of Hepar-P would enable Nova to 45 types of products ranging from functional market it as a botanical drug with therapeutic foods, herbal products, and health supplements claims rather than an “herbal” or “traditional” mainly distributed in pharmacies, clinics and product. This would boost the product’s its own retail outlets under the Nova brand.

Nova Natural Supplements & Skin Care Retail Outlet

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adverse weather conditions affected the 2 Tapping Premium Markets highland vegetable production areas in Cameron Highlands and Kundasang, Sabah. The earthquake in Sabah During the year, total production However, the year was not affected the construction of the Masilau of premium fruits and vegetables without challenges. This outstanding TKPM in Kundasang. Similarly, heavy under EPP7 (i.e. papaya, starfruit, rock achievement would have been stronger flooding in the east coast of Peninsular melon, jackfruit, banana, pineapple, had it not been for a series of natural Malaysia early in the year affected the capsicum, lettuce and tomato) was disasters during the year. For example, production of fruit and vegetables there. 54,489 mt, valued at RM70.8 million. It has been reported that the monthly net income of the 278 NKEA Permanent Food Production Zones (Taman Kekal Pengeluaran Makanan, TKPM) participants exceeded RM3,000 while 194 others achieved net income of RM1,000-RM2,999. As a comparison, in 2014, 171 TKPM participants generated monthly net income of RM3,000 and above. This is very encouraging for the farmers and motivates them for the coming year too. Traders selling fresh fruits at PAKAR Jengka

3 Ensuring Food Security Objectives are Consistent with Increasing GNI

The Ministry of Agriculture In line with this, the country is and Agro-based Industry (MOA) making strong strides in reducing its is very committed to address the dependency on imported rice. trade balance deficit of RM17 billion The nation’s self-sufficiency level recorded and lessen the country’s (SSL) for rice jumped from 63.1 percent dependency on food imports. The in 2010 to 71.4 percent in 2015. During ministry is developing various plans the same period, its milk SSL also rose to increase the export of premium from 8.5 percent (2010) to 13 percent agricultural products and also (2015). The nation is on track to meet increase local production to tip the its SSL targets of 85 percent for rice and scale and reduce our trade deficit. 13.6 percent for milk by 2020. Farm operations in MUDA granaries

216 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 During the year, total paddy participants and to ensure that the training programmes by the anchor production was at 230,793 mt in Muda, current participants will stay involved companies, has improved local milk Kedah under EPP10 and 103,604 in the EPP after the end of their contract production, and the safety and quality mt in other granaries under EPP11. period (10 planting seasons). of milk and dairy products. Following A total of 14,214 farmers benefitted Meanwhile, the domestic the introduction of new machineries from the MADA Land Amalgamation supply chain for dairy products at the dairy processing plants, locally- programme under EPP10 over the has strengthened, with the layers produced dairy products now have period of 2011 to 2015. of middle man reduced, and the longer shelf lives. Muda Agricultural Development delivery time from milk producer In 2015, total high-quality fresh Authority (MADA), the EPP owner for to processing plant (numbers of milk production from the three anchor EPP10, will continue its promotional days) shortened. The use of modern companies and EPP13 clusters farms programmes to attract more technology, coupled with effective was 19 million litres.

(Top left) Dairy cattle feeding at Evergreen Livestock Sdn. Bhd Dairy farm in Keningau, Sabah (Right) Milk Packaging Facility at Evergreen Livestock Sdn Bhd processing plant in Sabah under EPP13 (Bottom left) Mr. Loi of The Holstein Milk Company at Mawai Dairy Farm, Kota Tinggi, Johor under the Dairy Cluster EPP

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HOLSTEIN'S SUCCESS STORY

he fast-track rise of Farm Fresh The EPP, led by Department While Holstein has two farms of its to the top of the nation’s fresh of Veterinary Services (DVS), gave own, some 40 percent of its raw milk T milk category is nothing short RM11 million worth of grants that needs are sourced by Allied Dairy from of spectacular. A new kid on the block went to the purchase of pregnant about 40 contract farmers, located only four years ago, the local brand cows, milking equipment, and chiller in Johor and Negeri Sembilan. These now leads this competitive market with tanks – these were given to farmers farmers are paid RM2.50 per litre, a 38.3 percent share (source: Nielson, selected by Allied Dairy, which in turn big jump from the RM1.50 they used September 2015). purchases raw milk from them at a to get, significantly boosting their Farm Fresh producer, The Holstein fair price. income and sustainability. Milk Company Sdn Bhd, attributed its rather unexpected success to the Dairy Clusters EPP (EPP13). A member of the Holstein group, Allied Dairy Sdn Bhd, was appointed an anchor company of the EPP13 in 2012 and Holstein itself was appointed an anchor company to EPP13 in 2014. The success of Holstein, the country’s only integrated fresh milk producer, in penetrating and now leading the market hitherto dominated by foreign companies for the past 20 years is a testament of a good business plan and solid execution of an EPP in creating a local champion. The Malaysian dairy industry had prior to the EPP languished for over two decades. The foreign players have little reason to help develop local farmers as imported milk powder cost only 50 percent the price of fresh milk. What little fresh milk they sourced locally, they paid based on the world commodity price of milk powder. As such, local farmers had found it hard to maintain a sustainable business. Farm Fresh products that is available in major supermarkets

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016 will see a renewed focus on working relationships with the implementation and monitoring. various State EXCO for Agriculture. This is because the overarching This will definitely help during any 2issues and challenges surrounding implementation issues within the states. the performance of the Agriculture In addition, it would be imperative to take NKEA revolves around the discipline into account weather-induced delays of implementation and monitoring. A into the 2016 implementation plan, more targeted and purposeful approach budget requests and KPI trajectory as needs to be institutionalised. contingency planning during execution. This would include establishing Ultimately, in Malaysia, agriculture technical standard operating is still a key factor for economic growth, procedures for each EPP that will with rising demands for local and address issues of implementation, export market particularly in the agro- monitoring and technical evaluation food sector. There is a lucrative export that is outside of the current scope. market for a wide range of agricultural This will help close the gap in products for ASEAN and halal market. implementation and delivery. With its huge potential and prospects, Moving forward and towards 2020, the outlook looks positive for business it would be important to strengthen in agriculture.

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DATUK SERI DR. S. SUBRAMANIAM FAST MINISTER OF HEALTH FORWARDING A country’s healthcare system has significant social impact, both direct and indirect. Malaysia’s MALAYSIA’S healthcare sector has seen robust growth in the past decade, and continues to be one of the nation’s HEALTHCARE highest economic multiplier. Implementation of the healthcare EPPs has catalysed INDUSTRY new growth areas. Since its inception in 2011, the NKEA has attracted some RM2.44 billion of investment into the country, and created some 8,100 higher-value jobs. Infrastructure has either been built or upgraded, and both specialist skill-sets and technology have been harnessed to improve the quality of care for patients. The Private Aged Healthcare Facilities and Services Bill is targeted to be tabled in Parliament second quarter of 2016. While we are excited in anticipation for the flourishment of the aged care industry, we are fully aware that this industry is still in its infancy state in Malaysia. The challenge now is to provide a favourable ecosystem for the stakeholders and industrial players. To achieve on that, the Government is working hard not only on the legislation part as

220 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 mentioned, but also working hard to ensure that the physical planning In the interest of creating guideline for Senior Living facilities will be available for usage by the the necessary conditions for the local council. 2016 will not be without private healthcare industry to challenges for the NKEA Healthcare. The volatility of the local and thrive as a key economic sector, global economy is likely to impact somewhat growth in the medical the government has been lending tourism industry, investments by various EPP owners as well as the its weight to expedite growth. exports of the pharmaceuticals and medical devices. The Ministry of Health (MoH) remains resolute and will work closely with the Malaysian rom the onset of the Economic Healthcare Travel Council (MHTC), Transformation Programme INSIDE THIS NKEA the Malaysian Investment (ETP), the healthcare sector F Promoting and Positioning Development Authority (MIDA) and has been deemed as a high-potential 1 Malaysia's Healthcare Services the Ministry of International Trade wealth creator. Leveraging on organic and Industry (MITI) to counter the growth in services, pharmaceuticals and medical devices, new horizons have Manufacturing at the Core effect of the economic slowdown. begun to be explored in services, clinical 2 of Healthcare Industry The liberalisation of the travel visa research, health travel, and generics for Chinese visitors will be look as a pharmaceuticals manufacturing. Facilitating Local booster for us to open up the China’s Two new projects were 3 Manufacturing Export market for medical tourism. announced during the year under the pharmaceutical exports EPP to be The healthcare industry in Upholding Quality of Medical Malaysia is in a vibrant growth championed by Pharmaniaga Sdn Bhd 4 Devices Through Regulation phase which makes the constant re- and Auscustom Pharma. Both projects and Standards are expected to generate RM13.1 million assessment of the EPPs a necessity. in GNI, RM50.8 million in investment, Developing the Senior To ensure that the NKEA remains 5 Living Market and 116 jobs. dynamic and relevant, the list of Collectively, the 40 healthcare EPPS will be streamlined in 2016 projects announced under Healthcare and new EPPs will be introduced NKEA to date are projected to create following syndication with major 26,966 jobs and generate an income players. Challenges faced in 2015 of RM6.59 billion, as well as RM4.96 billion in new investments by 2020. requires the Ministry to relook into two EPPs and work on possible modifications to ensure they will continue to play the role of game changers in this industry.

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Through 2015, Malaysia generated Malaysian pharmaceutical exports products for the year was revised from RM588.6 million in healthcare travel as of October amounted to RM516.09 RM671.78 million to RM641.24 million. revenue for the period January to million in 2015, lower than the RM505 While the local healthcare September 2015 at an average response million during the same period in 2014. industry has long been dominated rate of 79 percent, while the target set Challenges this sector faced during the by the public sector, growth in for the full year is RM854 million (Re- year included depreciation of the ringgit private healthcare services has been baseline 2014: RM777 million). Health against the US$, increased cost of exponential over the past decade. In tourist revenue for the three quarters Active Pharmaceutical Ingredient (API) the interest of creating the necessary reached RM353.2 million of the full year and packaging materials, non-tariff conditions for the private healthcare target of RM516 million (Re-baseline barriers imposed by other countries industry to thrive as a key economic 2014: RM449 million). Year-to-date (e.g. Indonesia and Thailand), and sector, the government has been results forecast total healthcare travel competition from ASEAN state lending its weight to expedite growth. numbers for 2015 to achieve above 90 members. Consequently, the export percent of full year targets. growth target for pharmaceutical

There are over 250 private 1 Promoting and Positioning hospitals in Malaysia. However, only hospitals that are well-equipped and Malaysia's Healthcare Services catered to receive and handle medical tourism are approved and registered to be a participating medical tourism provider in Malaysia. In July, the Malaysian Healthcare Travel Council (MHTC) introduced the Elite Partners programme to highlight and effectively promote healthcare institutions of excellence that also cater to the needs of international patients. There are currently 22 selected hospitals and ambulatory care service providers on this list. During the year, MHTC established two additional representative offices, in Ho Chi Minh City and Yangon to supplement operations of its existing offices in Jakarta, Dhaka and Hong Kong. These five offices function as MHTC’s promotional and Malaysia Healthcare Week 2015 by MHTC in Bangladesh intelligence centres, and provide end-

222 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 (Top) Official launching of MHTC Representative Office in Yangon, Myanmar.(Bottom) MHTC Representative Office in Ho Chi Minh City, Vietnam to-end services to potential healthcare visiting specialists programmes and to expand promotional activities into travellers to Malaysia – from treatment training support. Indonesia’s second and third tiers enquiry and quotation to visa Malaysia Healthcare’s strongest cities, as well as to develop Malaysia arrangements and logistics. markets are Indonesia, constituting Healthcare’s overseas presence and To facilitate greater healthcare 62 percent of total healthcare revenue brand positioning in the other focus mobility and in the effort to foster numbers, followed by the Middle East countries, working closely with collaborations in MHTC’s key markets, (7.4 percent), India (3 percent), China Tourism Malaysia, Malaysia External MHTC ventured into health insurance (2.6 percent), Japan (2.6 percent), Trade Development Corp (MATRADE) portability agreements with insurance Australia and New Zealand (2.5 and the Ministry of Foreign Affairs. and third-party administrator percent) and the UK (2.5 percent). In addition to Malaysia’s medical partners in Bangladesh, Vietnam and Emerging markets such as China, excellence in cardiology, orthopaedics, Indonesia, and several key hospitals Central Asia and the greater ASEAN oncology, neurology and dentistry, in Malaysia throughout 2015. These region will continue to be an active there have been growing demands for agreements allow policyholders contributor to our Healthcare sector. its superiority in infertility treatments, to seek healthcare treatments in Projected growth in terms of healthcare particularly for IVF treatments, with partnering hospitals in Malaysia under traveller arrivals in 2016 is expected to Malaysia’s leading fertility hospital their existing insurance schemes. come from the Middle East, Australia, reporting IVF success rates of 66 Together with the private hospitals, New Zealand, Bangladesh, Vietnam percent in 2013 against the global MHTC is leading government-to- and Myanmar. The weaker ringgit average of 50 percent, alongside government cooperation between also presents renewed opportunities increasing demands for treatments in Malaysia and the rest of the world, from Singapore. cosmetics surgery and rehabilitation. especially Middle Eastern and Indonesia remains Malaysia Commonwealth of Independent States Healthcare’s leading market (61.7 (CIS) countries, with patient referrals, percent in 2015). MHTC will continue

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aim of becoming Malaysia’s first fully 2 Manufacturing at the Core accredited vaccine manufacturing facility. Site works related to of Healthcare Industry the construction of its vaccine manufacturing facility commenced on 31 July 2015. Concurrently, the company expanded its senior management team and signed a partnership agreement with a European vaccine manufacturer. AJ Biologics is also in detailed discussions, nearing finalisation, on a number of other partnership agreements with several reputed vaccine manufacturers globally. Two new projects were announced during the year under EPP3:

First, Auscustom Pharma Sdn Bhd’s integrated GMP research and manufacturing facility. The company plans to establish an R&D and manufacturing facility to produce small batches of orphan drugs and unmet medications needs for Malaysia and the region. The products include sterile injectables, non-sterile medications, and solutions for diabetic retinopathy, chronic diseases and integrative oncology. The project is estimated to generate RM10.7 million in GNI, RM14.4 million in investment, and 95 jobs. Surgical sutures manufactured by Vigilenz Medical Devices Sdn. Bhd Second, Pharmaniaga Bhd’s At the core of Malaysia’s healthcare Pharmaceuticals, Biocon’s US$250 manufacturing of high-value industry is an up-and-coming million biopharmaceutical R&D freeze dried pharmaceutical manufacturing sector with a focus and manufacturing facility, became products. Pharmaniaga proposed on pharmaceuticals and medical operational in mid-2015. The an extension and modification of devices. These are high-tech high-value manufacturing and scaling up of its existing manufacturing facility ventures that will bring in top dollar activities for two products – recombinant to establish a lyophilisation investments and quality jobs. This is human insulin and insulin analog – manufacturing suite to enable the done through building capacity and are slated for completion in early 2016. production of high-value freeze- capability in the pharmaceutical sub- This facility, located in Nusajaya Johor, dried pharmaceutical products. sector and supporting the growth of employs more than 300 Malaysian The project is expected to generate medical devices sector. Science/Engineering graduates. RM2.4 million in GNI, RM20.9 One of the project champions Meanwhile, AJ Biologics Sdn Bhd million in Investment, and 21 jobs. under EPP3: Malaysian continues to make strides towards its Tapping an already developed

224 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 manufacturing ecosystem, medical the foundation for the upscaling of Four EPP champions under devices is a promising new growth Malaysia’s IVD industry and help to EPP9: Become the hub for high- sector which has seen fresh and raise the country’s IVD profile globally, value medical devices contract fruitful strides taken by players in starting with developing countries. It manufacturing – ABio Orthapaedics the eight Medical Devices EPPs over was recently identified as one of the Sdn Bhd, SteriPack Asia Sdn Bhd, the year. leading companies in the upcoming Medical Devices Corporation Sdn Bhd Bionexus-status company Olipro 2016 Malaysia Best Practice Award by (MDC) and Straits Orthopaedics (Mfg) Biotechnology is manufacturing Frost & Sullivan. To date, MEDIVEN CE- Sdn Bhd – are leading developments World Health Organisation (WHO) marked products have gained local and in this field by expanding their standard test kits in Malaysia under international recognition. MEDIVEN manufacturing activities to spur EPP7: Upscale Malaysia’s in-vitro has sold its products to major hospitals greater participation from Malaysian diagnostic (IVD) industry. The two in Malaysia. entrepreneurs. test kits are the Olipro HIV ½ Rapid Surgical products manufacturer ABio plans to expand contract Test Kit which screens and detects Vigilenz Medical Devices Sdn Bhd manufacturing of orthopaedic HIV 1 & 2 and the Olipro BloodChek and Karl Mueller Scientific are to lead devices in Malaysia by including LF Kit which detects transfusion local medical device manufacturers advanced machining, titanium transmissible infection (TTI) during under EPP8: Build a Malaysian anodising, forging, coating and blood donation or screening. showcase on next generation of core casting. Meanwhile, Malaysia will Meanwhile, Medical Innovation single-use device (SUD) products in be the sole manufacturer for Smith Ventures Sdn Bhd (Mediven), was positioning Malaysia as the preferred & Nephew’s severe burns wound to spearhead this EPP through its supplier of high-quality contract dressing when SteriPack begins IVD project. The project will provide manufacturing for SUDs. operations in the country.

