NTP Annual Report 2017

National Transformation Programme Annual Report 2017 3
ANNUAL
REPORT
2017
CONTENTS
Transformation Takes Effect 2
Putting Our People First 4
2017 Year in Review 6
NTP 16
APPENDICES
Expenditure 2017 284
Agreed-Upon Procedures by PwC 285
NTP Performance 2017 286

Key Performance Indicators
our economic growth twice during the year. Additionally, all

A NOTE FROM THE PRIME MINISTER the major credit ratings agencies have reaffirmed Malaysia’s
ratings within the “A” band with a stable outlook.
TRANSFORMATION TAKES EFFECT At times, the Government has had to take tough but
necessary actions to drive this progress. This has included
the rationalisation of non-targeted, blanket subsidies and
the implementation of the Goods and Services Tax (GST)
to make revenue collection more efficient. We did so in
the face of severe opposition and criticism, but remained
steadfast knowing that these were the right decisions, and
the progress we have made is there for all to see – with our
fiscal deficit being reduced from 6.7% in 2009 to 3.0% as
at 2017.
On top of these improvements in public finance policy,

Malaysia is one of the few countries in the world to put a
statutory limit on government debt, further demonstrating
YAB DATO’ SRI the Government’s tenacity and discipline to institutionalise
MOHD NAJIB TUN ABDUL RAZAK reform. Indeed, Government debt amounted to 51% of GDP
Prime Minister Malaysia in 2017, safely below its self-imposed debt ceiling of 55%
of GDP. These actions have improved the Government’s
capacity to invest in social development, allowing us to
focus on the rakyat’s needs and channel aid to those who
need it the most.
In addition to fiscal reforms, the Government has also

targeted economic diversification, as well as the rejuvenation
of private sector investment. Prior to the NTP, our economy
had become too reliant on the oil and gas industry, which
is subject to significant volatility in oil prices, and public
investments. For instance, in 2009, oil and gas revenue
contributed to 41% of government income whereas private
In 2010, shortly after assuming the Prime Minister’s Office, investment was below 55% of total investments, posing a
I announced the launch of the National Transformation considerable economic risk.
Programme (NTP) – an initiative aimed at taking Malaysia
out of the middle-income trap and towards becoming Our forward-thinking on this and the diversification efforts
a high-income economy by 2020. After seven years of we put in place proved to be prudent amid the downward
implementation, I am pleased to say that the NTP has spiral of global oil prices in 2014, and helped to strengthen
delivered positive outcomes which have been seen and our economy’s resilience, as well as shield it from recession.
felt throughout the nation. Many milestones have been With the identified 12 National Key Economic Areas (NKEAs),
achieved along this ongoing journey but, most importantly, the share of Government revenue from oil and gas was
our promises to the rakyat are being met. drastically reduced to 15% in 2017. The NTP has also catalysed
private investment, whereby private sector investment as
I am particularly proud that we have decisively moved away a proportion of total investment has surged from 55% in
from the middle-income trap and are getting ever closer to 2010 to 68% in 2017.
becoming a high-income nation. This is demonstrated by the
narrowing gap between our Gross National Income (GNI) The 12 NKEAs contributed to 75% of GNI as at the end
per capita and the World Bank’s high-income threshold of 2017 current prices. This, in turn, has contributed
from 33% in 2010 to 20% in 2017. to the addition of 2.68 million employed persons to
the nation since 2010 based on CSDU’s calculation and
It has been a challenging period for many countries, but in methodology, using data from the Labour Force Survey.
Malaysia, our Gross Domestic Product (GDP) expanded by (For further details on progress of the 12 sectors, please
5.9% in 2017. This was the fastest pace of growth in three years refer to the 2017 Year in Review and NTP chapters within
and outpaced our regional neighbours such as Singapore, this Annual Report.)
Indonesia, South Korea and Taiwan. Our economy’s bright
prospects have been validated by global institutions such The reforms we have introduced since 2010 have also
as the World Bank, the International Monetary Fund and the resulted in growing foreign investor confidence in
Asian Development Bank, which raised their forecasts for Malaysia. This is evident with the entrance of various
new investors into the country over the past few years. transformation. To date, 6.8 million rural households have
In 2017, the Saudi Arabian state-owned oil and gas company, benefited from the NTP’s strategic initiatives, including
Saudi Aramco committed a US$7 billion investment in gaining access to treated water, 24-hour electricity and
the Refinery and Petrochemical Integrated Development better road connectivity.
(RAPID) project in Pengerang Integrated Petroleum Complex
(PIPC), and another US$900 million for a 50% stake in Moreover, we successfully delivered the country’s first
Petronas Chemicals Group Bhd’s polymers business. Huawei, Mass Rapid Transit (MRT) with the launch of the Sungai
a major networking and telecommunications equipment Buloh-Kajang (SBK) Line in 2017. The completed MRT
and services company, has chosen Malaysia as its global SBK Line serves as a testament that Malaysia has taken
operations headquarters, data hosting centre and global a formidable stride in improving public transportation
training centre. The company invested RM2.2 billion to set while demonstrating that excellent management and
up its operations in this country, creating more than 2,370 operationalisation of the project have led to its timely
job opportunities for our home-grown talent. delivery below the allocated budget.
Another remarkable hallmark for Malaysia is the launch of the The 51-km line now serves a population of over 1.2 million
Digital Free Trade Zone (DFTZ) in March 2017 with Jack Ma, living along the Sungai Buloh-Kajang corridor, offering
founder and Executive Chairman of Alibaba Group. The zone significant benefits to the public by reducing household
will provide 24,700 acres of physical and virtual platforms spending on transportation, commuting times and
at Sepang KLIA Aeropolis to help small- and medium-sized vehicle traffic congestion at the rail catchment areas.
enterprises (SMEs) capitalise on the expanding internet Surrounding businesses and properties along the line
economy and cross-border e-commerce activities. The have also blossomed from the spill-over effect of this
DFTZ is positioned to be the next regional hub for internet- mega “infra-rakyat” project.
based innovation and is expected to double SMEs’ goods
export growth rate to US$38 billion, create 60,000 jobs We are also developing the East Coast Rail Link (ECRL)
and facilitate US$65 billion worth of traded goods by 2025. that will connect Greater Kuala Lumpur/Klang Valley
to the east coast of peninsular Malaysia. The project is
These companies are coming to Malaysia because the policies expected to create 80,000 additional jobs and serve 5.4
we have set in place have made the country an attractive million passengers annually by 2030.
destination for those seeking to grow their businesses. These
efforts have been recognised by the World Economic Forum, Achievements such as the MRT and ECRL projects
with its Global Competitiveness Report 2017-2018 ranking could only be made a reality through our sustainable
Malaysia the 23rd most competitive country in the world, economic growth, socio-economic stability and good
behind only Singapore in the ranks of ASEAN countries. fiscal governance, as well as the close collaboration and
partnership between our civil servants, private sector
When we first laid out our plans for the NTP, we knew that and the rakyat in supporting the initiatives under the
for the transformation to be complete, its outcomes must NTP from its onset.
be inclusive and sustainable. This will ensure no Malaysian
is left behind as we become a high-income nation, and that Our civil servants have played a crucial role in helping to
our societal well-being can endure for the long term. To this ensure the successful and sustained delivery of the NTP.
end, we have seen our Gini Coefficient, which measures This is why, in March 2017, we established the Civil Service
income disparity, decline to 0.399 in 2016 from 0.441 in 2009. Delivery Unit (CSDU) to take over the role of Performance
We are currently on the right track in narrowing income Management and Delivery Unit (PEMANDU) in facilitating
disparity, and in the longer term, to improve the purchasing the programme. This move allows the civil service to take
power of the rakyat and ensure better living standards for full ownership in the last mile of Malaysia’s transformation,
all Malaysians. as well as realises our intent to forge a more competitive
and result-oriented system within the Government. To this
Furthermore, we have recorded a stunning reduction in our end, we have witnessed more and more members of our
poverty rate since the start of the NTP. As a result of targeted talented civil service taking proactive measures to deliver
programmes such as 1AZAM, the national poverty rate has and lead game-changing initiatives.
dropped to 0.4% as at 2016, against 3.8% in 2010, with the
mean monthly income of the Bottom 40% (B40) households With the significant progress we have achieved thus far, I
increasing to RM2,848 as at 2016 from RM1,440 in 2009. To am confident that we will attain our target of becoming a
help the rakyat manage the cost of living, RM6.31 billion has high-income nation by 2020. And that is not all: we have
been distributed via BR1M in 2017 alone to 7.22 million eligible already begun mapping our next phase of transformation
individuals and families. Cumulatively, the Government has under Transformasi Nasional 2050 (TN50). Once we
disbursed RM25.62 billion via BR1M since 2012. realise our vision of Malaysia becoming a developed
nation, we will then move forward with our plans to
Meanwhile, development in the rural areas continues to become one of the top countries in the world in economic
ensure the rural community equally enjoys the fruits of our development, citizen well-being and innovation by 2050.
In view of these realities, we have utilised the Bantuan

A NOTE FROM THE DEPUTY PRIME MINISTER Rakyat 1Malaysia (BR1M) scheme since 2012 to help
cushion the public from the impact of rising living costs.
Over seven million individuals and households have
PUTTING OUR PEOPLE FIRST benefited from this assistance through RM25.62 billion in
direct aid, of which RM6.31 billion was distributed in 2017.
While BR1M represents a critical measure by the

Government to provide immediate relief, we have also
sought to formulate long-term strategies to address
living costs through the Cabinet Committee on
Addressing the Rakyat’s Cost of Living. The Committee
studies the entire supply chain to identify solutions to
help minimise the impact of rising costs felt most by
the rakyat, such as in the areas of food, housing and
YAB DATO’ SERI DR. transportation.
AHMAD ZAHID HAMIDI
Deputy Prime Minister Malaysia In 2017, the Committee focused on urban poverty due
to the higher living costs in urban areas. As a result,
initiatives such as the My Farm Outlet (MFO), Q’Fish
Programme, National Food Warehouse, SiswaSave
programme and Kad Diskaun Siswa 1Malaysia for
university students were implemented accordingly.
Allow me to highlight that most of these initiatives are
targeted at the Bottom 40% (B40) households, which
remain a priority group. Under our administration,
Malaysians in the B40 group have been gradually lifted
out of poverty, as evidenced by our virtual eradication
of poverty to just 0.4% as at 2016. Additionally, various
When the Government first embarked on the NTP income-generating opportunities provided through
in 2010, we were clear that in order for Malaysia to programmes such as 1AZAM under the NTP have
become a high-income nation, the Government contributed to a growth in median monthly income
itself must transform its delivery of public services of the B40 group to RM3,000 in 2016 from RM2,629
to support the socio-economic reforms we aimed to in 2014 and an increase in mean monthly income to
achieve. To this end, we rounded up all the Ministries to RM2,848 from RM2,537 during the same period.
undertake a broad agenda of change which prioritised
the needs of the rakyat. As at 2017, 1AZAM has benefitted 100,420 Malaysians,
raising the overall income of participants by at
Now seven years into our transformation, I am pleased least RM300. We have also formulated a follow-up
to report that the Government continues to address programme called Beyond 1AZAM, with hopes that
the areas which the rakyat most want and need. successful 1AZAM participants will grow to become
Chief among these is the rising cost of living, which job creators through further training, entrepreneurship
is not a phenomenon unique to Malaysia. In fact, the support and continued access to micro and small
Economic Intelligence Unit’s Worldwide Cost of Living business financing. The programme has touched the
2017 report ranked Kuala Lumpur just 96th out of the lives of 5,674 participants as at 2017 after starting with
133 cities surveyed, with Singapore, Hong Kong and 1,511 participants in 2015.
Zurich identified as the world’s most expensive cities
to live in. According to the report, the global cost The Government has also aided the B40 category to
of living in 2017 is at 74% (taking an average of the leverage on the digital economy to propel themselves
indices for all cities surveyed using New York as the out of poverty and harness opportunities of the
base city), mainly driven by external factors, such as technological age. To this end, the e-Rezeki and
currency movements. This is also compounded by e-Usahawan programmes were introduced to raise
inflation in the prices of goods and services, which the average income of participants through talent-
occurs naturally over time in healthy economies.
matching and crowdsourcing via online platforms. At the primary and secondary levels, our focus has
E-Rezeki aims to produce 500 people who will been on enhancing the command of the English
successfully generate extra income through this language among students to raise their global
platform via crowdsourcing and has currently enlisted competitiveness. To this end, we have carried out
a total of 5,898 participants to date, while e-Usahawan the Dual Language Programme (DLP) and Highly
has attracted 12,300 participants. E-Usahawan Immersive Programme (HIP) which will cultivate
participants have managed to generate income of students who are proficient in the English language,
RM24.3 million from various business ventures through enabling them to thrive in the highly competitive
digital means. realm of employment. In 2017 alone, the DLP
was implemented in 1,214 schools, a tremendous
Additionally, we have continued to improve the quality increase from 378 schools in the previous year,
of life for rural communities. Since 2010, our rural whereas the HIP was expanded to 5,526 primary
development efforts have resulted in the construction and secondary schools nationwide, giving over
and upgrading of 6,868 km of rural roads, provided 2.54 million students greater exposure to the global
354,400 households with access to clean water, lingua franca. All these initiatives are to enhance
connected 161,931 households to stable electricity the English language proficiency without sacrificing
supply, and built and restored 103,033 houses for the the National Language.
rural poor.
In further addressing the rakyat’s main concerns,
Even with low-income households and rural the Government continues to ensure the safety and
communities representing the Government’s priority security of the rakyat through combating crime.
groups, we have also paid attention to the needs This is demonstrated by our shift in adopting a
of urbanites to ensure balanced socio-economic more service-oriented approach via the Modern
development. In this regard, our efforts to upgrade the Policing Programme, which engages the public
urban public transportation network lead the way in directly to alleviate their fears on crime. As a
providing a world-class public service delivery system. result of targeted efforts to tackle crime, we have
recorded a remarkable improvement of index crime
This has not only been achieved through the from 352.07 per 100,000 population in 2016 to
construction of the Mass Rapid Transit (MRT), of which 306.15 per 100,000 population in 2017, equivalent
the first rail line was completed in 2017, but also with to a 13% decrease.
improvements in bus and taxi services. Guided by the
vision of our YAB Prime Minister to provide affordable, Concurrently, we have also intensified our efforts
accessible, reliable and safe public transport services towards curbing corruption through prevention,
that meet international standards, we are systematically enforcement and education. I would like to take
transforming all areas of the urban commute, from this opportunity to highlight that we will remain
enabling travellers to plan their daily trips through to committed in our determination to eliminate
the last-mile journey which takes commuters to their corruption within the public and private sectors,
final destinations. Through infrastructure upgrades, but will require mutual understanding and
capacity building and provision of new public transport alignment from all parties to reject unethical
modes, we have successfully doubled public transport practices and embrace integrity at all levels.
modal share from just 10% in 2010 to 20% in 2015,
while average daily ridership continues to increase to At this juncture, I would like to record my gratitude
1.21 million passengers in the same year. to the civil service and all Malaysians for their
support and cooperation for our transformation.
Looking ahead to our future generations, we have I am confident that together, we can continue to
also put in place education reforms to ensure our push boundaries in the delivery of Government
youth are globally competitive, starting from the services and realise not only our goal of becoming
pre-school years. Hence, in 2017 the Government has a high-income economy, but also a nation which
focused on instilling awareness among parents on the puts the needs and interests of its citizens above
importance of pre-school education to encourage all else.
universal enrolment in Malaysia. The national pre-school
enrolment rate rose to 84.26% in 2017, which represents
884,983 children aged 4+ and 5+.
2017 year in review
YB DATUK SERI PANGLIMA YBHG TAN SRI DR. ALI HAMSA

ABDUL RAHMAN DAHLAN Chief Secretary to the Government
Minister in the Prime Minister’s
Department, Economic Planning Unit
The National Transformation Programme (NTP) liberalisation, talent management, equal

reached a new milestone in 2017, with the baton opportunities and entrepreneurship.
of transformation passed on to the Civil Service
Delivery Unit (CSDU) under the Prime Minister’s Moreover, putting the rakyat as a priority, the
Department. This transition enables the Government Government is persistently striving to deliver our
to seamlessly institutionalise best practices and a promises of raising livelihoods and addressing
performance-driven culture in our civil service. key public concerns. These aspirations are made
Anchored by good governance, socio-economic possible through the National Key Results Area
inclusiveness and sustainability at the same time, (NKRAs), in line with the Public Services Delivery
we have inched closer to our ambitious and coveted Transformation framework and the National Blue
goal year-on-year – to propel Malaysia towards Ocean Strategy (NBOS).
becoming a high-income nation.
This year, we are proud to announce the launch of
The NTP’s momentum has allowed Malaysia to the Problem Solving Talent Management (PSTM)
escape the middle-income trap, with our GNI per Programme that capitalises on the existing pool
capita reaching US$9,660 in 2017 against the World of talents within the civil service to improve the
Bank’s current high-income threshold of US$12,087 1, Government delivery process while complementing
thus narrowing the gap between our GNI per capita the NTP mechanism. PSTM is currently
and the World Bank’s high-income threshold to managed by CSDU and it has produced notable
20% in 2017, a commendable reduction from 33% recommendations to mitigate critical challenges,
at the start of NTP in 2010. such as the setting up of a special task force to
improve Malaysia’s competitiveness ranking.
The steady GNI growth is an outcome of the solid
economic foundation built upon by the NTP’s 12 The civil service continues to be ardent and proactive
National Key Economic Areas (NKEAs), where in spearheading transformative initiatives and
the vibrant momentum for growth across diverse commit to achieving the set targets under the NTP.
economic sectors shielded one another against This underlines the pivotal role of the civil service,
volatile market turbulence after the 2008 global together with the private sector and the rakyat,
financial crisis. Moreover, we have strengthened in ensuring successful implementation of national
key policy frameworks via the Strategic Reform strategic initiatives towards greater prosperity and
Initiatives (SRIs) to spur business competitiveness, shared growth for all Malaysians in years to come.
1
Estimate based on World Bank’s GNI per capita calculation (Atlas Method).
(RMbil) (%)
Malaysia’s GDP growth rate exceeds inflation & global growth rate
1000 8
900
6
800
700 4
600
500 2
400
0 GDP at Constant Prices (RM)
300 ETP
Real GDP Growth Rate (%)
200 Launch
-2 Global Growth Rate (%)
100
Consumer Price Index (%)
0 -4
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
9th Malaysian Plan 10th Malaysian Plan 11th Malaysian Plan

Based on World Bank’s GNI per capita calculation (Atlas Method), Constant 2005 Prices.
Malaysia maintaining its target towards fiscal balance
2009 2010 2011 2012 2013 2014 2015 2016 2017
3.5% 3.2% 3.1% 3.0%

3.9%
4.8% 4.5%
5.6%
6.7%
Improving our Efficiency as the In our pursuit of greater efficiency and better
outcomes, it takes creativity and innovation to
Government maximise resources. Malaysia has successfully
adopted the National Blue Ocean Strategy (NBOS)
– a pivotal platform for its National Transformation.
With “low cost, high impact and rapid execution”
as our mantra, NBOS has successfully fostered
The NTP Roadmaps detailed the Government’s closer coordination between Government agencies
socio-economic transformation agenda, focused by reducing overlaps or duplication of work, and
firstly on enhancing public service delivery and breaking down the existing “silo mentality” among
ensuring that we address the rakyat’s top priorities. the various parts of the Government.
Apart from the economic stimuli required to reach
high-income status, we were equally cognisant of To date, over 100 NBOS initiatives have been
the need for the Government to adopt effective successfully implemented to tackle an extensive
policies in this fast growing, globalised market. list of economic and social issues. One of the
best examples is the award-winning Urban Highlights of the National Key Results
Transformation Centres (UTCs) and Rural Areas (NKRAs)
Transformation Centres (RTCs), which serve as
one-stop centres in providing a wide range of Addressing the Rising Cost of Living
integrated government services under one location.
Recognised by the World Bank as one of the best Bantuan Rakyat 1Malaysia (BR1M) remains an
public service models in the world in 2016, these immediate relief to help manage the rakyat’s cost
centres have helped saved up to RM2 billion in of living. Since 2012, seven million Malaysians
government spending, ensured our resources are have benefited from BR1M by way of easing their
fully and rightly utilised, and, above all, allowed us payments of expenses such as monthly bills,
to better serve the public. school fees and medical costs through RM25.62
billion in direct aid. Additionally, through the
Aware of communities that have less access Special Committee on Addressing the Rakyat’s
to formal services, the Government has also Cost of Living chaired by the YAB Deputy Prime
established the Mobile Community Transformation Minister, the Government seeks to formulate long-
Centre (Mobile CTC) since 2013. This Mobile CTC term strategies to address living costs such as by
initiative shortens travel time and logistical barriers managing the production cost of food products
for communities in remote and isolated areas to through the utilisation of programmes under NBOS.
access key services that are otherwise only available
in UTCs, RTCs or other Government premises. Fighting Corruption
Another worthy mention is the 1Malaysia Training The Government aims to table the Corporate
Centres (1MTCs) programmes. Acting as a Liability Provision under the Malaysian Anti-
centralised platform for existing government Corruption Commission (MACC) Act in Parliament
training facilities, 1MTCs reduce the need for by 2018. The new provision will make companies
Government agencies and Ministries to rent directly liable for acts of bribery or corruption,
expensive third-party facilities. 1MTCs have also unless they can prove definitively that they have
been made available to the general public, the adequate procedures to prevent the alleged corrupt
private sector and NGOs for their capacity-building activities. Moreover, the MS ISO 37001 Anti-Bribery
objectives. Management System was introduced in the same
year to help organisations enforce measures
These NBOS-led services have been fortified by that meet internationally recognised anti-bribery
the Public Service Delivery Transformation (PSDT) practices and controls.
programme, introduced in 2013 based on principles
encompassing strategic collaboration, cooperation Reducing Crime
and interdependence among agencies to shape
a high-performing, dynamic, people-centric Since the beginning of our NTP journey in 2010,
civil service with high integrity. This effort was our index crime has reduced by a phenomenal 53%.
translated into 1,432 transformation initiatives, Initiatives such as Modern Policing, for instance,
of which 216 are classified as high impact. The are transforming the force from a traditional
initiatives have therefore increased the public’s policing culture to a technologically savvy, service-
convenience in accessing various public services oriented force. In line with population changes
such as healthcare, raising Government revenue and international standards, the Royal Malaysian
and productivity, as well as broadening delivery Police has started measuring crime incidents per
channels through the participation of NGOs and 100,000 population. In 2017, we recorded a crime
the community. rate of 306.15 per 100,000 population against the
baseline of 352.07 per 100,000 population set in
The PSDT programme has been undertaken in 2016. The Perception of Crime Indicator has also
tandem with the NTP, which identified seven of the been introduced, allowing the police force and
rakyat’s priority areas, or National Key Results Areas Ministry of Home Affairs to determine the key gaps
(NKRAs), to be improved upon by the Government in safety that need to be ameliorated.
through public sector reform.
Assuring Quality Education Improving Urban Public Transportation (UPT)
The Dual Language Programme (DLP) and The year 2017 was momentous for urban public
Highly Immersive Programme (HIP) to elevate transportation in Greater Kuala Lumpur / Klang Valley.
our students’ mastery of the English language The launch of the Mass Rapid Transit (MRT) Line 1
continued to register positive outcomes. The DLP on 17 July 2017 signalled the beginning of a new era
is currently implemented in 1,214 schools while HIP in our urban transportation system. This has led to
was expanded to 5,526 primary and secondary increase in total daily average ridership of rail and bus
schools nationwide, reaching 2.54 million students. to 1.21 million in 2017 from 1.16 million in the previous
In ensuring teachers’ proficiency of the language, year. To enhance first- and last-mile services, Malaysia
we have increased training for English teachers, has become one of the first countries in the world to
bringing proficiency of more than half of the English legalise e-hailing services. Furthermore, developments
teachers nationwide to the C1 level, or ‘Effective in the Integrated Common Payment System and the
Operational Efficiency’, according to the Common construction of parking facilities at rail stations should
European Framework of Reference. At the pre- encourage the rakyat’s switch to public transport.
school level, we have increased enrolment to 84.26%,
equivalent to 884,983 new pre-schoolers in 2017.
Raising Living Standards of Low Income Households

Upholding our Economic
As of 2016, Malaysia’s poverty rate has declined
Resilience and Business
to 0.4%, contributed by programmes such as Competitiveness
1AZAM which has increased the income of
100,420 individuals, or 91% of the programme’s
monitored participants to date, by at least RM300.
Additionally, the number of 1AZAM participants
The NTP continues to build up the resilience
categorised as poor has declined to 58.69% in
of the Malaysian economy through economic
2016 from 89.17% in 2009. Furthermore, successful
diversification in the National Key Economic Areas
1AZAM participants are further empowered by the
(NKEAs). In fact, GDP growth for the year is at 5.9%,
Beyond 1AZAM programme, with a total of 5,674
reaching the value of RM1,173.6 billion at constant
participants recorded in 2017. The Government
2010 prices and exceeding many analysts’ initial
has also introduced the e-Rezeki and e-Usahawan
forecasts. In 2017, the NKEAs represented 75% of
programmes to provide B40 households with
our GNI of RM1,316.3 billion at current prices.
access to income-generating opportunities through
digital means.
Diversification through the NKEAs is also reflected
by decreasing reliance on oil and gas as a source of
Improving Rural Development
Government revenue while increasing contribution
from other prioritised sectors. In 2017, oil and gas
As of 2017, the NTP has built and upgraded 6,868 km
revenue made up 15% of Government revenue,
of roads in rural areas through the Program Jalan
representing a remarkable reduction from 41% in
Luar Bandar (JALB) and Jalan Perhubungan Desa
2009. As a result of optimised revenue sources,
(JPD), and provided 354,400 and 161,931 households
Government income surged from RM185 billion in
with water and electricity supply respectively under
2011 to RM225 billion in 2017, with a compounded
the Program Bekalan Air Luar Bandar (BALB) and
annual growth rate (CAGR) of 3% for that period.
Program Bekalan Elektrik Luar Bandar (BELB).
Additionally, 103,033 households have benefited
Our economic landscape has been further
from the construction and restoration of houses via
strengthened by the stability of the Government’s
the Program Perumahan Rakyat Termiskin (PPRT).
finances, with our fiscal deficit reducing more than
A slew of economic activities such as the Desa
half from 6.7% in 2009 to 3.0% in 2017. Furthermore,
Lestari and Rural Business Challenge have also
the ratio of our Government debt to GDP remains
promoted entrepreneurship and strengthened local
below our limit of 55%, at 51% in 2017. Collectively,
economies. To date, approximately 6.8 million rural
these factors represent the robust economic
folks have benefited from this NKRA.
fundamentals which enable our economy to stand is apparent in the investments that have been made
firm against external shocks. by some of the world’s largest companies, among
the many include:
Overall, this has put Malaysia back on the global • Leading semiconductor company Broadcom
competitiveness track, rebounding from 25th in Limited transferred its Global Distribution Hub
2016 to 23rd in 2017 in World Economic Forum’s from Singapore to Malaysia in 2017;
(WEF) Global Competitiveness Index. This puts us • Top global Information and Communications
among the top countries in Asia. In terms of ease Technology (ICT) solutions provider Huawei
of doing business, Malaysia is ranked 24th out of 190 made Malaysia its regional operations
economies in World Bank’s Doing Business Report headquarters in 2017;
2018, placing us second in ASEAN and fourth within • Oil giant Saudi Aramco has committed to invest
the Asia-Pacific region. US$7 billion for a 50% stake in PETRONAS’
Refinery and Petrochemical Integrated
Since the start of the NTP, the private sector has Development (RAPID) in 2017;
increasingly represented a vital engine of growth, • Global banking company HSBC has committed
making up 68% share of total investments and to invest over RM1 billion to build its upcoming
growing at a CAGR of 10.5% from 2010-2017. regional head office in Tun Razak Exchange;
In parallel, positive economic environment and • Chinese e-commerce conglomerate Alibaba
validation from global institutions also contributed Group has established the Digital Free Trade
greatly to our foreign direct investment (FDI). This Zone (DFTZ) in Sepang.
CAGR
for private
Realised investment accelerated post-ETP investments
(RM bil)
204.3
Public
10.5% 186.9
179.1
Private 168.5
151.7
134.5
5.5% 110.9
101.3 100.5
98.7
92.4 92.4 95.7 94.6 94.1 94.2
85.6 85.1
81.6 83.0
77.8 80.2
74.1
69.7
ETP
Launch
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
9th Malaysian Plan 10th Malaysian Plan 11th Malaysian Plan

Digital Free Trade Zone (DFTZ)
Malaysia’s DFTZ is the first of its kind in the world that was launched in March 2017 to boost the nation’s
e-commerce growth and position our country as a regional hub for internet-based innovation. The DFTZ
will provide physical and virtual zones to facilitate small- and medium-sized enterprises (SMEs) to capitalise
on the boom of the digital economy and cross-border e-commerce activities. The physical zone comprises
the e-Fulfilment Hub and Satellite Services Hub while the virtual zone consists of the e-Services Platform.
The zone would be located within the KLIA Aeropolis, a 24,700-acre development led by Malaysia Airports
Holdings Bhd (MAHB) that is expected to generate more than RM7 billion worth of domestic and foreign
investments. The DFTZ sets its 2025 target to double SME’s goods export growth to US$38 billion, create
60,000 jobs and facilitate US$65 billion worth of traded goods.
The launch ceremony also witnessed the exchanges of Memoranda of Understanding (MoUs) between
four parties:
• Malaysia Digital Economy Corporation (MDEC) and Alibaba Group for strategic collaboration in the
development of DFTZ in Malaysia, consistent with the objective of the Electronic World Trade Platform
(eWTP); and the development of a regional hub for e-commerce business, trade facilitation, SME
onboarding, cloud services for enterprises, and an e-Fulfilment and logistics centre.
• MAHB and Cainiao Network for the development of a regional e-commerce and logistics hub in KLIA
Aeropolis.
• Alipay with Maybank and CIMB to launch Alipay barcode payment in Malaysia. This partnership will
enable mainland Chinese tourists to make payments using Alipay e-wallet, their most preferred payment
method. This will also give Malaysian merchants exposure to the vast China market.
• MDEC and Catcha Group for the collaboration to establish Kuala Lumpur Internet City (KLIC).
To date, over 1,500 SMEs are at various stages of onboarding in DFTZ.
Aside from improving the vibrancy of Malaysia’s RM3,000 from RM2,629 in 2014. Meanwhile, mean
business environment, these incredible investments income of the M40 increased 6.9% per annum to
have also contributed to local industries’ technical RM6,502 in 2016 from RM5,662 in 2014, whereas B40
knowledge and the job scene. Since 2010, the economy mean income rose 5.8% to RM2,848 from RM2,537.
has seen an additional 2.68 million employed persons 2
(as of the fourth quarter of 2017), whereby 27.2% are The reduction in Malaysia’s overall incidence
skilled workers. In addition, income inequality has of poverty since 2009 further underscores the
reduced, as indicated by the Gini Coefficient. In 2016, country’s inclusive development to aid the most
Malaysia’s Gini Coefficient declined to 0.399, marking vulnerable groups. In 2016, the poverty rate had
a significant reduction from 0.441 in 2009, supported fallen to just 0.4% compared with 3.8% in 2009,
by growth in median and mean income, which reached with the incidence of poverty declining in all
RM5,228 and RM6,958 respectively, in 2016, against states. Notably, poverty in rural areas has dropped
RM2,841 and RM4,025 respectively, in 2009. significantly to 1% from 8.4% in 2009, in tandem
with our intensified efforts in rural development
Additionally, the middle 40% (M40) and the bottom put in over the past seven years.
40% (B40) of household income earners have led
median and mean income growth. In 2016, the M40 These socio-economic improvements prove the
recorded a growth in median income of 6.9% per importance and relevance of the NTP, which then
annum to RM6,275 from RM5,465 in 2014, while cement our fervent and pragmatic ambition of
median income for the B40 rose 6.6% per annum to becoming a high-income nation.
2
Employed persons calculation is based on CSDU’s definition and methodology. The data for the calculation is sourced from Department Of Statistics Labour Force Survey.
Highlights of the National Key Economic highest number recorded since 2015 when the SME
Areas (NKEAs) development programme was initiated.
Business Services
GNI VALUE (RM BILLION) The business services sector continued to provide
AT CURRENT PRICES high-skilled services to the economy and increase the
nation’s income. The GNI generated from business
NKEA SECTOR 2017 services in 2017 stood at RM64 billion, contributed
by the aerospace, shared services and outsourcing,
Agriculture 73.6 data centre, shipbuilding and ship repair, and green
technology industries. Among the sector’s highlights
Palm Oil/Rubber 79.9
is the significant growth of the aerospace industry,
primarily in the aerospace manufacturing and
Oil, Gas & Energy 203.5
Maintenance, Repair & Overhaul (MRO) sub-sectors,
Electrical & Electronics 63.4 highlighted by the appointment of Composites
Technology Research Malaysia (CTRM) Sdn Bhd as
Wholesale & Retail 201.9 a single-source supplier for the manufacture and
supply of Airbus A350 fan cowls. Furthermore, UMW
Education3 58.3 Aerospace is the first Malaysian company to be a tier-1
fan case supplier to Rolls-Royce under a contract worth
Healthcare3 26.0 RM830 million, hence positioning Malaysia as a critical
supplier of aircraft structural components.
Communication Content
58.7
& Infrastructure Communications Content and Infrastructure
Tourism 81.1 The communications content and infrastructure sector

has been a key focus of the NTP in bridging the urban-
Financial Services 73.9 rural economic gap. The development of the sector
is aimed at opening the digital economy platform
Business Services 64.0
to the rural areas, thereby improving their economic
participation and increasing the nation’s per capita
TOTAL NKEA 984.3
income level. A 3,800-km national submarine cable
Other Industries 393.2 project, known as the Sistem Kabel Rakyat 1Malaysia
(SKR1M), was completed and started its operations
TOTAL GNI 1,316.3 on 16 September 2017 to enhance connectivity links
between Peninsular Malaysia, Sabah and Sarawak, and
lower internet traffic congestion among these three
regions. During the year, the NKEA recorded RM58.7
Agriculture billion in GNI anchored by growing telecommunications
penetration as well as production of creative content.
The Agriculture NKEA has sustained the development
of the sector through a shift to high value-added Electrical and Electronics (E&E)
agribusinesses. During the year, the sector contributed
RM73.6 billion to GNI, exceeding our Roadmap target Malaysia’s E&E sector continued to record robust
of RM49 billion by 2020. This is driven by growth of growth, capitalising on the rapid advancements in
the processed food sector, aquaculture segments and technology and the global digital revolution. In 2017,
herbal products, in addition to the development of the industry recorded RM343 billion worth of exports
agriculture SMEs which provided income-generating and GNI of RM63.4 billion. The growth was mainly driven
opportunities for smallholders in 2017. Of note, the by investment in the manufacturing of semiconductors,
processed food sector saw the participation of 154 solar modules, LED products and household appliances,
SMEs and RM511.21 million of sales to support anchor reflecting the success of our efforts through the NKEA
companies along the full value chain in 2017, the to innovate high-value manufacturing. Among the
3
Include public education and public healthcare.
sector’s highlights was OSRAM’s first stage investment Greater Kuala Lumpur/Klang Valley
in the fully integrated LED epitaxy, wafer fabrication
and product manufacturing facility, which has been The MRT Line 1 from Sungai Buloh to Kajang was
operational since November 2017. Moreover, MIMOS launched on 17 July 2017, two weeks ahead of schedule,
and NCIA have successfully established a human marking a significant achievement in our efforts to
capital development centre serving the field of wafer improve liveability and connectivity of Kuala Lumpur
fabrication and equipment, which offers holistic and and the Klang Valley. The region also continued to
industry-driven trainings based on the curriculum co- record progress of another iconic project, the River
developed with SFAM. of Life (RoL), to clean and beautify the designated
eight rivers with the aim to improve environmental
Education sustainability, catalyse investments and ensure better
living quality in and around the country’s capital. The
Malaysia has retained its attractiveness as a world-class RoL project was also given the Award of Excellence by
education destination. The NKEA registered GNI of the International Federation of Landscape Architects
RM58.3 billion as a result of continued private sector under the Cultural and Urban Landscape category of
activity to support international student enrolment, the Asia-Pacific Landscape Architecture Awards 2017.
with 170,068 enrolments in higher learning institutions
in 2017 as compared to 70,000 in 2010. This is driven Healthcare
by increased marketing efforts by the private sector
and the Government and the presence of globally Since the Healthcare NKEA was introduced in 2011,
renowned brands in education as well as the offering the industry has grown in strength. In 2017, for the
of multi-disciplinary and specialised offerings to third consecutive year, Malaysia was acknowledged
attract international students to study in Malaysia. In
by two international publications, The International
addition, Malaysian universities have achieved great
Living magazine as well as the International Medical
strides and have been ranked within the Top 50 in the
Travel Journal (IMTJ), to be one of the world’s top
world in subject areas such as Hospitality and Leisure
countries for healthcare in terms of service quality,
Management, Electronic and Electrical Engineering,
accessibility, cost competitiveness and standard of
Chemical Engineering, Mechanical Engineering, and
post-procedure recuperation options, and as the
Environmental Sciences, among others.
“Health & Medical Tourism Destination of the Year”
respectively. The sector registered GNI of RM26 billion
Financial Services
in 2017. Of note, the year saw the launch of Phase I
Clinical Trial Guidelines which enables early-phase
The Government’s move to diversify the economy
trials in Malaysia for drug discovery and development.
within the services sector has allowed Malaysia
Additionally, the Private Aged Healthcare Facility and
to weather the turbulent headwinds of the global
Services Act was passed in 2017 to regulate private
economy. Activity in this NKEA remains private
nursing homes for the elderly, thus ensuring quality
sector-led and closely guided by the regulators,
services are provided for senior citizens.
ensuring accessibility to financial services and
enabling expansion of Malaysia’s regional links
Oil, Gas and Energy
and innovation through financial technology. The
Malaysian financial system has become more
Despite low crude oil prices for most of 2017, Malaysia
regionally integrated to support stronger economic
remained committed in its journey to add value to
and financial linkages, as reflected by the presence
its oil and gas sector, reporting GNI of RM203.5
and activity of Malaysian commercial banks in
billion. Its flagship initiative, the Pengerang Integrated
ASEAN. As of 2017, the value of the capital, equity
Petroleum Complex, continues a steady construction
and debt markets amounted to RM3.2 trillion, RM1.9
progression and attracts more investments. The
trillion and RM1.3 trillion respectively, while Assets
project made headlines in February 2017 with the
under Management stood at RM776.2 billion. In
signing of a Share Purchase Agreement (SPA) by
addition, Malaysia commands a 30% share of the
oil giant Saudi Aramco to invest US$7 billion in the
global market value of Shariah assets and is also
Refinery and Petrochemical Integrated Development
the global leader of sukuk issuances. As such, these
(RAPID) project in Pengerang, representing the largest
contributed to the RM73.9 billion in GNI created
ever FDI inflow to Malaysia, while constituting Saudi
by the NKEA in 2017.
Aramco’s biggest investment outside the Kingdom of globalising and revolutionising this sector have resulted
Saudi Arabia to date. Furthermore, new regulations in a consumer confidence level of 76.6% according to
in the upstream segment are slated to promote the Nielsen’s Global Consumer Confidence Trend Tracker
sector’s vitality and competitiveness, while positive Report, and Malaysia defending its third-place ranking
results in the areas of energy efficiency and renewable in the AT Kearney Global Retail Development Index
energy reinforce the country’s commitment to the 21st for two years in a row. Nevertheless, we continue
Conference of Parties (COP 21) Paris agreement to to support the transformation of small retailers
reduce 45% of carbon emissions by 2030. and automotive workshops as well as facilitate the
industry’s efforts to diversify the shopping experience
Palm Oil and Rubber to drive investment as well as consumption, especially
by leveraging new developments in the digital realm.
Malaysia’s position as a major global plantation and
commodities player was sustained in 2017 with total Highlights of the Strategic Reform Initiatives
exports of RM77.8 billion for palm oil and palm-related (SRIs)
products, while the export of local natural rubber
and rubber compounds contributed RM9.36 billion, The SRIs continue to play a vital role in enabling a
a tremendous increase from RM5.89 billion last year. conducive environment for business and strengthening
Progress was made in promoting the benefits of Malaysia’s international competitiveness, as well as
palm oil nutrients such as tocotrienol and carotenoids promoting inclusiveness and sustainability of our
for commercial consumption, as illustrated by the national transformation.
RM41 million grants committed to 10 projects in the
development of palm-based food, health products Narrowing Disparity
and animal feed in 2017. New planting and replanting
of rubber, on the other hand, met its target of 8,557 This SRI has spearheaded the adoption of “growth with
hectares. RM132.7 million has been allocated for the equity” as a key principle to ensure inclusive planning
further planting of 8,557 hectares of rubber in Sabah and balanced economic growth. This SRI has paved the
and Sarawak. As a result, GNI contribution by this way for the development of the Bumiputera community
NKEA reached RM79.9 billion in 2017. and the implementation of the Bumiputera Economic
Transformation Roadmap (BETR) 1.0 in 2011 to
Tourism mitigate fundamental issues faced by Malaysia’s largest
community in a holistic manner. As of 2017, BETR 1.0 has
The tourism sector remains on track towards achieving created a total of RM122.2 billion business opportunities
our targets of 36 million tourist arrivals and RM104 and in April 2017, the YAB Prime Minister launched the
billion in GNI by 2020, with 25.7 million in arrivals Transformasi Kesejahteraan Bumiputera (TKB) road
recorded in 2017 following the successful rollout of map as an expansion of BETR 1.0 to focus on uplifting
the e-Visa facility for tourists from 10 countries such the well-being of the Bumiputera community through
as China, India and Bhutan. Tourism receipts for 2017 improved capacity building and economic participation.
reached RM81.4 billion, and since 2011, the sector has
contributed to RM81.1 billion in the country’s GNI. This Competition, Standards and Liberalisation
has been achieved by efforts to improve our tourist
offerings and attractions, making Malaysia one of the The SRI remains a key driver in raising the nation’s
17 must-visit destinations in 2017 by CNN Travel, and competitiveness through the eradication of anti-
Ipoh, Perak as one of Lonely Planet’s Top 10 cities for competitive behaviour, promoting world-class business
travel in 2017. Kuala Lumpur, on the other hand, was practices and facilitating a vibrant services sector
also named among the world’s top 10 cities in terms through a supportive regulatory framework. During
of tourism growth by the World Travel and Tourism the year, a total of 300 out of 327 anti-competitive
Council (WTTC). complaints were addressed by the Malaysia Competitive
Commission (MyCC), while five decisions were issued
Wholesale and Retail against companies found guilty of anti-competitive
behaviours. In improving the quality of goods and
The wholesale and retail sector was a key contributor to services, 5,331 Malaysian Standards have been made
economic growth in 2017, recording a GDP contribution available for businesses and consumers, of which 510
of RM205.2 billion and generating RM201.9 billion of standards are being made mandatory by regulators.
GNI during the year. Constant efforts in modernising, Meanwhile, Malaysia’s sustained position on international
competitiveness rankings validates our efforts to management as well as widening tax base for fair
enhance our business competitiveness and landscape. and effective revenue collection. As a result, our fiscal
position remains on track towards a near-balanced
Human Capital Development budget, with our fiscal deficit narrowing further to
3.0% in 2017. This has also enabled the Government
As we progress towards high-income nation status, to more effectively channel development spending
our talent pool needs to advance in tandem to meet and public aid to the most in need.
the needs of the labour market by modernising our
labour laws; creating a labour safety net; strengthening
human resource management; conducting labour
market analysis; upskilling and reskilling; and
2020 and Beyond
leveraging women talent. We are currently on the
right track: our global human capital development
performance was ranked second in Southeast Asia
and 33rd in the world in the Global Human Capital Amid the backdrop of criticisms and doubts raised
Report 2017 issued by the World Economic Forum by naysayers, the Government has consistently and
(WEF) as compared to ranking 42nd in 2016, with successfully progressed along the NTP agenda. The
strong scores across the capacity, development success of the NTP would not have materialised
and know-how components. The 2017 Corporate without the unyielding effort by the civil servants in
Women Directors International Report on Women implementing these reforms and ensuring that all
Board Directors of Asia-Pacific Companies has also changes would positively benefit Malaysians from all
ranked Malaysia third out of 20 Asia-Pacific countries walks of life.
for our achievements in raising women directorships.
The labour market also saw significant development With just two short years away to the year 2020, the
during the year with the passing of three major laws: Government remains resolute and committed to stay
the Private Employment Agencies (Amendment) Bill, on course for the NTP. It has delivered proven outcomes
the Self-Employment Social Security Act 2017, and and we are confident our high-income aspiration will
the Employment Insurance System (EIS) Bill 2017 to be achieved.
provide greater employee protection.
True to the spirit of transformation, the NTP’s aim was
Public Service Delivery Transformation (PSDT) to promote transparency and encourage open dialogue
with the public to warrant policy developments that
Under the PSDT SRI, the Government is focusing on would directly address the needs of the rakyat. As
transforming the delivery of public health services to such, the Government has already begun planning
the rakyat by introducing LEAN Healthcare initiatives. for the future by way of the Transformasi Nasional
Significant improvements in reducing waiting time 2050 (TN50) programme to sustain Malaysia’s growth
as well as congestion at the hospital prompted the from 2020 to 2050. Through engagements with local
expansion of LEAN Healthcare to all 133 hospitals communities ranging from professionals, students,
nationwide in phases. To date, 52 hospitals under the public and private institutions, many aspirations have
Ministry of Health have implemented the initiative been captured and compiled to finalise the framework
in their various departments, with aims for the Lean of TN50 in 2017. The process is in line with the YAB
methodology to eventually be expanded to other Prime Minister’s endeavour of a pro-rakyat, bottom-up
public hospitals. Besides LEAN, more than 100 approach in creating the country’s next vision.
NBOS initiatives and 1,432 PSDT initiatives have been
implemented, addressing a wide range of socio- Ultimately, the TN50 programme aims for Malaysia to
economic areas and providing game-changing public become a top-20 country in economic development,
services to the rakyat. These initiatives include the social progress and innovation. Additionally, the
Urban Transformation Centres (UTC) and 1Malaysia Government will continue improving the delivery of its
Customer Service of Civil Servants (1SERVE). services to prepare ahead of the upcoming challenges
that will arise as we reach out for this new goal. With
Public Finance Reform strong emphasis on excellence and the focus on people
and inclusiveness, we are assured that Malaysia will
This SRI continues to ensure optimisation of succeed in its transformation and elevate further upon
Government resources through prudent monetary the completion of NTP.
IMPROVING URBAN PUBLIC TRANSPORT
Delivering World
Class Urban Public
Transport Services
YB DATO’ SRI LIOW TIONG LAI

Minister of Transport
Good public transport networks support regular problem-solving sessions, managing

economic growth, growing populations and the stakeholders better as well as facilitating internal
diverse requirements of urban activity. When we decision-making.
formulated the Urban Public Transport (UPT)
NKRA in 2010, we envisioned the creation of an Keeping in mind the Ministry of Transport’s vision of
attractive and sustainable public transport network spearheading the transformation of an integrated,
to overcome the congestion on our roads, uneven efficient and safe transportation system, I believe
access to public transport services and perception that in time to come, all Malaysians will enjoy world-
of unreliable service. Since then, we have doubled class urban public transport facilities- a system that
the modal share for public transport to 20% from we can all be proud of.
when we started in 2010, serving as testament
to the Government’s delivery of results in urban
public transport.
The demand for public transport is expected to

increase further as Malaysia transforms into a high-
income nation by 2020. This transformation has
been driven by the construction of new public
transport infrastructure, such as the game-changing
MRT project which was launched in July 2017, as
well as the expansion and upgrading of existing rail
infrastructure, namely the LRT and KTM networks.
Despite setbacks in some of our major projects, we

shall keep moving forward to ensure all these works
are delivered on time and ready to serve the needs
of the rakyat. A good public transportation system
is essential for continued economic development
and growth. The UPT NKRA’s Delivery Management
Office (DMO) has been crucial in ensuring
comprehensive planning and implementation that
enable all parties to work together effectively. In
addition, the DMO has given all parties involved a
greater sense of urgency and stronger resolve to
take the required actions quickly, which includes
YB DATO’ SRI NANCY SHUKRI

Minister in the Prime Minister’s Department
The Government aspires to see Malaysia’s public Despite various initiatives undertaken since 2010
transport system become the mode of choice for to increase overall ridership, raising the daily public
urban commuters and aims to reduce congestion in ridership target continues to be a challenge, especially
our cities. This will improve our productivity as well as it requires broad mindset change among the
as enhance the quality of life of our urban public and Malaysian public. Nevertheless, the overall total daily
the liveability of Malaysian cities. average of rail and bus combined still rose by 4% to
1.21 million in 2017 from 1.16 million the previous year.
In doing so, we have adopted a market-friendly
approach which puts the needs of public transport Last-mile connectivity continues to be one of our
users first. This has been demonstrated through the priorities, although this is not a simple task. For
introduction of new regulation to allow e-hailing instance, the Bus Rapid Transit (BRT) KL-Klang
services, in response to strong demand for the service project has been put on hold after considering that
from the public, making Malaysia one of the first its proposed alignment will overlap significantly with
countries to do so and allowing traditional taxi and the LRT3 line which is currently under construction.
e-hailing services to co-exist in a fair and transparent Instead, MRT and LRT rail services will be further
manner. It also contributes towards the improvement enhanced through the provision of a more efficient
of first- and last-mile connectivity. and comprehensive feeder bus system.
In recognition of our efforts to modernise our We have also studied the urban public transport
transportation system, in October 2017, the Land Public ecosystem to identify ways to attract users and
Transport Commission (Suruhanjaya Pengangkutan enhance the convenience of urban public transport.
Awam Darat – SPAD) received the International Best In view of this, SPAD will be launching the Journey
Practices Award from the International Association of Planner mobile app in early 2018 to facilitate one’s
Transport Regulators (IATR) under the Transportation journey when using public transport.
Innovation, Reform and Multi-modal Integration
category for the National Land Public Transport As the Government moves toward the completion
Masterplan and the Taxi Industry Transformation of major urban public transport projects, more push
Programme. initiatives are required to encourage further take-up
of urban public transport. Nonetheless, I am confident
During the year, this NKRA shifted from reporting AM that the results delivered thus far have restored
peak ridership (7am-9am) to daily average ridership, public faith in the quality and reliability of the public
as this is a more accurate and widely used measure transport network in line with our aspiration towards
of public transport usage globally. The change in becoming a high-income nation.
reporting metrics will allow us to plan more effective
measures for ridership, which accounts for one of
the most important dimensions of public transport.
Improving the Rail Backbone of ownership issues, the 51-km mega project was
completed ahead of schedule and below budget.
the Greater KL/Klang Valley The line serves a corridor running from northwest
to southeast KL with a population catchment of
Public Transportation Network approximately 1.2 million people. To date, the SBK
Line has recorded an average daily ridership of
110,000 rail commuters, an encouraging take-up
rate for a new mode of public transport. Similar to
other rail transport, the MRT is a greener way to
In every global city, urban rail is the crucial nexus travel, as it lowers carbon emissions by removing
that binds together disparate modes of public up to 160,000 vehicles off the roads in the Klang
transportation. Its range, capacity and reliability Valley daily. Following its completion, the MRT SBK
means that urban rail must necessarily play a Line has already become an important mainstay
central role in the transportation network of a of the overall rail and bus ridership for Greater KL/
thriving and vibrant city. Klang Valley.
Following the completion of the LRT Line Extension KTM Komuter services continued to register an
Project in 2016, 35 km of new rail tracks and 23 new on-time arrival rate (within 10 minutes of the
stations were added to the LRT network, connecting scheduled time) of 95% during the AM peak period.
Kelana Jaya and Sri Petaling to Putra Heights, and Further improvements in terms of headway and
uniting the two LRT services of the Kelana Jaya frequency are also being evaluated to make rail
and Ampang Lines into a seamless network. Total travel a more convenient option. These will require
LRT daily ridership has since increased by 4% from the completion of the Klang Valley Double Track
439,985 in 2016 to 457,658 in 2017 on both the (KVDT) Project, which began in November 2015,
Kelana Jaya and Ampang Lines, contributing 38% involving track rehabilitation as well as station and
to the overall public transport ridership in 2017. signalling upgrades to the oldest railways in Greater
KL/Klang Valley.
“The MRT is a greener way to

travel, as it lowers carbon
The project involves the rehabilitation of 40 km of
track between Rawang and Salak Selatan, as well
as the Sentul and Simpang Batu lines, marking
emissions by removing up to efforts by KTM Berhad (KTMB) to improve the
160,000 vehicles off the roads quality of KTM services and alleviate service
in the Klang Valley daily.
” delays and cancellations. The project is scheduled
LRT3, a project under SPAD’s Urban Rail

Development Plan (URDP), aims to connect an
additional two million people within the western
corridor of Klang Valley from Bandar Utama to
Johan Setia, Klang, by the year 2021. The new
line, which has commenced construction, will
complement other elements of the Greater KL/
Klang Valley Master Plan to develop an integrated
public transport system. The project owner,
Prasarana Malaysia Bhd, is currently awarding
construction contracts for the project and finalising
the alignment of the line.
The commencement of full operations of MRT

Line 1 (Sungai Buloh - Kajang, SBK) has further
catalysed urban public transport in Greater KL/ Total LRT daily ridership has increased by 4% from
Klang Valley. Despite challenges such as land 439,985 in 2016 to 457,658 in 2017 on both the Kelana
Jaya and Ampang Lines.
for completion in 2019 with KTMB focusing on

enhancing 16 stations and upgrading its existing
signalling and electrification systems. While
passengers are expected to experience occasional
disruptions during the upgrade, SPAD is monitoring
the performance of the KTM to ensure KVDT works
have minimal impact on its operations and on-time
arrivals. There also remains work to be done on
improving passenger schedule information and
safety performance. However, the completion of
the project is expected to provide overall improved
service for all railway users.
The MRT Feeder Bus enhances first- and last-mile
connectivity.
KL Monorail is a key rail feeder for the last mile
of travel for many passengers for the Central
Business District (CBD) in Kuala Lumpur. However, has successfully delivered a 9% increase in ridership
the service is currently bottlenecked and requires for stage bus services in Greater KL/Klang Valley.
expansion, with ridership reaching capacity Additionally, 90% of all operators have improved
and demand expected to rise further. Currently, their bus services with new and upgraded bus fleets
Prasarana is working to rectify the capacity and under the BNR.
safety issues in the existing Monorail system and
are providing bus services as an alternative for the Currently there are 11 stage bus operators in the
rail service. Additionally, five sets of four-car trains, Greater KL/Klang Valley region, servicing 348 routes
which had been grounded in May 2017 due to safety daily and contributing to the increase in stage bus
concerns, have returned to service at the end of ridership. Since the implementation of the BNR,
the year. Plans are currently underway to procure service coverage has increased by 20.4% (from
an additional nine sets of new four-car trains to 7,643 km to 9,202 km), with new routes introduced
replace the existing sets of four-car trains by the and redundant services streamlined. Bus operators
end of 2019 and add much-needed capacity for also increased the frequency of buses for routes
the Monorail service. with high passenger demand.
The introduction of LRT and MRT feeder bus

Revitalising First- and Last-Mile routes to improve transport integration has also
supplemented the BNR and enhanced first- and
Connectivity Services last-mile connectivity. The fare is set at only RM1,
with 192 feeder buses now on the road servicing 49
routes. Bus frequencies are between 10 to 15 minutes,
depending on traffic conditions. The routes generally
do not exceed 10 km, making the feeder buses a
Buses play an integral role in providing first- and convenient and timely service for commuters.
last-mile connectivity, enabling public transport
users to enjoy the full spectrum of the UPT network A key challenge faced in enhancing connectivity is
to get to and from their destinations. a shortage of bus drivers, especially in the Klang
Valley, as most drivers with heavy vehicle licences
The Bus Network Revamp (BNR) initiative represents prefer to drive express buses or cargo vehicles.
part of the Government’s plan to revitalise first- and Nevertheless, Prasarana and other bus operators
last-mile connectivity by streamlining stage bus continue to improve efforts to recruit new bus
routes to cover more of Greater KL/Klang Valley drivers, including the review of compensation and
to improve passenger accessibility and integration other benefits.
with other public transport modes. Six previous bus
corridors were restructured into eight corridors, with While the BNR initiative has proven successful,
a more systematic bus route numbering system. efforts to improve bus service coverage must
Since its implementation in December 2015, the BNR continue. With many new flourishing transport,
commercial and residential projects coming up in MBPJ, MBSA, MPS and DBKL) based on locations
Greater KL/Klang Valley, there is still room to extend with high density and ridership. All the local councils
and optimise the bus service network in the city. have given their commitment to build these bus
SPAD is also monitoring current BNR operations stops in 2018 and enhance pedestrian access
in a continuous effort to improve connectivity for around the bus stop areas. SPAD has also worked
commuters using bus services. closely with DBKL to enforce bus lanes in the Kuala
Lumpur CBD through awareness campaigns and
joint enforcement activities. Although 14 bus lanes
“The Bus Network Revamp (BNR)

initiative represents part of the
have been established in KL since 1997, many road
users continue to commit offences by driving their
private vehicles in the designated bus lanes due to
Government’s plan to revitalise inadequate enforcement and awareness.
first- and last-mile connectivity
by streamlining stage bus As of 2017, a total of eight intra-city terminal hubs,
also known as Hentian Akhir Bandar (HAB), have
routes to cover more of Greater been fully completed to facilitate the flow of traffic
KL/Klang Valley to improve from the suburbs into the city. These consist of
passenger accessibility and HAB Pasar Seni, HAB Munshi Abdullah, HAB Jalan
Silang, HAB Wira Damai, HAB PJS 3/2 and HAB
integration with other public
Section 19. HAB Section 17 and HAB Jalan Othman
transport modes.
” were completed in 2017. The hubs integrate various
forms of public transport including buses and taxis
by improving traffic flow at bus staging areas and
To improve bus passenger services and enhance
provide pedestrian facilities and walkways.
availability of route and schedule information, the
Government installed 4,547 bus information panels
The BRT KL-Klang corridor, which was planned
in all 13 local councils within Greater KL/Klang Valley
for three major thoroughfares; namely, the Federal
between 2016 and 2017. Of these, 3,257 were installed
Highway, Jalan Tun Sambanthan and Jalan Syed Putra,
in high commuter catchment areas in 2017, exceeding
has been put on hold due to its proposed alignment
the target of installing 3,000 panels for the year. At
overlapping with the upcoming LRT3 line as well as
the same time, continuous efforts are taken by SPAD
the project’s financial and implementation challenges.
to encourage local councils to enhance bus stops,
bus lanes, road traffic and pedestrian safety.
Taxi services are another important element in
the ecosystem for first- and last-mile connectivity.
In view of this, SPAD has identified 28 priority bus
In 2016, the Government made the bold move
stops to be built by local councils (in particular,
2,460 new individual taxi licenses approved, with 581 drivers received RM5,000 cash grants to purchase new taxis as part
of the Taxi Industry Transformation Programme (TITP) in 2017.
taxi and e-hailing drivers with a greater focus

on customer service.
In managing the emerging e-hailing market,

the proposed Land Public Transport Act 2010
amendment tabled by SPAD to incorporate
e-hailing services was approved by both houses
of Parliament on 15 August 2017. Detailed ride-
sharing regulations and policies were developed
concurrently by SPAD and will be put in place in
early 2018, allowing for both taxi and e-hailing
services to co-exist. Malaysia is keeping up with
the times and is paving the way for positive
A fleet of double decker buses operated by Prasarana on outcomes for the entire taxi industry by embracing
a few routes in Kuala Lumpur. the TITP and enabling the e-hailing system.
Prior to the implementation of e-hailing regulations,

to introduce the Taxi Industry Transformation SPAD initiated a pre-registration exercise for
Programme (TITP) to put in place much-awaited e-hailing drivers from 26 June to 30 September
reforms to create a level playing field that benefits 2017, performing stringent background checks
drivers, operators and passengers. up-front. Under the e-hailing policy, e-hailing
operators such as Uber and Grab are required to
In 2017, the YAB Prime Minister announced a obtain Intermediation Business Licences (IBL) from
new RM183 million fund to provide individual taxi SPAD to operate. IBL licence-holders are required
drivers a cash grant of RM5,000 in purchasing to abide by several operating conditions, such as:
new vehicles to be used as taxis on e-hailing
platform. This new initiative will span five years • Providing comprehensive e-hailing insurance
and is expected to benefit more than 30,000 coverage for drivers, passengers, vehicles
existing taxi drivers. The TITP recorded the and third parties;
approval of 2,460 new individual licenses, with • Ensuring their drivers and vehicles comply
581 drivers received the grant. with regulations at all times including
stringent background screening vis-à-
“The proposed Land Public

Transport Act 2010 amendment •
vis criminal records, medical fitness and
summonses;
Possessing a valid digital Driver’s Card;
tabled by SPAD to incorporate • Undertaking annual vehicle inspections; and
• Providing full cooperation with the authorities
e-hailing services was approved with regards to data sharing, incident
by both houses of Parliament on investigations and random audit checks.
15 August 2017.
” Meanwhile, to align with the industry’s new goals,
the Centralised Taxi Service System (CTSS),
On 31 March 2017, SPAD put in place a new now known as the Taxi Performance Monitoring
policy allowing more vehicle types to be used System (TPMS), has been revised to include
as taxis, providing greater comfort and safety to e-hailing services. As for traditional taxis, the
passengers while allowing taxi drivers to better new scope of the system includes replacing
compete with e-hailing service providers. The existing taxi meters with smart digital meters.
TITP has also set the minimum standards for However, e-hailing concepts and policies are still
taxi leasing ( pajak ) contracts to ensure fair being reviewed to ensure clarity before TPMS
treatment to both companies and drivers, and implementation can resume, until which time
introduced improved training programmes for SPAD will internally manage and monitor TPMS.
Making Public Transport operators. With Journey Planner, the public can now
access unified public transport arrival information,
an Attractive Option schedules, journey options and real-time notifications
using their smartphones. Commuters can also plan
their journey based on selected criteria such as
the fastest route, fewest transfers or routes that
require minimal walking. The Journey Planner app is
While a number of high-impact UPT projects have expected to help boost demand for public transport
been completed as of 2017, the rakyat must also play by providing comprehensive travel information of all
their part in ensuring the success of urban public public transport networks.
transportation in Greater KL/Klang Valley. In addition
“The
to demonstrating responsibility towards UPT assets,
the rakyat themselves must choose to switch their Integrated Common Payment
preference from private to public transport. System will minimise barriers
to interchange between public
”
This could mean making a commitment to leave cars
at home or at designated parking areas while using transport modes.
public transport. It may also require a more gradual shift
such as riding local buses to get around on weekends
The continued expansion of the Greater KL/Klang Valley
or taking public transport at least once a week.
public transport system has resulted in an increasingly
complex network requiring better integration across all
Towards this end, SPAD will launch the free Journey
transport modes. In response to this, the Government
Planner mobile app for the public in Q1 2018. The app
has been developing an Integrated Common Payment
was developed in collaboration with all bus and rail
Deputy Minister of Transport, YB Datuk Ab Aziz Kaprawi launching the Automatic Fare Collection (AFC) system in
conjunction with the Southeast Asian (SEA) Games KL 2017.
Park ‘n Ride (PnR) facilities make it easier for private vehicle users to continue their journey via public transport modes.
System (ICPS), a standard ticketing system for all across 190 stations as well as system integration
rail and stage bus operators in the Klang Valley. Its between the ICPS core solution and five back-end
objectives are to minimise barriers to interchange systems under Prasarana, MRT, KTM Komuter, Touch
between public transport modes and to encourage ‘n Go and the payment switch provider under PayNet
greater use of public transport through optimised for bank cards. Each party will need to enhance its own
pricing. The first phase of the project (until mid- back-end system for this integration, which requires
2019) focuses on urban rail services and will implementation in stages to avoid integration risk and
subsequently be extended to stage bus services major service disruption. As a result, the official launch
to enable seamless integration with rail modes in of ICPS, which was originally scheduled in 2018, has
the future. been moved to June 2019.
The initiative, which reached 61% completion in 2017,

consists of the development of a central clearing house
for transit and integration among transit operators, “More PnRs have been built at
strategic locations throughout
card issuers and other payment gateway systems.
ICPS uses Europay MasterCard Visa (EMV) and Near the Greater KL/Klang Valley rail
Field Communication (NFC) technologies, enabling network, with a total of more than
the usage of Touch ‘n Go, EMV contactless bank cards,
mobile payment and other possibilities that can be
tailored for future needs.
20,000 parking bays to date.
”
With ICPS integration work currently underway
Installation and integration work is the most critical involving all rail operators, the public can expect to
phase of the project, requiring 20 months to complete have one common card for Prasarana (including rail
across various stakeholders. This includes the and bus) services, MRT and KTMB in 2018, and full
deployment of 6,200 ICPS readers at station automatic integration with the common card, the MyDebit bank
gates, ticket vending machines and other equipment card and adoption of mobile payment by June 2019.
Meanwhile, the integration of the Automatic Fare CUSTOMER SATISFACTION INDEX

Collection (AFC) system with Touch ‘n Go has been
completed and was launched on 24 August 2017 in
conjunction with the Southeast Asian (SEA) Games KL
2017. 13 stations were involved in the exercise, among
them are the KTM Bank Negara, KTM Subang, KTM
KL Sentral and KTM Bandar Tasik Selatan which have
90%
2017
an interchange to the Ampang, Sri Petaling or Kelana
Jaya Lines which leads to the Bukit Jalil stadium. 84%
2016
Park ‘n Ride (PnR) facilities have been identified as
74%
another important component in attracting public 2015
transport usage, by making it easier for private vehicle
users to continue their journey via public transport
modes. To this end, more PnRs have been built at
strategic locations throughout the Greater KL/Klang
Valley rail network, with a total of more than 20,000
parking bays to date. During the year, new parking Under MOT, 2,759 parking bays have been constructed
bays were constructed in Klang and Rawang which are at eight PnRs including Salak Tinggi, Taman Bahagia,
targeted for completion in 2018 and 2019, respectively. Taman Jaya, Taman Paramount, UKM and Nilai.
Testimonial From Public Transport User
Nora binti Ahmad
As a working professional at a banking institution, Nora

has been using the Mass Rapid Transit (MRT) services
for her workplace commute on a daily basis since July
2017. “Prior to using the MRT, I have either been driving,
or using the Light Rail Transit (LRT) for my everyday
commute,” she explains.
While she still needs to drive to the MRT station, the

MRT service has made things so much easier for her.
She finds the MRT to be a fast, reliable, and affordable
way to commute to work. “So far, I’ve had a great
experience using the MRT in general.”
She is also of the opinion that single drivers who now
Nora believes that while the public transport system in currently drive to work should definitely consider public
the Greater KL/Klang Valley region has been steadily transport if available, as they then do not have to pay
getting better, there are areas that could be greatly exorbitant parking fees, especially if working in the
improved, such as the MRT feeder bus routes. “One middle of KL.
of the improvements the Government can make is to
plan for the feeder bus routes to run both ways for “I hope that there will be more MRT lines and extensions,
the convenience of commuters as they do not have to and I definitely hope that feeder bus planning/routes
make a whole round trip when their stop is only one will be revisited. That way, more people will consider
stop away from the station,” she opines. taking up public transport.”
Public transport operators have also increasingly taken The Government has approached public transportation
on the responsibility of providing PnR facilities. As adoption in a sequenced manner whereby the first
of 2017, Prasarana brought the number of parking step taken was to increase capacity through the
bays available on the LRT network to a total of 10,102, development of public transport infrastructure. The
with 4,091 completed in 2017. The average occupancy Government is now further accelerating the utilisation
rate for LRT PnRs is 79%, with 15 out of 31 stations of the public transport capacity by encouraging more
recording 100% occupancy rates. For example, users to switch from private modes to public transport
LRT PnRs at the Glenmarie (569 parking bays) through the adoption of push factors.
and Putra Heights (452 parking bays) stations are
operating at full capacity and have been effective In 2017, public transport agencies and local authorities
in attracting commuters from outside of KL to use began adopting recommendations from the 2016 Travel
public transport. With the full launch of the MRT Demand Workshop to gradually introduce push factors
SBK Line in 2017, a total of 14 multi-storey and open- such as the review of public parking rates and reduction
air car parks with 8,000 bays were built at several of street parking bays, as well as the strengthening
stations along the line. Also in the pipeline are an of parking enforcement in the KL CBD. DBKL has
additional 5,275 parking bays at 11 stations along also created several ‘car-free’ zones such as on Jalan
the LRT3 Line scheduled for completion in 2020. Petaling and Jalan Masjid India and introduced KL
Car-Free Mornings on every first and third Sunday of
Parkway Dropzones (PDZs) are built at high- each month for major streets in Kuala Lumpur. This is a
ridership rail stations for better integration of step in the right direction to ensure strong adoption of
existing infrastructure such as bus stops with covered public transport in the KL CBD and help improve traffic
walkways, pedestrian linkages for passengers to congestion. In addition, SPAD continues to work closely
get to a station, and transit facilities for bus or taxi with DBKL to strengthen enforcement on motorists
passengers to board trains and encourage car-sharing. abusing bus and taxi lanes, which will help to reduce
The PDZs are also a transit facility for bus and taxi congestion on city roads by facilitating mobility for
passengers to board rail services. Three PDZs have public transport vehicles.
been planned with one completed in 2016 (PDZ Kg.
Dato’ Harun) and another completed in 2017 (PDZ A Ridership Workshop was also held in May 2017 to
Serdang). PDZ Batu Tiga will be completed in 2018, identify more ways to increase public transport ridership
with delays due to coordinative and cooperative in Greater KL/Klang Valley. The workshop outlined
challenges among different parties involved in initiatives to attract and retain users by improving
planning and implementation. service reliability, convenience and affordability of
rail and bus services in Greater KL/Klang Valley. The
Regular coordination meetings with different agencies, workshop resulted in the formulation of 13 initiatives. Five
local authorities and other stakeholder involved in of the initiatives were implemented in 2017, including
planning and implementation have been held to the introduction of attractive fare packages and
resolve this, while relevant issues are also escalated at collaborations with local businesses and communities
the DMO level to the Secretary-General of the Ministry for first- and last-mile connectivity to promote public
of Transport to expedite procedures and obtain transport services. In August 2017, Prasarana and
approvals. Additionally, local residents and commuters ERL launched the enhanced KL TravelPass transport
are constantly engaged to gain their feedback and ticket which allows passengers to enjoy KLIA Ekspres
cooperation when facing inconveniences such as airport transfers at a discounted price, with two-day
traffic and pedestrian congestion, noise and dust unlimited rides on Rapid KL rail services. To bridge the
during the construction period. first- and last-mile gap for rail services, rail and e-hailing
operators have also worked together to roll out various
The Gombak Integrated Transport Terminal (ITT), promotions and discounts for public transport users.
which will serve as the hub for all inter-city buses
operating KL-East Coast routes, is now recording SPAD will continue its efforts to ensure all 13 initiatives
progress after facing technical challenges and land are successfully implemented, thus delivering improved
matters. Relocation of utilities and earthworks public transport ridership and hence improve utilisation
started in 2017, while MRR2 road widening was for all public transport modes in the Greater KL/
required to alleviate traffic congestion and ease bus Klang Valley area. For 2018, initiatives which are being
accessibility into the ITT. Gombak ITT is scheduled considered include tax relief for public transport users,
for completion in 2019. as well as upgrading of bus stops and payment systems.
Planning Urban Public Transport Trips

