Middle Income Trap

(Img source: PEMANDU)

YAB Prime Minister of Malaysia has launched the new economic model for Malaysia last month. This initiative has an ambitious aim of making Malaysia into a high income economy. As Idris Jala, the head of the PEMANDU keep saying, this is not a plan, this is a program. This is not a plan, this is a program… or maybe better said “Ini bukan cobaan, ini betul-betul”.. “ini bukan cobaan, ini betul-betul”.. Ok, on a serious note. What are these program consists of? 131 Entry Point Projects with 60 business opportunities and 3.3 million job opportunities. From a layman perspective, probably the first question that an individual would ask is ‘what is it for me? ‘ Well, if you one of the head or Board directors of the GLCs or one of the corporate big boys.. There is plenty. But for the normal rakyat.. we can only hope on the spillover effect such as the employment opportunities and also spillover of small projects that is related to the Entry Point Projects.

However, I am not touching much on the New Economic Model. Just let the professional do the analysis on the Model. As for me, I am much interested on the strategy and program on how Malaysia can get out of the middle income. No more blueprint.. no more roadmap.. no more dreaming for the sky….. just pure action or as they call it Entry Point Projects. Implementation is the key. Action is the key. What makes me wonder is that how we as an individual can also apply the same concept and strategy to get ourselves out from the middle income into the high income bracket. Let’s put it this way. Malaysia has been depending on Foreign Direct Investment (FDIs) previously in creating the job and revenues for the government. They came in, open up their factory, provide jobs to locals and in the same time Government can get revenue from taxing the companies and also their workers. It has been good so far but nevertheless it can only give Malaysia so much. Too much dependence on this type of revenue alone could not bring Malaysia further into the high income bracket.

Therefore, Malaysia is trapped in the middle income. The only way Malaysia can increase its GNI or in layman’s term.. Its salary is by applying the same principle that made people millionaires and billionaire worldwide.. multiple streams of income. Do not be overly dependent on one source of income but by creating other type of sources. That’s why the government wants this EPP to happen. By having multiple entry point projects.. it can create the multiple revenues that the government can have in order to become a developed nation. If all the EPPs are implemented successfully, I am confident that the goal of Malaysia in becoming a developed nation by 2020 can be achieved.