Vigilenz Medical Devices Sdn. Bhd., Bukit Minyak, Penang

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In its initial stage, EPP10: Malaysian clinical device champions is focused on preparing three potential project owners to launch projects related to the orthopaedic implant manufacturing industry. Manufacturer UWC Holdings, which caters to the medical and healthcare industry among others, leads EPP11: Medical equipment supply chain orchestration through Examination tables manufactured by LKL Advance Metaltech Sdn. Bhd its investment in a medical equipment manufacturing facility in Bukit Minyak, specialising in medical equipment 2015 saw the completion of clinical Penang. The 80,000 square feet facility including hospital beds, patient trials on Lucenxia (M) Sdn Bhd’s will manufacture equipment including transport trolleys, birth-care tables, INTELLIS, an intelligent automated hospital beds, trolleys, stretchers, medical treatment carts and peripheral peritoneal dialysis (APD) cycler immobilisers and prefilled humidifiers. support equipment, and the fabrication designed for chronic kidney disease Toshiba Medical System Malaysia of steel and wooden products. patients. The pilot study concluded that manufactures ultrasound systems, EPP14: Renal products covers both the system was safe and efficacious. As transducers and printed wire boards the provision of services as well as the such, Lucenxia’s INTELLIS APD system other medical devices in Malaysia manufacturing of medical products is now ready for commercialisation. for export under EPP12: High-value involved in the treatment of end-stage The product was officially launched medical devices manufacturing. Its renal disease (ESRD). These services by YB Minister of Health, Datuk Seri Pulau Pinang facility spanning a total include innovative treatment methods S. Subramaniam in January 2016. of 7,800 m2 floor space commenced such as home treatment modality with Fresenius Medical Care, a global production in December 2014. integrated telemedicine systems. supplier of renal solutions and a EPP13: Building a medical Products manufactured include major player in hemodialysis (HD) hardware and furniture cluster is led automated PD cyclers, HD machines, and peritoneal dialysis (PD) products, by LKL Advance Metaltech Sdn Bhd, dialysis solutions, and bags and filters successfully increased the production a medical furniture manufacturer for HD machines. output of HD concentrates in 2014 and added a new production line for PD concentrates in its manufacturing facility in Bandar Enstek, Nilai, Negeri Sembilan. With SuisseMed Technologies of France as technology partner, Proligen has been given exclusive rights to represent SuisseMed Technologies SA in ASEAN to product high grade blood filtration filters in Malaysia. The dialyser manufactured will not only cater for local demands but for export market as well. This will help reduce the cost of treatment for patients and create job opportunities for Malaysians. Commercial production Official launching of Intellis of Lucenxia (M) Sdn Bhd by Health Minister Datuk Seri Dr. S Subramaniam is expected to start in 2017.

226 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 3 Facilitating Local Manufacturing Export

MOH signed two OTAs in 2015 with local drug manufacturer Kotra Pharma (M) Sdn Bhd for the supply of Diamicron MR 60mg (left) and Vastarel MR 35mg (right)

The introduction of the OTA the provision of OTAs and by Subsequently, Servier obtained scheme under EPP3, part of an effort expediting the registration of locally regulatory approval for the registration to position Malaysia as a regional manufactured generics. The OTA of its Malaysian-manufactured Vasterel export hub for generics, has generated initiative provides market access MR 35mg in , Singapore, much interest from both MNCs and for the products via public sector , Myanmar, Hong Kong local pharmaceutical companies. purchase and in doing so, attests and Thailand. OTAs are a direct negotiation to the products’ safety and efficacy, between the government and a local thereby providing confidence to manufacturer for three years. A two potential export markets as well. year extension may be given should MOH signed two OTAs in 2015 a local manufacturer able to export with local drug manufacturer their products overseas. Kotra Pharma (M) Sdn Bhd in joint Given the highly competitive venture with French multinational global pharmaceutical landscape, pharmaceutical company Servier the government aims to act as a for the manufacturing of the latter's springboard to boost the marketability patented drugs Vasterel MR 35mg and of Malaysian-made generics through Diamicron MR 60mg.

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Laboratory Practice (GLP) certified. 4 Upholding Quality of Medical Devices Malaysia has accredited testing facilities but none are GLP-compliant. Most of Through Regulation and Standards Malaysian manufactured products are tested in Singapore, US, Australia and Europe. This expensive but necessary The Medical Device Authority meant to assure quality control and activity, costing at about RM300,000 (MDA) is a statutory body under the the safety of the medical devices per product, has hindered local Ministry of Health Malaysia established produced, and that these devices are in manufacturers from exporting. under the Medical Device Authority accordance with the global standard. MDA has given out a grant worth Act 2012 (Act 738) to control, regulate The extension of the deadline is to RM22 million to MyBioScienceLab medical device, its industry and ensure all the involved companies have Sdn Bhd, formed with the purpose to activities as well as to enforce medical adequate amount of time to complete establish a comprehensive-integrated device law under the Medical Device the necessary preparations for the one-stop-centre public-private owned Act 2012 (Act 737). registration of their products. OECD-GLP certified non-clinical CRO In order to better regulate and In July, additional post-marketing Test Facility for pharmaceuticals, address industry concerns, the guidelines were introduced in cosmetics, nutraceuticals, authority has decided to alleviate Malaysia, covering complaint handling agrochemicals and medical device to and remove all obstacles in the and field corrective action (FCA). These support local and global industries. implementation of the Medical Device documents are designed to guide the Construction of the lab is more than Act 2012 (Act 737). industry in complying with the Medical 90 percent completed and is expected All medical devices used in the Device Act and related laws. to receive GLP certification by 2016. country are to be registered by July The US, Europe and Australian Grant applications for another GLP lab 2016, an extension from the previous markets require that the medical devices is currently being processed. Decision is deadline in July. The registration is used within their borders are Good expected to be made this year.

Menara Prisma MDA

228 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 5 Developing the Senior Living Market

Aged care services provided by Econ Healthcare Group

Malaysia’s aged care industry is planning principles, general planning, Secondly, legislation were still in its infancy with a fledgling specific planning, and design established and regulations were ecosystem. But with the awareness guidelines for the development of new strengthened. Two existing Acts – raised in recent years, interest in the and existing houses that adopt ageing- Care Centre Act 1993 (Act 506), and industry is rising. Various parties in-place concept, retirement villages, Private Healthcare Facilities and – including hospitals, property and care centres for the elderly. Services Act 1998 (Act 586) – currently developers, insurers and trade groups The guideline was approved by the govern the care of an older person – have indicated strong interest in this Cabinet on 1 July 2015 and is awaiting under the purview of two separate field. To prepare for the growth of this tabling at the next meeting of the Ministries, MoH and Ministry of industry, an ecosystem must be put National Council for Local Government Women, Family and Community in place. (MNKT) scheduled in early 2016. Development (KPWKM). KPWKM’s Firstly, a physical planning After the MNKT, the guideline will Social Welfare Department governs guideline for Senior Living facilities be presented at the State Planning the old folk homes, which target were set up. In 2012, the Town and Committee (SPC) meeting of all the those in the lower income group with Council Planning Department (JPBD) states in Peninsular Malaysia. Once no next of kin, while those who can started developing a seniors living approved by the SPCs, the guideline afford it go to private nursing homes facilities guideline for adoption by will be adopted and used by the local governed by MoH. the local councils. The guideline covers councils in the respective states.

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There are currently only 16 private requirements. Moreover, the country involving 112 care centre nursing homes registered with MoH, current old folk’s homes need to be operators (registered under KPWKM) which is grossly insufficient. The transformed into proper aged care and about 450 participants. Department of Statistics estimates that facilities. The Private Aged Healthcare In the meantime, the ministry has in 2015, the proportion of the Malaysian Facilities and Services Bill combines started to draft the regulations for population aged 60 years and older the relevant sections from both Acts the Bill. Five workshops and seven is 9.1 percent. Based on the current and will better govern the provision of meetings/discussions were conducted projections, Malaysia is expected to services and facilities for the aged care with the stakeholders to gather their reach ageing population status by the industry in a progressive economy. views and opinions on the Regulations. year 2035, at which point 15 percent of The Bill has been submitted to The first draft of the Regulations will be the total population will be 60 years the Attorney General of Chambers ready upon the finalisation of the Bill and older. (AGC) for vetting. Prior to that, various by the Cabinet. The Bill is scheduled to The two existing legislations syndications and consultations were be tabled in Parliament in the second will not be able to meet future conducted – 11 sessions across the quarter of 2016.

EDEN-ON-THE-PARK BRINGS A GREATER DIMENSION TO THE RETIREMENT VILLAGE INDUSTRY

One of the project champions has been completed and The target date of completion is steady and its services continued under the Retirement Village EPP, a temporary occupation permit December 2016. Construction to be popular. Eden-on-the-Park is the first for it has been granted by the works on the villas have also Recruitment and training Integrated Senior Lifestyle and council. The company will apply started and some units are is on track and the company Care Residence Resort facility for a Care Licence from the already at roof beam level. is ready for opening as soon in Malaysia. It features the "3R" Department of Social Welfare and In preparation for the opening as official licensing is granted concept of Rest, Recreation and a licence from the MoH to operate of its Care Residence, Eden by the Department of Social Rejuvenation, and is built around the facility as a Nursing Home. started its home care business as Welfare. As at December 2015, the "5S" principles of Security, Construction of the project’s part of its training and running-in the recruitment of caregivers Safety, Support, Service and Active Living Apartment tower process, as well as to get some had reached some 26 excluding Sustainability. is well underway – 7 of the 14 marketing exposure. During maintenance and administration The project’s Care Residence storeys have been completed. the year, this business had held staff.

(Left) Current site progression of the Active Retirement Living area of Eden-on-the-Park. (Right) Nursing room at Eden-on-the-Park

230 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

PPs in the Healthcare NKEA campus site under the jurisdiction are regularly evaluated on of the Kuala Lumpur City Hall. E their ability to remain as game Moving forward, emphasis will changers in the healthcare industry. be allocated towards upbringing In 2015, two EPPs were reassessed and EPPs 15, 16 and 17 in order to develop their scope revised. the Seniors Living industry. The The first, EPP5: Creating a Private Aged Healthcare Facilities diagnostic services nexus. The Ministry and Services Bill is to be tabled in of Health has decided not to continue Parliament in Q2 2016. on the current business model of the Plans are also underway to project which primarily relies on the integrate the “Physical Planning outsourcing of radiological services Guidelines for Senior Living Facilities” in MOH hospitals. The scope of this developed by the Town and Council project will be revised and a new Planning Department (JPBD) into the project champion will be identified. Regulations of Private Aged Healthcare Secondly, EPP6: UM Health Facilities and Services Bill as well Metropolis. As the consequential delay as the adoption of such guideline of Planning Approval from the Petaling by various local councils. Jaya City Council (MBPJ) affected the In addition to the continued progress of the project, UM Holdings emphasis on the pharmaceutical and decided to rescale the project scope. medical devices sub-sectors, new The team will work closely with UM EPPs may be a possibility coming from Holdings to explore the various options ongoing and upcoming discussions available, which include the possibility and consultations with the major of relocating the project site to the players in the industry.

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DATO’ SERI HAMZAH ZAINUDIN GETTING MINISTER OF DOMESTIC TRADE, CO-OPERATIVES AND CONSUMERISM

AHEAD IN A We have strived to promote a competitive business environment that encourages efficiency, GLOBALISED innovation and entrepreneurship through persistent enforcement of the Competition Act 2010 (CA ECONOMY 2010) by Malaysia Competition Commission (MyCC). Businesses that are pushed to compete in their home-ground would be equipped to compete at a global level. With the formation of the ASEAN Economic Community (AEC) and Malaysia becoming one of the member countries under the Trans- Pacific Partnership Agreement (TPPA), liberalisation is at our doorsteps and we must challenge ourselves to compete. We cannot aspire to become a high income and developed nation without laying the foundation to become competitive. Businesses must shape up and innovate in order to take advantage of the vast market opportunity liberalisation brings.

232 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 INSIDE THIS SRI

Competition Act 2010: Creating a DATUK SERI DATO’ SRI 1 Level Playing Field PANGLIMA MADIUS TANGAU MUSTAPA MOHAMED MINISTER OF SCIENCE, TECHNOLOGY AND INNOVATION MINISTER OF INTERNATIONAL TRADE AND INDUSTRY Rising Up the 2 Competitiveness Ranks

Standards can break barriers The Services Sector Blueprint Accelerating Revenue, Improving by guaranteeing the quality and launched in March 2015 provides 3 Market Access Through Standards efficiency that is needed to improve valuable policy direction for the market access and increase exports. development of Malaysia’s services This is something businesses in Pushing for Best Practices sector. The recommendations 4 in Agriculture Malaysia especially, the SMEs outlined under the Blueprint have need to understand. Although been incorporated into the 11th SMEs make up more than 98 Fortifying Systems for Malaysia Plan. As the secretariat to 5 Greater Data Security percent of Malaysian businesses, the Malaysia Services Development their contribution to the country’s GDP was just 32 percent in the year Council (MSDC), MITI assumes a Facilitating Greater Access 2012. Standards should be used as vital role in closely monitoring 6 to Markets catalyst to raise SMEs contribution the execution of the Blueprint to the GDP to 41 percent by 2020. strategies and consistently Liberalising Our Markets The success stories of companies reporting on the progress made to 7 for Greater Competitiveness that comply with standards the Special Committee on Services should be highlighted to inspire Sector chaired by our own YAB Strategic Policy Direction to Further more Malaysian manufacturers Prime Minister. 8 Develop the Services Sector and consumers alike, to adopt and embrace a culture of quality, thus contributing to national competitiveness. I strongly believe that standards, which are synonymous with quality are a critical component for us to achieve a developed nation status. Having developed our own standards are well and good, but we must also be conscious that there are some best practices or processes deployed and utilised by many other businesses or countries that we can adopt. We must be nimble to learn from others and to adapt as that would make us more efficient.

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ith globalisation, an In line with this, Competition, These reforms aim to position efficient and conducive Standards and Liberalisation under the private sector as the core engine W business environment the Strategic Reform Initiatives (CSL- of the economy by modernising has to be nurtured and sustained to SRI) play a vital role to develop an business regulation, liberalising increase Malaysia’s competitiveness efficient and competitive business the services sector, removing as a preferred investment destination. environment and culture that support market distortions, improving the There is huge potential to be tapped Malaysia’s goal of becoming a high- interface between Government and with the AEC and the various bilateral income nation by 2020. CSL-SRI also businesses, introducing competition and regional trade agreements focuses on reinforcing economic legislation and increasing the quality including the TPPA and the Regional reforms that were undertaken during of goods and services through Comprehensive Economic Partnership the 10th Malaysia Plan. standards compliance. Agreement (RCEP).

the number of cases solved. During the 1 Competition Act 2010: year, MyCC conducted 48 advocacy programmes throughout Malaysia. The Creating a Level Playing Field increase in the number of complaints received by MyCC from 8 complaints in 2012 to 232 complaints in 2015 is The implementation of the CA 2010 encourages efficiency, innovation and testimony to an increased level of and its enforcement by MyCC has helped entrepreneurship can flourish. This, awareness among consumers and strengthen the regulatory framework to in turn, promotes competitive prices, business owners and bodes well for promote a more competitive business improvement in the quality of products the efforts made by MyCC. environment in Malaysia. and services; providing consumers a MyCC has also strived to increase Established under the Ministry wider choice at fair prices. the number of cases resolved. In 2015, of Domestic Trade, Co-operatives In 2015, MyCC continued its efforts the Commission made 6 findings of and Consumerism, MyCC is an to engage with stakeholders from competition infringements under the independent statutory body tasked both the public and private sector in CA 2010 and completed two proposed with strengthening competition its advocacy work to raise awareness decisions. There were also two cases in the local business landscape. It of CA 2010, while striving to increase pending appeal. enforces, investigates and adjudicates infringements under the CA 2010. The implementation of the CA 2010 was identified as one of the SRIs under the Economic Transformation Programme (ETP), intended to foster healthy and thriving competition in the Malaysian economy. The Act, which came into force in 2012, promotes economic development by promoting and protecting the process of competition. By doing so, a business environment that An Advocacy Programme was held in October 2015 for SMEs on Competition Act: How can SMEs Benefit

234 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 According to the Report, Malaysia’s 2 Rising Up the distance to frontier score advanced from 76.84 in 2014 to 78.83 in 2015, as Competitiveness Ranks a result of improvements in five of the indicators, namely starting a business, dealing with construction permits, Malaysia’s position as one of the competitive economies, the country’s getting electricity, registering property top 18 most competitive countries highest ranking since 2005. and resolving insolvency. among 140 economies globally, in Additionally, Malaysia also improved The Report noted that the the World Economic Forum’s Global its ranking in the World Bank’s Ease of improvements in ranking reflected Competitiveness Report 2014-2015 is a Doing Business Report 2015 to the 18th the initiatives undertaken by validation of the effectiveness of the spot from the 20th spot in 2014, ahead of the Government through both economic reforms being undertaken economies such as Taiwan, Switzerland, administrative and ETP as well as by the country. It advanced two spots Thailand, the Netherlands and Japan. the efforts undertaken by the joint from the previous year, consolidating In Asia, Malaysia ranked 4th after public-private sector task force its position as the world's top 20 most Singapore, Hong Kong and South Korea. to facilitate business.

Amanah Rakyat (MARA), Malaysian 3 Accelerating Revenue, Improving Green Technology Corporation (MGTC), Malaysian External Trade Market Access Through Standards Development Corporation (MATRADE) and the Ministry of Health (MoH) to carry out several capacity building Compliance to standards is key to by the various Government agencies, and awareness programmes on the quality, a solution to push products and the National Standards Compliance importance of standards among services beyond market boundaries as Programme (NSCP) was launched in industries to increase the demand for well as to build customer loyalty. 2014 by Standards Malaysia. standards compliance. To ensure the competitiveness NSCP was designed based on the Despite this, challenges remain of Malaysian products and services, NSCP Study in 2013, benchmarked especially among SMEs who measures have been put in place to on approaches of selected countries perceive standards compliance improve the ecosystem of standards with greater standards compliance. and certification as cost instead of development and utilisation. Steps These countries include Singapore, investment for future returns. As have already been taken to streamline Germany, South Korea, Thailand, standards certification is voluntary, and reduce the time taken for the Indonesia and the European Union. this remains a persistent issue. development and adoption of standards. NSCP is crucial to address the lack of In order to gain a deeper perspective As of 2015, a total of 6,204 Malaysian concerted effort among Government of current perception of standards Standards were developed by Standards agencies and private sectors to compliance, Standards Malaysia Development Agencies (SDAs) that have inculcate standards and compliance convened a study on the economic been appointed by Standards Malaysia. in products and services. impact of standards compliance in the Of these, 3,622 standards are aligned Standards Malaysia collaborated marketability of products and services. with international standards. with a number of agencies including The study also looked into areas In an effort to increase standards SME Corporation (SME Corp), regarding efficiency and productivity at compliance and bridge initiatives offered CyberSecurity Malaysia (CSM), Majlis selected companies from the electrical

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 235 THE NTP – STRATEGIC REFORM INITIATIVES Competition, Standards and Liberalisation

and electronics, food and beverages standards compliance among a credible testing and certification and agriculture sectors. The findings the industries. process. Products will need to undergo of this study will be used to intensify Standards Malaysia also signed a conformity assessment procedures promotion on the use of standards and Memorandum of Understanding with which include laboratory testing to will be shared with central agencies Steinbeis Foundation Malaysia (STMY) obtain certification. Towards this and Ministries to formulate relevant in June 2015 to conduct a Technology end, existing test facilities may need policies to increase use of standards. Audit and gap analysis on standards to be upgraded to improve the testing Stakeholder engagements, compliance for 30 selected companies infrastructure for products in Malaysia. including a mini-lab with Certification as an effort to handhold the companies This will not only help the Bodies as well as dialogue sessions to obtain certification. manufacturing industry become more with Government agencies, Trade In line with initiatives to increase competitive, but also promote the Associations and Multinational standards utilisation, Standards country’s services industry and help Companies (MNCs) were held Malaysia will accredit more Conformity make Malaysia a testing hub. throughout the year to increase Assessment Bodies (CABs) to ensure

(Top) A Standards Utilisation Workshop was held in September 2015 with Ministries and Central Agencies (Bottom) A Capacity Building Programme for MS 9001 Quality Management System was held in August 2015 for SMEs

236 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 DVS. Additionally, myGAP certification 4 Pushing for Best Practices is currently free for those who are able to fulfil its requirements. in Agriculture In 2015 a total of 41 capacity building programmes were carried out involving approximately 1,740 farmers during which information on the requirements of myGAP was disseminated, including consultation on the certification process. Promotional programmes for myGAP also included reaching out to consumers on the benefits of myGAP certified products by collaborating with farmers and traders participating in the programme. In 2015, 14 awareness programmes were held throughout the country during the state-level and the national-level Farmers, Breeders and Fishermen’s Day (HPPNK) 2015.