Made Easier With SPAD’s myJourney App
Part of the efforts undertaken by the Land Public key feature of myJourney. To use this, users may key
Transport Commission (SPAD) to make public transport in their desired destination and the app will then show
easier to use for commuters is the creation of its journey the best journey options, which can also be sorted by
planner application ‘myJourney’. Conceived in 2015, quickest journey time, cheapest fare or least walking
the app aimed to assist commuters in planning their distance. Users can also view the schedules of their
journeys using the public transport network in the selected mode of transport under the ‘schedule’
Greater KL/Klang Valley area. It covers all stage buses function. In addition, the app features a ‘Service Alerts’
and rail services, featuring real-time information. function, where operators can update any major service
disruptions via an operator console developed by SPAD.
Nurul Asyikin Abdul Razak from SPAD’s Mobility If the service disruption affects a user while in-journey,
Division is the project team lead for the myJourney the app will provide an option to detour.”
app. Aside from administrative duties, she has also
taken the lead in engaging with stakeholders to gather Developing the journey planner app has had its
feedback on the app, and working closely with the challenges. Chief amongst which was ensuring
app developer to rectify issues found within the app. that the routes planned were the optimal ones
“I also designed the look-and-feel of the app that you for every journey. As the app takes into account
see today, which is then translated into the Journey all modes from all operators, there are hundreds
Planner website and mobile app,” she explains. of combinations of results that are possible. There
were other technical challenges as well, as Nurul
As Nurul highlights, the myJourney app’s main features explains: “Obtaining scheduled data from operators
include journey planning, schedule viewing and service was relatively easy, but getting real-time data
alert updates. “The ‘journey planning’ feature is the required a bit more work. All bus stops in Greater
KL/Klang Valley are identified and tagged with
unique IDs. SPAD also developed a Performance
Monitoring Hub System (PMHS) located in our
headquarters, which main objective is to monitor
the performance of all stage buses. All the data
from the PMHS then is pushed to the myJourney
platform. SPAD has also directly integrated
myJourney with KTMB servers to obtain real-time
data on the KTM Komuter service.”
Nurul and the SPAD team in charge of the

myJourney app will continue to develop it as
more public transport data comes in, especially
from the LRT3 extension, the MRT SSP line, and
all other new bus and rail services. “My hope for
SPAD’s myJourney app is that it will become the
number one app of choice for commuters to use
for their journey planning purposes, and a tool
that plays a major role in gathering data for public
transport users in Malaysia, for the betterment of
SPAD’s future plans for public transport.” The app
is expected to be launched to the public in 2018.
Testimonial From Public Transport User
Nurul Fatiah Abdul Aziz

While Fatiah finds using the LRT and MRT to be a
generally pleasant experience, she feels that there
is much room for improvement when it comes to
bus services, especially in other states. “We could
do with more buses in the Greater KL/Klang Valley
region which will enable more people to use public
transport. In other parts of Malaysia, I hope that the
bus services will be improved and become more
efficient: they actually still use the olden-day buses
in Sabah, for example, or even vans.”
“Ioutside
have many colleagues who live
of the Klang Valley. A lot
of them prefer to use the LRT/
MRT because it’s way cheaper.
”
She thinks that more people in Greater KL/Klang
Valley should start using public transport more often.
23-year-old Nurul Fatiah Abdul Aziz, a recent
“Switching to public transport would do a great deal
University Malaysia Sabah graduate, frequently uses
for the environment: it would help improve our air
a combination of ride-sharing services – including the
quality, reduce noise pollution and improve our health.
LRT, the MRT, as well as buses – to commute to the
Additionally, I have many colleagues who live outside
environmental NGO where she currently volunteers.
of the Klang Valley. A lot of them prefer to use the
“Previously, I used to carpool or have my brother send
LRT/MRT because it’s way cheaper than using a
me down, but I no longer have any colleagues living
car where they would have to pay over RM50 each
near where I do, so it is easier for me to take public
week for petrol. Using public transport cuts that
transport,” she explains.
figure by half.”
Compared to carpooling or having her brother drop

her off, Fatiah finds taking public transport to be
more predictable and reliable in terms of accurately
estimating her arrival times. “For example, if I’m taking
the MRT, I know the minutes between each station,
so I get to estimate how long it takes me to get to
my destination. If I’m driving there, sometimes I get
stuck in unexpected jams.”
Fatiah also finds taking public transportation easier

on her purse. “It’s more cost-efficient for me as using
either the LRT or the MRT is a cheaper option. When
I do occasionally drive to work, petrol takes up a
large chunk of my travel budget. By using public
transport, I don’t have to get stuck in traffic jams or
worry about parking,” she elucidates.
MOving Forward
Many high-impact projects have been completed and significantly reshaped the urban public transport
landscape in Greater KL/Klang Valley. The Government aspires to increase public transport modal share
and has done so with modal share rising from just 10% in 2010 to 20% in 2015. However, further increasing
the public transport modal share against private transport will be highly dependent on changing the public
mind-set around public transportation.
Public transport modal share
Year 2010 2015 2020 2030
PT
25% 40%
Modal 10% 19.6%
(target) (target)
Share
Source: 2015 GKL LPT Survey (SPAD)
SPAD’s next Public Transport Survey, slated to be conducted in 2018, is expected to provide a clearer measure
of the overall impact of urban public transport initiatives in Greater KL/Klang Valley after seven years of NTP
progress. The target to achieve a modal share of 25% by 2020 and 40% by 2030 remains challenging. SPAD,
which serves as the main regulatory body overseeing this NKRA, has also identified a targeted average daily
ridership in the Greater KL/Klang Valley public transport network of 1.6 million by 2020 and will continue
efforts towards various initiatives, including capacity expansion as well as travel demand management, that
will help to make this target a reality.
Cooperation from the rakyat is essential to fully realise the ambitions of the UPT NKRA. The rakyat should
engage their local representative and public transport operators to demand greater accessibility to public
transport through measures such as the provision of more frequent services, as well as the construction of
new bus stops, park and ride facilities and better pedestrian walkways and lighting around stops and stations.
The rakyat also has a shared responsibility to look after public amenities provided, such as bus info panels
and the public transport assets themselves to maintain the network and infrastructure for future generations.
As the public transport system becomes more reliable, comfortable and accessible with greater connectivity,
more travel demand management will need to be accelerated to enhance the attractiveness of utilising public
transportation over private vehicles. New strategies moving forward will look into the issue of reducing
private vehicle usage and addressing Malaysians’ penchant for driving. The tasks ahead will not be easy, but
will need to be undertaken to achieve the UPT NKRA’s aspirations for 2020 and beyond.
RAISING LIVING STANDARDS OF LOW-INCOME HOUSEHOLDS
Forging Inclusive
Transformation
YB DATO’ SRI ROHANI ABDUL KARIM

Minister of Women, Family and Community Development
Low poverty levels signal a healthy and thriving Additionally, the e-Rezeki and e-Usahawan
nation. As a key agenda under the NTP and in programmes, launched in 2016 and 2017,
line with the country’s transformation into a high- respectively, enable participants to earn additional
income nation, the Government is committed to income through digital platforms and provide them
improve income equality by ensuring economic with access to opportunities in the digital world
inclusion of low-income households and eliminating especially in digital economy.
poverty. Since the implementation of this NKRA,
Malaysia has recorded a stunning reduction in The journey to eradicate poverty is never easy
poverty to just 0.4% in 2016 against almost 4% and I applaud all partner agencies who have taken
in 2009. proactive roles in assisting the country’s most
vulnerable communities. Their relentless support
This has been contributed by programmes such has resulted in new and improved opportunities
as 1Akhiri Zaman Miskin (1AZAM), which seeks to for the B40 group to break the cycle of poverty.
encourage entrepreneurship among low-income With challenges along the way, the Government will
households to improve their income. Currently, continuously embrace innovation and technological
100,420 individuals, who account for 91% of all advances to realise the objectives of this NKRA.
monitored participants to date, have recorded an
increase in income by at least RM300 in any three
month period of the assessment year. Furthermore,
results from the 1AZAM 2016 Outcome Assessment
Study commissioned by the Ministry of Women,
Family and Community Development (MoWFCD)
showed that the number of 1AZAM participants
who were categorised as “poor” decreased from
89.17% in 2009 to 58.69% in 2016, a reduction of
30.48%.
Successful 1AZAM participants are further

empowered by the Beyond 1AZAM programme,
which enables further business expansion by
providing training and entrepreneurship support,
access to micro and small business financing
and additional mentorship. The programme was
launched in 2015 with 1,511 participants and has
now recorded a total of 5,674 participants.
Providing Low-Income participants that is designed to expand their

businesses through further training, entrepreneurship
Households with Income support, access to micro and small business
financing and additional mentorship. This year, 695
Generating Opportunities participants were involved in the Beyond 1AZAM
programme, all of whom went on to successfully
increase their income by at least 20%. In total, 5,674
participants have undergone the Beyond 1AZAM
programme, a significant increase from the initial
One of the main KPIs for the 1Akhiri Zaman number of 1,511 participants when the programme
Miskin (1AZAM) programme is to increase the launched in 2015.
monthly earnings of programme participants, the
progress of which is measured by comparing the Be that as it may, the quantitative achievements from
participants’ incomes before and after receiving the KPIs alone are not a full measure of the desired
the various types of support provided by the outcome, as the real objective of the initiative is
programme. Participants are considered to have to produce self-sufficient participants who will
benefited from the 1AZAM programme if their diligently commit to the 1AZAM programmes and
earnings increase by a minimum of RM300 in any subsequently will be able to lift themselves out of
three month period of the assessment year. In poverty and are prepared to face the unpredictable
2017, 5,708 out of the targeted 5,150 participants and challenging realities of the business world.
successfully increased their earnings by at least Programme implementers thus play a key role in
RM300, bringing the total number of successful providing support, motivation and direction to
participants to 100,420 since 2012. the participants to guide them towards a globally
competitive mind-set and to ensure that participants
Successful 1AZAM participants are further build the confidence to pursue new avenues once
empowered through the Beyond 1AZAM programme, they have graduated from the 1AZAM and Beyond
a follow-up programme for successful 1AZAM 1AZAM programmes.
Distribution of 1AZAM programme equipments in Kapit, Sarawak.

Leveraging Technology to Break As such, the e-Rezeki and e-Usahawan

programmes were launched in 2016 and 2017,
the Cycle of Poverty respectively, as digital components of 1AZAM.

Implemented by Malaysia Digital Economy
Corporate (MDEC), both programmes propel the
Government’s technology-embracing approach,
backed by successful case studies and positive
The Government has identified Digital Economy as transformation observed in high-growth nations.
a key agenda to drive the country forward beyond To especially encourage low-income households
its high-income aspirations. To ensure inclusiveness from amongst the B40 to utilise these digital
and that citizens from all backgrounds will benefit platforms to raise their income above the poverty
from this agenda, it is critical that low-income line, the Government has allowed more than one
households are provided access to digital platforms person from each household to participate in the
which can create income-generating opportunities programmes.
and act as a gateway to global business.
1AZAM catalyses higher income for food

stall operator
“My name is Sharifah binti Dun and I operate a food stall,

Gerai Chik Pah in Desa Pandan, Kuala Lumpur. I got to
know about the 1AZAM programme from friends and
customers, and I chose to apply for this programme
as it’s an aid and not a loan. In 2013, I received the
‘Pakej Gorengan’ aid worth RM3,000, which includes
a stall, wok, ladle, cooking oil, gas and other materials
including raw materials.
The aid I allowed me to increase my menu to include

fried food. My gross income increased from RM70 per
day and now could even reach RM2,000. On average,
my daily gross revenue is around RM1,000 and I aim for
a comfortable daily gross revenue of around RM5,000
to RM6,000 per day.
In the short-term, I have a plan to get a food truck

to expand my business. Once I have the food truck I
would like to introduce it and spread the word about
it in the “Nasi Lemak Kopi O” television programme.
My long-term goal will be to have my own restaurant.
My advice to other participants of the 1AZAM

programme is to please try your best to expand your
business. Work hard and don’t give up.
To those who wish to increase their household income,

I would advise them to attempt to venture into new
businesses and opportunities. We must work hard to
find new opportunities so that we increase our income.
If we don’t look for opportunities, they would not come
Ms. Sharifah binti Dun, 1AZAM participant. by itself.”
Improving the Programmes That

Improve Livelihoods
we give out ‘starter kits’ – packages that help

Nor Salimah Binti Musa, people to start a small scale business. The idea is
Head of Delivery Management
for participants to receive tools, equipment and raw
Office (DMO).
materials, enough for them to start operating and
use the profits to pump it back into their business.”
The DMO benchmarks the success of the 1AZAM

programme as the increase of household income
of more than RM300. Based on an Impact-
Assessment Survey conducted in 2016, almost 60%
of participants achieved this.
Since taking up the role in June 2017, Nor Salimah

has identified three main challenges to the current
success rates: lack of an entrepreneurial mindset
among participants, smaller profit potential for
participants living in rural areas and poor financial
Nor Salimah Musa, Head of the Ministry of Women, management among programme participants.
Family and Community Development’s Delivery
Management Office (DMO) for the Raising Living “These three challenges are tricky to address, but
Standards of Low-Income Households NKRA, is we have some ideas to mitigate it,” she shares.
the person in charge of 1AZAM Niaga and 1AZAM “For example, we could award the packages to
Khidmat – programmes designed to lift the poor, the persons in the family who show the highest
the extreme poor and the B40 out of poverty by entrepreneurial drive. That might give better
offering small-business starter kits and monitoring business sustainability.
support. A total of 39,545 participants have
participated in both programmes between January “As for participants in rural areas without many
2012 until November 2017. customers with disposable income, we have
started thinking of ways to help them sell online,
“The core part of my work is to plan the 1AZAM to do e-commerce. We have to adapt to the
Niaga and 1AZAM Khidmat Programmes mentality of future customers, where they expect
based on the budget allocation received (from products and services to come to them instead
the Government) and ensure its effective of the other way around.
implementation”, shares Nor Salimah. “After
figuring out the allocation available for the year “To address the challenge of participants’
together with my officers, we figure out how to business sustainability due to poor money
give them to the qualified participants effectively. management, we have to do more beyond the
We also work out the KPIs we would like to current financial awareness course built in to the
achieve for the year. programmes. There are participants who had
depleted their whole profit on new smartphones
“Throughout the year, my team and I meet the without earmarking a portion of the money to
participants on the ground and perform interviews be reinvested in their business. This challenge
with those who are interested and eligible for can be partly mitigated by prioritising the right
1AZAM programmes. To those who are eligible, applicants.”
Another part of the role also involves removing as aid packages and monitoring,” says Nor Salimah.
much red tape as possible so her officers can do The pilot project will start in 2018 with 100 youths.
their jobs effectively, thus serving potential 1AZAM
Niaga and 1AZAM Khidmat participants better. Stressing the importance of planning years in
“Our goal is to help. From time to time, I revise advance, Nor Salimah hopes to witness the
and improve procedures, forms and processes,” multiplier effect from successful implementations of
she says. Under her lead, the DMO also removed a all 1AZAM programmes under her purview, that will
requirement which excluded those without salary enable 1AZAM participants to get out of poverty,
declaration slips, such as farmers and fishermen, leveraging the financial support provided by the
from applying for 1AZAM Niaga and 1AZAM Government.
Khidmat programmes.
“To
of
address the challenge
participants’ business
sustainability due to poor
money management, we have
to do more beyond the current
financial awareness course built
in to the programmes.
”
The DMO also considers feedback received
from its stakeholders to further optimise the
implementation of the 1AZAM Niaga and 1AZAM
Khidmat programmes.
An example of incorporating feedback, packages

under the 1AZAM Niaga and 1AZAM Khidmat will
be reduced to just 15 pacakges in 2018. “We started
with 27 packages originally before finding out some
packages were unsuitable or not as profitable to
the participants. Therefore, we combined some
packages, added some packages, and removed
some packages. We didn’t have the kedai runcit
(sundry shop) package before this, and now we do.”
Moving forward, the DMO plans to roll out a new

1AZAM programme – AZAM Belia. “Unlike 1AZAM
Niaga and 1AZAM Khidmat Programmes, AZAM
Belia will offer mentoring support in addition to
The e-Usahawan is a digital entrepreneurship

development programme targeted at youth and
microentrepreneurs. The programme was made
available online in July 2017, and by the end of
2017, 12,300 participants had joined the programme
against the targeted 8,110. To date, the programme
has generated a total income of RM24.3 million.
“Ithouseholds
is critical that low-income
are provided access
to digital platforms which can
create income-generating
opportunities and act as a
gateway to global business.
”
As the e-Usahawan programme only began
operations this year, the Ministry has prioritised
attracting participants to join the programme.
Beginning 2018, however, the Ministry will begin
1AZAM programme applicant verification session in
monitoring the number of participants who
Penaga, Penang.
have successfully generated income through the
e-Usahawan programme, with the target set at
2,000 successful participants. to technological literacy and online marketing
programmes to improve their competitiveness in
One of the challenges of the e-Usahawan initiative online entrepreneurship.
will be to ensure that the programme can be
optimised by its participants who come from Meanwhile, the development of a digital
diverse backgrounds and technological literacy crowdsourcing platform, the e-Rezeki platform,
of various levels. Moreover, some participants are targeted to offer digital-based services to generate
not yet fully educated on the effective strategies of income has successfully enlisted a total of 5,898
online marketing. In this respect, MDEC will continue participants, exceeding the goal of enlisting 5,000
its efforts to ensure participants are given exposure new participants in 2017.
However, the full potential of the e-Rezeki

programme has yet to be fulfilled as not all
participants have been able to utilise the e-Rezeki
programme as a launching pad to garner an
increased income that would propel them above
the poverty line. MDEC will be intensifying its efforts
to educate all e-Rezeki participants on the value
of maintaining the programme as a steady extra
source of income.
In expanding this NKRA, MDEC expects to train

13,000-14,000 more individuals from the B40
group through both e-Usahawan and e-Rezeki
1AZAM programme applicant verification session in programmes in 2018.
Lingga, Sarawak.
MOving Forward
Future efforts will continue to focus on taking a holistic approach to address and alleviate the struggles
faced by financially vulnerable groups in the Malaysian society. Following the Low-Income Households
Lab in 2012, the Government has pushed to provide financial literacy education for 1AZAM participants,
through collaboration with NGOs, universities and the corporate sector. This has elevated the lives of 5,340
citizens in 2017.
Through these efforts, those in the low-income brackets have managed to increase their income and
experience a better quality of life, exemplified by those who have managed to break out of poverty thanks
to 1AZAM. Some of these participants have shown exceptional growth and interest in entrepreneurship,
and have since moved on to give back to the community through their capacity to create job opportunities,
hence ensuring a perpetual cycle of eradicating poverty.
Additionally, the digital agenda will be a key enabler to generate income for the B40 group and eradicate
poverty by bringing global business opportunities to their fingertips. To this effect, the Government has
demonstrated its commitment by pledging RM100 million in the Budget 2018 to further develop both the
e-Usahawan and e-Rezeki programmes. This is in line with the Government’s commitment to drive the
digital economy, which it expects will contribute more than 20% to Malaysia’s GDP by 2020 and ensure
inclusive economic growth.
Reducing CRime
Making Malaysia
a Safer Country
YAB DATO’ SERI DR. AHMAD ZAHID HAMIDI

Deputy Prime Minister and Minister of Home Affairs
Since the inception of the Reducing Crime NKRA, to drug offenses. To further ensure that crime rates
we have intensified our efforts in reducing overall are controlled, new initiatives such as the Modern
crime. Our initiatives, when coupled with the Policing programme and enhanced border security
commitment and dedication of agencies under the have also been implemented.
Ministry of Home Affairs have demonstrated much
success, as reflected in the staggering 53% decline In our battle against crime, I would like to thank the
in index crime over the year 2010 up until 2017. Royal Malaysian Police; the rakyat, who are now
increasingly involved in community policing; and
To get an accurate reflection of crime rates on the other NKRA stakeholders such as the Malaysian
ground, the Royal Malaysian Police in 2016 have Prisons Department and the National Anti-Drugs
institutionalised a new, international parameter Agency on a job well done. 2017 has emerged as
for index crime calculations. The new method a banner year for this NKRA, but to ensure that
calls for index crime to be calculated per 100,000 progress is maintained, we must remain vigilant.
population; which enables us to take into account Here, I call for the media to play a greater role
any increase in population. In 2017, we recorded an in crime prevention, and spreading information
index crime rate of 306.15 per 100,000 population regarding deterrent sentences to inhibit potential
against the baseline of 352.07 per 100,000 crimes. Media coverage also builds towards gaining
population set in 2016. the trust of the rakyat through communicating the
effectiveness of our security forces and how they too
In tandem, the Royal Malaysian Police has also taken can be involved. This is especially important towards
to utilising the Perception of Crime Indicator (PCI) managing the fear of crime amongst the rakyat.
to better address and measure the effectiveness
of crime prevention efforts. In 2017, we recorded Moving forward, we will continuously engage
a 39.8% reduction in the public’s fear of being a with multiple agencies across the criminal justice
crime victim in Kuala Lumpur, Selangor, Penang system, local and national governments, as well as
and Johor. the private sector to encourage them in playing
more active roles in combating crime. These efforts,
Recognising that crime must be dealt with from alongside community policing by the rakyat will
the ground up, we have begun to undertake more lead to a safer future for all citizens.
holistic approaches in terms of prison inmate
rehabilitation and reintegration to reduce the
rate of reoccurring offenders and thus directly
reduce the rate of potential crimes. Hence, we will
continue upskilling prisoners for better chances of
resettlement post release, and revise our approach
Reducing Incidences of Crime the rakyat that security within the country is firm
and that public safety is the priority of the police
and Maintaining a Positive force. Following the launch of PCI survey in Kuala
Lumpur in 2016, in 2017, the survey was expanded
Impression to three additional states – Selangor, Penang and
Johor – to receive more substantial data on the
rakyat’s perception towards crime in other states
in the country. As a result of initiatives undertaken
above and beyond this NKRA, the PCI has improved
The Royal Malaysian Police (RMP) has continuously from 61% in 2016 to 37% in 2017, with Kuala Lumpur
worked to reduce the index crime rate on a yearly recording a reading of 42%, Penang at 33%, Johor
basis. Since the launch of the NTP, the Government at 35% and Selangor at 37%.
recorded an improvement from 486 reported crimes
per day in 2010 to 307 reported crimes per day in
2016. In 2017, the average number of reported crimes
per day was 272, showing a continuous reduction
Transforming Policing to Better
of such incidences. Index crime in Malaysia takes
into consideration 13 types of crimes which occur
Serve the Rakyat
with regularity and collectively represent an overall
picture of Malaysia’s crime landscape. These crimes
are divided into property theft (car theft, motorcycle
theft, van theft, lorry theft, heavy machinery theft, The Modern Policing programme launched by
snatch theft and house break-ins) and violent crimes the RMP in 2015 has contributed to the progress
(murder, rape, armed robbery, unarmed robbery, in curbing criminal activities and improving the
armed assault, unarmed assault and battery). public’s perception of crime. The programme
changes traditional policing into one that is service-
oriented and people-friendly, with strong reliance
“The number of reported crimes

per day has dropped to 307 in
on technology and efficiency by streamlining and
simplifying decades of old processes and work
”
practices. Additionally, the programme aims to
2016, as compared to 486 in 2010. improve the rakyat’s confidence in safety and
security with the deployment of more officers on
the ground and increase the convenience of lodging
In 2017, the RMP converted its measurement of index
police reports.
crime from the average reported crime per day to
crime incidences per 100,000 population, in line
Among the initiatives under the Modern Policing
with the United Nations Office on Drugs and Crime
programme are:
(UNODC) standards. This measurement method is
a more accurate reflection of index crime rates, as it
• Redevelopment of the simplified police
takes into consideration criminal records for a given
reporting system (sPRS);
population size. This new method allows Malaysia
• Implementation of a customer rating system in
to benchmark its statistics against other countries
police stations under the Kuala Lumpur Police
in the world, particularly against other UNODC
Headquarters (Ibu Pejabat Polis Kontinjen Kuala
member states. According to Global Peace Index 2017
Lumpur - IPK KL);
produced by the Institute for Economics and Peace,
• Establishment of an online checking system
Malaysia is ranked at 29th out of 163 countries. The
(https://sso.rmp.gov.my) which has improved
2016 result of 352.07 crime incidences per 100,000
investigation processes by facilitating the timely
population is now used as a baseline value for future
reporting of each investigation stage;
measurements. In 2017, the crime rate was recorded
• Full implementation of Mobile Data Terminals
at of 306.15 per 100,000 population nationwide, a
(MDT), a portable computer installed in police
13% decrease from 2016.
mobile patrol vehicles connected to RMP
systems that enable officers to perform ground
To ensure continued improvement to the Perception
checks on certain individuals in situ;
of Crime Indicator (PCI), RMP will continuously assure
• Establishment and implementation of an
i-Quarters system for the monitoring of quarter RMP issued 1,941,799 POL 257 summonses, of which
assignment and occupation for police officers; 803,561 have been collected. In the year 2018, the
• Utilisation of mobile tablets for the lodging of RMP will pursue a higher target summons collection
police reports at the crime sites, replacing the of at least 42% from 40% in 2017. The enforcement
traditional practice of physically writing out of summons collection is crucial as it serves as a
crime reports in the Special Report logbook and penalty to offenders, besides educating them on
Emergency Report logbook in accordance with the consequences of their erroneous actions and
Section 107 of the Criminal Procedure Code. discouraging traffic offences.
Currently, Modern Policing initiatives are carried out To this effect, RMP has also put in place various
on a pilot basis in two police stations in Kuala Lumpur measures to ease summons payments such as
- the Taman Tun Dr. Ismail and Pantai police stations. online channels via MyEG Services, card payments
These police stations have carried out the full list via Maybank automated teller machines (ATMs),
of initiatives with a total of 360 officers positioned numerous computer on-line payment system
on the ground. Moving forward, the programme is (COPS) traffic counters found in shopping malls
planned to be deployed to all 24 stations under IPK KL as well as contingent and district headquarters and
by 2018 where 11,500 police personnel, or about 10% selected Department of Road Transport counters.
of the police force, will be engaged on the ground.
The RMP has determined the strategic direction and
The RMP’s Investigation and Traffic Enforcement action plan for the Modern Policing initiative towards
Department (JSPT) also continues to deal strictly achieving world-class law enforcement standards by
with traffic offences with the issuance of POL 2020. Following the completion of phase two of the
257 summons, which are issued directly by police initiative in 2017, RMP will focus on its implementation
personnel to traffic offenders on-site when the throughout the police force in Kuala Lumpur to ensure
infraction is detected. As of December 2017, the holistic safety measures are provided to the people.
E-Reporting Launch at Taman Tun Dr. Ismail Police Station on 10 March 2017.
New Light for Inmates
Khairul Zakran and M.K Manogaran are two men who them a chance to get out of that segment once they
have emerged successful from the inmate upskilling leave. “Many of them earn more than RM2,500 with
programme. For both, the programme represented the jobs they are able to secure with the certification
a new lease on life. Khairul, who spent a large part under Metro Driving Academy,” he added.
of his youth in prison cherished the programme
as it gave him a clean slate. “Once you cross the What made Khairul and Manogaran stick through
prison gates, you leave the good and the bad behind. the gruelling six months is the fact that the people
You leave all your credentials, achievements, and in Driving Programme treated them as people first,
grudges at the door”; the time spent in incarceration not inmates. “We learn a lot more than how to
was spent working on his discipline, focusing on his change windshield wipers and how the engines
spirituality and honing his soft skills. work, we learn about our bodies – how our body
time clocks work, why long-haul drivers get sleepier
The upskilling programme encompasses activities when its warmer. The programme produces great
ranging from baking, wood carving, tailoring, graduates, we know better than chugging down
to songket and batik making. For the first few coffee to keep ourselves awake, we understand
months in prison, Manogaran involved himself in how to prioritise the safety of our passengers and
various activities such as pipe packaging and grass cargo,” states Manogaran.
cutting, however the impactful change came after
enrolling in a driving course offered by the prison in Khairul highlighted how inmates are allowed room
collaboration with Metro Driving Academy. to think in prison. What they had no time for on the
outside, they had plenty of time for in prison. Hence,
“The entry requirements are lenient,” he said, “which every upskilling programme he was involved in not
is great because most inmates don’t have much to only honed his technical skills but also trained his
begin with”. Metro provides training on how to handle soft skills; “the misconception about prison is that
a diverse range of vehicles, from motorcycles and you’re not allowed to communicate. But the reality
cars to heavier machineries such as lorries and buses. is that you’re not walled off from humanity”.
PKP Haji Wan Ramzan Wan Ahmad, the Assistant This misconception is what adds towards the stigma
Commissioner of Prisons, said the objective of the attached to former inmates once they leave prison
inmate upskilling programme is to create pathways and start applying for jobs, society tends to assume
for prisoners to change their lives upon release from that they are one dimensional creatures, shaped by
prison. According to him, most prisoners are from the singular mistake which landed them in prison.
the B40 segment, and the Department tries to give
“The vocational unit in the Prisons Department is
looking at new methods to help prisoners once they
leave prison,” said Haji Wan Ramzan. “In the past,
training used to be skills driven, but the current
training programmes are more holistic and focused
on creating career paths for the trainees. Since
2007, we have trained 13,000 inmates.”
Having been participants in the programmes, both

Khairul and Manogaran attested to the fact that it
is easier to get jobs; with the certification. At the
end of the upskilling programmes, participants
are given a Sijil Kemahiran Malaysia certification.
The certification gives them an advantage in their
chosen fields. For example, the majority of drivers
Kajang Prison, Selangor. in Malaysia do not have certification – aside from
a licence – to testify for their skills in driving but The most disheartening thing perhaps is the
those who underwent the programme do. attitude of fellow Malaysians towards ex-inmates.
Both Manogaran and Khairul stated that usually,
Several years out of prison, and both have moved family and friends turn their backs on ex-inmates
on from their initial jobs of working with Metro when they need the support the most. “The
Driving Academy. Khairul, who started off as an main inhibitor is how people perceive us,” says
administrative clerk at Metro Driving Academy Khairul, “I came out of prison with dignity, but
has now made it into the field of private security when people treat you like castaways, that’s what
and is working on programmes where he can give demotivates you.”
back to the community and create launching pads
for those who are seeking to upskill themselves. The society needs to change their mentality and
Manogaran, who began as a driver in Metro has remove their ill judgments towards ex-prisoners.
now risen through the ranks to become Chief Driver. Instead, they should support them as best as
possible to re-adapt the society. “Prison is the last
Although the programme brings an abundance place you want to go, and everyone in the society
of benefits, it is also riddled with challenges play a role in reducing the rate of recidivism,”
and setbacks. “The implementation of training stated Haji Wan Ramzan. “Prison changes a
programme as such requires support from the person,” says Manogaran. “I call out for more
Government, especially in terms of funding,” said people to accept us in the working world. Give
Haji Wan Ramzan. “Funding is required to bring in us a chance to prove ourselves”.
professional instructor and develop infrastructure.”
Khairul Zakran (left) and M.K Manogaran (right), participants of the inmate upskilling programme.
Engaging the Public on Their Adopting A Holistic Approach to

Safety Needs Combat Drug Offences
To further understand the public’s concerns about Substance addiction remains a major concern in
crime and safety, the Government has completed the the country and the Government has continued its
development of a Community Engagement Index relentless effort to eradicate this social problem.
(CEI). The CEI aims to restructure and streamline the In 2017 the police uncovered 18 drug-processing
way the RMP engages with the public by measuring laboratories and detained 73 members of drug
three criteria: percentage of engagement (footprint); syndicates. Drugs worth about RM198.54 million
intensity of engagement (contact hours); and were seized during the police operations.
effectiveness of engagement (thumbs up).
Under the NTP, the Government has adopted a
new approach to drug treatment and rehabilitation
programmes to combat addiction. Spearheaded
by the National Anti-Drugs Agency (AADK), the
following measures are among those which have
been undertaken to address this:
• Establishment of drug rehabilitation centres

(PUSPEN) to identify and separate drug users
according to their type of addiction and treatment
needs. NGOs are encouraged to scale up
operations by running selected PUSPEN or halfway
houses, enabling them to apply their professional
experience and provide higher rehabilitation rates
to a larger number of drug users;
• Upgrading two Cure & Care Service Centres
(CCSC), formerly known as Narcotic Addiction
Inspector General of Police, Tan Sri Dato’ Sri Mohamad
Rehabilitation Centres, into Mini Cure & Care
Fuzi Harun observing PDRM’s newest asset, the Kawasaki
KLX250 scrambler. 1Malaysia Clinics (Mini C&C) in Blackspot areas; and
• Amending the Drug Dependents Act 1983 to make
non-compliance a seizable offence to reduce the
This initiative consists of two community engagement time taken to arrest non-compliant People Under
platforms - the ‘Talk to Us’ programme in Kuala Supervision (Orang Kena Pengawasan – OKP), as
Lumpur, as well as the Hari Bertemu Pelanggan no warrant will be necessary.
rolled out in 13 states. The purpose of these two
platforms, particularly the ‘Talk to Us’ programme, The battle against drug abuse should be a combined
is to get feedback from the public on how the effort of both the Government and the community.
police can improve their performance to improve Towards this end, the Community Empowerment
the public’s sense of security. Among the feedback Programme (CEP) seeks to enlist the community
received from the public include for the police to in the fight against substance abuse. The primary
patrol certain areas more often at night as well as vehicle for the CEP is the Community Battery – Drug
improving the friendliness and approachability of Abuse Prevention Strategies (COMBAT-DAPS), a
the police. These programmes are aligned to the product of a collaboration between Universiti Sains
RMP motto, “Polis dan Masyarakat Berpisah Tiada” Islam Malaysia, the Asian Centre for Research on
(there is no separation between the police and the Drug Abuse (ACREDA) and AADK.
community). In 2017 alone, RMP carried out 1,687
engagements nationwide.
The goal of COMBAT-DAPS is to provide the with a health-based system which emphasises
community with knowledge on drug abuse community involvement and provides end-to-end
prevention. Information shared with participants treatment. Following the success of a pilot project
during these sessions include the types of drugs and in the district of Besut in Terengganu in 2016, where
its respective effects, law and policies in Malaysia 54% of those who registered for treatment managed
pertaining to drug usage and abuse as well as the to stay off drugs, AADK is now empowered with an
state of drug addiction in Malaysia. enforcement role under Section 3(1) of the Drug
Dependants Act (Treatment and Rehabilitation)
1983 (Act 283) in a total of 106 districts nationwide.
“The previous methodology of

‘arrest, incarcerate and quit cold
This empowers AADK officers to take any person
reasonably suspected as a drug dependent into
custody. The person in custody can then be
turkey’ is being replaced with a detained for a period not exceeding 24 hours at
health-based system.
” any appropriate location to undergo urine tests.
The legislation enables AADK to act immediately

Drawing from the practices of COMBAT-DAPS, with the goal of curbing drug abuse. Among
an Empowerment Expansion Framework was operations carried out under this legislation are
developed and implemented in additional districts. Ops Cegah, Ops Bersepadu and Ops Sepayang
The Empowerment Expansion Framework focuses through collaborative efforts between AADK and
on active community participation at the district level RMP. In 2017, AADK executed 5,431 operations and
within each state, capacity-building for community conducted 40,800 urine tests. Out of the total
leaders in terms of programme management, as well number of tests, it was found that 21,941 (54%) of
as building a supportive environment. The process those detained tested positive for drugs.
of creating a supportive environment involves
eight strategic partners (Government agencies
and associations) and six smart partners (NGOs)
to participate in programmes and activities.
Guiding Prisoners to a
The strategic partners comprise of the Ministry
Brighter Future
of Youth and Sports, the RMP, the People’s
Volunteer Corps (RELA), the Department of Islamic
Development Malaysia (Jabatan Kemajuan Islam
Malaysia - JAKIM), the Department of Welfare,
Since the launch of the NTP, prison-related
the Ministry of Education and the Department of
initiatives have focused on increasing support to
National Unity and Integration. Smart partners
prisoners upon their release to start a new life. To
consist of PEMADAM, Pengasih Malaysia, alliances
this end, the Prisons Department of Malaysia has
consisting of youth associations such as Belia 4B,
been taking proactive and pragmatic measures in
private entities, SKUAD 1Malaysia, various NGOs
the rehabilitation of convicts through the Human
and other associations.
Development Programme.
The target for 2017 was to roll out the Community

Rehabilitation programmes were developed for the
Empowerment Programme in 50 high-risk areas out
inmates after taking into consideration criteria such
of the 178 areas identified. As of 2017, AADK had
as crime categories, level of education, age and level
implemented this programme in 64 high-risk areas,
of religious practice among the inmates to provide
surpassing its target by 28%.
inmates with a sense of structure, belonging and
purpose. The adoption of the rehabilitation approach
Initiatives to decriminalise drug addiction are also
is based on the philosophy of “potential prisoners
under way. The previous methodology of ‘arrest,
to recover with integrated assistance and guidance”.
incarcerate and quit cold turkey’ is being replaced
The selection process for potential skills training External Certification Officers. Among the courses
programme participants is based on the completion offered under the programme include those in
of two structured rehabilitation phases; namely the the field of food preparation and baking, sewing,
orientation phase (first phase) which restores the fabrication, furniture-making, wood-carving, basic
inmates to optimal physical and mental health, shapes landscaping and construction works, mechanical
and builds their discipline and helps inmates adapt to engineering, automotive services, pottery, plumbing,
prison life; followed by the character building phase metalworking and farming.
(second phase) which cultivates good behaviour
through worldly and spiritual knowledge. The CIDB programme is a training and examinations
based programme assessed by educators from the
Construction Academy of Malaysia. CIDB offers four
construction related courses; these are fixed ceiling
installation, wet trades, landscape construction and
wiring installation for buildings.
In tandem, short-term courses (Sijil Asas Kemahiran

Jangka Pendek) are offered to inmates with shorter
sentences and those otherwise ineligible for the other
two types of skills training. Through these short-
term courses, inmates can learn vocational skills
which will serve as a foundation to build a career
after they have served their time in prison. Among
these courses are basic construction, air conditioner
Kajang Women’s Prison, Selangor.
repair and maintenance, pickle and sauce making,
traditional cake-making, mushroom farming, bee
farming, vegetable farming, site preparation for
The inmates are then enrolled in their respective skills
planting seedlings and vegetables, reflexology as
training programmes which equip them with skills to
well as hair-cutting.
increase their employability and registers them in job
placement schemes which will help ensure that they
have the means to support themselves upon release.
This year, the Prisons Department continued its

“Inmates are equipped with skills
to ensure they have the means to
certified skill training programme, a technical and
vocational skill certification under the ‘Sistem Latihan
Dual Nasional’ (SLDN) in conjunction with the
support themselves upon release.
”
Construction Industry Development Board (CIDB). As of 2017, 2,854 have participated in the skills
The programme is certified by the Ministry of Human training programmes against 2,265 inmates in 2016.
Resources’ Department of Skills Development and Out of the total 2,854 participants, 2,073 are enrolled
Department of Manpower as well as the Ministry under the SLDN programme, 141 under CIDB and
of Works. This training programme is designed for 640 under the Sijil Asas Kemahiran Jangka Pendek.
Malaysian inmates in their third phase of the Human
Development Programme, which prepares prisoners Budgetary considerations remain a challenge for
for re-integration into society. the Department of Skills Development, as the
development of infrastructure and the assignment
The SLDN programme offers training courses of resources to provide the training requires budget
endorsed by the Department of Skills Development. allocation from the Government.
The training and certification are conducted
in-house, with 47 National Occupational Skills To improve the correction process, the Prisons
Standard (NOSS)-based courses offered in 42 Department will seek to strengthen its rehabilitation
prison institutions and community rehabilitation programme and enhance post-release support,
centres in the country. It is supervised by officers which is to increase the number of personnel and
from the Department of Skill Development who are respective Government agencies involved in the
the coaches and trainers, SLDN coordinators and process of deporting immigrant convicts.
The Prisons Department has also developed a Malaysia’s land borders (primarily with Thailand)
standard operating procedure (SOP) in accordance against illegal border crossings and smuggling.
to the Offenders Compulsory Attendance Act 1954 The programme encapsulates 21 specific initiatives,
which enables the Department to divert eligible including the formation of the Border Control
prisoners to rehabilitation centres, instead of Agency (AKSEM) in 2017 to drive the overall
undertaking immediate imprisonment for their programme.
drug-related or minor offenses. The Act allows for
minor sentences to be served outside prisons via The 21 initiatives are categorised under six focus
community sentences under the supervision of the areas as follows:
Prisons Department if the offender is a first-time
offender, or has been charged with less serious • Streamlining Border Processes and Policies;
crimes. Community sentences for rehabilitation are • Changing Border Community Mindset and
opted for to deter re-offending and recidivism. This Culture;
initiative is in line with the Government’s effort to • Improving Physical Infrastructure, Manpower
move towards alternative sentencing and streamlined and Technology;
criminal processes. • Strengthening Border Personnel Capabilities;
• Fostering Greater Inter-Agency Cooperation;
“AKSEM
and
has implemented 145.8% • Inculcating a Culture Which Emphasises
of the quick-win border security Integrity and Honour.
initiatives at our borders fronting As of 2017, AKSEM has implemented 145.8% of

Southern Thailand.
” six quick-win initiatives at several Immigration,
Customs, and Quarantine Security Complexes
(ICQS) located at the Kedah and Kelantan borders
In addition, the recent Prisons Lab concluded in fronting South Thailand. The quick wins achieved
2017 recommended the amendment to the Criminal are border security personnel accreditation training
Procedure Code, Compulsory Attendance Act 1954 and development, introducing and implementing
and drug-related Acts for dependents to attain due diligence and integrity testing, quarterly
treatment outside of prison by the year 2020. team-building sessions, stricter enforcement on
border communities, job rotation every six to 12
The Department of Prisons also aims to improve months at the border and a border awareness
the correction process to achieve a 5% recidivism programme. These were made possible with the
rate from the current 8.9% rate by year 2020. The passing of the Malaysia Border Control Agency
current recidivism rate has caused overcrowding in (AKSEM) Act 2017 as well as the amendment
prisons, with an average overcapacity rate of 17%. of National Security Council Directive No. 15,
By the year 2020, the Prisons Department targets to where the new framework will be enforced at
reduce prison overcrowding by diverting two-thirds the Malaysia-Thailand, Sarawak-Kalimantan and
of eligible prisoners by requiring eligible prisoners Sabah-Kalimantan borders.
to undergo effective rehabilitation programmes.
Aside from AKSEM, the main agencies involved
in border security include the police, General
Ensuring the Safety of Operations Force, Customs Department,
Immigration Department and AADK. Based on
Our Borders the National Blue Ocean Strategy (NBOS), RELA
may also be deployed, especially in Sarawak,
where there are many illegal pathways to
cross along the long and porous Kalimantan
border. Moreover, RELA has been lending extra
The Border Security Lab, which was conducted
manpower to the police, the CIQ (Customs,
in 2016 and involved 16 Government agencies,
Immigration and Quarantine) and to guard
was aimed at developing an amiable framework
border posts.
for border relations and a programme to secure
RMP Paves the Way for A Holistic Approach hear more of crimes happening via news media,
to Crime-Fighting but do not check the facts. Then they amplify the
news of the crimes by sharing to their group of
The Royal Malaysian Police (RMP), which has been friends via the social media,” he says.
steadily improving its community outreach efforts,
should be applauded for its various engagement Nonetheless, Choo acknowledges the work that
activities, according to Choo Lub Khung, Secretary- the RMP has put into transforming itself into a
General of the BK5 Bandar Kinrara Puchong community-oriented organisation. “The RMP today
Residents’ Association. “The people are now aware is more caring towards the community, and has
that at the various Control Centres, RMP officers become a service-oriented organisation looking
work round-the-clock to ensure that their safety is after crime prevention and community safety,”
secured at all times,” Choo elaborates. He believes he adds.
that given this increased awareness, the people are
more willing to become the RMP’s eyes and ears However, Choo believes that there is still room for
on the ground. improvement in this regard. “This transformation
should not only be from top to bottom, but also
This is a good sign, as it is Choo’s opinion that bottom-up. The RMP must be more proactive; using
crime prevention involves all parties – individuals, new media to amplify crime prevention tips to the
communities, businesses, non-government crime prevention pillars of society identified in the
organisations, and all levels of Government various districts. Through them, such tips will reach
agencies. As Choo sees it, the recently developed the rakyat at a faster speed,” he elaborates.
Perception of Crime Indicator (PCI) and Community
Engagement Index (CEI) are benchmarks on Indeed, both the PCI and CEI provide valuable
people’s perceptions towards crime, but results feedback on the community’s feelings, which the
show that the RMP still has a long way to go as far RMP can then take into account as it works towards
as this is concerned. a safer Malaysia, Choo points out. “The community
deserves to not only be safe but feel secure as
“The fear of crime happening and reality of crime well. Our quality of life would also be improved,
happening are two separate issues. The people feel as whether we feel safe or unsafe impacts our
that the crime rate is getting worse, as most of them quality of life.”
BK5 Bandar Kinrara Puchong Residents’ Association with the Royal Malaysian Police (RMP).
MOving Forward
The Reducing Crime NKRA has achieved great strides in lowering Malaysia’s index crime rate over the
course of the NTP. Meaningful change was made possible through concerted efforts across the criminal
justice system. In upholding this progress, the public as well as the agencies under the Ministry of Home
Affairs, such as the RMP, Prisons Department and AADK, must play their part in the combat and prevention
of crime, detection and arrest of offenders, bail and remand, case preparation, and resettlement and
rehabilitation, amongst others.
This NKRA will continue to strengthen Malaysian borders to effectively halt illegal smuggling activities.
Additionally, the RMP, in assuring the safety of the rakyat, will continue with community-oriented policing
which focuses on building ties and working closely with the community. Proactiveness in addressing public
safety concerns will be continued to cement sustainability against the country’s landscape of growing
urbanisation and inter-state migration.
To ensure a year-on-year curtailment of crime in the country based on the given populace, all Malaysians
must be involved. The public must play its role in practising greater vigilance and keeping a watchful eye
over happenings within their neighbourhood. In addition, forging a two-way relationship between the
public and the police will strengthen efforts in combating crime.
FIGHTING CORRUPTION
Raising the
Standards
of Integrity
YB SENATOR DATUK PAUL LOW SENG KUAN

Minister in the Prime Minister’s Department
The Malaysian Government remains firmly of stakeholders and capacity-building of civil

committed to eliminating the scourge of corruption. servants to further improve the delivery of good
This has necessitated tough reforms which require governance, integrity and compliance in human
buy-in from all parties. While further efforts are rights practices. JITN is also collaborating with
needed for corruption to be eradicated within our external organisations such as the Business
country, we must also acknowledge that significant Integrity Alliance (BIA) and Malaysian Institute of
strides have been achieved since the Government Corporate Governance (MICG) to promote good
made fighting corruption a priority under the NTP. governance initiatives within the private sector, and
improve knowledge and exposure to best practices
This is reflected by the drafting of the Corporate in corporate governance.
Liability Provision in the MACC Act, which marked an
important step in holding companies accountable These initiatives are critical to improving our score
for corrupt practices, as well as the introduction on Transparency International Corruption Perception
of the MS-ISO 37001 Anti Bribery Management Index (CPI). Malaysia was ranked 62nd out of 180
System to help organisations enforce measures countries worldwide in 2017, with our stated goal to
that meet internationally recognised anti-bribery be among the top 30 countries by 2020. As such,
practices and controls. I have no doubt that these a workshop was conducted in September 2017 to
developments will contribute towards enhancing improve Malaysia’s CPI ranking, following which
a culture of honesty and integrity in the nation. seven initiatives concerning prevention, enforcement
and perception are currently being pursued.
I am also pleased to note that the Malaysian Anti-
Corruption Commission (MACC) has been intensifying With strong political will and determination to
efforts in investigating and resolving corruption cases. curb corrupt activities, fraud and other abuses in
In 2017, MACC completed investigations and secured a much more pragmatic and holistic approach, I
conviction for 80.7% of corruption cases. The MACC am confident that Malaysia will achieve a higher
will continue to strengthen its enforcement in battling level of integrity by 2020.
corruption as long as it exists.
In tandem to the initiatives above, the National

Integrity and Governance Division (BITU), which
was established in 2015, has been upgraded to
become the Jabatan Integriti dan Tadbir Urus
Negara (JITN) to strengthen the institutional
infrastructure for anti-corruption. This will support
and sustain the NKRA through better coordination
Taking a Strict Stance against Department (RTD) had come under scrutiny due
to an increase in crime and apparent inaction
Corrupt Practices towards offences at that time. This paved the way
for the establishment of the Enforcement Agency
Integrity Commission (EAIC) in 2011 to strengthen
the integrity of the various enforcement agencies
under its purview, with the goal of building public
The NTP Roadmap has identified stricter confidence in these authorities. As of 2017, 343
enforcement and compliance as key elements to cases have been resolved, representing 64% of
reduce corruption in Malaysia. total registered investigation papers between
2012 to 2017. During the year, the EAIC held two
In 2017, 58.9% of corruption cases were successfully public hearing on the death of detainess while
disposed within a year of registration in 2016. The in custody.
Court also convicted 80.7% of the total number
“MACC
of cases. These achievements can be attributed
to the effectiveness of the Special Courts for successfully completed
Corruption and MACC investigations. Additionally, investigations on 58.9% of
1,405 of the 1,695 cases listed in the 2015 Auditor
General’s (AuG) Report were resolved in 2017,
corruption cases within a year of
giving a resolution rate of 76.5%. registration and convicted 80.7%
The integrity of enforcement agencies is another
focus area identified under this NKRA. As outlined by
of the total number of cases.
”
the GTP Roadmap in 2010, the effectiveness of these Meanwhile, to better understand issues faced
agencies, such as the Royal Malaysian Police (RMP), by the agencies and forge closer cooperation
Royal Malaysian Customs Department (RMCD), the with them, the EAIC visited 32 agencies in 2017,
Immigration Department and the Road Transport including the Penang National Anti-Drug Agency,
Special Corruption Court Judges Seminar held in November 2017.

Sabah Police Contingent Headquarters and the

Johor RTD.
Strengthening the Framework
Parallel with the responsibilities of anti-corruption
Against Corruption
authorities, the rakyat also plays a pivotal role in
fighting corruption. The Whistleblower Protection
Act 2010 (Act 711) encourages reporting of alleged
crime, corruption as well as abuse of power Fighting Corruption, Together
amongst others. The protection afforded by the
Act encompasses confidentiality of information Combating corruption will require the
and protection from lawsuits. It also protects commitment of all stakeholders. With this in
against detrimental action, a term generally used mind, the Government has worked diligently to
to describe negative repercussions that arise from include the business community and civil society
revealing information. Such repercussions can range in its anti-corruption efforts. Both private and
from the threat of physical harm to discrimination Government-linked companies are encouraged
at the workplace. to sign a Corporate Integrity Pledge. Public-
private collaborations to promote integrity and
Hence, the Act offers a trusted channel which good governance in private entities are based on
protects those who reveal information, thereby the Corporate Integrity System Malaysia (CISM)
encouraging more whistleblowers to come forward. framework which is modelled to support the
This helps foster an environment of zero tolerance corporate integrity initiatives in Malaysia. These
towards corrupt practices and any other forms include enhancing corporate governance, business
of wrong-doing. However, efforts need to be ethics and corporate social responsibility. These
strengthened to increase the public’s willingness efforts will require long-term commitment and a
to come forward to provide information on integrity deep sense of ownership from all stakeholders
and corruption issues. for the objectives of the CISM to be fully met. To
date there are 1,119 CISM signatories.
To further encourage public participation in anti-
“223,167
corruption, an online reporting system called the
Complaints Management System (CMS) was set integrity pacts have been
up for the public to lodge complaints or provide signed involving 8,681 projects
information on corruption. Public officials may also
be rewarded for reporting corrupt practices. The
worth RM13 billion as part of the
Anti-Corruption Revolution Movement (Gerakan initiatives to promote transparent
Revolusi Anti-Rasuah, GERAH), a public anti- Government procurement
”
corruption campaign and engagement platform
which promotes and encourages the public to report
processes.
corruption, has also been established. Since the 4th
GERAH campaign, MACC has successfully signed It has also been mandatory for companies
up 160,000 individuals. The efforts undertaken by participating in Government Procurement to sign
GERAH are supported by Sahabat GERAH, members the Integrity Pact. The Integrity Pact is an initiative
of the public who register as friends of GERAH and of the Fighting Corruption NKRA under the
are willing to support MACC in the battle against Government Transformation Program (GTP) that
corruption. began in 2010, which aims to enhance transparency
in the Government procurement processes as well
Finally, the Corruption-Free Pledge (Ikrar Bebas as to help combat corruption. Up to 31 December
Rasuah, IBR) initiative was also introduced, which 2017, 223,167 integrity pacts have been signed,
consists of a written open pledge by individuals involving 8,681 projects worth RM13 billion.
from public and private organisations to express
anti-corruption sentiments and to report such
activities as well.
Ensuring the Integrity of Corporations Increasing Oversight into the Political System
The proposed introduction of a Corporate Liability Reforming the governance of political financing has
Provision as part of the amendment in the MACC been a priority to fight corruption under the NTP,
Act 2009 aims to dissuade companies from with the rakyat calling for greater transparency
directly or indirectly abetting its employees to in sources of political funding over the years.
engage in corrupt practices. The provision would Heeding this call, the YAB Prime Minister formed
make companies liable for acts of corruption by the National Consultative Committee on Political
its employee unless the company in question is Financing (NCCPF) on 14 August 2015 to construct
able to prove that it has adequate procedures in a regulatory structure which comprehensively
place to prevent such acts. It will also strengthen addresses political financing.
the MACC Act which currently cannot hold board
members, chief executive officers and corporate
bodies directly liable for the corrupt practices
of their employees. In some cases, the employee “The passing of the Political
Financing Bill will signal a
is caught and punished, although it was the
company that gave the offending instruction to revolutionary transformation
the employee. The Corporate Liability Provision to improve the integrity of the
aims to address such occurrences and has been
recommended by the Organisation for Economic
Co-operation and Development (OECD) as one
Malaysian political system.
”
of the best legislations in curbing corruption. 2017 saw the formation of a Special Committee
This new provision is scheduled to be tabled in for drafting the Political Financing Bill. This draft
Parliament in 2018. law takes into consideration feedback received
from all parties during the NCCPF engagement
The Corporate Liability Provision is to be period held since 2016. Once the Bill is tabled and
introduced by 2018 and is supported by passed in Parliament, it will signal a revolutionary
the adoption of the ISO 37001 standard into transformation to improve the integrity of the
Malaysia’s Anti Bribery Management System Malaysian political system. 32 recommendations are
(ABMS – MS-ISO 37001), which will further being considered in the new Bill including political
support existing anti-bribery controls. It was donations and its administration, expenditure,
launched on 27 October 2017 and will help disclosure and state-funding. The drafting of this
bring Malaysia in line with the United Nations’ Bill is currently being undertaken by the Malaysian
Conventions Against Corruption (UNCAC). The Institute of Integrity (IIM).
standard prescribes a specific series of measures
to help organisations prevent, detect and address
bribery. Among the prescribed measures are
adopting an anti-bribery policy and appointing
a person to oversee anti-bribery compliance,
training and risk assessments.
For now, compliance to MS ISO 37001:2016 is

being implemented on a voluntary basis until the
standard is gazetted or referred to in relevant
Acts or regulations. To date, 11 organisations
including corporations, public agencies and local
authorities have been awarded MS ISO 37001:2016
The Corruption Perception Index (CPI) Workshop is
certification by SIRIM QAS International Sdn Bhd.
conducted with the aim of improving Malaysia’s CPI score.
19 judges from 14 states attended the Special Corruption Court Judges Seminar.
Taking Pride in Good Governance In the area of training for the courts, Special
Corruption Courts Judges Seminars have been held
annually since 2011 with the aim of enhancing the
comprehensive understanding of the law provisions
as provided in the MACC Act 2009. Training for
The effectiveness of the country’s efforts against judges on corruption includes a range of topics
corruption requires compliance to anti-corruption from writing legal reasoning to the intricacies of
controls and enhancement in integrity standards. dealing with several types of challenges in handling
This in turn requires improvements in awareness corruption cases. From 2011 to 2018, a total of eight
and training of related officials in organisations, courses have been held to train Special Corruption
especially those engaged in processes with high Court Judges and involved 152 judges throughout
risk of corruption and bribery. In light of this, the the country. This course is generally focused on the
Government is collaborating with groups such as application of national law on issues dealing with
the Malaysian Institute of Corporate Governance corruption. In 2017, 19 judges from 14 states attended
(MICG) and the Business Integrity Alliance (BIA) a three-day course held in Shah Alam, Selangor.
to provide guidance for organisations to improve
governance and prevent corruption in their ranks. In
2017, MICG and BIA successfully trained 53 public-
listed companies (PLCs) and government-linked
companies (GLCs).
JITN’s crusade against corruption and good governance internally. “They serve as
transformation agents within their respective
government bodies, and are answerable to me, as the
Director-General of JITN. This new chain of command
will help to foster a strong organisational culture of
Zaeidah Mohamed Esa, accountability, with zero intolerance towards abuse
Director-General, of power and corruption.”
National Integrity and
Governance Department. Beyond this, courses for judges serving in the Special
Courts for Corruption were held in collaboration
with the Federal Court of Malaysia’s Chief Registrar’s
Office. JITN also worked together with the Malaysian
Anti-Corruption Commission (MACC) to maintain
the Corporate Integrity System Malaysia (CISM)
web portal.
In the fight against corruption, the National Integrity
and Governance Department (JITN) stands at the “Corruption happens in the private sector as well.
forefront. Originally established as the Integrity Through strategic collaborations with Business
and Governance Division (BITU) of the Prime Integrity Alliance Berhad and the Malaysian Institute
Minister’s Department, prior to its upgrade as a of Corporate Governance, the agenda of empowering
standalone department in November 2017, JITN is integrity and private governance in the private sector
the Delivery Management Office (DMO) monitoring can be implemented more effectively. JITN is also
the implementation of the Fighting Corruption involved in funding Malaysian representatives to
NKRA initiatives, acting as the central agency for the United Nations Convention Against Corruption,
the management of integrity, governance, and human and the International Anti-Corruption Academy;
rights in both public and private sectors. both of which provide solid avenues for multilateral
cooperation in various corruption prevention
As Director-General of JITN, Zaeidah Mohamed Esa’s initiatives,” Zaeidah highlights.
responsibilities include overseeing and monitoring the
overall implementation of JITN’s core functions, based The Director-General acknowledges that corruption is
on its principles of preventing corruption through the not found only in Malaysia, or only in public or private
transformation of Malaysian mindsets and attitudes. sectors. “It exists everywhere, whether in international
This involves establishing good governance practices, institutions, religious institutions, voluntary bodies,
procedures, and regulations that contribute to the or sports organisations. I personally think that
reduction of corruption in this country. the effort to fully curb corruption at all levels is
the ultimate challenge for JITN. However, fighting
“JITN is committed to carrying out its responsibility corruption should begin with a proactive solution;
to monitor all NKRA initiatives and ensure they are hence, it is JITN’s duty to ensure that integrity and
successfully implemented. These include setting up good governance is successfully incorporated and
the Corruption Perception Index (CPI) Workshop, cultivated, especially in all government systems and
with the aim of improving Malaysia’s CPI score from policies.”
49 in 2016 to 55 by 2020; and promoting the Anti-
Bribery Management System (ABMS) to encourage All of these efforts and planned initiatives are believed
companies to undergo MS ISO 37001 certification, to contribute to the reduction of corruption in
amongst others,” Zaeidah explains. Malaysia, and at the same time, aligning people’s
mindsets with Malaysia’s NTP goals of becoming a
She also stresses that although JITN is the vanguard high-income developed nation. “The NTP’s aim is not
in the fight against corruption, it does not stand just about achieving a higher growth rate, but also
alone. Within the civil service, the heads of the one that is sustainable and inclusive. It has made
various integrity units in all government ministries, the economy more resilient and sustainable, in my
departments, and agencies are responsible to opinion; Malaysia’s aim of achieving developed-nation
help drive change towards strengthening integrity status by the year 2020 is not too far to reach.”
MOving Forward
In the coming years, we can expect renewed efforts to improve Malaysia’s CPI ranking and ensure stronger
improvements in transparency and integrity from the public service delivery. The newly established Jabatan
Integriti dan Tadbir Urus Negara (JITN) will be the lead agency to monitor and coordinate activities related
to the Fighting Corruption NKRA.
To ensure that Malaysia’s CPI ranking improves in the years ahead, a workshop was held from 5 to 7 September
2017 to address the decline in the nation’s CPI ranking. The key outcomes from this workshop include
seven priority initiatives that were identified to address 13 major issues highlighted concerning prevention,
enforcement and perception. In 2018 we will implement these initiatives with the relevant stakeholders.
Aligned with the introduction of the Corporate Liability Provision under the MACC Act and as a safeguarding
measure to reduce corruption and promote good governance, the Government will also encourage
companies to obtain the certification of MS-ISO 37001. As the standard can be used as anti-corruption
compliance guidelines for all parties in line with the inclusion of the Corporate Liability Provision in the
MACC Act 2009, it is expected to encourage more companies to obtain certification to show compliance
with the new provision.
ADDRESSING THE RISING COST OF LIVING
Aiding the Rakyat in

Managing Living Costs
YAB DATO’ SERI DR. AHMAD ZAHID HAMIDI

Deputy Prime Minister and Minister of Home Affairs
Over the course of the NTP, we have had to review our The Government has also listed several medium- and
fiscal measures to allow for sustainable socio-economic long-term strategies to manage the production cost
growth, while ensuring that this growth is not achieved of food products which would be carried out jointly by
at the expense of those in need. In view of this, the various public and private sectors via the National Blue
Government has introduced measures to help cushion Ocean Strategy. One of the strategies is to optimise
the public from the impact of living costs. production to ensure enough supply meets demand
particularly for farm outputs, livestock and fisheries.
Managing the cost of living is not unique to Malaysia. It A committee has been formed to study costs throughout
is a phenomenon faced by citizens all over the world. the supply chain to prevent price manipulation by
According to the Worldwide Cost of Living Survey 2017 middlemen. Concurrently, various initiatives have been
by the Economic Intelligence Unit, the global cost of put in place to ease the rakyat’s financial burden on food
living has risen to 74% while taking an average of the expenses such as the My Farm Outlet (MFO), Q’Fish
indices for all cities surveyed using New York as base Programme and the National Food Warehouse. To help
city, mainly due to deflation and currency devaluations. mitigate the impact of living costs for local university
Singapore remained the world’s most expensive city students, especially those in big cities, the Government
for the fourth straight year, followed by Hong Kong and has introduced the SiswaSave programme and the Kad
Zurich. Kuala Lumpur, meanwhile, was ranked 96th out Diskaun Siswa 1Malaysia.
of the 133 cities surveyed.
In ensuring that the Rakyat has continued access to
The disbursement of Bantuan Rakyat 1Malaysia (BR1M) affordable housing, the Government has identified
serves as the Government’s primary tool to help manage household needs, house pricing trends and specific
the cost of living for Malaysians. Since 2012, RM25.62 locations as fundamental factors in implementing housing
billion in direct aid has assisted over 7 million individuals schemes and initiatives which are based on the Rakyat’s
and families to ease payments of expenses such as needs. The Projek Perumahan Rakyat (PPR), PPR Rent-
monthly bills, school fees and medical costs. to-Own, Housing Loan Scheme (SPP) and MyDeposit
are among such initiatives which are targeted at the
In addition to providing immediate relief through BR1M, the low- and middle-income group.
Government also seeks to formulate long-term strategies
to address living costs. In 2016, the foremost agenda It is my hope that with our holistic approach, we will
was focused on enforcements to prevent price hikes in be able to provide better targeted channels to aid
staple products by unscrupulous traders following the those in need.
introduction of GST, whereas in 2017, urban poverty was
made our main priority as living costs are often higher in
urban areas.
Extending a helping
hand to those in need
Bantuan Rakyat 1Malaysia (BR1M) accounts for the

Government’s primary method to deliver immediate
relief to the public to manage living costs, which
rise naturally over time.
Photo from Utusan Online
BR1M helps cover individual and family expenses.
Since its implementation in 2012, BR1M has put a
total of RM25.62 billion in cash directly into the
hands of over seven million individuals and families.
Although detractors may argue that monetary
In ensuring inclusiveness of the aid initiative, BR1M
handouts only provide temporary relief, BR1M has
is available for eligible Malaysians nationwide, with
proven helpful in alleviating the financial burden of
1.4 million beneficiaries from Sabah and Sarawak.
those in the lower income bracket. This is because
the money can be used for various purposes such as
“Since 2012, BR1M has provided

over seven million individuals
purchasing groceries for the family, paying monthly
bills or help cover some of the expenses for their
children’s schooling. A study by the World Bank
and families with RM25.62 billion and Stanford University has also validated targeted
”
cash distributions through programmes such as
in direct cash assistance. BR1M, finding that a majority of the recipients
invest in their children’s education or use it for
In 2017, RM6.31 billion was disbursed to 7.22 million other purposes for the benefit of their families.
eligible individuals and families. The recipients
comprise 3.84 million households earning below The BR1M Upliftment Programme was launched
RM3,000 per month which received RM1,200 in 2017 in collaboration with Bank Simpanan
for each household; 392,319 households earning Nasional (BSN), Proton and Uber to aid the B40
between RM3,001 and RM4,000 per month which segment in earning higher incomes. Instead of cash
received RM900 for each household; and 2.98 payments under BR1M, members can choose to
million unmarried individuals earning less than allocate the funds towards a deposit to Proton for
RM2,000 per month which received RM450 each. purchase of a car to provide Uber services. It will
cater to two segments: those with qualifying cars
and those without qualifying cars. For the former,
BR1M members get to become an immediate
Uber driver partner after satisfying the mandatory
Uber driver partner background check and vehicle
requirements. A Proton/Bank Simpanan Nasional
Malaysia collaboration will support those without
qualifying cars.
Aside from job creation and income generation,

the BR1M Upliftment Programme will feature other
benefits, such as helping Malaysia reach its public
transportation targets as well as address peak hour
transportation reliability, the cost of transportation
and traffic congestion. Last but not least, the
Photo from Utusan Online
Seven million individuals and families have benefited implementation of this programme is expected
from BR1M. to reduce BR1M expenditure in the long term.
Low-Cost Housing Unit, High Life

