Business

Monday April 1, 2013

We need numbers to set targets and measure achievement

Transformation Unplugged by Idris Jala


About 2.8 million people have experienced the improved service of the new 37 KTM and 35 LRT trains, 470 new RapidKL buses and the free service of GoKL buses. About 2.8 million people have experienced the improved service of the new 37 KTM and 35 LRT trains, 470 new RapidKL buses and the free service of GoKL buses.

I BELIEVE in numbers always have, always will. Properly used and measured they do not lie. And when you rely on them and interpret them correctly, you can separate the wheat from the chaff quite easily.

This is why we use numbers all the time in both government and economic transformation programmes. Yes, we argue qualitatively about what we want but we must have some way to translate it into numbers. Otherwise there is no measurable target and no measurable achievement there is no progress.

Idris Jala Idris Jala

As those who have read this column before will know, we have a true north in our transformation programmes that is to achieve developed status by 2020. The target for that narrow as it may seem is to achieve a gross national income per capita of US$15,000 by 2020.

Yes, we are aware that development needs to be balanced, inclusive and sustainable but nevertheless we want to achieve that US$15,000 by 2020 along with our other goals.

But yes, there are other goals too if we want to achieve that major goal. And so we want to achieve those too so as to be able to meet our overall target. If we meet or exceed most of our sub-targets, then we are on target to achieve developed status.

As our Prime Minister pointed out eloquently when we launched our transformation annual reports recently, that overall we have achieved 108% of targets for government transformation and 118% of our targets for economic transformation.

What that means is we are on target to achieve developed status by 2020 and if achievements continue at the current pace, we could reach that by as early as 2018. This is not something plucked from the air it is what the figures show.

To round off some points in the annual reports for the transformation programmes, let me list down clearly and unambiguously 12 clear signs of success.

1. When the ETP roadmap was released in October 2010, the official gross national income (GNI) per capita for 2009 was US$6,700. Using this 2009 baseline, GNI per capita in US dollars has risen 49% in three years, a good measure by any standards. In early 2012, due to the adoption of the United Nation's System of National Accounts (SNA 2008) by many countries in the world, all our historical figures from 2005 onwards had to be changed. This explains why the 2009 GNI per capita was changed in 2012. No one in the Government did this to deliberately mislead anybody as alleged by some parties. As a general principle, in assessing performance against set key performance indicator (KPI), it is important not to change the goal post. That is why we kept to the baseline KPI of US$6,700 per capita in our ETP annual report. Even if we are to take the revised 2009 GNI per capita of US$7,059, the improvement of 41% is still very good.

Even if we take out the effects of US dollar appreciation, income shows a growth of an excellent 24% over the period. At this rate, we can achieve developed status by 2018.

2. Our targets for GNI, private investment and employment for last year have all been met. We, as a nation, employed an additional 438,800 people, 113% of target. Private investment at RM139.5bil, exceeded the target by 9% while GNI at RM903.8bil was 102% of target. The 2012 GNI per capita was US$9,970.

3. Our economic growth in 2012 was 5.6%, up from 5.1% for the previous year. This achievement was all the more remarkable because it happened during a global economic slowdown. Singapore for the same year grew just 1.3%, South Korea by 2%, Japan 1.9% and the United States 2.2%. The UK and the euro region contracted by 0.1% and 0.5% respectively. In comparison to countries in the upper-middle income bracket as per World Bank's classification, Malaysia also performed better than Russia (3.4%), Turkey (2.6%) and Mexico (3.8%), to name a few.

4. We have had two consecutive years of record government revenue. Last year it grew 12% to RM207bil, enabling us to carry out our various programmes to help the poor and carry out infrastructure projects.

5. We have made great strides in reducing the budget deficit from 6.6% of gross domestic product (GDP goods and services produced in a year) to 4.5% in 2012. The target for this year is 4% and we are on target to reduce it further to 3% by 2015 and a surplus by 2020.

6. Private investment growth has more than tripled since the start of economic transformation from a compounded annual growth rate (CAGR) of 5% between 2005 and 2010, to 17% between 2011 and 2012. Last year, it grew 22% on top of a 12.2% growth in 2011 impressive numbers by any standards and important because of their impact on the economy in future years when production starts.

7. Private investments hit a record RM139.5bil last year, exceeding the targeted RM127.9bil and exceeding the previous year's RM94bil by a hefty 48%. That really is something.

8. The stock market hit a high of 1692.65 points on Jan 4, 2013. In terms of market capitalisation, it increased 30% or RM340bil to RM1.46 trillion as of that date from RM1.12 trillion in August 2010.

9. Trade increased to reach record highs in the past three years. It increased 8.7% to hit RM1.47 trillion in 2011 and increased again by 4.1% to RM1.53 trillion last year, despite difficult global conditions.

10. We have received international recognition. In 2012, our position in the World Bank ranking in terms of ease of doing business improved to 12 from 18. In AT Kearney's Foreign Direct Investment Confidence Index our position improved to 10 from 21.

11. Let's look at how these have touched people's lives. Under the GTP, we have positively impacted the lives of many people. For example, under our Rural infrastructure NKRA, over the last three years, it is estimated that 4.3 million rural people have benefited. We built 3,349 km of rural roads (equivalent distance from Johor to Myanmar). Thousands of rural people benefited from our electrification, water and housing programme. We estimate that 2.8 million people have experienced the improved service of the new 37 KTM and 35 LRT trains, 470 new RapidKL buses, the free service of GoKL buses, the new terminal in Bandar Tasik Selatan and the refurbished Pudu Raya terminal and the 6,800 new parking bays within the KL rail network. Some 2.4 million students and teachers have benefited from our Education NKRA initiatives. Under the Low income household NKRA, 505,600 people has benefited, with 109,050 moving out of poverty. This is done purely on needs, regardless of race and ethnic background. When our minimum wage initiative reaches full implementation, it will lift the incomes of about 3.2 million people out of poverty. BR1M 1 and 2 have been received by over 4 million households. Since 2009, the average household income has increased from RM4,025 to RM5,000. Bumiputra incomes have increased by 6.9% to RM4,457, Chinese by 8% to RM6,366 and Indians by 9% to RM5,233.

12. It is clear that our transformation journey is going according to plan. As we continue to grow and transform the economy, government revenue rises. This allows the Government to spend on programmes to benefit the rakyat. This includes GTP and other initiatives. With a robust economy and healthy government revenue, we are able to pay the billions of money spent on providing subsidies, such as fuel, electricity, public medical health services, public transport, etc. This is evidence that a lot of things in the country are going right and we are progressing as a nation. Take heart that we have done well and believe we can do it. The figures show it, and, believe me, they don't lie.

Let me close with a quote from Alexander Graham Bell: “When one door closes, another opens. But we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us”.

Our Prime Minister has opened the transformation door for Malaysia and we have since been pursuing this journey. Let us all rejoice that there is hope for us a nation. If we all join hands, we can build it together into a great nation.

  • Datuk Seri Idris Jala is CEO of the Performance Management and Delivery Unit and Minister in the Prime Minister's Department. All fair and reasonable comments are welcome at idrisjala@pemandu.gov.my

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