MyGAP produce being sold at Pasar Tani Putrajaya Despite the strides made, a number of challenges remain. For instance, 2015 saw a 21 percent increase in the MyGAP is benchmarked with the current myGAP certification is number of farms being certified, pushing international GAP certification a lengthy process and coupled with the total number of certified farms to schemes such as ASEAN GAP and the absence of price differentiation 4,414 farms. This increase in the number is now in the process of being for certified products in the domestic of certified farms is largely attributed harmonised with Global GAP. MyGAP market, it has deterred many farms to the outreach and capacity building certified products will thus benefit from obtaining the certification as programmes by the implementing from this exercise by gaining better farmers seek immediate benefits from agencies, namely Department of market recognition and acceptance. myGAP certification. Also, there is Agriculture (DoA), Department of Since the inclusion of lack of awareness among consumers Fisheries (DoF) and the Department of implementation of standards and on the health benefits of myGAP Veterinary Services (DVS). certification as one of SRIs in 2010, products which are in line with its The development and usage of the Departments under MoA namely tagline of “Improving Lives”. standards for the Agriculture NKEA DoA, DoF and DVS have registered a Hence, there is a need to streamline focus on benchmarking Malaysia’s compound annual growth rate (CAGR) and reduce the time required for the agricultural practices against of 40 percent, 40 percent, and 37 certification process. Farmers also international standards such as Good percent respectively in the number need to be encouraged to carry out self- Agricultural Practice (GAP). of farm certifications. As of 2015, the assessment on their readiness prior to MoA has consolidated a DoA has 1,600 farms certified, while submission for certification. number of certification schemes for DoF has 173 farms certified and DVS While efforts to get all farms certified agriculture under myGAP (with the has 2,251 of farms certified. should continue, emphasis will need tagline “Producing More, Improving The increase in the number of to be made on larger establishments, Lives”) which now represents a certified farms has largely been which are looking beyond the domestic comprehensive certification scheme due to the ongoing outreach and market. Currently focus is on farms for the fruit & vegetables, aquaculture capacity building programmes by the that come forward for audit, of which and livestock sectors. implementing agencies DoA, DoF and a majority are small farms.

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In 2010, Information Security 5 Fortifying Systems Management Systems (ISO/IEC 27001) or better known as ISMS, was introduced for Greater Data Security to manage sensitive information so that it remained secure by applying risk management processes. Cyber risk is currently at the as banks, telecommunication, and The National Security Council top of the international agenda as transportation services are constantly (NSC) was tasked to oversee the high-profile breaches raise fears exposed to vulnerability that can lead implementation of ISMS standards that hack attacks and other security to major disruptions. An attack on a and its compliance by CNIIs. Since failures could endanger the global CNII can be devastating on both the NSC took helm, the number of CNIIs economy. Cybercrime costs the nation and its citizens. certified increased from 20 in 2012 to global economy over US$400 billion Cyber security has been identified 146 out of 201 CNIIs in 2015. per year, according to estimates by the Government of Malaysia as a The increase in ISMS compliance by the Center for Strategic and new source of growth for the Digital has also resulted in a spill over effect International Studies. Economy. To date, 48 products has for other Information Security Industry The Global Risks 2015 report by been evaluated and certified under the such as ISMS compliance services, cyber the World Economic Forum (WEF) Malaysian Common Criteria Scheme, security consultancy services, increase clearly points out that 90 percent of based on the ISO 15408 standard. in procurement of cyber security related companies worldwide recognise they Continuous effort is being undertaken to hardware and software including are insufficiently prepared to protect increase awareness among CNIIs on the enhanced interest in Common Criteria themselves against cyber-attack. The importance of product certification to Certified Products and Vulnerability ever increasing reliance on easily enhance security assurance within their Assessment Services to name a few. hackable smart devices makes us even organisations. Programs undertaken in more vulnerable. 2015 include Common Criteria training In Malaysia, Critical National for Information and Communication Information Infrastructure (CNIIs) such Technology (ICT) product developers.

Malaysia Cyber Security Awards Presentation Ceremony 2015

238 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 SRI in 2012, certification grew by 40 6 Facilitating Greater Access percent (CAGR growth), primarily due to the capacity building programmes to Markets for food establishments, resulting in greater appreciation for the value of MeSTI. MeSTI compliance also serves as a building block for micro and SMEs in Malaysia to be a major producer and exporter of food products via food safety and quality compliance. This programme also acts as a stepping stone for companies to obtain certification under Good Manufacturing Practice (GMP) and Hazard Analysis and Critical Control Point (HACCP). For example, Fatihah Frozen Sdn Bhd. was able to obtain GMP within 7 months after MeSTI certification, as opposed to the usual time frame of 1-2 years. One of the challenges being faced in the MeSTI registration and certification is the lack of auditors which has resulted in a backlog. Whilst temporary auditors have been hired, they are under a short term contract. The rehiring of temporary auditors requires the need for constant training. MeSTI certification awarded to Safiah Satay by the Ministry of Health in conjunction with World Health Day in August 2015 GREEN TECHNOLOGY Standards bear an intrinsic value certified under the Makanan Selamat The MyHIJAU Directory is a in today’s demand for quality and Tanggunjawab Industri (MeSTI) comprehensive guide to a wide safe products. More so now, with programme. This constitutes 30.9 range of green products and services, regulators and consumers being percent of all food establishments systematically categorised with increasingly concerned about the that are registered with Food Safety detailed information and description quality and safety of food. They are Information System of Malaysia for for consumer reference. Products or taking unprecedented interest in the Domestic (FOSIM) under category P1 services that carry MyHIJAU Logo are way food is produced, processed, and - Food premises that are involved in entitled to enjoy tariff schemes like the marketed and demand greater quality food manufacturing. Green Income Tax Allowance (GITA) and safety assurances. The objective of MeSTI is to put in and Green Income Tax Exemption place a system for the maintenance (GITE) as announced in the National FOOD STANDARDS of food hygiene and process control Budget 2014. MyHIJAU registered In 2015, the Ministry of Health which includes food safety assurance products will also get the opportunity certified 1,152 new food establishments and food traceability. Since the participate in the Government Green bringing a total of 2,401 premises implementation of MeSTI under this Procurement (GGP).

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A Government Green Procurement (GGP) Action Plan Workshop was held in December 2015

In 2015, a total of 1,439 products conducted 14 workshops nationwide an effort to counter that, KeTTHA through and services obtained certification as part of the MyHIJAU SME & MGTC embarked on an awareness under MyHIJAU, an increase of 307.6 Entrepreneur Development Programme campaign on GGP for all Ministries and percent (353 products) from 2014. This in 2015. These workshops were aimed Agencies. The Ministry of Education, was mainly spurred by the mandatory at encouraging SMEs to implement Ministry of Health, KeTTHA, Ministry requirements of Minimum Energy green technology applications and of Home Affairs and the Economic Performance Standards (MEPS) adopt green practices as well as Planning Unit have been selected as pilot for 5 domestic electrical products facilitate the registration of MyHIJAU implementers in this project. (Air Conditioners, Refrigerators, mark for businesses producing green KeTTHA targets to expand the Televisions, Domestic Fans and products and services. GGP implementation in 2016 with Lighting) under the Electricity In 2015, continuous development the expansion to 12 products that Regulations 1994 (Electricity Supply of business structure and support have been identified under GGP i.e. Act 1990) which came into force on activities for MyHIJAU has increased cleaning services, ICT equipment, paint/ 3 May 2015. Under MEPS, appliances the total number of Certification coating, fibre cement and EE Lighting, that satisfy the safety and performance Bodies for MyHIJAU from 3 to 8. The building facilities, green data centre, requirements (Energy Efficiency 5 additional MyHIJAU Certification multipurpose printing device, air- Factor) must be issued with a Bodies registered with MGTC are the conditioning, apparel and furniture. Certificate of Approval (COA) by the Malaysian Timber Certification Council In 2016, GGP will also be expanded Energy Commission Malaysia. Prior (MTCC), Global GreenTAG Sdn Bhd, to the Ministry of Works, Ministry of to MEPS, a Voluntary Energy Efficient GREENBUILDINGINDEX Sdn Bhd, BSI National Resources and Environment, Appliances and Equipment standards Services Malaysia Sdn Bhd and DQS Ministry of Federal Territories, and labelling programme was in place. Certification (M) Sdn Bhd. Ministry of Transport, Ministry of The Ministry of Energy, Green Despite the increase in registration, Urban Wellbeing, Housing and Local Technology and Water (KeTTHA) demand and awareness of green products Government; and Ministry of Rural and through its agency, MGTC also remains low in the domestic market. As Regional Development.

240 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 After more than five years of 7 Liberalising Our Markets intensive negotiations, on October 5, 2015, Ministers of the 12 Trans- for Greater Competitiveness Pacific Partnership (TPP) countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, , New Lifting market barriers to allow has services chapters. These five FTAs Zealand, , Singapore, United foreign investments and businesses are with Japan, , Australia, States, and Vietnam – announced brings in new ideas and technologies New Zealand and India. At the regional conclusion of their negotiations. The which may act as catalysts for greater level, services sectors have been fairly partnership is expected to support and more sustainable growth; not liberalised through the implementation jobs, drive sustainable growth, just in Malaysia but also within the of the ASEAN Framework Agreement on foster inclusive development, and ASEAN region. In its efforts towards Services (AFAS) Agreement. promote innovation across the creating a more liberalising and fair Currently, ASEAN has signed the Asia-Pacific region. global trading environment, Malaysia 9th Package of AFAS with average offer To ensure effectiveness of the continues to pursue regional and of 100 sub-sectors. In addition services initiatives and to reap the benefits bilateral trading arrangements to liberalisation is also part of the ASEAN from liberalisation, trade facilitative complement the multilateral approach + 1 Free Trade Agreements namely regulations and regulatory reforms to trade liberalisation. The national with China, Korea, India, Australia have been put in place to create a services liberalisation process is co- and New Zealand. Besides FTAs, to conducive business environment. ordinated by MSDC chaired by Minister attract more foreign investment in Specific policy measures have been of International Trade and Industry. services, Malaysia has also undertaken undertaken to reduce regulatory As of 2015, Malaysia has concluded autonomous liberalisation for 45 costs of doing business to improve and signed a total of seven bilateral Free services sub-sectors announced by the the business climate and support Trade Agreements (FTAs) of which five Government in 2009 and 2011. economic growth.

Heads of States stand for a family photo before their East Asia Summit (EAS) meeting in Kuala Lumpur in November 2015

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Investment Incentives - 8 Strategic Policy Direction to Further to enhance effectiveness of incentives Develop the Services Sector Human Capital Development - to produce, attract and retain skilled talent The Government has formulated horizontal strategies and action plan Sector Governance Reform the Services Sector Blueprint to items for implementation. - to cultivate an efficient, strengthen the services sector. YAB A total of 29 action plan items were facilitative policy environment Prime Minister launched the Services recommended for implementation and machinery Sector Blueprint on 16 March 2015. under four policy levers: The Blueprint identifies key Internationalisation - to The Services Blueprint will be challenges in further developing the significantly increase the number implemented from 2015 to 2020 in services sector and provides a set of of service providers in Malaysia tandem with the 11th Malaysian Plan.

Services Sector Blueprint Launch by YAB Prime Minister Dato’ Seri Mohd in March 2015. Photo courtesy of BERNAMA Images

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n 2016, there will be continuous The focus on the services sector will push to encourage the private be on the rigorous implementation of I sector to implement standards in the Services Sector Blueprint and to their products and services. Standards ensure it its deliverables. There will and certification are part of the be need to have effective monitoring equation for companies to grow big of the progress and to ensure any and emphasis should be made towards impediments are adequately addressed. industry development to focus on the Overall, progress of this SRI has laid requirements and needs across the the perspectives and policy initiatives entire value chain. needed to face today’s economic Certification processes will be opportunities and challenges. On- streamlined and testing facilities going movements towards a more will be improved to encourage more open market necessitates a continuous companies to obtain certification. strategic response to sustain and Once certified, MATRADE will be able improve the competitive position to assist the companies in improving of the Malaysian economy. market access especially in the priority sectors of LED and Medical Devices.

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DATO’ SERI AHMAD HUSNI MOHAMAD HANADZLAH FISCAL MINISTER OF FINANCE II RESILIENCE FOR 2015 was in some ways a SUSTAINABLE watershed year for the Malaysian economy. Battered at the tail end of 2015 by a series of challenges, both ECONOMIC from the external environment as well as conservative investor confidence, our ringgit like most GROWTH economies in this region, was in a flux against the US dollar alongside oil prices, which took a beating due to a supply glut. Having embarked on the National Transformation Programme in 2010, our economy is in a more resilient shape to take the challenges we were subjected to in 2015. With the target of reducing our fiscal deficit at 6.5 percent in 2009 of the GDP and keeping a lid on Central Government debt at maximum amount of 55 percent of annual Gross Domestic Product (GDP), we had to embark on a series of disciplined public finance reforms to get government finance in check. Under this SRI in 2015, we saw successful implementation of the Goods and Services Tax (GST) after almost 30 years of building the case to introduce the broad-based

244 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 INSIDE THIS SRI

Enhancing Taxation Systems 1 for Better Revenue Collection

Implementation of Accrual Accounting 2 to Strengthen Fiscal Management Efficiency and Effectiveness

Goods and Services Tax consumption tax in the country. GST percent on the back of low oil prices 3 collection proved to be an important compared to 30 percent in 2014. buffer against the challenges of Regardless, contributions from lesser revenue contribution from other areas such as GST, and savings the oil and gas industry. from subsidy rationalisation, Additionally, the move to as well as the development of remove subsidies for fuel at the other economic sectors under 015 was a year of challenges. The rapidly declining crude oil end of 2014, resulted in cost savings the Economic Transformation prices along with the value of of an estimated RM10.7 billion in programme have helped mitigate 2the ringgit against the US dollar, came 2015, enabling this savings to this effect somewhat. in as an unexpected shock, placing be channelled back as part of We head into 2016 knowing considerable strain on the economy social safety net programmes for that it will be a rough year from and demonstrating what we had deserving Malaysians. an economic standpoint, but always known – the need to reduce As part of the discipline in also taking comfort in the fact our reliance on oil-based revenue. The fact that Malaysia has been transitioning towards a high that forward looking and prudent able to reduce its dependency on income nation, in 2015, the measures have been taken to oil and gas (O&G) revenue from 41 Government was able to reduce create buffers that will enable us percent in 2009 to 21.5 percent of total our deficit to 3.2 percent of GDP as to face this situation with some Government revenue, places us in a targeted. Malaysia’s borrowings as degree of confidence. It will be a much better position than countries of end of 2015 was at 54.5 percent test of the resilience enhancing whose revenues crashed with the plunge in crude oil prices. to GDP, which is still below the 55 measures we have worked so hard Our relatively more diversified percent self-regulated debt ceiling. to put in place. sources of revenue, the implementation Since 2010, the Government of Goods and Service Tax (GST), has also been able to reduce and rationalisation of subsidies dependence on oil revenue by have provided a certain amount of driving contributions from other cushioning from the plunge in oil sectors and areas. This is essential prices. Additionally, the final private consumption expenditure which to ensure that other sectors are registered a 4.9 percent growth in 2015, able to buffer the impact of sharp coupled with increased investments by volatilities oil prices. For example, the private sector had also helped us in 2015, oil revenue dropped to 19.6 in weathering the storm.

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The initiatives of SRI PFR mainly THESE INITIATIVES INCLUDE: Implementation of Accrual focused on the taxation system with Accounting system Enhancement of tax the Ministry of Finance (MOF) being the administration and Implementation of Goods sole driver for this initiative, supported compliance – direct tax and Services Tax (GST) by its agencies namely Inland Revenue Board of Malaysia (IRBM), the Royal Enhancement of tax Malaysian Customs Department administration and (RMCD) and the Accountant General’s compliance – indirect tax Department (AGD).