Satisfaction
The Projek Perumahan Rakyat (PPR) under the

Ministry of Urban Wellbeing, Housing and Local
Government has benefitted thousands of families
by providing low-cost shelters. Fadzillah Shaari,
54 and her family of four is one of them.
“Before we moved to our PPR unit, our family

rented a squatter’s home at Datuk Keramat,”
she shared, “We constantly feared flooding, fires
and landlord evictions. It was not uncommon in
the area.”
PPR provides the rakyat an opportunity for fulfilling
housing.
Now, Fadzillah and her family is proud to call
Block C, PPR Hiliran Ampang their home. They
rented the unit for a low monthly rental of RM124 After she received the house keys, the family
per month since 2006 and in 2010, decided to moved into the basic unit which came with a
purchase the unit for RM35,000. The family functional electrical system and running water.
received a rebate of RM2,500 for making the Many of Fadzillah’s friends and family members
full payment thus lowering the total cost of the congratulated her and asked about PPR themselves.
house even further to just RM32,500. “They told me it’s hard to cope with the cost of
living, and it is hard to find places with low rental
“We really like living here. The environment is costs,” said Fadzillah, “My rent (before I purchased
comfortable and the house is near my working the unit) was just RM124 per month. Some of them
place and is easily accessible,” said Fadzillah. Her pay RM600, RM700, RM800 every month for one,
three-bedroom, two-bathroom unit at the housing two-bedroom houses. It’s especially hard for big
area comes with a plethora of amenities, including families.”
a children’s playground, a kindergarten, a surau, an
internet centre, an elderly centre, a health centre Fadzillah hopes that more units will be available
and a sheltered multi-purpose hall. The residents’ in the future for families like hers. She is happy
club has more than 100 members and frequently that more PPR units – multi-storey flats, walk-up
organises beneficial activities for the youth and flats and terrace houses – are being built each
the elderly. A multi-storey parking area is currently year. Acknowledging that she was ‘lucky’ to have
being developed to address residents’ parking found out about PPR by chance from the Kuala
problem. Lumpur City Hall officers, Fadzillah noted that more
awareness about the programme could be created
Fadzillah was introduced to the PPR by Kuala so more people will have the chance to rent or
Lumpur City Hall officers. They were completing purchase the low-cost units.
surveys at the Datuk Keramat area, where her family
used to live. Upon inquiry and finding out that her “(As a beneficiary,) I will continue to promote PPR
family is eligible for the assistance, she applied and so other low-income families may benefit, as ours
was subsequently selected. During the process, did,” she said.
Fadzillah shared that she was pleased that families
with children and elderly are given priority for the
limited units.
KADS1M – A Student-Approved Financial

Assistance
Ayu Nur Hani Azman, a 21-year-old student The process to apply and receive the card was
pursuing a Bachelor in Business Management in straightforward if a tad lengthy, Ayu shared. Upon
Transportation at UiTM Puncak Alam is a big fan word-of-mouth recommendations from her friends
of KADS1M offered by Bank Rakyat. Abbreviated and seeing advertisements of KADS1M on mass
from Kad Debit-i Diskaun Siswa 1Malaysia, or media, she completed the card application online
1Malaysia Student Discount Debit-i Card, KADS1M in early 2017 and waited for its approval. It was
is a contactless Syariah-compliant 3-in-1 discount, ready for collection at the nearest Bank Negara
ATM and debit card. It does not impose any branch in mid-2017.
additional foreign transaction fees and provides
SMS notifications upon suspected suspicious Having used the card, Ayu shared some pointers
transactions. for first-time applicants. “I would advise my peers
to start the application process early because you
“I’ve received other government-initiated student do have to wait for the card to be ready,” said Ayu,
discount cards and book voucher programmes, “Bank Negara will send an email to notify the card
and KADS1M is my favourite one to use so far,” approval, but in my case it took months, so you
she said enthusiastically, “Upon receiving the card have to be patient.”
with RM250 deposited inside, we (students) can
use the amount for anything. It really helped with Many of Ayu’s friends are also recipients of KADS1M
my expenses at university.” and they have also enjoyed the financial benefits
offered by the card. She emphasises students to
Sharing that she used the money to pay for petrol, implement prudent money management upon
food and books, Ayu also regularly makes use of the receiving the financial assistance. “It’s good if one
merchant discounts offered to get more savings. “I can plan to use the money effectively. Some of my
can get 10% discount from MPH with the card, as peers have blown their RM250 assistance purely
well as discounts from fast food outlets like KFC for entertainment purposes. KADS1M is supposed
and Marry Brown. It’s great to get discounts, as it to help us with our studies, and we should make
helps reduce cost on school supplies especially.” the best use (of the money).”
KADS1M holders can enjoy merchant discounts from a With the help of KADS1M as well as other support
wide variety of categories, including automotive, books given to students, Ayu hopes to graduate in
and stationaries, medical clinic, food and beverages, 2020, succeed in her career path and contribute
optometry, education, printing and souvenirs, to the nation.
clothes, accommodation,
transportation and travel,
groceries, saloon and
beauty, sports and
recreation, and others
with more than 2,000
merchants enlisted.
Ayu Nur Hani Azman,

KADS1M user.
MOving Forward
When the NTP was implemented in 2010, the Government had set out to ensure that the socio-economic
improvements were inclusive and sustainable. Over the past 7 years, the proportion of people living in
poverty has declined in a consistent fashion to under 0.4% (as of 2016). Malaysian households have enjoyed
a median income increase of 6.6% from RM4,585 in 2014 to RM5,228 in 2016. Wages had also seen a marked
improvement for the B40 in real terms due to the implementation of the minimum wage.
Malaysia is so often driven by the anxiety behind its current debate on cost of living that many forget that
global influences also affect the rakyat’s state of being. Thus, maintaining fiscal discipline in good times to
expand support for the economy when needed and to meet long-term obligations to the rakyat is vital.
However, the results of transformation are clear: a more durable, growing economy; annual deficit cuts; rising
wages, falling poverty; affordable healthcare; and better education. Investments into the country has also
been consistent. As of December 2017, the nation’s GDP stood at RM1,352.5 billion.
For all the work that remains, a new foundation has already been laid to manage our cost of living. With
socio-economic sustainability and inclusiveness making up the main thrusts of the NTP, the Government
will increasingly seek to facilitate income-generating opportunities for the rakyat to improve their well-being
and help manage the cost of living that will continue to be influenced and impacted by the global market.
Opportunities under the NTP will sustainably empower the public to better contend with living costs, as
monetary aid and subsidies are limited over the longer term – economic improvement must be one that
is not only sustainable but shared. To achieve it, Malaysia must remain competitive and continue to attract
strategic investments to strengthen its economy for many generations to come.
Improving Rural Development
Transforming
Rural Livelihoods
YB DATO’ SRI ISMAIL SABRI YAAKOB

Minister of Rural and Regional Development
When we first embarked on the NTP, we had targets as set out in the NTP Roadmap launched
identified that more was needed to be done to in 2010, KKLW remains steadfast in implementing
serve the rural population which made up about rural development initiatives in accordance with
35% of Malaysians. At the time, many villages in the national agenda. Although land acquisition
Sabah and Sarawak remained unconnected by remains a key challenge faced by rural development
roads, while more than 25% of households did not projects, close cooperation among stakeholders
have access to electricity. Additionally, more than ensures projects continue to be implemented
40% of households in Sabah and Sarawak and 12% efficiently and effectively.
of those in Peninsular Malaysia lacked access to
clean or treated water. Moving forward, KKLW will enhance efforts to
implement the Government’s policies in line with
The Improving Rural Development NKRA sought Transformasi Nasional 2050 (TN50). The Ministry
to improve these outcomes, catalysing inimitable and its agencies will continue to serve as the agent
change to the lives and economies in rural areas. The of transformation for rural communities to realise
goals of this NKRA are to ensure rural communities TN50 and warrant the prosperity of our nation.
are provided with access to infrastructure and
achieve sustainable living through economic
opportunities with a vision of narrowing the urban-
rural divide and achieving inclusive and balanced
economic growth.
Since 2010, this has been achieved by building or

upgrading roads in rural areas, connecting rural
households to clean or treated water and 24-hour
electricity supply, and building or restoring houses
for the rural poor. Additionally, the Ministry of Rural
and Regional Development (Kementerian Kemajuan
Luar Bandar dan Wilayah – KKLW) has introduced
economic programmes to raise the incomes of the
rural population to ensure they enjoy the benefits
of modernisation. Approaching the end of 2017,
these efforts have benefited 6.8 million people.
It is important to note that while the Rural

Development NKRA has since exceeded its
Providing Universal Access to Meanwhile, JPD involves roads which connect one
village to another or to the main highways to improve
Infrastructure access across villages, enabling travelling options and
therefore better quality of life for the rural population.
The roads also enable connectivity to health centres
and clinics, schools, religious and community centres
as well as other public amenities. JPD projects focus
The provision of rural infrastructure has focused on building new roads as well as upgrading existing
on managing the polarity in the Government’s dirt or laterite roads to premix/tar, semi-grout or
investments in urban and rural areas to ensure concrete roads.
Malaysia’s transformation reaches all parts of the
country. Since 2010, the NTP has accelerated the Between 2010 and 2017, 6,868 km of roads have been
development of rural areas through various road built and upgraded through JALB and JPD, benefiting
building programmes as well as through the provision 3.7 million villagers. This is almost the distance between
of electricity and water. Putrajaya and Mumbai, India by road.
Another vital service provided through the Government’s
“ Between 2010 and 2017, 6,868

km of roads have been built and
rural development initiatives is water supply, which is
undertaken through the Program Bekalan Air Luar
Bandar (BALB). The programme provides the rural
upgraded through JALB and JPD, population, including Orang Asli communities, with
benefiting 3.7 million villagers.
” supply to clean, treated water. The water is supplied
through reticulation or alternative water source systems
and new water treatment plants, while existing water
KKLW oversees two construction programmes: treatment plants are also upgraded.
Program Jalan Luar Bandar (JALB) and Jalan
Perhubungan Desa (JPD). JALB aims to upgrade BALB acts as an impetus for rural economic
and increase the coverage of rural highway systems, development, especially in the agriculture, tourism
focusing on remote areas to encourage growth of and industrial sectors. In ensuring clean and treated
industry in those areas. This initiative eases the water reaches rural communities in a comprehensive
movement of commercial and heavy vehicles, and timely manner, the Ministry has provided 354,400
widening their reach and spurring economic households with water supply, touching the lives of 1.8
development in surrounding areas. This complements million individuals from 2010 to 2017. This brings the
KKLW’s aspirations to widen the coverage of basic total coverage of water supply in Malaysia to more
infrastructure in villages throughout Malaysia. than 90%.
Meanwhile, the rural electrification programme,

Program Bekalan Elektrik Luar Bandar (BELB), has
been vital in providing rural populations with 24-hour
electricity by connecting villages to the grid and
alternative systems such as solar hybrid and micro-
hybrid. The installation of Lampu Jalan Kampung
is also carried out to ensure steady and reliable
electricity supply, especially in remote areas. Projects
involve the construction of transmission, distribution
and service lines up to households’ meters. Since
2010, this initiative has connected 161,931 households
with electricity supply, benefiting 809,655 rural folks
living in 85% of the villages throughout Malaysia and
A completed project under Program Jalan Luar Bandar.
bringing the total coverage of electricity supply in
the country close to 100%.
Solar hybrid stations under Program Bekalan Elektrik Luar Bandar.
Despite the substantial achievements of these

initiatives, the Ministry continues to face challenges
Providing Rural Villagers with
in land acquisition, which recur on an annual basis.
As some of the land involved in rural infrastructure
a House to Call Home
projects are privately owned, the Ministry takes
the initiative to go on the ground to negotiate land
acquisitions with the land owners.
In line with Malaysia’s transformation into a
developed nation, the Program Perumahan Rakyat
Termiskin (PPRT) is implemented to eradicate
poverty in rural areas and achieve inclusive and
balanced growth on a national level. The project
involves the construction of new houses and
restoration of existing houses to provide villagers
with safer and more comfortable dwellings.
The project targets the hardcore poor who are

enrolled in the e-Kasih database, with priority given
to the old, infirm and handicapped, as well as single
mothers with many dependents. In 2017, the size of
houses built was expanded to 660 sq ft from 600
sq ft previously, while the design of the houses was
also improved. Between 2010 and 2017, 103,033
houses were built or restored, providing homes or
improving the living conditions of 515,170 people.
In ensuring the housing is provided to those who

are truly in need, the Ministry will visit and assess
proposed recipients from the e-Kasih recipient list
An elevated water tank under Program Bekalan Air Luar
Bandar. to confirm their eligibility.
Perlis Entrepreneur Moves Up After Taking

On Rural Business Challenge
When Mohd Syafiq bin Drahman applied for the “This programme has changed my life and my
Rural Business Challenge (RBC) programme in business,” says Syafiq. “Previously my company was
2015, little did he know how much it would mean not as well known. Nowadays I get more business
for his business. opportunities as I am better known. Business loans
are also easier to apply for.”
Syafiq, who runs Ameqin Sepakat Sdn Bhd, an
automotive painting and supply business in Arau, The RBC winner also has some good advice for
Perlis, applied for the RBC after finding out about rural youth entrepreneurs looking to win the RBC
the competition that aims to develop youth in the future. “My advice to those who want to
entrepreneurs in rural areas from a friend. join the RBC is to strengthen yourself and your
determination,” he says. “Always be confident when
In 2017, 87% of RBC winners from 2015 achieved facing the jury panels. Make sure your business
an increase in income by more than 30%. The 30- plans are solid and don’t give up. Success will not
year old says the competition, which is run by come easily without effort, prayer and tawakal to
the Ministry of Rural and Regional Development Allah swt.”
(KKLW) under the Improving Rural Development
NKRA, was a tough experience. The Perlis-based entrepreneur says he now has
his sights set on becoming the first choice for
“Sometimes, I felt depressed,” he shares. However, customers in the state in the near-term while
those feelings dissipated after receiving support expanding to other states over the longer-term.
and encouragement from friends. His perseverance
paid off when he was selected as an RBC winner.
As part of his prize winnings, the Ministry paid

for new machines and building renovations to
expand his workshop. “The RBC grant has helped
to grow my business,” says Syafiq. “I can build a
new building to house my business expansion as
well as add extensions to existing buildings.”
Support from KKLW did not just come in the

form of financial assistance but also advising and
networking opportunities. “I received advice on
how to grow my business,” says Syafiq. “I also met
with other entrepreneurs from various other types
of businesses. Through these meetings, we could
share our experience and exchange opinions.”
Having successfully come through the RBC

experience, Syafiq has seen conditions for his
business notably improve. His profile has been RBC winner, Mohd Syafiq bin Drahman.
raised, allowing him to win new customers and
even apply for loans more easily. He has also seen
an improvement in his bottom line, growing income
from under RM300,000 before entering the RBC
competition to approximately RM600,000 in 2017.
Empowering Communities Under the Rural Business Challenge (RBC), youth

aged 18 to 40 years are invited to compete by
through Entrepreneurship proposing profitable and sustainable business plans
for the development or expansion of businesses in
rural areas. This also aims to encourage rural youth
to choose entrepreneurship as a career of choice,
create job opportunities and catalyse rural economies
In line with the goals of the NTP, the development while making villages an attractive place to reside in.
of rural economies is crucial to the transformation
“88
of the Malaysian economy as a whole. To this end,
the Desa Lestari and Rural Business Challenge villages have succeeded in
initiatives form the main thrust of KKLW’s efforts stimulating economic activities
to elevate rural economies.
to raise the income of its
The Desa Lestari programme aims to transform residents, recording 95,832
villages into modern and economically active
areas which enable residents to generate
higher income. It is implemented through the
individual beneficiaries.
”
establishment of cooperatives which act as a In 2017, 87% of RBC winners from 2015 recorded
platform for development and enable communities an increase in income of more than 30%. For RBC
to plan and operationalise development projects. 2017, the Ministry promoted the entrepreneurship
The programme also provides employment development programme through Reality Rural
opportunities to villagers including single mothers Business Challenge, a reality TV show highlighting
and the elderly. Since its implementation in 2013, 88 the achievement of RBC winners to attract rural
villages have succeeded in stimulating economic youth to its entrepreneurship programmes. The
activities to raise the income of its residents, TV show as well as exhibitions organised by the
recording 95,832 individual beneficiaries. Ministry form its dynamic and modern approach
to attract youth to entrepreneurship via interactive
Among Desa Lestari projects which have been and engaging platforms. The challenge, however, is
undertaken since 2013 include a bee farming project selecting projects which are able to generate high
and a farm services project in Kampung Paloh 1, returns and finding participants who are capable
Gua Musang, Kelantan. For 2017, an additional 15 of operating businesses well.
villages were selected to participate in Desa Lestari.
The Desa Lestari programme aims to transform villages into modern and economically active areas which enable
residents to generate higher income.
Setting the Foundations for a Thriving

Rural Community
Ahmad Firdaus Baharuddin, Under Secretary of the The direct and positive correlation between
Infrastructure Division under the Ministry of Rural infrastructural upgrades and a better quality of
and Regional Development is a man committed life is easy to witness in rural areas. For example,
to his work. constructing and lighting up kampung roads in
rural areas leads to an increase in economic,
“My schedule is hectic and involves a lot of meetings educational and social activities, lowers crime
and travel to rural areas around Malaysia,” he shares, rates, reduces accidents and improves access
“Even though many of these areas are difficult to healthcare and educational opportunities,
and time-consuming to reach, there is simply no among others. Connecting rural areas to
substitution for personal visits. The visits help us dependable, 24-hour electricity supply opens up
understand the real scenario happening ‘on the a host of opportunities and activities previously
ground’, which allows us to do our work more impossible, time-consuming and unaffordable.
effectively.”
However, not all projects run smoothly. “Often
Under his direct purview are six types of times, I need to work with multiple parties
programmes related to rural area development: the to get a project completed. Projects might
Village Road Programme, Rural Road Programme, be delayed or halted due to land issues and
Rural Water Supply Programme, Rural Electricity bureaucracy,” Ahmad Firdaus shares. “I also have
Supply Programme, Village Road Lights Programme to manage the available funding, with the aim
and the Social Amenities Programme. These of stretching it as much as possible.” He shares
programmes work towards closing the urban-rural that this is when managing both beneficiary and
divide by creating a solid foundation for rural- stakeholders’ expectations and costs plays an
community growth, thus allowing every Malaysian important role.
to succeed regardless of location.
Construction in progress for rural road development.

Ahmad Firdaus believes that, in the context of Asked about long-term rural area development,
inclusive growth for the nation, infrastructural Ahmad Firdaus reaffirms his commitment to
upgrades in rural areas are essential but need improving the standard of living for residents
to be part of a broader, multi-pronged strategy. in rural areas. “Ultimately, we want the standard
“Our one-off projects in villages are definitely not of living in rural areas to be as good as urban
enough. Our villagers may get access to electricity areas, so people don’t have to move to enjoy
and water, but they are still unable to join the good amenities. And we will continue to work
digital economy due to lack of financial, logistical with partners and agencies to make it happen.”
and internet infrastructure. They still need access
to banks and post offices, which might be far
away. If we want to ensure inclusive growth, these
developments must go hand-in-hand.”
Despite work-related challenges, Ahmad Firdaus

is proud of his team’s work. The results speak
for themselves; four out of the six programmes
within the Infrastructure Division have exceeded
targets. The top-achieving programme, the
Rural Water Supply Programme (RM632.40
million allocated) have successfully supplied
5,326 rural households with clean water. The
programme boasts a commendable 177.53%
completion rate from its original target of 3,000 Ahmad Firdaus on the ground to ensure smooth roll out
households. of rural development projects.
Another high achiever is the Social Amenities

Programme (RM60 million allocated), which
completed 1,222 projects, equivalent to a 152.75%
completion rate from a target of 800 projects.
Some of the projects in the Social Amenities
Programme include new jetty constructions,
surau and hall upgrades, drain installations and
other planned and as-requested infrastructural
upgrades.
The Rural Road Programme (RM887.82 million

allocated) and the Village Road Programme
(RM284 million allocated) achieved 111.74% and
102.91% of its targets, covering 245.82 km and
582.45 km of new roads, respectively. Among the
remaining programmes close to the finish line is
the Rural Electricity Supply Programme (RM447
million allocated). At 98.05%, the programme has
lit up 8110 households in rural areas.
Lighting up the Bario Community
For residents living in urban areas, it is easy to provides affordable and renewable electricity to
take access to electricity for granted. However, Bario residents. Bario is located at 3,200 feet above
for residents living in rural areas, particularly in sea level and surrounded with mountainous terrain,
Sabah and Sarawak, electricity is a luxury. It is which made electricity connection to the state’s
only available to residents who are rich enough to traditional electricity grid all but impossible.
purchase generators for their homes or residents
who are lucky enough to live in areas connected to “Almost all kitchen and daily tasks were hard before
electricity grids. having electricity,” shares Aminah. “There was no
activity after dinner. One needs to light the firewood
For residents belonging to neither categories, this is for cooking and we use ‘damar’ or kerosene lamps
where the Rural Electrifications Scheme comes in. as lights (at night).”
Dayang Nalin, 54, of Kampung Arur Dalan in Bario The reliable access to electricity has eased daily
district, Sarawak has been a full-time farmer since tasks for residents like Dayang and collectively
2007. Her family earns a living by planting rice, created a positive impact on villagers. The improved
pineapples and coffee. “Kampung Arur Dalan was standard of living has led to an increase of economic
the first in Bario to enjoy solar hybrid electricity,” activities as well. “Since electricity is available ‘at the
the mother-of-two says. “It was not 100% good in fingertips’, activities such as baking and pineapple
the beginning, but as of December 2017 we started jam-making (using electrical appliances) is possible,”
enjoying 24-hour electricity (thanks to the Rural she says.
Electrification Scheme).”
Dayang looks forward to further development in her
Now, Dayang’s home, along with hundreds of village, including tourism and agricultural activities.
households in Bario, are connected to the Bario “(I would like it if) the 55-year-old longhouse can be
Central Solar Hybrid Power Station. It is a solar hybrid fitted with new roofing and tiles. Aside from that, the
power system and the biggest solar project under Arur Dalan clear water stream can also be turned
the Government’s alternative rural electrification into a tourist attraction, bringing economic activities
initiative in Sarawak. The two energy sources are right to our doorsteps,” she suggests. “Additionally,
solar photovoltaic (70%) and diesel generator (30%). I hope idle land in the kampung can be planted
Constructed in 2010 and launched in October with durian and Arabica coffee, among others (for
2016, the Central Solar Hybrid Power Station now additional income)”.
Solar farm for rural electrification programme in Bario.

MOving Forward
As KKLW continues to carry out rural infrastructure programmes to ensure socio-economic inclusiveness,
attention will be given especially to rural areas in Sabah and Sarawak, where development has lagged
behind peninsular Malaysia due to the remoteness of some villages and geographical conditions affecting
development plans, including cost. Overall, the Ministry will enhance its strategy and efforts to implement
the Government’s rural development plans.
EDUCATION
Creating a Holistic
Education System
from the Ground Up
YB DATO’ SERI MAHDZIR KHALID

Minister of Education
Under the NTP, we have identified the need to As we sought to provide our children with a proper
improve student outcomes to guarantee that our head-start at an early age, intensified initiatives for
children are able to compete globally and contribute pre-schools participation have led to a stellar 84.26%
to our national economic growth. As such, we enrolment rate, or equivalent to 884,983 new pre-
have focused on initiatives that raise the quality of schoolers in 2017. Although the 5+ age group has
our education system, resulting in a steady stride almost reached universal enrolment at 90.89%, more
towards a performance-oriented culture of teaching can be done to improve the 77.8% enrolment rate
and learning since 2010. This is a stark contrast to of the 4+ age group. The Government thus plans to
the situation prior to the NTP’s Education initiatives continue offering fee assistance to eligible families
in 2009, when it was found that our students were and stepping up awareness efforts on the benefits
lagging behind their regional peers in ASEAN, of pre-school education for the 4+ age group.
based on the Trends in International Mathematics
and Science Study (TIMSS) and Programme for Thorough planning and a multi-faceted
International Student Assessment (PISA). implementation structure are still imperative to
fix systemic issues and nurture a sustainable
To ensure that our students are competent in their learning environment for future Malaysians. As we
mastery of the English language, the roll-out of progress towards enhancing our education system,
the Dual Language Programme (DLP) and Highly the initiatives under the NTP will require multiple
Immersive Programme (HIP) have continued to stakeholders to achieve the goals of the Malaysia
show positive results. In 2017 alone, the DLP was Education Blueprint (MEB). With this in mind, I am
implemented in 1,214 schools, a tremendous increase confident that the synergy between the public and
from 378 schools in the previous year when the private sectors will go a long way in our journey to
programme started as a pilot project. Moreover, realise the aspirations of the MEB.
the HIP was expanded to 5,526 schools nationwide
(3,693 primary schools and 1,807 secondary schools),
giving 2.54 million students greater exposure to the
global lingua franca.
Knowing the importance of English language

proficiency in teachers as well, the Ministry of
Education (MOE) is focused on conducting more
rigorous training sessions for English teachers. To
date, 34% of English teachers nationwide have
attained the minimum C1 level proficiency.
YB DATO’ SERI HAJI IDRIS JUSOH

Minister of Higher Education
The NTP has identified the education sector not only as In addition, Malaysian universities have been ranked
a driver of human capital development and productivity, top 50 in the world in subject areas such as Hospitality
but also as one of the engines of economic growth and Leisure Management, Electronic and Electrical
through the private education sector. To achieve Engineering, Chemical Engineering, Mechanical
this, the Education NKEA focuses on strengthening Engineering and Environmental Sciences, among
private education services by encouraging private others.
consumption, enabling investments into the sector
and expanding our education exports – in essence, Catalysing our private education sector based on
establishing Malaysia as a global education hub. our transformation goals has not been an easy
job, especially amid stiff competition from other
Through the marketing, promotion and other international education centres. This has required us
associated activities carried out by both public and to improve coordination and cooperation with other
private institutions of higher learning (IHLs), Malaysia Ministries, such as the Ministry of Home Affairs and the
has become a choice destination for international Ministry of Health to improve student visa processing
students, with 170,068 enrolments in 2017 as compared and increase international student enrolment. In 2017,
to 70,000 in 2010. Indeed, with 11 renowned foreign we also conducted an International Student Lab with
IHLs establishing branch campuses and collaborations public and private sector representatives to improve
here, Malaysia is on its way to become a global leader international student visa processing and ensure a
for international education. facilitative environment for them during their studies
here. We have also recognised the need to streamline
In contributing to the development of our talent efforts to market Malaysia as an attractive education
pool, we have also achieved good progress in the hub, which Education Malaysia Global Services (EMGS)
establishment of discipline clusters. These discipline has been tasked to coordinate.
clusters aim to establish a network of academic
institutions and industry players to improve offerings This collaborative approach to increase coordination
and raise standards in specialised education fields and dialogue between the departments, divisions
by allowing both academic institutions and industry and agencies of the various Ministries involved has
players to collaborate and develop quality curriculum been the foundation in delivering outcomes under
and education programmes for students. the Education NKEA and this will continue to be
encouraged to promote collegiality and commonality
Key discipline clusters that have been developed among stakeholders. This alignment with the goals of
include hospitality and tourism, Islamic finance the Ministry of Higher Education (MOHE) will ensure
and business education, games development and our higher education ecosystem continuously improves,
professional accountancy. These discipline clusters in line with our motto, “Soaring Upwards”.
have been progressing well, with an increase in
enrolment every year.
Sustaining for the Education forms which range from light PPP such as one-off
sponsorship programmes, to full PPP whereby the
Transformation private sector may fully manage a public school.
As of 2017, there was a 178% increase in overall
sponsors to 4,093 from 1,473 in 2016.
However, currently PPP initiatives are more

The Malaysia Education Blueprint (MEB) was inclined towards ‘private-sector-supported’ rather
introduced in 2013 as an expansion of the than ‘private-sector-led’. As a first step to attract
transformation of Malaysia’s education system more private sector participation in education
catalysed by the NTP. The Blueprint is currently being programmes, MOE conducted a feasibility study
implemented in three Waves: Wave 2 of the MEB on privately run public schools this year. A new
commenced in 2016 following the completion of Wave PPP model has also been devised following the
1 in 2015 and Wave 3 is scheduled to begin in 2021. PPP Lab conducted in 2016 involving public and
private sector representatives. The new model is
In Wave 2 of the MEB, continuing innovations expected to commence implementation in 2018.
in parental, community, and private-sector
involvement are being explored through public- To ensure that participants of the PPP are kept
private partnership (PPP) initiatives aimed at informed on the PPP initiatives, a PPP icon
empowering communities across Malaysia to was established as a link in the MOE website in
support and motivate schools to raise their 2017 (https://www.moe.gov.my). This acts as an
performance. Education PPP can come in different electronic one-stop centre for PPP-related matters.
Malaysia Education Blueprint (MEB)
Wave 1 of the MEB was focused on delivering quick wins that would kick-start the transformation
of the education system. During this period, initiatives were centred on raising teaching quality
by upskilling the existing pool of teachers, raising school leadership quality by improving the
appointment and training of principals as well as improving student literacy (in both Bahasa
Malaysia and English) and numeracy through intensive remedial programmes. The Ministry also
sought to strengthen and empower state and district offices to improve the quality of frontline
support provided to all schools.
Wave 2 will see the Ministry rolling out structural changes aimed at accelerating transformation.
This will include moving all 421,000 teachers and 10,000 principals onto a new career package,
providing options for increased English language exposure and introducing revised primary and
secondary curricula which address the knowledge, skills and values needed to thrive in today’s
global economy.
The focus of Wave 3 will be on accelerating the performance improvement of Malaysia’s education
system, moving it into the top third internationally. To embark on the journey to excellence, the
Ministry will focus on increasing operational flexibility to cultivate a peer-led culture of professional
excellence, capable of innovating and taking achievements to greater heights by enhancing school-
based management and autonomy around curriculum implementation and budget allocation for
most, if not all, schools. The goal is to create a self-sustaining system that is capable of innovating
and taking achievements to greater heights.
Highly Immersive Programme Raises language activities in and out of class and parental
Students’ Exposure to English involvement in students’ language-learning activities
in school has been enhanced.”
The Highly Immersive Programme (HIP) supports
the development of a highly-immersive English Through the various HIP activities, students are now
language environment in schools, and features four more exposed to the English language. “Studies
main activity types: In-Class, Out-Of-Class, Extra- have shown that increased contact to a language
Class, and Outreach. The English Language Teaching directly impacts language proficiency improvement,”
Centre (ELTC), as part of the MOE, acts as the HIP Dr. Kalminderjit points out, adding that increased
secretariat. It oversees HIP implementation as well as student participation in activities involving the
programme monitoring and sustainability. Moreover, English language signified that students are more
ELTC conducts support visits and evaluates the confident in using English.
success and impact of the HIP. It engages with
state- and district-level English language officers There are, however, some aspects of HIP that could
in problem-solving HIP challenges and discussing be further improved. Dr. Kalminderjit believes that
the way forward. These language officers also assist the students’ use of English could be better tracked,
ELTC in monitoring HIP in schools. and that the school heads who spearhead the
programme could demonstrate greater continuous
As Work Stream Leader for the programme at ELTC, and sustaining support.
Dr. Kalminderjit Kaur d/o Gurcharan Singh’s role is
four-fold: planning the funding, activities and rollout “My hope is that our education system produces
of the programme in schools; providing orientation students that are able to communicate competently
to schools; planning strategies for monitoring and in English internationally, demonstrating critical and
evaluation; and organising engagement activities creative abilities using the language.”
such as colloquiums, symposiums and discourses
which serve as a platform for HIP schools to meet Speech and Drama Course Gives Innovative Spin
and share best practices as well as discuss strategies to Learning English
for long-term programme sustainability.
One hallmark of the HIP is its use of innovative ways
Dr. Kalminderjit, as she is commonly addressed, to keep students engaged in learning English. Among
believes that the success of HIP at any individual these innovative activities is a speech and drama
school depends on the commitment and support course conducted in a non-classroom setting with
from the school head, teachers, students and the students in 20 schools across four states. Enfiniti
surrounding community. “We must ensure that the Academy of Musical Theatre & Performing Arts
correct information about HIP is received by schools. (ENACT) in collaboration with the Sime Darby
Then, the entire school community must buy into Foundation brought this week-long workshop to
HIP for its success. This means that school heads students who would otherwise have little exposure to
and teachers especially must be committed to the using English. ENACT is part of Enfiniti Vision Media,
programme’s outcomes. Additionally, continuous an internationally-recognised production company.
monitoring must be carried out at the state and
district levels.” Enfiniti Vision Media Course Director, Joanna
Bessey, designed the workshop and is one of its
Dr. Kalminderjit believes that HIP has been showing instructors. According to her, the workshop was
positive results. “It has seen the development of designed to enhance communication and soft skills,
an immersive, language-rich environment in the and to present exercises that boost the students’
implementing schools. Students have developed confidence to speak in English. “ENACT’s highly-
confidence and a positive attitude in using the experienced teachers and methods as well as our
language in a fun and non-threatening environment. award-winning theatre professionals ensure students
The entire school community is engaging in English can follow the specifically-designed drama toolkit,”
Bessey explains.
The drama toolkit is part of a speech and drama Baharu is one of the 20 schools that participated
activity workbook that Bessey also developed. The in the ENACT workshop, and Mohd Jamil thinks
workbook acts as a teacher’s guidebook while the that the workshop is a valuable programme which
workshop is conducted. “With the book, schools can he hopes can be extended and be held after school
eventually establish their own speech and drama hours as well. “Although her English is good, my
clubs to continue the programme,” Bessey enthuses. daughter does not have many opportunities to
speak in English. This workshop gave her a great
As part of the workshop, the students plan, produce, chance to be able to express herself in English.”
and put on their own skits. In the process, the students
learn how to adjust to change, work together as a Richard Mark s/o Ricky, a student from SK Runchang
team, deal with time pressure, share their own ideas, in Pahang, found the workshop enjoyable and wishes
tell stories and speak grammatically-correct English there could be more such activities in English. “Most
— all with clarity, confidence, and emotion. “And they of my English practice is in speaking with my school
do all this while having fun,” says Bessey. friends, but we don’t do that often,” he explains.
His adoptive mother, Rohaya, believes that he has
Mohd Jamil bin Ismail, father of Nurul Huda Najihah shown definite signs of improvement in his English
who is a student of SK Pengkalan Baharu in Perak, skills. “He never used to sing in English, but now I
agrees. “My daughter found that this workshop made hear him doing so every so often at home.” Rohaya
it easy for students to learn English. She enjoyed hopes that he will be able to better understand
herself attending the workshop.” SK Pengkalan English through this and other initiatives in school.
Students enjoying activities by Enfiniti Academy of Musical Theatre & Performing Arts.
Strengthening the In addition to financial aid, the Government is focused

on raising the standards of pre-school education
Education Model and in 2016 announced a new policy requiring
diploma qualifications or higher in ECCE for pre-
school teachers. 32.85% of 34,740 private pre-school
teachers now meet those requirements. The policy
will take full effect by 2020, whereby all teachers will
An individual’s road to learning begins almost from be required to meet those qualifications. This will not
infancy and Malaysia’s education system has been only improve the quality of pre-school education, but
designed to cater to that need through its efforts is also expected to spur public and private institutes
to encourage enrolment in early childhood care of higher learning to provide ECCE diploma courses.
and education (ECCE). These initiatives also aim The Government will support private pre-school
to complement efforts that will enable women to teachers in the process of obtaining their ECCE
return to the workforce after entering motherhood, diplomas by 2020 by utilising Teacher Training
which are currently carried out under the Human Institutes (Institut Pendidikan Guru, IPG) capacity
Capital Development Strategic Reform Initiative. to train private pre-school teachers. MOE and the
Ministry of Higher Education (MOHE) will also ensure
that private institutions of higher learning (IHLs)
“The national childcare enrolment

rate rose from 4% in 2010 to
offer high-quality ECCE diplomas.
Additionally, the development of an integrated

6.92% in 2017, accounting for ECCE hub in Kota Kemuning by SEGi Education
177,228 out of 2.5 million children Group will assist with providing the required
”
education and training for ECCE professionals.
aged 4 and below.
Development of the hub now is underway
following approval from the Public Private
Fee assistance makes up the Government’s key Partnership Unit (Unit Kerjasama Awam Swasta,
initiative in encouraging ECCE enrolment. During UKAS) in 2017.
the year, the Government allocated RM3 million
for fee assistance for private childcare, helping The National Pre-school Quality Standard self-
to alleviate childcare costs for 1,030 families. It assessment is another measure introduced by the
also channelled RM18 million in fee assistance to Government to ensure high-quality pre-schools.
32,378 children from low-income families to enrol Since its introduction in 2015, 23,285 pre-schools
in private pre-school centres where there are no have participated in the assessment in 2017, of which
public pre-schools available. Additionally, RM88,521
was provided to the ECCE Council and RM20,000
to the National Child Care Association to conduct
advocacy programmes and registration drives.
As a result, the national childcare enrolment rate

rose from 4% in 2010 to 6.92% in 2017, accounting
for 177,228 out of 2.5 million children aged 4 and
below. Moreover, the national pre-school enrolment
rate rose from 72.4% in 2010 to 84.26% in 2017,
which represents 884,983 children aged 4+ and
5+. Enrolment across the age groups is however
still uneven with only 77.8% of children aged 4+
enrolled in pre-schools, while the enrolment rate
among children aged 5+ is almost universal at
The Ministry aims to ensure all students are literate and
90.89%. In an effort to address this disparity, MOE numerate.
will prioritise easing the registration process, rules
and regulations to set up new private pre-schools
and continue providing fee assistance.
98.86% have met the minimum quality standards.

The Inspectorate of Schools (Jemaah Nazir dan
Jaminan Kualiti, JNJK) together with other
agencies — namely the Department of Community
Development (Jabatan Kemajuan Masyarakat -
KEMAS) under the Ministry of Rural and Regional
Development, the Department of National Unity
and Integration (Jabatan Perpaduan Negara &
Integrasi Nasional, JPNIN) and MOE’s Private
Education Division — coordinated verification
activities of the self-assessment tool on 95 private
pre-school centres. Of these, 82 or 86.32% met
the minimum quality standards.
YB Dato’ Seri Mahdzir Khalid launched the new ELTC
campus and the second HIP Colloquium on 14 August
At the primary school level, the Literacy and 2017.
Numeracy Screening (LINUS) programme, which
aims to ensure all students obtain basic literacy A comparison of DLP students’ achievement in their
(Bahasa Malaysia and English) and numeracy 2016 year-end assessment and their 2017 mid-term
skills by end of Year 3, has run for eight years. assessment showed that 36.38% of 14,794 primary
The 2017 rates for Bahasa Malaysia literacy, school students and 46.4% of 22,965 secondary
English literacy and numeracy were recorded school students demonstrated an improvement in
at 98.3%, 95.7% and 98.8%, respectively. Its their English examinations.
implementation over the past eight years
has made the programme an integral part of In an effort to ensure effective implementation of
classroom teaching and learning. To expand on the DLP, the English Language Teaching Centre
this and ensure that all primary school students (ELTC) conducted an online teacher training course
master literacy and numeracy skills not only at to support Science and Mathematics teachers in
the basic level but also at a more advanced level, delivering these subjects in English. By the end
a new programme will be developed in 2018 with of 2017, a total of 709 DLP teachers completed
the aspiration of providing students from Years the online modules. Additionally, several private
4 to 6 the required literacy and numeracy skills education institutions collaborated with the MOE
in line with the school syllabus. to support a few schools where teachers and
students found the programme challenging. This
initiative included the Teach English and Create
Transforming Malaysian Hope (TEACH) programme conducted by Universiti
Putra Malaysia’s Faculty of Educational Studies for
Students into Global Citizens SK Bandar Tasik Kesuma and SK Saujana Impian,
an English support programme by the International
School of Kuala Lumpur (ISKL) for DLP teachers in
six Kuala Lumpur schools, English teacher training
by Berjaya University College of Hospitality for two
As part of the efforts to nurture globally competitive DLP schools and a DLP support programme by Sri
Malaysians through a high level of English UCSI for two schools in Selangor.
proficiency, in 2016 the Government introduced
the Dual Language Programme (DLP), where a pilot To expand the DLP further without risk of dilution,
programme was implemented involving Year 1, Year 4 the MOE will select more schools based on the
and Form 1 students in 378 schools. The programme fulfilment of four criteria, namely, the institutions
has since expanded to 836 more schools in 2017 must have sufficient resources, competent teachers,
bringing the number of schools implementing DLP parental consent for the implementation of the
to 1,214 schools (consist of of 585 primary schools DLP and meet or exceed the national average in
and 629 secondary schools). To date, a total of Bahasa Malaysia (BM) scores.
129,859 students have participated in the DLP.
Moving forward, the DLP programme will also focus programme conducted by Taylor’s University,
on expanding to more schools in rural areas. Hence, sponsored by Mah Sing in collaboration with The
priority will be given to train DLP teachers to ensure Edge Education Foundation; and English, Science
competency in teaching Mathematics and Science in and ICT programmes conducted by Universiti Tunku
both BM and English. Additionally, there is an urgent Abdul Rahman (UTAR) for SK Sungai Lesong, Perak,
need for secondary schools to start offering DLP to which is both a DLP and HIP school.
ensure that DLP students from primary schools can
seamlessly transition to a secondary school where
the programme is offered.
“Several educational bodies
and companies within the
The Highly Immersive Programme (HIP) is another
effort to increase students’ English proficiency private sector have facilitated
and provides increased immersion in the English intervention programmes for HIP
language through in-class and out-of-class activities, schools that needed assistance
extra classes and outreach programmes. In 2016,
Phase 1 and Phase 2 of the HIP was rolled out, with
with seeking outreach partners
58% of schools involved achieving an immersiveness to carry out English-language
level of 3 and above. Phase 1 of the HIP was
implemented in 94 primary schools in six states
beginning March 2016, namely: Perlis, Pahang, Perak,
activities.
”
Negeri Sembilan, Sabah and Sarawak. Meanwhile, To ensure teachers meet language proficiency
Phase 2 started in July 2016, involving a total of 1,106 requirements, MOE has set a target for all English
schools nationwide. Phase 3 was rolled out in 2017, teachers to meet a minimum proficiency level of
with 4,326 schools enrolling in the HIP, bringing the C1, based on the Common European Framework
total number of schools enrolled to 5,526. By 2018, of Reference for Languages (CEFR). To date,
the Ministry targets for 10,000 schools to enrol in approximately 34% of 42,105 English teachers have
the HIP. attained C1 level proficiency. Regulations setting
a minimum English language proficiency criteria
To improve the effectiveness of the HIP, the second of Band C1 for new English teachers will be put in
HIP Colloquium was conducted at the ELTC in August place by 2020.
2017, serving as a platform to discuss HIP best
practices in schools, its impact, challenges and way MOE is also continuing its efforts to increase the
forward. Strategies on increasing the involvement proficiency of in-service English teachers who do not
of the whole school, parents and the community to meet the minimum requirements by providing the
maximise students’ outcome in English were also Professional Upskilling of English Language Teachers
discussed. 178 schools across the country as well (ProELT) course. 16,000 teachers have been trained
as 11 outreach partners involved in the programme under the course since 2012. In 2016, the Ministry
participated in the colloquium. commenced the course internally through the ELTC.
Currently, the centre’s capacity for teacher training
Several educational bodies and companies within is 650 teachers annually.
the private sector have facilitated intervention
programmes for HIP schools that needed assistance The ProELT programme is not planned as a
with seeking outreach partners to carry out English- permanent initiative as the Government seeks to
language activities. These programmes included a introduce minimum English proficiency requirements
six-month English Programme conducted by SOLS for new teachers by 2020. In 2017, 60% of teachers
24/7 for SMK Seri Tasik and SJKT Vivekananda; the graduating from IPG achieved C1 before their
English Speech and Drama Programme conducted postings. IPGs have also tightened selection
by Enfiniti Academy and sponsored by Yayasan criteria to require a minimum of 5As in the SPM
Sime Darby for 20 HIP schools in Selangor, Perak, (Sijil Pelajaran Malaysia), with English pre-service
Negeri Sembilan and Pahang; an English drama teachers required to obtain an A or A+ for the
English examination.
Common European Framework of Reference for Languages (CEFR)
LEVEL GENERAL DESCRIPTION
Highly proficient - can use English very fluently,

C2 Mastery
precisely and sensitively in most contexts
Proficient
user
Effective
Able to use English fluently and flexibly
C1 Operational
in a wide range of contexts
Proficiency
Can use English effectively, with some fluency,

B2 Vantage
in a range of contexts
Independent
user
Can communicate essential points and ideas
B1 Threshold
in familiar contexts
Can communicate in English within

A2 Waystage
a limited range of contexts
Basic user
Can communicate in basic English
A1 Breakthrough
with help from the listener
Empowering Special Educational Equipping Students with

Needs (SEN) Students World-Class Learning Tools
In 2016, the YAB Prime Minister launched an The MOE introduced 1BestariNet in 2011 to equip
action plan for persons with special needs schools with the Frog Virtual Learning Environment
covering 10 main strategies. One of these is to (VLE), an integrated platform allowing teaching,
empower the economy of persons with special learning, collaboration and administrative functions
needs by involving them in vocational training and through the internet. Phase 2 of the programme
administrative jobs provided by the Government, kicked off in 2016 and continued through 2017.
NGOs and the private sector. In support of this, a
mini-lab was conducted in May 2017 to develop To encourage take up of the VLE platform in
a framework to help SEN students transition schools, the Ministry has been working to boost
from the completion of secondary school to connectivity by reducing the number of schools
employment. connected to the slower internet connection
systems of Asymmetric Digital Subscriber Line
The framework divided SEN students into two (ADSL) and Very Small Aperture Terminal (VSAT)
categories, namely those with a Disabled Person and instead connect all schools to faster internet
(OKU) card and those without. The lab suggested speeds between 2-10 Mbps by 2020. In 2017,
that the two transition modules for primary and 92.6% out of 9,732 schools were connected to
secondary SEN students be developed in 2017 internet of speeds between 2-10 Mbps, whilst the
and implemented in May 2018, championed number of schools connected to ADSL and VSAT
by the Ministry of Human Resources (MOHR) combined has been reduced significantly to 3,357.
and supported by MOE, MOHE, the Ministry of The improvement in connectivity has resulted in
Women, Family and Community Development, an increase in the use of VLE among students.
Ministry of Rural and Regional Development, This year, a monthly average of 865,738 number of
Ministry of Youth and Sports, the Department students utilised VLE in at least one lesson session
of Social Welfare and JobsMalaysia. per week, as compared to the targeted monthly
average of 660,000 students.
The Ministry will develop more learning content There are many strategies and initiatives that
to encourage more students to utilise the Frog are relevant to both public and private IHLs,
VLE platform. The Ministry is also studying the for example, the Redesigning Higher Education
possibility of introducing policies and guidelines initiatives that consist of key initiatives from the
allowing students to bring mobile devices to school MEB (HE). There is also greater focus on outcomes,
to enhance VLE usage. performance and quality standards through the
use of rating instruments such as SETARA and
MyQuest. The focus on performance and outcomes
is used as part of the criteria for policy decisions
such as obtaining licences to recruit international
students by private IHLs.
Establishing Malaysia as an
International Education Hub
Frog VLE supports 21st century learning in schools. In making Malaysia globally prominent by
attracting quality international students, MOHE
has rolled out an extensive plan as laid out in Shift
The Role of Private Institutions 8: Global Prominence of the MEB (HE). Under
MEB (HE), MOHE pledged that it would improve
of Higher Learning the coordination of all activities related to the
management of international students to enhance
Malaysia’s capacity to host international students
with the target of 250,000 students by 2025. In
2017, 170,068 international students enrolled in
In line with the MEB - Higher Education’s (MEB programmes offered in Malaysia (136,293 in IHLs,
(HE)) aspirations to embrace public and private 33,031 in schools and language centres and 744 in
IHLs to enable Malaysia to compete globally, the technical and vocational institutions).
private sector is considered as the engine of growth
for Malaysian higher education. This is because The Ministry will collaborate with all stakeholders,
private IHLs host approximately 693,322 students from IHLs to the Immigration Department, to
from the total of 1.34 million tertiary students ensure a seamless experience for students
enrolled in the country. from the time they apply through to the completion
of their studies. The Ministry also seeks to build
Private IHLs are integral to the Malaysian higher greater global visibility and trust in the Malaysian
education system. In the NTP, private IHLs have higher education brand. To achieve the former,
been identified as the key drivers of the initiatives the Ministry will partner with relevant agencies to
under the Education NKEA. MOHE, through MEB develop and implement high-impact promotional
(HE), envisions a harmonised higher education activities. The latter will be achieved through the
regulatory framework for both public and private provision of high-quality innovative programmes that
IHLs through policies that support the expansion appeal to a wider student base and the enrichment
of higher education especially via high-quality of student experiences.
undergraduate programmes at private IHLs. In
other words, the Ministry promotes institutional Attracting globally renowned names in academia
growth without compromising the quality of the
private higher education sector. In line with the aforementioned strategies, the
number of international schools operating in the
country has now reached 132. Both MOE and Infrastructure and facilities upgrades will continue at
MOHE strictly monitor the performance of these EduCity to ensure it continues to attract students. A
schools and institutions and have also adopted a number of infrastructural plans aimed at enhancing the
more stringent approach towards approving new student experience are now in the pipeline, including
licences to ensure the presence of only renowned a student union centre expected to commence
and established operators. The updated guidelines construction in mid-2018 and a planned expansion of its
for the establishment of new international schools gymnasium in the first quarter of 2018. Other upgrades
are now available on MOE’s website. include a rugby field which started preliminary work in
late 2017. Following feedback on the Student Village
To further support the country’s status as an (the student hostel) received from residents and
education hub, the Government facilitates the entry partners, a phased refurbishment and enhancement
of Tier One institutions to establish foreign branch of the Student Village will also be undertaken.
campuses in the country. Malaysia is currently home
to world-class university branch campuses from To widen its reach for potential students, EduCity
Australia, China and the UK. From the UK alone, there collaborated with Education Malaysia Global Service
are five institutions: Nottingham University, Reading (EMGS) to hold roadshows in Kazakhstan, Indonesia,
University, Newcastle University of Medicine, Heriot- China and South Korea. The roadshows received 57
Watt University and Southampton University which potential entrants for the 2017/2018 academic year
is its largest outside of the UK. Malaysia is also and their applications were forwarded to respective
home to the Asia School of Business, a collaborative universities. Marketing efforts will be a key driver to
set-up between the Malaysian Central Bank and increasing student enrolment within EduCity in the
MIT Sloan School of Management. Its inaugural years moving forward.
MBA class began in September 2016 and out of 47
students, 31 are foreign students from all over the Facilitating Malaysia’s international education hub
world. The presence of these international branch
campuses shows external confidence in the higher EMGS is Malaysia’s umbrella organisation for higher
education system and the potential of Malaysia as and tertiary education, operating under MOHE to
a higher education destination. market the Malaysian education brand as well as
manage applications, processing and renewals of
international student visas.
“Malaysia is currently home to

world-class university branch EMGS received 51,464 new visa applications from public
and private IHLs, language centres and accredited
campuses from Australia, China training centres as of 2017. The overall turnaround
and the UK.
” time for the issuance of Visa Approval Letters (VAL)
once visa application documents have been reviewed
and verified has been significantly reduced from 20
Meanwhile, the EduCity@Iskandar (EduCity) working days in 2016 to seven working days in 2017
initiative, Asia’s first multi-varsity educational for complete applications. This is primarily due to a
complex, further marks Malaysia’s strategy to task force established at the Cyberjaya Immigration
distinguish itself as an education hub at the tertiary Office from 24 January to 8 February 2017 to clear a
level, housing universities and higher learning backlog of over 7,000 applications.
institutions, academia, industry action and R&D
centres, student accommodation, recreational and The Immigration Department also hired additional
sports facilities in a single location that is the first officers to process VAL applications. With the addition
of its kind in Asia. Conceived in 2011, EduCity now of these new officers, the total visa processing time,
counts over 4,500 students and 600 alumni in its i.e. from visa application to visa issuance for inbound
ranks. In 2017, EduCity saw an enrolment of over international students was reduced from a maximum
4,393 students. Efforts are ongoing to ensure that of 77 days to 14 days. This is a significant reduction as
EduCity continues to attract students to study lengthy visa processing was a significant barrier for the
within the education hub. enrolment of international students in previous years.
EMGS has also implemented Big Data Analytics In August 2017, an International Student Lab
(BDA) through its Business Intelligence Dashboard. was held to identify ways to improve Malaysia’s
This tool provides MOHE and other stakeholders such competitiveness and attractiveness as an
as the Ministry of Home Affairs and the Immigration international student destination. The Lab was
Department with greater insight into international attended by more than 80 representatives from
student trends in Malaysia by enabling convenient the public and private sectors.
access to data on students and institutions. EMGS’s
big data tool currently has real-time data available The recommendations of the International Student
for 646,153 application records. EMGS has also Lab included:
customised a dashboard using BDA for MOHE which
provides greater insights into its daily operations. • Improving health screening processes;
• Introducing a student profiling mechanism;
• Allowing international students to work in
“EMGS has implemented Big Data

Analytics to gain greater insight •
Malaysia during their studies;
Improving international student identification
(iKad);
on international student trends • Allowing automatic visa extension upon
in Malaysia.
” •
graduation for international students; and
Implementing coordinated marketing efforts
among education institutions and relevant
To verify student identities during pre- and post- agencies.
arrival medical screening, EMGS has implemented
biometric authentication measures (fingerprint Moving forward, marketing initiatives for EMGS
readers) across all 108 EMGS panel clinics within in 2018 will involve more vigorous student
Malaysia. This ensures the validity of the medical recruitment activities through participation in
screening results, avoiding fraudulent activities at the over 60 international events, such as the British
clinics such as students standing in for each other Council’s Going Global 2018 event which will be
and reducing the risk of the spread of communicable co-hosted by MOHE in May 2018. The coming
diseases. It also ensures that the student who arrives year will also see solo roadshows being held in
in Malaysia is the same individual who attended the key markets like China, Indonesia and India which
medical screening overseas. As of end August 2017, will allow for a higher branding visibility. EMGS
EMGS has captured 26,672 sets of biometric data will also intensify engagements with professional
for registration and future verification in Malaysia. education consultants and recruitment agents
via international platforms like ICEF in Germany,
Currently, the pre-arrival medical screening in Brazil, Korea, Japan, and Vietnam; and St. Alphe
EMGS Panel Clinics is only compulsory for Indian, in Thailand and Russia as a means to tap into
Bangladeshi and Sri Lankan students, which may new markets, while maintaining the traditional
lead to non-compliance amongst students of other focus markets on Indonesia, China, Central Asia
nationalities in undergoing the medical screening and South Asia.
thus posing a health risk. Medical Examination
Report (MER) forms submitted by students from EMGS will also take the lead in coordinating
other countries are either incomplete or submitted marketing efforts between Ministries, departments
in languages other than English. In some instances, and agencies, such as MATRADE and MOTAC,
students’ fingerprints are not captured and clinics with the education institutions to ensure synergy
in Malaysia are unable to verify them during post- in promoting Malaysia as a hub for international
arrival medical screening. Moving forward, EMGS education. EMGS will be working to ensure that
will review the need for all international students the educational institutions involved move from
to conduct their medical screenings at EMGS Panel promoting their own bodies towards adopting
Clinics only. This will ensure that all MER submissions a holistic approach to promote Malaysia as an
are complete as EMGS will ensure that the clinics attractive education hub.
adhere to its standards for submission.
Perak Primary School Rises to the

Challenge to Increase Students’ English
Proficiency
A rural school in the district of Batang Padang, educational games for students to play with during
Perak, Sekolah Kebangsaan Sungai Lesong recess and other break times.” In 2017, SKSL had
(SKSL) was a pilot school for the Dual Language DLP classes in Year One, Two, Four, and Five, and
Programme (DLP) and the Highly Immersive 2018 will see the inaugural DLP class sitting for
Programme (HIP). Former SKSL headmaster, the UPSR. The DLP classes have a 100% pass rate
Zamri bin Abdul Rani, took on the challenge of for English and Science, while the official weekly
implementing both initiatives positively. “It required school assembly is conducted exclusively in English.
a paradigm shift by all stakeholders, especially the
students, to see English as a viable language to be Personally, Zamri feels these initiatives are important
taught outside of urban and suburban schools,” towards achieving Malaysia’s goal of becoming a
he says. developed nation by empowering students with
proficiency of the English language to face the
As the school’s chief administrator, Zamri did not challenges of a more globalised world. However,
find it easy to build up confidence among teachers financing the HIP could be further improved. “In
and parents. Financing the DLP and HIP initiatives order to create an environment that is conducive
was also a challenge: SKSL had to approach the towards learning English in an immersive manner,
Parent-Teacher Association for assistance to rural schools require adequate financing, so that
purchase the necessary teaching and reference they can provide sufficient English materials to
materials. the students.”
Zamri recounts providing constant help and It is Zamri’s hope that HIP and DLP can be
support to his teachers, right down to attending further extended and expanded to all schools,
their classes to demonstrate solidarity and show and that these programmes can be made more
his commitment to them. “I had to expose them self-sufficient.
to the bigger picture, academically speaking.” He
also brought the students’ parents around, calling
them in for meetings and discussions to convince
them that those learning Science and Mathematics
in English have a brighter future.
He attributes the initiatives’ success to the help

and support of the district education office and
the state’s education department. He pointed out
that following a visit from the HIP Secretariat, the
English Language Teaching Centre, SKSL was
connected to Universiti Tunku Abdul Rahman,
which also provided significant assistance.
SKSL rose to the challenge, becoming the third-

best HIP school nationwide in 2016, by having the Zamri (middle), former headmaster of Sekolah
students use English beyond the classroom. “We’ve Kebangsaan Sungai Lesong, actively engages the
used Scrabble as a basis for our Word Attack game Ministry and parents to support HIP and DLP activities.
to help increase student vocabulary; we’ve also

created a ‘HIP-Zonia’ area with all sorts of English
Building a Competitive Talent to optimise their practical experience and ensure

employment upon graduation. The construction of
Pipeline through Discipline Clusters the UCSI Hospital reached 80% completion as of
December 2017, with construction estimated to be
fully completed at the end of March 2018. Built in
phases, UCSI Hospital is expected to receive its first
patients in July 2018 and will begin with a capacity
The establishment of private higher education clusters of 130 beds. During its initial operations, UCSI
aims to develop a pool of talents in specialised areas. Hospital’s core services will include internal medicine,
The initiative ensures Malaysia possesses a highly cardiology, accident and emergency medicine,
skilled talent pool in line with the country’s high- general surgery, orthopaedics, gynaecology, as well
income aspirations by leveraging on the existing as plastic and reconstructive surgery.
networks of education institutions, international
institutions and related industries to co-collaborate
and develop relevant academic offerings.
Islamic finance and business education cluster

“UCSI Hospital is collaborating
with world-renowned medical
professionals to bring expert
The Islamic finance and business education cluster
is being developed through the leadership of the
International Council of Islamic Finance Educators
knowledge to its students.
”
(ICIFE). Under its new President appointed in March To boost its national and international standing, UCSI
2017, the Council is focused on strengthening both Hospital has begun communicating with Harvard
local and foreign memberships among individuals University to establish clinical collaborations in the
and institutions, with the objective of formalising fields of cardiology, cardiothoracic surgery as well
a professional body of accredited Islamic finance as plastic and reconstructive surgery. UCSI is also
educators comprising academics and industry working on avenues for research collaboration with
professionals. Harvard. Both parties are already collaborating on
other fronts: to date, five UCSI University students
To boost its membership, ICIFE participated in various have been selected to advance high-impact research
regional Islamic finance conferences, such as the 14th at Harvard on year-long arrangements.
Kuala Lumpur Islamic Finance Forum 2017 (KLIFF)
and the 5th Global Waqf Conference in Indonesia, UCSI Hospital is also collaborating with world-
both of which were held in October 2017. Following renowned medical professionals to bring expert
participation in these conferences, a total of 16 bodies knowledge to its students. For example, Professor
and institutes applied for ICIFE membership. Dr. Gordon Harold Williams – a world-renowned
endocrinologist who leads the Hormonal Mechanisms
ICIFE also worked on refining the current curriculum of Cardiometabolic Injury Programme at Harvard’s
on Islamic economics and finance by holding the 2nd Brigham and Women’s Hospital and has published
Roundtable on Islamic Economic and Finance from more than 500 papers in top journals – is serving as
21-22 September 2017. Attended by academics, a visiting professor at UCSI University’s Faculty of
heads of departments and deans of faculties from Medicine and Social Sciences. UCSI has also secured
18 universities across Malaysia and Indonesia, the expertise of leading academics from King’s College
the objective of the Roundtable was to improve London and the Baker IDI Heart and Diabetes Institute
the content and design the best practices in the as visiting professors.
implementation of the curriculum.
Hospitality and tourism cluster
Health science education cluster
The NTP aims to support the tourism industry by
The UCSI University Teaching Hospital (UCSI increasing the number of hospitality and tourism
Hospital) is being built to provide medical students graduates from 20,000 in 2009 to 50,000 to 2020.
with state-of-the-art facilities and opportunities Through initiatives led by The Malaysia Centre of
to work with world-renowned medical experts
Higher education clusters aim to develop a pool of talents in specialised areas.
Tourism and Hospitality Education (MyCenTHE), Games development cluster

24,280 students enrolled in hospitality and tourism
courses in private institutions in 2017 against the In an effort to ensure a continuous flow of talent
target 26,000. into the game development industry, engagement
activities have been identified as an important tool
In 2017, MyCenTHE, together with Sunway University, to penetrate the student and school audience
Taylor’s University and KDU University College, formed through school career talks, workshops and events.
the EPP10 Committee to jointly plan and execute the This is aimed at educating school counsellors on
National Awareness Campaign on Hospitality and the global and local game development industry
Tourism. The campaign was executed to market as well as opportunities within the industry.
and increase awareness of hospitality and tourism
courses to spur student enrolment. It also sought to Since 2013, institutions such as KDU University
address issues on hospitality and tourism graduate College, Tunku Abdul Rahman University College,
employability by advocating a focus on developing Universiti Teknikal Malaysia Melaka and Universiti
transferable skills, as it is generally accepted that Tunku Abdul Rahman (UTAR) have engaged with
poor marketing as well as low salaries offered by the secondary school counsellors in the Klang Valley
private sector discourage interest in the hospitality and Melaka. Activities included providing school
and tourism industry. counsellors the opportunity to visit the Kuala
Lumpur office of Streamline Studios, a major US-
MyCenTHE has also seen an expansion in its based game development studio, and Codemasters
membership, growing from 15 members and seven Studios KL, one of the oldest games development
cluster leaders in 2016 to 19 members, nine cluster studios from the UK. This allowed the counsellors
leaders and four discipline leaders from institutions to gain insights into games development while
across Malaysia in 2017, demonstrating yet again the enabling the games development cluster project
close partnership between the Government and the champions to visit secondary schools and engage
private sector in developing Malaysia’s education directly with students.
ecosystem. With more leading institutions on
hospitality and tourism courses joining forces under As part of activities under this cluster, secondary
MyCenTHE and the EPP10 Committee, it is expected school engagements via workshops and
that an increasing number of institutions will start competitions are also held to raise student
participating and that there will be a significant increase awareness on the game development industry
in enrolments in hospitality and tourism courses. and its processes and to demonstrate that game
development is a technical career with great growth certification programmes and to enhance students’
possibilities. One of the biggest events of this readiness for employment. On 14 June 2016, an MoU
nature is TableTop, an activity geared at educating was signed between Sunway TES CAE and JPP.
and equipping secondary-school students
with knowledge about the game development Following the signing of the MoU, Sunway TES
pipeline using board games. Using a given theme, CAE developed a teaching model, which it then
participants would be tasked with creating a deployed at Politeknik Port Dickson to start with.
table-top game that is fun and innovative. Similar The teaching model incorporated a one-week Train-
exposure activities include the Global Game Jam, the-Trainers (TTT) programme, where the trainers
a game development workshop for secondary- had their paradigms shifted from an academic to a
school students, and the Smartmob Mobile Game professional perspective. The teaching model also
Competition which has been held in Selangor and included a two-week Intensive English programme
Melaka annually since 2015. to enhance students’ English proficiency in
preparing to study ACCA F5 (Performance
These competitions and workshops have sparked Management) and F6 (Taxation) subjects; a six-
the interest of secondary-school students and have month study course of ACCA F5 and F6 subjects
given them the opportunity to try their hands at with on-going Intensive English classes to ensure
the game development process: in 2017 alone, 36 students remain ready to study the ACCA subjects;
schools and 251 secondary school students were and a module to teach students how to write in
involved in the events under this discipline cluster. the ACCA F5 and F6 final examinations.
Since the introduction of the TableTop competition
in 2013, 718 students have participated from 128 The six-month study course was conducted from
schools. The trend shows a yearly increase in the January to June 2017 by Sunway TES CAE and 18
number of students participating. students from seven polytechnics were selected to
study in this special programme in preparation for the
A key challenge to the development of this discipline final exams in June 2017. Following the study course,
cluster lies in gaining the initial support from both the pass rate for the F5 and F6 exams was 1% and
the schools and district education offices for these 41% respectively, with one student not having entered
engagement activities due to the lack of awareness the final exam. Challenges identified by lecturers as
on the games development cluster. However, support reasons for this sub-optimal result included poor
has usually been overwhelming once the officers are discipline among the students and their lack of
made aware of the opportunities within the discipline language skills. Subsequently, from 4 to 8 August
cluster. Moving forward, the initiatives of the games 2017, a TTT Programme was provided to 10 lecturers
development cluster will be expanded to other states, of Politeknik Port Dickson on the F5 and F6 syllabi.
beginning with Penang and Sabah in 2018.
Accounting cluster
Championed by Sunway TES Sdn Bhd, the Sunway

TES Centre for Accountancy Excellence (CAE) is
aimed at building the accountancy talent pool by
incorporating professional accounting qualifications
into existing accounting degree programmes offered
by public and private institutes of higher learning.
In November 2015, Sunway TES CAE began

collaborating with the Polytechnic Education
Department (Jabatan Pendidikan Politeknik, JPP)
to upgrade the quality of the syllabus for the
three-year Diploma in Accountancy and ensure
the qualification aligns with industrial requirements.
This is an aspiration to bridge polytechnics’ teaching
The Government collaborates with IHLs to champion the
methodologies to be on par with professional education discipline clusters.
Creating Alternative Education will continue to support PPPs to ensure that TVET
graduates are industry-ready.
Pathways Efforts are also focused on ensuring the quality
of TVET instructors based on six e-profiling
competencies. To date a total of 15,471 TVET
instructors have completed a competency
The Malaysian Government has consistently evaluation on the e-profiling system. The Centre
championed Technical Vocational Education and for Instructor and Advanced Skill Training
Training (TVET) to provide alternative pathways for (CIAST) under MOHR is currently monitoring and
students to attain professional qualifications. This coordinating the agencies involved to implement
focus area aims to rapidly scale up and increase the staff training through provisioning and upskilling
quality of private skills-training institutions and attract assignments based on the results of competency
international vocational students. This will be achieved analysis conducted in e-profiling to ensure that
by increasing PPPs with technical and vocational truly necessary training is carried out.
schools, and facilitating industry investment in training
to provide students with an alternative option for MOHR has also taken steps to increase TVET levels,
learning and to establish closer ties with the industry. namely by requiring at least 30% of the total intake
in all public skills training institutes to undergo
In 2017, under the 18 different agencies tracked, the National Dual Training System (NDTS), having
a total of 8,380 students were trained through an industry-led bodies to become supervisors to NDTS
industry-based approach. This helped to minimise skill training modules and raising financial incentives
gaps and contribute to higher employment rates for for apprentices from RM300 to RM500 to increase
TVET graduates. Moving forward, the Government the number of students trained under the NDTS.
Table-setting demonstration by Mercure Kota Kinabalu to students from Ascot Academy.

