In my breakfast session today with foreign fund managers in London, I shared about recent developments and the prospects for growth and development in Malaysia.
I emphasised that Malaysia remains resilient and sustainable at the core. Growth last year was recorded at five percent, slightly higher than predicted during a time of turmoil for the world economy, making Malaysia one of the fastest-growing countries in the region. The OECD forecasts us to average that same healthy rate – far higher than the global average – over the next four years.
In the push towards our goal of an advanced economy, our commitments to infrastructural development are on track. The Mass Rapid Transit (MRT) project, the backbone of our public transportation network is on schedule. In July, we are expected to sign a memorandum of understanding (MOU) with Singapore for the development of the high-speed rail (HSR). Once completed, the HSR is a game-changer and will link KL to Singapore in 90 minutes. Even amidst the slump in global crude oil prices, Petroliam Nasional Bhd (Petronas) has signed three engineering, procurement, construction and commission (EPCC) contracts for the development of its petrochemical plants at the Pengerang Integrated Petroleum Complex. We have also embarked on other infrastructure projects to continue driving growth, including the Pan Borneo Highway stretching 2,239km which is estimated to cost RM27 billion.
In recent years, we have managed to meet our targets in reducing fiscal deficits and the Government remains committed to continue in the trajectory of prudent monetary policy. In spite of the volatility in global financial markets, our financial system continues to have ample liquidity to support real sector activities. Our banking system remains sound and well capitalised, with the key capital ratios well above the required regulatory minimum levels.
Even as my predecessors were unwilling to introduce the Goods and Services Tax (GST), the implementation of the GST is a proactive measure. We introduced the GST to help broaden our revenue base and reduce our dependence on revenue from the oil and gas sector. It was the right thing to do, as the new Governor of Bank Negara, Datuk Muhammad Ibrahim recently reaffirmed.
As we move towards a high income economy by 2020, we have also introduced various upskilling initiatives to increase the availability of industry-ready entry-level talent for high skilled jobs in order to increase productivity and per capita income.
We were determined that Malaysia should be open for business, with an increasingly diversified economy and an increasingly skilled and productive workforce, so that Malaysia would become the preferred destination for investment in Southeast Asia.
The fact that Malaysian equities had a total net inflow from foreign institutions of a massive RM 6.1 billion for year-to-date end April 2016, suggests that we are on course.
Malaysia is also a gateway to ASEAN, with its Free Trade Area, and market of 625 million people, and ever freer and more integrated trade as we implement the ASEAN Economic Community. FDI flows to ASEAN are already higher than they are to China.
But Malaysia is also a gateway to the Regional Comprehensive Economic Partnership that is being negotiated by ASEAN with Australia, China, India, Japan, South Korea and New Zealand. And Malaysia is also a gateway to the TPP, which will give exporters preferential access to a market of 800 million people with a combined GDP of USD27.5 trillion.
We are also on track to reach developed nation status by 2020. Opportunities in Malaysia, and through us in ASEAN, South Asia and the Asia-Pacific, abound.
We have delivered and we believe that Malaysia can do much more with the right partners.
Recently, the ruling coalition, Barisan Nasional, won the Sarawak State Election convincingly with more seats than before. This is an example of our continued political stability and the Malaysian voters have chosen us to continue with the development agenda. Indeed, we are committed to deliver the long-term plans for the benefit of our people and for the market.
I extended my invitation to the foreign fund managers to be a part of the Malaysian success story this morning and I am confident that Malaysia remains the preferred investment destination with her growth prospects.