1 Enhancing Taxation Systems for Better Revenue Collection

Additional collection of revenue RMCD. There was a boost in numbers on the back of changes in their audit from indirect taxes through specific of contract officers as well as changes approach which sees improvement in audits made by RMCD significantly made in audit approach in 2015. taxpayers’ compliance as well. Both exceeded targets from RM159.6 million The same applies for IRBM which initiatives contributes to the increase in 2014 to RM222 million in 2015 (148 managed to achieve an additional in the overall government revenue. percent of target) due to improved collection of RM2.04 billion in 2015 efficiency of auditing and collection by compared with RM1.99 billion in 2014

2 Implementation of Accrual Accounting to Strengthen Fiscal Management Efficiency and Effectiveness

The implementation of accrual essential to increase the effectiveness 2016 and the Government is confident accounting is in-line with practices of Outcome Based Budgeting of achieving the launch and usage of developed countries. Accrual in promoting the sustainability of the system in 2017 making the accounting will add depth to the of fiscal policies. transition from cash based accounting accountability and transparency of The delivery of the new system to the accrual based accounting system the management of public sector was delayed due to common issues in in 6 years’ since it started in 2011. resources and it will facilitate system development. The milestone of the costing of resources, which is the delivery was stretched to December

246 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 SUMMARY OF COMPARATIVE USEFULNESS OF CASH AND ACCRUAL ACCOUNTING IN GOVERNMENT

Criteria Cash Accounting Accrual Accounting

Ease of understanding Simpler, but unfamiliar Greater complexity, but familiar to more people

Relatively easy to manipulate, but the issuance Ease of manipulation depends upon Ease of manipulation of the Cash Basis International Public Sector accounting and auditing standards Accounting Standards (IPSAS) is a step forward

Includes cash information together Comprehensiveness Cash information only with other information

Usefulness for Provides cash information and commitment Provides only basic information managing liquidity information (e.g., payment arrears)

Non-financial asset No information provided Provides information on asset use management

Countries use a range of cash accounting bases, Countries use different accrual accounting Comparability policies are generally not explained well standards. Seek compliance with IPSAS

Measuring sustainability Useful, but needs to be supplemented of fiscal policy/considering Very limited usefulness with additional information (e.g., intergenerational equity demographic profiles)

Credit rating agencies, lenders and the media Credibility Limited are more familiar with accrual financial statements. Can lead to lower borrowing costs

Basis for determining Limited Good, in conjunction with cash information fiscal strategy

Provides information on accountability Accountability Limited for resources (e.g., fixed assets)

Basis for product/ Limited Good service pricing

Disincentives for fraud Better than cash, but depends on the internal Limited and corruption control environment (among other things)

Although information system costs may be Information system costs can be higher (because Implementation lower, additional efforts are required to identify of customization and limited availability) and value assets (among other things)

Ongoing information system costs can be higher Ongoing operation of systems is more sustainable because the systems are generally customized. because (i) it is easier to attract and retain skilled Ongoing operation Cash accounting systems generally require staff; and (ii) subsidiary records are integrated more personnel to operate them. However, (e.g., payables, receivables and asset registers) fewer qualified accountants are necessary

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3 Goods and Services Tax

GST, which was implemented in as food and controlled medicine to April 2015, proved to be a forward ensure that the low and middle income looking policy as revenue gained families are not overly burdened by through its implementation has the tax, those who consume more, helped cushion the shortfall in particularly the wealthy bear a heavier revenue from the petroleum sector. tax burden through this system. Total consumption taxes of Sales The Sales Tax and Service Tax Tax, Service Tax and GST provided an (SST) is also a consumption tax but the estimated revenue of RM34.6 billion main difference is that the coverage as of December 2015 and collection is of GST is for the whole supply chain set to increase to RM39 billion in 2016. whereas SST is limited to certain part This is in contrast with the of supply chain. GST is also claimable contributions from Petronas and oil- for input products and services related sectors which are anticipated meaning it is separate from business to decline to RM31.8 billion in 2016 cost while SST is treated as part of the from RM43.6 billion in 2015 and the cost for businesses. percentage of oil-related revenue to government's overall revenue was expected to decline further to 14.1 percent in 2016 from an estimated 19.6 percent in 2015. The reduction is due to a decrease in Petronas's dividend payout by RM10 billion apart from the low crude oil price. Although GST imposes a 6 percent tax compared to the now abolised Sales and Service Tax (SST) at 10 percent and Service Tax at 6 percent, in the longer term the former is envisaged to yield a higher revenue collection. Having been implemented in more than 160 countries, GST is acknowledged as a fairer, more efficient tax system given its broad-based approach, with taxation occurring at the point of consumption. Having zero-rated many of the essentials such

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oving forward, the main It should also be noted that the goal challenge is to ensure that of public finance reform is to utilise M the Government’s target of Government funds more efficiently achieving a balanced budget in 2020 in areas such as social safety nets for is met. As part of the initiative, the the deserving, healthcare, education Government will continue reducing and other critical infrastructure for subsidies that distort the market and the rakyat. implement efforts to tighten leakages We will also see the of revenue with tax control elements implementation of the accrual specifically in the areas of used car accounting system in 2017, replacing imports, the shipping industry and the current cash based system. SME corporate income tax incentives.

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DAT0' SRI ABDUL WAHID OMAR NARROWING MINISTER IN THE PRIME MINISTER'S DEPARTMENT DISPARITY The Narrowing Disparity Strategic Reform Initiative (SRI) PROMOTES has surpassed its Key Performance Indicator (KPI) targets set for the year and this encompasses the INCLUSIVENESS increase of RM3.69 billion in market capitalisation by 11 Skim Jejak Jaya AND Bumiputera (SJJB) companies, with two companies breaching the RM1 billion mark. SUSTAINABILITY Various initiatives spearheaded by TERAJU have resulted in RM63.4 billion of business opportunities for Bumiputera companies via its key programmes, notably the Carve Out and Compete Programme, High Performing Bumiputera Companies Programme (TeraS), Bumiputera Entrepreneurs Start- up Scheme (SUPERB) and Skim Jejak Jaya Bumiputera (SJJB). Given the challenging economic climate in 2015, TERAJU has placed greater focus on enhancing and broadening its initiatives in order to build a more resilient and competitive pool of Bumiputera companies. This has led to the development of strategic

250 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 TERAJU’s most imminent challenge would be to prepare Bumiputera businesses for the initiatives, new enablers, schemes forthcoming removal of trade and collaborations to enhance Bumiputera participation in the barriers under the Trans-Pacific National Key Economic Area (NKEA) Entry Point Projects (EPP). Partnership Agreement (TPPA). The forthcoming market liberalisation and expansion under the ASEAN Economic Community (AEC) and Trans- Pacific Partnership Agreement (TPPA) presents both opportunities and challenges for Bumiputera companies. There is therefore he Narrowing Disparity a greater need to enhance their Strategic Reform Initiative INSIDE THIS SRI capacity to compete in an open T (SRI) was devised to address Facilitating Growth for High and liberalised economy. In order inequality between the Bumiputera 1 Performing Companies to ensure that the implemented share of the economy in relation to its population and other groups. efforts will not be derailed Leveraging on Collaborative It is aimed at helping Bumiputera by liberalisation, effective 2 Capacity-Building companies to develop and enhance new programmes focusing on capacity, and improve competitiveness human capital development, and reduce reliance on Government sustainable wealth ownership contracts, and improve Bumiputera under this SRI are built around the and entrepreneurship will be representation in market equity, Bumiputera Economic Transformation developed, as recommended in high value-added occupations and Roadmap which was launched in the 11th Malaysia Plan. management positions. November 2011. Five areas for a These initiatives are spearheaded game-changing development of the TERAJU will intensify its efforts by Unit Peneraju Agenda Bumiputera Bumiputera economy were brought into by forging effective collaborations (TERAJU) which has been mandated to focus – education, employment, income to upscale Bumiputera companies lead, coordinate and drive Bumiputera levels, wealth creation and the overall to compete in the market. economic participation. The initiatives performance of Bumiputera companies.

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into large projects like the Mass Rapid 1 Facilitating Growth Transit (MRT ) Line 1 and 2. To further develop and support for High Performing Companies the growth of Bumiputera companies, the year also saw the continuance of programmes that improved Bumiputera TERAJU identifies high performing value for Bumiputera companies access to financing and markets, such as Bumiputera companies and creates through the introduction of various the TeraS Fund, Facilitation Fund, Halal programmes and initiatives to address programmes and initiatives from the Fund, Skim Jejak Jaya Bumiputera (SJJB) economic challenges so that these start-up stage, up to potential listing and export programmes. These capacity companies can thrive in a conducive in Bursa Malaysia. development and financing programmes environment that levels the playing As of 2015, RM36.06 billion worth were created in collaboration with both field. This is the cornerstone of the of business opportunities were created public and private financial and non- TeraS programme, which currently for Bumiputera companies under its financial institutions. comprising 991 Bumiputera Small- Carve-Out & Compete Programme, The year also saw collaborations Medium Enterprises (SMEs) from through collaborations with various with Yayasan Waqaf Malaysia, which various sectors and industries. The public and private institutions as the includes several areas under corporate objective of this programme is to mega-project owners. This provides a waqaf such as the development of allow Bumiputera SMEs to drive the platform for Bumiputera contractors Malay-reserve lands and endowment SME sector and eventually contribute to compete among themselves with lands. The newly established towards the economy by 2020. contracts awarded based on merits, Perbadanan Wakaf Nasional Berhad Since 2011, TERAJU has continued with the aim to support and encourage (PWNB) is tasked to spearhead and to create opportunities and enhance the entry of Bumiputera contractors implement these initiatives.

The newly established Perbadanan Wakaf Nasional Berhad (PWNB) is tasked to spearhead and implement corporate Waqaf initiatives

252 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 2 Leveraging on Collaborative DENTISTRY Capacity-Building WITH A The cooperative sector is also one of the focus areas as the majority of the DIFFERENCE cooperatives in Malaysia are owned by Bumiputeras. In ensuring that the Patang Saharing capability of these cooperatives are Dentist enhanced and strengthened, TERAJU has collaborated with Suruhanjaya Koperasi Malaysia (SKM) in 2015 to scale up 20 high or many of us, visits to the “For Dental Spa itself, every day performing Bumiputera cooperatives to dentist often invoke feelings we are forced to turn away up to nine move them to the next level. of extreme anxiety. To make a patients because we are not just not Towards the effort to empower F difference, Patang Saharing decided able to cope." small, medium and micro-enterprises, to establish a dental practice that Patang attributes his success TERAJU also collaborates with incorporates an atmosphere of to TERAJU’s SUPERB programme, the respective Economic Corridor relaxation. “Dental Spa was created which provided valuable experience Authorities to provide Bumiputera to push for a culture of dental care as and introduced him to like-minded entrepreneurs within their region with well as to remove the stigma of trauma innovative entrepreneurs, trainers and specialized funding schemes, training and fear associated with dental clinics. mentors who inspired him. and other capacity building initiatives. More often than not, this is due to the “SUPERB not only helped me to Institut Keusahawanan Negara rather clinical atmosphere of most prepare for opportunities out there (INSKEN), being a unit under TERAJU, clinics and at times, the rudimentary but also to be more discerning. The is tasked to identify and implement setting of rural clinics.” emphasis placed on quality in self, capacity building initiatives with the “When patients are calmer, it service and products offered has objective of equipping Bumiputera becomes easier to administer treatment, helped create the extremely confident entrepreneurs with tools and making their visits to the dentist more entrepreneur that I am today.” knowledge relevant to the industry. therapeutic.” In 2015, as a result of increasing This effort is aimed at developing The positive image of dental demand and market prominence, and identifying potential as well as practice spearheaded by Dental Spa Patang moved Dental Spa to a effective training mechanisms to has been a resounding success, evident much bigger premise and upgraded achieve the national entrepreneurship in the increasing number of patients its equipment and machines, as development aspirations. in his clinic. Hence, Patang plans to part of his expansion plan. “I am At present, 7,871 underprivileged develop a chain of Dental Spa in Sabah looking to creating a more conducive students have benefited from the capacity and eventually, the whole of Malaysia. environment for my staff to enable building initiatives under Yayasan “Tawau currently has only eight them to face challenges that come with Peneraju Pendidikan Bumiputera which dental clinics including government the expansion of this business. range from academic and technical as clinics, servicing a population of more well as professional education. than 400,000 people and we are not Institut Keusahawanan Negara able to meet the growing demand for (INSKEN) and Yayasan Peneraju dental care.” Pendidikan Bumiputera are part of Bumiputera Economic Transformation Roadmap initiatives.

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ALL GEARED

UP FOR Dato' Husni Salleh LIBERALISATION TERAJU Chief Executive Officer

ERAJU’s main agenda has market, relying heavily on government EMKAY Group and the construction of always been to ensure that contacts and concessions. For a the Malaysia International Trade and T Bumiputera companies are majority of these companies, their Exhibition Centre (MITEC), all valued able to compete and excel in a liberalised biggest clients compose of either the at a total of RM36.06 billion. economy. In spearheading the National Government or Government-linked The early success of the TeraS Bumiputera Empowerment Agenda, companies, seeing very few tap into programme is evident from the most of TERAJU’s initiatives focus on the international market. interim performance review of the MRT upskilling and preparing Bumiputera While the battle to shift the project, which is the first project to be businesses for both TPPA and AEC dependency mindset has been subjected to the Carve-Out & Compete together with ensuring the objectives challenging, one of the institutions Programme. of Bumiputera development as stated under TERAJU, INSKEN has played Firstly, as of 2015, 47 percent of the in RMKe-11 are achieved, said its Chief a huge part in pushing companies to contracts awarded by MRT Corporation Executive Officer Dato’ Husni Salleh. spread their wings and venture into were to Bumiputera contractors, The Narrowing Disparity Labs new markets. which is higher than the minimum began when Malaysia started According to Dato’ Husni, they have Carve-Out and Compete threshold participating in the TPPA negotiations, been upfront with TeraS companies on of 42 percent. Secondly, the interim and at the time, TERAJU was already the need to compete given that there review also revealed that out of the receiving constant feedback on what are no guaranteed contracts from three top performing contractors in the to expect once the agreement is signed. either the Government or TERAJU. MRT project, two of them were TeraS “As a result, liberalisation is While being recognised as a TeraS companies. something that we take into serious company has numerous advantages, In 2015, TERAJU created more than consideration when designing many of including the opportunities for funding RM60 billion worth in investments, our programmes. We wanted to ensure and capacity development, it does not business, financing and human capital that Bumiputera companies are able to preclude one from competing with development opportunities. Moving compete in an intensely competitive other TeraS companies as well as non- on, TERAJU will continue to focus environment, alongside being well- TeraS Bumiputera companies on upskilling and empowering more equipped and poised to take advantage Through its Carve-Out and Compete Bumiputera companies to become of the new market opportunities Initiative, Bumiputera companies are global players. brought about by liberalisation.” provided opportunities to participate Furthermore, he felt that many in mega government projects such Bumiputera companies were as KVMRT Line 1, Menara Warisan extremely confined to the domestic Merdeka, development projects by

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ERAJU’s most imminent Empowering Bumiputera which includes pushing for trade challenge would be to prepare human capital adjustment assistance. The 2015 Bumiputera businesses for the study commissioned by the Ministry T Increasing Bumiputera effective upcoming removal of trade barriers of International Trade and Industry control and sustainable under the Trans-Pacific Partnership (MITI) and TERAJU also called for an corporate ownership Agreement (TPPA). This could affect increased engagement of Bumiputera Bumiputera companies which tend to Enlarging the share of SMEs in global supply chains through be domestically driven by Government Bumiputera wealth ownership the assistance of Government-linked policies and assistance programmes. companies (GLCs), large companies Empowering the Bumiputera The growth of Bumiputera as well as Multinational Corporations Economic Community companies may be challenged by (MNCs). This would facilitate the tougher competition especially with Strengthening the delivery scaling up of Bumiputera SMEs, which free trade agreements such as the effectiveness of Bumiputera- would place them in a better position ASEAN Free Trade Area, ASEAN oriented programmes to compete in open markets. Economic Community and TPPA. Efforts are also being undertaken Hence, to intensify the growth and The implementation of new to increase the value of Skim Jejak competitiveness of Bumiputera programmes will include participation Jaya Bumiputera (SJJB) Public-Listed companies to face the TPPA and towards from qualified companies under the Companies (PLCs) by an additional RM1 achieving RMK11 goals of creating TeraS programme. billion by the end of 2016. The target for 30 national Champions, 10 regional In view of this, TERAJU will the coming year would be to chart a 10 Champions and five international also be working on some of the key percent increase in Growth, Employment Champions, new programmes will be recommendations made in the Study and Turnover (GET) for 60 percent of the developed to enhance the Bumiputera on Potential Economic Impact of micro and small companies participating Economic Community (BEC) which will TPPA on the Malaysian Economy in the INSKEN 500 programme. focus on the following areas: and Selected Key Economic Sectors,

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DATO' SRI RICHARD RIOT ANAK JAEM A HIGH-INCOME MINISTER OF HUMAN RESOURCE ECONOMY “Human capital development (HCD) is integral in ensuring NEEDS A that Malaysia is able to achieve its high-income aspirations by 2020. Additionally, an efficient WORLD-CLASS and effective labour market is necessary to attract investments into Malaysia and enable everyone WORKFORCE to participate in and enjoy the benefits of economic growth. In championing HCD, I wish to highlight the emphasis the Government has placed on skills development in the 11th Malaysia Plan (11MP) which comes into force in 2016. This is necessary because 60 percent of the 1.5 million newly created jobs under 11MP will require skills from Technical Vocational Education and Training (TVET). It is crucial that the Malaysian workforce is upskilled to compete in the more liberalised economy of the future. In terms of achievements for 2015, the Human Capital Development Strategic Reform Initiative (HCD- SRI) successfully met most of its KPIs on the back of enhanced collaboration across numerous ministries due to the wide scope of human capital development.