MyCenTHE Rebrands for Greater Industry

Relevance
According to Professor Dr. Kashif Hussain, Dean of

UCSI University’s Faculty of Hospitality and Tourism
Management, Malaysia currently earns over RM100
billion in tourism receipts, which is expected to grow
to RM168 billion by 2020 and RM295 billion by 2027. “In
2016, the hospitality industry directly supported 639,500
jobs, and indirectly supported 1,700,500 jobs or 12% of
total employment. By 2027, the industry will directly
lead to the employment of 956,000 people (5.4% of
total employment) and indirectly support 2,564,000 Dr. Khashif Hassan, Dean of UCSI University’s Faculty of
jobs (14.5% of total employment). Hospitality and Tourism Management and President of
MyCenTHE.
As part of the initiative under the NTP to build a
hospitality and tourism cluster, the Malaysia Centre for In 2017, MyCenTHE, along with its IHL partners,
Tourism and Hospitality Education (MyCenTHE) was established a working committee of the four major
launched in 2010 with the aim of equipping Malaysia’s players of the education sector (UCSI University, KDU
expanding tourism and hospitality industries with quality University College, Sunway University and Taylor’s
human capital. Its primary objectives are to increase the University) to raise the quality of the workforce with
annual output of tourism and hospitality personnel to the combined efforts of its member institutions across
50,000 by 2020, and increase the share of graduates the nine states. “We reorganised our key strategies and
with diplomas or degrees in the industry to 50%. UCSI plans moving forward. We also increased our branding
University was appointed by MOHE to lead this initiative. and promotion efforts by running a National Awareness
Campaign 2017, as well as reaching out to the youth
Currently, 24 private institutes of higher learning (IHL) and public using social media to create heightened
in Malaysia are working together with MyCenTHE to awareness regarding the future of the hospitality and
promote tourism and hospitality education, with nine tourism industry, as well as related career areas,” Dr.
cluster leaders representing the states of Sarawak, Kashif explains.
Penang, Negeri Sembilan, Melaka, Sabah, Johor, Pahang,
Kedah, and Perak. Dr. Kashif, who is also the President The National Awareness Campaign 2017, with its “We
of MyCenTHE, points out that the hospitality and Want You In Hospitality and Tourism Industry” tagline,
tourism cluster is a diverse field. “Educational institutions took place in October and November 2017 in Kuala
offering tourism and hospitality education have a great Lumpur, Selangor, Penang, Kedah, Perak, Pahang, Negeri
opportunity to develop new and unique programmes, Sembilan, Johor, Sabah and Sarawak. “The objective of
equipping graduates to work in hotels and resorts, F&B the nationwide campaign was to promote the hospitality
outlets of all classes, airlines and other transportation and tourism industry to 3,000 students from 100 local
enterprises, cultural venues and venues catering to the schools, bringing them to various hotels, resorts, theme
events industry, amongst others.” parks, convention centres and tourism companies in
order to allow them to explore the nature, working
MyCenTHE aims to see an increase in the industry’s lifestyle, and culture of the industry. We hoped that
average monthly salary from RM2,000 to RM4,000 through this campaign, we would be able to help bridge
so that graduates may have sustainable careers and the gap between academia and the industry.”
better livelihoods ahead. This entailed ensuring that
tourism education is relevant to the needs of the tourism “As higher education providers, we need to ensure
industry. “All of the MyCenTHE cluster leaders have that we produce the best graduates not only in the
implemented work-based learning in their offered industry, but for the industry. The industry demands
curriculums. This approach has provided students quality human capital that possesses the ability to
with the required professional skills in accordance anticipate and exceed their customers’ or ‘guests’ needs,
with industry trends, real-life experience, and viable and deliver high quality service. We are keen to ensure
employment opportunities, which has significantly that hospitality and tourism education does not only
increased graduate employability and industry positively impact the national economy but also help
engagement,” Dr. Kashif notes. nurture our existing and upcoming talent pool.”
MOving Forward
A more thorough approach to policy formulation and de-clogging processes will be crucial to take the
Government’s NTP education initiatives, such as ECCE enrolment, upskilling of teachers and promotion
of the DLP and HIP forward following the achievements and challenges faced in 2017. The rakyat can also
expect an exciting year ahead with the implementation of new guidelines and outcomes from the various
labs held this year, most notably from the special education needs students mini-lab and the International
Student Lab.
In terms of promoting Malaysia as a premier destination for education, international marketing activities
with relevant stakeholders will be enhanced and processes improved to make Malaysia globally competitive.
Each discipline cluster will focus on improving marketing and branding by consolidating and creating new
partnerships between industry players and education providers to increase enrolment in the disciplines
and raise awareness on the opportunities within the related industries. Meanwhile, EduCity@Iskandar will
continue to improve its infrastructure and step up its local and international marketing activities to increase
enrolment of local and international students into EduCity institutions.
Greater Kuala Lumpur / Klang Valley
Rejuvenating the
Urban Landscape
YB DATUK SERI TENGKU ADNAN TENGKU MANSOR

Minister of Federal Territories
The Greater Kuala Lumpur and Klang Valley (Greater number is expected to grow higher as the MRT
KL/Klang Valley) region is rapidly increasing in continues to provide valuable connectivity within
connectivity, bringing wealth and prosperity to its the Greater KL/Klang Valley region.
residents in line with the goal of the Greater KL/
KV NKEA to improve its liveability and become a Other significant initiatives include the River of
competitive commercial centre in the global arena. Life project, which aims to transform the Klang
Its GNI contribution is expected to increase from and Gombak Rivers and its surrounding areas into
RM248 billion in 2010 to RM693 billion by 2020, thriving recreational activity spots and enhance
with its progress on track towards creating 320,000 its economic value, as seen in other world-class
jobs in the same year. cities. The project marked the launch of the River
of Life Heritage Quarter on 28 August 2017, a new
To improve its liveability and regional premium attraction across 2.7-km-worth of riverside
competitiveness, the Greater KL/Klang Valley within the heart of the city, delighting residents
NKEA has implemented initiatives to improve and tourists alike. It has also gained international
the region’s connectivity, revitalise its rivers and recognition with AECOM, the infrastructure firm that
protect its green spaces, enhance its commercial designed the overall river beautification, receiving
attractiveness and ensure proper management of the Award of Excellence by the International
its waste and water resources to meet the needs of Federation of LANDSCAPE Architects and the
its growing population and drive economic activity. Asia-Pacific Landscape Architecture Awards 2017
According to the Economist Intelligence Unit’s (EIU) under the Cultural and Urban Landscape category.
Global Liveability Report 2017, Kuala Lumpur has
improved its liveability ranking to 70th out of 140 The success of this NKEA is attributed to the close
cities from 78th in 2010 and remains the second cooperation among the relevant ministries and
most liveable city in Southeast Asia. agencies as well as public support in ensuring the
sustainability of the enhancements in Greater KL/
To this end, many projects first embarked upon Klang Valley. As we approach the 2020 mark, all
in 2010 have reached significant milestones over stakeholders must increase their efforts to ensure
this year, representing not only achievements for that the completion of projects are in line with our
this NKEA but also serving as cornerstones for targets for the country.
Malaysia’s transformation under the NTP. These
include the completion of the full MRT Line 1 on
17 July 2017. The project, which was delivered
two weeks ahead of schedule and saved RM2
billion below budget, is now recording an average
ridership of 110,000 commuters daily, and the
Creating Connectivity within the

City and Beyond
Klang Valley Mass Rapid Transit Project
As a flagship project under the NTP, the MRT

project was formulated to add much-needed
capacity to the Greater KL/Klang Valley’s growing
public transport system and catalyse economic
YAB Prime Minister officially launching MRT Line 1 at the
activity. The MRT also contributes to the liveability Tun Razak Exchange station.
of Greater KL/Klang Valley by providing a low-
pollution travel option for residents to move around
the city, enabling an estimated 160,000 vehicles to The second phase of the MRT project (Sungai
be taken off the roads and a reduction of 34,400 Buloh - Serdang - Putrajaya (SSP) Line) is under
tonnes of carbon dioxide emissions per year. construction, with a ground-breaking ceremony
at the Putrajaya Sentral Station by the YAB Prime
Minister on 15 September 2016. As of 2017, work
packages related to viaducts, underground works,
electrical and mechanical systems have been
awarded accordingly. As of 31 December 2017, the
progress of the SSP Line reached 19.13% and is on
track to complete as scheduled by 2022. The first
phase of the MRT SSP Line is slated for operations
by the second quarter of 2021, while the full line
will be operational in the succeeding year.
Together, the SBK and SSP Lines will provide extra

capacity to transport 900,000 commuters daily.
In tandem with these lines, plans are underway
for the third phase of the project (the Circle Line).
The Circle Line will loop around Greater KL/Klang
Valley, hence completing the full MRT project.
MRT Line 1 commenced full operations on 17 July 2017. The MRT urban rail network is a complex project
which involves extensive construction in a highly
congested urban area. Hence, best practices will
The project reached a significant milestone when be used to increase workforce efficiency while
the full MRT Line 1 (Sungai Buloh - Kajang, SBK) was reducing the risk of damage and injury. To this
launched on 17 July 2017, improving connectivity effect, common disruptions caused by construction
within Greater KL/Klang Valley; pushing it closer sites such as noise and air pollution, road closures,
to becoming a fully connected region. The line and potential damage to neighbouring properties
encompasses 31 stops from Sungai Buloh to will be better managed through putting up sound
Kajang, serving a population catchment of 1.2 barriers among others. Safety in construction
million individuals. The Line’s connectivity is further sites and its surrounding areas will be prioritised,
enhanced with its integration to the region’s existing especially at locations in close proximity to
rail backbone comprising of the LRT, Monorail, KTM pedestrians, busy traffic, and buildings. To ensure
Komuter, KLIA Express and KLIA Transit services. compliance, impact assessments and stakeholder
engagements will be conducted at regular intervals.
To obtain the latest information and progress on Beginning from Bandar Malaysia, the HSR route will
MRT development, the public can access various cover Bangi - Putrajaya, Seremban, Melaka, Muar,
offline and online MRT touchpoints, such as Batu Pahat and Iskandar Puteri before reaching
information centres located at Viva Mall in Kuala Jurong East, Singapore.
Lumpur and Atmosphere Putrajaya, as well as
mobile information centres and kiosks located at The increased connectivity between two of
other shopping malls. The public can also provide Southeast Asia’s major economic engines is
feedback on the MRT development via http://www. expected to further facilitate cross-border
mymrt.com.my/en/feedback-form. businesses by providing them access to a broader
market place. At the same time, the public will
Kuala Lumpur-Singapore High-Speed Rail project enjoy shorter travel time and a more comfortable
ride through the HSR’s city-centre-to-city-centre
The Kuala Lumpur - Singapore High-Speed Rail (KL connection along the corridor.
- SG HSR) is another project aimed at improving
the connectivity of Greater KL/Klang Valley. The In 2017, two international-level Industry Briefings
project aims to create socio-economic multipliers were held with Land Transport Authority (LTA)
through economic clusters which are expected to Singapore to prepare a tender in 2018 for the
blossom along the rail line. establishment of a privately financed HSR asset
company (AssetsCo). The results of the HSR
The railway, which will cut the journey time between AssetsCo tender are expected in 2018, after
KL and Singapore to just 90 minutes, will serve eight which the appointed parties will be responsible
stations: seven in Malaysia and one in Singapore. for designing, building, financing and maintaining
MRT Line 1 seen here is expected to serve a population catchment of 1.2 million individuals.
all rolling stock and rail assets. On 17 October 2017,

MyHSR Corp also unveiled the Station Concept
Design and the Ground Control Point Survey Works
launched by the YAB Prime Minister.
A project of this scale will require a significant

workforce with expertise in the high-speed rail
industry, which is in short supply in Malaysia as
it is a relatively new industry in the country. To
address this, initiatives have been identified to
develop and upskill local talent with the required
technical skills through: academic programmes and
modules, Technical and Vocational Education Training
(TVET) modules, professional redevelopment and
reskilling; and the Young Engineer Programme. These
initiatives will provide on-the-job training as well as
continuous assessments and evaluations through YB Datuk Seri Abdul Rahman Dahlan officiating the
collaborations with institutions of higher learning and SEDP Delivery Kick-Off and CTP (Cities Transformation
Programme) Plenary in February 2017.
TVET institutions as well as project partners.
“
Pedestrian Network and Bicycle Lanes Masterplan
The increased connectivity
between two of Southeast Since 2010, 49.8 km of pedestrian walkways around
Asia’s major economic engines Kuala Lumpur have been re-paved, anti-climb
fencing has been installed and greenery has been
is expected to further facilitate added as part of a project to improve pedestrian
cross-border businesses by linkages with major developments in the city and
providing them access to a boost commercial and leisure activities. These
”
changes have enhanced pedestrian comfort and
broader market place. safety which in turn, encourages more on-foot
travel around the city.
In addition, MyHSR Corp together with the
Economic Planning Unit developed the Socio- Following the successful completion of bicycle
economic Development Programme (SEDP) to lanes which connect Mid Valley to Dataran
accelerate inclusive growth in the cities along the Merdeka in 2015, DBKL will foster public mobility
HSR corridor in the same year. The SEDP will be through incorporating a pedestrian network and
implemented with a focus on three components: bicycle lanes masterplan in current and future
economy, inclusivity and sustainability. Each developments. The masterplan will be completed
component is supported by a set of enablers in 2018, and will incorporate public views and focus
to maximise benefits for local communities and group discussions.
ensure meaningful participation in its development.
As such, an SEDP Delivery Kick-Off and CTP The masterplan will include pedestrian networks and
(Cities Transformation Programme) Plenary was bicycle lanes as a guide for DBKL and local councils
organised in February 2017 to share an overview to upgrade bicycle lanes. This will complement new
and updated progress of the SEDP. The events services such as bike sharing around the Greater KL
also acted as a platform to kick-off the SEDP area which encourages low carbon transportation
delivery programmes – the Economic Acceleration for its citizens. The introduction of the masterplan
Programme (EAP) and the Cities Transformation is also targeted to guide local and city councils in
Programme (CTP). rethinking the allocation of road space, which is
currently vehicle-centric.
Boosting Economic Activities platforms through both traditional and digital

means.
in Greater Kuala Lumpur and InvestKL will also participate and host various
Klang Valley roundtable initiatives for different sectors
and regions. Among events planned are an
Oil and Gas Roundtable, as well as a Belt and
Road Conference and Tax Symposium. These
engagements will take place all over the world,
Despite a challenging global economic outlook including in major cities in the US, Europe,
in 2017, InvestKL persevered in its efforts of China and Japan. On the local front, InvestKL
facilitating the establishment of 100 multinational also hosted an industry roundtable for insurance
corporations (MNCs) in Greater KL/Klang Valley companies and Central Bank of Malaysia (Bank
by 2020. Progress is attained through engaging Negara Malaysia) to discuss mutually beneficial
with C-level decision makers and solidifying policies and regulations to ensure long term
alliances with various partners. As a result, growth. The continued success in attracting
InvestKL recorded the entry of 12 MNCs in 2017. large MNCs to Greater KL is testament to the
effectiveness of these numerous initiatives.
Stakeholder engagement sessions were
undertaken throughout the year in close Meanwhile, TalentCorp continued to attract and
partnership with the Ministry of International retain high-skilled talents in Malaysia to support
Trade and Industry as the main regulator of the talent needs of Greater KL/Klang Valley. As
foreign direct investment. The sessions enable the of 2017, the Scholarship Talent Attraction and
agency to better facilitate the entry of MNCs, gain Retention (STAR) programme registered 1,206
better understanding of individual MNC needs Public Service Department (JPA) scholars.
and concerns as well as ensure continued support
towards existing MNCs to encourage their long- Under the Returning Expert Programme (REP),
term presence in Malaysia. Sessions conducted 405 applicants have been successfully approved
during the year include a French Delegation as of 2017. To ensure continued success, marketing
roundtable with The Movement of the Enterprises must be intensified to increase interests among
of France (MEDEF), the largest employer returning Malaysian professionals from their
federation in France, as well as a luncheon in stints abroad. Meanwhile, the Residence Pass-
conjunction with the French President’s visit to Talent (RP-T) programme (which is meant to
Kuala Lumpur. retain highly skilled expatriates in Malaysia)
approved 1,049 applicants in the same year,
“InvestKL
further enhancing the high-skilled talent pool,
recorded the entry of and rate of knowledge transfer in Malaysia.
12 MNCs in 2017.
” It is important to ensure employment pass
applications are processed in a convenient and
Strategic partnership initiatives with the Big Four timely manner to attract interested applicants,
accounting firms and international chambers especially as human resource constraints may
of commerce, amongst others, will also be impact the efficiency of the application process.
leveraged to engage potential investors and In 2017, MyXpats Centre successfully processed
secure the remaining MNCs needed towards 97% of employment passes within its five-day
the 2020 target. At the same time, continuous charter, while the Expatriate Service Division
promotional campaigns on the advantages (ESD) online system has registered 13,000
of the Greater KL/Klang Valley region will be companies and processed 106,000 applications
carried out across local and international media since 2014.
Developing a World-Class City upgraded and installed, with the construction of one
more sewage treatment plant and an additional 7 km
of sewerage pipe networks under construction to date.
To prevent the risk of effluent overflow or malfunction
that would exacerbate river contamination, old and
River of Life existing small-capacity treatment plants are also
being upgraded, with 13 re-engineered into regional
In light of the region’s increasing population, sewerage treatment plants and 267 plants currently
ensuring that Greater KL/Klang Valley continues on schedule to be completed.
to be a liveable environment is critical. Thus, from
2011, significant efforts have been channelled to The agencies involved have identified wastewater
improve the region’s rivers under the River of Life produced from wet markets as one of the main
(RoL) project. Following the launch of Phase 1 in sources of river pollution. As a countermeasure,
2017, the environment-centric project is on track four wastewater treatment plants for wet markets
for completion by 2020. in Kuala Lumpur have been built with an additional
five in Selangor at the final stages of construction.
As part of the river cleaning process, work continues A total of 504 gross pollutant traps, trash rakes and
to be undertaken across eight river tributaries, log booms have also been installed, while 13 river
spanning 110 km to improve water quality to Class treatment plants have been built and two more
IIb. Water quality is measured in classes; Class I under construction.
denotes the highest water quality while Class V
rivers are extremely polluted. Prior to the RoL Rehabilitation works along Sungai Kerayong’s 13 km
project implementation, the WQI for rivers within riverbank stretch and riverbank enhancing works
the RoL project was a harmful Class IV-V, but all at selected locations in Sungai Klang and Sungai
eight tributaries have since improved to Class III. Gombak have also been completed. Additionally,
interceptor systems have been installed at the
Since 2011, a total of 27 sewage treatment plants and 10.7 km river stretch under the project’s river
136.33 km of sewerage pipe networks have been beautification component. The system is designed
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to intercept street debris not captured by sewage will ensure that delays to the project are minimal.
or wastewater treatment facilities and redirect it to Ongoing efforts in educating the public must be
eight sullage treatment plants before the water is continued to ensure that the upgraded facilities
released to the river. This additional measure will will not be vandalised.
help ensure the water quality along the 10.7km
of rivers can achieve Class IIb. Presently, four
interceptor systems have been completed with
the remaining still under construction.
The river beautification component has achieved

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significant milestones in 2017 following the Gom
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upgrading of the areas surrounding the 10.7 km S
river stretch from Titiwangsa to Brickfields, with

Masjid Jamek at its focal point. Restoration and .B
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renovation of Masjid Jamek have been completed
and the area has been made more accessible and Sg
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attractive to patrons, visitors and pedestrians.
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on 28 August 2017 by the YAB Prime Minister. ng
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Beautification works have commenced since 2014 Sg
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at areas around Dataran Merdeka, Masjid India,

PWTC and Brickfields, while a contract is in the
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process of being awarded for works at Taman
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Tasik Titiwangsa. Beautification of all areas are
Sg
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LEGEND
expected to be completed in 2019. The Ministry of . Kl
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Riv_ROL
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Federal Territories will continue to work together River
POP
with DBKL to ensure the completion of Phase 2 Phase 3A
0 2 4 8km
of river beautification works. Projects are closely
managed with regular progress reviews of each Coverage of the Public Outreach Programme.
node and package.
Preserving green spaces
Dumping of foreign materials into the region’s
water channels hinder and can potentially inhibit Tree Planting and Park Adoption initiatives to
river cleaning efforts. As such, further engagement plant 100,000 trees in Kuala Lumpur by 2020 was
with the public is imperative. To help with this, achieved in the year 2013, seven years ahead of
a five-phase Public Outreach Programme (POP) schedule. Nevertheless, there have been continued
was devised. Each POP Phase is catered to one efforts to increase this number to ensure a greener,
area of Kuala Lumpur and Klang Valley, which and more liveable Greater KL/Klang Valley.
target the local communities (school children and
food traders, among others) living within 300 Following Wilhelmsen Ship Services and Wilhelmsen
m of riverbanks to increase awareness on river Ship Management’s tree planting initiative in 2016,
cleanliness. POP also fosters civic-mindedness to four additional parks were adopted in 2017 by
ensure the sustainability and maintenance of the private corporations and community organisations.
improved river quality. The demand was encouraged by a partnership with
Yayasan Hijau which allows adoption funds to be
Although substantial improvements have been exempted from taxation.
recorded, the RoL project can be hampered by
construction works, geographical constraints and A collaborative effort between Think City and
soil conditions. However, constant collaboration Seksan Design to redesign and repurpose existing
between the Government and private agencies spaces resulted in the launch of the Tun Perak
The upgraded Tun Perak Pocket Park adds greenery to a busy city intersection and utilises river boulders from the nearby
River of Life project.
Pocket Park. The pocket park also features recycled remains under construction due to the challenges
rocks taken from river boulders removed from RoL of working in a confined space coupled with heavy
project areas. traffic. Heritage Trail 6, or Jejak Rimba Bandar,
is on track for completion in 2018, where the
Naza TTDI’s KL Metropolis City also committed to a 1.2-km-stretch along Jalan Ampang and one of
large-scale corporate adoption initiative worth RM20 the entrances to Bukit Nanas Forest Reserve will
million over 15 years. Additionally, a fern conservation be upgraded, allowing visitors access to the only
garden was set up at YTL Stripes Hotel on Jalan remaining virgin rainforest in Kuala Lumpur city.
Kemuning, Kuala Lumpur, while AIA Group adopted Heritage Trails 7 and 8, or Jejak Bijih Timah, will have
a portion of Metropolitan Kepong Park. its pedestrian walkways upgraded and two new
pocket parks established at Jalan Sultan and Jalan
Promoting iconic places Panggong respectively. The project is expected to
be completed in 2018. The famed tourist area of
Ongoing work to develop heritage trails is Jalan Petaling and its vicinity will encourage more
progressing as per the Heritage Trail Master visitors to learn about Kuala Lumpur’s colourful
Plan. Heritage Trails 5 to 8 are undergoing work history of tin mining and tin merchants.
development, despite facing challenges including
the relocation of nearby utilities. Management of solid waste and water
Heritage Trail 5, or Jejak Pahlawan, which connects Solid waste management (SWM) is another
Precinct 7 of the RoL project to Jalan Parlimen, area of focus identified under the NKEA. In
Peninsular Malaysia, SWM for states under the daily, or 920,000 population equivalent (PE),
Solid Waste & Public Cleansing Management Act to improve the quality of treated effluent and
2007 (Act 672) is governed by the Ministry of reduce ammonia pollution into Sungai Langat
Urban Wellbeing, Housing and Local Government’s – an important water catchment area servicing
National Solid Waste Management Department. the population of Greater KL. The project will
Act 672 targets to reduce the amount of solid also establish additional space for recreation
waste sent to landfills by 40% by 2020. However, and facilities for the public as the majority of the
the initiative requires innovative solutions and project will be built underground.
private sector participation to reduce reliance
on the Government, which is heavily funding Covering the Langat catchment average area
investments in SWM currently. of 61.72 sq km ranging from Mile 11 Cheras to
Kajang, the design also took into consideration the
As such, the Catchment Area Needs Statement rationalisation of 164 small treatment plants from
(CANS) initiative, conceived during the Solid Mile 11 Cheras, Desa Baiduri, Cheras Jaya, Kajang 1
Waste Management Lab in July 2015, aims and Kajang 3 including Kajang Prison. The project
to encourage private sector participation by is scheduled for completion by October 2020.
providing a platform with relevant information for
tonnage diversion needs and charting the waste Other ongoing projects include the Upper
flow of any particular location. This information Kerayong Sewage Treatment Plant which is
will aid the private sector in delivering suitable expected to complete in 2018 covering the
proposals to address tonnage diversion and at Cheras and Ampang areas. Pipe network and
the same alleviate the Government’s capital and rationalisation projects in Puchong and Kajang are
operating expenditure. This initiative sends a clear also expected to be completed in 2018 following
invitation to the private sector to be involved in the successful completion of pipe network and
SWM. By proposing locality-tailored solid waste rationalisation in Petaling Jaya Utara and Klang
management solutions, the private sector can in 2017. These projects will help ensure increased
assist the Government to achieve its target for sewage and effluent from a larger population is
waste diversion and unlock the local waste- captured and treated to protect environmental
recovery industry while reducing the Government’s quality in the Greater KL area.
financial burden.
While the National Solid Waste Management

Department seeks to work with the private sector
to explore solution-focused partnerships, the
department previously did not have suitable tools
and capacity to evaluate proposals received from
the private sector. In view of this, the Business
Evaluation Pipeline (BEP) was developed to
evaluate SWM proposals from the private sector.
Version 1.0 of BEP was rolled out in February 2017,
streamlining the format and evaluation criteria for
initial adoption. BEP version 2.0, which will include
a holistic evaluation criteria, is expected to be
ready for adoption by the end of 2017. BEP will be
integrated with CANS once it is fully operational.
The Ministry of Energy, Green Technology and

Water (KeTTHA) is leading the Langat Centralised
The Bunus Sewage Treatment Plant is part of the larger
Sewage Treatment Plant (LCSTP) project, which effort of improving river water quality at Sungai Bunus.
will enable the treatment of 207,000 m3 sewage
MRT’s strategic solutions: changing the

face of construction
The Klang Valley Mass Rapid Transit (KVMRT)

project is Malaysia’s largest infrastructure
undertaking to date. Thus, when engaging the
Project Delivery Partner (PDP) to build it, the
Government entrusted MMC Gamuda KVMRT
(PDP) Sdn Bhd (MMC Gamuda) to act as a single
point of accountability.
Maslan Othman, Deputy Project Director of MMC

Gamuda, attributed the MRT’s success to paying
close attention to planning the alignment of the
MRT line, design management, procurement, and The entire MRT project went smoothly with proactive
corporate communication and stakeholder engagement.
construction management.
In terms of alignment, a key challenge was Kuala One of the challenges faced was with health, safety
Lumpur’s congestion, outlines Maslan. “Additionally, and environmental considerations, as Malaysian
the alignment (route) had to run through certain contractors were new to the stringent, world-class
must-serve townships and business hubs, such standards imposed by MRTC and MMC Gamuda,
as KL Sentral and Bukit Bintang. The alignment which was independently overseen by the ICE. It
selection had to balance between optimising was imperative that a project of such a massive
ridership and integrating the MRT to the existing scale had cohesion in addressing the safety of
transport systems, while ensuring the need for everyone working on the project.
minimal land acquisition and minimal social impact
to the surrounding communities”. “We set up the KVMRT Training Centre to make
safety training mandatory among all vendors,
In-depth knowledge of the industry’s supply contractors and workers via a passport system.
chain gave MMC Gamuda the ability to structure Ultimately, the training resulted in a positive change
a procurement strategy that ensured an optimal in mindset and behaviour towards a safer working
spread of works to the different tiers of the culture,” Mazlan elaborated. Hence, workplace
construction industry, concentrating on local injuries and deaths were reduced significantly,
industry players to improve their capabilities and compared to other similar projects in the past.
skillsets. The PDP was involved at every stage
jointly with its client, MRT Corp (MRTC), and the As a result of this primary role played by MMC
Independent Consulting Engineers (ICE). Gamuda, in conjunction with MRTC and the ICE,
the MRT project managed to be delivered on time
Given the need for effective construction and on budget, as HSS Integrated Sdn Bhd (HSSI)
management, the PDP was provided the authority Executive Director/Chief Executive Officer Dato’ Ir.
to step in when issues arose that could hinder the Nitchiananthan a/l Balasubramaniam highlighted.
timely delivery of the project. “Thus, we could
proactively deploy experienced personnel and HSSI, an associated entity of HSS Engineers Berhad,
physical resources when it was apparent that was first involved with the MRT project in 2011
contractors were faced with possible delays. The for Line 1, and continued working on the MRT
contractors responded positively by co-operating Line 2 as the ICE in 2015. “We were brought on
with us, which succeeded in getting the work back board for governance purposes. This is the first
on track,” Maslan pointed out. large-scale PDP project in the country, costing
around RM20 – 30 billion. The whole structure rolling stock, communications, signalling – had to be
of governance required an independent party to from local players. Railway players have been working
audit both the PDP and the project as a whole; to develop local skillsets in people and capabilities of
this also included cash flow management of the companies in anticipation of ongoing work on MRT
DanaInfra bonds, which funded Line 1 of the MRT,” Lines 2 and 3, not to mention the High-Speed Rail
Dato’ Nitchiananthan explained. and the East Coast Rail Link, and double-tracking
in the southern sector. The MRT project is helping
He opined that overall, the entire MRT project to develop the railway industry and expertise in
went smoothly as there was proactive corporate Malaysia,” Dato’ Nitchiananthan enthused.
communication and stakeholder engagement via
social media and town hall meetings. “Overall, there The impact of the MRT project has been huge
was good teamwork between MRTC, PDP, and the in the Klang Valley in terms of modal shift. Dato’
ICE, which continued into Line 2 as well.” Dato’ Nitchiananthan reported that ridership on Line 1
Nitchiananthan noted that the project came first has been doing very well. “That does not mean
for everybody involved; hence, all parties played it cannot be doing better: once other strategies
their roles synergistically. and policies such as area road pricing, congestion
charging, and higher car parking rates are in place,
The multiplier effect of the MRT project had been I think we will see ridership of the MRT move to
significant. “At least 30 percent of the systems – the next level.”
Construction of the Merdeka station.

Malaysia Scores with UK’s Sports Direct
The UK’s largest sporting goods retailer, Sports To fill up key senior-level roles, the company
Direct, has identified Malaysia as a vital location favours internal staff training, development and
for expanding its Southeast Asian presence, and promotion rather than recruitment via head-
is currently working with InvestKL and the British hunters. Management trainee courses are available
High Commission to make Malaysia its regional hub. and staff members from the Sports Direct Malaysia
headquarters will also be nurtured to head its
“We are in the business of sports. With Malaysia as planned regional expansion.
our regional hub, we will offer the widest variety
in sporting goods and best value for authentic Gibbons is thankful for the support received from
brands to some 648 million people in ASEAN,” says InvestKL and the British High Commission in
Paul Gibbons, Managing Director of Sports Direct facilitating the company’s growth and presence in
Malaysia. The company, which has already invested the ASEAN region. On track to become the fourth
approximately RM120 million during its seven-year largest economy in the coming decade, many big
presence in Malaysia, plans to leverage its Malaysian brands are looking to tap into this key market
operations as a springboard into neighbouring with a rapidly growing middle-income population.
Singapore, Thailand and Vietnam among others With more than 72 international sporting brands
in the next three years. available under Sports Direct and a focus on new
and larger stores designed to attain enhanced levels
Calling Malaysia “the right place to set up and of excellence to its customers, the company is well-
expand from”, Gibbons cites the lower operating positioned to not only be Malaysia’s No. 1 sports
costs, geographically central location, similarity retailer, but also in amongst the ASEAN countries.
in judicial systems, good infrastructure and
connectivity, centralisation of ports and ease in
conducting business as key reasons why Malaysia
was chosen as Sports Direct’s regional hub.
Although currency fluctuations and several changes

in policies have caused some short-term disruptions
to its business, Gibbons still claims that “there is
no better country which can handle expansion into
Southeast Asia and Asia Pacific than Malaysia.”
The company is also riding on key retail trends,

particularly the demand for experiential retail and
rapid e-commerce adoption. In October 2017,
Sports Direct Malaysia launched a new five-storey,
26,000-sq-ft flagship superstore in Bukit Bintang
with the capacity to stage fitness classes on the
rooftop level. The sporting goods giant will also start
a domestic web business and add more product
offerings on the Lazada e-commerce platform.
Meanwhile, Gibbons is also proud of the low staff

attrition rate in Sports Direct Malaysia, which is
currently less than 2%. He also notes that many of its
700-plus staff members are talented sportspersons Paul Gibbons, Managing Director of Sports Direct
Malaysia.
and sports enthusiasts themselves, contributing
to the excellent customer experience that Sports
Direct is known for.
MOving Forward
The Greater KL/Klang Valley NKEA has come a long way since its inception from the NTP Labs held in 2010.
Many initiatives have now been completed while a number of the key longer-term construction projects
have achieved steady progress, beginning with the completion of MRT Line 1 and RoL river beautification
Phase 1. Despite the challenges faced in completing the projects, the implementers behind the NKEA have
consistently kept a close eye on its 2020 targets and the NKEA is on track to fulfil its target of transforming
the region into a magnet for investments and high-skilled jobs, improving connectivity, creating new iconic
places and enhancing basic services.
The NKEA is committed to ensuring that the benefits of the projects under its purview will continue to
reward current and future generations through initiatives such as tree-planting, park adoption, and the
ROL Public Outreach Programme. These initiatives not only will imbue the rakyat with a greater sense of
ownership over the city, but also enhance environmental sustainability. Indeed, Kuala Lumpur’s inclusion as
a member city into the C40 Cities Climate Leadership Group in 2016 reflects its commitment to addressing
climate change in line with the NTP’s sustainability agenda and will help strengthen Greater KL/Klang
Valley’s ambition to be economically competitive and ensure liveability for all its citizens.
OIL, GAS AND ENERGY
Empowering ECONOMIC
DIVERSIFICATION
YB DATUK SERI PANGLIMA DR. MAXIMUS JOHNITY ONGKILI

Minister of Energy, Green Technology and Water
Malaysia’s electricity demand is met through a has also carried out extensive promotional efforts to
diversified fuel mix to ensure sustainability of supply attract Exploration & Production (E&P) players to invest
and affordability for the rakyat. In 2017, gas and coal and operate in Malaysia’s O&G field.
made up 46% and 42% of the total electricity generation
respectively, leaving 11% of that from hydro power. Despite challenges faced by the Oil and Gas Services
and Equipment (OGSE) sector after oil price
In line with our commitment to the 21st Conference of depreciation, Malaysia continues to attract high-profile
Parties (COP 21) in Paris to reduce 45% of greenhouse OGSE multinational corporations (MNCs). Indeed,
gas emissions by 2030, Malaysia is aggressively our country has been the centre of OGSE activities
promoting the use of renewable energy, especially in the Asia Pacific region since 2011, with 18 out of
solar power, through the introduction of initiatives 50 top OGSE MNCs setting up headquarters here.
such as Feed-In-Tariff mechanism, Large Scale Solar Meanwhile, local OGSE companies are also venturing
programme and Net Energy Metering. This results in our past Malaysian borders, testifying to an already strong
renewable energy achieving 22.5% of the total capacity O&G ecosystem for our players to thrive.
mix to date, against the ASEAN target of 23% by 2025.
To pave the way for natural gas market liberalisation in
Besides renewable energy, the Ministry of Energy, Peninsular Malaysia, the Gas Supply Act (Amendment)
Green Technology and Water (KeTTHA) has taken 2016 was finally enforced on 16 January 2017. The
steps to stimulate investments in cost-effective energy passing and enforcement of the Act is timely, as global
efficiency measures in buildings through the Energy gas prices are converging amid an increase in liquefied
Performance Contracting (EPC) mechanism. To assist natural gas (LNG) trades. The liberalised gas market, in
Energy Service Companies (ESCOs) in obtaining turn, will witness more alternative gas supplies under
funds from commercial financial institutions and the Third-Party Access arrangement and thus create a
strengthening their financial credit profile, the EPC competitive natural gas market for Peninsular Malaysia.
Fund was set up in August 2017. Furthermore, Peninsular Malaysia’s electricity tariffs and
natural gas tariffs will be market reflective, consistent
On the oil and gas (O&G) front, global oversupply with other high-income nations.
in the recent decade continued to exert downward
pressure on oil prices. As such, the Government must It is no doubt that the OGE industry remains critical to
ensure growth in the industry through new, high value- push Malaysia into high-income status by 2020, whilst
added activities while sustaining domestic production. not forsaking de-carbonising efforts to tackle climate
In 2017, the OGE NKEA contributed 15% of the total change. These are, ultimately, only made possible
GNI in Malaysia (RM203.5 billion). via a robust collaboration between Government and
private sectors.
The O&G upstream sector is carefully optimised through
various initiatives by PETRONAS and this has yielded
commendable results in our production. PETRONAS
PETRONAS Tangga Barat Central Processing Platform.
Ensuring Sustainability of Meanwhile, in the upstream O&G exploration

and production arena, low oil prices have heavily
Production impacted the viability of projects to rejuvenate
existing fields through Enhanced Oil Recovery
(EOR) technologies, due to their smaller production
volumes and higher production costs vis-à-vis
non-depleting oil fields. In addition, the increased
Upstream initiatives under this NKEA aims to extend complexity of EOR projects requires specialised
the life cycle of existing resources by optimising expertise and advanced technology. Low crude
exploration, development and production activities oil prices have pushed down the development of
to address declining domestic oil and gas (O&G) new marginal O&G fields due to reduced economic
production. These efforts are led by PETRONAS feasibility, compounded by the fact that production
and are closely tied to global market trends. volumes typically decline faster than bigger fields.
On the other hand, due to the current oil price
Globally, oil demand is expected to fall due to fuel environment, production sharing contract (PSC)
efficiency improvements, the rise of renewable contractors are cutting their spending on exploration
energy and its associated technologies, as well as activities, especially in low prospectivity areas.
weaker global economic growth. In the meantime,
excess natural gas supply in the global market Despite the challenging landscape, PETRONAS
led to shifting new liquefied natural gas (LNG) achieved significant milestones in 2017 for five
contracts towards shorter durations and smaller EOR projects in Malaysia, while exceeding its
volumes, making it difficult for oil companies to targets for O&G production volume in marginal
sanction large LNG projects globally. While natural fields. In order to sustain domestic O&G production,
gas demand is expected to grow, coal will likely PETRONAS will continue to competitively market
remain a major competitor, being a cheaper fuel exploration blocks through domestic bid rounds
alternative for power generation. Additionally, LNG and international roadshows, and will ramp up
buyers are also becoming sellers, and collaborations promotional efforts to attract O&G exploration
among buyers are expected to intensify. The market and production players to invest in Malaysian
will be challenging for traditional LNG sellers and exploration activities.
O&G companies.
Third-Party Access Enabling Extracting Growth from the

Energy Market Liberalisation Downstream Segment
Current global market conditions impacting natural Malaysia’s experience and expertise in the O&G
gas prices and the changing structure of LNG industry has enabled the development of a thriving
contracts have set the stage for the industry to downstream segment. Still, there remains plenty
cater to the latent demand for natural gas. This has of room for growth, especially in capturing value
enabled Peninsular Malaysia’s natural gas market from increasing international flows of crude oil,
liberalisation through a gradual shift to applying refined products and natural gas. There are also
market pricing and the entry of more third parties opportunities to extract value from demand for
into the gas market. natural gas, which has been weighed down by a
lack of supply.
To this end, the Energy Commission (EC) has
introduced Third-Party Access and is focused on To this end, the Pengerang Integrated Petroleum
establishing the supporting framework to ensure Complex (PIPC) is being constructed in Pengerang,
its successful enforcement. The Gas Supply Act Johor, representing the single largest downstream
(Amendment) 2016 was enforced on 16 January investment project in Malaysia. It currently houses
2017 and new licences have been issued to existing PETRONAS’ Pengerang Integrated Complex (PIC)
and new players. This marked the start of the and Pengerang Deepwater Terminal (PDT).
liberalisation of the natural gas market in Peninsular
“To
Malaysia. Existing players who own regasification
terminals are required to apply for regasification this end, the Pengerang
licences from the EC, while new players interested Integrated Petroleum Complex
to import the gas molecules need to apply for
shipping licences. The EC has also finalised the
(PIPC) is being constructed in
tariff determination guidelines for regasification, Pengerang, Johor, representing
transmission and distribution facilities, which will the single largest downstream
be open for TPA under the new arrangement.
However, as TPA is a new concept in the Peninsular

investment project in Malaysia.
”
Malaysian natural gas market, one of the biggest Effective functionality of the PIPC can only
challenges for the EC is to secure buy-in from be achieved when the necessary supporting
existing and potential new players who are less infrastructure and public amenities are in place. In
aware of the new regulations and hence will require this respect, the Federal and State Governments
more time to adapt to the new regime. The EC is have planned 25 critical PIPC infrastructure projects
also facing challenges in streamlining the rules for worth approximately RM2.49 billion to meet the
access to natural gas facilities across the value needs of the Complex. In order to ensure the
chain (i.e. regasification terminal, transmission and effective delivery of these projects, the Federal
distribution), which is a tremendous undertaking Project Steering Committee (FPSC), chaired by
given Peninsular Malaysia’s closed market structure. the Chief Secretary to the Government, has been
set up to provide the necessary support to Johor
In this respect, the EC has been engaging Petroleum Development Corporation (JPDC), the
with existing and potential players on the TPA implementing agency for the development of
arrangements while streamlining the rules to infrastructure and public amenities, as well as to
create more flexibility in the utilisation of the gas nine other implementing Federal Ministries and
facilities to cater for spot LNG cargoes and third- Federal/State support agencies. The governance
party supply. In the medium and long term, the structure enables effective issue escalation and
creation of new gas demand remains as the utmost intervention to ensure timely completion of all
priority to attract new players to participate in the infrastructure projects.
domestic market.
PIPC infrastructure development reached significant

milestones in 2017. These include the completion
of a police station in Taman Bayu Damai at the
end of the year and the construction of a dual-
carriageway, four-lane road which enables road
connections between Kampung Bukit Gelugor and
Kampung Pengerang, which will enable safer and
more comfortable commuting on that route. The
upgrading of the road from Bandar Penawar to
Sungai Rengit, located in and around Pengerang
and the upgrading of Klinik Kesihatan Sungai
Rengit to cater for more patients and provide
better services for local citizens are expected to
YAB Dato’ Mohamed Khaled Nordin, Chief Minister of
be completed in 2018. Johor, Tan Sri Mohd Sidek Hassan, Chairman of PETRONAS
and Tan Sri Wan Zulkiflee Wan Ariffin, President and
As the agency in charge of promoting and securing Group Chief Executive Officer of PETRONAS officiated the
Pengerang Co-generation Plant (PCP).
investments to realise PIPC’s vision as an integrated
downstream O&G hub, JPDC in 2017 secured
potential downstream investments amounting to
partnering on a world-scale greenfield project. It
RM2.3 billion via letters of intent (LOIs) from local
will create significant spin-off effects and boost
and foreign companies.
the reputation of the PIPC, which will help in
attracting further investments into the Complex.
As part of the efforts to elevate the competencies
of the current skilled workforce to meet industry
Saudi Aramco is investing approximately
requirements, JPDC has also been working with the
US$7 billion in RAPID, representing the largest
National Youth Skills Institute (Institut Kemahiran
ever foreign direct investment (FDI) inflow to
Belia Negara – IKBN) in Bandar Penawar to provide
Malaysia, while constituting Saudi Aramco’s
training for more than 300 students on site safety;
biggest investment outside the Kingdom of Saudi
scaffolding; health, safety and environment (HSE);
Arabia to date. This is a unique transaction, an
welding; supervisory roles; and rigging and slinging.
integral part of which is equity participation in an
Trainees who complete this training are certified
integrated refining and petrochemical complex in
under the Industry Accreditation Programme, with
RAPID. As such, it involves Saudi Aramco buying
the programme recording a 90% employability
an equal equity interest in PETRONAS’ units
success rate.
PRPC Polymers Sdn Bhd and PRPC RC Sdn Bhd.
Pengerang Integrated Complex pioneering large-

Under this partnership, Saudi Aramco will supply
scale downstream investment
up to 70% of the crude feedstock requirements
of the refinery, which is expected to commence
PETRONAS’s PIC is being constructed with the
operations in 2020, with natural gas, power and
aim of boosting the Malaysian O&G downstream
other utilities to be supplied by PETRONAS.
sector and reached 84% completion as at end-
Having Saudi Aramco, a company with the
2017. It remains on track to begin operations in
largest reserves in the world, as a partner will
the first quarter of 2019.
help to ensure the security of crude supply to
the refinery.
The project made headlines in February 2017 with
the signing of a Share Purchase Agreement (SPA)
Indeed, Saudi Aramco, co-owner of SADARA
by oil giant Saudi Aramco to invest in the Refinery
Chemical Company (the largest petrochemical
and Petrochemical Integrated Development
complex in the world), is one of the world’s
(RAPID) project in PIC. The investment is historic
leading oil companies, with significant expertise
for the industry due to the unique structure of
in low-cost production. This partnership gives
two professionally run national oil companies in
PETRONAS access to Saudi Aramco’s vast
experience in execution, implementation and The refinery is the main source of feedstock for
operation of similar large-scale and integrated the downstream Petrochemical Complex within
petrochemical projects, making it a highly RAPID and, as such, will be the cornerstone of
valuable partner to PETRONAS. the integrated nature of RAPID. The facility will
position Malaysia as a leader in Asia’s chemical
Apart from the investment from Saudi Aramco, products market and provide opportunities to
PIC also achieved several operational milestones venture into premium differentiated and specialty
during the year, including the arrival of two petrochemicals, as well as the rapidly developing
modularised furnaces, or crude heaters, on 20 automotive, pharmaceutical and consumer
January 2017. The furnaces are an important products markets. The refinery is poised for start-
component of the crude distillation unit within up within the first quarter of 2019.
the refinery and are critical in providing feed for
other process units of the refinery. The furnaces The refinery, among the best in its class with a
were also certified as the biggest heaters to ever Nelson Complexity Index of 9.5 out of a possible
land on Malaysian shores, with each weighing score of 15, will be capable of producing large
about 1,000 tonnes and possessing a processing volumes of high-value products from crude oil.
capacity of 150,000 barrels per day (bpd). The index provides a simple metric for quantifying
and ranking the complexity of refineries and units.
Additionally, two modularised waste heat boilers A higher number on the index can be attributed
were installed at the refinery on 21 March 2017. to greater value of its end product. The Rapid
The boilers are an important component of the refinery’s capacity will be the largest in Malaysia
Residual Fluid Catalytic Cracking (RFCC) unit and the fourth-largest in Southeast Asia.
within the refinery, which function to crack hydro-
treated atmospheric residue into feedstock for
the Steam Cracker facility. Each waste heat boiler
weighs about 2,000 tonnes and are the largest “The RAPID refinery will position
Malaysia as a leader in Asia’s
”
in Malaysia. The Complex also installed Malaysia’s
biggest Crude Distillation Unit (CDU) column on 10 chemical products market.
June 2017. The CDU column is designed to process
300,000 bpd of medium-heavy sour crude oil
Progress for the 1,220 MW Pengerang Co-
in a single distillation column. The column also
generation Plant (PCP) is similarly encouraging,
represents the heart of the refinery, as it is the
with the first unit of four co-generation units
first process unit to receive crude and is among
having commenced operations in mid-October
the biggest single CDU column installations in
2017, where 400 MW has been supplied to
the refining industry. The column was designed
Peninsular Malaysia national electricity grid.
by Sinopec Engineering and fabricated by KNM
To facilitate transmission to Tenaga Nasional
Process Systems Sdn Bhd in Gebeng, Pahang. It
Berhad (TNB), a 275-kV overhead Pengerang
spans almost 10 metres in width and 66 metres
Transmission Line is in place, spanning 52 km
in height and weighs 1,300 tonnes.
from PCP to the TNB substation at Tanjung
Langsat. PCP is designed as a stand-alone utility
RAPID comprises the Refinery, Steam Cracker and
provider to RAPID, while also supplying 400 MW
Petrochemical Complex, and is 82% completed
of power to TNB. Besides electricity generation,
with the major facilities having been installed.
PCP will also provide reliable and continuous
The petrochemical complex comprises various
supply of steam of up to 1,480 tonnes per hour
production units to add value to C2 and C3
for plants within the Complex. The large amount
from the refinery and steam cracker complex.
of steam needed for process requirements in
It will capitalise on the region’s high-growth
RAPID presents a unique opportunity to create
differentiated commodity petrochemical products
the most efficient electricity production process
market, and will strengthen PETRONAS’ position
in a co-generation configuration.
in the competitive petrochemicals industry.
The Regasification Terminal 2 (RGT2) started million cubic m3 from PDT Phase 1. In September
commercial operations in October 2017 to 2017, PDT’s two crude tanks achieved Ready For
provide primary gas supply to RAPID, PCP and Start-Up (RFSU) status. As of December 2017,
the Peninsular Gas Utilisation (PGU) grid in a bid PDT received more than 1,458 vessels with a total
to augment the availability of gas in Peninsular of 7 Very Large Crude Carriers (VLCCs) and has
Malaysia. It will offer facilities for LNG unloading/ handled a total of 1.5 million tonnes (discharge/
reloading, storage, handling, and regasification. load) of petroleum products. In an effort to further
The Terminal’s regasification unit has a capacity expand the realised capacity of the oil storage
of 3.5 million tonnes per annum (approximately terminals, the Government is working closely with
700 MMscfd) and will be connected to PGU via the terminal storage operators to explore potential
the Pengerang Gas Pipeline. It also includes two opportunities.
units of 200,000 m3 of LNG storage tanks, and one
LNG Jetty Topside with LNG unloading/reloading Meanwhile, the oil storage terminals in Southern
facilities. RGT2 will not only play a critical role in Johor are benefiting from the newly introduced
Peninsular Malaysia’s energy security, but also act zero-rated GST policy which exempts services
as an additional entry point for third-party gas supplied to customers overseas, performed in
suppliers to penetrate the Peninsular Malaysia gas connection with goods for export. This incentive
market, bringing it another step closer towards underscores Malaysia’s commitment in becoming a
becoming a fully liberalised natural gas market. regional O&G storage hub. In 2016, the oil storage
terminals located in Southern Johor such Tanjung
Pengerang Deepwater Terminal expansion Bin, Tanjung Langsat, Far East Oil Terminal One
(FEOTO) in Pasir Gudang, and Pengerang were
The second phase of Pengerang Deepwater Terminal admitted under the new FOB Straits pricing
(PDT) is currently under construction and will add index by S&P Global Platts, recognising Malaysia’s
2.1 million cubic m3 to the existing capacity of 1.3 growing presence in this market.
The second phase of Pengerang Deepwater Terminal (PDT) will add 2.1 million m3 to the existing storage capacity in Pengerang.
Catalysing OGSE Activity allowing it to exceed its aim of securing RM736 million
in investments in 2017. Notable investments in the
year came from Hengyuan Refining Company Bhd
(formerly known as Shell Refining Company Bhd)
with RM609 million and Innochems Technologies
Sdn Bhd with RM12 million. Despite the challenging
To establish Malaysia as an Oil and Gas Services environment, MPRC remains committed in supporting
and Equipment (OGSE) hub, Malaysia Petroleum investments by upstream OGSE companies.
Resources Corporation (MPRC) has embarked on
several initiatives, including facilitating local OGSE First-time bidders for international projects in new
companies’ expansion into Asia Pacific and beyond; market segments are a good barometer of the
building Malaysia’s reputation as a regional hub by competitiveness of locally domiciled firms. In 2017,
establishing a Malaysian presence in prominent O&G eight companies successfully bid for global projects
exhibitions globally; and attracting OGSE MNCs to (see table for more details), bringing the cumulative
set up regional headquarters in Malaysia. At present, total to 54, close to the 2020 target of 60.
the regional headquarters of the top five global OGSE
MNCs and 18 out of the top 50 global OGSE MNCs are Marketing/trade facilitations by MPRC via trade
already in Malaysia. The Government targets to have shows and specialised marketing missions with
half of the top OGSE MNCs’ regional headquarters key Government agencies were actively organised
in Malaysia by 2020. in previous years, leading to reputational gains
for Malaysian OGSE firms. Southeast Asia and
OGSE companies’ investments, either as FDI or the Middle East continue to present a trove of
domestic direct investments (DDI), have been opportunities for OGSE companies to tap into,
encouraging. As of December 2017, RM724.5 million hence MPRC remains committed to assist OGSE
has been netted, exceeding the year’s target of companies in their venture to SEA and the Middle
RM650 million, while the cumulative figure from East. In recent months, OGSE companies are also
2012 until December 2017 stood at RM7.7 billion, looking to venture into South America, particularly
putting the sector on track to achieving its 2020 Mexico and Brazil. With these two South American
target of RM10 billion. countries opening their markets to international
OGSE companies, MPRC will also direct Malaysia’s
While the low oil price environment proved export development efforts to that region.
a dampener for upstream players, it enabled
downstream players such as petrochemical refineries However, with the budget constraints among
as well as methanol and LNG production facilities to Government agencies, international export
thrive as operating costs stayed low and profit margins development activities such as trade missions and
continued to improve. Of note, MPRC undertook exhibitions at major conferences declined in 2017.
a strategy recalibration and adjusted its focus to This had some bearing on the robustness of MPRC’s
facilitate investments in the downstream segment, pipeline, impacting international awareness of
Company Country Solutions
Dyna Segmen Sdn Bhd Iran Online pipe repair (own technology/ Malaysian-manufactured)
Rubber flexible hose
Flytech Engineering Sdn Bhd Thailand
(own technology/ Malaysian-manufactured)
Marine growth control
IEV Group Sdn Bhd Iran
(own technology/ Malaysian-manufactured)
MISC Bhd Brazil FPO leasing and operations
MIT Innovation Sdn Bhd Saudi ICWD drilling tools (own technology/ Malaysian-manufactured)
MIT Innovation Sdn Bhd Oman ICWD drilling tools (own technology/ Malaysian-manufactured)
Sylmax Technology Resources
Vietnam Helideck friction test
Sdn Bhd
TRK Resources Sdn Bhd Vietnam Helideck Inspection Services (including helideck friction test)
Malaysia’s OGSE capabilities, while Malaysian OGSE Malaysia in 2017 included an offshore and onshore
players continue to have insufficient information of welding company from France, Serimax which
middle to long-term views on international markets relocated from Singapore. Three companies also
and projects. established new headquarters here: Global SCS,
an asset integrity inspection services company
In mitigating the above, plans are in the pipeline to from Aberdeen; Maire Tecnimont, a construction
leverage on MATRADE and Malaysia-based MNCs’ engineering firm from Milan; and EM&I, an asset
international presence to identify global OGSE integrity inspection and specialised maintenance
business opportunities, which will then be shared firm from the UK. Additionally, Serba Dinamik
with local companies. MATRADE and MPRC will Holdings Bhd has signed an agreement with
foster closer collaborations with Malaysian OGSE Monadelphous, an Australian engineering group,
players to steer them to global clients in targeted to establish a joint venture for a shutdown and
markets. Promotional and marketing efforts to turnaround business.
raise awareness of Malaysia’s OGSE capabilities to
global clients will also be ramped up. The Government has long emphasised the need
for the industry to diversify its product range and
During the year, MPRC observed an influx of OGSE head further downstream. With oil prices staying in
companies from Europe, Australia, and China. At the doldrums, more international and local OGSE
the same time, a growing number of engineering companies that were hitherto predominantly in
companies are setting up regional headquarters to upstream businesses are training their focus on
capture downstream opportunities in Malaysia as downstream opportunities in Malaysia.
well as capitalise on Asia Pacific’s move into the
downstream business. With the reduction in operator-led projects,
the OGSE industry will need to embrace scale,
In recent years, Malaysia has steadily attracted innovation and cutting-edge technology, higher
a growing number of services-based MNCs, as standards, as well as integrated and value-added
opposed to manufacturing firms. This is in line with services to be more competitive. There is also
the nation’s transformation from a manufacturing acknowledgement among market players that
economy to a service-based and high-income the O&G downturn will weed out non-competitive
country. In terms of MNC investment in Malaysia players, while stronger firms will adjust and
either through merger or joint venture opportunities, survive. To ensure longer-term sustainability,
all six targeted companies had set up shop in OGSE companies will need to regularly review
Malaysia in 2017, bringing the cumulative figure and restructure their strategies, organisations and
from 33 to 39 companies, close to the target of 50 financials to adapt to the new realities of lower
by 2020. MNCs setting up regional headquarters in oil prices over the longer term.
YB Dato Seri Hamzah Zainudin, Minister of Domestic Trade, Co-operatives and Consumerism, and Hengyuan officials at
the groundbreaking ceremony of its new complex for Euro 4M gasoline production in August 2017.
Ensuring Energy Sustainability Facility (UNDP-GEF). Additionally, KeTTHA will

provide an interest rate subsidy of 1% per annum
to successful applicants. To date, RM20.7 million
funds have been committed with 10 EPC projects
financed. The fund will spur the implementation of
The Government remains committed to promote energy-efficiency projects in the building sector
energy efficiency in line with environmental and assist energy service companies (ESCOs) to
concerns and ensuring sustainability. In 2017, the overcome difficulties in securing financing from
Government successfully encouraged 500 energy- commercial financial institutions.
intensive companies with electricity consumption
“Since
of 3 million kWh to be more energy efficient via
the Efficient Management of Electrical Energy its inception in 2011, the
Regulations (EMEER) 2008. The companies have Feed-in Tariff Programme (FiT)
since reduced their total consumption to 14,455.86
GWh in 2017, which is 2.67% or 355.42 GWh lower
has continued to contribute to
than the baseline 2015 annual consumption of the increase in renewable energy
14,811.28 GWh. capacity, where a cumulative total
Under the 11th Malaysia Plan, KeTTHA also reduced the
of 528.06 MW has been installed
Special Industrial Tariff (SIT) by 2%, continuing the
effort from the previous year to incentivise the energy-
as of December 2017.
”
intensive industries to be more energy efficient by
The Government hopes that the success of this
implementing appropriate conservation measures.
EPC financing model will enhance commercial
Furthermore, the Government continues to promote
financial institutions’ confidence in financing
conditional energy audit grants for industrial and
ESCOs’ implementation of more energy-efficiency
commercial buildings to spur the adoption of energy-
projects through the EPC method, thereby growing
efficient measures in the private sector. In 2017, 25
the industry.
commercial and 30 industrial buildings underwent
the energy audit, exceeding the target set by the
Adding to ongoing efforts to decouple Malaysia’s
Ministry. Approved grant applications registered at
electricity generation from conventional fossil fuels
65 commercial and 90 industrial buildings for 2016
is the Government’s expansion of total renewable
and 2017. The energy audit and retrofitting exercises
energy capacity to 7,271.74 MW, ranging from
to be conducted by the applicants will enable energy
large hydro-power plants to off-grid solar panels,
savings of 295 GWh, or RM106 million, which would
which comprises 21.67% of total installed electricity
also translate 218 ktCO2, which measures the amount
capacity in Malaysia. Since its inception in 2011, the
of carbon that would be saved from the retrofit and
Feed-in Tariff Programme (FiT) has continued to
audit exercise.
contribute to the increase in renewable energy
At the Green Technology and Climate Change
Council (MTHPI) 2017 event held on 2 March
2017, the YAB Prime Minister approved the
establishment of the Energy Performance
Contracting (EPC) fund to catalyse growth in
the nascent local energy-efficiency service
industry. Malaysia Debt Ventures Bhd (MDV),
a Minister of Finance Incorporated entity, has
provided up to RM200 million in financing and
is tasked to manage the financing programme.
Meanwhile, the EPC will also be supported by a
credit guarantee fund contributed by KeTTHA
and the JKR-Building Sector Energy Efficiency
Project (BSEEP) funded by the United Nations
Development Program-Global Environment
Amcorp Perting Hydro 6MW, Bentong, Pahang.
PIPC – upskilling the community, raising Komuniti Bandar Penawar, and has successfully
living standards secured employment with PIPC as a Site Safety
Supervisor.
The Pengerang Integrated Petroleum Complex (PIPC)
mega project, under the Oil, Gas and Energy NKEA, “I am most grateful for the world of opportunities
is not just making waves for the value it is adding opened up to me by this Site Safety Course. Aside
to the downstream oil & gas value chain in Johor from serving as a refresher course for the job aspects
and Malaysia, but is also changing for the better of I have already been exposed to, I learned various
everyday lives of many in the district and state. new concepts and became more proficient in the
area of ensuring site safety,” said Nurul Amri, who
With the numerous job opportunities being offered previously held project and safety management
by the Complex throughout its various stages of roles in other prominent firms. Thirty-year-old Mohd
completion, the mega project serves as a catalyst Suffian Mohd Yunos, who is part of Nurul Amri’s
for the upskilling of talent in its surrounding cohort, also gained his current employment upon
areas, directly and effectively supporting the completing the same course. Having worked 10
Government’s drive to raise the competency levels years in the building and oil and gas industries,
of the country’s labour force. Johor Petroleum the native from Sungai Rengit, Johor found the
Development Corporation Berhad (JPDC) is, in this course enlightening as it provided him with the
respect, a close partner and enabler of the PIPC exact competencies required for employment as
project, supporting its talent needs through its a Site Safety Supervisor.
provision of a variety of training and development
courses that aim to upskill the human capital Both Johorians’ assessment of the Site Safety
needed for the project’s smooth running. Course were also positive because it was
conveniently conducted in Johor. “Prior to JPDC’s
Nurul Amri Sa’adon, 38 years of age, is one provision of training, oil and gas industry-oriented
such beneficiary of JPDC’s talent improvement skill development training could only be more
initiative. The Pengerang resident undertook the commonly found in other states like Institut
Site Safety Course, an oil and gas industry-oriented Teknologi Petroleum PETRONAS (INSTEP) in
skill development training led by JPDC at Kolej Terengganu,” Nurul Amri shared.
Regasification Terminal 2 (RGT2) in Pengerang started commercial operations at the end of 2017.
PETRONAS Refinery and Petrochemical Integrated Development (RAPID) in Pengerang.
In terms of content, Nurul Amri sees the course training as sufficiently meeting its objectives, he
as having achieved an enviable balance between believes that its continued success requires having
exploring theoretical concepts and implementing dedicated and suitably qualified trainers to conduct
those concepts in practical ways at the workplace. the training programme.
“This balance is crucial in ensuring that course
participants not only gain an appreciation for Mohd Suffian opines that industry-academia
the theoretical frameworks that underlie their job alignment is crucial. “Talent needs are great and will
functions, but are also able to perform at a higher level only increase going forward as Malaysia forges ahead
in the workplace with the knowledge gained from in the competitive world of oil and gas. Industry
the course,” Nurul Amri explained. This sentiment competency needs must be met, and the academic
was shared by Mohd Suffian, who added that the world would do well to facilitate this outcome through
benefits accrued to course participants “would be frequent engagements and/or collaborations with
compounded with self-motivation and focus – two industry players.”
key elements for success in many other endeavours.”
Both Johorians credit their present occupations to
Nevertheless, Nurul Amri believes that the training can JPDC’s training and are banking on it to continue
still be improved in several ways. “It would be good providing a solid foundation for their future career
if JPDC could offer more sponsorships to enable prospects. Nurul Amri specifically pointed out his
locals to undertake oil and gas-related professional optimism in securing a permanent position after his
education in Johor. This way, there is no need for them contract expires later this year. “I am confident that
to leave for other states, which could help mitigate with the training by JPDC that I have undertaken,
the brain drain in the state’s oil and gas sector,” he combined with the practical experience I am
explained. Additionally, the provision of official course gaining at my present position that in itself was
certificates could serve as documentary evidence of made possible by the aforementioned training, will
course participants’ improved proficiencies and hence enable me to secure a permanent occupation upon
lead to greater employability in the international the expiry of my contract,” he shared.
job market. Whilst Mohd Suffian views the current
capacity. A cumulative total of 528.06 MW has in Sabah and 200 MW in Peninsular are expected
been installed as of December 2017. Under FiT, to be completed in 2018.
the number of solar PV service providers overseen
by SEDA grew from only 30 players before the The EC has also conducted two cycles of open
formation of SEDA in 2011 to 120 players by 2017. bidding for LSS for commercial operation in 2017 to
With their formidable experience, financial backing 2020. The first cycle of open bidding for the 2017-
and expertise gained from their participation in FiT, 2018 period was concluded in December 2016 with
some of these service providers have ventured into a total capacity of 401 MW offered to 18 developers
solar farms in local and overseas markets. throughout Peninsular Malaysia, Sabah and Labuan.
The first plant is expected to be commissioned on
Launched in October 2016 and implemented in 1 January 2018, and more projects are expected to
November 2016, Net Energy Metering (NEM) paved be completed throughout the year such as LSS
the way for Malaysian consumers to take part in the Fast Track Semenanjung – Quantum Solar Park
movement towards greater adoption of renewable (Malaysia) Sdn Bhd, with installed capacity of 150
energy. NEM has come a long way since the first MW; LSS Fast Track Semenanjung – Edra Solar Sdn
year of its implementation, with total approved NEM Bhd, with installed capacity of 50 MW; LSS Fast
capacity for 2017 standing at 6,114.48 kW. However, Track Sabah – Tadau Energy Sdn Bhd with installed
adoption by the public and businesses is lower than capacity of 48 MW; in addition to the 401 MW LSS
for FiT projects, despite a comparatively generous First Cycle Open Bidding project.
allocation of 90 MW and 10 MW for Peninsular
Malaysia and Sabah, respectively. The low adoption The second cycle of open bidding for 2019-
is mainly due to users’ unfamiliarity with this new 2020 period is in the final evaluation stage and is
initiative and the lower sell-back tariffs to TNB, as scheduled to be concluded by end of 2017.
NEM encourages self-consumption of the electricity
generated via the solar PV instead of selling the self- However, successful bidders faced difficulties
generated energy. Hence the Ministry is working with in securing financing from commercial financial
the EC and other agencies to strengthen the NEM institutions due to the latter’s unfamiliarity
operating model and increase promotional efforts to with the LSS programme, causing delays in the
improve the NEM take-up rate in the coming years. implementation of LSS projects. With the collective
effort by KeTTHA, Bank Negara Malaysia, and other
Meanwhile, the Large-Scale Solar (LSS) programme related agencies, Malaysia successfully introduced
has completed its first year of implementation. The green sukuk to address funding gaps in green
2-MW LSS, a direct award in Sabah was completed financing. KeTTHA is also working closely with the
on 15 September 2017, while another 48-MW project EC to monitor and ensure the timely completion
of the LSS projects. In July 2017, the Securities
Commission (SC) introduced the first green sukuk
under its Sustainable & Responsible Investment
(SRI) initiative to address the funding gap in green
financing. The framework underlying this green
sukuk was the result of collaboration between the
SC, Bank Negara Malaysia and the World Bank
Group. The fostering of a conducive funding
ecosystem is an important part of the Government’s
efforts to fulfil Malaysia’s commitment towards the
reduction of its greenhouse gas emission intensity,
in accordance with the COP 21 Paris Agreement.
On 27 July 2017, the world’s first green sukuk worth
RM250 million was issued by Tadau Energy Sdn
Bhd, followed by the world’s largest green sukuk
issuance of RM1 billion by Quantum Solar Park Sdn
Bhd. Both sukuk are to finance the construction of
Fortune 11 Sdn Bhd’s 5 MW solar farm in Sepang, large-scale solar photovoltaic projects in Malaysia.
Selangor.
MOving Forward
Although oil prices gradually recovered in the fourth quarter of 2017 following the output-cut extension
by OPEC and non-OPEC producers, it is widely believed that oil prices will maintain at the current level
for the near future. Nevertheless, Malaysia’s experienced O&G players are better positioned than before
to weather this challenge, having built up their competencies and expertise over the years.
As aforementioned, the Peninsular Malaysia natural gas market liberalisation will be supported by low
global natural gas prices. However, all parties need to step up their efforts to establish the supporting
framework for the enforcement of TPA and facilitate the entry of new players into the Peninsular Malaysia
natural gas market. This is crucial, as a liberalised market will contribute to stronger energy security and
economic prosperity.
Moving forward, an upgrade of the PIPC Development Masterplan may consist of a plastic and fine chemicals
park, a downstream finished products zone, as well as a medium and light industries hub with the overall
investment target rising from US$29.5 billion to US$84.6 billion. Pengerang Deepwater Terminal’s (PDT)
total storage capacity is expected to increase to 3.2 million m3 by 2020, and discussions have been in
place to explore its potential as a strategic oil reserve storage. In the long-run, the growth of infrastructure,
investments in storage facilities and the new petrochemical refining complex is expected to realise Malaysia’s
vision of becoming a regional O&G downstream hub, complementing Singapore’s capabilities as one of
the world’s oil refining and trading hubs.
Marketing efforts will be intensified to attract MNCs to relocate or establish their regional operations in
Malaysia. New O&G investment, especially large-scale investments from China, Russia and the Middle East;
as well as high-quality investments such as high-end manufacturing and centres of excellence for complex
engineering will establish Malaysia as an OGSE hub. Nevertheless, awareness of Malaysia’s home-grown
technologies and expertise in the international market remains crucial to realise Malaysia’s aspiration.
The Government will continue to focus on energy efficiency and renewable energy initiatives to meet
the 11th Malaysia Plan’s targets as well as fulfil the country’s commitment to COP 21. All parties need to
embrace energy-efficient measures and join the green movement, preserving the environment for the
future generations so that Malaysia can be on par with other developed and developing countries globally
in moving towards cleaner energy for the nation.
WHOLESALE AND RETAIL
Modernising Malaysia’s
Shopping Experience
YB DATO’ SERI HAMZAH ZAINUDIN

