III PILLAR Pursuing Balanced Regional Development III 12-2 Introduction Regional development aims to reduce imbalances through better spread of socioeconomic benefits among regions and across all states to promote equitable growth and increase the wellbeing of the rakyat. Despite efforts to reduce regional imbalances, disparities between and within states and region remain, while urban and rural divide persists. Hence, in the remaining Plan period, 2018-2020, efforts will be undertaken to reduce development gaps between urban and rural areas. Among others, the efforts will include increasing accessibility and connectivity as well as improving basic infrastructure and amenities to generate more economic activities in the less developed areas. Interstate collaboration will also be enhanced to spur economic growth, particularly in bordering areas within the region through better utilisation of resources. Major cities and growth centres in rural areas will be leveraged to accelerate economic growth towards balanced regional development. In addition to balance regional development within national boundaries, subregional cooperation with neighbouring countries will also be intensified through the ASEAN subregional cooperation1. The socioeconomic development of less developed areas will be accelerated along international boundaries. This cooperation will promote synergy by optimising the underlying complementarities and comparative advantages among neighbouring countries. 1 ASEAN subregional cooperation includes the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA), Malaysia-Thailand Committee on the Joint Development Strategy for Border Areas (JDS) and Malaysia-Singapore Joint Ministerial Committee for Iskandar Malaysia (JMCIM). Mid-Term Review of the Eleventh Malaysia Plan 12-2 Chapter 12: Pursuing Balanced Regional Development 12-3 New Priorities and Emphases, 2018-2020 Efforts in addressing regional imbalances will be intensified to narrow the socioeconomic development gap between regions and states to spur economic activities and uplift the wellbeing of the rakyat. In addressing regional imbalances, states are clustered based on geographical boundaries as follows: Perlis NORTHERN REGION SABAH REGION Kedah Pulau Pinang Kelantan Sabah Terengganu FT of Labuan Perak EASTERN REGION Pahang Selangor FT of Kuala Lumpur CENTRAL REGION FT of Putrajaya Negeri Sembilan Sarawak SARAWAK Melaka REGION Johor SOUTHERN REGION III 12-4 In achieving inclusive growth, measures will be undertaken to reduce development gaps between urban and rural areas. Therefore, the priority areas and strategies towards pursuing balanced regional development are as shown in Exhibit 12-1. Exhibit 12-1 Pursuing Balanced Regional Development PRIORITY Strengthening PRIORITY Bridging urban-rural PRIORITY Accelerating AREA A regional economic AREA B development gap AREA C development in development Sabah and Sarawak Strengthening Intensifying economic growth and streamlining Enhancing rural Strategy state and regional Strategy Strategy and development C1 development A1 infrastructure B1 planning planning Improving infrastructure Strategy for better Modernising and C2 connectivity Strategy diversifying the Strategy Improving urban- A2 B2 rural linkages economic base Expanding access to basic infrastructure, Strategy amenities and C3 Creating local services Promoting Strategy economic Strategy competitive cities A3 activities in rural B3 areas Increasing Strategy employment C4 opportunities Strategy Enhancing ASEAN A4 subregional Enhancing the cooperation development of Strategy customary land C5 12-5 Mid-Term Review of the Eleventh Malaysia Plan 12- Chapter 12: Pursuing Balanced Regional Development 17 1 16 2 15 3 14 4 13 SDG 5 11 12 6 11 7 10 8 9 17 1 16 2 15 3 6 Targets, 2020Strengthening regional14 4 economic development 13 SDG 5 10 12 6 11 7 cities 10 8 Selected 9 Regional 17 1 development 16 2 City 15 3 framework 14 4 13 SDG 5 9 12 6 17 1 11 7 Competitiveness 16 2 10 8 9 15 3 Master Plan Study 14 4 13 SDG 5 9 12 6 11 7 10 8 Integrated regional 9 17 1 1,000 16 2 development 15 3 14 4 13 SDG 5 framework study 7 12 6 300 11 7 10 8 17 1 9 16 2 4 Bridging urban-rural15 3 development gap 14 4 13 SDG 5 6 12 6 Upgraded towers 11 7 17 1 10 8 41,160 16 2 9 15 3 14 4 New towers 13 SDG 5 9 12 6 11 7 10 8 9 60,000 Telecommunicationareas nationwide towers in rural 3,000 Additional houses supplied with km electricity 1:0.67 Additional houses supplied with clean and treated water 225,600 Construction of 1 17 16 2 hectares paved roads 15 3 14 4 51,000 13 SDG 5 9 Urban-rural 12 6 11 7 hectares 17 1 16 2 10 8 9 income disparity Accelerating 15 development3 in Sabah and Sarawak ratio 14 4 Sarawak 13 SDG 5 9 12 6 400 11 7 10 8 9 17 1 Sabah 16 2 15 3 14 4 106 New Target 