256 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 One particularly game- changing development is the green light received from the Economic Efforts under the HCD- Council in November 2015 for the SRI initiative have been geared setting up of the National Human Capital Development Council to towards creating more inclusive spearhead relevant policies and initiatives in creating globally and progressive labour policies, competitive talent right here in Malaysia. improving workers skills and In pushing for women in leadership positions, it is pushing for greater diversity encouraging to note the increase in the number of women decision- in the workforce. makers in public companies in 2015. The year saw an increase of 15.6 percent in public companies and 10.7 percent in public listed companies, as reported by the he HCD–SRI, which oversees Companies Commission of the wide area of human capital INSIDE THIS SRI Malaysia and BURSA respectively. development is tasked with T Strengthening Leadership Capacity building and upskilling the upskilling of Malaysian workforce 1 and Policy Efficacy programmes such as MyProcert to meet the demands of a nation in and TVET were ongoing in 2015 transition towards high income status. and expected to continue to gain It is also meant to prepare Building Capabilities Through 2 Skills Training momentum as we move into 2016. the Malaysian work force for a We stand today at a very more liberalised economy with implementation of the Association important juncture for human Inclusiveness in the Workplace of Southeast Asian Nations (ASEAN) 3 to Increase Productivity, Improve capital development in this country. Economic Community (AEC) and Motivation and Talent Retention The foundation of our education Trans-Pacific Partnership Agreement system is being improved through (TPPA). Liberalisation under AEC and the Education NKRA and NKEA. As TPPA will increase competition in the Some of the notable achievements we step up towards high-income workforce due to the greater mobility include the improvement to labour status and with liberalisation of skilled workers from other ASEAN laws, the implementation of Minimum knocking at our doors, the need countries and beyond. Wage and Minimum Retirement Age, Since the inception of the National an increase in upskilling initiatives to to upskill our current workforce Transformation Programme (NTP) in move towards fulfilling the target of and become globally relevant is 2010, efforts under HCD-SRI have been a 35 percent high skilled workforce of utmost importance. geared towards creating more inclusive by 2020 and the creation of more The Government is committed and progressive labour policies, facilitative environment within the in fostering a conducive landscape improving workers skills and pushing Malaysian workforce to attract and for the best talents to thrive. for greater diversity in the workforce. retain talent.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 257 THE NTP – STRATEGIC REFORM INITIATIVES Human Capital Development

1 Strengthening Leadership and Policy Efficacy

To drive the human capital facilitate accelerated industry-led 2013, with additional labour indicators development agenda under the programme delivery and streamline from the Department of Statistics and 11MP, a high-powered National standards across Ministries. These data from research studies for selected Human Capital Development Council efforts will be guided by the need to sectors and economic corridors. With (NHCDC) has been established ensure that academic and Technical the enhancement of the Labour Market to define overall human capital Vocational Education and Training Integrated Data Warehouse (LMIDW) development policy direction and (TVET) institutions produce quality scheduled to be launched in the first determine initiative priorities. graduates whose skills match half of 2016, ILMIA is able to provide The set-up of the NHCDC industry requirements. labour and supply data according to championed by the Economic In the management of labour sectors and competencies. Planning Unit was endorsed by the market information and data, efforts The Labour Market portal will be Economic Council in November to improve content and presentation beneficial for all stakeholders namely 2015. Comprising key representatives continued in 2015. Ministries and agencies for their policy from relevant Government Ministries The Institute for Labour Market interventions and supply planning, and and agencies, as well as major Information and Analysis (ILMIA) industry players to obtain information private sector players and industry is now strengthening its portal and on labour data as well as provide inputs representatives, the agency will dashboard which were developed in on workforce requirements.

2015 saw strengthened academia 2 Building Capabilities industry linkages in certification delivery with the collaboration of more than 55 Through Skills Training institutes of higher learning including polytechnics. This collaboration helped develop 707 faculty members as well The priority initiatives under MYPROCERT AND INDUSTRY – as trained 6,016 students in the various the HCD-SRI are accelerating the ACADEMIC COLLABORATION knowledge areas. development of skilled workforce, so The MyProCert programme was that employees are able to keep up developed in collaboration with TECHNICAL VOCATIONAL with the skills demands of a dynamic Multimedia Development Corp (MDeC) EDUCATION AND TRAINING economy. Efforts here also prevent to produce more professionals with Given the crucial role of TVET as skills gaps from widening to ensure internationally recognised technical a platform to upskill low and medium that companies can be confident and ICT certifications. skilled workers, the Ministry of Youth of having the pipeline of workers Through the programme, 3,169 and Sports struck up a partnership with they need. employees are trained for upskilling ITE Singapore in 2015 (see Figure 1), Malaysia’s skilled workers and reskilling in various knowledge to collaborate on a series of master represent 28 percent of the total areas like project management, big trainers’ courses to equip Malaysian workforce as of 2015, and the target is data analytics, embedded system, TVET trainers with skills essential to reach 35 percent by 2020. enterprise architecture and others. to teach TVET courses more effectively.

258 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 There are currently seven Ministry of Youth’s Collaboration with ITE Singapore on TVET Trainers ministries and agencies involved in and Leaders Training providing TVET, including Ministries of Education, Higher Education, Human Key Training Components Resources and Development, and 1. Enhancing leadership and Youth and Sports. In addition, there management skills are a great number of state service Ministry of Youth Temasek 2. Upgrading pedagogical providers as well as public and private and Sports, Foundation Malaysia competency to provide quality institutions in Malaysia. Main Sponsor Co-Sponsor delivery Also, under the 11MP there will be 3. Adopt student-centred learning a fundamental shift in how the TVET Training strategies to promote greater system operates. The programme will Training Grant expenses in student engagement Singapore & shift from being government-driven Malaysia to one that enables industry-led 4. Promote self and peer assessment through reflective programmes and interventions. TVET Academic learning ITE Education In line with this, EPU will work with Leaders & Master Services Malaysian Qualifications Agency (MQA) Trainers 5. Design and develop video-based Consultancy & Beneficiaries learning resources and Department of Skills Development Training Services (DSD) towards streamlining a single qualification and rating system to

Figure 1: Ministry of Youth collaborates with ITE Singapore on TVET Trainers and Leaders Training enhance industry-based linkages and ensure that there are more apprenticeship The 11th Malaysia Plan’s (11MP) for the Vocational and Technical programmes, thus elevating TVET as a recommendation on human capital Transformation Plan and RM30 pathway of choice for students. development takes into account million to TalentCorp for the Industry TalentCorp focuses on enhancing the urgent need to upskill the local Academia Collaboration Programme. local graduate employability by workforce so that they will be able to There is also an urgent need providing industry exposure for 17,967 compete both locally and regionally. to coordinate TVET programmes undergraduates through structured This is due to the fact that 60 percent across various Ministries to ensure internships; and collaborated of the 1.5 million newly created jobs private and public TVET institutions with industry to upskill 7,153 fresh under the 11MP will require TVET skills. produce quality graduates to meet graduates in line with industry In view of this, Malaysia's TVET industry demands. requirements in 2015. enrolment for the country has to be increased from 164,000 in 2013 to 225,000 students by 2020 and ensure that the graduates will meet employers’ future requirements. The allocation of RM1 billion for the Skill Development Fund under the 11MP in the next five years reflects the seriousness of the government in this area. The fund is envisaged to benefit the incoming younger workforce, enabling them to receive skills and vocational education. Additionally, RM1.2 billion will be allocated to the Ministry of Education Malaysian Contingent for the World Skills Competition before departing for Sao Paulo, Brazil

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 259 THE NTP – STRATEGIC REFORM INITIATIVES Human Capital Development

Johan Mahmood Merican TalentCorp Malaysia’s Chief RETAINING WOMEN Executive Officer IN THE WORKFORCE

ccording to the 2015 statistics that diversity has actually helped improve “double-burden syndrome” of taking on by Towers Watson’s Global the bottom line and 56 percent admitted the added responsibilities of managing A Norm Database, women that it has helped them compete in new their home, caring for their children make up merely 27 percent of industries or geographies. or the elderly. managers globally. In Malaysia, TalentCorp Malaysia’s Chief “Once these women leave the women consist of merely 31 percent Executive Officer Johan Mahmood workforce, they do not return to the of the workforce in a managerial Merican said the continuous efforts workforce as compared to other South East towards this at numerous levels have Asian countries such as Japan and Korea capacity which is a small chunk, shown results with female labour force which exhibits women returning to the with 36 percent likely to leave their participation rising from 46.8 percent in workforce in their late thirties onwards.” employer within the next two years. 2010 to 53.6 percent in 2014. The greatest challenge is to The importance of gender diversity “We may rank below Vietnam persuade companies to adopt more in the workplace and measures to in terms of overall participation by flexible hiring and balanced work- improve has been emphasised in the women but with this increase, we life policies to ensure that valuable 10th Malaysia Plan and the most recent are looking at an additional 600, 000 talents are not lost due to the lack effort to promote diversity is the launch women in the workforce as well as of work-life balance, said Johan. of the 30% Club in Malaysia, which aims an impact of 0.3 percent on the GDP "When approached on this matter, to increase the representation of women according to the World Bank.” the standard response by companies on corporate boards. Key measures taken by the include – why should we do it and can Creating gender diversity in the Government to increase female we trust our employees.” workforce is more of an economic labour force participation rate include In July - August 2015, TalentCorp imperative than a gender issue as it encouraging more employers to and PwC Malaysia conducted a involves retaining and attracting talents adopt flexible work arrangements, Diversity in the Workplace Survey to that are valuable to economic growth. promoting childcare facilities, career better understand the current diversity McKinsey's Women Matter: An Asian comeback programme for women landscape in public listed companies, Perspective, 2012 highlighted how the and supporting the development of with the support of Bursa Malaysia. increasing participation of women women entrepreneurs. The survey obtained responses from in the workforce could potentially According to Johan, though two- 130 listed companies, encompassing increase Malaysia’s GDP between RM6 third of graduates are women, a 1,094 members of the board and billion to RM9 billion. significant percentage of women tend 464,092 employees in Malaysian According to PricewaterhouseCoopers' to drop off the workforce in their late public-listed companies. (PwC) annual CEO survey for 2015, out of 20s or early 30s, mainly due to work-life The survey also included 67 of Top the two-thirds of Chief Executives whose balance issues. 100 listed companies, representing companies have a formal diversity and A 2012 World Bank report attributes 70 percent of Bursa’s total market inclusiveness strategy, 85 percent believed this to many women being caught in a capitalisation.

260 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 According to the survey, 31 juggling act becomes impossible, On career comeback, examples percent of companies surveyed have many leave the workplace. include companies like Petronas and introduced flexi-work arrangements, “Simple flexi-arrangement IHS that have implemented programmes 28 percent have staggered hours, 18 like staggered hours makes a lot of that promote the hiring of women percent allowed telecommuting, 15 difference in retaining talents.” professionals who took a career break percent allowed for reduced or part- In the case of trusting employees, due to various reasons as well as facilitate time work and 10 percent allowed for companies can introduce it gradually, their transition back to the workforce. a compressed work week. said Johan who added that PwC “International Business Machines Johan pointed out that more introduced a flexi-hours arrangement Corporation (IBM) for example, allows companies need to wake up to the based on merits, where priority was its employees to take a leave of absence fact that unlike in the 80s, there given to a worker with above average without the fear of losing their job. In are substantially more women in performance. fact, Chong Chye Neo, IBM Malaysia’s universities and as a result, the female “PwC’s approach was successful first woman Managing Director, took two workforce has increased exponentially. because it was not regarded as an leaves of absence during her career in Hence, it makes good business sense entitlement but a privilege. EcoWorld, IBM and if that option were not available to put in place the necessary support for example, piloted for flexi-work for her, IBM Malaysia would have lost a for women talents to retain valuable arrangement during school holidays so female talent of Chong’s calibre.” human capital. that parents can look after their children. Over the years, more companies in “Women today do not have “It was discovered that even Malaysia have introduced flexi-work the support of extended families employees who do not use the arrangement, Family Life Benefits and and working mothers struggle to flexi-work arrangement are happy Work-life Benefits including Maybank, juggle their roles as nurturers and because they know that the option Nestle, Kimberly-Clark, IBM, DHL and workplace professionals. When the is available to them. Standard Chartered.

Women Labour Force Participation In Malaysia

Female Labour Force Participation Rate in Malaysia from 2010-2014 Gender Composition by Organisation Levels Female

Male TARGET 5% +6.8% 13% 22% 32% 39% 40% 52%

55% 53.6% 95% 52.4% 87% 49.5% 78% 68% 47.9% 61% 60% 46.8% 48%

2010 2011 2012 2013 2014 2015 Overall Board CEO Top Senior Executive Non- Management and Mid Executive Management

Source: Department of Statistics Malaysia, 2014 Source: Diversity in the Workplace Survey of Malaysian PLCs by TalentCorp & PwC Malaysia, 2015

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 261 THE NTP – STRATEGIC REFORM INITIATIVES Human Capital Development

grants for the setup of new childcare 3 Inclusiveness in the Workplace centres, tax exemptions for childcare centres and double tax deductions for Increases Productivity, Improves employers who provide employees with childcare facilities. Motivation And Talent Retention On flexiwork initiatives, TalentCorp’s flexWorkLife.my aims to build a network of employers and An inclusive workplace facilitates Arrangements (FWA) promoting talents to optimise work-life integration the creation of an environment where Childcare Facilities, Career Comeback with the intent of retaining women at everyone is treated with dignity Programme for women to return to work work and encourage women to return and respect, where the talents and and supporting entrepreneurship. to work. In addition to the repository of skills of different groups are valued, FWA, while promoting convenience best practices on FWA and guidelines, resulting in higher productivity for employees, will require maturity the online portal also features case because the workforce is happier and accountability to ensure efficacy studies from employers who have and more motivated. within the organisation. Changes in in place FWA, work-life benefits and the workplaces including flexiwork family friendly facilities. ATTRACTING AND RETAINING arrangements and childcare facilities, In 2015, TalentCorp supported 20 WOMEN IN THE WORKFORCE were among the factor that drew an leading employers to implement and THROUGH INNOVATIVE WORK increased number of women into the enhance FWA at their organisations PLACE SOLUTIONS workforce. Provision for childcare is an as a key strategy to retain women in Women dominate public university important factor as it allows women to the workforce. In addition, TalentCorp intakes, making up 63 percent of work guilt free. helped 256 women return to the enrolment, with most entering into Therefore, there is a need for more workforce after a career break under the job market upon graduation. proactive measures such as funding in the Career Comeback programme However, many end up having to leave the form of fee assistance for childcare, launched in March 2015. the workforce in the midst of climbing the corporate ladder, due to family commitments. Initiatives under this SRI aims to increase the participation of women in the labour market to 59 percent by 2019 and increase women participation in decision making positions for corporate sectors to 30 percent by 2016. Efforts here have seen the participation of Malaysian women in the workforce rise to 53.6 percent in 2014 from 49.5 percent in 2012. Despite this, the percentage of working age women in the workforce is relatively low when compared to other ASEAN countries. Key measures taken by the Government to increase the rate of participation of the female labour include encouraging employers Panel discussion during Lead the Change event to encourage greater diversity in Malaysia’s to implement Flexible Work workforce in 2015

262 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 and investors. In the UK, where the 30% Club was founded, tremendous success has been recorded. The number of women in UK Boards has risen from 12.6 percent in 2010 to 26.1 percent by October 2015. A total 197 of pledges were signed by Chairmen and CEOs of public-listed companies during the launch of 30% Club Malaysia’s “Lead the Change” event, paving a way to increase the number of women in decision making positions. This is because gender diversity creates an effective boardroom, therefore is good for business. Through these initiatives, an additional 40 placements have been made for women in the boardroom as

Over 700 attendees consisting of Chairmen, CEOs, Directors, and various distinguished guests in decision making of 2015 since the start of the Women positions were present during the launch of Lead the Change event in 2015 Directors Programme in 2013. Challenges remain in efforts ADDRESSING THE GENDER GAP In pursuit of this goal, two new to change mind-sets of traditional IN LEADERSHIP: WOMEN ON measures were announced by the business leaders and much of 2015 BOARD – LEAD THE CHANGE Prime Minister: has been centred on educating To encourage greater diversity in business leaders on the growing global Malaysia’s workforce, the government Through policy requirements, significance of this agenda. There were hopes to achieve 30 percent women GLCs will allow their executives to serve on the boards of other also operational challenges in creating in decision-making positions in listed companies as long as vacancies for more women on board the corporate sector by 2020. In there is no conflict of interest such as finding mechanisms to refresh conjunction with this, the ‘Lead the board composition and enabling the Change’ event, held in May 2015, was Listed companies will be required matching of companies with available launched by YAB Prime Minister and to disclose the composition and competencies and experience. was well attended by Chairmen, Boards diversity of their boards and top It must be noted that this and senior management of corporate management in terms of gender, endeavour extends beyond just being Malaysia. This event was organised ethnicity and age moving forward inclusive, it is also about according by Ministry of Women, Family and board seats based on merits. Community Development together During the event, the Malaysian with PEMANDU, in collaboration with chapter of the 30% Club was launched BURSA and TalentCorp. with 3 Founding Chairs namely Tan Noting that the goal of women Sri Megat Zaharuddin, Tan Sri Jeffrey making up 30 percent of company Cheah and Tan Sri Zarinah Anwar. boards was still some way off, the The 30% Club is a global network of Prime Minister urged business leaders business advocates who champion to “take the next step, break those diversity on boards, most notably in glass ceilings and install women the UK and the US, where the majority on your boards.” of advocates are top business leaders

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 263 THE NTP – STRATEGIC REFORM INITIATIVES Human Capital Development

Dato' Aziz Bakar Former Chief Executive Officer of Malaysian Directors Academy (MINDA) and Co-founder of the FIGHTING FOR DIVERSITY 30% Club Malaysia IN THE BOARDROOM

y 2016, women are supposed to fill 2015, would lead the engagement with the of research showing that women in the 30 percent or more of the decision- corporate sector in an effort to accelerate boardroom help make more balanced B making positions in corporate the increase in women representation corporate decisions,” said Dato' Aziz. Malaysia. This was the aspirational target in the boardroom. The 30% Club was Nevertheless, there is a growing announced by the government in 2011. started in the United Kingdom in 2010 number of progressive male directors who In his Budget 2012 speech, YAB to encourage women representation on are open to having women as directors, Prime Minister Dato’ Sri Najib Tun Razak company boards. The Malaysian chapter he added. said that Government will organise is the seventh, after UK, Ireland, US, South In an effort to create a large pool of advanced management programmes for Africa, Hong Kong, and Australia. professional women with boardroom women with potential to become board “Based on experiences in the UK, the experience, the 30% Club Malaysia, in members, intensify advocacy activities move for diversity should be a voluntary collaboration with NAM Institute for the for greater participation of women business-led decision to avoid ‘tokenism’ Empowerment of Women (NIEW), an agency in the corporate sector and develop merely to fulfil legislative or regulatory under the Ministry of Women, Family and a database of potential women directors. requirements. Doing it this way would Community Development, is providing The 30 percent aspiration is also lead to a more meaningful and sustainable comprehensive boardroom training for emphasised in the 11th Malaysia Plan. change in the corporate sector,” said Anne. women interested in board positions. Creating diversity at the top would most Studies have shown that companies who “Companies can also refer to our repository definitely pave way for greater diversity in have a higher proportion of women in top of potential women directors for their board.” other parts of the organisation, said Anne management perform better than their The new government policy which Abraham, the Chief Executive Officer of industry peers. allows for top executives in government- LeadWomen Sdn Bhd and co-founder of In the UK, the Club has achieved linked companies (GLCs) to serve on the 30% Club Malaysia. 26.1 percent women representation on the boards of other listed companies, She however pointed out that gender FTSE-100 boards in October 2015, against will also increase the number of women diversity in Corporate Malaysia cannot solely the goal of 30 percent by end-2015. With executives with boardroom experience. be a government-driven agenda because, many CEOs of top FTSE companies among The government has urged all listed firms without the involvement of the corporate their members, the Club has grown as an to adopt similar policy. sector, there would not be much traction. international movement. A future move in this direction would From 2008 to 2014, women Former Chief Executive Officer of be the Bursa Malaysia requirement for representation in senior roles in companies Malaysian Directors Academy (MINDA) and listed companies to not only disclose the grew just by 2.7 percent, to tip the scale at a Co-founder of the 30% Club Malaysia Dato' composition and diversity of their boards mere 10.7 percent in 2015 despite vigorous Aziz Bakar said that the journey to change and top management in terms of gender, campaigns by the government. For the top mindsets in corporate sector is a long and ethnicity and age but also to state their 100 public listed companies by market at times, frustrating journey. target and timeframes to achieve it. capitalisation, the percentage of women “There are a large number of The target by 31 December 2016 is to company boards grew from 13 .2 percent corporations that are still very ‘old school’ ensure that Malaysia achieves 30 percent in 2014 to 14 percent in 2015. in thinking, where board members tend women representation on the Top 100 She added that the Kuala Lumpur to regard the boardroom as the boys-only companies, in order for Malaysia to be fairly Chapter of the 30% Club launched in May club. This is despite the growing body benchmarked with the other countries.