Minister of Domestic Trade, Co-Operatives and Consumerism
For the past seven years, the wholesale and retail Moving forward, extra focus will be given to
industry has revolutionised Malaysia’s consumer the e-Commerce industry to fulfil domestic and
experience through initiatives spearheaded by the international consumption demand. This has
private sector. Coupled with the exploration of new already resulted in the launch of BizTrust, a business
retail concepts such as e-commerce, the sector has certification awarded to online business entities, in
been liberalised, increasing the level of competition June 2017 in line with the National E-Commerce
and choice for customers. Wholesale and retail has Strategic Roadmap.
risen to become a main contributor to our overall
GDP, recording a GDP contribution of RM205.2 billion In light of the upcoming emphasis on the
in 2017, a 10.14% increase from 2016’s RM186.3 billion. e-Commerce sector, and the overall progress of the
wholesale and retail sector; I call upon all Malaysian
Our constant efforts in modernising, globalising and traders to continue contributing and gaining from
revolutionising this sector have resulted in an increase this upwards trajectory.
in consumer confidence to 94 percentage points
according to Nielsen’s Global Consumer Confidence
Report, an increase from 2016’s 84 percentage points.
An even bigger mark of success is that Malaysia’s rank

in the AT Kearney Global Retail Development Index
(GRDI) is at its highest in the past 10 years. Retaining
its place in third position from 2016 and second only
to consumer mammoths India and China, we have
risen to be a worthy contender despite being in a
hotbed of retail activity, among Singapore, Indonesia,
Thailand and Hong Kong.
The success is accredited to the tenacity and

resilience of the sector. The continuous reviewal of
existing projects ensures that our strategy remains
relevant, and can reinvigorate Malaysia’s wholesale
and retail. To succeed, we saw the injection of new
players into the Makan Bazaar, Big Box Boulevards,
Virtual Malls and Wellness Resorts to maintain a
globally competitive sector.
Innovating Large-Format Stores (KPDNKK) is liberalising the sector by reviewing and

approving foreign-owned stores which are 2,000
square metres in size, as opposed to enforcing the
conventional requirement of a 3,000-square metre
minimum for retail hotspots such as Klang Valley,
The development of large-format stores was Ipoh, Johor Bahru and Penang.
identified as a focus area under this NKEA to
“As
expand retailers’ scale and capabilities. This,
in turn, was targeted to encourage private at 2016, the wholesale and
investment, increase competitiveness of the stores, retail sector has employed 1.7
provide more choices for consumers and create million individuals, an increase
employment opportunities. Significantly, as at 2016
the sector employs 1.7 million people, an increase of 13% as compared to 1.5 million
of 13% as compared to 1.5 million in 2010.
To date, this has resulted in the establishment of

in 2011.
”
44 hypermarkets and 56 superstores, facilitating Development of the sector is also planned with
investments including RM1.27 billion from Abu balanced growth in mind. Hence, to ensure a level
Dhabi’s Lulu Group which aims to set up 10 playing field in the small-format industry while
hypermarkets across Malaysia by 2020. In 2017, facilitating knowledge transfer, KPDNKK has
Tesco launched two superstores in Batu Pahat, enforced specific local shareholding thresholds for
Johor and Bertam, Pulau Pinang. Additionally, small-format stores. Following this trend, Giant has
Giant opened another superstore in Tunjong, launched its subsidiary, G Ekspres. Currently, there
Kelantan. AEON opened another hypermarket in are eight G Ekspres outlets in the Klang Valley.
Bandar Dato’ Onn, Johor in September 2017. Giant has also received approval from KPDNKK
to open 500 small-format outlets. Meanwhile,
Tesco has also introduced Tesco Xpress, and
there are currently nine outlets: two in Penang,
four in Selangor and three in Kuala Lumpur. These
activities, in addition to facilitation from KPDNKK,
ensure continued investment in the sector, with
the operators committed to retaining their large-
format stores while investing in smaller stores.
Building Up Small- and

Medium-Sized Retailers
Consumer confidence has increased in 2017, as compared
to 2016.
The Small Retailer Transformation Programme

In tandem with a shift in consumer trends, (TUKAR) and Automotive Workshop Modernisation
hypermarket and superstore operators have (ATOM) initiatives were formulated to help smaller
moved towards a new strategy of opening small- retailers modernise and move their businesses up the
format stores in 2017. Malaysian consumers have value chain by helping them improve their profitability.
demonstrated a preference for smaller-sized This is being achieved by enhancing their human
convenient stores, situated in locations closer capital and expertise through training, providing new
to their neighbourhoods. In response to this, the equipment, improving product displays through new
Ministry of Domestic Trade and Consumer Affairs marketing strategies and introducing better inventory
tracking systems.
To date, 2,367 shops have been transformed under the or rescheduling of repayment of their loans under
TUKAR programme, with participants recording an Bank Rakyat. Furthermore, during Open Days,
increase in revenue of at least 40%* after 12 months. participants were also given professional advice on
Under ATOM, 864 shops all over Malaysia have stock keeping and budgeting, among others, by
been transformed, resulting in 80% of participants industry professionals such as Tesco, the Malaysia
reporting at least a 40%* increase in revenue. Automotive Institute and AKPK.
In 2017, the focus of the programmes shifted to As a follow up measure, the Delivery Management
enhancing and sustaining the performance of existing Office and AKPK have also gone to the ground
TUKAR and ATOM participants who performed well to monitor the well-being and progress of the
throughout the first phase of the programme, a participants.
period spanning between ATOM and TUKAR’s launch
in 2011 to 2016.
In the second phase of the TUKAR and ATOM

programmes, which were launched in 2017, 28 and 21
existing TUKAR and ATOM participants respectively
qualified for loans to further expand their businesses.
Qualified participants are required to show high
potential for growth based on their sales records
and the locations of their establishments, possess a
good record in the CTOS and CCRIS databases and
have no arrears. Most importantly, to ensure their
continued success, the potential participants need
to show commitment to expand their business.
The programmes are self-sustaining due to the nature

of the funding system utilised. The loan operates on
a revolving basis, whereby the loans repaid in the
first phase will then go towards funding expansion
projects in phase two.
“Under ATOM, 864 shops all over

Malaysia have been transformed,
resulting in 80% of participants
reporting at least a 40% increase
in revenue .”
To ensure the viability of TUKAR and ATOM and to
help participants manage their finances, KPDNKK
and Bank Rakyat have continuously engaged with
participants through various programmes to offer
financial guidance and advice. To further facilitate
this, KPDNKK through the Credit Counselling and
Debt Management Agency (Agensi Kaunseling
Pengurusan Kredit – AKPK) held two Open Days
in 2017 to conduct financial management sessions, The TUKAR programme has helped to modernise
where participants were given advice on restructuring business practices of small retailers.
* Based on the TUKAR and ATOM Programme Impact Study conducted in 2013. A new study will be conducted in 2018.
The ideal local economic environment creates a great platform for Tesco to expand their business.
Empowering our Retailers Tesco has also collaborated with the Ministry of
Health to ensure that goods sold by the retailer are
UK grocery and general merchandise retailer Tesco MeSTI compliant. “Compliance to MeSTI ensures
marked its 15th anniversary in Malaysia in 2017 and now that our products meet certain standards and level
operates 57 outlets nationwide. “To our UK parent of quality,” says Azliza.
company, expanding to Malaysia seemed like the
“KPDNKK’s
right step,” says Azliza Baizura Azmel, the Corporate
Services Director of Tesco Malaysia, noting that the recent decision to
company had seen a need to grow its presence in allow foreign-owned stores to
Asia. Malaysia’s politically stable environment, growing
expand with smaller premises
pool of skilled workers, its status as a growing nation
and an accommodating policy framework and legal have allowed Tesco to penetrate
system made the country a good platform for Tesco
to expand into the region.
the lucrative small-format sector.
”
From the opening of its first outlet in Puchong in 2002, The company also finds that the Ministry of
Tesco’s continued growth in Malaysia has also been Domestic Trade, Cooperatives and Consumerism
supported by facilitative policies and the Government’s (KPDNKK) is supportive of its needs. “At the end
efforts to increase the ease of doing business the of the day, it’s always about the conversations we
country. Additionally, over the years, the Malaysian have with KPDNKK; who have always been attentive
Government has enforced competition and data to our concerns,” says Darshan Singh, the Head of
protection laws to ensure a level playing field in the Government Relations and Corporate Services for
retail sector, thus attracting more foreign companies. Tesco, Malaysia.
The company will be further expanding its presence Additionally, Tesco uses social media sites such
in Malaysia following KPDNKK’s recent decision as Facebook to carry out fluid interaction with its
to allow foreign-owned large-format stores to consumers, allowing the chain to share information
open smaller premises, which will allow Tesco to and receive feedback; ensuring services which are
penetrate the lucrative small-format sector. This is in tandem with their stores in Europe and the US.
in line with current retail trends, where consumers
prefer to shop in smaller stores located near their
homes. In 2017 Tesco launched its chain of new
generation stores which focus on time saving,
increased value for money and the incorporation
of technology such as self-checkout counters.
“Malaysia’s solid talent pool aids

with ease of business in Malaysia
for Tesco.
”
The company is also keen to leverage Malaysia’s
talent pool for its staffing needs. “We’re always
looking to diversify our talent pool. We look at
Malaysians first to reduce our dependency on
foreign workers,” says Azliza. In a collaboration
with the Ministry of Education, the company
trained and upskilled young talents who are keen
on working after completing secondary school to
improve their employability. Further adding value
to Malaysia’s economy, Tesco works alongside
homeless shelters such as Anjung Singgah in Kuala
Lumpur to provide jobs to the homeless and other
Azliza Baizura Azmel, Corporate Services Director, Tesco
marginalised members of society, such as people
Malaysia.
with disabilities and retirees.
Moving forward, Tesco will utilise technology to

further enhance its services and expand its footprint
in Malaysia. To remain current in this day and age,
Azliza emphasises on the importance of having
both a virtual and physical presence. In line with
this, Tesco now offers real-time delivery through
e-commerce platforms such as LAZADA and
Happy Fresh in addition to its own delivery service.
This also follows thriving growth in Malaysia’s
e-commerce, which the Government is increasingly
seeking to drive inclusive economic activities and
income-generating opportunities.
The Zen5es Wellness Report is expected to attract 60,00 commuters travelling between Johor Bahru and Singapore daily.
Preparing for the Future The integrated development will have 53,000
square feet of lettable retail area which is divided
of Retail into three major blocks. The first block contains
729 units of family housing, while the second block
will be made up of 987 apartment suites available
for purchase under lifetime lease. The third block
will consist of a private 529-bed hospital, of which
The establishment of wellness resorts is aimed to 322 beds are reserved specifically for elderly care
revolutionise the wholesale and retail sector to and confinement care. The residential units will
attract higher value consumers and tourist spending be available for sale from 2021, following the
through game-changing lifestyle concepts. To this completion of the resort in the same year.
end, the Zen5es Wellness Resort in Iskandar Johor is
“The
currently under construction and, upon completion,
will create a new landmark in the Southern corridor Zen5es Wellness Resort
of Iskandar Malaysia. It is projected to contribute is projected to contribute
RM718 million to the sector’s overall GNI, attract
RM1 billion in investments and create 4,300 career
RM718 million to the sector’s
opportunities for Malaysians from all levels of skill overall GNI, attract RM1 billion
and expertise. The resort is also expected to create in investments and create
a ripple effect among locals and international
healthcare travellers alike through the promotion
4,300 career opportunities for
of healthcare awareness. Malaysians from all levels of skill
Due to its location at Malaysia’s Southern gateway,

the resort is well-positioned to attract the 60,000
and expertise.
”
commuters travelling between Johor Bahru and Completing this massive development is not without
Singapore daily. Moreover, the resort will also be its challenges, as the current soft market sentiment
located adjacent to the future Bukit Chagar Rapid leads to difficulties in obtaining financial support for
Transit System (RTS), hence easing mobility for construction. Nevertheless, the persistent effort to
future clients. seek alternative financial resources has ameliorated
the risk of delays.
A Wellness Resort City Like No Other
Malaysia is an ageing nation. The number of senior amenities such as cafes, retail shops and supermarkets
citizens is expected to double to 5.8 million or 15.3% at the ground level. The first block will offer integrated
of the population by 2030. Sensing a ripe opportunity, multi-generational residences suitable for families while
innovative property development company Leadmont the second block is the ‘apartments for life’ catering
Group is venturing into the wellness resort industry to retirees seeking a safe, secure environment that
to cater to the growing need for quality healthcare fosters community and companionship. It will also
and medical services. offer a high-care nursing home and confinement
care centre. The third block is a specialist private
“Zen5es Wellness Resort is a one-stop integrated hospital,” she explained, “What makes us different
wellness resort city,” said Brendan Soh, Sales and is our holistic approach. The whole compound is
Marketing Manager of Leadmont Group, “Located designed to accommodate not just senior citizens,
a mere 5-minutes’ drive away from the rapidly- but also medical tourists of any age. We call this the
growing Iskandar City, Zen5es Wellness Resort ‘intergenerational approach’.”
will leverage on Malaysia’s superb reputation as a
cost-effective healthcare and medical destination Passionate about senior care, Mimi develops Zen5es
and as a retirement haven.” Wellness Resort’s model of care following best
practices from other senior care facilities worldwide.
Positive signals all around “The Zen5es Wellness Resort will take the best
approach possible, and incorporate localisation twists
With its close proximity to Singapore and Indonesia, into the mix.”
connections to major existing and future transportation
hubs, and favourable currency exchange rate, the Introducing Malaysians to a whole new specialisation
wellness resort is expected to draw significant interest
from Malaysians, the expat community and regional The project will require a significant number of
and international medical tourists. In 2016, the medical skilled human resources and will provide ample job
tourism industry in Malaysia exceeded RM1 billion in opportunities. “Malaysia has the right talent and
revenue from one million healthcare travellers. Sherene skillsets. However, we do not have enough (in the
Ali, CEO of Malaysia Health Travel Council expects country),” said Mimi, referencing the high number
RM4 billion in revenue by 2020. of skilled Malaysians who have migrated overseas,
“To supplement this and to provide an international
The Johor State Government is supportive, as feel, we will also recruit talent from ASEAN countries,
demonstrated by Menteri Besar YAB Dato’ Mohamed especially in the medical and hospitality sector. At the
Khaled Nordin’s expressed intention for Iskandar same time, we hope that Malaysians with specialisation
Malaysia to follow into South Korea’s footsteps and in senior care will be encouraged by this project and
emerge as the leading medical tourism destination return to pursue their passion in their home country.”
in ASEAN. Brendan and his team work with multiple
government agencies such as the Ministry of Domestic Upon completion of the flagship project in Iskandar
Trade, Co-operatives and Consumerism (KPDNKK), Malaysia, the company plans to replicate and offer
Malaysian Investment Development Authority (MIDA) cost-efficient alternatives all over Malaysia, in cities
and the Ministry of Finance (MOF) and receives advice, such as Penang, Sabah, Kota Kinabalu, Ipoh and
guidance and – if all goes well – tax incentives. Melaka. “We found from our research that Malaysians
have low expectations for senior care, which is very
Understanding the needs of medical tourists sad. I want us to improve the way we look after the
elderly,” said Mimi passionately, “That’s what drives me.”
Leading the visionary, first-of-its-kind project is Mimi
Asche, Chief Operating Officer of Leadmont Group’s
Health and Wellness Division. “Zen5es Wellness Resort
will feature three blocks in the same compound, with
Preparing Small Business Owners for retailers manage their business from the traditional
Modern Consumers way to a more organised manner.”
Intan Shahirah Ramli, Senior Incorporating corporate social responsibility initiatives in

Assistant Director in the the programmes, MDTCC received positive cooperation
Delivery Management from the private sector. Local and foreign hypermarket
Office Division within owners and main players of automotive workshop
the Ministry of services shared their expertise to participants in a variety
Domestic Trade, of areas, including standard operation procedures,
Cooperatives and shop management and customer handling, stocks and
Consumerism inventory management and more.
(MDTCC) has
been involved in Accelerating Mindset Changes
the Wholesale &
Retail National The experienced civil servant notes the biggest challenges
Key Economic Area (NKEA) since July 2013. Under in implementing the TUKAR and ATOM programmes
her purview are two projects: the Small Retailer are challenges related to mental transformation – how
Transformation Programme (TUKAR) and the to transform local retailers’ mindset to stay consistent
Automotive Workshop Modernisation (ATOM). after their businesses were modernised. “The majority
of local retailers (in the programmes) have not received
Targeting traditional sundry shops and local automotive any formal education in managing a shop,” said Intan
workshops respectively, both programmes aim to Shahirah, “They have been running the business either
increase the competitiveness of small businesses using their own logic, or following routines passed down
in Malaysia, which can no longer sustain in the by first- or second-generation family members who ran
open market without catering to rapidly changing, the business before them.”
technology-centric consumer demands. TUKAR and
ATOM programmes are designed to drive growth and To overcome these challenges, consistent effort is
accelerate business modernisation. required from both the retailers and the Ministry.
On MDTCC’s end, shop visits and monitoring are
Results and Transformation Efforts conducted periodically. There are also free Ministry-
conducted refresher courses that shop owners can
“Since the implementation of both programmes, as of attend to refresh their skills and knowledge. The courses
December 2017, 2,367 traditional sundry shop owners also enable participants to meet other participants
have participated in TUKAR and 864 local automotive to exchange ideas and experiences. The responses
workshop owners have participated in ATOM,” said received from these efforts were positive, with some
Intan Shahirah. “Based on our 2013 Impact Studies, participants grouping together and initiating bulk
four out of five participants have increased their shops’ buying to enjoy better margins for their businesses.
sales as direct results of the programmes. About a
quarter of successful participants have managed to The demands of the market changes and develops
increase their sales by 80% and more.” rapidly with the growth of current technology. For
example, bigger retailers operating in Malaysia such
Under the TUKAR and ATOM programmes, local as Tesco have seen success by riding on the rapid
retailers undergo two types of transformations: e-commerce adoption in Malaysia, which enables them
physical and mental. “Physical transformations to expand their market instead of depending on foot
are material transformations such as the shop’s traffic. In the future, the wholesale and retail sector will
outlook, usage of point-of-sale system at the cashier face increased competition from cross-border retail
counter to record daily sales, usage of chiller and e-commerce platforms offering items with cheaper
freezer to reduce loss from damage of fresh items prices. “As such, (Malaysian) businesses need to make
like fish and vegetables, usage of computerised full use of innovative solutions and pivot into value-
machines to identify vehicle problems and many added services in order to stay ahead, failing which it
others,” explained Intan Shahirah, “While mental could be rendered obsolete when competitors catch
transformation is our effort in changing the way up,” concluded Intan Shahirah.
MOving Forward
As a key economic sector which has grown in size over the past seven years, the wholesale and retail
sector has achieved great strides in contributing to Malaysia’s GNI, investments and job creation. The
sector achieved its 2020 GNI target of RM156 billion ahead of schedule in 2015 and as at 2017, contributed
RM201.9 billion to GNI. It is now one of the country’s fastest growing sectors, with its rate of expansion
outpacing GDP growth since 2011.
In addition to ongoing initiatives, the steady growth of this sector has been contributed from projects
which have been completed or where the private sector has taken their rightful reins. This includes the
establishment of the virtual amaxMALL which attracted more 646 retailers to utilise the platform.
To ensure diverse consumer offerings, the NKEA also facilitated the establishment of Big Box Boulevards
(BBB), large-scale integrated outlets which house large-scale retailers in a single location. The outlets
are homes to hypermarkets, furniture superstores, digital product malls and sporting-goods stores. The
Government targeted for one Big Box Boulevard to be operational by 2014. Currently, existing players
BBB include Oasis Damansara by Sime Darby Brunsfield; the Kuala Lumpur Logistics Centre; and Nilai 3
by Hatia Properties.
Other projects which the private sectors are now leading include the Makan Bazaar initiative which combines
hawker stalls, quick-service restaurants, cafés, bars and fine dining restaurants under one roof in strategic
locations nationwide. Three Makan Bazaars have since been opened, with another one in the development
stage. The three operational Makan Bazaars are located in Oasis Square in Ara Damansara, Medini Mall in
Nusajaya, Johor and KLCC. Another project, transforming KLIA2 into a retail hub, has also been completed
in 2014, with retail space of over than 350,000 square feet of which 118 lots have been allocated for retail
offerings, 81 lots for food and beverages (F&B) and 26 lots for services. The target of developing 55,000
square metres of additional retail space in KLIA2 by 2020 has also been achieved ahead of target.
Online platforms will become an increasingly valuable tool for retailers to reach a wider consumer base,
although a brick-and-mortar presence is seen to remain vital to the business. Hence, retailers around
Malaysia should consider having both physical and online channels for greater sales and distribution.
To this effect, efforts to expand Malaysia’s e-commerce and online retail sectors have been supported
by the launch of BizTrust, a safety certification launched in June 2017 to bolster consumer confidence in
dealing with online business entities. BizTrust can be obtained by online businesses, including those on
social media via the Companies Commission of Malaysia to certify that an entity has complied with the
characteristics of the established trust principles and criteria, such as business registration, online security
and data protection. The certification will enable Malaysian online business entities to capitalise on the
rapidly growing e-commerce industry, in line with global trends as well as the country’s focus to develop
the digital economy through the Digital Free Trade Zone (DFTZ).
Moving forward, it is hoped that the developed projects will continue to thrive and spur continued
progression for the wholesale and retail industry.
PALM OIL AND RUBBER
Defending Malaysia’s
Global Leadership in
Commodities
YB DATUK SERI MAH SIEW KEONG

Minister of Plantation Industries and Commodities
The Palm Oil and Rubber NKEAs have provided I am glad to note that RM132.7 million has been
the platform for the palm oil and rubber industry allocated for the planting of 8,557 hectares of
to move up the value chain. The total export value rubber in Sabah and Sarawak. Sabah Rubber
of palm oil and related products was RM77.8 billion Industry Board and Sarawak Department of
in 2017. While the export value of natural rubber Agriculture will be actively executing the replanting
and rubber compounds was RM9.36 billion, a and new planting programme, which has benefited
significant increase from RM5.89 million in 2016. 2,890 smallholders as per the 2017 target.
The export of local latex was RM17.45 billion, 19%
higher than 2016.
The focus in 2017 was strengthening sustainable

palm oil production. In this regard, several
initiatives were introduced including the mandatory
implementation of Malaysia Sustainable Palm Oil
certification by end 2019. In addition, progress
was made in the integration of palm oil with other
activities mostly benefitting the independent
smallholders who constitute 17% of the oil palm
planted area. This has increased productivity and
increased incomes.
Ensuring Sustainable tonnes from 86.33 million tonnes in 2016. However,

the oil extraction rate (OER) this year has not been
Extraction of Value at optimum level, at a rate of 19.7% against the
2017 target of 21.5%. The low OER rate is due to
three main factors, namely the use of low quality
oil palm clones in planting, poor farm planning
and infrastructure, and sub-standard harvesting
Productivity and yield have been identified as practices, such as the harvesting of unripe fruit.
focus areas for the NKEA in view of the strong
“To126,290
global demand for commodities. Efforts have also
focused on improving industry best practices to date, the industry has recorded
enhance yield and quality of production to drive hectares of new planting
exports. This has resulted in the NKEA exceeding
its 2020 target of planting and replanting 110,844
and replanting of oil palm and
hectares of oil palm and 62,000 hectares of rubber. 215,634 hectares of new planting
To date, the industry has recorded 126,290 hectares
of new planting and replanting of oil palm and
215,634 hectares of new planting and replanting
and replanting of rubber.
”
of rubber. The rubber industry had also generally The Ministry will mitigate low OER by encouraging
performed well in 2017, as the export of local natural the selection of superior, high-yielding seeds as well
rubber and compound rubber had contributed as high quality oil palm clones for planting. The
RM9.36 billion, a vast increase compared to RM5.89 Ministry is also working on educating planters and
billion last year. Meanwhile, the export of local latex harvesters on the best planting, farm management
products recorded a revenue of RM17.45 billion, an and harvesting practices. With regards to harvesting
increase of 19% from 2016. practices, the Ministry will especially emphasise
the long-term value of picking only ripe fruits as
Activities in 2017 were, however, weighed down opposed to indiscriminately harvesting fruits.
by internal and external factors. The crude palm
oil (CPO) price has fluctuated between a range of Meanwhile, progress in 2017 for new planting and
RM2,300 to RM3,300 throughout the year, though replanting of oil palm has been slow due to delays
it should be noted that CPO price was comparably in obtaining approval from the Sarawak State
higher than the price in 2016, which was in the Government in using the Native Customary Rights
range of RM2,257 to RM3,200. (NCR) land that had been allocated for oil palm
plantation. The 2017 target was eventually achieved,
In addition, the production of fresh fruit bunch however, with 7,982 million hectares of new planting
(FFB) increased by 18% in 2017 to 101.74 million and 4,838 million hectares of replanting recorded
for oil palm against the total target of 12,000
hectares. To mitigate any potential delays in new
planting and replanting in 2018, land that has been
allocated for future oil palm development has been
cleared for planting activities.
On the other hand, new planting and replanting

of rubber, has met its target of 8,557 hectares this
year. For 2018, RM132.7 million has been allocated
for the further planting of 8,557 hectares of rubber
in Sabah and Sarawak, and is being overseen and
executed by Sabah Rubber Industry Board and
Sarawak Agriculture Department. A total of 2,890
smallholders are expected to benefit through this
Mature plantation requires new planting. programme.
Growing the Downstream Sector Authority (MIDA) and SME Corp to promote the
grants further.
In the rubber sector, the Malaysian Rubber Board

(MRB) has established standards for Malaysian
The NKEA aims to realise the full potential of rubber and rubber products in an effort to increase
available downstream opportunities and tap into their export value as well as secure their use
a more lucrative part of the value chain under the domestically. The five standards for Malaysian rubber
palm oil and rubber sectors. The move of going and rubber products are ISO 3146, ISO 4074:2015,
downstream has been incentivised by a total ISO/DIS 20163 and ISO/FDIS 2930. These standards
allocation of RM280 million in grants under the are focused on development testing of rubber
11th Malaysian Plan. In this respect, the Government products such as polymers, packaging of Technically
is not only assisting the big players but also the Specified Rubber (TSR), condoms, compounded
small- and medium-sized enterprises (SMEs). rubber, cup lumps and crepe rubber.
“RM97.5
Government grants in the palm oil sector are divided
into two categories: the commercialisation grants million worth of
for companies interested in the development of investments were achieved for
palm-based food products, health-based products,
the commercialisation of palm
”
animal feed and high-value oleo-derivatives;
and clinical research grants on the nutritional oil products in 2017.
advantage of palm oil and its phytonutrients.
Additionally, support from the Government has
Progress was made in promoting the benefits
enabled local companies to continue an aggressive
of palm oil nutrients such as tocotrienol and
expansion of Malaysian dry rubber products in
carotenoids for commercial consumption, as
the global market, focusing on industrial hoses,
illustrated by the RM41 million worth of grants
rubber automotive parts, re-tread tires and other
committed to 10 projects in the development of
specialised products.
palm-based food, health products and animal feed
in 2017. Similarly, RM2.7 million worth of grants
With the drop in crude oil prices in recent
was committed to three projects in creating high-
years, petrochemicals have since become a cost
value oleo-derivatives in 2017. As such, RM97.5
competitive alternative to rubber derivatives,
million worth of investments were achieved for
in particular ekoprena and pureprena, in the
the commercialisation of palm oil products in
production of various commercial goods. To
2017, amounting to a total of RM2.7 billion for 57
encourage the use of ekoprena and pureprena,
projects since year 2011.
MRB collaborated with six new companies in 2017
to leverage their partnership in encouraging the
With regards to encouraging clinical trials on
use of alternative rubber derivatives for rubber
palm oil phytonutrients and potent oleochemicals,
product applications. These companies are
RM11.9 million worth of clinical research grants
Silverstone Berhad, M-Xell Chemicals Sdn Bhd,
were awarded in 2017, bringing the total number
Polymer Engineering Product & Construction
of grants allocated for clinical trials to RM158.5
Sdn Bhd, Proton Berhad, FT Hose and Mitsubishi
million for a total of 16 trials conducted since 2011.
Chemical Corporation (MCC) from Japan.
The Ministry of Plantation Industries and
The Government is also poised to step up
Commodities (MPIC) and Malaysian Palm Oil Board
promotional activities to position ekoprena and
(MPOB) will continue to increase its marketing
pureprena as a green and biodegradable option
efforts to attract grant applicants. At the same
to improve their marketability, in line with the
time, MPIC and MPOB will explore strategic
target to generate more than RM5 billion of total
coordination with similar government agencies
revenue for rubber derivatives by 2020.
such as the Malaysian Investment Development
laid out a compliance timeline for the MSPO certification

that will be executed in stages. MPOCC is also in the
process of training more qualified and accredited
Certifying Bodies (CB) and auditors to improve the
certification process and speed up the audit and
certification for applicants.
Meanwhile, briefings and dialogue sessions with

smallholders, associations and plantation groups were
also conducted to sensitise their understanding on the
MSPO certification and encourage compliance with the
standard. Local smallholders may lack capacity and
The export of local rubber products contributes to resources to commit to the lengthy compliance and
national income. completion process needed for MSPO certification
and are conventionally driven by quantity rather
than quality of FFB. To encourage their adherence to
Advocating Environmental MSPO standards, the Government has allocated RM130
million to help smallholders to transition the initial steps
Sustainability towards meeting the requirements for certification
as well as helping them bear the costs of the audit
and certification processes. At the same time, MPOCC
is working with its stakeholders to create the MSPO
Supply Chain Standards to ensure strict quality controls
Launched in January 2015, the Malaysian Sustainable for the entire MSPO supply chain. Thus, quality control
Palm Oil (MSPO) Certification is a voluntary-based protocols at the mills and further downstream should
certification scheme implemented by the Malaysian impose pressure on smallholders at the upstream to
Palm Oil Certification Council (MPOCC), introduced comply with rigid FFB standards, aligned with MSPO
to address concerns about management practices, certification itself.
transparency, compliance with legal requirements, social
responsibility, new plantings and the environmental
sustainability of the palm oil industry. The certification
“Currently, 30 palm oil mills in
”
is awarded to oil palm plantations run by smallholders,
companies and corporations, as well as palm oil
Malaysia are certified by MPOCC.
processing facilities that comply with standards
and practices set and adhered to within the global
Moving forward, the Ministry will ensure that the
sustainable palm oil industry. Branding with MPSO’s
MSPO certification achieves international recognition.
standards will thus increase the value and demand of
Palm oil entities that are already certified against the
Malaysian palm oil as a premium edible oil, following
current and internationally recognised Roundtable on
global demand for sustainably sourced products.
Sustainable Palm Oil (RSPO) standards will need to
complete MSPO certification by 2018, while palm oil
Currently, 30 palm oil mills in Malaysia are certified
entities without RSPO certification and independent
by MPOCC. In 2017, MPOCC awarded the certification
and organised smallholders will need to obtain MSPO
to a total of 296,007 hectares worth of new palm
certification by 2019. The Ministry is targeting for the
oil areas.
MSPO certification to be eventually integrated with the
RSPO standards, and for Malaysian palm oil entities to
To expedite the implementation of the certification
have dual certification of the RSPO and MSPO.
across the Malaysian palm oil industry and consistently
elevate the industry to the next level, MSPO certification
In the area of sustainable energy, five new biogas plants
has been made mandatory to all oil palm plantations
have been completed in 2017. Along with generation of
in Malaysia by 2019, as the voluntary nature of the
electricity, the plants will contribute towards reducing
certification may have delayed some stakeholders from
carbon footprint from palm oil production.
starting the process. In February 2017, the Ministry had
Big demand for healthy snacks
Healthier snacks have been dominating consumer

demand trends of late, and one company is working
to satisfy this. Haliza Industries Sdn Bhd (HISB)
specialises in the production of healthy snacks such
as potato chips, cereals, and food seasoning made
from organic ingredients. In 2017, thanks to the
Commercialisation Grant for the Development of
Food and Health-Based products under the Palm
Oil and Rubber (POR) NKEA, HISB has been able to Haliza Industries at Halal Fest 2017.
expand its offerings to include corn-based snacks.
“In August 2017, we received a grant worth RM2.5 Under the POR NKEA, funding is also provided for
million from the Government, which we matched with clinical research of the nutritional benefits of palm oil
our own funding. We used the money to purchase and its phytonutrients in the areas of renal disease,
high-technology, fully automated machinery,” said neuroprotection, arthritis, cardiovascular diseases,
Datin Hajah Nor Haliza, founder of Haliza Industries. cancer, fatty liver disease, macular degeneration,
“The machines are not available in Malaysia and had pancreatic disease, radioprotection and child nutrition.
to be imported from overseas. Aside from creating
higher quality products, the machines also improved To promote public awareness on the health benefits
our production from 100 kg of cereal per hour to of tocotrienol, the 100% Bumiputera-owned company,
200 kg of cereal per hour.” devoted to healthier snack food products, invites
educational institutions and organisations for
The grant has accelerated business growth, leading to tours. Interested parties may send requests directly
Datin Hajah Nor Haliza forecasting higher revenues. through its website. “In 2017, 64 schools and ten
She now plans to expand her workforce from 15 higher educational institutions visited and learned
employees to 35 employees by the end of 2018. The more about tocotrienol, along with other aspects of
proud founder is looking to finalise the procurement food production,” said Datin Hajah Nor Haliza, “Along
of warehouses in China to use as its international with public education, we hope to increase local
distribution hubs. Currently, the company currently distribution as well. We would like our products to
exports 90% of its food products to countries such be offered in Kedai Rakyat 1Malaysia, petrol stations
as Saudi Arabia, China, Singapore, Brunei and Japan. and supermarkets.”
Its success in these countries stem from the large The founder bears responsibility for creating quality
demand for halal-certified products, especially in food products and urges other food entrepreneurs
China and Japan. “We provide the type of quality, to commit to the same vision. In 2018 and beyond,
halal food products that these markets look for,” she hopes for additional help and support from
says Datin Hajah Nor Haliza, adding that the official government agencies and related private institutions
website for Haliza Industries (www.haliza.com. to speed up processes and scale bigger in the
my) displays the various licences and certificates domestic and international markets. “We are looking
awarded to the company. Moving forward, the for ways and funding to build more factories and
company plans to enter the American, Australian distribution channels to cater to the growing demand,”
and New Zealand markets. said Datin Hajah Nor Haliza, sharing priority business
strategies for the upcoming years. “We also want
HISB’s continued success also relies on its promotion to focus on our supply chain and optimise revenue
of its nutritious snack food products. The company’s generated from our products.”
products are not only natural and MSG-free, but
also contain a palm-based phytonutrient called With a visionary leader and a growing worldwide
tocotrienol, which is linked to health benefits such as demand for halal high quality and nutritious food
improved heart health and a reduced risk of cancer. products, the future of Haliza Industries looks bright.
Malaysia’s Journey Towards Zero Biogas experiences and development in biogas capture
Emission by 2020 and utilisation from palm oil mill effluent under
the Economic Transformation Programme, current
Biogas, a by-product of the palm oil milling process and future perspectives’, Malaysia faces many
is produced after palm oil mill effluent (POME) is issues and challenges towards a nationwide biogas
treated anaerobically to remove organic pollutants. implementation, due to problems ‘relating to
It is a source of renewable energy heavily explored in technology, finance, governance and grid connectivity’.
palm oil-producing nations such as Malaysia, which One such example is cost-effective solutions for biogas
produced approximately 63.4 million tonnes of POME capture in Malaysia, which is ‘difficult to completely
in 2015. Capturing and using biogas can reduce the achieve’ due to highly volatile processing volumes and
palm oil industry’s environmental impact and reliance extreme weather patterns. Current solutions could
on petroleum-based fuel as well as adding an extra not harness POME’s full potential. However, there are
monetisation incentive to millers through the selling many areas to explore which may nudge the industry
of excess energy. towards the coveted zero-emissions scenario.
However, endeavours to capture and use biogas as For example, there must be more research and
a source of energy can be improved upon, said Dr. development for innovative and creative solutions
Loh Soh Kheang, Head of Energy & Environment to biorefinery approaches as ‘more often than not
Unit within the Engineering and Processing there is no one-size-fits-all solution’. There is also a
Division in the Malaysian Palm Oil Board (MPOB). need for a holistic value chain management as the
Uncaptured biogas releases high levels of methane economic viability and sustainability of the project
in the atmosphere – a compound which accelerates cannot be guaranteed without the establishment
global warming. This environmental issue also taints of a tangible biogas utilisation aspect. Furthermore,
the image of the palm oil industry and reduces the various relevant stakeholders, agencies and renewable
attractiveness of Malaysian palm oil and its products energy players currently lack alignment due to ‘vested
in environmentally-sensitive markets such as the interests and restricted information sharing culture’.
European Union and the United States. More must be done to encourage transparent and
continuous experience and knowledge-sharing so
To address this issue, the Palm Oil and Rubber the whole ecosystem can advance together.
NKEA focused its attention on developing biogas
capture or methane avoidance facilities at palm Going forward, Dr. Loh calls for a more concentrated
oil mills through one of its projects. This effort has government effort to process applications, facilitate
successfully sped up the previously slow adoption of and coordinate nationwide biogas implementation via
nationwide biogas implementation by palm oil mills – a practical one-stop centre. This will hopefully lead to
as of December 2016, there are 92 completed biogas Malaysia’s full compliance with national and international
plants, with a further nine under construction and an sustainability frameworks while tapping and monetising
additional 145 in the planning phase. Furthermore, biogas, an abundant source of renewable energy readily
all new and existing mills applying for throughput available in our palm-rich nation.
expansion must include biogas capture or methane
avoidance facilities. Facilitating these are various
national-level incentives such as the introduction
of feed-in-tariff (effective 1 January 2014), Green
Technology Financing Scheme and the fiscal
incentives for renewable energy. On the international
front, as a signatory of the Kyoto Protocol, industry
players in Malaysia are able to transform greenhouse
gas into cash value through the Clean Development
Mechanism.
However, according to Dr. Loh and her team’s Biogas plant is a contributor to the source of electricity
research paper entitled ‘First Report on Malaysia’s to the nation.
MOving Forward
New and existing initiatives will continue under the Palm Oil and Rubber NKEA to overcome the fluctuations
within the global market, including steps to improve both the upstream and downstream sectors of the
palm oil and rubber industries. The NKEA is committed to boost the take-up rates of commercialisation and
technology acquisition grants. MPIC and MPOB will continue to engage with industry players interested in
expanding to the downstream segment of palm oil through NKEA grants and ramp up promotional efforts
to increase grant awareness.
The NKEA will also be working on increasing number of MSPO certification issued to palm oil entities.
The MSPO certification, of note, will be crucial in ensuring that the Malaysian palm oil industry is able to
present itself as an environmentally friendly industry and hence widen its export base, especially to resistant
markets in Europe.
TOURISM
Building Asia’s
Tourism Central
YB DATO’ SERI MOHAMED NAZRI ABDUL AZIZ

Minister of Tourism and Culture
Tourism remains a mainstay of the Malaysian The reopening and refurbishment of world class
economy and important developments in 2017 event venues such as Malaysia International Trade
ensure that it will continue as an important and Exhibition Centre (MITEC) and the Bukit Jalil
economic growth driver for years to come – with Complex have upgraded the country’s overall event
the sector remaining on track towards achieving hosting capacity and puts us in a better position to
our targets of 36 million tourist arrivals and RM104 win the right to host more prestigious and influential
billion in GNI by 2020. events that will draw large international crowds. It
also reinforces the country’s already strong standing
The year saw the sector received 25.7 million in as one of the premier destinations for major events
arrivals in 2017. Tourism receipts reached RM81.4 and business events. The efforts of the Malaysia
billion in 2017, up from RM56.5 billion in 2010. Thus Convention and Exhibition Bureau (MyCEB) has
far tourism has contributed to RM81.1 billion in the done much in ensuring that Malaysia continues
country’s GNI against RM37 billion in GNI in 2009. to grow into one of the region’s top destinations
for world-class events by welcoming a total of
The year, Malaysia continues to receive international 120,528 international delegates throughout the
accolades in tourism, with Penang being named year, delivering RM1.4 billion in estimated economic
one of the 17 must-visit destinations in 2017 by CNN impact to the country.
Travel and Ipoh, Perak as one of Lonely Planet’s Top
10 cities for travel in 2017. Kuala Lumpur, on the In order to achieve our 2020 targets, we will conduct
other hand, was also named among the world’s top a high-level review of existing initiatives and focus
10 cities in terms of tourism growth by the World on game-changing and last-mile initiatives to push
Travel and Tourism Council (WTTC). All these serve us towards our 2020 targets.
as a testament to the commitment and work put
in by the Ministry of Tourism and Culture (MOTAC)
and the private sector in achieving the targets for
tourism.
Following the successful rollout of the e-Visa facility

for tourists from China, India, Bangladesh, Pakistan,
Nepal and Myanmar in 2016, 2017 saw the facility
being extended to citizens of Sri Lanka, Bhutan,
Serbia and Montenegro, bringing the total number
of countries eligible to ten, further contributing to
the number of tourist arrivals.
Positioning Malaysia as a Shopping Experience” with the Melium Group

and Pavilion. Efforts have also gone a long way
Vibrant Shopping Destination towards designating Kuala Lumpur City Centre-
Bukit Bintang as a vibrant shopping precinct.
The vicinity recorded 124 million footfalls in 2017,
against the target of 105 million.
Malaysia has long recognised the importance of In addition to retail promotion, the industry has
shopping to drive yield from the country’s tourism identified Malaysian crafts as a retail opportunity
industry. It is indeed a lucrative component of the to widen the country’s unique offerings. In a bid
nation’s tourism industry and efforts in promoting to help popularise local arts and crafts among
Malaysia as a vibrant shopping destination has tourists and provide an avenue for local craftsmen
resulted in shopping tourist spend of RM26 billion and entrepreneurs to access the market, Kraftangan
as of 2017, amounting to 32% of total tourism Malaysia has opened outlets at Kompleks Kraf
receipts against 28% in 2009. Johor, Tangs Melaka and Plaza Sungai Wang in
Kuala Lumpur. Products and items available at
This has been attributed by annual retail events these outlets include locally made batik, pewter,
such as the National Sales event launched on 1 wicker and wood, ceramics and songket souvenir
March 2017 at Suria KLCC, the “Miss SHOPhia items. During the year, craft sales from these three
Shop” campaign, the Snap & Win online contest outlets have recorded cumulative sales of RM1.2
in conjunction with the 1Malaysia Super Sale million, whilst craft industry sales reached a total
2017 and the “Malaysia Mega Sale – A Luxury of RM500.5 million.
Total craft industry sales reached a total of RM500.5 million.

Making Malaysia a Top the target of 16.5 million. The number of visitors
at heritage sites in Malaysia surged dramatically
Tourist Destination by year-end as tourist arrivals increased in the
months of November and December.
Promoting the spa and wellness industry
MOTAC has continued its efforts in promoting the

Building on Malaysia’s growth as an internationally spa industry to enrich Malaysia’s tourism offerings.
recognised tourist destination, the tourism industry In October 2017, the Malaysian Signature Massage
remains on track to achieve its targets of attracting initiative was successfully launched to elevate massage
36 million tourists to the country, and hitting RM168 techniques and introduce related products such as
billion in tourist receipts by 2020. Arrivals have aromatherapy and oils into a country-specific signature
grown to 25.7 million in 2017. Total receipts have also massage product. This further serves as an effective
seen growth to RM81.4 billion in 2017, an increase of enabler for the marketing of the Malaysian spa industry
44% compared to RM56.5 billion in 2010. globally.
“
The launch also marked the start of a nationwide
Total receipts have also seen marketing and upskilling roadshow programme which
growth to RM81.4 billion in 2017, had begun to roll out in various states at the end of
an increase of 44% compared to 2017 into 2018. Further promotion and demonstration
”
of the Malaysian Signature Massage in major regional
RM56.5 billion in 2010. and global tourism travel marts and forums were
carried out at the end of 2017 and planned for 2018,
In 2017, the roll out of the e-Visa facility was including at the Asia Tourism Forum (ATF) Chiang Mai,
extended to tourists from Sri Lanka, Bhutan, Serbia International Tourism Fair (ITB) Berlin, Dubai Travel
and Montenegro. This brings the total number of Mart and the World Travel Mart, London.
countries eligible for the e-Visa to ten. It is hoped
that these countries will contribute to tourists Malaysia Mega Biodiversity Hub
arrivals in Malaysia as tourist numbers from these
markets is expected to grow in the next 10 years in The Malaysia Mega Biodiversity Hub (MMBH) sites
line with the growth of middle income households recorded a total of 906,661 visitors in 2017, against
in those countries. the year’s target of 750,000 visitors. Generally,
among the factors which have influenced the
Heritage sites increase in volume of tourists to MMBH live sites
are the natural resources attraction, recreational
Malaysia boasts five important sites that are currently activities available and location accessibility.
inscribed under UNESCO’s World Heritage List.
These include the famous Melaka City and George Hiking is one of the most popular activities
Town, Penang along the Straits of Malacca which has taken up by tourists at MMBH live sites, and a
seen over 500 years of trade and cultural exchanges significant number of tourists have taken the
between the East and the West; the Lenggong Valley hike up Gunung Tahan and Gunung Kinabalu.
Archaeological Site which contains the remains Meanwhile, for those more interested in flora and
of the Perak Man, Southeast Asia’s oldest most fauna conservation, activities at the Kuala Gandah
complete human skeleton and records of human Elephant Conservation Centre are geared towards
settlement in the span of over two millennia; whereas the conservation of local wildlife affected by loss
both Mulu National Park and Kinabalu Park on the of habitat. Its short distance from Kuala Lumpur
island of Borneo are important biodiversity hotspots. and accessibility via highways also increases its
All these sites play an important role in attracting appeal among tourists. Gunung Mulu National Park,
tourists to visit Malaysia. on the other hand, is known for its pristine tropical
forest, unique limestone pinnacles and extensive
Visitor statistics of arrivals to the World Heritage cave formation, making it a popular adventurous
sites in 2017 came up to 19 million visitors, against and recreational attraction.
Although MMBH live sites are able to attract Merang-Penarik (Terengganu), Bako-Santubong-
international and domestic tourists alike, the main Semenggoh-Bau-Padawan (Sarawak) and Sandakan-
challenges faced by most sites are maintenance, Kinabatangan (Sabah). In developing these clusters,
safety and accessibility among them. Moving engagements were held with the State Economic
forward, the sustainability of the environment Planning Units on the implementation structure and
and surrounding landscapes must be carefully project concession opportunities. There have also
balanced when establishing new sites, along with been engagements on the development of potential
the impact of increased tourists on the culture of products within the cluster in addition to the roles
local people. of various agencies involved.
Developing ecotourism clusters To oversee the development process, a Cluster

Destination Coordination Group (CDCG) has been
Tourism initiatives have also been focused on set up for the Taiping-Kuala Sepetang-Batu Kurau-
developing ecotourism clusters. In 2017, the Bukit Merah cluster. More CDCGs are in the pipeline
Taiping-Kuala Sepetang-Batu Kurau-Bukit to manage the progress of ecotourism clusters in
Merah area was identified as a site which will be Pahang, Terengganu, Sabah and Sarawak.
developed as an ecotourism cluster. Among the
proposed initiatives to develop the cluster include In keeping up with the global trends of ecotourism
improving signage for ecotourism sites, upskilling and ensuring sustainability, MOTAC has developed
and hand-holding local community businesses the National Ecotourism Plan (NEP) 2016-2025.
and establishing a research programme for The plan embodies the collaborations between the
product development and conservation. These Government, private sector and local communities,
initiatives are projected to benefit the local with specific focus on areas such as investments,
communities through the increased economic tourism concessions, synergy between ecotourism
activities brought by the ecotourism industry. and conservation, marketing and promotion, and
development of ecotourism clusters. The NEP will
Several other sites have also been identified for serve as a platform for sustainable development and
potential ecotourism clusters. These include conservation of ecotourism sites as well as poverty-
Lanchang-Jerantut-Taman Negara (Pahang), Setiu- reduction and community empowerment in Malaysia.
The growth of international cruise tourism in Malaysia has been a steady driver in the tourism industry.
Cruise tourism
Extracting Value from Major
The growth of international cruise tourism in Malaysia
has been a steady driver in the tourism industry, with
Events and Business Events
471 international cruise calls at Malaysian ports bringing
in 924,885 passengers at primary ports in the country.
This brings the total calls made to Malaysian ports,
including local cruise ships, to 599. In attracting a The value of the major events industry extends
higher rate of arrivals, the cruise sector has been far beyond the expenditure on venue rental and
primed for growth with several new developments includes supporting industries such as hospitality,
that will enhance Malaysia as a cruise destination. entertainment and food and beverages (F&B),
transportation and retail. It also has an intangible
One of the industry’s key players, the TUI group, is but strategic value in providing the country
designating Langkawi as a homeport in 2018. The “TUI exposure to event visitors from across the globe,
Discovery” will be home-porting in Langkawi starting who may potentially become leisure tourists or
December 2018 to cater for the winter season market. even investors in Malaysia.
The route will cover Langkawi, Port Klang, Melaka,
Singapore, Koh Samui (Thailand), Laem Chabang Major events
(Thailand), Sihanoukville (Cambodia) and Phu My
(Vietnam). Based on the cruise schedule, there will During the period between 2012 to 2017, major
be eight sailings with 1,800 passengers on board for events contributed RM3.17 billion to the nation’s
each sailing. economy. This comprises RM792.7 million in F&B
and entertainment spending, RM951 million in hotel
Another key player in the cruise industry, Star accommodation spending, RM951 million in retail
Cruises, has also expanded its offering with multiple spending and RM475.6 million from other revenues.
homeports and fly-cruise options to cater for Among the top events destinations in Malaysia
demand from Southeast Asian tourists as well as include Kuala Lumpur, Georgetown, Langkawi and
those outside the region. This provides greater Johor Bahru.
flexibility to tailor cruise routes and itineraries to
suit the needs of various consumers. Additionally, In 2017, the total number of international tourists at
now that Port Klang has been established as a Star major events supported by the Malaysia Convention
Cruise homeport, tourists have greater ease to fly & Exhibition Bureau (MyCEB) amounted to 58,492
in and out of Kuala Lumpur. attendees. The events, which helped raised
Malaysia’s prominence on the world map, include
Royal Caribbean Cruises has also submitted a proposal G-Dragon 2017 World Tour “Act III, M.O.T.T.E” in
to the Penang Port Council with the objective of Kuala Lumpur in September 2017 that drew 8,813
extending the berths at the Swettenham Port Cruise total attendees with total tourist expenditure worth
Terminal to accommodate larger cruise ships. The RM8.8 million and Ed Sheeran Live in Malaysia in
proposed extension covers the lengthening of the November 2017 with 12,956 total attendees and
pier from the present 400 metres to 688 metres. RM12.8 million worth of total tourist expenditure.
The extension will enable the docking of two mega Moreover, a sporting event called the Ironman®
cruise liners simultaneously – with each carrying Malaysia and Ironman® 70.3 Langkawi was held
4,900 passengers, an increase over the pier’s present in November 2017, and attracted 7,200 total
capacity of simultaneous dockings of cruise ships participants and spectators with total tourist
carrying a maximum of 3,000 passengers each. The expenditure of RM22.3 million. Another international
expansion includes space for tour buses to wait and sporting event, the Viper Challenge Series 2017
pick up ship passengers taking packaged tours, along was held and attracted 52,519 total participants
with better accessibility for senior citizens and the and spectators with total tourist expenditure of
physically challenged. RM50.1 million.
Furthermore, several international music events were

hosted during the year. Amongst them, the Good
Vibes Festival 2017 held on 12 to 13 August attracted
Business events
In the business event segment, MyCEB together

with its partners has secured a total of 151
international conferences, incentive groups and
trade exhibition events as at December 2017, which
amounted to 381,342 number of delegate days,
with a total estimated economic impact value of
RM954 million.
Among the key conferences hosted in 2017 were

the World Congress of the International Federation
of Freight Forwarders Associations (FIATA) 2017
which drew 1,611 delegates and the Asia Pacific Life
Malaysia hosted Ironman® Malaysia and Ironman® 70.3 Insurance Congress (APLIC) 2017 that attracted
Langkawi in November 2017. 4,563 delegates. The incentive groups segment
also drew large number of delegates, such as the
Amway Advance Sales & Marketing Training to
10,294 attendees with total tourist expenditure of Malaysia that saw 1,390 delegates and Babycare
RM14.7 million, while the K-Wave Music Festival held Leadership Summit 2017 that drew 1,575 delegates.
on 5 August 2017 attracted 14,672 attendees with In addition, these events also contributed to
total tourist expenditure of RM14.97 million. benefits beyond tourism such as enhancing
Malaysia’s global reputation as a preferred business
One of the main challenges facing the events events destination, advocating knowledge transfer
industry is the decreasing amount of available between international professionals and local talent,
subvention funds, a form of budget allocation increasing trade and investment prospects, as well
from the Government for international events. as creating legacy stories for Malaysia.
This is despite international events segment
generating positive economic returns from The industry is also further supported by the
indirect economic benefits such as withholding growth of Malaysia’s association community with
taxes, levies, GST and international tourist the establishment of the Malaysian Society of
expenditure from events hosted in Malaysia. Association Executives in response to the need
In order to mitigate the effects of budget for a single body to regulate the profession of
rationalisation, the international events segment association executives in Malaysia. Its mission
has to adapt and recalibrate its focus to support is to advance the stature and professionalism
more events that require lower investments from of associations in Malaysia through advocacy,
the Government. In addition, the targeted events education and advisory services.
should also possess the ability to attract regional
attendees. Currently, Malaysia’s key strategy is to Educational programmes such as the Malaysia
fill the calendar with as many events as possible Business Events Week and Bid Workshop were
with the aim of offering variety and choice to also held throughout the year to increase and
potential regional attendees. strengthen the capabilities and capacity of local
industry partners. These capability and capacity-
To strike the criteria of mass participation and building initiatives will enable the business events
high returns in events, MyCEB will identify events industry to deliver transformative outcomes in
which can draw a high number of attendees per terms of increased spend per tourist, as well as
event to generate higher yield. For example, generate a broader economic impact for Malaysia.
only concerts or sporting events which are able
to attract more than 10,000 total attendees While the year 2017 was positive for business
with the ratio of 3:1 (local: international) will be events and the segment has presented significant
considered, given the availability of venues in the potential to generate revenue for the country, more
Kuala Lumpur Sports City such as the Bukit Jalil effort and emphasis need to be placed on creating
National Stadium and the Axiata Arena. greater synergies between associations and relevant
Ministries in realising the potential socio-economic

benefits from business events. MyCEB will continue Enhancing Tourist Connectivity
with an inter-ministerial collaboration in order to
identify events which contribute towards achieving
the NTP goals. This will ensure that potential
networking and business development opportunities
Efforts to enhance Malaysia’s connectivity have
are aligned with strategic ministerial goals.
enabled more links between the country and
potential tourist markets, with 158,682 weekly seats
As such, MyCEB has developed the Business Events
secured by all Malaysian carriers from identified
Roadmap to power Malaysia’s knowledge and
priority countries including China, India, Australia,
creative economy. The roadmap has underlined
Japan, Republic of Korea and Taiwan.
five key goals that institutionalise platforms for
collaboration and support the development of
strong local hosts:
• Significantly increase Malaysia’s market share

“The Government will hold
continuous bilateral discussions
in conventions and exhibitions taking place in with potential target countries to
Southeast Asia; leverage the ASEAN Air Transport
• Business events will play a major role in
achieving 2020 goals of every government
Working Group (ASEAN ATWG)
ministry as a platform to discuss a more
•
•
Create Asia’s most professional, successful and
sustainable business events industry;
Significantly increase the contribution of
liberal air service arrangements.
”
business events to the country’s GDP, job One of the notable highlights in 2017 was the
creation and tax revenue; and new Air Service Agreement (ASA) signed with
• Help Malaysians expand their global investment, the Government of India during the YAB Prime
trade and professional networks. Minister’s visit to India from 30 March to 4 April 2017.
An additional 1,861 seats have been added, giving
MyCEB will also empower and energise the a total of 22,531 seats per week to six major cities
Malaysian Association of Convention and Exhibition in India namely Delhi, Kolkata, Mumbai, Chennai,
Organisers and Suppliers (MACEOS) and the Bangalore and Hyderabad. Designated airlines
newly formed Business Events Industry Council from Malaysia will also be allowed to enter into
of Malaysia to become strong advocates of the domestic codeshare arrangements with selected
needs of business events players. Indian airlines.
There will also be continuous engagement with India

to acquire additional traffic rights. This includes a
proposal to add eight additional secondary cities
to the existing 18 cities. The additional cities are
Coimbatore, Pune, Madurai, Vijayawada, Mangalore,
Surat, Chandigarh and Srinagar.
During the year, the Government also applied for

additional traffic rights to Australia, especially to four
main cities. The additional traffic rights to Australia
will serve to increase travel and traffic between both
countries by boosting weekly seat capacity.
To continue expanding Malaysia’s global linkages,

the Government will hold continuous bilateral
MyCEB has developed the Business Events Roadmap to discussions with potential target countries,
power Malaysia’s knowledge and creative economy.
Making Malaysia an International

Conference Destination
International conferences hosted by Malaysia have

an impact that go beyond tourism as they serve as
a catalyst for transformation, helping to spur national
development on a variety of fronts through knowledge
transfer, networking, global exposure and championing
of key issues and best practices. To this end, the Malaysia
Convention and Exhibition Bureau (MyCEB) has been
working with various Ministries to bring in conferences
that help them achieve their Ministry goals.
2018 looks to be a banner year for Malaysia with a hefty
MyCEB currently works with Ministries and key number of world conferences lined up.
associations to identify and bid for conferences which
are aligned with the nation’s development goals and
requirements. “Our strategy is to bring in events that will kick off the year, representing the premier global
relate to Malaysia’s areas of focus,” says Datuk Zulkefli conference for sustainable urban development. To
Hj Sharif, CEO of MyCEB. bring the conference to Kuala Lumpur, MyCEB worked
with the Ministry of Urban Wellbeing, Housing and
Malaysia saw much success in bringing in major Local Government.
international conferences to its shores in 2017, thanks
to aggressive efforts by the Government to bid for Other events on the calendar include the World Cancer
high profile events. Major conferences held in Malaysia Congress which will raise Malaysia’s prominence as
during the year included the International Federation an international host and the World Chef Congress,
of Freight Forwarders Associations’ (FIATA) World for which Kuala Lumpur represented the Asian
Congress, the International Forum on Quality and region at the global level to win the right to host the
Safety in Healthcare Asia 2017 and the Asia-Pacific event, beating out high profile competing cities like
Retailers Convention and Exhibition (APRCE) 2017. Vancouver, Canada. The country will also host the
World Library and Information Congress 2018 and the
Building on this momentum, 2018 looks to be a International Solid Waste Association World Congress.
banner year for Malaysia with a hefty number of world
conferences lined up, mainly as a result of the NKEA Given the increasing importance of conferences to
Tourism’s initiatives, as well as substantial Government national development, MyCEB is now also tracking
backing. The United Nations’ World Urban Forum other outcomes beyond traditional statistics such as
tourist arrivals and spending. These outcomes include
charters and MoUs signed, legacies left behind and
business deals concluded.
But much more needs to be done, including the public

and private sector pulling together to successfully
bid for key conferences. If leveraged correctly, there
could be huge national benefits from the hosting of
international conferences and exhibitions.
Conferences and exhibitions are considered so

strategic in some countries, that in Thailand for
example, MyCEB’s equivalent – the Thailand
Convention and Exhibition Bureau (TCEB) – comes
under the Prime Minister’s Department, notes
The International Federation of Freight Forwarders
Associations’ (FIATA) World Congress was held in Malaysia Datuk Zulkefli. The benefits of hosting such events
in October 2017.
are numerous. Firstly, the host country gets to be “It’s not all about how beautiful the country is or
profiled and showcase its strengths. Then there is the whether it has a good airport,” says Datuk Zulfkefli.
knowledge transfer that happens when professionals, “Safety and security are also important.”
experts and even Nobel Prize winners come together
to interact with the local population. There is also the The MyCEB chief adds that Malaysia also needs to
legacy left behind to the destination. build and allow access to more iconic and unique
spaces and venues in order to make itself more
MyCEB, which was established in line with one competitive.
of the NTP’s targets to make Malaysia a leading
destination for events and conferences, has also He notes that conference delegates want to
been working on initiatives to bolster the country’s experience something special offered by the
competitiveness in the sector. These include initiatives host country. Examples of this are conferences
to raise the professionalism of associations to the in Beijing where delegates are taken to dinner at
next level through the Malaysia Society of Association the Great Wall of China or conferences in Sydney
Executives as well as the Kesatria programme which where dining is provided outside the Sydney
identifies prominent experts and authorities to be Opera House.
‘ambassadors’ for the country to help boost Malaysia’
hosting credentials. MyCEB has also developed a “It has become so competitive that conference
Malaysia Business Events Roadmap to help position organisers now want experiences that money
Malaysia as Asia’s business events hub. cannot buy,” he says. “All countries are now
competing to offer special arrangements to win
The value of hosting global conferences is also being events. To win, you need a nationwide collaboration.
recognised by more countries now, which means From immigration, to local authorities, to hotels,
more competition for Malaysia. With that, conference everything has to work together. Collaboration
organisers are also looking at many other factors needs to be a lot better, from inter-department
besides the normal pre-requisites. to inter-agency. We cannot work in silos.”
Malaysia needs to build and allow access to more iconic and unique venues in order to make itself more competitive.
Taking Melaka Tourism to The Next Level
Datuk Wira Boo Kuang Loon’s vision to take Melaka’s

status as a tourist destination to new heights is drawing
closer to reality with the impending completion of the
Encore Melaka show in the second quarter of 2018.
The Encore Melaka is a world-class, live theatre

production that has been staged exclusively in China
for over 10 years as part of the Impressions Series of
shows. Back when the production was heading out of
China, Melaka successfully beat some 150 cities from
around the world for the distinction to host the first “Impression Series-Encore Melaka is a purpose-
international Impression production. built theatre that has no rival in the region,” he says.
“What we offer is not just the advanced quality of the
Once complete, the Encore Melaka show is expected hardware such as the sound and lighting equipment
to attract more than one million audiences a year, but the software – the uniqueness of the cultural
enriching the historic city’s cultural scene and performance.”
boosting the local creative industry through the
hiring and training of local performers as well as He adds that the Impression Series-Encore Melaka and
through technology and knowledge transfer. The the larger development it is part of, Impression City,
theatre is expected to be the first 360-degree rotating have been planned carefully to ensure the quality of
auditorium in Southeast Asia with advanced audio its service is on par with global standards.
and lighting effects.
“We aim to set the benchmark for excellent
Datuk Wira Boo, who is the CEO of Yong Tai, the customer service. Visitors would visually experience
developer of the Impression Series-Encore Melaka, the beauty of local culture, while having a deeper
says the project will raise tourism standards in Melaka, understanding of Melaka and the formation of
not only in terms of venues but also service. modern Malaysia,” he says.
Encore Melaka show is expected to attract more than one million audiences a year.
Encore Melaka is situated not far from the city and provides a great scenic view of the Straits of Malacca.
He adds that although the Impression Series The Impression City tourist complex, meanwhile,
originates from China, the show will reflect the provides a vibrant mix of entertainment, shopping,
“true voice” of the Melaka community. dining, art, culture and lifestyle attractions that caters
to both locals and tourists.
“It will be a cultural performance reflecting a
society that embraces diversity and upholds “The Impression City master-plan takes its inspiration
harmony,” he says. “Diverse and inclusive, Melaka from elements found in nature and life. The Impression
offers a peaceful atmosphere welcoming multi- Series-Encore Melaka is the centre of Impression City
ethnic integration.” – representing the sun, the centre of the solar system
in our development philosophy,” says Datuk Wira Boo.
The journey to host the world-famous show
was a challenging one that took years of work Challenges faced during development included
and planning. It started with an official letter to identifying a suitable location for the theatre that
the team behind Impressions in China. It was was not too far from the city while providing a great
then followed up with many rounds of detailed scenic view of the Straits of Malacca. Datuk Wira
assessments and numerous visits to China before Boo also says that since the theatre is one-of-a-kind,
successfully convincing Impression China to from the interior to the exterior, extra attention was
produce its first international show in Melaka. required to resolve construction issues.
The Malaysian Government also played an He adds that for Malaysia to continue to improve
important role in the development of the its capabilities to develop world-class tourist
Impression Series-Encore Melaka by providing attractions, there must be an emphasis on
Investment Tax Allowances and training grants enhancing the visitor experience.
from the Malaysian Investment Development
Authority (MIDA). The training grants were “Key considerations to be addressed include quality
allocated to train local performers and included of service infrastructure, hygiene conditions and
course fees, audio visual equipment expenditure, safety and security,” he says. “We should work
venue rentals as well as funds to cover other with local and international advisers to review and
expenses. develop industry standards.”
Efforts to enhance Malaysia’s connectivity have enabled more links between the country and potential tourist markets.
namely to leverage the ASEAN Air Transport arrangements and acquire additional traffic rights to
Working Group (ASEAN ATWG) as a platform to countries such as Australia and India, with a further
discuss more liberal air service arrangements with 3,500 weekly seats being added to four Australian
related countries. However, negotiations are not cities. Another planned negotiation, the ASEAN-
straightforward as each country has its own policies Japan RASA (Regional Air Service Agreement)
and restrictions on air service arrangements. Meeting is scheduled to be held in early 2018.
Operational issues faced by Malaysian airlines To further grow international inbound tourist
operating in China and Japan, such as inadequate arrivals, there should be an increase in tourism
slot allocations, airport capacity constraints and promotion, especially to China and India, since
traffic rights restriction, may hamper the ability of most Malaysian airlines are now focusing on these
Malaysian carriers to expand their reach to these two major markets. As such, Tourism Malaysia
markets and attract more tourists from these has been aggressively collaborating with industry
countries to Malaysia. As such, the Government players to develop special packages to Malaysia,
will continue to facilitate designated Malaysian participating in several joint promotions with
airlines into the regions to develop the market. foreign airlines such as Singapore Airlines, Etihad
Airways, Emirates, and Air Asia X to attract tourist
Malaysia, as part of ASEAN, organised exploratory arrivals into the country. Apart from that, airlines
talks on air services agreements between the and tour operators are continuously encouraged
Republic of Korea and ASEAN on 11 October 2017 to carry out charter flight services from second- or
in Singapore. This served as a preliminary discussion third-tier cities particularly in China, Taiwan, Japan
before the convening of official air talks between and Republic of Korea to new destinations such as
both sides. The Government also convened with the east coast of Peninsular Malaysia, Johor Bahru
related countries during the 10th ICAO Air Services and Kuching. Tourism Malaysia has also executed
Negotiation Event (ICAN2017) held in Colombo, targeted promotions to attract high net-worth
Sri Lanka from 4 to 8 December 2017. This marked tourists focusing on major events and business
a continuous effort to further liberalise air service events, ecotourism and shopping.
MOving Forward
With the goal of recording a total of 36 million in arrivals and a GNI contribution of RM104 billion by 2020,
the sector must remain abreast on delivering game changers and last-mile initiatives.
A number of initiatives from the Tourism Lab 2.0 were identified in 2016 with the potential to push for the
achievement of 2020 targets. In addition to those currently being implemented, such as the focus on business
and major events, MOTAC will continue to strategise the best ways to roll out those niche sectors identified
within the lab including diving and culture an crafts, as well as nationwide rollout of Malaysian Signature Massage.
As part of MOTAC’s ongoing efforts at driving progress in the tourism sector, a new policy study is being
developed. The National Tourism Policy Study 2020-2050 is currently in the process of being formulated
by comprehensively reviewing all existing plans and policies related to tourism in Malaysia. It applies a two-
pronged approach: firstly, providing a well-defined strategic direction that sets targets for consolidating and
strengthening the position of Malaysia as a leading tourism destination; secondly, transforming the governance
of the industry into a more business-friendly environment to foster more public-private partnerships (PPP)
involvement in the development of the sector.
The final report is targeted to be ready by June 2018. Once completed, the study will provide a blueprint
for the development of tourism in Malaysia from 2020 to 2050, and will also identify new sets of targets in
terms of tourist arrivals receipts, and manpower requirements in the sector for 2030.
In terms of marketing and promotions, Tourism Malaysia will continue to maximise integrated global advertising
campaigns by integrating promotional messages from other Ministries such as the Ministry of Health, Ministry of
Higher Education, MIDA and MATRADE in promoting Malaysia to the world. Furthermore, efforts in promoting
Malaysia as a location for films, documentaries and reality game shows to international production houses
and television stations will be intensified. In line with current trends, digital and social media platforms will
continue to be used as the main medium for promotions, publicity and advertising campaigns.
Electrical AND Electronics
Innovating High-Value
Manufacturing
YB DATO’ SRI MUSTAPA MOHAMED

Minister of International Trade and Industry
The electrical and electronics (E&E) sector remains Most of the E&E investments involved expansion
key to Malaysia’s continued industrial growth, and diversification activities in the manufacturing
providing for new businesses and new jobs. The of light-emitting diode (LED) products, household
GNI contribution from the E&E sector has increased appliances, solar wafers, cells and modules, thus
from RM38.7 billion in 2009 to RM63.4 billion in 2017. realising Malaysia’s vision of moving towards more
In fact, Malaysia is the world’s 7th largest exporter of value-added upstream activities. The industry is
E&E products valued at RM343.0 billion, accounting expected to generate new job opportunities for
for 36.7% of total exports for the year. Moreover, the 9,238 people.
industry has shown an upward trend in exports for
the past four years. It is also the only industry with Of note, the Collaborative Research Engineering for
a trade surplus for four consecutive years from 2014 Science and Technology (CREST) has provided a
to 2017. Presently, Singapore, China and the United conducive platform for the industries, academia and
States are Malaysia’s major export destinations for government to work together to nurture innovation
E&E products. and research activities. In 2017, 11 new projects were
approved with a commitment from CREST, industries
In preparation for the global digital revolution, and universities amounting to RM16.1 million. These
a High-Level Task Force (HLTF) chaired by the projects are expected to further produce high quality
Ministry of International Trade and Industry (MITI) inventions for commercialisation. On top of that,
has been formed to spearhead the development 11 projects were successfully completed with one
of the National Industry 4.0 Blueprint, with strong intellectual property (IP) filed and one open-source
consideration on feedbacks from both public licence created. Since its inception in 2012, CREST
and private sectors. As such, this blueprint has has successfully produced 57 postgraduates with
recognised E&E as a priority area. projected cumulative income of RM16.2 million from
2017 until 2022.
In the first 10 months of 2017, the Malaysian
Investment Development Authority (MIDA) MITI is currently working closely with MIDA to
approved a total of 91 E&E projects with establish a Manufacturing Innovation Centre (MIC)
investments of up to RM9 billion. Of these, 17 for the E&E sector to tackle issues related to talent,
projects are new with investments totalling RM1.2 foreign workers, technology adoption, low R&D
billion, while 74 were expansion and diversification spending and the lack of a cohesive ecosystem.
projects with investments amounting to RM7.8 These efforts reflect MITI’s commitment to push the
billion. Foreign investments contributed 86%, industry towards Industry 4.0 to ensure Malaysia
or RM7.8 billion while domestic investments remains competitive in the global arena.
accounted for 13% or RM1.2 billion.
YB DATUK SERI PANGLIMA WILFRED MADIUS TANGAU