13 SDG 5 7 (NCR) land 12 6 Mapping of Native Customary Rights 11 7 10 8 9 % Upgraded towers Revised Target 99.0 New towers Original Target Telecommunication towers Coverage of electricity supply III 12-6 Priority Area A: Box 12-1 Socioeconomic Disparities among Regions Strengthening Regional Socioeconomic disparities among regions and states as shown in Economic Development Graph A continue to exist despite various efforts undertaken to Socioeconomic disparities among regions, as illustrated in Box narrow regional development gap. The uneven progress in Sabah, 12-1, will be addressed in the remaining Plan period to achieve Eastern and Northern regions was illustrated by the relatively balanced regional development for the benefit of the rakyat. In this low gross domestic product (GDP) per capita as compared to the regard, efforts will be intensified to accelerate economic growth national average of RM38,915 in 2016. Sabah region recorded and address inter- and intra-regional imbalances. Four strategies the lowest GDP per capita at RM22,098, the Eastern region identified to support this priority area are as follows: at RM23,392 and the Northern region at RM29,725 in 2016. Moreover, higher poverty incidences in the Sabah and Sarawak regions also illustrate the socioeconomic imbalances. Although the Strengthening and absolute poverty rate in Sabah fell significantly from 19.7% in 2009 streamlining state and to 2.9% in 2016, it was still higher than the national average of regional development STRATEGY 0.4%. At district level, there were even incidences of double-digit planning to stimulate A1 poverty rate in Sabah, such as in Tongod at 14.6% and Beluran at economic development 12.1%. As Malaysia strives to be an inclusive nation, balanced and Modernising and sustainable development need to be promoted across regions. STRATEGY diversifying the economic Based on regional contribution to the national economic growth A2 base to enable robust and as shown in Graph B, the growth rates of Sabah, Central and dynamic economic growth Southern regions were higher than that of national average of 5.1% for the 2016-2017 period. The Sabah region has shown a significant improvement in GDP growth from 4.2% in the Tenth Plan to 6.4% during the 2016-2017 period. Despite establishing regional Promoting competitive economic corridors to boost economic activities, the Sarawak, cities to spur growth of STRATEGY Eastern and Northern regions recorded lower growth than the major cities A3 national average during the period of 2016-2017. These regions, which relied more on industrial commodities particularly oil palm and rubber, were affected by the El-Nino phenomenon in 2016. Enhancing ASEAN STRATEGY subregional cooperation A4 to accelerate economic activities in the bordering area Mid-Term Review of the Eleventh Malaysia Plan 12-6 Chapter 12: Pursuing Balanced Regional Development 12-7 Graph A GDP per Capita, 2010 & 2016 and Absolute Poverty Rate by State, 2009 & 2016 GDP per capiGDtPa per(RM c ‘000apita) (RM ‘000) Absolute pAobvertysolu trea tpeo (%verty of hourates (%eholds of hou) seholds) SABAH REGIONSABAH REGION 22.1 SABAH REGION 19.2 19.2 22.1 SABAH REGION 2.8 2.8 Sabah Sabah Sabah Sabah 19.7 19.7 21.1 21.1 2.9 2.9 FT of LabuanFT of Labuan 61.8 61.8 FT of LabuanFT of0. 0Labuan 0.0 EASTERN REGIONEASTERN REGION 3.5 3.5 23.4 23.4 EASTERN REGIONEASTERN 0.RE3GION 0.3 Kelantan Kelant12.an8 12.8 Kelantan Kela0.4ntan 0.4 Terengganu Terengganu 27.3 27.3 Terengganu Teren0.g4ganu 0.4 Pahang Pahang 32.3 32.3 Pahang 0.P2ahang 0.2 NORTHERN RNOEGIONRTHERN REGION 3.5 3.5 29.7 29.7 2010 2010 NORTHERN RNOEGIONRTHERN0. R1EGION 0.1 2009 2009 Kedah Kedah19.2 19.2 Kedah Kedah 2016 2016 0.2 0.2 2016 2016 Perlis Perlis 22.5 22.5 Perak 0.2Perak 0.2 Perak Perak 27.3 27.3 Perlis 0.1 Perlis 0.1 Pulau PinangPulau Pinang 47.3 Pulau PinangPulau Pinang 47.3 0.1 0.1 SOUTHERN RSOUTHERNEGION REGION 32.0 1.3 1.3 32.0 SOUTHERN RSOUTHERNEGION 0.0 REGION 0.0 Johor Johor 32.0 32.0 Johor 0.0 Johor 0.0 SARAWAK REGION 5.3 5.3 SARAWAK REGION 44.4 44.4 SARAWAK RESGIONARAWAK RE0.GION6 0.6 Sarawak Sarawak 44.4 44.4 Sarawak Sa0.raw6 ak 0.6 CENTRAL REGIONCENTRAL REGION CENTRAL REGIONCENTRAL RE0.GION7 0.7 54.2 54.2 0.0 0.0 Negeri SembilanNegeri Sembilan 38.5 38.5 Negeri SembilanNegeri 0.Sembilan2 0.2 Melaka Melaka 41.4 41.4 Melaka 0.0Melaka 0.0 Selangor Selangor 44.7 44.7 Selangor 0.Selan0 gor 0.0 FT of Kuala LumpurFT of Kuala Lumpur 101.6 101.6 FT of Kuala LumpurFT of Kuala Lumpur 0.0 0.0 MALAYSIA MALAYSIA MALAYSIA MALAYSIA 38.9 38.9 0.4 0.4 3.8 3.8 Source: DepartmentSource:Source: Department Departmentof Statistics of of Statistics StatisticsMalaysia Malaysia Malaysia III 12-8 Graph B Regional Contribution to National Economic Growth, 2015-2017 Growth to GDP by region, % p.a.