264 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 MOVING FORWARD

n developing a Malaysian With regards to leveraging women workforce that is capable of talent in the workforce, a cohesive, I coping with the demands of a overall action plan for childcare to high-income economy, moving into increase enrolment and quality of 2016, operational aspects which need provision will be developed while addressing include improving labour engagement sessions will be organised market information, sustaining the through townhalls with various parties; development of policies and initiatives chambers of commerce, developers to enhance TVET as well as to leverage association, association of architects, women talent in the workforce. local councils. For the Labour Market Information Strategic initiatives will also and Data Warehouse project, ILMIA continue, working towards increasing will continue to enjoy commitment women in key decision making across ministries to enable it to positions, by 30% Club Malaysia, NIEW continue its on-going analysis, for and TalentCorp. inputs into research, policy making The capabilities and skills of and programme development. Malaysians is a key determinant of In transforming TVET, the our economic success. With the right government is constantly looking policies in place, human capital is for opportunities to engage and a resource that can be effectively encourage employers to be more leveraged to bring dividends not just involved in dual vocational training. for the workforce but for the economy Awareness campaigns will continue as a whole. The HCD-SRI will continue to be carried out to promote and to steadfastly work towards creating provide more information to parents a world-class workforce in meeting and prospective students. demands of a high-income economy.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 265 EXPENDITURE BUDGET 2015

EXPENDITURE BUDGET 2015

he GTP’s performance and expenditure budget is presented here in the interests of transparency and accountability. Priding itself on emphasising T cost-effectiveness where possible, the GTP sets itself apart from other projects, and thus allows for greater savings in areas where possible so long as it does not impede the achievements of the NKPIs. Meanwhile, budget expenditure is not reported for the Economic Transformation Programme (ETP) as the ETP is private-sector driven and contains market sensitive data. NKRA 2015 OE* SPENDING

GOVERNMENT TRANSFORMATION PROGRAMME (GTP)

KPI Achievement Total Carry Forward No NKRA Total 2015 OE Total Spent (RM) % Spent (%) (Previous Years) (RM)

1 Addressing the Cost of Living 98 15,000,000 - 15,000,000 100

2 Improving Rural Development 107 6,232,000 - 6,217,466 100

Raising Living Standards of 3 97 154,666,600 - 154,326,829 100 Low-Income Households

4 Assuring Quality Education 94 163,067,900 - 150,932,998 93

5 Reducing Crime 114 114,099,102 - 112,076,154 98

6 Fighting Corruption 93 2,644,890 - 2,542,026 96

Total 438,065,602 423,553,448

*OE refers to Operating Expenditure NKRA 2015 DE* SPENDING

GOVERNMENT TRANSFORMATION PROGRAMME (GTP)

KPI Achievement Total Carry Forward No NKRA Total 2015 DE Total Spent (RM) % Spent (%) (Previous Years) (RM)

1 Improving Rural Development 107 2,247,692,900 - 2,154,638,309 96

Improving Urban Public 2 72 46,010,290 - 46,010,290 100 Transportation

3 Reducing Crime 114 40,000,000 69,083,600 10,000,000 25

Total 2,333,703,190 69,083,600 2,210,648,599

*DE refers to Development Expenditure

266 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 AGREED UPON PROCEDURES BY PwC

hat is the value that Agreed-Upon Procedures Where exceptions are noted, how does PwC (AUP) bring to the National Transformation address this? W Programme (NTP)? In the event there are exceptions, PWC will highlight External validation is key to effectively evaluate the to PEMANDU these exceptions/issues in a weekly efficacy of the NTP. Towards this end, it was important coordination meeting. Based on data and explanation that an independent professional services firm were provided by the Ministries, the results are re-evaluated to be appointed to meet this purpose. From the onset and adjusted, where appropriate, prior to inclusion in of the NTP, PricewaterhouseCoopers Malaysia (PwC) the Annual Report. conducted yearly AUP exercises on the NTP reporting process. These are a set of specific tests and procedures performed on the reported results of each National Does the Agreed-Upon Procedure process have Key Result Area (NKRA), National Key Economic Area room for improvement? What are the steps being taken (NKEA) and Strategic Reform Initiatives (SRI) against forward to improve the process? National Key Performance Indicators (NKPIs). In striving towards improving processes and the quality of information, PwC has identified various How does the AUP method of evaluation strive opportunities to achieve this objective. The AUP process to ensure greater transparency and accuracy in the is constantly being reiterated. PEMANDU, together with reporting process of the NTP ? the relevant Ministries and private sector stakeholders, will be taking positive prescriptive actions to realise these In endeavouring to make the scoring system improvements over the next 12 months. as transparent as possible, the appointment of an independent third party ensures greater consistency and accuracy in methods of data collection and calculations How is market-sensitive data reported? reported in the Annual Report. The AUP is applied to a sample taken from each KPI as well as projects announced Exceptions are made where targets feature market- during the Progress Updates. It is then checked against sensitive data to maintain confidentiality for the parties guidelines and formulae developed in the initial involved. In such instances, involved parties will be PEMANDU lab sessions. Where exceptions are noted by required to sign Non-Disclosure Agreements which PwC, the processes and sources of data are re-evaluated then enable the data to be used for analysis without prior to their incorporation in the Annual Report. compromising on confidentiality.

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 267 NTP PERFORMANCE 2015

NTP PERFORMANCE 2015

ll three methods have been formulated to provide a pragmatic representation of the actual KPI numbers in percentages. The overall NKRA/NKEA/SRI A composite scoring is the average of all scores.

Scoring Method Description Method 1 Scoring is calculated by a simple comparison against set 2015 targets. Scoring is calculated by dividing actual results against set 2015 targets with an added rule: Method 2 • If the scoring is less than 100%, score #2 is taken as the actual percentage • If the scoring is equal or more than 100%, score #2 is taken as 100% Scoring is calculated by dividing actual results against set 2015 targets with an added rule: • If the scoring is equal and less than 50%, score #3 is indicated as 0 Method 3 • If the scoring is more than 50% and less than 100%, score #3 is indicated as 0.5 • If the scoring is equal or more than 100%, score #3 is indicated as 1

Methods 1 and 2 Methods 3

Achievement Traffic Lights Achievement Scoring Traffic Lights 90% and above 100% and above 1 51% – 89% 51% – 99% 0.5 50% and less 50% and less 0

268 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 Key Performance Indicators

NATIONAL KEY RESULT AREAS (NKRAS)

NKRA — ADDRESSING THE RISING COST OF LIVING

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1 Setup of new KR1M 25 24 96 96 0.5

2 Handout of Back to School Incentive 100% 99.3% 99 99 0.5

3 Handout of BB1M 100% 100% 100 100 1.0

Direct handout to the Rakyat (BR1M) i. RM950 for eligible household recipients with total earnings less than RM3,000 per month + Family Bereavement Scheme; 4 ii. RM750 for eligible household recipients with total earnings between 100% 98.3% 98 98 0.5 RM3,000 and RM4,000 per month + Family Bereavement Scheme; and iii. RM350 for eligible single Individuals recipients aged below 21 years old with income less than RM2,000 per month

5 Number of new 1Malaysia Clinics providing services 34 27 79 79 0.5

TOTAL 98% 98% 63%

NKRA — IMPROVING RURAL DEVELOPMENT

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1.1 Roads Delivery (km length) 697 732.22 105 100 1.0

Peninsular Malaysia 303 313.67 104 100 1.0

Sabah 198 214.85 109 100 1.0

Sarawak 196 203.7 104 100 1.0

1.2 Water Delivery: Number of Households 7,500 9,399 125 100 1.0

Peninsular Malaysia 2,500 2,536 101 100 1.0

Sabah 2,500 4,150 166 100 1.0

Sarawak 2,500 2,713 109 100 1.0

1.3 Electricity Delivery: Number of Households 13,319 14,430 108 100 1.0

Peninsular Malaysia 1,235 1,243 101 100 1.0

Sabah 3,584 3,605 101 100 1.0

Sarawak 8,500 9,582 113 100 1.0

1.4 Housing: Number of Houses 8,500 9,080 107 100 1.0

Peninsular Malaysia 4,244 4,372 103 100 1.0

Sabah 1,309 1,733 132 100 1.0

Sarawak 2,947 2,975 101 100 1.0

(More on next page)

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 269 NTP PERFORMANCE 2015

(From previous page)

NKRA — IMPROVING RURAL DEVELOPMENT (Continued)

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1.5 Road Maintenance (km length) 313 322.5 103 100 1.0

Peninsular Malaysia 213 222.5 104 100 1.0

Sabah 50 50 100 100 1.0

Sarawak 50 50 100 100 1.0

2.0 Rural Development : 21st Century Village

2.1 AGRI EPP7: Large Scale Premium Fruits or Vegetable Farm - Number of Farms 2 2 100 100 1.0

2.2 Desa Lestari Programme: Number of Villages 13 13 100 100 1.0

2.3 Percentage of 2013 Rural Business Challenge winners achieving 30% increase of income 80% 85% 106 100 1.0

TOTAL 107% 100% 100%

NKRA — IMPROVING URBAN PUBLIC TRANSPORT

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1 Number of KL Budget Taxi Fleet - at par with ASEAN Best-in-Class 3,749 1,895 51 51 0.5

2 KL Monorail Expansion Project: Number of 4 car train sets delivered and commissioned 12 5 42 42 0.0

3 Bus Rapid Transit Corridor 1 (KL - Klang) project: Cabinet approval on funding model 100% 90% 90 90 0.5

4 Percentage of completion on the streamlining of Klang Valley Stage Bus Network according to Corridors 100% 100% 100 100 1.0

5 Percentage completion of design for the KTMB Ticketing System (AFC) 100% 54.9% 55 55 0.5

6 ITT Gombak project: Finalisation of the Supplementary Agreement (based on the latest decision) 100% 100% 100 100 1.0

7 Urban Public Transport Customer Satisfaction Level (GKL/KV) 75% 74% 99 99 0.5

8 AM Peak Urban Public Transport Ridership (GKL/KV) 500,000 447,195 89 89 0.5

9 KTM Komuter On-time Performance during AM Peak (within 10 minutes) 85% 95.14% 112 100 1.0

10 Number of additional parking bays at Klang Valley rail network 1,600 229 14 14 0.0

11 LRT Extension (Kelana Jaya): Construction progress 98% 93.57% 95 95 0.5

12 LRT Extension (Ampang): Construction progress 98% 91.24% 93 93 0.5

13 Number of Budget Taxis installed with Centralized Taxi Service System (TEKS1M) 1,500 0 0 0 0.0

Parkway Dropzone Facilities: i. Kg Dato' Harun: Project complete and facilities operational 14 100% 78.49% 78 78 0.5 ii. Serdang: LOA issued and site possession iii. Batu Tiga: LOA issued and site possession

15 KTMB Semi - Overhaul EMU Class 83 project 40% 15% 38 38 0.0

16 Percentage completion of the Journey Planner platform 100% 70% 70 70 0.5

Operationalisation of the Performance Monitoring Hub System (PMHS) for all Stage Buses in GKL/ 17 100% 83.2% 83 83 0.5 KV by SPAD

18 Utilisation of Stage Bus in GKL/KV 70% 75.25% 108 100 1.0

TOTAL 72% 71% 50%

270 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 NKRA — RAISING LIVING STANDARDS OF LOW-INCOME HOUSEHOLDS

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1.0 Number of new participants participate in 1AZAM programme 18,500 19,945 108 100 1.0

2.0 Number of new existing AZAM participants increased their income by RM300 for any 3 months 22,387 18,880 84 84 0.5

3.0 Number of 1AZAM participants in Financial Literacy Programme 18,500 13,960 75 75 0.5

4.0 Number of 1AZAM projects in colloboration with NGO and Corporate Sector 28 37 132 100 1.0

5.0 Number of 1AZAM community / group based programme 60 65 108 100 1.0

Beyond 1AZAM participants obtained minimum 50% increased in income from existing AZAM 6.0 2,100 1,511 72 72 0.5 project for a consecutive of 3 months

7.0 Percentage of updates recorded in eKasih 100 100 100 100 1.0

TOTAL 97% 90% 79%

NKRA — ASSURING QUALITY EDUCATION

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1 Nationwide pre-school enrolment, including NGO (4+ and 5+ years only) 88% 84.63% 96 96 0.5

2 English literacy rate among Year 3 students 90% 94.1% 105 100 1.0

3 Percentage of Band 1 & 2 schools 35% 36.83% 105 100 1.0

4 Percentage of Band 6 & 7 schools 1.2% 0.95% 126 100 1.0

5 Number of High Performing Schools 130 132 102 100 1.0

6 Numeracy rate 100% 99.1% 99 99 0.5

7 Bahasa Melayu literacy rate 100% 98.6% 99 99 0.5

8 Percentage of primary school head masters receiving New Deals 5% 3.42% 68 68 0.5

9 Percentage of secondary school principals receiving New Deals 5% 4.22% 84 84 0.5

10 New English teacher trainees achieved A or A+ SPM in English before entering IPG 100% 100% 100 100 1.0

11 Percentage of PPD assessed to obtain baseline rating 100% 100% 100 100 1.0

12 IPG Strategic Plan is developed by December 2015 100% 100% 100 100 1.0

i. Percentage of teachers starting with B1 entry level proficiency increase by at least one band higher 13 100% 93.46% 93 93 0.5 ii. Percentage of teachers starting with B2 entry level proficiency increase by at least one band higher

Percentage progress of development of database of 13-17 year old enrolment 14 100% 100% 100 100 1.0 in Technical Vocational Education and Traning (TVET) across all agencies

15 New English teachers from IPG, IPTA and IPTS achieved C1 based on CEFR before posting 100% 66.2% 66 66 0.5

16 National childcare enrolment rate (0-4) 12.5% 8.02% 64 64 0.5

TOTAL 94% 92% 75%

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 271 NTP PERFORMANCE 2015

NKRA — REDUCING CRIME

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1 Percentage reduction in Reported Index Crime 5% 10.1% 202 100 1.0

2 Percentage reduciton in Reported House Break Ins 10% 6.3% 63 63 0.5

3 Percentage reduction in Reported Street Crime 15% 16.9% 113 100 1.0

4 Percentage development of Crime Perception Indicator 100% 100% 100 100 1.0

5 Number of PDRM Mobile Patrol Vehicles (MPVs) that are beyond lifespan to be replaced 25% 33.9% 136 100 1.0

Percentage of Orang Kena Pengawasan (OKP) who attended treatment programme in the 6 57% 36.7% 64 64 0.5 community to maintain recovery for a year

Upskilling of Inmates: 7 i. Number of inmates undergoing certified skill training 100% 117.1% 117 100 1.0 ii. Percentage completion of a training facility for prisoners to learn new skills

TOTAL 114% 90% 86%

NKRA — FIGHTING CORRUPTION

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

3 Transparency International (TI) - Corruption Perception Index (CPI) score 55% 50% 91 91 0.5

4 Percentage of disposal of corruption cases within 1 year upon registration 85% 84.5% 99 99 0.5

5 Percentage of conviction rate for corruption cases 85% 77% 91 91 0.5

6 Tabling of AuG Report in every Parliament Session 100% 100% 100 100 1.0

Percentage of resolution of cases highlighted in AuG Report Series 1-3 2013 successfully dealt with 7 85% 80.6% 95 95 0.5 within 1 year after being tabled in Parliament

8 Percentage completion on insertion of corporate liability provision in MACC Act 100% 60% 60 60 0.5

9 Number of Corporate Integrity Pledge (CIP) signatories implementing prevention measures 40 41 103 100 1.0

Percentage of results of direct negotiation contracts published online, excluding Strategic and 10 100% 100% 100 100 1.0 Security contracts

11 Percentage of Public Private Partnership (PPP) projects to sign Integrity Pact 100% 100% 100 100 1.0

TOTAL 93% 93% 72%

272 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 NKRA — PUBLIC SERVICE DELIVERY TRANSFORMATION

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

PSDT Index i. Number of participating ministries 1.1 100% 155% 155 100 1.0 ii. Number of projects mobilised iii. Number of projects closed in the reporting year

1.2 Number of Knowledge Transfer Programme (KTP) pilot projects 2 2 100 100 1.0

Roll out of the new maintenance model to main roads and protocol roads: Percentage of road maintenance conducted within: 2.1 i. Below 3m2: 12 hours 100% 100% 100 100 1.0 ii. Above 3m2: 2 days iii. Maintenance team to inspect sites for road repairs in 18 hours

2.2 Percentage of reduction on breakdown hours for lifts 60% 60% 100 100 1.0

3.1 Percentage implementation of new JobsMalaysia portal 100% 51.2% 51 51 0.5

TPC-Oral and Healthcare Clinical Information System (OHCIS) Development: Showcase VER 1.0 4.1 100% 100% 100 100 1.0 at one OHCIS clinic (showcase basic dental application features)