Minister of Science, Technology and Innovation
The NTP continues to place emphasis on the role The successful commercialisation of these products
of the electrical and electronics (E&E) sector for its within the targeted NKEA timeframe will further
contribution to the socio-economic development of strengthen our national capabilities in energy
the nation. In this respect, the Ministry of Science, storage for a future solar-powered economy. To
Technology and Innovation (MOSTI) together with improve BSGQC uptake, close collaborations with
its agencies; MIMOS Berhad, SIRIM Berhad and solar-power companies and telco operators for
NanoMalaysia Berhad continue to play an active role full-fledged field trials of BSGQC will be explored.
in re-energising this sector to catalyse investment This technology will revolutionise the energy
and provide high-skilled employment opportunities. sector within the E&E ecosystem by creating
supportive technology platforms to meet future
As at 2017, MIMOS has successfully established energy needs while controlling the sector’s impact
an E&E shared services platform for advanced to climate change.
analytical services in the semiconductor industry.
The platform is currently utilised by over 300 In providing industry players, particularly small
companies. The facilities provided have proven and medium enterprises (SMEs), with a facilitative
invaluable in supporting business and industry environment to empower them to move up the
needs, as evidenced by the increase in E&E exports manufacturing design value chain, SIRIM’s Eco-
from RM249.8 billion in 2010 to RM343.0 billion Industrial Design Centre (EIDC) continues to offer
in 2017. Additionally, the facilities foster the birth much-needed assistance. Indeed, EIDC supports local
of a knowledge-based economy by enabling local firms in the production of environmentally friendly
researchers and scientists to produce higher-quality products through eco-innovation, whilst enhancing
inventions; thereby enabling them to compete in their capabilities for global competitiveness.
the global arena. Malaysia will move forward with
increased collaborations with international partners In addressing industry players’ emerging challenges,
and accreditation of the facilities which fulfil the especially in terms of labour, automation will be a
required standards for global market acceptance. key technology to be embraced. SIRIM will adopt
Industry 4.0 by strengthening local industry players’
NanoMalaysia Berhad, in spearheading the uptake uptake of additive manufacturing technology to
of nanotechnology by E&E sector players, facilitated increase the sectors’ production capacity through
the development of two innovative products in proposing the establishment of an Additive
2017, namely; backup-storage graphene-based Manufacturing Demonstration Centre (AMDC).
quantum cells (BSGQC) and light-emitting diodes
(LEDs) using copper-based carbon nanotube (Cu-
CNT) substrates.
Surging Ahead with

Semiconductors
Malaysia has an extensive history in semiconductor industry, although activities were traditionally focused
on the lower value-add spectrum such as testing and assembly. Under the NTP, the sector has shifted
towards mature technology semiconductor fabrication and expanded into advanced packaging and
integrated circuit (IC) design, among other higher value-add activities.
Advanced
Semiconductor IC R&D and Manufacturing Packaging, Sales and
Value Chain Design and Fabrication Assembly Distribution
and Testing
• Integrated device manufacturer (IDM)

• Original equipment
• Advanced packaging manufacturer (OEM)
Company company
• Fabless company • Original design
• Foundry • Outsourced assembly manufacturer (ODM)
• IC design house
and test (OSAT)
company
• Automated test
• Electronic design • Specialised equipment • Electronic
equipment (ATE)
automation (EDA) and tools supplier manufacturing service
Supporting manufacturer
company • Raw wafer and (EMS) provider
Industry • Intellectual property chemicals material
• Lead frames and
• Equipment and tool
packaging material
(IP) company supplier supplier
supplier
Semiconductor and integrated circuit (IC) industry value chain.
Invigourating semiconductor wafer fabrication SFAM holds consultations with the public sector
regarding infrastructure, water supply quality
To fortify the electrical and electronics (E&E) and electricity supply security, and promotes
ecosystem in Malaysia, specifically in the benchmarking based on global standards for
semiconductor industry, the Semiconductor industrial emission and discharge limits. It also
Fabrication Association of Malaysia (SFAM) was facilitates the semiconductor industry development
established in 2012 to be an industry association by expanding the local supplier base to support
for companies producing semiconductor wafers wafer fabs. Currently, it participates in the E&E
in Malaysia. It will act as the reference body for Productivity Nexus to promote automation and
existing and future wafer fabrication partners in Industry 4.0.
Malaysia, presenting a common voice to address
local and global stakeholders. Officially inaugurated On the human capital development front, SFAM
on 25 April 2017 at SEMICON Southeast Asia, engages with academia such as UniMAP, Universiti
SFAM is helmed by its President, Dato’ Peter Sains Malaysia (USM) and Universiti Kuala Lumpur
Halm, with members from X-FAB, Silterra, ON (UniKL) among others to enhance the curriculum
Semiconductor, OSRAM Opto Semiconductor, in engineering, science and technology. It also
MIMOS Semiconductor, Infineon Technologies and provides internship programmes for undergraduates
Fuji Electric. Its associate members are the Advanced and research opportunities for postgraduates and
Technology Training Centre (ADTEC) Kulim and the lecturers. For example, Silterra, a member of SFAM,
Advanced Multidisciplinary MEMS-Based Integrated has hosted 180 interns over 2016 and 2017. SFAM
Electronic NCER Centre of Excellence (AMBIENCE), and MIMOS also co-developed a semiconductor
Universiti Malaysia Perlis (UniMAP). training curriculum for the wafer fabrication industry.
To support critical high-technology expertise needs Penang’s Bayan Lepas Free Industrial Zone (FIZ),
of wafer fabs, it works with relevant agencies such there is a need to locate some of the lab’s services
as Malaysian Investment Development Authority and research capabilities in the northern region to
(MIDA) and Talent Corporation Malaysia Berhad enable shorter turnaround times.
(TalentCorp) to expedite immigration procedures.
For experienced technicians, it collaborates with Developing integrated circuit design
polytechnics and training centres to provide channels
for employment through upskilling. Among these In the field of permanent magnet synchronous
institutions are the Polytechnic Tuanku Sultanah motors (PMSM), MIMOS, in collaboration with
Bahiyah (PTSB) Kulim, Polytechnic Sultan Abdul local firms, My Technology and Emerald Systems
Halim Mu’adzam Shah (POLIMAS) Jitra, ADTEC released the Green Motion Controller (GMC), a new
Kulim, ADTEC Taiping, and the Kedah Industrial Skills IC solution that efficiently controls and manages
and Management Development Centre (KISMEC). the performance of PMSM. The GMC will be used
in selected applications and is expected to reduce
Supporting wafer fabrication via advanced energy consumption by 40% vis-à-vis existing
analytical services lab solutions. GMC could potentially replace existing
PMSM controllers, thereby simplifying system
The MIMOS Advanced Analytical Services Lab design and reducing product costs by up to 50%.
supports the wafer fabrication industry by
meeting the analytical services needs. More than The GMC has proven effective in industrial elevator
300 companies are presently utilising the lab’s applications and MIMOS has successfully facilitated
value-added analytical shared services, while over the development of an energy-saving prototype for
600 services were provided to the industry in large electrical home appliances, achieving energy
failure and material analysis in 2017. The presence savings of more than 40%. MIMOS is presently
of a comprehensive infrastructure of advanced collaborating with a solution provider to develop
analytical capabilities in Malaysia elevates the a GMC-based platform for use in air conditioning
country’s global competitiveness, reduces local compressor applications.
dependency on foreign lab services, and lowers
“The
cost and turnaround time.
Green Motion Controller
However, technological advancements have created is expected to reduce energy
”
the need for continuous enhancements to enable
the lab to keep pace with Industry 4.0 practices.
consumption by 40%.
Competition from regional and global services is
keen, requiring the lab to continuously innovate its
Additionally, the GMC system has been
systems, processes and offerings to better meet
demonstrated to original equipment manufacturers
demands.
(OEMs) in China for potential adoption in their
electrical home appliances solutions.
To alleviate these challenges, the lab is working
to create mutually beneficial partnerships
Growing the advanced packaging sector
with global research institutes and companies
such as Interuniversity Microelectronics Centre
Advanced packaging, a component in semiconductor
(IMEC) Belgium, Industrial Technology Research
manufacturing, has become extremely competitive
Institute (ITRI) Taiwan and Electronics and
in Malaysia with strong back-end manufacturing
Telecommunications Research Institute (ETRI)
dominated by multinational companies (MNCs).
Korea, while seeking and maintaining accreditation
The rapid changes in technology and demand for
of its facilities with ISO/IEC 17025, ISO 9001 and
advanced packages are forcing manufacturers to
other standards to secure global market acceptance.
introduce new differentiated packages to preserve
Also, given that most E&E companies are located
their edge on their circuits’ small sizes, low costs
in the Northern Corridor Economic Region (NCER),
and high performance.
including Kedah’s Kulim Hi-Tech Park (KHTP) and
In 2017, RM1.2 billion was invested in this sector to Malaysia has 250 companies involved in upstream
undertake an expansion and diversification project activities such as polysilicon, wafer, cell and
to produce wafer-level chip scale packaging and module production, and downstream activities
wafer bumping, which are techniques of advanced such as inverters and system integrators. In 2017, a
packaging. The investment demonstrates Malaysia’s RM300 million expansion project producing solar
position as a preferred investment destination ingots, wafers, cells and modules was approved
for both new and existing companies against by MIDA. The project involves integrated
the backdrop of an uncertain economic climate, manufacturing of solar PV products, from ingots
reaffirming domestic and foreign investors’ to modules.
confidence in Malaysia’s economic fundamentals.
LED and SSL Continue

Promoting Sustainable Energy to Illuminate
Malaysia has introduced various incentives

and strategies to encourage the growth of Malaysia is gaining prominence as a production
the renewable energy sector. Given Malaysia’s hub for light-emitting diode (LED) manufacturers.
location in the equatorial region where sunshine The development and production of LED clusters
is in abundance all year round, solar energy is in the country cover semiconductor devices for
naturally positioned to play a crucial role in the LED, wafer fabrication, as well as lighting products
country’s future energy generation. and solutions.
Demand for solar energy is expected to rise as Creating local solid-state lighting champions
consumers and businesses become increasingly
aware of its benefits not just to the environment SME Corporation Malaysia’s (SME Corp) capacity
but also to the economy. Malaysia, a key exporter building programme to produce local solid-state
of solar photovoltaic (PV) cells and modules, lighting (SSL) champions aims to develop Malaysia’s
is well-positioned to benefit from the spillover SSL value chain towards chip and application
effects of growing solar power usage worldwide, R&D. This programme assists local SSL companies
which is expected to see growth of between 12%- in expanding abroad via trade delegations that
20% over the next five years. focus on key SSL-related areas, establishes
strong intellectual property (IP) recognition by
Ranked as the world’s third largest producer the Government to thwart the entry of imitation
of solar PV cells and modules with production LED products into Malaysia, and establishes pro-
capacity of 4.1 GW and 7.2 GW respectively, environment regulations and public awareness.
In one week, OSRAM’s new LED chip factory in Kulim, Kedah can produce enough LEDs to replace all the street lights in
New York, Rio de Janeiro, Hong Kong and Berlin.
The scope of SME Corp’s assistance encompasses by SMEs on new market entry due to the high
matching grants for international certification costs upfront costs and the lack of detailed knowledge
and the acquisition of automated machineries and about new markets and competitors.
inspection tools. To date, it has provided RM7.6
million worth of matching grants to 11 companies: Expanding LED front-end operations
Avialite, Primelux Energy, ecoNoon, P-Plus, Extra-
Built, LED Vision, PCO Lite, Oversea Lighting & Meanwhile, OSRAM’s investment in Kulim, which will
Electric, HANS LEDLite, Novabrite and EcoTech establish Malaysia’s first fully integrated LED epitaxy,
LED. The companies recorded combined annual wafer fabrication and product manufacturing
sales of RM137.6 million in 2017 against RM70.1 million facility, continues to progress well. The first stage
in 2013 and combined annual exports worth RM8.4 of the facility, which employs 1,500 people, is now
million against RM6.3 million in 2014. operational, whereas future expansion of two
additional stages will bring in a total investment to
However, soft global economic conditions have RM4.9 billion.
caused some order cancellations and extension
of project timelines. Some companies have also
struggled to regain their cost competitiveness,
while fluctuations in the foreign exchange rates Epitaxy
have made certifications, imports of raw materials
and packaging costlier, which compounded the Epitaxy is a technique that involves growing
competitive threat from China’s low-cost offerings. a thin crystalline film of one material on top
of another crystalline material, such that the
To boost their export competitiveness, LED crystal lattices match. In other words, epitaxy
companies have joined the Go-Ex Programme, is when additional layers of semiconductor
one of the High-Impact Programmes under the crystals are grown on the surface of the wafer.
SME Masterplan 2012-2020, developed as part of
the Government’s initiatives to guide and grow the
exports of Malaysian small and medium enterprises
(SMEs) by strengthening their resilience and
competitiveness. Implemented by Malaysia External The Northern Corridor Implementation Authority
Trade Development Corporation (MATRADE), the (NCIA) has facilitated OSRAM’s purchase of
programme is aimed at addressing challenges faced a metal organic chemical vapour deposition
The OSRAM factory in Kulim will produce blue LED chips which, by means of a converter layer, can generate white light.
(MOCVD) system and implementation of the level vendors is further taken up by five more local
Northern Corridor Competency Enhancement players, namely STRiDE Electronics, Inari Amertron
Programme (NCEP), as well as supported the Berhad, Prodelcon, Tekun Asas and Bi Technologies.
Technical and Vocational Education and Training
at Kulim Hi-Tech Park (TVET@KHTP) Programme, To sustain competitiveness in the industry, there
which is implemented by the KISMEC to produce is a need for vendors to upscale their ability to
skilled labour to support OSRAM’s operations design according to new product specifications.
in Kulim. This will also require attracting, acquiring and
retaining talent. In an effort to address this, the
vendors are increasing their engagement with
Establishing Malaysia’s universities like USM through career talks and
technical collaborations to ensure varsity studies
Prominence in Test, reflect industry needs. The hub also provides the
vendors’ R&D teams with quick access to Keysight
Measurement and Automation experts for consultation and verification.
Strengthening testing and certifications for solar

and LED products
Test and measurement form the basic block of As for solar and LED products, testing centres
automation by creating signals and capturing have been created by QAV Technologies Sdn
responses for control systems to perform decision Bhd (QAV) to provide quality assurance and
making without human intervention. The impact testing services. QAV is the only TUV NORD-
of automation is tremendous – it increases certified failure analysis, reliability testing and
productivity, quality and consistency of products electromagnetic compatibility centre in Malaysia.
and processes in mining, agriculture, manufacturing It is also the first American National Standards
and services. In view of its cross-cutting linkages Institute (ANSI) certified lab outside of the United
to various economic sectors, automation will serve States (US). QAV has expanded its LED testing
as a catalyst to facilitate Malaysia’s transition to a operations in Penang and set up a new operations
high-technology nation. branch in Selangor. QAV’s operations in Malaysia
benefit local manufacturers by generating income
Building a test and measurement hub growth, as QAV’s certifications enable direct
shipments to the US. QAV’s testing centres also
A shared test and measurement hub was set up assist local companies’ development of testing
in Penang in 2014, led by Keysight Technologies and certification methods that are not available
and facilitated by NCIA, to develop local test and in the country yet.
measurement companies as they seek to grow
their research, development and commercialisation In 2017, 52 products were tested by QAV, and
capabilities. The hub has raised the value of the currently aims to establish a platform for the
local E&E ecosystem by developing their know-how certification of Malaysian product standards,
in high-precision engineering. This has enabled thereby making Malaysia the Asia-Pacific regional
Keysight to replace its foreign procurement of hub for ANSI and the US Department of Energy
high-precision components with locally produced (DOE) certification. This can benefit the country by
components, with some of its manufacturing plants attracting more LED MNCs to Malaysia. In addition,
in other parts of the world are now procuring from QAV maintains multiple industrial training and
Malaysian vendors. research collaborations with institutions of higher
learning, such as Monash University, Universiti
To date, seven local players have benefitted directly Tenaga Nasional (UNITEN), Multimedia University
from this test and measurement hub. For example, (MMU) and Universiti Tunku Abdul Rahman (UTAR).
CEEDTec and Myreka are currently Keysight’s first-
level vendors that have co-developed 26 local However, QAV faces escalating testing costs and
products with Keysight for the global market must contend with the unpredictable nature of
and created 36 IPs. Benefits from this initiative standards and requirements. This encumbers
are significant, as the work packages of the first- QAV’s efforts to train and retain its personnel, while
complicating its relationships with manufacturers, 2014. Notable projects undertaken this year include
many of which do not actively keep abreast of oil palm fruit grader by Universiti Putra Malaysia
changes in the landscape of standards and (UPM), lock rotor temperature monitor by Daikin
requirements. As such, QAV undertakes regular Research & Development Malaysia Sdn Bhd,
engagements with industry players to mitigate this. and payout tension meter system services and
troubleshoot sensor by Asian Geos Sdn Bhd.
Creating an innovation nucleus in test and
measurement
The National Instruments Academy and Innovation

Nucleus (NI-AIN) continues to empower innovation
“The NI-AIN allows SMEs to
innovate without the need for
for local SMEs through its shared service lab facility.
Launched on 13 September 2012 by National
Instruments (NI), Technology Park Malaysia
huge capital outlays.
”
(TPM) and SME Corp, the centre currently houses Going forward, there remains a need to increase the
approximately RM20 million worth of hardware and centre’s utilisation. This can partly be resolved by
software assets. The automation solutions centre convincing SMEs to embrace automation as part
also serves as an SME incubator centre specialising of the broader Industry 4.0 landscape through
in design, system integration, system customisation concerted efforts by Ministry of International Trade
and engineering services, allowing SMEs to innovate and Industry (MITI), MIDA and SME Corp. There is
without the need for huge capital outlays, while also the demand for more up-to-date equipment. As
accelerating the lab-to-commercialisation phase. such, the centre will work with SME Corp to attract
It also facilitates research institutions’ R&D with more SMEs, encourage higher-learning institutions
minimal grants. to utilise its equipment and provide training for
industrial Internet of Things (IoT) applications.
In 2017, the centre was involved in 10 projects
by local companies, agencies and institutes Enabling automation equipment manufacturing
encompassing test and measurement, system
design, prototyping, proof-of-concept and system The machinery and equipment (M&E) industry
customisation, making a total of 74 projects since in Malaysia, which began with the need to repair
Collaboration between Keysight Technologies, Myreka and CEEDTec in the area of test and measurement resulted in the
establishment of a Machinery and Equipment Shared Services Facility in Bayan Lepas, Penang.
and service imported machineries in the resource- The Grow the Embedded Systems Industry project,
based and agro-based industries, has undergone helmed by Malaysia Digital Economy Corporation
steep developmental phases. Rapid advancements Sdn Bhd (MDEC), centred on growing the local
in technology and innovation have propelled the industrial domain via industry collaborations with
industry to move up the value chain to manufacture technology leaders such as Intel, NI, Altera, Cisco,
state-of-the art M&E for high-tech industries, such Microsoft, Windriver and PTC-ThingWorx, and
as the front-end semiconductor processing, medical other parties including MIDA, MATRADE, NCIA,
devices, aerospace, and oil and gas. MIMOS, SIRIM, SME Corp, TalentCorp, Penang
Skills Development Centre (PSDC) to develop local
In line with this, Malaysian companies have capabilities.
transformed from being mere contract
manufacturers (CM) to undertake R&D, design and Two embedded systems and IoT projects were
development (D&D), and system integration to successfully completed in 2017: Silkron’s retrofitted
become OEMs for the export market. In 2017, MIDA smart vending machine and Sophic Automation’s
approved a diversification project with investment IoT data extractor and universal bus translators for
of RM181 million to produce chamber and module smart manufacturing. Overall, 23 projects have been
for semiconductor process equipment. approved and completed from 2012 till 2017. Moving
forward, MDEC will continue to monitor and assist
the growth of the embedded systems companies,
Industrial E&E Bolsters accelerate digital adoption and unlock global market
access. In addition, these companies are encouraged
Growth Momentum to focus on talent upskilling with data analytics
capabilities to move up the development value
chain and exploit new business models. Against this
backdrop, opportunities for local embedded systems
and IoT enterprises to tap into include niche-area
Industrial E&E projects under this NKEA focus on technology development, application development,
developing embedded systems and IoT products, and technology collaborations and partnerships
electric vehicle component manufacturing, with technology MNCs.
and nanotechnology and commercial graphene
applications to compete in the world market and In 2017, MIDA also approved a new project by an
penetrate certain niche sectors. Leveraging on existing foreign company with a RM2.0 billion
Malaysia’s existing expertise and capabilities in the investment in R&D for the development of leading-
E&E sector, these new and high-growth segments edge semiconductor technologies for 10-nanometer
will create more business opportunities. complementary metal-oxide-semiconductor (CMOS)
manufacturing processes, product innovation and
Developing embedded systems and Internet of IoT solutions. Through this investment, 100 patents
Things industry are expected to be filed by local R&D talents, and
100 staff engineers will be hired over the next five
Modern devices need to be increasingly intelligent years.
to fulfil more sophisticated customer demands. The
intelligence of these devices resides in embedded Strong policies is imperative to create high-impact
systems, which are intelligent solutions with tightly projects and support adoption of embedded systems
integrated hardware and software designed to and IoT in vertical sectors and the development of
perform a dedicated function. These intelligent the digital economy. Such policies should foster
embedded systems have evolved to become what competition and cooperation between embedded
is popularly called the IoT, a network of components systems and IoT industry players to provide the best
that contain embedded technology to communicate solutions to end-users. Talent availability will also
via the internet. The data from IoT will provide likely remain a hindrance, and thus policies should
insights to enable new revenue streams, better hence encourage talent development in science,
understand customer behaviour and improve control technology, engineering and mathematics (STEM).
over operations, amongst others.
Enabling electric vehicle component manufacturing Demand for electric buses will likely pick up with the
completion and implementation of more national
Electric vehicles powered by lithium-ion batteries development projects to improve public transport
(LIBs) are fast gaining traction among car buyers and mobility in urban areas. There is also international
due to their fuel savings. Electric vehicle component demand for proven technology for hot and humid
manufacturing in Malaysia commenced with the climates like Malaysia’s. Spin-off benefits to local
LIB manufacturing project, led by the Malaysia vendors will uplift domestic manufacturing industry,
Automotive Institute (MAI), under the Economic especially in the E&E sector. At present, the nature of
and Technical Collaboration (ECOTECH) of the the investment, which is capital-intensive, continues
Malaysia-Australia Free Trade Agreement (MAFTA) to be the biggest obstacle to the advancement of
in 2013. The first goal of this project was to acquire this initiative. As such, more pilot projects should be
Malaysian IP in LIB manufacturing as a commercial in place to augment public awareness and market
platform for a Malaysian manufacturer. The target demand for this platform.
by 2020 is to have at least one local manufacturer
producing LIBs for domestic and export markets. Transforming the E&E sector through
At present, battery material is produced on a pilot nanotechnology
scale to support limited manufacturing of 18650-
type LIBs. Performance and cycle tests have also Nanotechnology plays an important role in
been conducted on these LIBs. Malaysia’s Industry 4.0 journey as the global
market for nano-materials and nanotech-based
products is expected to reach US$3 trillion
“Spin-off benefits from the demand

for electric buses will uplift the
by 2020. Hence, Malaysia is positioning local
entrepreneurs and companies to capture a
significant market share.
domestic manufacturing industry,
especially in the E&E sector.
” This initiative is supported by NanoMalaysia
Berhad’s nanotechnology commercialisation
programmes, namely the National Graphene
Market development in Europe, Japan and China Action Plan 2020 (NGAP2020) and iNanovation.
have presented unique opportunities for Malaysia. Both NGAP2020 and iNanovation help introduce
These countries have announced their intention to companies to the adoption of commercial
shift from conventional mobility options to green graphene and nanotechnology products for
energy alternatives, including electric mobility. These their E&E applications. NanoMalaysia also leads
announcements have been supported by several Advanced Materials Industrialisation, an open
automakers which have pledged to go fully electric innovation platform under MITI designed to
in the near future. Malaysia stands to gain from these enhance E&E manufacturing in Malaysia.
developments due to its developing expertise in
battery technology as well as its strategic location. Targets under this initiative for 2017 comprise
of two product commercialisations utilising
MAI also initiated the electric bus manufacturing commercial graphene and nanotechnology for
project under ECOTECH in 2013. The first goal of E&E applications. The first of these projects, the
this project was to acquire Malaysian IP in prototype- backup-storage graphene-based quantum cells
ready electric buses as a platform for a Malaysian (BSGQC) project, was conceived to support MNA
commercial bus assembler. The target by 2020 is Research, a specialist local start-up that received
to have at least one local complete knocked-down catalytic funding from NanoMalaysia’s NGAP2020
(CKD) manufacturer producing electric buses for to scale up its graphene-infused energy-storage
domestic and export markets with supporting management system from product development
infrastructure in place. A prototype electric bus stage and penetrate the market. MNA Research
has been delivered as a platform for commercial has successfully completed pilot production and
manufacturing development. Knowledge-transfer testing of the system and has acquired sales
activities were undertaken that involved local orders from various local companies specialising
engineers, while prospective investors were engaged in renewable energy.
and a business plan evaluation is in progress.
Backup-Storage Graphene-Based Quantum Cells (BSGQC)
BSGQC are potential replacement for valve-regulated lead-acid (VRLA) batteries due to their efficient
energy-storage management system that can serve well in sustainable renewable energy generation,
particularly for solar and telecommunication tower applications. BSGQC have the added advantage of
withstanding extreme temperatures besides having environmentally friendly properties.
Smart
Battery battery Battery Graphene
cells module management supercapacitor
pack / system and Design of
battery firmware BSGQC battery
cartridge controller (100Ah)
Structure of backup-storage graphene-based quantum cells (BSGQC).
The second project aims to complete the product development of LED heat sinks using copper-carbon
nanotube (Cu-CNT) substrates and license the technology from Universiti Teknologi PETRONAS (UTP) to
HANS LEDLite using catalytic funding provided under iNanovation, thus bringing the product to market.
Pilot production has been completed and the technology licensing of the Cu-CNT substrates was signed in
2017 between UTP, NanoMalaysia and HANS LEDLite, enabling the first batch of substrates to be brought
into the market.
Copper-Carbon Nanotube (Cu-CNT) Substrates
Cu-CNT-based LEDs possess higher thermal conductivity than aluminium-based LEDs, which are the
current dominant variant in the market. This technology will help HANS LEDLite to differentiate themselves
in the global LED market through higher performance, better reliability and longer lifespan products.
Efficient Thermal
Cost Savings Management System
Nanocomposite enables efficient thermal
to Consumers management system and higher product efficacy.
Longer lifetime of electric
and electronic products.
Substrate for High
Power Electronics
Superior Heat Increase product performance at lower cost.
Removal
Heat dissipates more rapidly
through nanocomposites
Reduced Power
than conventional metallic Consumption
substrates. Savings to household application.
Benefits of copper-carbon nanotube (Cu-CNT) substrates.

The successful commercialisation of these two Unlike traditional training centres that focus on
products pushes Malaysia’s capabilities in energy theory and provide limited hands-on exposure,
storage for long-lasting high-performance LEDs in the MIMOS-NCIA ACDC offers enhanced facilities
the market. However, both projects are hampered for experiential learning in high-technology
by limited capacity, administrative difficulties in equipment maintenance and processes. In fact,
securing projects and marketing. The companies 80% of the facility’s training in industrial-grade
must also further optimise performance and costs wafer fabrication comprises of practical learning
to ensure their products meet expectations while and the remaining 20% focuses on the theoretical
providing a reasonable and sustainable profit margin. frameworks, enabling accelerated development of
skill sets that supports movement up the E&E value
To mitigate these issues, NanoMalaysia provides a chain, and complements technical and vocational
market validation platform to run proof-of-value education and training (TVET) and Malaysia Board
assessments for these products in a real market of Technologists (MBOT) programmes.
situation. It also provides NANOVerify nanotech-
based product certification programme to boost
customer confidence. As these products are newly
introduced to the market, continued partnership with
“430 engineers and students have
undergone skill enhancement at
”
NanoMalaysia will provide these companies access
to future funding for new product development the MIMOS-NCIA ACDC.
or the scaling up thereof, technical and business
consultation services, IP rights consultation and
However, continual upgrade of the centre is
services, and opportunities for wider market access.
required to keep pace with global technological
advancements, including alignment with Industry
4.0 practices. As such, more strategic engagements
Developing the E&E Talent Pool could be done with the Ministry of Higher Education
(MOHE) to make this centre an integral part of
microelectronics and semiconductor education,
thereby accelerating students’ interest and
development in the required fields to support
Forging advanced competency in wafer fabrication industry needs.
The MIMOS-NCIA Advanced Competency Building capacity in test, measurement and

Development Centre (MIMOS-NCIA ACDC) is a automation
human capital development centre serving the
field of wafer fabrication and equipment. Jointly The NI-AIN Capacity Building Programme serves as
established by MIMOS and NCIA, it leverages a training hub for engineers and university students
on MIMOS’ facilities and semiconductor training to obtain and upgrade their proficiency in the
curriculum co-developed with SFAM to offer end- LabVIEW system design platform. The programme
to-end, high-tech, industry-driven training to foster also offers guidance for engineers to complete
the hands-on experience needed to produce highly their automation projects, training for participants
skilled workers for the E&E sector. in advanced data transfer method with data loss
prevention technology, and training for trainers to
Since its launch in July 2017, 430 engineers and advance their knowledge in the field of test and
students have undergone skill enhancement at measurement as well as automation. As a result,
the centre. MIMOS has also trained more than engineers can produce better solutions and apply
2,400 skilled workers in the E&E sector in the last new industry technology such as IoT, automation
decade with its provision of high-impact training and system integration. In 2017, the programme has
to members of the SFAM, MNCs, SMEs, research upskilled 130 local talents.
institutions, lecturers and university students.
Transformative Enablers 118 collaborative R&D projects, amounting to a

total project value of RM125.0 million, with industry
contributing 61% to this total. Of the 118 projects
approved, 41 have been completed since its inception
the end of 2014, of which 10 have been translated
Supporting collaborative research and into new products and processes that generate new
development revenues and savings from productivity in design
and manufacturing processes.
Collaborative Research in Engineering, Science &
Technology (CREST) is an industry-led catalyst for The revenue and savings to be gained in five years
the growth of Malaysia’s E&E sector by promoting from these new products and productivity tools are
industry, academia and government collaboration estimated at RM60.2 million – a remarkable return,
in R&D, talent development and commercialisation, given CREST’s funding of just RM9.1 million for these
targeting six focus clusters as defined by industry projects. These R&D collaborations also enabled 57
stakeholders, namely: students to complete their postgraduate studies,
and 13 IP disclosures with seven patents to be filed.
1. Optoelectronics, LED and SSL;
2. Embedded systems and IoT; Two new business spillover opportunities were
3. IC design, test and validation; also created from the projects. USM School of
4. Advanced materials and packaging; Physics’ Thermal Materials Research Lab, led by Dr.
5. World-class electronic manufacturing; Mutharasu Devarajan, partners with local SMEs in
6. Drones, driverless and autonomous vehicles. developing thermal interface engineering design
solutions for LED and semiconductor component
Since CREST commenced operations in June 2012, manufacturers. Also, USM School of Mechanical
a total of 46 local companies, 17 MNCs and 20 Engineering’s ‘TheVibrationLab’, led by Professor
public and private universities have undertaken Mohd Zaidi Ripin, provides acoustic and vibrational
The official launch of MIMOS-NCIA Advanced Competency Development Centre on 18 July 2017 was graced by Ahmad Rizan
Ibrahim, Datuk Wira Dr. Abu Bakar Mohamad Diah and Datuk Redza Rafiq Abdul Razak.
The Development of the E&E Industry stakeholders such as the American Malaysian
in Malaysia Chamber of Commerce (AMCHAM), USAINS – the
corporate arm of Universiti Sains Malaysia (USM),
The electrical and electronics (E&E) industry has Talent Corporation Malaysia Berhad (TalentCorp),
become a major part of Malaysia’s manufacturing the Ministry of Higher Education (MOHE), and the
sector and is a significant supporter of the country’s Semiconductor Fabrication Association of Malaysia
export and employment levels. Due to its multiplier (SFAM),” Azman elaborated.
effects and extensive linkages with other sub-
sectors, the industry has been identified as a Notably, the Industry-Academia Collaboration (IAC),
catalytic subsector under the 11th Malaysia Plan to which was launched in 2015, has seen strategic
re-energise the nation’s domestic manufacturing collaborations formed between higher-learning
sector. institutions such as USM, Universiti Malaya (UM) and
Universiti Teknologi Malaysia (UTM) with companies
In this regard, the Malaysian Investment such as Intel, First Solar, National Instruments,
Development Authority (MIDA) is working to Motorola and OSRAM. MIDA is also engaging with
promote the growth of the semiconductor, solar, the Ministry of Finance (MOF), Ministry of Science,
light-emitting diode (LED), test and measurement, Technology and Innovation (MOSTI), MIMOS Berhad
as well as the automation industries. This effort and related companies for the establishment of the
is also being undertaken extensively on a more Manufacturing Innovation Centre (MIC). MIDA is
regional scale in the Northern Corridor Economic also cooperating with the Malaysia Digital Economy
Region (NCER), led by the Northern Corridor Corporation (MDEC) and Electrical and Electronics
Implementation Authority (NCIA). Strategic Council (EESC) to develop the Digital
Internet of Things (IoT) Marketplace, an initiative led
Collaborations are key by Silterra. Meanwhile, the agency has also aligned
efforts in the export chapter through the National
Dato’ Azman Mahmud, Chief Executive Officer Exports Council (NEC) and productivity chapter
of MIDA, states that collaborations between the through the E&E Productivity Nexus (EEPN).
public sector, industry and academia are crucial
to address the industry’s talent demands whilst Datuk Redza Rafiq Abdul Razak, Chief Executive
increasing the competitiveness of existing workers. Officer of NCIA concurred with MIDA’s stance
“MIDA has undertaken partnerships with various on collaborations, saying that NCIA upholds
Datuk Redza Rafiq Abdul Razak, Chief Executive Officer of Dato’ Azman Mahmud, Chief Executive Officer of
Northern Corridor Implementation Authority. Malaysian Investment Development Authority.
the “quadruple-helix model” that involves the 6. facilitated the creation of a RM30.5 million LED
government, private sector players, academia and test and certification centre by QAV;
the community in all of its development initiatives. 7. collaborated with Keysight Technologies to
“We leverage on private sector participation in line build a test and measurement hub; and
with the Government’s stand to position them as the 8. collaborated with TF-AMD Microelectronics to
driver of economic growth, with the government grow automation equipment manufacturing
playing the role of enabler and facilitator,” said with 12 local vendors.
Redza, adding that engagements with members of
the community and academia are crucial to secure These have culminated in OSRAM recently decided
their support and insights in order to refine the to set up a RM4.9 billion facility in KHTP.
delivery of NCIA’s development initiatives.
However, the abovementioned achievements did
Results from collaborations positive so far not come easy. “Financial constraints prevented us
from giving out more incentives to companies to
“Our collaborations with the NEC and EEPN have implement Industry 4.0 and smart manufacturing
resulted in incentives for Industry 4.0 and smart initiatives,” explained Azman. This made it difficult
manufacturing, as announced in Budget 2018, to raise the low rate of innovation in the country
including an Accelerated Capital Allowance of and sustain the right talent pool to support the
200% on the first RM10 million qualifying capital E&E industry.
expenditure incurred in the years of assessment
2018 to 2020 for manufacturing and manufacturing- Collaboration is, once again, key in addressing
related services sectors,” Azman said. these challenges. To overcome funding constraints,
MIDA is also doubling its efforts to connect local
“The Capital Allowance, meanwhile, is for companies to multinational companies (MNCs)
the purchase of ICT equipment and software to achieve integration into their supply chains
with effect from year of assessment 2017, and through adopting and producing new technologies,
expenditure incurred on the development of processes and products. To expand the talent
customised software with effect from year of pipeline, MIDA is engaging with policymakers,
assessment 2018. There is also the extension of academia, and other stakeholders through initiatives
the Automation Accelerated Capital Allowance, such as career fairs and the Industry Working
which was introduced in 2015 to year of assessment Group, which serves to strengthen and develop
2020 for labour-intensive industries such as rubber, syllabi specific to emerging industry requirements.
plastic, wood and textiles,” he continued.
Up north, Redza pointed to the establishment of
NCIA’s accomplishments are similarly illustrious. It the Kedah Science and Technology Park (KSTP)
has, amongst others: to help disseminate knowledge and information on
technological advancements and get more SMEs
1. s upported a wafer chip producer’s capacity on board with Industry 4.0. KSTP would drive
expansion initiative, which also benefited the region’s economy through applied R&D by
SMEs providing ancillary services such as parts providing a platform to develop ground-breaking
cleaning, supply and installation of equipment; technologies via its Global Research Centre and
2. set up a semiconductor equipment training Modern Industrial Park.
centre with MIMOS;
3. established a waste treatment processing Certainly, the outlook for the industry looks bright,
facility to support industries in Kulim Hi-Tech especially with MIDA and NCIA continuing to work
Park (KHTP); closely with the relevant stakeholders to promote
4. developed assembly and test systems using productivity and innovation whilst familiarising local
advanced packaging technology; companies with emerging technological trends.
5. supported the growth of substrate
manufacturers and related industries;
Advancing Technology Through Building

a Test and Measurement Hub
Test and measurement is essential to the electrical capabilities to be able to design and build their own
and electronics (E&E) industry as its technologies products. Two shared services facilities labs were
in smart sensors, precision engineering, intelligent established within Keysight to incubate CEEDTec
instruments, data acquisition and signal processing and Myreka’s design and development expertise in
are the foundation for automation; which is the the areas of precision power source solutions and
crucial enabler to achieve technological advancement audio signal analysis solutions respectively.
in Industry 4.0 and smart manufacturing.
On the other hand, NI had partnered up with
Hence, under the NKEA E&E, building a test and Technology Park Malaysia (TPM) and SME
measurement hub was pinnacle to the sectors’ Corporation Malaysia (SME Corp) to launch one
progress. Two companies participated in realising of NI’s largest public-private partnership initiatives
this requirement, namely; Keysight Technologies in 2013, called the National Instruments Academy
(Keysight), which is a leading electronic test and and Innovation Nucleus (NI-AIN). NI-AIN is a shared
measurement company and National Instruments services lab facility, which comprises foundation
(NI), a provider of platform-based systems which labs for training, as well as vertical application
enables engineers and scientists to solve complex labs for creating test, measurement and control
engineering problems. systems for various industry applications. It is
designed to be an small and medium enterprises
In collaboration with the Northern Corridor (SME) incubator centre for high-value design and
Implementation Authority (NCIA), Keysight engineering services.
launched a programme with two Malaysian design
partners, CEEDTec and Myreka. The programme was “Working alongside Keysight, CEEDTec and Myreka
designed to expand their research & development now have full scale design-to-manufacturing
(R&D) and original design manufacturers (ODM) capabilities, benefitting from the technology
Chandran Nair, Vice President, Sales and Marketing for Chan Keng Cheong, Keysight’s Vice President of Global
Asia-Pacific, National Instruments. Procurement and Materials.
collaborations, proximity to Keysight’s global Keysight’s initiative, in collaboration with NCIA, has
standards and access to market information. This been a catalyst for CEEDTec and Myreka to develop
has subsequently allowed them to compete on an new and differentiated technologies through R&D,
international scale and move up the value chain,” as well as showcase world-class innovations from
said Tay Eng Su, Keysight’s Director of Customer Malaysia. Moving forward, Keysight’s strategy with
Experience, Quality and Compliance. both CEEDTec and Myreka will continue to provide
guidance in new technologies and markets to
Hing Wai Toong, NI Area Sales Manager, states address future challenges and meet the complex
that the NI-AIN provides a shared technology demands of the ever-increasingly competitive
infrastructure that SMEs have access to for business environment.
system development and integrations. “Our human
capital development centre also provides training, Chandran Nair, Vice President for Asia-Pacific of NI,
certification and skills development programmes says that the Malaysian Government is instrumental
in science, technology and innovation. These in encouraging local companies to invest in
complement our SME incubator center which hosts technology to streamline their work processes.
local and overseas experts who provide technical “This encourages the use of automated test and
consultation in engineering projects, especially in measurement systems to meet productivity goals
test, measurement and control,” explained Hing. and test requirements for complex high-technology
devices,” Nair said. “By collaborating with NI, the
“Through participation in this programme with Government has fulfilled the industry’s needs in
Keysight, CEEDTec has developed advanced R&D and collaboration, and also continues to help
capabilities on sophisticated measurement upskill the current E&E workforce and facilitate the
grade equipment design and manufacturing to creation of new talent through skills-based learning
enable them to become a full original equipment for university students and fresh graduates.”
maufacturer company in the coming years with
a brand and channel of their own. Meanwhile, The test and measurement segment will see
Myreka has accumulated 15 intellectual properties tremendous growth going forward. Technological
and grown its technological capabilities to advancements, such as Industrial Internet of Things
extend its design solutions to other multinational (IIoT), autonomous vehicles and 5G wireless
corporations,” said Chan Keng Cheong, Keysight’s systems, will result in overwhelming demand for
Vice President of Global Procurement and Materials. next-generation test and measurement systems.
Companies in this field will continue to be at the
The rapid expansion of CEEDTec and Myreka has forefront, facilitating technological advancements
also spawned a second tier of local ecosystem and helping bring cutting-edge products to market
partners who are providing advanced technology quicker and at lower cost.
support in the areas of printed circuit board
assembly, precision metal works and tooling and
high-density transformers. All in all, this initiative
has successfully grown seven local SMEs and
created over 200 jobs.
Additionally, NI’s Hing identified the low awareness

of NI-AIN’s benefits as a challenge to be overcome.
“NI has always been committed to supporting the
SME ecosystem. As such, encouraging SMEs to
access the facility will be an ongoing commitment,”
says Hing. To do this, NI has been working closely
with government agencies to roll out promotional
and engagement programmes targeted at SMEs.
Creating Local Solid-state Lighting

Champions
Solid-state lighting (SSL) products like light-

emitting diodes (LEDs) have been receiving
considerable attention due to the advantages they
offer over conventional lighting technologies, such
as their extended lifespans and reduced energy
consumption.
To push Malaysia to the forefront of the production

of these advanced lighting solutions, SME
Corporation Malaysia (SME Corp) has been tasked
Primelux Energy Sdn Bhd.
to oversee 10 companies in the Malaysian LED
Consortium (MLC) through its capacity-building
programme, which will assist them in the areas of
development efforts have gained traction. “With
certification and regulation support, developing a
our funding assistance, these companies are better
technology roadmap, supply chain management,
able to research and develop innovative products
marketing strategy implementation, branding,
to meet global market demands,” she said. “A
and partner search. The programme moved into
number of them have made a name for themselves
its second phase in 2014, supporting the MLC in
in countries like India, Australia, Vietnam, Indonesia
achieving sales of RM84.2 million for the year.
and Thailand, with their products used in stadiums,
public transportation systems and exhibition halls.”
Datuk Dr. Hafsah Hashim, Chief Executive Officer
of SME Corp describes the programme as one
Indeed, Hee Wee Leng, Co-Founder and Chief
of “total immersion”, where the corporation is
Executive Officer of Avialite reported that
wholly involved with the participating small and
the company has been receiving orders from
medium enterprises (SMEs) from end-to-end of
telecommunications companies in Indonesia, the
the value creation chain. “SME Corp offers two
Philippines and Myanmar for maintenance and new
forms of assistance: the first comes in the form
tower project requirements. “This supplements
of funding for the development or improvement
our domestic order book, which comprises such
of commercially viable SSL products, whilst the
projects as the supply and installation of lamps
second takes the form of matching grants for
nationwide for edotco Group Sdn Bhd worth RM8
the purchase or improvement of manufacturing
million for five years, and a three-year nationwide
equipment, testing, processes or monitoring
contract from Telekom Malaysia Berhad worth RM16
techniques, to obtain international certifications,”
million,” Hee said. Avialite’s quality offerings also
she elaborated.
garnered it awards such as the SME Corp Best
Innovation Award in Manufacturing (2014), the Best
Two such companies are beneficiaries of this
Innovation Award from The Electrical & Electronics
programme, i.e. Avialite Sdn Bhd and Primelux
Association of Malaysia (2016), and the Enterprise
Energy Sdn Bhd. Avialite supplies aviation
50 Award from SME Corp and Deloitte (2017).
obstruction warning lights to warn aircraft of tall
obstacle hazards in low-visibility conditions, while
Similarly, Aimi Syairah Md Zin, Deputy General
Primelux Energy supplies outdoor lighting and lux,
Manager of Primelux Energy remarked that the
as well as 3D photometric design.
company’s enhanced capacity enables it to work
with international institutions like LUX-TSI, from
Programme taking industry to greater heights
which it receives world-class consultancy, testing
and certification services as it undertakes design
Since the programme’s inception, Hafsah observed
and manufacturing work for LED street lanterns.
that the consortium members’ research and
“We also engage with Oxford University Innovation
to procure research and training assistance for our In addition, SMEs need to align themselves to
business strategy development,” Aimi shared, adding Industry 4.0 and scale up their adoption of
that the company is primed to receive the prestigious the latest technological advances to better
CE marking that indicates conformity with health, compete in the global marketplace. She also
safety, and environmental protection standards for believes that while our local SMEs are creative
products sold within the European Economic Area. and keen to undertake new LED designs, they
should protect their intellectual property (IP)
With the push for innovation also comes improved via IP registrations and obtain international
remuneration: skilled workers are able to draw over certifications for their products to attain a
RM3,000 per month, whilst management-level premium advantage.
employees can command in excess of RM5,000,
Hafsah explained. Worker productivity levels and job Outlook is bright
opportunities have increased too, alongside sales in
domestic and overseas markets. Hafsah sees plenty of potential in SSL solutions
overseas, as Europe has banned all fluorescent
These positive outcomes notwithstanding, Hafsah lighting, with Australia following suit. Hee
believes that several areas for improvement exist. added that LED lighting is gaining acceptance
“As our SMEs increasingly establish their footprint in Malaysia, making this a sunrise industry.
overseas, I would like to see more MNCs collaborating “LED is the future of lighting. Its performance
with them to give them greater impetus to be in terms of light output per unit of energy and
progressive in their outlook and world-class in their lifespan will only get better,” Hee opined.
systems and processes.”
Avialite Sdn Bhd.

engineering design services to electronic product In 2017, the number of eco-design applications
manufacturers and test validation equipment undertaken by companies utilising EIDC’s shared
developers. facilities stood at 24, bringing the total number
to 68 since 2015. Other benefits brought about
These projects yield many benefits to the local by the centre include greater localisation of
E&E field, including supporting SMEs in developing components, market expansion for businesses,
new technologies, nurturing start-ups in bringing reduction of processing time, waste and cost, as
innovative products to market, improving design and well as environmental sustainability.
manufacturing cycle times to increase productivity,
developing relevant postgraduate talents and However, EIDC is faced with aging facilities, high
technopreneurs, as well as enhancing the ability of annual hardware and software maintenance
local universities to support the industry in research, expenditure, and low uptake of the facilities and
engineering and design activities. eco-industrial design services. SMEs also possess
limited knowledge and tools for product design,
“24
development and testing. Thus, they instead focus
eco-design applications were on low-level product development and R&D. The
undertaken at EIDC’s shared centre is also highly dependent on imported
”
materials for 3D printing, while the low readiness
facilities in 2017. of SMEs to adopt Industry 4.0 presents an overall
hindrance to continuous growth.
However, more local companies, both SMEs
and large local enterprises (LLEs), need to In mitigating the challenges above, SIRIM
collaborate in commercialising research outputs is establishing the Additive Manufacturing
to market. There is also a lack of self-funding Demonstration Centre (AMDC) at EIDC to sensitise
and venture funding in developing technologies SMEs in developing and producing more value-
and solutions that are new to market. Thus, added products. EIDC will continue to focus on
pre-seed and seed co-funding schemes should its targeted sectors, especially E&E, M&E, medical
be created to support the validation of new devices and aerospace, in the area of additive
technologies to market. Government funding manufacturing technology advancement. In
agencies should also reallocate funds to the addition, the centre aims to create a conducive
commercialisation of new technologies until the manufacturing system that will facilitate the
minimum viable product (MVP) stage to lower uptake of additive manufacturing technology
technological risk. among SMEs in supporting the Industry 4.0
implementation in Malaysia.
Promoting eco-industrial engineering design
Complementing the work of CREST is the SIRIM

Eco-Industrial Design Centre (EIDC), which was
set up to assist SMEs to move up the value chain
by providing affordable services in product
conceptualisation and visualisation, 3D design
and modelling, environmental and engineering
analysis, as well as rapid prototyping. EIDC
creates the required excellence in the field of
industrial design that combines eco-innovation
elements to minimise environmental impact while
ensuring aesthetics, ergonomics and usability
of products. The facilities at EIDC has also been
strengthened to comply with the Restriction of Ir. Dr. Mohamad Jamil Sulaiman, Datuk Seri Panglima
Hazardous Substances (RoHS) Directive. Wilfred Madius Tangau and Professor Ir. Dr. Ahmad Fadzil
Mohamad Hani visited SIRIM Industrial Design Centre,
Bukit Jalil, Kuala Lumpur.
MOving Forward
The Government will continue driving the development of the E&E sector by allocating targeted incentives and
funding to promote the adoption of Industry 4.0, in line with its commitment to reduce Malaysia’s dependency on
low-skilled foreign workers in the manufacturing sector. The adoption of Industry 4.0 in this context will increase
efficiency and productivity, in tandem with global trends.
Autonomous Autonomous, flexible and cooperative robots interact with one another and work safely side
Robots by side with humans and learn from them
Mirror physical world in a virtual model, which can simulate machines, products and humans,
Simulation
and allow for testing and optimisation of machine settings before the physical changeover
System Universal data integration of companies, departments and functions to establish cohesive
Integration capabilities and enable truly automated value chains
Industrial Internet Devices enriched with embedded computing and connected using standard technologies
of Things allow field services to communicate and interact with one another and centralised controllers
The need to protect critical industrial systems and manufacturing lines, which have increased
Cyber Security
connectivity and use of standard communications protocols, from cyber security threats
Data sharing across sites and company boundaries to increase machine data and
Cloud Computing
functionality and enable more data-driven services for production systems
Additive High performance and decentralised systems to produce of small batches of customised
Manufacturing products that offer manufacturing advantages, such as complex and lightweight designs
Augmented and Provide real-time information to improve decision making and work procedures, train plant
Virtual Reality personnel to handle emergencies, interact with machines and maintenance instructions
Big Data Collection and comprehensive evaluation of data from different sources to support real-time
Analytics decision making
Nine advances in technologies which form the foundation of Industry 4.0.
Industry 4.0’s impact is manyfold – it will transform the design process, manufacturing process, operation, service
of products and production system, whilst the increased connectivity and interaction among parts, machines
and humans will speed up production system by as much as 30% and improve efficiency level by 25%, elevating
mass customisation to new levels. This enables faster, more flexible and efficient processes to produce higher-
quality goods at reduced costs.
The Government has formulated the National Industry 4.0 Blueprint, which is led by MITI in close collaboration
with MOSTI, MOHE, Ministry of Human Resource (MOHR), Ministry of Finance (MOF), Ministry of Communications
and Multimedia (KKMM) and the Economic Planning Unit (EPU), to spearhead the development of Industry 4.0
strategies focusing on manufacturing and manufacturing-related services, with input from stakeholders within
and outside of the industry. The National Industry 4.0 Blueprint will be tabled to the Cabinet in the first quarter of
2018. MIDA is also expected to complete a study titled “Future of Manufacturing: Industry 3+2” in the first quarter
of 2018, covering five catalytic and high-potential growth industries sub-sectors; namely E&E, M&E, chemicals,
aerospace and medical device.
In the immediate term, the Government aims to promote investments from high-technology companies to
undertake advanced R&D activities in Malaysia. Plans are also afoot to develop upskilling programmes to train
Malaysian engineers to undertake R&D and IC design activities to fulfil the industry’s demand for R&D personnel.
MNCs will be encouraged to groom start-ups through R&D collaborations, local outsourcing and commercialisation
support, whilst collaborations are fostered between MNCs and local universities to conduct R&D activities, increase
commercialisation rate and align academic syllabi with industry needs.
BUSINESS SERVICEs
Establishing Malaysia’s
Niche in the Global
Business Services Industry

Minister of International Trade and Industry
Malaysia continues to retain its position as a for the past 14 consecutive years since 2004. On
competitive location for business services globally. top of that, Malaysia remains among the top 25
This year, the Business Services sector secured countries in the world in terms of ease of doing
RM41.1 billion in investments and recorded a GNI business which reflects continuous effort by the
of RM64 billion, which puts the NKEA on track Government to make Malaysia as an attractive
to achieve the overall 2020 GNI target of RM78.7 business destination.
billion. The overall investments comprised of
contributions from shared services and outsourcing
(SSO), green technology and aerospace projects.
The local global business services sector is expected
to see a compounded annual growth rate (CAGR)
of 10%-15% for the next three years.
The aerospace sector has emerged as a key engine

of growth in the business services sector. It has
created over 21,000 job opportunities since the
inception of the NKEA and achieved significant
expansion in 2017 with more than 200 small and
medium enterprises (SMEs) now involved in the
aerospace industry. Malaysia has also positioned
itself as a critical supplier of aircraft structural
components. For instance, UMW Aerospace is the
first Malaysian company to be a tier-1 supplier to
Rolls-Royce, with value of contract worth RM830
million as of 2017.
GBS Iskandar is also poised to strengthen Malaysia’s

competitive ability to capture a larger share of the
growing global business services market. To date,
GBS Iskandar has created over 2,800 professional
jobs while successfully attracting over RM1.4 billion
(US$315 million) in committed investments.
Additionally, Malaysia has retained its third ranking

in AT Kearney’s Global Services Location Index
Aerospace Industry Continues the operationalisation of UMW Aerospace’s fan

case manufacturing facility in Serendah, Selangor.
to Soar Once all phases of the project are complete, the
facility will be able to produce up to 250 units of
fan cases worth RM770 million annually. The fan
cases will be used as part of Rolls Royce’s Trent
1000 engine for the B-787 Dreamliner passenger
The aerospace industry continued to surge aircraft, as well as the Trent 700 engines for the
forward in 2017, recording an annual revenue of Airbus A330 Neo. Malaysian aerospace players have
RM6.96 billion* and attracting RM600 million* in also developed to become suppliers of composite
investment. The total aerospace industry revenue and metallic aero structure components for Airbus
comprises revenue from three aerospace focus and Boeing. This is a testament to the technical
areas under this NKEA, namely SME manufacturing know-how and high-value manufacturing prowess
(RM17.2 million), Maintenance, Repair and Overhaul of local players.
(MRO) services (RM6.23 billion*), and pure-play
engineering services (RM125 million*). Overall,
current investments into the aerospace industry
stand at RM2.55 billion* against the 2020 target
“Overall, current investments into
the aerospace industry stand at
of RM1.9 billion.
RM2.55 billion* against the 2020
A noteworthy development within the aerospace
industry in 2017 was the appointment of Composites
target of RM1.9 billion.
”
Technology Research Malaysia (CTRM) Sdn Bhd as
a single-source supplier for the manufacture and Significant strides were also made in the MRO
supply of Airbus A350 fan cowls. CTRM has thus far sector of the industry in the past year. One of the
invested RM93.4 million towards the construction of sector’s key players, Sepang Aircraft Engineering
facilities which will boost its capacity to meet future (SAE), officially opened its second hangar in 2017.
increase in demand of Airbus A320 and A350 The hangar covers 12,000 m2 and will boost SAE’s
aircraft parts. Moreover, Malaysia has positioned capacity to handle the Airbus A320 family and
itself as a producer of aero engine parts, following accommodate two aircrafts for major maintenance
Launch of the new Sepang Aircraft Engineering hangar.
*Figures projected by the National Aerospace Industry Coordinating Office (NAICO) as of Jan 2018.
checks at one time, thus complementing the

37,000 m2 first hangar which can accommodate
Moving Up the Outsourcing
six single-aisle aircraft or two widebody aircrafts.
It also features Malaysia’s first eco-friendly closed-
Value Chain
door dedicated paint bay, as well as state-of-the-
art workshops for the repair and overhaul of a
wide range of components used on Airbus aircraft,
including hydraulic and pneumatic systems. The shared services and outsourcing (SSO) sector,
also known as Global Business Services (GBS),
The Government has made it a priority to encourage continues to grow from strength to strength,
the development of a large and thriving aerospace with annual export revenue of RM3 billion* with
domain. It will also look to boost the capacity and investments of RM731 million*. However, to ensure
capabilities of local aerospace companies to ensure Malaysia’s continued competitiveness in GBS, the
they will be globally competitive. To this end, SME country must achieve its goal of transitioning from
Corporation Malaysia (SME Corp) has conducted being primarily a Business Process Outsourcing
programmes to nurture and raise the capacity of (BPO) player to a Knowledge Process Outsourcing
suitably qualified small and medium enterprises (KPO) hub.
(SMEs), helping to prepare them for success in
“Tocompetitiveness
the aerospace market. Some 20 SMEs have been
selected over the past two years to be part of ensure Malaysia’s continued
this grooming programme. The majority of these in GBS, the
companies have been successfully AS9100 certified
and have generated RM17.2million in revenue to date.
country must achieve its goal
of transitioning from being
The National Aerospace Industry Coordinating primarily a Business Process
Office (NAICO) has also continued to spearhead
the Government’s efforts to facilitate industry
Outsourcing (BPO) player to a
coordination and enhance partnerships. As part of Knowledge Process Outsourcing
these efforts, NAICO has strategically expanded its
global network and pursued closer collaborations
with aerospace industry bodies in two other
(KPO) hub.
”
emerging aerospace countries, Mexico and Morocco. In view of the goal to move further up the SSO
It has also conducted intelligence gathering activities value chain and transform Malaysia into a KPO hub,
across Asia and Europe. These efforts are expected the Government has placed significant emphasis on
to result in more opportunities for local companies the development of qualified talent to support the
to enter new markets while at the same time help SSO ecosystem, especially in terms of advanced
draw more foreign direct investment. and high-value activities. As such, the Malaysia
Digital Economy Corporation (MDEC) and Talent
NAICO has also led various talent-based initiatives Corporation Malaysia (TalentCorp) have together
to ensure a steady supply of qualified talent for the launched the Industry-Academia Collaboration
industry. The initiatives include the development for Global Business Services (IAC-GBS). Through
of a Critical Occupation List for aerospace in the IAC-GBS, universities, Government entities
collaboration with TalentCorp Malaysia. An and industries will collaborate to design and
Industry-Based Education Training (IBET) centre develop curricula for short courses and industrial
located at MARA Advanced Skills College (KKTM) training that are relevant for the KPO transition.
Masjid Tanah was also established as a result of a IAC-GBS is an innovative model that covers the
collaboration between CTRM, Aerospace Malaysia full spectrum of training and placement activities
Innovation Centre (AMIC) and Council of Trust from end-to-end. It involves creating awareness,
for the Bumiputera (MARA). The centre will offer providing internship and certification opportunities,
industry-based training programmes. implementing curriculum embedment, organising
*Figures projected by the Malaysia Digital Economy Corporation (MDEC) as of Jan 2018.
collaborations with industry stakeholders were also

carried out to develop a sustainable talent pool
for Iskandar Puteri, including the GBS Iskandar
Campus Connect initiative and the GBS Iskandar
Readiness Enhancement Dedicated Skilling
(REDS) programme, aimed at upskilling Malaysians
with skills required by GBS and assisting in job
placements.
A Client Engagement Programme has also been

formulated to increase client retention rates and
enhance the appeal and attractiveness of Iskandar
Puteri. The programme will feature community-
Official launching ceremony of Aegis in Iskandar Puteri.
centric activities such as sports tournaments and
knowledge-sharing activities.
industry-focused competitions and boot camps
as well as upskilling graduates. As of 2017, 21
employers and six higher learning institutions have Developing Data Centres
participated in programmes organised by IAC-GBS.
More than 300 participants have enrolled in IAC- in Malaysia
GBS programmes since 2015, of which roughly 70%
have been successfully placed in GBS companies.
Down south, the Iskandar Puteri city in Johor The Data Centre (DC) sector saw revenue of RM1.0
continues to develop as a GBS hub. It has seen billion* in 2017. The DC sector has received a boost
over RM1.6 billion in GBS-related investments and with the Government’s adoption of the “Cloud
over 3,000 jobs created in the sector to date. In First” Strategy into the national agenda, with
2017, it welcomed several new entrants such as implementation beginning with the public sector. The
Aegis, Courts, KPMG and Technopals, bringing in adoption of cloud technology will bring innovative
a total investment of RM447.7 million and creating public services to the rakyat without incurring high
1,397 new jobs. capital expenditure by investing in information
technology infrastructure such as data centres,
The MSC Malaysia Status was also awarded to two servers and storage.
office complexes located in Iskandar Puteri, namely
Medini 7 and Medini 9. This is a reflection of the Malaysia has also successfully attracted foreign
availability of world-class services, infrastructure investments such as Alibaba Cloud and the acquisition
and amenities in Iskandar, which aligns with the of CSF CX Sdn Bhd by Bridge Data Centres. Alibaba
goal for the entire Medini development to attain Cloud, the cloud computing arm of Alibaba Group,
‘smart city’ status. will support local SMEs and offer training programs
such as the Alibaba Cloud Certified Professional
In line with this, a new steering committee was set up (ACP) certification.
in 2016 to focus on administering the development
of the city as well as to ensure that Iskandar Puteri As part of Malaysia’s aspirations to be a pioneer in
stays on track to achieve the investment target technology investment policies, a Trusted Data Zone
of RM6.5 billion by 2020. To achieve this, the (TDZ) draft Bill is stated to be tabled in Parliament
committee will focus on accelerating the flow of in 2018. The TDZ is aimed at developing progressive
business services investments in Iskandar Puteri technology governance policies, specifically for
as well as put in place plans to buffer against data centres. It is expected that the TDZ will also
the challenging global economic climate. Several strengthen Malaysia’s stature as a DC hub.
*Figures projected by the Malaysia Digital Economy Corporation (MDEC) as of Jan 2018.
Navigating the ShipBuilding The eighth IGEM was held on 11 to 13 October

2017, attracting 34,868 global attendees and 320
and Ship Repair Industry participating companies from over 30 countries. A
total of RM1.6 billion in investments were secured
towards Growth during the event.
The shipbuilding and ship repair (SBSR) industry in

“Itgreen
is anticipated that by 2030,
businesses will contribute
Malaysia is developing at a steady rate, with total approximately 1.5% to the
exports of RM700 million in 2016, representing an nation’s GDP, or equivalent to
”
increase of 2.5% from 2015. In order to facilitate further
growth of the industry, a SBSR Advisory Panel was
RM60 billion.
established in 2017. The panel, led by the Malaysian
Investment Development Authority (MIDA) and Among key highlights at the exhibition was the
assisted by the Malaysian Industry-Government Group unveiling of the Green Technology Master Plan
for High Technology (MIGHT), is mandated to initiate (GTMP). The Master Plan outlines Malaysia’s green
and drive key projects to develop the SBSR industry. technology strategy to create a resource-efficient
and low-carbon footprint economy. It aims to boost
The Government launched the modernisation of the growth and development of Malaysia’s green
fishing vessels initiative in 2017, which is aimed at technology sector, with a target revenue of RM180
upgrading the vessels in the fishing industry from billion and creation of more than 200,000 green
wooden hulls to steel/fibreglass hulls to ensure jobs by 2030. It is anticipated that by 2030, green
robust standards regarding safety, hygiene and businesses will contribute approximately 1.5% to the
overall seaworthiness. Echoing this, the Department nation’s Gross Domestic Products (GDP), or equivalent
of Fisheries has devised the standards and design to RM60 billion, as compared to RM7.9 billion in 2013.
for the steel/fibreglass vessels, whereas financing The Master Plan also aims to achieve RM86.3 billion
schemes to support this initiative are offered by in total investment in the green technology sector.
MIDA and Agrobank to enable fishing industry
players to upgrade their vessels, in line with the Additionally, the GTMP outlines the Government’s
goal to modernise the local fishing industry. commitment to shift the country from mere
green technology adoption to green technology
production. The ultimate objective of the shift is
Leveraging Green Technology to cement Malaysia’s position as a forerunner in
the global green movement as part of the National
for a Sustainable Future Transformation 2050 (TN50) aspirations.
The green technology sector continues to advance,

generating RM6.1 billion in revenue and attracting
RM2.9 billion in investments in 2017. As the custodian
of green initiatives in the country, the Ministry of
Energy, Green Technology and Water (KeTTHA)
annually organises the International Greentech & Eco
Products Exhibition & Conference Malaysia (IGEM).
The event serves as a platform for Malaysian solution
providers and green energy businesses to tap into
the fast expanding ASEAN market by showcasing
the latest innovations to policy makers, Government
Launch of the Green Technology Master Plan at
organisations, investors and members of the mass
IGEM2017.
market under the IGEM brand.
Malaysia’s Aerospace Poised to Soar Shamsul Kamar Abu Samah, Head of NAICO, said
that the outlook for the Malaysian aerospace sector
The Malaysian aerospace industry has made impressive continues to be promising thanks to the expansion of
strides in becoming a regional aerospace hub. its two major airlines – AirAsia and Malaysia Airlines.
Especially when taking into consideration the fact
that Malaysia is now the single source supplier for “More aircrafts mean more engineering activities,”
Airbus A530 fan cowls; as well as manufacturing of said Shamsul. He added that Malaysia has to act
fan cases for the Trent 1000 and Trent 7000 Rolls fast to establish itself as a regional hub and tap
Royce engines. into the anticipated boom in aircraft delivery with
some 16,000 aircrafts expected to be delivered by
The growth and development of aerospace 2036 to the Asia Pacific region. Not only that, one
manufacturing stems in large part to efforts by the quarter of the 16,000 aircraft are expected to make
Government to develop the sector through the National their way to South East Asian customers.
Transformation Programme and ministry initiatives
such as the National Aerospace Industry Coordinating “We need to grab this opportunity,” he said. “We
Office (NAICO). The latter was established in August need to be fast as other countries in the region are
2015 to develop and enhance the aerospace industry, also looking to do this. This means that engagement
implement the Malaysian Aerospace Industry Blueprint with global players is very crucial.”
2030, coordinate and monitor aerospace industry
development programs, and be the referral point for To this end, NAICO has pushed hard on national
foreign and domestic investors. developmental activities. To sharpen the nation’s
Shamsul Kamar Abu Samah, Head of National Aerospace Industry Coordinating Office.
competitive edge and position the industry for the “We need to move into different ways of producing
future, NAICO along with its industry partners such parts and components,” he said. “Smart robots,
as Aerospace Malaysia Innovation Centre (AMIC) online automation and 3D printing needs to be
developed the National Research and Technology introduced to our shop floors. We need to do it
Roadmap to identify strategic research areas. The because in developed countries, they are looking
roadmap is expected to be launched in 2018. The into it. If we are not competitive enough, they
roadmap will chart the technological competency will pull out the activities that they previously
focus areas of the Malaysian ecosystem as well as outsourced. It is critical for us to understand this.”
direct university research, government assistance To address this challenge and assist the industry to
and technology acquisition. move into Industry 4.0, NAICO along with Ministry
of International Trade and Industry (MITI) are
As aerospace is also a highly-skilled and developing the National Industry 4.0 Blueprint.
knowledge-intensive industry, NAICO also worked The blueprint is expected to be launched in the
with the Council of Trust for the Bumiputera first quarter of 2018.
(MARA) and the Ministry of Higher Education
(MOHE) to develop the required aerospace Shamsul added that all elements of the Malaysian
related human resources the country needs. It aerospace ecosystem should work more closely
was also appointed by the Ministry of Human together and represent the country as one. He
Resources (MOHR) to lead the aerospace skills noted that Japan develops clusters of industries in
development framework. selected geographical regions and the companies
within the clusters are able to pool their resources
It also worked with SME Corporation Malaysia and strengths and submit a unified bid for projects
(SME Corp) to develop Malaysia’s aerospace SMEs, and tenders, increasing their chances of winning.
including SMEs that are not currently involved in
the aerospace sector but would like to venture “We need to strengthen the local ecosystem,
into it. NAICO is also involved in the development cluster our capabilities and offer better solutions
of infrastructure to support the growth of the to original equipment manufacturers (OEMs) and
aerospace industry. It worked closely with Malaysia Tier 1 companies,” he said. “This way they can see
Airports Holdings Berhad (MAHB) to promote the that a strong ecosystem is being built in Malaysia
development of the KLIA Aeropolis, and UMW to and this is the place that they need to be.”
develop the Aerospace Hard Metal Manufacturing
Park in Serendah, Selangor.
Shamsul noted that the National Transformation

Programme and its aerospace specific initiatives
also helped to boost Malaysia’s profile as a
regional Maintenance, Repair and Overhaul
(MRO) destination as well as develop a pool of
competitive SMEs. “The National Transformation
Programme through it various projects have
really assisted in our efforts to develop the local
aerospace ecosystem,” said Shamsul.
Additionally, Shamsul noted that the main

challenge facing the local industry is convincing
Malaysia companies to embark on Industry 4.0
to ensure the industry remains sustainable.
Johor SME Takes to the Skies automatic but competitive, and APE had to make a
presentation to SME Corp in order to be selected.
Aerospace Partners Engineering (APE) is a Johor-
based small and medium enterprise (SME) that During the program, APE was brought to the
makes parts for aircraft interior fit-out companies United Kingdom for a learning experience through
based in Singapore. Started in 2010 by a former immersion in the aerospace industry. There,
Malaysia Airlines employee, Jeffrey Lee, APE has program participants visited the Farnborough
managed to win significant contracts including Airshow as well as attended special industry
a deal in 2012 to fabricate parts eventually fitted sessions at Cranfield University. At Cranfield, APE
on Singapore Airlines’ Business Class seats. It and the other Malaysian SMEs were given a course
is currently capable of making some 2,000 on what it takes to be successful in the aerospace
different precision machined parts that are used business as well as how to drive the business.
in aircrafts all over the world including SilkAir,
Xiamen Airlines and Aeromexico. Back in Malaysia, the SMEs were introduced to
potential aerospace OEM customers operating
APE is also one of the graduates of the NKEA in the country such as Spirit AeroSystems and
Business Services which benefited from initiatives UMW. They were also given briefings by aerospace
to enhance the development of SMEs in the certification experts and met with Airbus
global aerospace manufacturing industry. Led representatives who outlined what was needed in
by SME Corporation Malaysia (SME Corp) as order to become a supplier to the global aviation
part of EPP8 - Developing SMEs in the Global manufacturer.
Aerospace Manufacturing Industry, SMEs are
placed in a year-long development program to Lee says that the NKEA also helped APE to connect
bring them up to speed with what is required to potential Tier-1 and Tier-2 customers and
to be a supplier to global aerospace original partners in Malaysia. It also served as a networking
equipment manufacturers (OEMs) and Tier-1 platform for SMEs to share experiences, skills and
companies. Although APE was invited to apply resources, which could help in submitting more
for admission to the program, admission was not competitive bids for contracts.
Computer numerical control (CNC) tooling machine.