Percentage of rework cases on targeted recipients 5.1 50% 86% 172 100 1.0 for PBR upon endorsed by Focus Group Committee

6.1 Number of additional MOH Hospitals implementing LEAN Healthcare - reducing waiting time 10 16 160 100 1.0

TOTAL 120% 93% 93%

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 273 NTP PERFORMANCE 2015

NATIONAL KEY ECONOMIC AREAS (NKEAS)

NKEA — GREATER KUALA LUMPUR/KLANG VALLEY

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Number of Letter of Intent (LOI) or equivalent Incentive Offer concluded for MNCs to set up Regional Headquarters/Regional Headquarters/Regional Hub 10 10 100 100 1.0 EPP1: Attracting activity in GKL 100 of the world's 1 most dynamic Number of new jobs created 400 560 140 100 1.0 firms within priority sectors Amount spent by MNCs in 2015 (RM mil) 360 588.59 164 100 1.0

Realised Jobs for 2015 1,000 1,313 131 100 1.0

Number of approved application under Returning Expert Program 800 616 77 77 0.5 EPP2: Attracting Percentage of issuance of Employment Pass Process within 5 working days 70% 71.5% 102 100 1.0 the right mix 2 of internal and New JPA scholars under STAR Program 2,000 1,019 51 51 0.5 external talent Number of approved application under Residence Pass-Talent Program 1,000 1,113 111 100 1.0

EPP3: Connecting Completion of SPAD’s draft bilateral agreement between MY and SG 100% 50% 50 50 0 KL to Singapore via 3 a High Speed Rail Percentage completion of approval for MY portion of alignment 100% 60% 60 60 0.5 system

Percentage of Tunnels and Station Trackway handed over to System Works 80% 100% 125 100 1.0 Contractor (SWC)

Percentage of structural completion of 12 stations for Phase 1 (Sg. Buloh - 100% 100% 100 100 1.0 Semantan) EPP4: Mass 4 Rapid Transit Percentage of track laid for Phase 1 (Sg. Buloh - Semantan) 100% 100% 100 100 1.0

Number of trains delivered and tested at Sg Buloh Depot 15 24 160 100 1.0

Accident Frequency Rate 2 1.18 100 100 1.0

Percentage of implementation of Bunus STP 5% 7.53% 151 100 1.0 to achieve 5% construction progress5 Percentage of implementation of Jinjang-Kepong STP to achieve 3% 100% 100% 100 100 1.0 construction progress

Percentage reduction of rubbish collected at SMART 80% 104.3% 130 100 1.0 ( L1 & L2) log booms as compared to 2010 result (0%)

Water quality results from 3 selected water quality monitoring stations meet EPP5: Revitalising WQI ≥ 60 (Class III) the Klang River i. Sungai Gombak (Stn. Tun Razak) 100% 104.75% 105 100 1.0 5 into a heritage and ii. Sungai Klang (Stn. IFFRM - DUKE) commercial centre iii. Sungai Klang (Stn. Dang Wangi) for Greater KL/KV Water quality results from 5 selected River Water Treatment Plant meet > 76.5 (Class II) a. RWTP Sg. Gisir b. RWTP Sg. Kemensah 100% 100% 100 100 1.0 c. RWTP Sg. Klang d. RWTP Sg. Belongkong **Drop RWTP Sg.Sering

Percentage construction progress for River Beautification works (Phase 1) 50% 36.5% 73 73 0.5 and interceptor system at Precinct 7

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274 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 (From previous page)

NKEA — GREATER KUALA LUMPUR/KLANG VALLEY (Continued)

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Compliance of wastewater discharge quality from all completed Waste Water Treatment Plant (WWTP) to Water Quality Index ≥ 76.5 (Class II) i. Pasar Harian Selayang 100% 100% 100 100 1.0 ii. Pasar Jln Kelang Lama EPP5: Revitalising iii. Pasar Air Panas the Klang River iv. Pasar Sentul Pasar into a heritage and 5 Completion of Waste Water Treatment Plant (WWTP) construction in Pasar commercial centre 100% 100% 100 100 1.0 for Greater KL/KV Borong Kuala Lumpur (continued) Percentage of effluent from all 101 communal grease traps installed to 100% 93% 93 93% 0.5 comply with the National Water Quality Standards (fat, oil and grease)

Percentage completion of Policy Framework arising from the Market & Feasibility 100% 100% 100 100 1.0 Study of Freezed Government Land along River Beautification Corridor

Greening Greater Number trees tagged under Global Positioning Index (GPI) 30,000 35,043 117 100 1.0 KL to ensure 6 residents enjoy sufficient green Number of trees sponsored 2,500 2,219 89 89 0.5 space

Heritage Trail 5: Percentage completion of the project 45% 45% 100 100 1.0 EPP7: Creating 7 iconic places and Countdown Clock 100% 87% 87 87 0.5 attractions Heritage Trail 3: Number of suitable retail operators changed 2 7 350 100 1.0

EPP8: Creating a comprehensive Percentage completion of the outcome evaluation report for walkways 8 100% 100% 100 100 1.0 pedestrian constructed between 2011 - 2014 network

Percentage completion of detailed Designing of Leachate Treatment System 100% 90% 90 90 0.5 in Taman Beringin

EPP9: Solid Waste Increase the recycling rate :Percentage completion of regulation 9 100% 70% 70 70 0.5 Management on separation at source to be amended by August

Percentage completion of Gazettement of regulation on Construction 100% 88% 88 88 0.5 & Demolition Plant to AG

Langat sewage treatment plant and network 100% 100% 100 100 1.0

Percentage of construction of Pipe Network in Petaling Jaya Utara (Package D47) 65% 72.2% 136 100 1.0

BO BO#3: Sewerage Percentage of construction of Pipe Network in Kajang 1 & 3 (Package D49) 12% 14.9% 124 100 1.0 #3 Non-River Percentage of construction of Pipe Network Lot 130 Klang (Package D55) 75% 86% 137 100 1.0

Regionalisation of Sewerage Tratment Plants (STP) 100% 99.98% 100 100 1.0 in Kajang 2: Percentage of construction progress

TOTAL 111% 93% 86%

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 275 NTP PERFORMANCE 2015

NKEA — OIL, GAS AND ENERGY

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Total production from marginal fields (oil and gas) (kboe/d) EPP2: Developing Small 2 Fields Through Innovative Production from marginal fields (oil) (kbd) Solutions *Information kept confidential at the request of involved Production from marginal fields (gas) (MMscfd) parties

EPP3: Intensifying 3 Number of new explored wells Exploration Activities

Committed Oil Storage Capacity (Mil m3)(cumulative target of 10 Mil m3) 0.83 1.25 151 100 1.0 EPP4: Building a Regional 4 Oil Storage & Trading Hub Number of oil trading companies based in Malaysia 6 6 100 100 1.0

EPP5: Unlocking Premium 5.1 Amendment of Gas Supply Act- Implementation of third party access 100% 97.5% 75 75 0.5 Gas Demand in Malaysia

Amount of committed investment by Oil & Gas Supplier and EPP6: Encouraging 1,500 1,231 82 82 0.5 Investments in the Oil and Services and Equipment companies (RM mil) 6 Gas Services Equipment Realised Investment by Oil & Gas Supplier and Services and 1,000 1,439 144 100 1.0 (OGSE) Industry Equipment companies (RM mil)

EPP7: Taking Local Oil and Number of first time bidders (companies) for international projects Gas Services Equipment 7 in new markets segments (includes new countries or new segments 15 22 147 100 1.0 (OGSE) Companies to the within the same country) Global Stage

EPP8: Attracting MNCs to Set Number of new MNCs bringing their global operations to Malaysia 8 Up Preparations in Malaysia or mergers/JVs with local Oil Gas Services and Equipments (OGSE) 6 11 183 100 1.0 and Partner with Local Firms companies

9 EPP9: Energy Efficiency Percentage of completion on gazettement of Euro5 specifications 100% 100% 100 100 1.0

EPP10: Building Up Additional amount of grid connected renewable energy power 10 400 332.76 83 83 0.5 Renewable Power Capacity plants installed capacity (MW)

EPP11: Deploying Nuclear Percentage progress in obtaining Cabinet decsion on Nuclear Power 11 100% 0% 0 0 0 Energy for Power Generation Infrastructure Development Plan

Percentage completion of MOU signed for implementing integrated 100% 100% 100 100 100 EPP13: Increase in refinery and petrochemical investor 13 Petrochemical Output Percentage completion of activities for 2015 in relation to relocation 100% 97.83% 98 98 0.5 and building of infrastructure

TOTAL 107% 89% 78%

276 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 NKEA — FINANCIAL SERVICES

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Launch of Islamic equity crowdfunding platform 100% 100% 100 100 1.0

Launch of equity crowdfunding platform 100% 100% 100 100 1.0 EPP1: Revitalising 1 Average Daily Value (ADV) - (RM Billion) 2 1.991 100 100 1.0 Malaysia's Equity Markets Increase in value of new listings. Target Market Capitalization (RM bil) 14 12.613 90 90 0.5

Number of new products and offerings 5 6 120 100 1.0

EPP3: Transforming or Percentage completion of Draft Bill to amend the Financial 3 Rationalising Development 100% 100% 100 100 1.0 Institutions Act 2002 of DFI

Conversion of Composite Insurance and Takaful Licences Under the EPP5: Insuring Most, if Not 5 Financial Services Act 2013 (FSA) and Islamic Financial Services 100% 100% 100 100 1.0 All, of Our Population Act 2013 (IFSA)

EPP6: Accelerating the Investor education and awareness program on Private Retirement 6 Growth of the Private 100% 111.7% 112 100 1.0 Scheme (PRS) Pension Industry

TOTAL 103% 99% 94%

NKEA — WHOLESALE AND RETAIL

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Number of new hypermarkets 6 6 100 100 1.0 EPP1: Increasing number 1 of large format stores Number of new superstores 5 9 180 100 1.0

EPP2: Modernising 2 via the Small Retailer Number of establishments modernized under the TUKAR programme 300 302 101 100 1.0 Transformation

EPP4: Transforming 4 automotive workshops Number of workshops modernized under the ATOM programme 180 188 104 100 1.0 (ATOM)

EPP5: Developing 5 Identify new Makan Bazaar site 1 1 100 100 1.0 makan bazaars

Number of virtual mall identified and operationalised in 2015 1 1 100 100 1.0 7 EPP7: Virtual Mall Number of sellers subscribed to the Virtual Mall 75 212 283 100 1.0

EPP9: Making Malaysia Increase of Cost, Insurance and Freight (CIF) for 9 7.32 11.88 162 100 1.0 duty free 328 selected imported finished products (RM bil)

EPP11: Organising unified 11 Number of sub-sectors involved in 1Malaysia Unified Sale 60 60 100 100 1.0 Malaysia sales

EPP13: Developing big 13 Percentage of development on Oasis Autocity 60% 77.79% 130 100 1.0 box boulevards

TOTAL 122% 100% 100%

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 277 NTP PERFORMANCE 2015

NKEA — PALM OIL AND RUBBER

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

8,550 Area of replanting and new planting approved for smallholders (ha) (capped 100 100 100 1.0 EPP1: Accelerate the 1 at 100%) replanting of oil palm Area of replanting and new planting implemented by smallholders (ha) 15,000 15,798 105 100 1.0

Total FFB sold to mills by all cooperatives by year end (MT) 26,800 39,330.38 147 100 1.0

Number of new cooperatives that commence selling of FFB to mills 5 5 100 100 1.0

New area of plantations/smallholders complying with COP/MSGAP/ 2 EPP2: Improving FFB Yield 250,000 486,775.38 195 100 1.0 RSPO/MSPO (ha)

National Average Yield (MT/ha/yr) 19.56 18.49 95 95 0.5

National FFB Production (million MT) 98 98.34 100 100 1.0

EPP3: Improving Workers' 3 Productivity in Plantations Number of ICOPM 2.0 entries 70 104 149 100 1.0 and Estates

Number of Palm Oil Mills certified by MPOB for Code of Practice 25 23 92 92 0.5 EPP4: Increasing the and other international certifications 4 Oil Extraction Rate Oil Extraction Rate (%) 21.05 20.46 97 97 0.5

Progress of biogas plant construction for 8 new mills (%) 100 112.5 113 100 1.0 EPP5: Developing Biogas 5 facilities at Palm Oil Mills Progress of 2 new mills with biogas plant connected to the grid (%) 100 250 250 100 1.0

EPP6: Developing Take up rate of the pre-commercialization and technology 6 100 74.309 74 74 0.5 Oleo-Derivatives acquisition funds (%)

EPP8: Expediting growth 8 of Food and Health-based Take up rate of funds for food and health-based products (%) 100 5.5 6 6 0.0 downstream

Rubber EPP1: Ensuring Area of replanting and new planting by rubber smallholders (ha) 44,641 45,921 103 100 1.0 9 sustainability of the upstream rubber industry Malaysian Export of Natural Rubber and Compound Rubber (mil mt) 1.3 1.0 77 77 0.5

Rubber EPP2: Increasing 10 world market share of latex Malaysian Export Revenue from Latex Products (RM bil) 13 14.5 112 100 1.0 gloves to 65%

Rubber EPP3: 11 Commercialising Ekoprena Sales of Ekoprena and Pureprena (mt) 700 646 92 92 0.5 and Pureprena

TOTAL 111% 91% 78%

278 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 NKEA — TOURISM

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

EPP1: Positioning Malaysia 1 as a duty free shopping Total tourist spend per arrival (RM per tourist) 1,016 842 83 83 0.5 destination for tourist goods

EPP2: Designating vibrant 2 shopping precincts in Retail revenue per sq ft (RM/sq ft) 1,650 1,522 92 92 0.5 Malaysia

EPP3: Establishing Premium Establishment of 2nd Outlet Center in Malaysia; Opening of Mitsui 3 100% 100% 100 100 1.0 Outlets in Malaysia Outlet Park KLIA Sepang

EPP4: Establishing Malaysia Number of visitors to MMBH Sites 625,000 755,399 121 100 1.0 4 as a Mega Biodiversity Hub Percentage completion of upgrading of Sepang Environmental (MMBH) 70% 70% 100 100 1.0 Interactive Centre (EIC)

Project TWO: Percentage completion of earthworks 50% 33.4% 67 67 0.5 EPP5: Developing 5 integrated resorts Melaka Gateway: Percentage completion of the Malaysia Eye 50% 54% 108 100 1.0

Number of cruise passengers at Malaysian ports 500,000 523,272 105 100 1.0 EPP6: Developing 6 Cruise Tourism Number of international cruise calls at Malaysian ports 404 487 121 100 1.0

EPP7: Targeting more Number of international attendees at International Events 7 95,000 67,400 71 71 0.5 international events supported by Malaysia Major Events, MyCEB

EPP8: Establishing 8 dedicated entertainment Number of approved designated entertainment & lifestyle premises 2 2 100 100 1.0 zones

EPP9A: Developing local expertise and better Number of therapists trained/undergoing training 250 255 102 100 1.0 9 regulating the spa industry EPP9B: Expanding sports Revenue generated from golf tourism (RM Mil) 320 319.3 100 100 1.0 tourism offering in Malaysia

EPP10: Establishing Malaysia as a leading 10 Number of delegate days for events secured/year by MyCEB 370,000 334,493 90 90 0.5 business tourism destination

EPP11: Enhancing Total weekly seats to identified priority countries 11 connectivity to priority 129,500 125,432 97 97 0.5 by all Malaysian carriers medium-haul markets

EPP12: Improving rates, 12 Number of new 4-star & 5-star hotel rooms 4,500 4,597 102 100 1.0 mix and quality of hotels

TOTAL 97% 94% 81%

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 279 NTP PERFORMANCE 2015

NKEA — ELECTRICAL AND ELECTRONICS

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Number of Advance Analytical Services provided by local 30 67 223 100 1.0 consultants to the industry

Number of trained engineers and students in Failure Analysis (FA) EPP1: Executing a smart 50 78 156 100 1.0 and Material Analysis follower strategy for mature 1 technology semiconductor Number of classroom trained engineers and students in Wafer Testing 50 75 150 100 1.0 fabrication plants Number of wafer testing services provided to local E&E companies 3 3 100 100 1.0

Number of projects utilizing Metrology Lab 15 15 100 100 1.0

EPP2: Developing assembly 2 and test using advanced Number of Advance Packaging companies in operation 3 5 167 100 1.0 packaging technology

EPP3: Developing Number of jobs created from new Integrated Circuit (IC) design firms 40 13 33 33 0.0 3 Integrated Circuit Number of companies involved in Green Motion Controller (GMC) Design Firms 2 3 150 100 1.0 chip in pre-commercialization validation and qualification

EPP4: Supporting the growth 4 of substrate manufacturers Number of wafer substrate manufacturers in operation 2 2 100 100 1.0 and related industries

EPP6: Growing wafer Additional MW local solar wafer and cell production 6 30 500 200* 100 1.0 and cell producers in Northern Corridor

EPP7: Increasing solar 7 Additional MW solar module production in Northern Corridor 100 500 200* 100 1.0 module producers

EPP8: Developing LED Number of high impact project approved for material substrate 7 1 1 100 100 1.0 front-end operations supplier or epitaxy manufacturer

Total annual sales of local LED companies under SMECorp capacity EPP10: Creating local 110 116.98 106 100 1.0 building program (RM mil) 10 Solid State Lighting (SSL) champions Number of new LED products internationally certified 30 35 117 100 1.0

Number of new products to enhance Test & Mesurement local ecosystem 10 10 100 100 1.0

Number of new Test & Measurement collaborations between local 5 5 100 100 1.0 EPP11: Building a test companies and MNCs 11 and measurement hub No. products tested utilising QAV test centre (both Penang 48 43 90 90 0.5 & Selangor)

Number of countries that QAV penetrates in international market 5 4 80 80 0.5

EPP12: Expanding wireless Number of projects on Wireless Sensor Network (WSN) 12 3 3 100 100 1.0 communication and RFID commercialised in the market

Number of high impact project in operation for Automation Equipment 1 1 100 100 1.0

Number of additional appointment of local Machinery & Equipment EPP13: Growing automation 5 6 120 100 1.0 13 automation companies by AMD equipment manufacturing Number of new automation projects undertaken by SMEs in system design, prototyping, proof-of-concept and system customisation at 30 29 97 97 0.5 National Instruments Academy and Innovation Nucleus (NI-AIN)