As part of the program, APE also received a

RM500,000 productivity enhancement grant
from SME Corp which assisted in increasing APE’s
production capabilities.
“SME Corp held our hand and looked to see

where they could help in terms of information
and financial assistance,” said Lee.
The aerospace entrepreneur also noted that

National Transformation Programme initiatives
Additive manufacturing machine.
such as Asia Aerospace City and the Malaysian
Aerospace Industry Blueprint 2030 would help
draw in bigger aerospace OEMs which in turn “Additionally, while the Government has
would help boost the local industry and enhance encouraged more companies to adopt Industry
Malaysia’s competitiveness as an aerospace hub. 4.0 technologies and innovations to position
themselves for the future and become more
“Overall, the aerospace landscape has improved competitive, the exercise is a costly one that could
under the National Transformation Programme. run into the millions,” says Lee. He suggests that
We now know what it takes to build a complete the Government consider schemes that could
aerospace ecosystem in Malaysia,” says Lee. help lower the financial barrier for SMEs to adopt
Industry 4.0 technologies such as 3D printing.
For the future, APE has plans to expand its current
manufacturing capacity from 4,000 machining Lee also suggests that due to the speed at which
hours per month to 10,000 machining hours per the country’s competitors are moving, bureaucracy
month. It is also looking to expand its workforce could be minimised to further enhance Malaysia’s
from 30 employees to 100 employees in the next competitiveness. He adds that the Government
5 years. could also look into providing incentives for Tier-
1 and Tier-2 companies operating in Malaysia to
Lee also said that he wants the company to move work with SMEs to grow the overall industry, either
up the value chain and upgrade itself from its by helping with technology transfer or by taking
current Tier-2/Tier-3 status and become a Tier- up more Malaysian made content.
1 manufacturer. This would mean APE would
eventually own its own designs, do assembly and “We should partner more SMEs with Tier-1 and
kitting work and well as perform research and Tier-2 companies,” he says.
development.
“We want to move up the value chain and do work

that is at the higher end,” said Lee.
In terms of improving the operating environment

for aerospace SMEs, the APE founder says that
the Government could help lower the capital
expenditure requirements to move into Industry
4.0, speed up processing, as well as help connect
SMEs with Tier-1 companies. He also notes that
the fluctuations in foreign exchange rates and
rising costs may impact the Malaysian aerospace
sector’s regional competitiveness.
Ensuring a Greener Future for Malaysia approximately RM50 billion to the Malaysian economy
currently, to grow about 5% every year in terms of realised
Malaysians can look forward to a future that is cleaner, investments. The sector’s growth thus far has been
greener and more sustainable thanks to initiatives to reflected by developments in the area of green energy,
reduce carbon emissions, a better waste management for which Malaysia is one of the largest producers of
policies and a strong commitment by the Government solar panels in the world and is also home to among the
to develop the green technology sector under the NTP. highest numbers of green certified buildings in the world.
From the phasing out of conventional gas-guzzling The Secretary General explains that starting from 2018,
automobiles in favour of electric vehicles to the recycling budget allocations for the construction of new sewage
of wastewater for industrial use, the country has treatment plants will be removed and channelled towards
already mapped out where it wants to go in the Green wastewater recycling plants. This will enable a higher rate
Technology Master Plan Malaysia (GTMP). The GTMP, of recycling wastewater, which, in turn, will remove the
which was developed by the Ministry of Energy, Green need for any new dams in the country.
Technology and Water (Kementerian Tenaga, Teknologi
Hijau dan Air, KeTTHA), is a framework that facilitates Some RM5 billion in funds have also been approved for
the mainstreaming of green technology in the country, the Green Technology Financing Scheme 2.0 (GTFS
strengthening the role of green technology as well as 2.0), which is run by the Malaysian Green Technology
using it as a catalyst to drive sustainable growth. Corporation (GreenTech Malaysia). The allocated funds
will last up to the year 2022. GTFS aims to boost the
Among targets set out under the GTMP, include for new growth of green technology companies by assisting with
vehicles to be 100% electric and energy efficient, 15% of financing through soft loans.
waste water to be treated and for the number of green
certified buildings in the country to reach 1,750, all by Dato’ Seri Ir. Dr. Zaini says that all that remains is for
the year 2030. Malaysians to adopt a greener lifestyle and culture
which will stimulate demand for more green technology,
The hefty 200-page GTMP which was launched in October products and services.
2017, is a significant achievement for the country and will
further accelerate the expansion of the green technology Dr. Mohd Azman Zainul Abidin, Group CEO of GreenTech
sector which is already a growing presence in the country, Malaysia, concurs, saying that the world is downsizing
says Dato’ Seri Ir. Dr. Zaini Ujang, Secretary General of carbon footprints and Malaysians need to embrace this.
KeTTHA. He points out that green technology and policies Countries such as Sweden, for example, are establishing
cut across many Ministries and portfolios – from housing to and integrating their waste and water into the electricity
transport to the environment to energy - making it difficult supply grid, while India’s MRT system in Bangalore and
for many countries to come up with a consensus on how Hyderabad was built with its train stations utilising
to move forward and to commit to targets. renewable energy.
“When I was in Europe, people asked me: ‘How do you In line with this movement, RM7.05 billion has been
get everyone to agree on a single masterplan?’” says Dato’ approved as green investments from 319 projects to
Seri Ir. Dr. Zaini. “In some countries, they just agree on date to help Malaysia reduce its carbon footprint. “The
general carbon emission principles but not on the details, green economy is the way forward,” says Dr. Mohd
whereas in Malaysia, we go into six sectors and itemise Azman, adding that GreenTech Malaysia will heavily focus
the parameters and detail the ways to move forward.” on smart sustainable cities and low carbon mobility,
besides continuing the promotion of renewable energy
He credits the strong commitment from the top leadership and energy efficiency, sustainable waste, water and
in Government for the success in getting all Ministries to manufacturing processes.
work together on a common roadmap. “The YAB Prime
Minister is the driving force behind it,” he says, adding In terms of ways to enhance the development of the
that the YAB Prime Minister chairs the Malaysian Green green economy, Dr. Mohd Azman believes that green
Technology and Climate Change Council twice a year. initiatives should be supported by more legislation
which would empower greater levels of funding and
With the GTMP in place, Dato’ Seri Ir. Dr. Zaini expects the authority. This would enable the agency to carry out
local green economy, which according to him contributes green technology initiatives more effectively.
MOving Forward
NKEA Business Services has seen its fair share of ups and downs over the years. Technological advancements
and global economic realities have impacted initiatives that were initially charted out at the beginning of
the journey, necessitating changes to the NKEA initiatives along the way.
For example, the increasingly challenging global financial environment has led to large MRO companies
downsizing their MRO activities within Malaysia. In the data centre industry, the advancement of cloud
technology has forced industry players to adjust their data centre design principles accordingly, as
companies consolidated their hardware and floorspace requirements. Meanwhile, in the SBSR space, the
downward trend of the oil and gas market has had an adverse impact on shipbuilders as the demand for
Offshore Support Vessels (OSV) has declined.
Nevertheless, the initiatives under NKEA Business Services were continuously agile and innovative to
meet these challenges head on. The coordinated efforts of several agencies have led to increased SME
participation in the aerospace industry supply chain. Continuous efforts are also ongoing to attract global
data centre players and enhance the sector from a financial, regulatory and environmental perspective to
ensure that Malaysia is an attractive data centre location. Lastly, the SBSR industry has started diversifying
from the oil and gas sector, instead exploring other opportunities that show plenty of room to encourage
localisation of design and production such as the fisheries and tourism segment.
Moving forward, to continue the momentum of the industry’s development, the Government will take
proactive measures and work in tandem with the private sector to advance the development of the business
services industry. The capacity and capabilities of local industry players will need to be cultivated in line
with achieving the NTP goals and moving towards Industry 4.0.
COMMUNICATIONS CONTENT AND INFRASTRUCTURE
Realising a Better
Future through Content
and Connectivity
YB DATUK SERI PANGLIMA DR. MOHD SALLEH TUN SAID KERUAK

Minister of Communications and Multimedia
2017 was a banner year for the communications Parallel to this, Malaysia’s creative sectors have continued
content and infrastructure (CCI) sector, with the to flourish. The export value of creative content such as
NKEA contributing RM58.7 billion to GNI. Strong films, animation, games for both finished products and
progress was recorded in both the financial and social related services reached RM737.84 million by Q3 2017.
initiatives undertaken by the Government, especially
those under the Broadband for All programme. The Malaysia is also becoming an increasingly popular
Government is committed and remains on track to destination for international movie producers who have
double broadband speeds while maintaining the same responded well to the various initiatives introduced
price levels to improve the rakyat’s socio-economic through the Film in Malaysia Incentive (FIMI). Throughout
wellbeing, especially the bottom 40% of income the year, a slew of international productions have either
earners (B40). Affordable high-quality broadband selected Malaysia as a location to shoot their movies or
will enable the rakyat to leverage the digital platforms utilise our state-of-the-art studios, such as the Pinewood
to create additional income on a sustainable basis. Iskandar Malaysia Studios. The FIMI will, from time to
time, be enhanced to ensure Malaysia continues to
Communication and internet coverage in Malaysia attract high-quality investments from the entertainment
has improved with the completion of more than world and create jobs and opportunities for our local
800 upgraded and new telecommunication towers. practitioners across the creative industry value chain.
These initiatives, supplemented by the expansion and
improvement of 3G and Long-Term Evolution (LTE) As we seek to accelerate the adoption of high speed
wireless broadband coverage, have greatly bridged broadband, the Nationwide Fiberisation Plan (NFP)
the digital divide between urban and rural areas. I am is being developed to expand the country’s fixed
also happy to report that the LTE wireless broadband broadband infrastructure, covering about six million
coverage has increased to 77% in populated areas premises, of which two million premises are located in
nationwide. rural areas. This is to further improve coverage that began
with the High Speed Broadband (HSBB) project in 2008.
Another milestone this year has been the completion
of the 3,800-km national submarine cable project, The move to expand high-speed broadband nationwide
known as the Sistem Kabel Rakyat 1Malaysia (SKR1M), is crucial to ensure the country remains competitive
which started operations on 16 September 2017. The and Malaysians, including those living in rural areas,
completion of this project has enhanced connectivity participate and benefit fully from the digital economy.
links between Peninsular Malaysia with Sabah and With these strategic measures in place, Malaysia is
Sarawak, and lowered Internet traffic congestion well on its way to achieve its communications, creative
between the three regions. content and infrastructure aspirations.
Improving Internet Connectivity mobile broadband nationwide, with Long-Term

Evolution (LTE) and 4G coverage continuing
to Enable Inclusive Growth to expand in 2017. The initiatives are driven by
private sector participation and coordinated by
the Malaysian Communications and Multimedia
Commission (MCMC). As a result, LTE and 4G
coverage reached 77% in populated areas,
To ensure fast and robust nationwide providing connectivity to additional locations
connectivity, the High Speed Broadband (HSBB) such as Penampang in Sabah, Bintulu in Sarawak,
project continued to gain momentum throughout Kulaijaya in Johor, Seberang Perai Utara in Pulau
2017 amid its second and final phase. During Pinang and Seremban in Negeri Sembilan.
the year, 480,084 ports with speeds of up to
100Mbps were rolled out in capital cities and
major towns, achieving 183% of the 2017 target,
“LTE and 4G coverage reached
thus completing the entire HSBB project as per
the contract signed between the Government
and Telekom Malaysia via the public-private
77% in populated areas.
”
partnership (PPP) model. As part of further efforts to bring connectivity
to the rakyat, the Pusat Internet 1Malaysia (PI1M)
Nonetheless, completing the HSBB project is initiative continues to play a key role in connecting
not without challenges. Some of the issues rural areas by providing computers, Internet
encountered in the implementation of this facilities, IT-related workshops and community
project include the insufficiency of appropriate programmes. 52 new centres were established
infrastructure required for installation and for under the NKEA CCI by the end of 2017.
the service to work optimally, namely fibre
optic wiring in buildings. Telecommunication In addition, the public can now enjoy free WiFi
companies also faced inconsistent application within a one kilometre radius of a PI1M, further
processes at the local authority level to build enhancing high speed Internet accessibility. This
telecommunication towers and conduct civil has also enabled entrepreneurs in rural areas to
works. Telecommunication Infrastructure increase their income and living standards by using
Meetings were held at state level, where online channels to expand their customer reach.
appropriate resolutions were passed on a case
by case basis to overcome this challenge, and In tandem with initiatives to enhance broadband
hit the roll-out target. connectivity, a 3,800-kilometre submarine fibre
optic cable connecting Peninsular Malaysia
Meanwhile, under the Sub-Urban Broadband with Sabah and Sarawak has been completed
(SUBB) project, 146,904 ports were added in 2017, under the Sistem Kabel Rakyat 1Malaysia
making the total number of ports reach 366,294 (SKR1M) programme. Using the latest 100 Gbps
since the inception of the project, surpassing the wavelength technology with initial capacity of
cumulative target of 317,000 ports by 2017. The four terabits per second (Tbps), SKR1M is one
initiative is at 150% completion and is targeted of the Government’s game-changing efforts
to be completed in 2019. Some of the new towns to accelerate connectivity between Peninsular
and cities that received SUBB coverage include Malaysia and Sabah and Sarawak by providing
Kota Belud in Sabah, Lundu in Sarawak, Jengka diversity in the country’s networks, as well as
in Pahang, Batu Kikir in Negeri Sembilan, Bedong to cater for future bandwidth requirements
in Kedah and Kuala Perlis in Perlis. between states. This project started in 2015
with a cost of RM619 million via a PPP where
As people increasingly access the Internet the Government and Telekom Malaysia allocated
via mobile technologies, significant strides RM412 million and RM207 million, respectively.
were made to improve access to high speed
Bringing the Digital Economy to Rural Additionally, a Hulu Terengganu based cake and
Entrepreneurs cookie vendor, Mazni binti Muhamad has also made
use of PI1M to further grow her business. Before
The Pusat Internet 1Malaysia (PI1M) programme using internet facilities at PI1M, Mazni said that she
has not only successfully fulfilled the objective of relied on regular customers, enquiries through the
bridging the digital divide between rural and urban WhatsApp application and help from friends to
populations, but it has also been a boon to rural promote her products via word of mouth.
entrepreneurs by extending their geographical
marketing reach, offering new social media channels But since engaging with PI1M, Mazni said that she
to market their products as well as making it easier could promote her business more easily and the
to apply for grants and certifications. PI1M centre even helped to promote her products
through programs and events, whether they were
Thanks to the push provided by the National conducted within PI1M or outside PI1M.
Transformation Program, there are now some 840
“Ibehope
PI1Ms operating nationwide with over 550,000
registered members. The PI1M centres serve as that PI1M continues to
broadband access centres as well as places for rural a platform to help small
”
communities to receive free ICT training, including
entrepreneurs.
online entrepreneurship training. The facilities and
courses have encouraged more rural businesses to
promote their products and services – whether food, “I hope that PI1M continues to be a platform to help
handicraft or homestays – on the internet, bringing small entrepreneurs like me,” she said. “Although the
them in line with the rise and growing acceptance support is more on training and knowledge sharing
of e-commerce globally. and not financial support, I still feel very proud and
thankful,” she added.
One such beneficiary is Masinah binti Paris of
Kampung Medong Dalat in Dalat, Sarawak. Masinah Another entrepreneur who gained from the offerings
has been marketing sago products under the Sago of PI1M is Mohd Jaid bin Aspar of Bagan Datoh
Medang brand since 1999. Prior to her introduction in Perak. Jaid, who markets dodol and soy milk,
to the world of online marketing via PI1M, Masinah used the facilities of PI1M at Simpang 4 Rungkup
had marketed her sago products via conventional to take advantage of the time saving features
advertisements in the Dalat district villages. But she of e-government and applied for grants and
realised that the internet aids greatly in expanding certifications online.
her marketing reach.
“In Bagan Datoh, even to get a good cell phone
“The conventional way is no longer as relevant in connection is difficult, so the PI1M is really helpful
the current marketplace,” she said. To bring her since it provides good internet connection,” he said.
business online, Masinah attended ICT training and
online marketing workshops conducted at the PI1M Among the courses that Jaid took at the PI1M were
in Kampung Medong Hilir. e-government, social media and training on how
to fill out online applications such as for the MeSTI
Masinah’s online marketing efforts met with and Halal certifications as well as for grants from
encouraging response from her customers in Ministry of International Trade and Industry (MITI)
Sarawak and she even received orders from and SME Corp.
customers in Peninsular Malaysia. Her products were
also marketed by PI1M Kampung Medong Hilir which As a token of appreciation, Jaid is currently a loyal
helped attract more people to seek out her products. supporter of PI1M centres and he has collaborated
with Public Private Research Network (PPRN) to
Thanks to the training and guidance provided promote internet facilities and training which are
by PI1M Kampung Medong Hilir, Masinah said her available at PI1M to entrepreneurs in the area.
income has now exceeded RM10,000 a month.
Enhancing Public Service Realising the Global Potential

Delivery through Technology of Malaysian Creative Content
The Digital Document Management System 2.0 Malaysian creative content continued to perform
(DDMS 2.0) forms part of the Government’s efforts well in 2017, recording forecasted export value of
to improve file management efficiency, promote RM737.84 million against the target of RM650 million.
eco-friendliness and improve services to the rakyat. Since 2012 to 2017, creative content exports have
As at December 2017, 32 new Government agencies grown at a rapid CAGR of 6.15%. Being the agency
have adopted the DDMS system against the target tasked with developing Malaysia’s digital economy,
of 30 new agencies for the entire year. A total of 65 the Malaysia Digital Economy Corporation (MDEC)
agencies have adopted the DDMS since 2011, with continues to facilitate export activities through
21,000 users and 1.2 million records digitised. Among promotion, capabilities development programmes
the new agencies and Ministries which have come and collaborations to support creative content
on board are the National Sports Council of Malaysia development and export.
(Majlis Sukan Negara – MSN), Shah Alam Hospital,
Human Rights Commission of Malaysia (Suruhanjaya This has enabled home-grown intellectual property
Hak Asasi Malaysia – SUHAKAM), Department of (IP) to strengthen its global competitiveness in work-
Islamic Development Malaysia (Jabatan Kemajuan for-hire agreements. Key examples of locally made
Islam Malaysia – JAKIM) and Universiti Putra Malaysia. IPs which have reached the global stage are Chuck
Chicken, Seafood, Saladin, Upin & Ipin, Boboiboy,
The roll out of DDMS has its challenges. The practice Ejen Ali, Kuku Harajuku, Boing, Origanimals, Didi &
of printing out digitised documents remains deeply Friends and Hogie the Globehopper.
embedded within the general work culture. Altering
long-standing practices in order to transition users
to a greener way of working requires a fundamental
change in user mind-sets. For example, to diminish
the culture of printing, the Government is constantly
“From 2012 to 2017, creative
content exports have grown at
engaging with DDMS users to raise awareness on
the benefits of the system in increasing efficiency
and reducing wastage.
a rapid CAGR of 6.15%.
”
Video game development, another component of
creative content, has also gained positive momentum
in Malaysia with more than 30 AAA games created
by Malaysian talents. AAA is an informal rating
recognised across the gaming industry used for
video games with the highest development budgets
and levels of promotion. Some notable examples
of games created using Malaysian talents include
Final Fantasy XV, Unchartered, Tekken 7, Gears of
War 4, Fable Legends, Street Fighter V, Dark Souls
3 and Bloodborne.
In order to take locally made content to the next level,

the Kre8tif! Conference 2017 was organised under
MDEC’s #animationMY platform. The programme
was initiated to spark innovation and exploration of
Inputing into DDMS 2.0 system by Ministry of Education. major trends across the creative sector. It drew over
550 participants from seven countries and featured Talent. FINAS has also strategically partnered with
35 speakers from North America, Europe, Australia Khazanah Nasional Berhad to promote Pinewood
and Southeast Asia. Meanwhile, to develop Malaysia Iskandar Malaysia Studios, attracting international
into a Game Hub by 2025, MDEC has organised film-makers into the country and thus generating a
the annual Level UP KL event to catalyse business good source of revenue for the industry.
opportunities and share technical insights and
future-shaping trends from thought leaders from
all over the world.
In terms of film and video production, the National

Film Development Corporation Malaysia (FINAS)
continues to lead efforts in attracting foreign
investments via the Film in Malaysia Incentives
(FIMI) programme. The programme offers a 30%
cash rebate on all Qualifying Malaysian Production
Expenditure (QMPE) and has succeeded in attracting
the filming of foreign productions in Malaysia as
well as increase local productions, both for studio-
based and location-based productions. Among the
beneficiaries of this programme include ASTRO Shaw
(Ola Bola), Animonsta Studios (BoboiBoy Season 3),
KRU Studios (Cicakman 3D) and foreign productions
Example of locally made IP which has reached the global stage.
such as the Hi-5 TV Series, Prey and Asia’s Got
Connecting 1Malaysia
The Connecting 1Malaysia focus area works to create • Only registered users in the platform can
an ecosystem which accelerates the adoption of communicate with one another – e-mails
new communications technologies. cannot be received from, or sent to other
e-mail servers (outside of Digital Mailbox);
Following the completion of Connecting 1Malaysia • The security of this platform is guaranteed
initiatives such as the Get Malaysian Business Online further as all senders and recipients are
(GMBO) and Telepresence, a new initiative known required to go through a one-off verification
as the Digital Mailbox was introduced in 2017. The process which involves them identifying
service was developed by Pos Malaysia in line with themselves at the post office, along with
the declining trend in the use of physical letters as providing proof of identification.
well as the increasing demand for mailing security.
The Digital Mailbox will be launched to the
As most e-mail servers are hosted in foreign public in 2018 and has underwent a soft launch
countries and has no restriction on the sending in 2017 for Pos Malaysia staff, with 19,000 new
or receiving end, organisations and individuals are subscribers signed up during this period. Pos
hesitant and mostly unwilling to share confidential Malaysia will continue to conduct rigorous
details via conventional e-mail pathways. Therefore, testing and will seek feedback from various
the Digital Mailbox creates a secure environment Ministries and agencies regarding the service
for the exchange of information through an online before its launch. It is also working to gain
platform hosted on a Malaysian-based server. The consumer buy-in to ensure the success of the
features are: service.
Preparing Our Infrastructure for the Digital

Economy
As the world evolves to integrate more technology, rural areas,” he said. “This is where the USP comes
advanced and reliable communication infrastructure in. With the funding, they can build the towers and
increases in importance. Thus, dedicated efforts expand their coverage in rural areas and this is a
by the Government to expand Malaysia’s benefit to the industry.”
communications infrastructure in urban and rural
areas have intensified of late. The nation’s coverage Dato’ Mohd Ali outlines that PI1M goes beyond
of high speed broadband of both fibre and wireless merely providing internet facilities, and also carries
varieties continue to expand in line with the out sessions for basic ICT training which includes
Communication Content and Infrastructure NKEA’s online entrepreneurship lessons.
aim to improve promote the uptake of world-class
digital services and content. “We teach PI1M users how to market their food
products, handicrafts and homestays online,” he
Towards this end, connectivity via High Speed said. “Because of this, they have expanded their
Broadband (HSBB), Sub-Urban Broadband (SUBB), reach to the whole country and some, overseas.”
the Sistem Kabel Rakyat 1Malaysia (SKR1M),
increased mobile coverage, 4G/LTE coverage and A challenge in moving forward is the sustainability
3G coverage has been ensured by the Malaysian of PI1M. The centres are not self-sustaining, hence
Government. some countries in the region are turning similar
centres in their home countries to co-operative type
To uplift the whole nation in line with this centres which are able to generate revenue through
technological movement, there was a need to methods such as collecting a membership fee.
ensure that rural areas were advancing at the same
pace as urban areas. Hence, to bring connectivity In terms of infrastructure roll-out; charges are
in rural areas on par with urban cities, rural sites imposed by Malaysian states for site acquisition to
have been covered by the Government’s Universal build communication towers and fibre optic cables.
Service Provision (USP) scheme which allocates
funds to build communication towers in remote rural “For fibre rollouts, a few agencies now charge RM30-
areas as well as establishes Pusat Internet 1Malaysia 40 per 100 meters,” he said. “Before this, there were
(community internet centres). no charges. This introduces new costs. You can
imagine the cost if you roll out many kilometres of
Dato’ Mohd Ali Hanafiah Mohd Yunus, Chief Officer, fibre. Everyone is talking about the digital economy
Communications and Digital Ecosystem Sector, and we need to have fibre everywhere.”
said that the government’s USP initiative was
vital to encourage To overcome these issues MCMC is conducting
telecommunication ongoing engagements with state governments.
companies to provide The major telecommunication companies are
services to the less also involved in the discussions and all parties are
profitable rural areas encouraged to give their views and try to find a
of the country. “We solution. Dato’ Mohd Ali said that the issue is one
know the industry will which is critical to ensure cost effective roll out of
come in when there communication infrastructure.
is profit, but they are
not keen on going into By weeding out and identifying these issues; the
Government continues towards working alongside its
states and agencies to streamline the infrastructure
Dato’ Mohd Ali Hanafiah processes.
Mohd Yunus, Chief
Officer, Communications
and Digital Ecosystem
Sector, MCMC.
MOving Forward
The development of the CCI sector is crucial in transitioning Malaysia from a middle-income to high-
income economy. The sector has come a long way since the beginning of the NTP in 2011, with many
major milestones achieved throughout the years – notably the expanded high-speed Internet coverage
nationwide which has impacted many Malaysians, and the growth of the creative industry. Despite the
challenges along the way, the sector continues to showcase great development in communication services,
government services and the creative content segment.
In line with the sector’s aim to provide new and compelling content and services to stimulate demand and
driving high growth in communications, the Government will remain committed to work towards achieving
its targets. The sector also plays a role in achieving inclusive transformation as the Government continues
to bridge the digital divide between urban and rural areas through the expansion of high speed broadband
in rural areas, providing rural communities access to the digital economy.
Following global trends and in the effort to boost connectivity, MDEC is spearheading the Digital Free
Trade Zone (DFTZ) initiative which is now supported with high speed broadband connectivity at KLIA
Aeropolis and in the near future, Bandar Malaysia.
healthcare
advancing
healthcare services
YB DATUK SERI DR S. SUBRAMANIAM

Minister of Health
Since taking over the helm at the Ministry of Health builds on the existing primary healthcare framework
(MOH), I am delighted to note that the year 2017 within the public and private sectors to target non-
has shown remarkable growth in the Healthcare communicable diseases and emphasises early
Industry. MOH’s initiatives that have contributed detection, intervention and treatment. The second
profoundly to the NKEA are clearly exemplified is the development of the non-profit Voluntary
by the positive results in the Industry Sponsored Health Insurance Scheme (VHI), which will ensure
Research (ISR) conducted by Clinical Research the sustainability of our current public healthcare
Malaysia (CRM), to the increased revenues generated systems while bridging the gap between public and
through healthcare travellers and tourists monitored private healthcare.
by the Malaysian Healthcare Travel Council (MHTC).
Alongside the initiatives conducted by the Medical Another highlight of the year was the tabling of
Device Authority (MDA) that have led to the the Private Aged Healthcare Facilities and Services
increased number of approvals of establishment Act to regulate all private aged care centres, thus
licence applications, improved lab compliance ensuring adequate standards are maintained to care
to Organisation for Economic Co-operation and for our elderly. This Act is critical to meet mounting
Development (OECD) Good Laboratory Practice demands for aged care services, as Malaysia shall
(GLP) requirements for pre-clinical testing as become an aged nation by 2030 with an estimated
well as increased Medical Devices registration are 15% of the population to be over the age of 60 years.
also to be trumpeted about and be proud of. To
top off all these efforts, the upsurge in generic Additionally, the inception of e-Health such as
pharmaceutical products registered under the MY Health Information Exchange (MyHIX) and
National Pharmaceutical Regulatory Authority MY Health Data Warehouse (MyHDW) will place
(NPRA) has significantly contributed to the Malaysia at the forefront of the Healthcare Industry.
development of the Healthcare sector in Malaysia. The total healthcare integration system as well as
digitalisation efforts are aligned with our Industry
With these achievements and on-going 4.0 efforts, and focuses on modernising the health
commitments, our Healthcare Industry generated sector as Malaysia closes in on the completion of
RM26 billion in GNI* in 2017 as compared to RM15 the NTP and moves towards the TN50 horizon.
billion at the beginning of the NTP in 2010.
To further benefit the rakyat, Healthcare in Malaysia

has embarked on two transformative processes.
The first is the Enhanced Primary Healthcare, which
*Includes public healthcare.

showcasing the quality of

malaysian healthcare
Malaysia has established itself as one of the most

preferred destinations for healthcare travel globally.
This is evidenced by the recognition earned from the
US-based International Living magazine which has
YB Datuk Seri Dr. S.Subramaniam, Minister of Health
ranked Malaysia as one of the world’s top countries Malaysia, chaired a roundtable discussion with captains
for healthcare in terms of service quality, accessibility, of the private healthcare industry on medical tourism and
standard of post-procedure recuperation options the way forward.
and cost-competitiveness for three years since

2015. The International Medical Travel Journal (IMTJ)
In 2017, the healthcare travel industry recorded
has also acknowledged Malaysia as “Health and
a preliminary performance of RM1.3 billion*. The
Medical Tourism: Destination of the Year” for three
industry is expected to record a year-on-year
consecutive years from 2015 to 2017.
growth of 16%*. Healthcare travel spending also
creates sizeable multiplier effects. Malaysia has
Healthcare travel (Medical Tourism) is one of the
outpaced the regional industry growth with more
fastest-growing sectors in the country, registering
than one million healthcare travellers, spending
an average growth rate of 16% to 17% every year.
around RM5 billion* for medical treatment as well
as non-medical expenditure such as hospitality
services and tourism activities. The aim is to achieve
30% growth year-on-year by 2020.
Efforts in this area are led by the Malaysian

Healthcare Travel Council (MHTC), which has
introduced long-term sustainability initiatives to
maintain the successful growth trajectory, in line
with the three key tenets of industry facilitation,
optimisation of digital marketing and sustainable
growth. MHTC has set out the following strategies
to drive the growth of this industry:
• Strengthening end-to-end experience from the

arrival of the healthcare travellers through to
their departure after treatment;
• Securing partnerships with industry players and
to enhance network and relationships;
• Amplifying branding and recognition.
To effectively amplify promotion, MHTC has

identified four focus countries as key target markets:
Indonesia, China, Myanmar and Vietnam while
continuing efforts to penetrate other important
markets such as Singapore, Brunei, Bangladesh,
Ms. Sherene Azli together with H.E Mr. Mohd Hassan Bal, the Middle East, India, Australia and New Zealand.
Malaysian Ambassador to Zagreb and Keith Pollard, Chief
Editor of the International Medical Travel Journal at the
IMTJ Awards 2017.
*Projected data from MHTC as at 29 January 2018, for data ending 31 December 2017.
2017 was focused on smoothing the airport

Elite Hospitals greeting process. As the project goes on, more
initiatives will be implemented to improve the
The Malaysian Government has further services along the value chain. Moving forward,
supported the healthcare travel sector MHTC is looking to strengthen its partnerships with
by facilitating investments in medical member hospitals and travel agents to ensure that
infrastructure for hospitals, putting Malaysia patients’ post-treatment experience is enhanced
on par with well-developed countries through through their Affiliate programme.
producing well-trained medical staff and
providing excellent hospital facilities. Securing partnerships with industry players to
enhance networks and relationships
MHTC Elite Hospitals represent the best of
these health services and are internationally Recognising the overall journey as an important
accredited, providing international support facet of healthcare travel, the end-to-end
services for foreign patients. The international experience will provide a seamless journey from the
accreditation of Elite Hospitals from reputable moment they begin searching for information from
international agencies guarantees the highest their home countries through to their successful
standards of quality and safety to all patients. treatments and return home. Accordingly, MHTC
Its services are benchmarked against the best has worked to create more value-for-money and
practices in the world and provide state-of- attractive packages for healthcare travellers by
the-art facilities and served by highly qualified bundling hospital services with existing deals from
medical personnel. tour agents and airline companies. Additionally, to
increase awareness on its efforts, MHTC is selecting
In 2017, Malaysian Elite Hospitals geared towards effective distribution channels through partnerships
serving the demand for high-value, niche quality with local travel agents while maintaining its
healthcare. Many hospitals developed specialist strategic integration between airlines, in-bound
treatment and diagnostic faculties, comprising travel agencies and complementary services
high-end care centres as well. centred around the healthcare value chain.
Several of these hospitals have received global Amplifying branding and recognition
and regional awards as well as certifications
along the year, namely Sunway Medical Centre Invigorating the Malaysia healthcare brand and
for orthopaedics, Prince Court Medical Centre gaining mindshare is important for expanding
for paediatrics and healthcare travel, TMC Malaysia’s healthcare travel market size. As
Fertility Centre for fertility services, and KPJ such, the “Malaysia Loves You” campaign was
Berhad as Malaysia’s hospital of the year. launched in 2016 to effectively advocate the
essential attributes of Malaysian healthcare,
namely quality, accessibility, affordability and
ease of communication. In 2017, this marketing
Strengthening end-to-end experience pursuit was continued with the “Share My Love”
campaign which took on a more contemporary
MHTC strives to create a holistic ecosystem for and artistic approach to convey what good
healthcare travellers to enjoy a seamless healthcare health means to Malaysians. The “Share My Love”
experience through the following initiatives: campaign has featured the works of 7 local artists
to inspire others in spreading the value of care
• The establishment of representative offices in and healthy living.
focus markets to gain faster access to the markets
and facilitate potential visitors with enquiries and Capitalising on the power of social media to
any healthcare travel assistance needed; increase publicity, the public was given an
• The introduction of a Meet-and-Greet service at opportunity to win prizes through a social media
the aerobridge by Malaysia Healthcare Concierge contest by sending in their own version of fun heart
and Lounge; doodles this year. MHTC had since received more
• Fast-tracking passport and customs clearance at than 1,400 submissions for the Instagram contest.
the Kuala Lumpur International Airport (KLIA).
Boosting Malaysia’s needles and sutures, ophthalmic lenses, medical and

surgical X-ray apparatus, orthopaedic appliances
Production and Exports of and medical furniture. These devices are exported
mainly to the US (23%), Belgium (13%), Germany
Healthcare Products (12%) and Singapore (9%).
The sector recorded numerous achievements during

the year, including a significant increase in medical
devices registration. The increase in registration
Malaysia’s healthcare exports are focused on is reflective of the increasing number of medical
medical devices and pharmaceuticals, since the devices which are of superior quality and are safe
Government has identified and listed the medical for patient use, as regulated by the Medical Devices
devices sector as a high-growth sector under the 11th Act 2012 (Act 737). As of December 2017, more
Malaysian Plan 2016-2020. Medical devices exports than 195,000 medical devices have been registered
have increased consistently year-on-year at the and over 2,000 establishment licences, which are
average of 14.2%. In 2017, total exports of medical company licences given to facilities, have been
devices and products hit approximately RM11.3 issued by the Medical Device Authority (MDA).
billion and grew by 16.8% from 2016’s export value
of RM9.7 billion. The total market size of medical To spur the sector, MDA has been working to
devices in Malaysia is now US$1.4 billion, against increase the knowledge of industry players
global medical devices market worth an estimated on the regulatory requirements governing the
US$324 billion. manufacturing of medical devices in Malaysia
through training sessions, awareness programmes,
“Pharmaceutical
consultation sessions and the International Medical
exports grew at Device Conference held on 8-10 August 2017.
an average annual rate of 8%,
from RM577.8 million in 2011 to Further supporting the medical device
”
ecosystem, the Government provided grants
RM938.5 million in 2017. for the establishment of two Good Laboratory
Practice (GLP) labs in Malaysia in 2016, which are
MyBioScience Lab Sdn Bhd, Melaka and Makmal
Meanwhile, pharmaceutical exports grew at an
Bioserasi, Universiti Kebangsaan Malaysia (UKM).
average annual rate of 8%, from RM577.8 million
The GLP labs will allow local medical devices
in 2011 to RM737.3 million in 2016. Exports of
manufacturers to incur lower costs and encourage
pharmaceutical products for the year 2017 grew
foreign manufacturers to invest in Malaysia by
by 27.3% as compared to 2016 against the Ministry’s
target of 8%. Total export revenue hit RM938.5
million against the target of RM796.3 million.
The overall impact of focusing on Malaysia’s

production and exports of healthcare products is the
gradual substitution of imported products, which
will develop the capacity of local manufacturers,
leading to an increase in export volume and value.
The move is also cost-saving for the Ministry of
Health (MOH).
Medical Devices
Malaysia’s major export categories for medical

devices are surgical and examination gloves,
Mutation study lab with automated colony counter and
electromedical equipment, catheters, syringes,
biosafety cabinet in Makmal Bioserasi, UKM.
providing testing facilities for their products. The new plant will manufacture surgical
The two labs have commenced the OECD GLP sutures such as Class II sutures, hernia meshes,
compliance process and expected to receive their antibacterial wound management solutions and
OECD GLP status in 2018. antibiofilm orthopaedic implants which will then
be exported worldwide.
A key highlight recorded by the medical devices

sector in 2017 was the conclusion of MOH’s first
off-take agreement (OTA) for medical devices
with Vigilenz for Antibacterial Electro Activated
Super Oxidized Water (Hydrocyn Aqua). The
Hydrocyn product has received FDA 1510K
approval.
Moving forward, Vigilenz has started the

development of nano fibre wound dressing and
clinical trials of antibiofilm orthopaedic implants
The conference aims to obtain updates on global (Orthosyn). In ensuring that its products are
regulatory requirements for medical devices as well as
spearheading growth of the medical device sector. up to standards, the company has provided
training for its staff as per the new Medical
Device Regulations and Risk Management
Vigilenz Medical Devices Sdn Bhd requirements. In tandem, the company has
kicked off its collaboration on development
As one of the NTP’s project champions, Vigilenz research with UKM, UTM, and USM. As for its
Medical Devices (Vigilenz) commenced the progress in exports, 2017 has seen to the export
operations of its new plant in the Penang Science market registration in the UK and additional
Park in 2017. product registration in Australia.
Vigilenz’s ISO Class cleanroom manufacturing area compliant to ISO 13485:2016, equipped with in-house microbiology
laboratory.
Fresenius Medical Care Sdn Bhd (FME) regional manufacturing facility in Bandar Enstek.
Fresenius Medical Care Sdn Bhd
Fresenius Medical Care Sdn Bhd (FME) created a new

milestone in the Malaysian medical devices industry
when it became the first Continuous Ambulatory
Peritoneal Dialysis (CAPD) manufacturer in Malaysia
in 2017.
The FME regional manufacturing facility in Bandar

Enstek, Fresenius Medical Care Production Sdn
Bhd (FMCP) was launched in September 2017.
FMCP produces haemodialysis concentrates A & B,
Citrosteril (a disinfectant for haemodialysis machines),
as well as CAPD Stay.Safe Link for dialysis treatment.
(From left to right) Mr. Carsten Fischer, Chargés
FME products manufactured in Malaysia meet the d’Affaires of the German Embassy, Mr. Harry De Wit,
President and CEO, Fresenius Medical Care Asia Pacific,
FME’s global quality standards, providing the local Mr. Gerhard Breith, Senior Vice President, GMQ Asia
market with access to stable supply of the products Pacific, Mr. Mahesh Nair, Senior Vice President, Fresenius
and ensuring continuity of treatment for patients. Medical Care South Asia Pacific, YBhg. Dato’ Seri Dr.
Chen Chaw Min, Secretary General, Ministry of Health
FME has invested close to RM80 million in its facility Malaysia, and Mr. Michael Wong, Managing Director,
to date, with additional investment for expansion in Fresenius Medical Care Malaysia at the official opening of
the next 5 years. Fresenius Medical Care regional manufacturing plant at
Bandar Enstek, Malaysia.
A training on Malaysia’s Pharmaceutical Regulatory System was held for 12 regulators from Tanzania, Uzbekistan, Nigeria,
Thailand, Jordan, Sudan, Indonesia, Iran, Kazakhstan and Morocco which aim to promote Malaysia’s Regulatory System
and to build confidence towards pharmaceutical products manufactured locally.
Pharmaceuticals Malaysia, training on the Pharmaceutical Regulatory

System was conducted by NPRA in September
Malaysia is ranked Asia’s 14th largest pharmaceutical 2017, showcasing the alignment of Malaysia’s
exporter, exporting to more than 50 countries pharmaceutical regulatory system to international
including countries in Africa and South America. Its requirements. This is expected to facilitate Malaysia’s
major export destinations are Singapore, Brunei, Hong pharmaceutical exports further.
Kong, Vietnam and Indonesia, with the main types of
“Malaysia
pharmaceuticals exported comprising medicaments
in measured dosage forms containing antibiotics and is Asia’s 14 largest th
health supplement such as vitamins and antibiotics. pharmaceutical exporter,

Despite the relatively small size of the industry and its
exporting to more than 50
”
concentration on generic medicines.
countries worldwide.
The investment climate for pharmaceuticals
is promoted by the National Pharmaceuticals
The sector has also reached an important milestone
Regulatory Agency’s (NPRA’s) launch of QUEST
with Thailand confirming its readiness to sign the
3+ in January 2017, an enhanced online registration
ASEAN Mutual Recognition Agreement (MRA)
system that will improve and raise efficiency of the
for Bioequivalence (BE) Study Reports of Generic
pharmaceuticals registration process. On top of the
Medicinal Products. This leaves only one member
automation of processes under QUEST 3+, NPRA
state, Philippines, to confirm intention to sign the MRA.
has also implemented fast track registration of
generic products, effectively reducing registration
The MRA eliminates the need to conduct another BE
time to three months (90 working days) from the
study as it would have been conducted in a listed
date of application as compared to seven months
BE Centre. Harmonising BE study requirements
(210 working days) for other prescription drugs.
and eliminating technical barriers for registration of
generic products within ASEAN will allow generic
To build trust and receptiveness towards
pharmaceuticals to gain earlier access in the region,
pharmaceutical products manufactured in
Strengthening the Country’s Biotechnology

Sector: Bringing It Home
Increasing local generic manufacturing for Bhd was incorporated as a wholly owned subsidiary
exports is a focus under the Healthcare NKEA of of Biocon in Malaysia to set up this greenfield facility.
the National Transformation Programme (NTP). To date, Biocon has invested nearly US$275 million
This ultimately spurred Malaysia’s creation of a in the facility, which houses Asia’s largest state-
highly supportive legal, financial and institutional of-the-art integrated insulins manufacturing plant
climate for the growth of biotechnology as well as that is designed to manufacture insulin and insulin
its implementation of proactive policy measures. analogues to cater to the needs of people with
diabetes in Malaysia and other global markets.
“This enabling environment led to Biocon, India’s
largest and fully-integrated, innovation-led In November 2016, Biocon Sdn Bhd was awarded
biopharmaceutical company to join hands with the a contract to supply rh-Insulin cartridges and re-
Malaysian Government in 2010 to strengthen the usable insulin pens over a period of three years
country’s biotechnology sector,” says Srinivasan under the Malaysian Government’s Off-Take
Raman, Vice President and Head of Biocon Malaysia’s Agreement (OTA) initiative.
operations.
Biocon’s rh-Insulin, Insugen®, manufactured at the
The company was chosen as an Entry Point Project Johor facility, is Malaysia’s first locally made biosimilar
(EPP) champion under the Healthcare NKEA product to be approved by the National Pharmaceutical
after it proposed the largest investment in the Regulatory Authority (NPRA) for commercial sales in
Malaysian biotechnology sector to set up a high-end the country. Insugen® is enabling access to a safe,
biopharmaceutical manufacturing and R&D facility affordable and quality treatment option for over 3.3
at the BioXcell Biotech Park in Johor. Biocon Sdn million people with diabetes in Malaysia.
Biocon’s rh-Insulin, Insugen® is Malaysia’s first locally made biosimilar product to be approved by NPRA for commercial
sales in the country.
Biocon facility in Malaysia.
The benefits of purchasing insulin from a local to creating local employment opportunities, the
vendor are manifold. There are currently 3.3 million company has trained over 240 of its Malaysian
individuals currently diagnosed with diabetes, and employees at its headquarters in India. “We
the Malaysian Government spends nearly US$566 continue to provide training to our staff in
per year on every diabetic. These numbers are Malaysia in various areas of biopharmaceutical
expected to multiply to a whopping 4.5 million manufacturing, quality control, supply chain and
diabetics by 2020, which will significantly impact research and development. The company also
the Government’s healthcare expenditure. Locally utilises local vendors to source its input materials
manufactured affordable rh-Insulin has the potential and services as well as in the construction and
to reduce the diabetes treatment cost burden and set-up of its manufacturing plant,” says Srinivasan.
increase access to insulin therapy for diabetes
patients in Malaysia. Biocon is also making a significant contribution
to build the biotechnology industry ecosystem
This OTA provides assurance of public sector in Malaysia. Three senior leaders from Biocon
purchases of locally manufactured pharmaceutical Malaysia have joined the industry-academia panel
products and incentivises exports. “When the of Universiti Teknologi Malaysia and Universiti
Malaysian Government purchases and uses Kebangsaan Malaysia. These industry-academia
these products, it provides confidence to the collaborations enable universities to tailor their
export market about the safety and efficacy of curriculum to emerging industry trends and talent
these drugs. Winning the OTA thus endorses our requirements.
credibility as a manufacturer of affordable yet
high-quality insulin products.” Wrapping up the conversation, Srivinasan said
“the Malaysian Government’s support for the
To upskill the local community, Biocon employs a healthcare sector via the NTP has shown the
team of over 550, including 450 Malaysians at its world how progressive policies can make a
insulin manufacturing plant in Johor. In addition transformational impact”.
aside from reducing cost of registration in other

ASEAN countries.
Further strengthening Malaysia’s generic pharma

production, these EPP champions have invested
in high technology manufacturing. A significant
contribution in this sector is that the total 11 projects
have garnered RM852.95 million in committed
investments, led by pharmaceutical project
champions such as Kotra Pharma Sdn Bhd and
Pharmaniaga LifeScience Sdn Bhd.
Kota Pharma’s Vaxcel Omeprazole 40mg Injection
for treatment of duodenal and gastric ulcer, reflux
Kotra Pharma Sdn Bhd esophagitis and Zollinger-Ellison syndrome.
Kotra Pharma is undertaking three projects under

the Healthcare NKEA, namely: • The contract manufacturing partnership with
Servier to manufacture its patented products.
• The Accessible Sterile IV Export Project /
Prefilled Syringe Line (PFS) with 12 products The three projects involve an estimated investment
to be manufactured; of RM25 million for construction and development
• The Metered Dosage Inhaler (MDI) Project with of manufacturing lines, staff training, product
eight products to be manufactured under this line; research and development.
Freeze dried product formulations are more stable than small volume liquid injectables and generally have longer shelf life.
The MDI and PFS lines are currently at the

final stages of preparation and readiness for
Advancing up the Healthcare
line inspection and audit by NPRA. Following
NPRA’s approval, the first product under PFS
Value Chain through Clinical
line is targeted to be commercialised in the
second quarter of 2018 while the MDI products
Research
are expected for commercialisation in the fourth
quarter of 2018. However, through Malaysia’s
contract manufacturing partnership with Servier,
Kotra Pharma has already commenced exports Clinical research in Malaysia is led by Clinical
of its products to Brunei. Research Malaysia (CRM) as the centralised body
managing the entire clinical research field, which
A total of five OTAs have been awarded to also includes university hospitals. This centralisation
Kotra Pharma. The drugs supplied under OTAs of resources is vital in this niche space as it allows
are for treating stomach and oesophagus Malaysia to optimise and mobilise resources
problems, cardiovascular disorders, upper and quickly and efficiently. The sector’s positive
lower respiratory tract infections and other trajectory has been acknowledged by international
intra-abdominal infections, and control of blood sponsors and research communities alike. This is
glucose for diabetes patients. again demonstrated by an investment value of
over RM220 million since 2012 from companies
Pharmaniaga LifeScience Sdn Bhd conducting clinical trials in this country.
“Results
Pharmaniaga LifeScience (Pharmaniaga) is the
first and only pharmaceutical Small Volume of the study are expected
Injectable (SVI) manufacturer in Malaysia to install to lower the cost of hepatitis C
and utilise Lyophilisation (freeze-dry) technology
treatment from RM320,000
following a RM21 million investment to expand its
existing manufacturing facility. per patient to just RM1,200 per
The company currently has 15 products in its

Lyophilisation product pipeline and manufactured
patient in Malaysia.
”
pilot batches for its first four products in June Malaysia is successfully making its mark on the
2016. Stability studies have been completed global map as a result of cutting-edge research
and the dossiers are undergoing final review by conducted on hepatitis C in collaboration with the
Pharmaniaga, after which the product will then Drugs for Neglected Diseases Initiative (DNDi).
be off for registration submission to the NPRA. The project is a one-of-a-kind model and will pave
the way for more smart partnerships between the
Commercialisation of the products are expected Government and NGOs. Results of the study are
in 2018. This is expected to be followed by export expected to lower the cost of hepatitis C treatment
to the ASEAN market in 2022, and Europe in 2024. from RM320,000 per patient to just RM1,200 per
The company expects to create an additional 21 patient in Malaysia, allowing more than 500,000
highly skilled jobs from the expansion, with hiring Malaysian patients suffering from hepatitis C to
expected to start in 2019. access affordable treatment.
The Government is expected to realise substantial On another note, the sector has also witnessed
savings by purchasing generic lyophilised a reduction in Clinical Trial Agreement (CTA)
products as the originator products are generally reviews and approval timelines from three months
priced higher. to just five working days with the launch of the
e-submission system.
Memorandum of Understanding (MoU) between C&R Research Inc and Clinical Research Malaysia signed to promote clinical
trial activities in Malaysia and South Korea.
There are, however, challenges in terms of conduct early-phase trials and eventually move
attracting more clinical research, including: into drug development and discovery.
• Insufficient oncologists to take up oncology Early-phase studies play a crucial role in the
trials; development of medicines as it investigates the
• Malaysia’s involvement in mainly late-phase effect, efficacy and safety of pharmaceutical drugs
trials makes it less attractive to pharmaceutical in humans. Indeed, this phase overlaps between
and medical device companies; scientific research and clinical medicine. The conduct
• Lack of awareness and interest in the of early-phase studies may also contribute to the
importance of clinical trials among medical transfer of knowledge and recent technologies unto
professionals and the public. Malaysians, creating new jobs in clinical research,
advancing local innovations and reducing the
The untapped field of clinical research brings outflow of investments – hence moving the country
numerous benefits in terms of improving patients’ higher in the clinical research value chain. In fact,
choices as well as raking in economic benefits to Phase I of the Clinical Trial Guideline was completed
the country. Improvements in the field will provide in November 2017. This guideline gives sponsors,
patients with the opportunity to receive medication investigators and trial sites an overview of the
or treatment that is yet to be available in the market, conduct of Phase I in Malaysia.
especially expensive oncology drugs.
Project ACCELERATE involves collaborations
Besides difficulty in attracting more clinical across agencies, clinical research industries
research, the next challenge lies in ensuring and universities on pre-clinical projects. CRM
Malaysia can move its activities upstream in the will also collaborate with local universities and
clinical research ecosystem. These will be mitigated MOH in ‘bench to bedside’ projects. Additionally,
by the Phase I Realisation Project (P1RP) which a trained crisis management team has been
includes Project ACCELERATE. Both projects prepared to tackle any issues in relation to early
are spearheaded by CRM to enable Malaysia to phase clinical trials.
Phase I trials have attracted interest from

various companies in Malaysia, out of which one
Ensuring the Health of Senior
company has confirmed to conduct the Phase I
trial at the beginning of 2018 while another three
Citizens
companies are already at the site evaluation
stage to consider Malaysia as the Phase I centre
of their drug development program. There are
at least another five currently at the feasibility Apart from providing affordable and quality
stage. Furthermore, CRM is assisting Aurigene health services for everyone in Malaysia, the
in their pre-clinical work on novel anti-cancer healthcare industry has to pay specific attention
compounds and associated biomarkers. This pre- to the needs of senior citizens. This is consistent
clinical Phase I project is expected to sensitise the with the shift in the country’s demographics,
local industry towards discovery and eventually whereby 15% of the population is projected
lead to the manufacturing of innovator drugs in to be aged 65 and above by 2030, from the
Malaysia. current 9.3%. This shift is expected to exert
considerable strain on the nation’s healthcare
In view of the need to promote the importance of system, especially with the rising rates of non-
clinical trials, CRM has initiated the ‘I AM AWARE’ communicable diseases worldwide.
campaign and Clinical Trials Day, as well as other
media-led awareness activities. To date, these
campaigns have enabled CRM to register more
than 2,000 patients and healthy volunteers who “AMOHground-breaking Act under
was tabled in Parliament in
have shown interest in clinical trials.
October 2017 to regulate private
CRM has been actively pursuing international
collaborations, for instance:
nursing homes.
”
• oU with C&R Research Inc, Korea’s largest
M Private Aged Healthcare Facility and Services Act
contract research organisation (CRO). This
collaboration will allow Malaysia to attract Private Healthcare Facilities and Services Act
more Korean biopharmaceutical companies 1998 (Act 586), a legislation that regulates all
to conduct clinical trials in this country. With professional medical centres. This is clearly
this cooperation, C&R and CRM have agreed insufficient to cater for the rising demand in aged
to promote clinical trial activities in Malaysia care, and it has prompted the Government to
and South Korea, while providing support and propose a more specific regulation for private
resources to complement the needs of each facilities and services for aged care. Thus, a
country in terms of business development, ground-breaking Act under MOH was tabled in
clinical trial operations and trainings. This Parliament in October 2017 to regulate private
has resulted in CRM receiving enquiries from nursing homes. The Private Aged Healthcare
Korean companies to conduct clinical trials Facility and Services Act will set a minimum
in Malaysia. Moreover, C&R Research is also level of quality for care and services delivered at
looking at establishing their office here in private aged care institutions, and encourages
Malaysia; the licensing and regulation of unregistered care
• CRM has been assisting FIND, a global health institutions as well as supports the elderly who
non-profit organisation based in Geneva, choose to age in their own homes, reducing
Switzerland with identifying clinical trials dependency among the elderly community as
sites for a hepatitis C diagnostic kit. The per World Health Organization (WHO) standards.
collaboration will greatly widen access to
hepatitis C diagnosis in Malaysia and speed
up the test result for patients.
Sunway Shines As Malaysia’s Medical increasing numbers of foreign medical patients.

Tourism Takes Off
“The launch of the NTP helped bring industry
Far sighted government policies to tap into the players together to more effectively brand the
booming health tourism market are paying off country as a medical travel destination,” she said.
as tourists flock to the country’s shores to take “It also increased focus and urgency to implement
advantage of the affordable yet world class medical necessary measures to facilitate the development
care available in Malaysia. This is reflected in the of the sector and ease travel arrangements of
medical tourist traffic streaming into the country foreign patients. It has certainly paved the way
with some 921,000 visitors traveling to Malaysia for in putting Malaysia on the world map in terms of
medical purposes in 2016, up sharply from 643,000 medical tourism.”
in 2011.
Dr. Mah added that other non-healthcare related
One of the key players in the industry is Sunway initiatives under the NTP such as improving public
Medical Centre, one of the most established and transportation also helped to enhance Sunway’s
largest private hospitals in Malaysia as well as the appeal to medical tourists. This is because improved
ASEAN region. Sunway credited key NTP initiatives transportation infrastructure made the Sunway
such as the Malaysia Healthcare Travel Council City’s cluster of hospitals, malls, theme parks and
(MHTC) as having helped boost its profile in the hotels more attractive.
regional healthcare tourism arena.
“The indirect knock-on effect from the NKEA with a
Dr. Michelle Mah, the Director of Business special focus on the development of an integrated
Development and Corporate Communications public transportation system has resulted in
at Sunway Medical Centre said that the MHTC creating an excellent commuting hub for medical
contributed greatly in promoting Malaysia as a tourists especially in Sunway City where the BRT
medical travel destination of choice, and helped (Bus Rapid Transit) connects the hotels, shopping
raise the profile of not just Malaysia but also malls, theme park and residences to our hospital,”
Malaysian hospitals. This in turn helped draw in noted Dr. Mah.
Sunway has also worked with Harvard University and the University of Cambridge to improve its standard of healthcare
and education.
Sunway Medical Centre is an elite member of the MHTC.
Sunway is also an Elite member of the MHTC which like Cambridge University and the Royal Papworth
also added to its appeal. Dr. Mah said that as elite Hospital, Europe’s top heart and lung hospital, to raise
member hospital, more pathways and opportunities the bar in terms of the standard of care we deliver.”
opened up for it to tap into foreign markets. “The
affiliation with MHTC has boosted our credibility in Sunway also recently collaborated with some of the
international markets and facilitated our outreach top global universities such as Harvard University
initiatives,” she said. and the University of Cambridge to enhance the
standard of healthcare and education in Malaysia.
Dr. Mah also commended the commitment and As part of the collaboration, Sunway Medical Centre
dedication of MHTC representatives, noting that the established the Sunway Clinical Research Centre
MHTC CEO, Sherene Azli, was very supportive and which will be the Regional Site Partner of the
helpful in supplying information and analysis on the University of Cambridge’s School of Medicine.
market trends and competitors as well as promoting
Sunway Medical Centre abroad. In terms of suggestions on how to improve the
healthcare tourism landscape in the country, Dr. Mah
Sunway Medical has also managed to attract medical said that the government could look into assistance
talents residing abroad to return to Malaysia under in the form of grants and sponsorships for the
the Returning Expert Programme (REP). This enabled private sector in the area of training and research
it to increase its pool of specialists and deliver even to intensify research efforts and position Malaysia
more comprehensive medical services to patients. to be a regional leader in various medical fields.
“Their return to Malaysia helped to augment the pool
of medical talents for the country,” she said. “Shift the focus of Malaysian healthcare to quality
and not just as a more value for money destination
Looking ahead, Dr. Mah said that Malaysian hospitals compared to our competitors,” said Dr. Mah.
are increasingly competing in terms of standard and “This will require not just investing in talent and
comprehensiveness of care. “For example, Sunway technology, but also more active clinical research
Medical now has one of the most comprehensive and active benchmarking on the clinical outcomes.
cancer centres, not just in Malaysia but also the region,” We believe MHTC is already working on some of
she said. “We are also working with top institutions these initiatives.”
Delivering healthcare to your doorstep patient has continuity in care even if attended to by
multiple practitioners while maintaining the privacy
In an era when digitalisation and mechanisation and security of users’ information. This service is
of services are at the forefront, one of the NKEA’s currently available in the Klang Valley and will roll
project champions, Love on Wheels is providing out nationwide over time. Looking ahead, given that
mobile nursing and physiotherapy services straight Malaysia is expected to be an aged nation by 2030,
to the patients’ doorstep or easy-to-understand mSIHAT can help address some of the challenges
medical advices remotely through a mobile app. such as limited beds, overcrowded hospitals and
high cost of care.
The company has recently developed a structured
programme that is approved by the Department of The future of aged care
Skills Malaysia to train caregivers on the knowledge,
skills and attitude needed for delivering quality The Eden-on-the-Park project, an integrated
care to the elderly. The programme emphasises retirement and care residence resort in Kuching
practical training and is supplemented by centre- was completed in 2015. It comprises a 71-suite
based (theory) learning to ensure that caregivers (142-bedded) state-of-the-art care complex, a
are sensitive towards the needs of the elderly 104-apartment condominium block and 14 single-
and able to detect critical health conditions. The storey villas.
capacity building initiative is expected to reduce
dependency on foreign workers as well as lowering Since its inception, the Care Centre has opened
the cost of elderly care over the long-term. the eyes of Malaysians to what dignified senior
living and aged care can be, changing the negative
Another initiative undertaken by Love on Wheels is perception of care centres to one which is positive
the mSIHAT mobile app. Through the application, and supportive of a healthy lifestyle.
caregivers will be aware of when their services
are required by the patient in real time, wherever Eden-on-the-Park Sdn Bhd, the promoter and
they are in Malaysia. This application provides a creator of the Malaysian Integrated Seniors
platform for patients and healthcare practitioners Lifestyle and Care residence, is planning to replicate
to connect for mobile physiotherapy, nursing the concept in its first off-site venture in Kota
and caregiving. mSIHAT also assures that the Kinabalu, which will commence construction once
practitioner is qualified and certified and that the development plans are approved.
Eden’s Active Senior Lifestyle Apartment with its 50 metre salt water pool.
MOving Forward
Healthcare travel in Malaysia is booming rapidly as the country had witnessed a positive growth trend in
healthcare travel revenue over the past six years to stay on track to achieve the 2020 goal of RM2.8 billion.
MHTC is raising the profile of Malaysia as the leading global healthcare destination and the industry will
be strengthened as one of the country’s sources of income. Plans are in place for the establishment of
flagship hospitals, the positioning of Malaysia as Asia’s leading hub for fertility and cardiology, and the
introduction of high-end medical packages for healthcare travellers.
In terms of healthcare exports, the Government should consistently engage with the industry to understand
its challenges and needs. This will also help the balance between supply from local manufacturers and
demand from MOH. Alliance between the two will ensure that production is aligned with the relevant
national goals and health policy. Moreover, greater synergy between the Industry Pharmaceutical Master
Plan, National Medicine Policy and National Healthcare Plan is required to achieve a strong multiplier effect
for the pharmaceutical industry.
The private sector should also focus on market expansion for large players and developing niche strategies
for small players. Local manufacturers must be able to differentiate their products and services in some
unique way and create a stronger and competitive ecosystem by systematically enforcing their brand
presence.
CRM will continue working on increasing public-private partnership (PPP) in oncology to optimise the
uptake of oncology clinical trials in Malaysia. This will enable oncologists from private hospitals to conduct
trials in MOH hospitals. CRM will also continue working with the Institute of Medical Research (IMR) and
other companies in pre-clinical collaborations to drive a turnover to early phase clinical trials. Additionally,
the organisation will promote Malaysia as a clinical trial hub in Asia through participation in international
congresses, meetings and social media.
To bolster the elderly healthcare initiative, the industry should consider an integrated financial system and a
stronger financial support, such as long-term care insurance and reverse mortgage, to ensure sustainability
for the ageing population in utilising aged care facilities.
The future of the Malaysian healthcare industry will increasingly hinge on the adoption of e-Health, in
line with the Industrial Revolution 4.0 concept to further modernise healthcare services and unlock more
growth opportunities. This will also require appropriate regulations to maximise the benefits of using
technology in healthcare.
financial services
PROVIDING INCLUSIVE
AND SUSTAINABLE
FINANCIAL SOLUTIONS
YB DATUK SERI JOHARI ABDUL GHANI