EPP14: Building T&D manufacturer accepting MIDA's offer as 14 transmission and 1 1 100 100 1.0 to start the manufacturing the T&D equipment distribution companies

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* Achievement is capped at 200%. JinkoSolar set up its first overseas solar cell and solar module fab in Penang in May 2015. This facility provided the company with an additional capacity of 500MW for solar PV cells and 450MW for modules, which significantly exceeded target

280 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 (From previous page)

NKEA — ELECTRICAL AND ELECTRONICS (Continued)

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

EPP15: Building a home appliance manufacturing Total annual sales of Pensonic being the main local home appliance 15 380 385.50 101 100 1.0 hub and international company (RM mil) distribution network

EPP16: Development of Number of high impact projects approved for Balance of Systems 16 Balance of Systems for 1 1 100 100 1.0 for Solar PV industry Photovoltaic

Number of new embedded systems projects approved under 4 4 100 100 1.0 EPP17: Growing Embeded the Digital Malaysia Embedded Systems Funding Programme 17 Systems Industry Number of new ecosystem partners appointed to grow 2 2 100 100 1.0 the embedded systems industry under Digital Malaysia

Percentage completion the prototyping of Li-ion battery for electric EPP18: Enabling Electric 100 100 100 100 1.0 and hybrid vehicles 18 Vehicle Component Manufacturing Percentage completion the prototyping of EV bus 100 100 100 100 1.0

Percentage of pre-commercialisation of Cu-CNT nanocomposite 100 100 100 100 1.0 EPP20: Enabling for thermal management in LED industry 20 Nanotechnology Number of companies undertaking commercial prototypes for E&E Industry (Lithium Battery & Conductive Inks) under National Graphene 2 2 100 100 1.0 Action Plan 2020 (NGAP2020)

Total number of new quality NKEA E&E projects approved by MIDA 11 11 100 100 1.0

Percentage realised investment of E&E sector projects since 2011 till 2014 65% 78% 120 100 1.0

Total approved investment for E&E sector (RM bil) 6.0 8.9 148 100 1.0 EPP1-20: Cross 1-20 cutting enablers Number of R&D projects collaborated with academia and private 20 16 80 80 0.5 sector where CREST grants approved

Number of Eco Design applications undertaken by companies/ organizations utilising Eco Industrial Design Centre (EIDC) 20 24 120 100 1.0 shared facilities

TOTAL 116% 97% 91%

NKEA — BUSINESS SERVICES

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

EPP1: Growing aviation 1 maintenance, repair and Revenue from MRO services (RM Mil) 6,050 3,531 58 58 0.5 overhaul services

Overseas sales revenue (RM mil) 2,318 2,506 108 100 1.0 EPP2: Building globally- 2 Number of new jobs created 13,200 16,370 124 100 1.0 competitive outsourcers Public Sector Data Centre Outsourced - Number of agencies 10 25 250 100 1.0

Percentage completion of site readiness for implementation 100% 100% 100 100 1.0 EPP3: Making Malaysia a of Iskandar Data Nexus Hub 3 Global Data Center Hub Total DC services revenue (RM mil) 915 831 91 91 0.5

Revenue generated from green technology subsectors e.g. Energy/ EPP4: Jump-starting a 3,500 3,801 109 100 1.0 Building/Transport/Waste/Water/Services (RM mil) 4 vibrant green technology industry New investment realised (RM mil) 2,500 2,540 102 100 1.0

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NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 281 NTP PERFORMANCE 2015

(From previous page)

NKEA — BUSINESS SERVICES (Continued)

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Number of newly appointed engineers 280 196 70 70 0.5 EPP5: Growing Large Pure- 5 Investment from pure play engineering services companies (RM mil) 37 12.35 33 33 0.0 Play Engineering Services Revenue from pure play engineering services companies (RM mil) 80 66.29 83 83 0.5

Number of jobs created 350 1,053 301 100 1.0

EPP7: Making Malaysia The Total Revenue (RM Mil) 550 588.9 107 100 1.0 Hub For Aerospace OEMs In 7 South East Asia Leveraging Additional Investments from spin-off companies (RM Mil) 580 353 61 61 0.5 On ‘Asia Aerospace City’ Number of SMEs completed assessment and identification 5 5 100 100 1.0 of scope for purpose of certification of AS9100 or NADCAP

EPP6: Growing Shipbuilding 6 Number of jobs created 620 245 40 40 0.0 and Ship repair services

TOTAL 109% 84% 72%

NKEA — COMMUNICATIONS CONTENT AND INFRASTRUCTURE

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Revenue of export from Creative Content (RM mil) 600 890.31 148 100 1.0 1 EPP1: My Creative Content Total estimated production spending under the "Film in Malaysia 400 457 114 100 1.0 Incentive" (RM mil)

Number of schools with internet connection speeds 4 EPP4: e-Learning 6,690 6,695 100 100 1.0 of 4Mbps-10Mbps

Number of government health facilities implementing 5 EPP5: e-Healthcare 200 409 205 100 1.0 e-Healthcare Applications

Number of Agencies On-Board Digital Document Management 18 31 172 100 1.0 EPP6: Deepening System (DDMS) 6 e-Government Percentage of increase in number of online transactions 10% 7.28% 73 73 0.5 at Ministries and selected agencies

Number of ports providing high speed broadband 55,000 88,588 161 100 1.0 in sub-urban areas (SUBB)

7 EPP7: Broadband For All Percentage of access (coverage) to LTE wireless broadband 58% 53.5% 92 92 0.5

Number of ports providing high speed broadband with speed 76,000 106,854 141 100 1.0 up to 100Mbps in capital cities and major towns

8 EPP8: Extending Reach Number of Program Sites Commissioned 950 983 103 100 1.0

Percentage of implementation of submarine cables (linking Sabah, 45% 35% 67 67 0.5 Sarawak, and Peninsular Malaysia) rollout 10 EPP10: Regional Network Percentage completion of Implementation of new international 50% 50% 100 100 1.0 submarine cable

TOTAL 123% 94% 88%

282 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 NKEA — EDUCATION

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Private pre-school enrolment, including NGO (4+ and 5+ years only) 454,177 426,246 94 94 0.5 EPP1: Scaling up early child 1 care and education centres Private childcare enrolment rate (0-4 years) 9.4% 6.07% 65 65 0.5

Scaling up private skills training provision 38,000 39,153 103 100 1.0

Number of students trained in industry based approach 6,500 8,451 130 100 1.0 EPP5: Scaling up private 5 skills training provision Number of new TVET students studying in Malaysia 1,200 2,539 212 100 1.0

Percentage of graduates with competencies of Level 3,4,5 SKM 35% 41.3% 118 100 1.0

Number of students enrolled at HEIs in the Islamic finance 14,000 16,293 116 100 1.0 and business programme EPP7: Building an Islamic 7 finance and business i. Number of members registered under the International Council of Islamic Finance Educators (ICIFE) - 150 individuals education discipline cluster 100% 83% 83 83 0.5 & 10 institutions ii. Number of accredited programmes under ICIFE

Number of students enroled in private HEI EPP10: Building a in the hospitality and tourism programme: 10 hospitality and tourism 100% 100% 100 100 1.0 i. cluster discipline cluster ii. nationwide

EPP11: Launching 11 Number of students enrolled in EduCity@Iskandar 3,000 4,022 134 100 1.0 EduCity@Iskandar

EPP12: Championing Number of international student enrolled 125,000 140,420 112 100 1.0 12 Malaysia's international education brand Number of post-graduate international students enrolled in HEIs 30,000 26,538 88 88 0.5

EPP13: Introducing public Number of internship places filled under Structured 13 private partnerships in 15,000 17,967 120 100 1.0 Internship Programme education

EPP14: Building a games Number of students enrolled in private HEIs with games 14 500 458 92 92 0.5 development cluster cluster contact

Building an accounting cluster: EPP17: Building an i. Number of students enrolled in Sunway TES collaboration 17 100% 67% 67 67 0.5 accounting cluster with public HEIs programme ii. Number of new professionally qualified accounting graduates

TOTAL 109% 93% 80%

NKEA — AGRICULTURE

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Number of pre-clinical and clinical trials to be 10 10 100 100 1.0 EPP1: Unlocking value from Malaysia’s conducted for nutraceutical and cosmeceuticals 1 biodiversity through herbal products Total sale of herbal product (RM Million) 3.5 3.85 110 100 1.0

Total export of Edible Bird Nest product (MT) 200 262.79 131 100 1.0 EPP2: Expanding the production 2 of swiftlet nests Total number of newly registered of EBN Premises 3,000 1,344 45 45 0.0

EPP3: Venturing into commercial scale Total production of Seaweed under Cluster and 3 1,500 1,235.53 82 82 0.5 seaweed farming in Sabah Mini Estate (MT)

EPP4: Farming through integrated cage Total production of farmed fish by anchor 4 11,500 8,627.86 75 75 0.5 aquaculture systems companies (MT)

5 EPP5: Rearing cattle in oil palm estates Total cattle population in oil palm estates 42,500 43,741 103 100 1.0

EPP 6: Replicating integrated aquaculture 6 Total production of shrimps (MT) 35,000 31,670 90 90 0.5 model (iZAQs)

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NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 283 NTP PERFORMANCE 2015

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NKEA — AGRICULTURE (Continued)

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

EPP7: Upgrading capabilities to produce Total production from Taman Kekal Pengelularan 7 55,000 54,489.14 99 99 0.5 premium fruit and vegetables Makanan (TKPM) and anchor companies (MT)

Total sales of Anchor Companies (AC) and Small 200 294.7 147 100 1.0 EPP8: Strengthening the export capability and Medium Enterprice (SME) (RM mil) 8 of the processed food industry Number of new Small and Medium Enterprice 21 50 238 100 1.0 (SME) under Anchor Companies (AC)

Total tonnage of fragrant rice produced. (MT) 2,500 2,719.58 109 100 1.0 Introducing fragrant rice variety for non- 9 irrigated areas Total area planted (Ha) 1,000 1,027.46 103 100 1.0

Total production from amalgamated land (MT) 254,600 230,793 91 91 0.5

EPP10: Scaling up and strengthening paddy 10 Total land area amalgamated (Ha) 5,000 5,029 101 100 1.0 farming in Muda area Number of blocks on detailed design and 57 57 100 100 1.0 preparation of contract document of tertiary system

Total production from amalgamated land (MT) 83,570 103,603.971 124 100 1.0 EPP11: Scaling up and strengthening of 11 paddy farming in other irrigated areas Total land area amalgamated (Ha) 7,700 8,079.29 105 100 1.0

EPP13: Establishing dairy clusters in 13 Total fresh milk produced (Mil litre) 23 19 83 83 0.5 Malaysia

Total number of Outgrowers developed 100 100 100 100 1.0 EPP14: Establishing a leadership position 14 in regional breeding services Total seeds produced (MT) 150 94.769 63 63 0.5

17 EPP17: Developing pasar komuniti Total revenue generated from PAKAR (RM million) 75 76.608 102 100 1.0

TOTAL 104% 93% 80%

NKEA — HEALTHCARE

Target Actual Method Method Method No EPP KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

EPP2: Creating a supportive Number of new clinical trials 214 201 94 94 0.5 2 ecosystem to grow clinical research Number of clinical trials performed in MOH facilities 120 128 107 100 1.0

Percentage of offtake proposal processed within 87 working days as EPP3: Pursuing stipulated in SOP approved by MOF 100% 97.7% 98 98 0.5 3 pharmaceutical export (by processed means completion of price negotiations) opportunities Export growth of pharmaceutical products (RM mil) 641.244 627.80 98 98 0.5

EPP4: Reinvigorating Revenue generated from Healthcare Travellers (RM mil) 854 900.04 105 100 1.0 health travel through better 4 customer experience, proactive alliances and niche Revenue generated from Healthcare Tourists (RM mil) 516 574.18 111 100 1.0 marketing

Percentage of time taken to process complete submission received 80% 100% 125 100 1.0 7- in 2015 for establishment license within 30 working days EPP7-14: Medical device 14 Percentage completion of streamlining of data for medical device 100% 100% 100 100 1.0 export (RM million)

Private Aged Healthcare Facilities and Services Act: Submission of 15- EPP15-17: Senior Living the final draft of the Regulations by International Centers for Law 100% 70% 70 70 0.5 17 and Legal Studies (ICeLLS) to PEMANDU

TOTAL 101% 96% 78%

284 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 STRATEGIC REFORM INITIATIVES (SRIS)

SRI — COMPETITION, STANDARDS AND LIBERALISATION

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Number of fruit and vegetable farms certified under myGAP 750 692 92 92 0.5

1 Number of aquaculture farms certified under myGAP 106 105 99 99 0.5

Number of livestock farms/premises certified under myGAP 1,834 2,328 127 100 1.0

2 Number of new products under MyHIJAU Programme 1,100 1,439 131 100 1.0

3 Number of Food Production Establishments Certified for food safety assurance system (MeSTI) 1,078 1,152 107 100 1.0

4 Number of new certifications obtained by companies from Accredited Certification Bodies 1,000 1,052 105 100 1.0

TOTAL 110% 99% 83%

SRI — PUBLIC FINANCE REFORM

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1 Enhancement of tax administration and compliance - Direct Tax (LHDNM), RM mil 2,000 2,043 102 100 1.0

2 Enhancement of tax administration and compliance - Indirect Tax (RMCD), RM mil 150 222.03 148 100 1.0

3 Percentage of Implementation of Accrual Accounting Activities in 2015 100% 36.1% 36 36 0.0

TOTAL 95% 79% 67%

SRI — NARROWING DISPARITY

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

1 Total value of business opportunities created for Bumiputera companies (RM bil) 7.3 14.53 199 100 1.0

Achieve financing approval for Bumiputera companies at a minimum of 2.5 times against 2 2.5 3.07 100 100 1.0 respective government funds received

3 Increase in value of Bumiputera PLCs (RM bil) 2.5 1.5 60 60 0.5

TOTAL 120% 87% 83%

NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 285 NTP PERFORMANCE 2015

SRI — HUMAN CAPITAL DEVELOPMENT

Target Actual Method Method Method No KPI (FY) (YTD) 1 (%) 2 (%) 3 (%)

Percentage completion of identification of critical skills gap report 100% 95% 95 95 0.5

Number of new companies offering flexible work arrangements 20 20 100 100 1.0 1 GEMS & Upskilling 7,000 7,137 102 100 1.0

Number of women placed under Flexworklife.my 200 256 128 100 1.0

Percentage of women on board - Public Companies only 16% 15.6% 98 98 0.5

Number of new childcare centres registered under Jabatan Kebajikan Masyarakat (JKM): i. At the Workplace ii. Institutions 100% 119% 119 100 1.0 iii. Government iv. Registered Home Based v. Notification for at-home care below 4 children 2 Data collection system to be extended to all registered childcare centres 100% 89% 89 89 0.5

Percentage of women on public listed board (BURSA) 11.50% 10.7% 93 93 0.5

Number of additional women placements under Women Directors Programme 15 14 93 93 0.5

Number of trained childcare minders through Kursus Asuhan PERMATA or Kursus Asas Asuhan 800 1,254 157 100 1.0 (for home-based childcare)

Percentage completion of ILMIA Research and Publication on: i. HCD game changer for labour market transformation towards high income economy 100% 100% 100 100 1.0 ii. Sarawak Corridor Of Renewable Energy (SCORE) study

Percentage completion of Enhanced Content for ILMIA Portal and Dashboard : i. Upgrade of information and analysis in labour market to provide updated information 100% 100% 100 100 1.0 for policy formulation

Percentage completion of Enhancement of Labour Market Datawarehouse (LMIDW) and Dashboard: 100% 100% 100 100 1.0 i. Provide comprehensive labour market data and analysis

3 Number of participants in HR Capability Programme for SME 22,000 29,302 133 100 1.0

Customer Satisfaction with National Human Resource Centre Portal : i. Learning experience with NHRC Portal (navigational experience) 100% 106% 106 100 1.0 ii. Quality of the info provided by knowledge center is good

Number of employers inspected for Minimum Wages Statutory 34,100 41,009 120 100 1.0

Percentage completion of engagement sessions conducted with stakeholders and identification of areas of amendment (including policy changes and process improvement) of the Review of the Employment Act 100% 100% 100 100 1.0 1955 & Industrial Relations Act

Number of approved applications for certification of MyProCert 3,000 3,169 106 100 1.0 4 Industry-Academia Collaboration (IAC):Number of Talent developed and Faculty Members (FM) 5,550 6,723 121 100 1.0

TOTAL 108% 98% 87%

286 NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 (This page is intentionally left blank)

ACKNOWLEDGEMENT

The National Transformation Programme (NTP) is a bold push to create a courageous, confident and globally-relevant Malaysia.

Aimed at transforming various aspects of public service delivery and catalysing the economy to achieve sustainable and inclusive socio-economic development for Malaysians from all walks of life, the NTP is a colossal nation-building effort shouldered by many stakeholders from the public and private sectors.

The Government of Malaysia expresses our deepest appreciation and gratitude to participating civil servants, corporations, non-governmental organisations and all individuals who have graciously contributed time, effort and advice to the planning and execution of various initiatives under the programme since 2010. It is your immense support that continues to give meaning and fuel this endeavour.

2020 is a vision. The National Transformation Programme will drive us towards realising it. Set targets must continue to be met to enable and achieve our national ambition of attaining high- income and developed nation status by 2020.

Copyright © 2016

PERFORMANCE MANAGEMENT & DELIVERY UNIT (PEMANDU), PRIME MINISTER’S DEPARTMENT

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Disclaimer: While every reasonable care has been taken in preparing this document, PEMANDU cannot be held responsible for any inaccuracies. All information and specifications are current at the time of preparation and are subject to change as may be required. NATIONAL TRANSFORMATION PROGRAMME ANNUAL REPORT 2015 ISSN: 2180-0340 Printing 2016 ISSN: Edition, First Copyright © 2016 First www.pemandu.gov.my PERFORMANCE MANAGEMENT AND DELIVERY UNIT (PEMANDU) MANAGEMENT PERFORMANCE Building Putra Perdana Block, East Floor, Department, 3rd Prime Minister’s Malaysia 62502 Putrajaya, Centre, Administrative Government Federal Tel : +603 8872 7240 Fax : +603 8889 4428