Minister of Finance II
Guided by regulators and market-led efforts, the Furthermore, the Malaysian financial system has
Financial Services NKEA has achieved significant become more regionally integrated to support
progress in developing Malaysia’s financial industry, stronger economic and financial linkages, as
especially in improving her regional competitiveness reflected by the presence and activity of Malaysian
in line with the financial system needs of a high- commercial banks in ASEAN. Beyond banking
income nation. The Government has also outlined integration, other initiatives to strengthen economic
three strategic areas to further strengthen Malaysia’s and financial integration in ASEAN include the
economic resilience while driving inclusive and ongoing promotion of local currency settlement
sustainable economic growth for years to come. These arrangements between ASEAN countries with banks
comprise ensuring well-distributed economic growth serving as key enablers in these mechanisms, the
and development to provide equal opportunities to deepening of regional financial markets, increasing
those in small townships and rural areas; positioning interconnectedness and safety of payment systems
Malaysia as a competitive market for the digital as well as enhancing financial inclusion.
economy; and leveraging financial technology as an
enabler to fortify the resilience and sustainability of The banking industry is facing rapid and irreversible
the financial system. forces of change across technology, customer
behaviour and regulation. The effect is that the
The NTP has been contributing to these areas, with industry’s current shape and operating models
this NKEA paving the way for universal access to may no longer be competitive and sustainable in
insurance for the rakyat, while regulators and market the long-run.
players have rapidly taken up opportunities presented
by financial technology. Other indicators, such as the The Ministry fully believes that with proper
value of the capital, equity and debt markets, the fund harnessing, technology will help to broaden retail
management industry’s Assets under Management investor participation and stimulate more innovative,
(AuM) and Malaysia’s share of global Islamic assets under market-based financing options. The digitisation of
management also reflect the continued resilience and the financial services value chain will also make it
global prominence of our financial system. As at the easier for consumers to access financial services.
end of the year, the value of the capital, equity and debt This will help address funding challenges faced
markets amounted to RM3.2 trillion, RM1.9 trillion and by the Malaysian business community, especially
RM1.3 trillion respectively, while AuM stood at RM776.2 for the micro, small and medium-sized enterprise
billion. Of the US$71 billion global market value of Shariah segment and in the long-term, further enriching
assets, Malaysia commands a 30% share and is also the our financial services industry in tandem with our
global leader of sukuk issuances. These contributed to transformation into a high-income nation by 2020.
the RM73.9 billion in GNI created by the NKEA in 2017,
accounting for 6% of total GNI generated.
ENCOURAGING FINANCIAL PROTECTION This also calls for the evolution of a more comprehensive
ecosystem for innovation which includes incubator
IN AN iNCLUSIVE MANNER programmes that are proving to be highly successful
in helping entrepreneurs commercialise ideas and scale
up companies. Such programmes can significantly
reduce the cost of innovation for firms and risks
for financiers and risk managers such as insurance
Insurance and takaful penetration in Malaysia has ranged providers. Malaysia’s well-developed institutions also
between 54% and 56% between 2012 and 2017. Bank play a key role in partnership with financial institutions
Negara Malaysia (BNM) targets to increase this to 75% to support innovative financing solutions.
by 2020. To increase the uptake of insurance and takaful
among Malaysians, BNM has been undertaking a number
of initiatives. This includes working with the insurance and
takaful industry to introduce a diverse range of affordable,
accessible and simple products intended to meet the
“Since the operationalisation of
the ECF market in mid-2016,
needs of the underserved household segment. In addition 37 issuers have raised a total of
to increasing insurance and takaful coverage among RM32.74 million through ECF
Malaysians, the initiative is also expected to heighten
awareness of insurance and takaful over the longer term.
operators as of December 2017.
”
Another key initiative is to diversify distribution channels
In an effort to energise the digital agenda for
for insurance products. The insurance and takaful
Malaysia’s capital market, SC through its aFINity
industry has begun offering life insurance products
(alliance of FinTech Community) outreach
through direct channels since July 2017, particularly
programme has prioritised engagements with start-
through the digital space. As a result, protection-focused
ups, technopreneuers, incumbent capital market
products are now available via cost-efficient distribution
participants, sectoral players and other stakeholders.
channels. This will enable the development of product
It also launched Engagement Labs in 2017 with
comparison websites and further catalyse innovation
interested parties to delve into the key aspects
for protection-focused products.
of digital business and raise understanding in its
deployment in the Malaysian capital market.
EMBRACING DIGITAL FINANCE AND On its part, BNM has enhanced its regulatory
REINVENTING THE FUTURE approach to digital finance with the introduction of

the Regulatory Sandbox on 18 October 2016. Under
the Sandbox, financial institutions regulated by BNM
and fintech companies looking to carry out businesses
regulated by BNM may be granted certain regulatory
flexibilities to experiment with innovative solutions
Following the new peer-to-peer (P2P) financing
in a production or live environment accompanied by
framework which came into effect on 2 May 2016 and
appropriate safeguards. A Sandbox may be deployed
the registration of financing platform operators, RM37.15
for a period not exceeding 12 months, and thus six
million of financing has been issued through these
fintech companies have been approved to test their
platforms. The introduction of P2P financing follows the
solutions in the Sandbox.
launch of equity crowdfunding (ECF) in 2015, making
it the second market-based financing asset class in
To attract more digital natives, Bursa Malaysia has
Malaysia. Since the operationalisation of the ECF market
refreshed its BursaMktPlc online platform which
in mid-2016, 37 issuers have raised a total of RM32.74
is aimed at improving financial literacy, educating
million through ECF operators as of December 2017.
and empowering investors to participate in the next
generation of growth and creation of economic value.
In 2017, the Securities Commission (SC) introduced the
The website contains information about the Malaysian
Digital Investment Management framework, setting out
financial markets, including research reports, and
licensing and conduct requirements for the offering
serves to equip potential investors with knowledge
of automated discretionary portfolio management
on capital markets and provide experienced investors
services to investors, making investments affordable
with tools to make investment decisions.
and accessible to everyone, at all stages of their lives.
building a sustainable growth of 105%. The market has also recorded net
inflows from foreign institutions of RM16.5 billion during
securities capital market the period from January 2010 to December 2017.
Total capital raising through the capital market

amounted to RM146.7 billion in 2017. Primary market
issuances amounted to RM132.1 billion, with a total of
The equity capital market remained resilient in RM124.9 billion raised in the corporate bond and sukuk
2017 with support and collective efforts from the market, and RM7.4 billion raised via new equity listings.
SC, Bursa Malaysia and industry players who work Notable IPOs for the year include Lotte Chemical Titan
together to build a vibrant, robust and competitive Holding Bhd (RM3.8 billion) and Eco World International
marketplace with a continued focus on sustainability. Bhd (RM2.6 billion). RM14.5 billion was also raised via
In addition to expanding the market’s range of the secondary market through rights issues and private
tradable products, efforts are centred on facilitating placements. Since 2010, the total capital raising in the
greater market efficiency and accessibility, thus capital market has reached close to RM900 billion.
widening Malaysia’s footprint in the regional
marketplace. As part of the amplified efforts to ensure a supportive
market for issuers and investors, on 25 May 2017
The equity market has recorded significant gains Bursa Malaysia launched the Mid- and Small-Cap
since 2009, driven by Malaysia’s stable economic (MidS) Scheme, a platform to provide independent
growth. The FBMKLCI has risen by 105% during the analyst coverage by licensed research houses for an
period, with market capitalisation increasing by 187% inaugural batch of 100 mid- and small-cap public-listed
and Average Daily Value (ADV) recording robust companies (PLCs).
Malaysia Equity FBM KLCI 105%

Market Growth
from January Market Capitalisation 187%
2009 through
December 2017 ADV 105%
Market Foreign Shareholdings 2.4 percentage points
2017 (inflow) RM11.1 billion

Foreign Instituions Net Flow 2014 - 2016 (Outflow) RM28.9 billion
2010 - 2013 (Inflow) RM34.3 billion
Source: Bursa Malaysia MIS
Foreign 8,000 TNFI: Total Net Foreign Institutions Inflow TNF0: Total Net Foreign Institutions Outflow
Institutions 6,000
Net Inflows 4,000
January 2010 -
December 2017 2,000
RM16.5 -2,000
DEC 2017
RM0.96B
billion -4,000
-6,000
-8,000 2010 2011 2012 2013 2014 2015 2016 YTD 31 DEC 2017
TNFI TNFI TNFI TNFI TNFO TNFO TNFO TNFI: RM11.1B
Source: Bursa Malaysia MIS (RM mil) RM15.2B RM2.2B RM13.8B RM3.0B RM6.6B RM19.4B RM2.9B
ADVANCING MALAYSIA’S GLOBAL The first half of 2017 saw the release of another
policy document on wa’d (promise) and two
LEADERSHIP IN ISLAMIC FINANCE exposure drafts on rahn (collateral) and bai’ al-sarf
(currency exchange) to the industry. The finalised
policy documents on rahn and bai’ al-sarf, which
will be issued by the end of 2017, will mark the
completion of the Shariah regulatory standards
In collaboration with the financial industry, compendium which is widely applied in the Islamic
BNM issued a Strategy Paper on Value-based finance industry.
Intermediation (VBI) in July 2017. VBI outlines a
holistic approach for the Islamic finance industry Malaysia also continues to capitalise on the
to deliver the intended outcomes of Shariah availability of Shariah compliant assets in its capital
finance. This includes processes and outcomes market. Furthermore, it is regulated on internationally
that generate positive and sustainable impact on benchmarked securities laws and practices. Malaysia
the economy, community and the environment. already offers comprehensive Islamic capital market
(ICM) capabilities with its Islamic funds and sukuk
markets ranked as the largest in the world and
“Mcomprehensive
a l ays i a a l re a d y o f fe r s
Islamic capital
supported by a sizeable Islamic equity market.
The Islamic capital market nevertheless requires
significant new drivers globally to build greater
market (ICM) capabilities with its scale and elevate it to the next phase of growth. In
Islamic funds and sukuk markets this regard, the growing demand and preference
ranked as the largest in the world for Islamic fund and wealth management services
represent a new growth opportunity for ICM.
and supported by a sizeable
Islamic equity market.
” In view of this, the SC launched a five-year Islamic
Fund and Wealth Management Blueprint in January
2017 to drive greater development and growth of
The initial focus of VBI will be its implementation
Malaysia’s Islamic capital market. Key initiatives
within the Islamic banking industry. Subsequently,
will be operationalised based on three mutually
it will be expanded to the takaful industry and
reinforcing strategic thrusts. These will strengthen
other areas of the financial sector.
Malaysia’s positioning as a global hub for Islamic
funds, establish Malaysia as a regional centre for
In line with the recommendation under the
Shariah-compliant sustainable and responsible
Financial Sector Blueprint, which seeks to position
investment, and develop Malaysia as an international
Malaysia as reference centre for the offering of
provider of Islamic wealth management services.
Islamic financial products and services, BNM has
also embarked on a Shariah Standards initiative.
Leveraging on its strength in the Islamic capital
This initiative aims to develop a contract-based
market, the SC also developed a Sustainable and
regulatory framework that is underpinned by
Responsible Investing (SRI) Fund framework, which
standards on Shariah contracts which contain
will be instrumental in developing and branding
guidance on sound practices and effective
Malaysia as a regional SRI market, further cementing
governance.
the country’s position as the largest SRI market in
Asia. The framework details out the requirements
From 2013 to 2016, 11 Shariah standards have
that will have to be complied with by SRI funds,
been issued covering the policy documents on
including additional disclosures.
murabahah (cost and mark-up), mudharabah
(profit sharing partnership), musyarakah (profit
Bursa Malaysia continued to register a healthy
& loss sharing partnership), istisna’ (construction),
breadth of Shariah-compliant securities on
tawarruq (commodity trading), kafalah (guarantee),
the Main and ACE Markets. As of 31 December
wakalah (agency), wadi’ah (safe custody), hibah
2017, 76% of the 902 PLCs on Bursa Malaysia
(gift), qard (loan) and ijarah (lease).
are Shariah-compliant with Shariah market
capitalisation accounting for 60.5% of the total prospects and provide greater opportunity for
market capitalisation. Additionally, since its launch active managers to make informed decisions within
in September 2016, Bursa Malaysia-i has signed up the sector. Bursa Malaysia aims to further grow the
14 Islamic Participating Organisations (POs), almost two new equity segments and continue to drive
half of the 30 POs currently registered with Bursa sustainability in the marketplace by bringing new
Malaysia Securities. POs are companies which carry investable products to the market.
out the business of dealing in securities.
enabling capital market access

to small players
Given the importance of small- and medium-sized

enterprises (SMEs) in driving Malaysia’s economy,
regulators have recognised the need to develop
a supportive capital market-based fundraising
mechanism for this important business segment. LEAP Market exchange of MoU and agreement on 25 July
2017.
In line with this, Bursa Malaysia launched the Leading
Entrepreneur Accelerator Platform (LEAP) on 25
July 2017. The first of its kind in ASEAN, designed
solely for SMEs and sophisticated investors, the enabling CONTINUED GROWTH OF
new market aims to provide SMEs with a fast and
efficient fund-raising platform and visibility through THE CAPITAL MARKET
the capital market. This initiative will contribute to
enhancing SME fundraising activities in Malaysia.
The LEAP market offers several benefits to its

Given the overall size of the capital market, which
various stakeholders. For example, it benefits
now stands at more than RM3.2 trillion, the SC is
issuers by providing an alternative and less costly
establishing the Institute of Capital Market Research
platform for fundraising and provides sophisticated
to further accelerate the market’s growth momentum.
investors with access to a wider pool of potential
investments that may yield high returns or provide
The Institute will benefit industry and policy makers
investment diversification opportunities, while
by facilitating the introduction of innovative products
allowing advisers to enhance their profile and
and services through greater applied research,
access additional revenue streams. Bursa Malaysia’s
identifying new growth areas, developing more
launch of its MidS Scheme also served to catalyse
in-depth and rigorous research on capital market
the LEAP market ecosystem.
trends and issues, providing more analytical thinking
for policy formulation as well as enhancing talent in
Moreover, two new indices were introduced as
the capital market via industry collaborations and
part of an initiative to track the performance and
strategic partnerships.
generate more interest in mid- and small-cap PLCs.
The inclusion of the FTSE Bursa Malaysia MidS
The Institute will also function as the central repository
Cap Index and FTSE Bursa Malaysia MidS Cap
and reference point for capital market data and
Shariah Index into the FTSE Bursa Malaysia Index
disseminate comprehensive statistics to facilitate
Series is in line with global trends where investors
analysis for the benefit of various industry participants,
are now allocating their investment portfolio
including undergraduate and post-graduate students
strategically into the mid- and small-cap segment.
undertaking research projects relating to financial
Mid- and small-cap stocks offer attractive growth
markets, business and the economy.
ministry of finance steering financial insurance and capital market subsectors, the Malaysian
financial landscape will be further enhanced.
services sector to a new era “The more meaningful participation of ASEAN financial
institutions in the domestic financial system and
Malaysia’s financial services sector has emerged as a capital markets, coupled with greater operational
primary source of financing for the private sector to flexibilities accorded to these institutions, will further
perform businesses and promote economic growth, promote a more competitive and dynamic domestic
says Datuk Siti Zauyah Md Desa, Deputy Secretary- financial system that will support economic growth
General (Policy) of the Ministry of Finance. The and development,” she says.
financial services subsector constituted about 14%
of the services sector, and the services sector, in turn, One of the challenges facing the industry is the
made up nearly 53% of Malaysia’s GDP between 2010 increasing popularity of FinTech (financial technology)
and 2016. companies which is disrupting the way traditional
banking is being done.
Datuk Siti Zauyah says that the robust state of the
financial industry is the outcome of careful planning “This creates a big challenge for traditional banks
and implementation of Government initiatives because they are not able to adjust quickly to
designed to strengthen the sector. These include the the changes – not just in technology, but also in
Financial Services NKEA under the NTP, the Financial operations, culture, and other facets of the industry,”
Sector Masterplan (FSMP) 2000, Financial Sector says Datuk Siti Zauyah.
Blueprint 2011 – 2020 (FSBP), the Capital Market
Masterplan 2 (CMP2) and measures taken under the Another concern surrounding the rise of FinTech
11th Malaysia Plan (11MP). is the potential tax leakages and the challenge
to tax revenue generated from e-commerce and
Moves taken to develop the financial industry in other FinTech transactions which can easily bypass
the country include initiatives to improve levels of regulatory requirements.
governance, competitiveness, regional integration
and inclusion. The Government has also taken Nonetheless, the Malaysian Government has positioned
measures to make financial services more supportive financial services to take advantage of disruptive
of entrepreneurship and innovation. technology such as FinTech in line with global trends.
This includes the introduction of a conducive regulatory
Datuk Siti Zauyah adds that in order for Malaysia’s environment that harnesses the potential of FinTech to
financial service sector to be more competitive, it needed modernise, deepen and increase the competitiveness
to be efficient and inculcate integrity. “The sector has of the domestic financial and funding markets.
to have a good communication strategy to educate
the stakeholders and this could be done effectively “FinTech is touted as a game changer, the revolution
through digitalisation and online transactions.” that is taking the financial services industry into a new
era,” says Datuk Siti Zauyah.
She also says that Malaysia needs to establish strategic
partnerships with countries in the region, for example
Islamic Finance and Public-Private Partnership for
Infrastructure Development, to bridge the gap
between the demand and supply of capital.
“At the same time, we need to distribute the relevant

risks and return in a manner which is fair for all parties
involved and more importantly, incentivise good
operational performance,” says Datuk Siti Zauyah.
The Deputy Secretary-General also notes that with

the progressive liberalisation achieved in the banking, Datuk Siti Zauyah Md Desa, Deputy Secretary-General
(Policy), Ministry of Finance.
MOving Forward
The Malaysian economy has proven its resilience amid the uncertain global economic environment by
advancing its strategic focus areas in the financial industry. In embracing the new normal, regulators and
regulations have proved their ability to adapt. As there is a need for greater certainty around the regulatory
agenda, policy must continue to empower the role of the financial system as a positive contributor to
economic growth as well as an enabler for inclusiveness.
Financial institutions will now need to sharpen their strategic focus to remain relevant amid emerging
competitors, shifting demographics, rising customer expectations and changing regulations. A conducive
and robust business environment will remain pivotal to maintain the growth and sustainability of the industry.
AGRICULTURE
bringing malaysian farm

products to the world
YB DATO’ SRI AHMAD SHABERY CHEEK

Minister of Agriculture and Agro-based Industry
Agriculture initiatives under the NTP have adopted production since the establishment of the Integrated
a bold approach aimed at extracting value from a Zone for Aquaculture Models (IZAQs) project.
sector traditionally seen as the poor man’s sector. In Annual shrimp production stood at 25,399 tonnes in
contrast, the Government sees agriculture as a high- 2017, compared with 10,464 tonnes in 2012. Aligned
yielding activity which can leverage Malaysia’s rich with agriculture industry norms, the aquaculture
natural resources and catalyse economic growth, sector is affected by the risk of disease and the
contributing to employment, income generation need to ensure minimum standards. In view of this,
and food security. the Government is undertaking various efforts to
maintain quality and boost aquaculture production,
With this in mind, the Agriculture NKEA marks a shift such as to allow companies to import shrimp
from subsistence farming towards agribusinesses, brood stocks from approved sources in Thailand,
facilitating the production of high-value products Singapore, Brunei and the US, at the same time
for export. This contributed to the RM73.6 billion requesting anchor companies to adopt the Malaysia
in GNI generated by the agriculture sector in 2017, Good Agricultural Practice (MyGAP).
an achievement which has already surpassed the
roadmap target of RM49 billion by 2020. This has In the herbal sector, 27 products have undergone
been driven by the growth of the processed food pre-clinical and clinical trials since 2011, of which
sector, aquaculture segments and herbal products, three have been completed and launched for use
as well as the development of agriculture SMEs in the nutraceutical and cosmeceutical industries.
through the anchor company model to take up The growth of this segment, in turn, continues to
NKEA projects and provide income-generating spur demand for contract farming of local botanicals
opportunities for smallholders. under the herbal cluster initiative which commenced
in 2012, with total sales from the herbal cluster
In the processed food sector, we recorded the reaching RM5.25 million in 2017 against just RM1
development of 154 SMEs and RM511.21 million of million at its start.
sales to support anchor companies along the full
value chain in 2017, the highest number recorded With new projects still taking off, such as in fresh
since 2015 when we initiated the SME development milk production, as well as continued momentum of
programme. This exceeds the targets of developing existing projects, I am confident that the agriculture
40 SMEs and generating RM320 million in processed sector remains well-positioned to complete its
food sales for the year. To date, 323 SMEs have been transformation in line with our socio-economic
developed with RM1.1 billion in sales generated. agenda under the NTP.
Meanwhile, the shrimp farming industry has

generated more than RM2.7 billion worth of
DEVELOPING AGRICULTURE SMEs 2016, the percentage of local fresh milk market
share stood at 61.24% against the market share of
imported fresh milk.
Under this project, 154 SMEs have been developed

The Ministry of Agriculture aims to consolidate against the target of 40 SMEs in 2017 alone. Sales
the local processed food industry by developing from these SMEs have reached RM511.21 million,
an integrated food park facility, under a project 50% more than the original target planned.
to strengthen export capability of the processed
food industry. The food park will produce ready- Another project undertaken in this NKEA is the
to-eat packaged food by SMEs to be marketed transformation of seaweed farming in Sabah into
and distributed by anchor companies that will a high-yielding, commercial-scale business by
also obtain product certification, package, brand, clustering farms under the seaweed mini-estate
market, manage suppliers and help develop small initiative which is spearheaded by the Department
fragmented players through apprenticeship training. of Fisheries (DoF). To date, five mini estate projects
and four cluster programmes are actively operating,
providing valuable income-generating opportunities
“As of 2016, the percentage of

local fresh milk market share
to 615 seaweed farmers.
Operators have, however, encountered challenges

stood at 61.24% against the such as production and demand issues, land
market share of imported fresh disputes, as well as low seaweed price levels. In
”
terms of production, Semporna has been identified
milk. as an ideal habitat for the best-quality seaweed
and efforts have been made to develop the optimal
An anchor company under the food park project, technique to grow seaweed. However, gains in
Holstein Milk Sdn Bhd, is presently distributing its terms of yield quality and quantity have been
dairy products under the “Farm Fresh” brand, mostly offset somewhat by a lack of standardisation in
through home vendors instead of hypermarkets. implementing good agricultural practices. While
To date, the company has signed up 350 home MyGAP standards are in place, not all farmers
vendors and 25 stockists. Holstein’s decision to implement the standards strictly.
utilise home vendors provides job opportunities
to more than 300 people, besides increasing the Furthermore, the State Government is unable to
national market share of local fresh milk. As of gazette and allocate areas for seaweed farming
The PAKAR programme recorded 3,441 participants in 2017.

and instead, leases out areas for short periods of of herbal companies exhibiting strong potential
less than five years. This scenario limits the DoF’s in terms of product offerings, command of the
ability to attract seaweed growers to participate market as well as financial strength have been
in this programme. There is also only one active identified and appointed as anchor companies.
seaweed processing company for growers to sell These companies are offered grant incentives to
their produce to, which weighs down demand, finance their product development through pre-
affects pricing and restricts growers’ compensation. clinical and clinical studies. As of October 2017,
In mitigation, the Ministry is looking to expand the 14 companies have been identified as anchor
pool of entrepreneurs to buy and process seaweed companies under this project.
to avoid the current monopoly which impacts
pricing. Moving forward, the Ministry is planning to
produce the National Seaweed Blueprint based on
a study that was conducted in 2016 in collaboration
with a local university to better address the
“From 2011 to 2017, Malaysia has
exported EBN products mainly to
industry’s supply-demand dynamics. Hong Kong (RM507.51 million),
followed by China (RM360.57
The Pasar Komuniti dan Karavan (PAKAR) initiative
million) and Taiwan (RM166.71
”
was introduced under the Wholesale and Retail
NKEA in 2010 to modernise the traditional concept million).
of markets by introducing more up-to-date
trading methods and creating cleaner and more
comfortable environs for traders and consumers. The product development pipeline for 2017 involved 14
The initiative was transferred to the Agriculture herbal products that have entered pre-clinical studies,
NKEA in 2013, following which 10 PAKAR sites while 11 products have commenced clinical studies.
in Manjung, Jengka, Pekan, Bera, Mersing, Paroi, Additionally, four products have completed pre-clinical
Kuala Kedah, Kota Belud, Keningau and Kuching and clinical studies, which will expand the market
were established. In 2013, 1,865 people took part in for high-value herbal products both domestically
this initiative, with this number almost doubling to and internationally. A notable company in this field
3,441 in 2017. In 2017 alone, revenue generated from is BioAlpha, a botanical drug producer and owner of
the PAKAR programme reached RM103 million, a herbal park. Focus Malaysia has listed BioAlpha as
exceeding the target by 24%. one of the fastest-growing companies (for companies
with market capitalisation below RM500 million) on
To boost participation, the Ministry is working to Bursa Malaysia in 2017. BioAlpha was publicly listed in
improve the coordination of agricultural marketing 2015 and has expanded into new markets.
activities by private sector and Government entities
to enhance marketing and undertake new market The DoF also leads the Integrated Zone for
development for Malaysia’s agricultural produce Aquaculture Models (IZAQs) project, which focuses
moving forward. on improving the production of fully certified export-
quality shrimp for premium markets. Smallholders
and SMEs are continually engaged to participate
BOOSTING EXPORT OF in this project through contract farming or profit-

sharing agreements with anchor companies. As of
AGRICULTURE GOODS 2017, anchor companies in the IZAQs project have
committed to producing 9,264 jobs in the sector.
The Government’s capital expenditure of RM300
million in this sector has also catalysed more than
RM2.7 billion worth of shrimp production.
The herbal product project aims to take advantage
of Malaysia’s rich biodiversity to establish the Nevertheless, this project faces a unique challenge
country as a producer of high-value herbal products as most of the ponds are in remote areas. For
in the global market for traditional medicines instance, one of the highest-producing anchor
and supplements. A total of 27 high-value herbal companies, Pegagau, which operates in Kalabakan,
product development initiatives have undergone 90 km away from Tawau in Sabah and produced
pre-clinical and clinical studies, whereas a selection 2,651 tonnes of shrimp in 2017, faced issues in
Milking New Opportunities
Dairy farming is something most people would Started by Johor-based entrepreneur Loi Tuan Ee
associate with New Zealand, rather than tropical about seven years ago, the company received strong
Malaysia. Yet Malaysia’s own The Holstein Milk support and backing from the Government including
Company has not only managed to surpass foreign investments from national strategic investment firm,
established brands in the fresh milk category, it has Khazanah Nasional, which now holds a 30% stake in
helped spur a new development of a sustainable dairy the company. Holstein also received a RM10 million
industry as well as significantly increase incomes of soft loan from the Government which has aided in
dairy farmers around the country. The Holstein Milk funding for initial equipment investment.
Company, one of Malaysia’s premier diary brands,
has also helped to improve the quality of fresh milk in Holstein currently produces about one million bottles
the market as their products are made of pure fresh of milk a month from approximately 4,000 heads of
milk directly from the farm, free from any form of cattle. It has two farms — one in Kota Tinggi, Johor,
preservatives, unlike most imported brands sold as and another at the Muadzam Shah Cattle Research and
fresh milk which are either reconstituted from powder Innovation Centre in Pahang. The latter was started in
or milk solids or treated with preservatives. 2014 with assistance from the East Coast Economic
Region (ECER) and MARDI (Malaysian Agricultural
Holstein has a 39% market share for fresh milk in Research and Development Institute). New farms and
Malaysia with its “Farm Fresh” brand, the No. 1 brand in processing plants expansion are underway.
the fresh milk category. Holstein is an anchor company
under the Agriculture NKEA, which aims to develop “Malaysia is a very conducive location to set up
dairy farming clusters in Peninsular Malaysia as well a business and the Government has been very
as develop small entrepreneurs as distributors. supportive,” says Loi.
Loi at his dairy farm in Kota Tinggi, Johor.

Holstein has also played a role in lifting the incomes of He adds, “With the correct dairy development policies
dairy farmers in Malaysia, contributing to the long-term in Malaysia, more private sector involvement and
sustainability of the industry. About 30% of its milk is parties will invest in the sector to improve the quality
sourced from contract farmers and Holstein currently of farming and increase fresh milk products.
pays them a fair price of about RM2.80 per litre as
compared to RM1.20-RM1.40 per litre previously. By “With concerted efforts amongst Government
doing so, Holstein has managed to put an additional agencies to educate Malaysian parents to feed their
RM3,000-RM15,000 a month into the pockets of children fresh milk instead of powdered milk, even if
contract dairy farmers around the country. three out of 10 kids were to switch, it will translate to
a growth of RM500 million for the fresh milk market.
This translates to 70 million additional litres of fresh
“Malaysia is a very conducive

location to set up a business and
milk which will require 20,000 dairy cattle to produce.
“More Malaysians today are moving towards the

the Government has been very consumption of healthier and more nutritious food,”
supportive.
” he says. “The long-term future of the industry in the
country is extremely good.”
“In the dairy industry context, we are of the view

that the Agriculture NKEA has succeeded beyond
expectations,” says Loi. “For decades, the price of
raw milk has been suppressed by foreign processors
at RM1.20 -RM1.40 per litre. Today, it is RM2.80 per
litre. This is life changing for the local dairy farmers.
Many farmers have gradually increased their herds
to produce more milk as they can earn more profits.”
Loi says that the potential for dairy in Southeast Asia is

vast as it is a multi-billion dollar market. “The Malaysia
market is significantly smaller compared to Indonesia
and Vietnam,” he says.
The dairy entrepreneur has several suggestions

to enhance the industry, especially in terms of the
governance of the milk industry. He believes there
needs to be a central agency that coordinates all
national dairy development programmes. Loi also
urges that the label “fresh milk” should not be allowed
for imported processed liquid milk. “This will allow
the Government to establish better pricing for local
farmers who produce real fresh milk,” he says.
Loi adds that he is optimistic about the long-term

future of the dairy industry as consumers are getting
more discerning and aware about the benefits and
differences between fresh milk and powdered milk.
receiving electricity supply. This delayed the project Meanwhile, under a project to upgrade the
for almost a year. However, strategic intervention industry’s capabilities to produce premium fruit
and monitoring from federal agencies resolved the and vegetables, the local fruits and vegetables
operational issues, enabling the farms to operate export sector has seen exports of fruits rise from
according to projected targets. RM630 million in 2011 to RM1.09 billion in 2016,
led by exports of watermelon and durian mainly
On the other hand, upstream edible birds’ nest (EBN) to Singapore and Hong Kong, while vegetable
production and development of high value-added exports increased from RM750 million in 2011 to
downstream products, driven by the Department RM1.5 billion in 2016, led by tomato and cucumber
of Veterinary Services, has recorded significant exports to Singapore and the UAE. In fact, the
achievements since its commencement. From durian to China reached RM18 million in 2016.
2011 to 2017, Malaysia has exported EBN products The local premium fruits and vegetables export
mainly to Hong Kong (RM507.51 million), followed project leverages existing Permanent Food
by China (RM360.57 million) and Taiwan (RM166.71 Production Zones to boost the production of
million). As of 2017, 15 companies under the third shortlisted fruits and vegetables and catalyse
batch of exporters are currently being audited by the sector holistically.
the Certification and Accreditation Administration
of China (CNCA), while the number of existing The main complication faced by this project
companies that have been approved to export is limited market access to other countries.
products stands at 19. The total export for EBN Nevertheless, federal agencies led by Department
products reached 385.44 tonnes in 2017, exceeding of Agriculture are in constant negotiations
the target of 270 tonnes. with their counterparts in target markets such
as China, the US, Australia and Japan. Among
A challenge faced by this initiative was the export results of this effort is the signing of a protocol on
restrictions on EBN products due to an avian phytosanitary requirement in May 2017 to export
influenza outbreak in Kelantan during the year. pineapples to China, allowing Malaysia to export
Although China lifted its export ban on 15 June 12,000 tonnes of pineapples worth RM40 million
2017, the epidemic risked Malaysia’s reputation as an annually to China. Currently, Malaysia exports
EBN exporter and has required stricter monitoring of RM160 million worth of pineapples mainly to
the implementation of MyGAP standards to ensure Singapore, Iran and the UAE every year.
EBN producers comply with the highest standards.
Working visit by YB Dato’ SrI Ahmad Shabery Cheek to a manufacturer of ‘daun belalai gajah’ extract.
MOving Forward
The Ministry of Agriculture has developed the National Dairy Industry Development Programme (NDIDP)
2017-2020 to raise milk production by an additional 20 million litres by 2020 through the import of 10,000
heads of dairy cattle. In 2017, funding was allocated for this programme on a pilot basis, covering the
development of Muadzam Dairy Valley and upgrading of dairy farms in Segamat in Johor and Gemencheh
in Negeri Sembilan. Work on this project is expected to begin in January 2018. An additional 4.5 million
litres of milk is targeted to be produced by August 2018 (19 million litres for the full year), with 28 million
litres to be achieved by December 2019.
Separately, recognising the importance of certification to ensure quality control, the Ministry will make
MyGAP certification compulsory throughout the agriculture industry and aims for all companies to be
certified by 2020.
PUBLIC SERVICE DELIVERY TRANSFORMATION
Touching Lives through

Public Services
YBHG TAN SRI DR. ALI HAMSA

Chief Secretary to the Government
Over the course of the NTP, the Public Service Delivery Johor Bharu in 2013, significant improvements in
Transformation (PSDT) SRI focus areas have evolved reducing waiting time as well as congestion at the
from improving the Government’s services to create hospital prompted the expansion of LEAN Healthcare
a business-conducive environment to ensuring that to all 133 hospitals nationwide in phases.
Malaysia’s public services effectively address the
rakyat’s key concerns. This has been achieved through There are 52 hospitals under the Ministry of Health
holistic activities which focus on maximising outcomes (MOH) which have implemented the LEAN Healthcare
and optimising resources. This is in line with our National initiative in their various departments. MOH aims
Blue Ocean Strategy (NBOS) which was introduced to expand the LEAN methodology to all hospitals
in 2009 with the aim to increase collaboration across nationwide.
Ministries, Departments and Agencies (MDAs) to
implement high-impact citizen-centric projects rapidly Further to this, the Government has also embarked
at low cost. on various transformation led by Public Service
Department to enhance and expand digitisation
As a testament to these initiatives, Malaysia was ranked of public services. A total of 1,432 transformation
second out of nine ASEAN countries and 15th globally initiatives, including high-impact initiatives such as the
for its efficiency in Government spending in the World 1Malaysia Customer Service of Civil Servants (1SERVE),
Economic Forum’s Global Competitiveness Report 1Malaysia Civil Service Retirement Support (1PESARA),
2017-2018. Globally, Malaysia’s ranking is ahead of some Domiciliary Treatment Services and Ez ADU KPDNKK
European and other Asian countries such as Finland, have been undertaken.
Norway, China, Iceland, Sweden and Japan.
The Government is committed to continuously
To date, more than 100 NBOS initiatives have been review and improve its services. We will continue
implemented, addressing a wide range of socio- to adopt NBOS to deliver the TN50 vision, which
economic areas and providing game-changing will require paradigm shift in terms of planning and
public services to the rakyat. These include the Urban implementation. With this innovative thinking and
Transformation Centres (UTC) and Rural Transformation shift of our perspective and strategy in delivering
Centres (RTC) which serve as one-stop premises which national transformation, we are confident the NTP
provide a range of integrated Government services for will be successful and pave a new phase of Malaysia’s
the rakyat’s convenience and for efficient utilisation of transformational and inclusive development.
public resources.
Under the PSDT SRI, the Government is focusing on

transforming the delivery of public health services to
the rakyat by introducing LEAN Healthcare initiatives.
Initiated as a pilot project in Hospital Sultan Ismail,
Improving Healthcare Services 1. Introducing a block appointment system in

specialist clinics;
for the Rakyat 2. Improving Operating Theatre (OT) utilisation;
3. Improving management of medical records;
4. Improving turnaround time on urgent diagnostic
tests run by the Pathology department; and
5. Improving delivery of hospital support services.
SRI PSDT projects focus on process improvements
and “doing more with existing or less resources”. To Strengthening the frontline
this end, the LEAN Healthcare initiative by the Ministry
of Health (MOH) has demonstrated improvements Emergency Departments and Medical Wards are
in the quality of care provided by public hospitals, at the frontline of hospitals, and to this effect MOH
thereby enhancing the patient experience and adding continues to focus on improving services in these
value to delivery of healthcare to the public. areas. To date, MOH has rolled out LEAN to the EDs
and MWs of 52 hospitals. This has improved patient
Up to 2017, 52 hospitals have embarked on the LEAN flow at the ED’s Green Zones, which is measured by
Healthcare transformation journey mainly in the the throughput of the following two metric targets:
Emergency Departments (ED) and Medical Wards
(MW), which include 16 new hospitals this year. The • Waiting time from arrival to consultation (ATC)
initiative aims to reduce waiting time and congestion of 60 minutes or less; and
in hospitals by improving the process flow of patients’ • Total length of stay (LOS) in ED of 120 minutes
visit at MOH hospitals. or less.
The 16 hospitals are Hospital Banting, Hospital Throughput indicates the ED’s percentage of
Segamat, Hospital Kluang, Hospital Port Dickson, success in meeting the key targets mentioned
Hospital Bukit Mertajam, Hospital Kepala Batas, above. Before the implementation of LEAN,
Hospital Sibu, Hospital Pekan, Hospital Tawau, Hospital the EDs were first ranked into categories A, B,
Duchess of Kent, Hospital Keningau, Hospital Lahad C and D based on ATC and LOS throughput. A
Datu, Hospital Bintulu, Hospital Kapit, Hospital Sri measure of success is when EDs move up in the
Aman and Hospital Seri Manjung. direction of Category D to Category A post-LEAN
implementation as they become more efficient
In addition to EDs and MWs, MOH also initiated five and achieve higher throughput.
LEAN pilot projects this year:
ATC
Arrival to Consultation LOS
Length of Stay
UPSTREAM DOWNSTREAM
Patient Arrival Doctor
at ED Consultation Discharge
THROUGHPUT* (TP) 2x2 MATRIX

High
ATC (TP) LOS (TP) WHAT IT MEANS Efficient
Unlikely
Process
LOS (TP)
low low Upstream Issue D A

low high Unlikely C B
Inefficient Inefficient
high low Downstream Issue Process
Process Process
Issue
high high Efficient Process Upstream Downstream
Low
*Higher throughput is better Low High
ATC (TP)
The diagrams above demonstrate how the Emergency Departments are categorised on a 2x2 matrix based on throughput
of ATC and LOS.
Post LEAN Emergency Department (ED)

Efficiency Categories
High
4 EDs showed significant
None
7 EDs improvements moving
Remaining towards Category A
LOS (TP)
D A
C B
1 ED 8 EDs
Low
Low High
ATC (TP)
The diagram above shows the Efficiency Categories of the 16 Emergency Departments post LEAN implementation.
Four out of the 16 EDs demonstrated a significantly Meanwhile in the MWs, MOH aimed to improve bed
higher throughput post LEAN implementation, management. This involved improving the discharge
showing movement from Category B to Category A. time (DT), bed turnaround time (BTT), bed occupancy
The remaining EDs showed smaller improvements rate (BOR) and bed waiting time (BWT) to streamline
but remained within Categories A and B. the process. The targets for the metrics are four hours
or under for DT, 30 minutes or under for BTT, 85% or
To achieve the LEAN targets, steps that did not below for BOR and 120 minutes or below for BWT.
create value were eliminated and value-added
changes which result in high-impact improvements To measure performance, the MWs were also ranked
were introduced. on a 2x2 matrix based on the aforementioned metrics
for EDs, as depicted in the following diagram:
1
BWT
Bed Waiting Time
2
DT
Discharge Time
3
BTT
Bed Turnaround Time
2x2 MATRIX
High
Process Capacity &
1 2 3 4 5 6
(Average Time)
Issue Process Issue

BWT/DT
B D
Decision Inpatient Decision to Patient Bed
Treatment
to Admit (Bed) Discharge Leaves Bed Available A C
Efficient Capacity
4
BOR
Bed Occupancy Rate Low
MV Issue
Low High
BOR
Discharge
Depart
Lounge
The diagrams above demonstrate how the Medical Wards are categorised on a 2x2 matrix based on DT, BWT & BOR
performances.
Post LEAN Medical Wards (MW)

Efficiency Categories
High
3 MWs 3 MWs
(Average Time)
BWT/DT B D
A C
8 MWs showed significant 8 MWs 3 MWs
improvements moving
towards Category A Low
Low High
BOR
The diagram above shows the Efficiency Categories of the 16 Medical Wards post LEAN implementation.
Overall improvements were seen in the MWs post

LEAN implementation, where on average:
• Discharge time has reduced by 94 minutes (39%

improvement);
• Bed waiting time has reduced by 40 minutes (35%
improvement); and
• Bed occupancy rate has shown 8% improvement.
In implementing these projects, MOH observed

encouraging levels of teamwork in ED and MW
teams, while Hospital Quality Managers also facilitated
collaboration between both departments and other
departments such as pathology, radiology, IT and
finance. The challenge is to incorporate LEAN thinking
within the staff’s day to day work, as they are already
occupied with the demands of high workload.
Continuity is also a challenge with rapid turnover of
staff in many MOH hospitals. From 2018 onwards, the
ED and MW KPIs will be incorporated into the Hospital
Performance Indicators for Accountability (HPIAs) to
support the internalisation of LEAN.
Discharge lounge for patients to wait for their pick up.

Revamping Malaysia’s The TAT target for routine tests is four hours; however
urgent tests have a turnaround time of 45 minutes
Healthcare Service Delivery (20% of routine TAT). The challenge for lab staff is in
the workflow of urgent tests, where 60% of all tests
are urgent requests. MOH mandates that at least 90%
of urgent biochemistry and haematology requests
must be reported within 45 minutes.
Establishing Hospital Kuala Lumpur as a premier
hospital Following the pilot, improvements were seen. The
percentage of Biochemistry tests that met the KPI
In his Budget 2012 speech, the YAB Prime Minister improved from 9% to 24% (167% increase), and
announced that Hospital Kuala Lumpur (HKL) will Haematology tests improved from 56% to 66% (18%
be upgraded to a premier hospital. To achieve this increase).
target, HKL was allocated RM300 million in funding
for the construction of new facilities including a The second HKL LEAN project was initiated to improve
new specialist complex, ambulatory care centre, the management of patient medical records, which
nephrology centre and a seven-storey car park. is critical to the delivery of efficient and effective
healthcare services at hospitals. A good patient
To enable HKL’s transition into a premier hospital, medical record system can, among other things,
a two-part workshop involving MOH, HKL and the ensure patient safety, reduce patients’ waiting time,
Universiti Kuala Lumpur’s Malaysian Institute of support better clinical decision-making and reduce
Industrial Technology was held in June 2016. The unnecessary test requests. The LEAN project focused
workshop identified three areas for HKL to address: on seven departments which experience high patient
The Turnaround Time (TAT) for urgent diagnostic attendance that increases annually: Emergency
tests, the management and retrieval of patients’ Department, General Medicine, Ophthalmology,
medical records and the quality of support services. Orthopaedics, Paediatrics, Neurology and Nephrology,
Addressing these issues formed Phase 1 of the HKL covering both outpatient and inpatient workflows.
Transformation journey.
Key results on Medical Records 2017 pilot LEAN
A LEAN pilot project was thus kicked off to speed implementation were:
up diagnostic results produced by the pathology
laboratory (Core Lab), which receives an average of • Reduction in records retrieval period from 14 days
2,300 blood samples a day on weekdays and 500 to five days
blood samples a day on weekends, with 6:00 a.m. • The number of records not found on any clinic
to 7:00 p.m. being peak operational hours. day has reduced from 35% to 5%; and
• The number of temporary records created has
reduced from 80 cards a day to less than 10 cards
a day.
The third LEAN pilot project was initiated to optimise

the delivery of hospital support services. This is the
first initiative which involves a third party, Radicare Sdn
Bhd, which is HKL’s concessionaire for hospital support
services. The project focuses on two key areas within the
outsourcing management framework: communications
management and performance management.
Communications management ensures that HKL staff
and Radicare representatives are coordinated on the
needs of the hospital, whilst a robust performance
management system ensures that support is provided in
a timely manner and meets patients’ healthcare needs.
HKL and Radicare have identified a list of issues, of
HKL Core Lab - The time stamping step at the urgent which two thirds are deemed to be quick wins, and
workstation was removed to expedite the processing of
samples. have begun implementing potential solutions.
Public Service Department: to raise their employment prospects upon their release
The Bedrock of National Transformation from prison, and to reduce their falling back into crime
and recidivism.
To further establish the momentum of the national
transformation, which has roots in the 1Malaysia The 1Malaysia Map initiative is another example, led by
philosophy of “People First, Performance Now”, the the Natural Resources and Environment Ministry (NRE)
Public Service Transformation effort was introduced and aims to make the most of the available application
in 2013 to support Malaysia’s mission of becoming a platforms through sharing of geospatial data from
developed, high-income nation. This effort is led by the various agencies. This data encompasses the five sectors
Public Service Department (PSD) with support from the of Point of Interest, Emergencies and Natural Disasters,
Malaysian public service to ensure the achievement of Education, Natural Environment, and Health. The NRE
desired outcomes. also drove another strategic collaboration, the Flood
Warning and Prediction Management system by working
It is imperative for the Malaysian public service to closely with and sharing data between agencies like the
adapt to present-day realities to ensure it offers the Malaysian Meteorological Department, Remote Sensing
best services to the rakyat. The execution of this Agency and the Drainage and Irrigation Department to
transformation effort, therefore, is based on the Public raise the accuracy of flood predictions and reduce loss
Service Transformation Framework, which has five of life and possessions.
Strategic Bases that encompass transforming the public
service through strategic collaborations, cooperation Success has also been seen in the people-oriented
and co-dependence between Government agencies to 1SERVE initiative, which offers various services
bring about a delivery mechanism that is characterised through one-stop PSD counters with the help of other
by high performance, integrity, dynamism, and strong departments like the Road Transport Department,
people orientation. National Registration Department, Malaysian Immigration
Department and local authorities. Another high impact
This transformation effort takes a holistic and integrated initiative is the Ministry of Health’s Domiciliary Treatment
approach, with elements of creativity and innovation Service, which is performed in patients’ homes after
featuring prominently in the execution of annual lab their discharge from hospital.
sessions. This helps to secure the commitment and
cooperation of each public agency to deliver services Efforts to entrench this culture of transformation
of discernibly enhanced quality. are being prioritised by the civil service to ensure its
provision of services remains relevant and fulfils the
The close cooperation within the Malaysian Public Service rakyat’s needs. A new direction set through Public
in the past five years has yielded 1,432 transformation Service Transformation 2.0 underlines several points
initiatives, including 216 high-impact initiatives to deliver of focus, namely execution through core business,
maximum value to the target groups, raise productivity, taking the Do-it-Yourself approach, optimising cost
form new models for service delivery, diversify service and producing cost-effective outcomes, intensifying
delivery channels, and introduce new products or strategic collaborations, increasing alternative service
services. Taken together, these initiatives open the doors delivery channels, prioritising touch-point services, and
for the rakyat to have easier and more comfortable delivering high-impact quick wins. Emphasis is also
access to services like healthcare and consultations being given to promotional activities and extending
on elevating income and productivity levels. Channels the transformation effort to agency, state and local
for service delivery have also been broadened with authority levels.
the participation of non-governmental organisations
(NGOs) and the community. The importance of a successful Public Service
Transformation must continually be impressed upon
The close collaborations between public agencies all civil servants to ultimately create a public service
also serve to optimise resources. Various initiatives that is wholly people-centric and trustworthy. Indeed,
were birthed from this endeavour, one of which is the this transformative effort’s success is contingent on
Inmate Upskilling programme by the Malaysia Prisons the hard work, sacrifice and perseverance of the civil
Department under the jurisdiction of the Ministry of service in realising a service delivery mechanism that
Home Affairs. This programme aims to improve the is holistic, inclusive and capable of uplifting the rakyat’s
delivery of skills training and certification for inmates quality of life in line with the aspirations of Transformasi
Nasional 2050.
National Blue Ocean Strategy (NBOS):

Simultaneously Pursuing High Income
and Greater Public Well-being
While Malaysia is moving fast towards becoming a

developed nation by 2020, the Government must
ensure that the rakyat can truly enjoy high income
along with a greater level of public well-being. As
such, the National Blue Ocean Strategy (NBOS)
was launched by the YAB Prime Minister in 2009
to deliver initiatives that are high-impact, low-cost,
rapidly executed and sustainable.
The NBOS employs the concept of blue ocean

strategy, which takes a systematic approach to form
creative solutions without directly competing with
existing socio-economic boundaries. The adaptation
The Chief Secretary, YBhg Tan Sri Dr. Ali Hamsa, greeted
of blue ocean strategy into NBOS is thus critical in a service user at the UTC in Kuala Terengganu.
improving efficiency in the public delivery system
and accelerate the national transformation process.
initiative was subsequently launched after the Federal
To date, 115 NBOS initiatives have been implemented Government successfully got various ministries,
in more than 80 Ministries and agencies in the country. agencies and State Governments on board.
These initiatives include the Urban Transformation
Centre (UTC), Rural Transformation Centre (RTC), The Government has plans to establish a UTC in
Mobile Community Transformation Centre (Mobile every state capital throughout the country as well
CTC), Community Rehabilitation Programme and as other densely populated areas as the need arises.
among others. Each State Government, upon the Finance Ministry’s
request, must submit their plans for suitable UTC
Urban Transformation Centres sites in their states. The UTCs must be located in
an under-utilised Government building, situated in
The Urban Transformation Centre (UTC) serves as the state capital or a highly populated area, and be
a one-stop centre offering miscellaneous public strategically positioned with easy access to public
services for urban dwellers, with services extended transport. Currently, there are 20 UTCs nationwide.
to after-office hours (except for public holidays) to
cater to urbanites’ busy schedules. UTCs house various Federal and State Government
agencies, statutory bodies, NGOs and private sector
The Government’s main objective for establishing agencies under one roof to facilitate the rakyat’s
the UTCs is to raise the service delivery standards procurement of services rendered by these parties,
of the public and private sectors as well as NGOs by thereby raising delivery standards by optimising the
centrally locating these services at a venue that is usage of all available resources.
easily accessible by the people. The UTC also functions
as a conduit for affordable community activities by State UTC services are categorised into 10 clusters:
judiciously utilising Government buildings, as well
as rehabilitating public spaces and intensifying 1. Common Government Services
economic activity in its vicinity. 2. Health Services
3. Safety Services
The decision to kickstart the UTC initiative was made 4. Training, Education and Career Services
at the National Blue Ocean Strategy Meeting on 24 5. Entrepreneurship and Business Opportunity
April 2012, chaired by the YAB Prime Minister. The Development
6. Youth Activity Centre initiatives include free eye examinations at selected

7. Welfare Services locations, post-flood programmes for those affected
8. Utility Services by flooding, free tuition classes for school students,
9. Banking Services and the participation of additional agencies such as
10. NGO Services JobsMalaysia through the Program Kembara Kerjaya
Jelajah FELDA, the National Heart Institute through
Services offered by city-based UTCs include: Program Pemeriksaan Jantung dan Kesihatan Rakyat,
as well as the Tribunal for Consumer Claims Malaysia
1. Common Government Services and the Tribunal of Housing and Strata Management.
2. Health Services
3. Safety Services The Mobile CTC is rolled out in a carnival format
4. Entrepreneurship and Business Opportunity where vans and buses of Government units and
Development private agencies gather at a location in the rural
5. Utility Services area. Meanwhile, mobile CTCs boat services are also
6. Banking Services available for areas that are not connected via roads.
The use of under-utilised Government buildings Operationalisation of the Mobile CTC programme
to house UTCs, instead of building new premises, emphasises on NBOS elements such as cost
also optimises public funds and is in line with the effectiveness, which is achieved through the sharing
basic concept of the National Blue Ocean Strategy: of resources between the Federal Government, State
high-impact, low-cost, rapidly executed. The UTCs Governments and participating agencies to maximise
have also gained recognition as an innovative idea service output for the rakyat. Since implementation,
by international delegations from the World Bank, the Mobile CTC programme has successfully
Indonesia, Singapore, India, Sri Lanka and Tanzania, transformed the way services can be accessed by
among others. Additionally, it received the Prime communities who are otherwise marginalised.
Minister Innovation Award in 2014.
Community Rehabilitation Programme (CRP)
Mobile Community Transformation Centre
The Community Rehabilitation Programme (CRP),
The Mobile Community Transformation Centre introduced in 2011, complements the Fighting Crime
(Mobile CTC) was launched by the YAB Prime Minister NKRA initiatives to reduce recidivism rate of petty
on 1 March 2013 as one of the initiatives under the criminals and overcrowding in prisons by ensuring
National Blue Ocean Strategy (NBOS) and as an readiness of inmates or ‘People Under Supervision’
extension of the Urban Transformation Centre (UTC). to reintegrate and readjust with society before they
Through the Mobile CTC, Government and private are released. The rehabilitation is done through
services that are normally available at UTC premises
are brought to communities in the rural and remote
areas of Malaysia. Since the start of its implementation
up until 2017, Mobile CTC programmes have been
rolled out at 152 locations and impacted over 2.59
million Malaysians in rural areas.
Among the services provided by Mobile CTCs include

identity card registration, licence renewal, health
screening, distribution of Government aids such as
the Bantuan Rakyat 1Malaysia (BR1M) and business
consultancy.
Besides that, a number of new initiatives have also The Mobile CTC serving a group of customers in Besut,
been introduced to further benefit the rakyat. These Terengganu.
training and productive work on military premises As a result, inmates are given the opportunity to
such as farming, fishery, animal husbandry and learn and dive deeper into the working field while
manufacturing, amongst other technical skills. increasing their income prior to release day. In
fact, inmates who are undergoing CRP are paid
The CRP is part of the Government’s transformation RM200 more per month than non-participating
agenda under NBOS that optimises available public inmates.
resources to generate a higher impact. The use of
military camps as Community Rehabilitation Centres To date, implementation of CRP has successfully
is the brainchild of the YAB Prime Minister, involving raised employability of ex-prisoners to 88.48%,
an innovative collaboration between two Government with increase in the number of particpants from
agencies – The Malaysian Armed Forces and the 3,665 to 4,142 with a job, whether employed
Malaysia Prisons Department. The military camps in by employers or self-employed. Additionally,
the programme are: the Government has saved as much as RM2.9
million every year for grass trimming works and
1. Mahkota Camp in Kluang, Johor; drain cleaning activities at the military camps
2. Sultan Abdul Halim Muazam Shah Camp in maintained by inmates, while RM232.2 million was
Jitra, Kedah; saved from not having to construct new prisons,
3. Syed Sirajuddin Camp in Gemas, Negeri Sembilan; which is a huge figure as compared to the cost of
4. Desa Pahlawan Camp in Kota Bharu, Kelantan; building five CRP centres at just RM22.8 million
5. Batu 10 Camp in Kuantan Pahang; and to hold over 1,450 inmates.
6. Paradise Camp in Kota Belud, Sabah.
Inmates working out at one of the CRP camps.

The LEAN Project: Elevating the

Healthcare Consumer Experience
Dr. Marzilawati Abd Rahman has taken on the departments to provide the best customer service
position of being Hospital Kuala Lumpur’s (HKL) possible by eliminating inefficiencies and creating
LEAN champion for the hospitals’ LEAN journey smooth process flows that standardise the ways
which kicked off in 2015. The Acute Internal of performing their tasks.” Today, more than seven
Medicine Physician embarked on this journey HKL departments (orthopaedic, ophthalmology,
by learning the basics of the LEAN concept and nephrology, neurology, pathology, paediatric,
tools from the Ministry of Health (MOH), namely record office and support services departments)
those of the Medical Development Division, the are involved in this initiative.
Institute for Health System Research, and the
Universiti Kuala Lumpur. “We commenced our Further, Dr. Marzilawati, as Chairman of HKL’s
LEAN Healthcare improvements with our two Corporate Culture since 2016, worked with her
busiest departments, which are the Department corporate culture team to create a training module
of Medicine and Emergency Department where on soft skills called the ‘Premiere Work Culture
we improved processes to add value to our patient Module’ to enable staff to deliver more personal
care,” says Dr. Marzilawati. patient care, in line with LEAN Healthcare’s
objectives. About 1,350 HKL healthcare workers
As the LEAN Healthcare executor in HKL, the had undergone the course since its commencement
physician also gives talks to promote LEAN in 2016, yielding positive feedback from their direct
Healthcare awareness among HKL’s staff alongside reports.
other MOH hospitals in Peninsular Malaysia. Towards
this end, Dr. Marzilawati adds “I am very honoured Dr. Marzilawati opines that the LEAN programme
to work with Datin Dr. Nor Akma bt Yusuf, who adds value to Malaysia’s healthcare services in
not only led the development and implementation general. The clinician explains, “The programme
of LEAN Healthcare but also initiated the Kaizen allows hospitals to improve the quality of care for
Office in HKL, whose personnel empower patients by reducing errors and waiting times,
Dr. Marzilawati Abd Rahman, LEAN Healthcare executor in HKL.

which can lead to lower cost. LEAN Healthcare

approaches support healthcare workers and
physicians by eliminating roadblocks and allowing
them to focus on providing good care. It helps
break down barriers between disconnected
departmental ‘silos,’ allowing them to work together
for the benefit of patients.”
This programme achieved several achievements in

HKL alone, the biggest of which was the streamlining
of an early pulmonary Tuberculosis (PTB) diagnosis
in the hospital’s medical wards by expediting the
sputum microscopy process and having a mobile
unit for the bedside registration and counselling of
patients with the disease. Indeed, the results were
remarkable - patients with PTB were more quickly
diagnosed and treated, reducing man-hours in
medical wards by about 40%.
HKL Core Lab - Blood samples are placed in a basket
after barcoding instead of being repacked again into
Dr. Marzilawati added, “At present, our specimen bags to shorten process time.
improvements are growing from many areas, and
the improvements we made were presented at
the International Conference 2017 (British Medical “Working together with the relevant ministries will
Journal Quality and Safety in Healthcare) as well as ensure patient safety, improve workflow, as well as
at the National QA Convention 2017 in Malaysia.” achieve a balanced and synchronous production of
healthcare services in Malaysia. Sharing innovations,
While she is satisfied with the results thus far, she expertise and services between ministries will be a
also believes that her team has some way to go conducive platform for public healthcare to grow,
before LEAN Healthcare becomes embedded and increase the number of success stories in
in HKL’s working culture. Part of this reason is LEAN’s journey,” she asserted. Assimilation and
because transforming a culture is not an easy incorporation with Malaysia’s National Blue Ocean
task, especially for an organisation as huge as Strategy (NBOS) platform will further enhance
HKL. “Starting something new is always tough. cost-saving measures and create various benefits
My biggest challenges were in breaking the through quality improvements for the wider
‘silos’ between departments and to change the Malaysian society.
entrenched mindsets and perceptions in utilising
LEAN tools for improvements. However, the LEAN Going forward, Dr. Marzilawati foresees public
concepts themselves teach me and my team to healthcare to continue leading the marketplace for
respect and support the staff. All of it is a team healthcare services in Malaysia. As price pressures
effort, not the work of any individual,” she said. and cost challenges loom large, so too will the
number of customers for public healthcare services
Dr. Marzilawati thinks that LEAN Healthcare or its grow. In this respect, the clinician believes that
underlying concepts should be expanded to other LEAN methods will be instrumental in enabling
Ministries in the Government to further elevate the healthcare providers to effectively reduce the
capacity and quality of public services in Malaysia. actual cost of providing safe and reliable care.
Optimising utilisation of operating theatres than admissions, with the majority of outpatients
seeking treatment at the specialist clinics. There
The LEAN Operating Theatre (OT) project was are presently 14 departments in Hospital Sungai
piloted in 2017 at Hospital Sultan Ismail in Johor. It Buloh with specialist clinics: Ophthalmology;
aims to achieve 80% utilisation of operating theatres Orthopaedics; O&G; Ear, Nose and Throat
and a turnaround time of 20 minutes. Turnaround (ENT); Paediatrics; Infectious Disease; Surgical;
time refers to the time taken from when a patient Dermatology; Psychiatric and Mental Health;
exits the OT to the next patient entering the room. Plastic Surgery; Oral and Maxillofacial Surgery
Three types of surgeries take place in these OTs: (OMFS); Neurosurgery; Paediatric Dentistry; and
emergency, elective and non-surgical procedures. Anaesthesiology.
Scheduling for the use of OTs are extremely complex
due to OTs being used by medical personnel from Currently, most patients with scheduled
multiple disciplines, the lack of visibility towards appointments arrive at the specialist clinics at
actual demand and a high proportion of emergency around 8:00 a.m., causing congestion at the clinics
surgeries displacing scheduled surgeries. The project with patients facing difficulties in parking their
is currently ongoing, and is in the stage of collecting cars. To overcome these problems, a staggered
base data. patient appointment system is introduced
across all 14 specialist clinics. This system will
Improving efficiency at specialist clinics use pre-determined time blocks for scheduling
appointments and ensure that patient demand and
Hospital Sungai Buloh has piloted the introduction staffing levels are matched, thus possibly reducing
of block appointment times to reduce congestion waiting time and creating a more positive patient
in specialist clinics. In 2014, outpatient attendance experience. Implementation is due to begin in all
at Hospital Sungai Buloh was over five times more 14 clinics at various start points throughout 2018.
Congestion at the central registration counter at Hospital Sungai Buloh.

MOving Forward
The LEAN Healthcare initiative will be expanded in the hospitals that have previously implemented LEAN
project in EDs and MWs with projects for the Orthopaedics Clinic, Ophthalmology Clinic, Operating
Theatre, Medical Record Service and Hospital Support Service. These pioneering projects are presently in
the calibration phase. All data gleaned from these projects will then be used to develop a master template
for nationwide rollout.
Vital to the sustainability of LEAN is the development of an organisation which supports staff involvement
and LEAN education to inculcate LEAN thinking and implementation in their day-to-day work. A new LEAN
Healthcare governance structure will also be introduced to ensure the sustainability of LEAN Healthcare
initiatives. This will involve the establishment of a dedicated sub-unit parked under the Quality Unit at the
State and hospital levels to facilitate implementation and monitoring as well as provide feedback on the
progress of its implementation.
Following the successful implementation of NBOS programmes as well as the transformation initiatives led
by Public Service Department, the Government remains committed to continuing these efforts to touch the
lives of over 30 million rakyat, in line with the TN50 vision of a prosperous, inclusive and sustainable nation.
HUMAN CAPITAL DEVELOPMENT
developing a
high-skilled
workforce
YB DATO’ SRI RICHARD RIOT ANAK JAEM

Minister of Human Resources
In developing our human capital, the Government is As we continuously develop our labour force, we
working towards building a high-skilled workforce must remain proactive in responding to global
while supporting the country’s talent needs as we are trends such as digitalisation and automation, in
now transitioning into a high-income country. This is tandem with Industry 4.0, as well as crowdsourcing,
in line with the strategic thrusts of the 11th Malaysia which is changing the labour landscape. In view
Plan which aims at accelerating human capital of this, the Government has taken the initiative to
development for an advanced nation. To achieve enhance the branding of TVET Malaysia with the
these outcomes, the SRI looks at six focus areas: aim to produce skilled manpower that meets the
modernising labour law; creating a labour safety industry needs and becomes the choice of our youth
net; strengthening human resource management; career development. Our human resource agencies
conducting labour market analysis; upskilling and and education institutions must continue to focus
reskilling; and leveraging women talent. on supporting and providing the development of
relevant skills.
This has resulted in positive outcomes in the
country’s human capital landscape and has With good economic growth and positive outlook
contributed to continued growth in wages, with on the demand side, more quality jobs are expected
the mean monthly household income of Malaysians to be created to absorb the increase in labour force.
rising to RM6,958 in 2016 from RM4,025 in This development augurs well for achieving one of
2009 and median monthly household income the targets of the 11th Malaysia Plan target, which is
reaching RM5,228 in 2016 from just RM2,841 in to increase the share of compensation of employees
2009. Additionally, Malaysia was ranked second to GDP up to 40%, as compared to 33.6% in 2013.
in Southeast Asia and 33rd out of 130 countries in
the Global Human Capital Report 2017 issued by
the World Economic Forum (WEF) as compared to
ranking 42nd in 2016, with strong scores across the
capacity, development and know-how components.
Under the Ministry of Human Resources (MOHR),

the labour market also saw significant development
during the year with the passing of three major
laws, namely the Self-Employment Social Security
Act 2017, the Private Employment Agencies
(Amendment) Bill and the Employment Insurance
System Bill (EIS) 2017.
YB DATO’ SRI ROHANI ABDUL KARIM

Minister of Women, Family and Community Development
The women talent thrust forms an important of the Boards in the top 100 public-listed companies
component of the Strategic Reform Initiative (SRI) by market capitalisation in Malaysia, as compared
in achieving the NTP’s goals on inclusiveness. Its to 16.6 % in 2016.
initiatives are helmed by the Ministry of Women,
Family and Community Development (KPWKM) that These achievements, among others, have put
focuses on the “3R” principles, which are Retaining, Malaysia on the global arena in championing the
Returning and Rising women talent towards a initiatives to promote participation of women
gender-balanced and sustainable pool of talent in the corporate sector. As a validation to these
for the country. achievements, the 2017 Corporate Women Directors
International Report on Women Board Directors of
Throughout the year, the Ministry has facilitated Asia-Pacific Companies has ranked Malaysia third
several initiatives such as the provision of affordable out of 20 Asia-Pacific countries for the achievement
and accessible childcare centres and the promotion in women directorships. The study was based on a
of flexible working arrangements to accommodate total of 1,597 large public-listed companies across
the needs of working mothers with young children. the 20 economies.
In 2017, 329 new childcare centres were established,
bringing the total number of registered childcare Ensuring that women are well-represented in the
centres to 4,143 compared to 2,045 in 2012. Meanwhile, labour force and key decision-making positions
92 companies have adopted the flexible working is a cross-sectorial effort that requires undivided
arrangement since the start of the initiative in 2012. commitment from the private sector. Though
These efforts by the Ministry have seen significant heartening progress is being made in the creation
achievements in the women labour force participation of environments conducive for women to be in the
rate, which recorded an increase to 54.6% in Q3 2017 workforce, awareness on the importance of having
from 54.3% the year before. gender diversity in the workforce is still low. The
Ministry will continue to leverage on the Human
Additionally, this year the Ministry played a key Capital Development - Women Talent Steering
role in reinvigorating the women registry for Committee platform to resolve cross-cutting issues
board candidacy and harnessing their skill set via related to this SRI portfolio.
mentorship and training programmes. To date, 1,326
candidates are listed in the registry, of which 1,051
have undergone the Women Directors Training
Programme that prepares them for Board positions.
This has contributed to more women rising to the
decision-making level and appointed as Board
directors. As a result, in 2017, women made up 19.2%
Ensuring EMPLOYMENT SECURITY Malaysia, Labour Department of Sabah and Labour

Department of Sarawak from January 2013 to December
2017 had found that 98% from 154,501 employers
inspected had complied with the Minimum Wages
Order. Moreover, the National Employment Returns
Malaysia’s labour laws are being modernised to transform (NER) 2016 study conducted by the Institute of Labour
the local talent pool towards a 35% skilled workforce by Market Information and Analysis (ILMIA) revealed that
2020 in line with the country’s efforts to achieve high- 76.3% of establishments surveyed had not recorded
income nation status. As part of these efforts, labour increases in their labour costs following the introduction
safety net programmes have been introduced to protect of minimum wages.
the Malaysian workforce in difficult times and ensure
“SOCSO’s
that all prosperity gained from the transition to a high-
income economy is shared with the rakyat. To this end, Return to Work
three major laws were passed in 2017. Programme (RTW) provides
The first law, the Self-Employment Social Security Act 2017 return-to-work, retraining and
or Act 789 under the Social Security Organisation (SOCSO), employment support as well as
was approved by Parliament in April 2017 and officially job placement services to insured
”
implemented on 13 June 2017 to extend social security
coverage to the informal sector. The preliminary phase of persons.
this initiative involved providing coverage for taxi drivers
and other services of a similar nature. To date, 2,800 taxi Several other key laws are also currently under review,
drivers have been registered and insured, of which eight have including the Occupational Safety and Health Act 1994,
received benefits due to injury at work or while commuting. Private Employment Agencies Act 1981, Factories and
This scheme aligns the need for comprehensive social Machinery Act 1967, the Employment Act 1955, the
security coverage with the universal principles of social justice Industrial Relations Act 1967, as well as the Trade Unions
as stipulated in Article 23 of the Human Rights Declaration, Act 1959.
International Labour Organisation (ILO) Convention 102 and
Recommendation 202 of ILO. In further supporting employee well-being, SOCSO’s
Return to Work Programme (RTW) provides return-
The second law, the Private Employment Agencies to-work, retraining and employment support as well
(Amendment) Bill, was passed on 14 August 2017 as job placement services to insured persons, marking
and aims at providing protection to local workers who another effort to enable injured workers to return to
obtain employment abroad through private employment work quickly. The programme also ensures minimal
agencies. This law is expected to be implemented in 2018. disruption to national productivity. Since the launch
of the programme in December 2016, a total of 18,137
The third law, the Employment Insurance System (EIS) insured workers have successfully been rehabilitated
Bill 2017, was passed on 25 October and marked a and have returned to work.
major milestone in strengthening employee protection
in Malaysia. The EIS, which will be administered by the In relation to the RTW, the Tun Razak SOCSO Rehabilitation
SOCSO by 2018, allows for the establishment of an Centre in Ayer Keroh, Melaka was established in 2014 and
insurance scheme for laid-off workers to claim a portion launched by the YAB Prime Minister on 21 April 2017. The
of their insured salary for a period of between three to centre provides treatment and rehabilitation services to
six months. Workers who lost employment will also be employees injured at work or while going to or returning
entitled to receive allowances based on reduced income from the workplace. To date, 2,187 patients have benefited
and training attended. They will also be given priority from the centre’s services.
to early re-employment opportunities. The scheme
provides coverage to employees involved in voluntary In addition, the 1Malaysia Outplacement Centre (1MOC)
or mutual separation schemes or those retrenched due by the Human Resource Development Fund (HRDF) is
to business restructuring or closure. a separate but related initiative which aims to enhance
the employability of retrenched Malaysian workers
The Minimum Wages Order was introduced in 2012 and by serving as a one-stop centre providing advisory
it has been reviewed once every two years since, with on career counselling and planning as well as job
the last revision being in 2016. Statutory inspections applications and matching. To date, it has helped 3,162
conducted by the Labour Department of Peninsular retrenched workers regain employment.
1Malaysia Outplacement Centre providing counselling, planning and preparation for next career move or placement.
STRENGHTENING COMPANY research papers and whitepapers which aid in

human capital growth planning, has been utilised
FUNDAMENTALS BY FOCUSING by 1,315 individual users and 20,444 companies as
of December 2017. The portal is slated to undergo
ON HUMAN RESOURCES some improvements in 2018 to provide better
service and a more seamless experience to a greater
number of users.
Effective management of human resources is a

key success factor for all businesses. In 2017, the
Ministry of Human Resources (MOHR) focused on
“HRDF has developed a small-
and medium-sized enterprises
ensuring that Malaysian companies were properly (SME) Diagnostic Tool called the
equipped and prepared to adapt to the changes in MyFuture to enable a structured
”
labour laws and the creation of labour safety net
systems. The Ministry recognised that the changes
approach to training.
introduced will only be effective if industry players
can understand the reason behind these changes
and comply with the requirements. HRDF has also developed a small- and medium-sized
enterprises (SME) Diagnostic Tool called MyFuture
To support this, during the year, the coverage of to enable a structured approach to training.
HRDF was extended from Manufacturing, Services MyFuture helps to identify gaps in the human capital
and Mining & Quarrying to other sectors as well. capabilities of SMEs, enabling HRDF to suggest
Engagements with private sector players were more structured capacity-building programmes for
held to cover employers with one employee or them. To date, 1,296 companies have gone through
more across all sectors (with the exception of the assessments and received recommendations for the
public sector, statutory bodies, NGOs, financial structured training programmes.
and construction sectors), ensuring all workers in
Malaysia have access to the training fund. To improve human resource management of foreign
workers, the Government has also introduced online
Additionally, the National Human Resource Centre systems to facilitate hiring applications from the
(NHRC) Portal by HRDF, a platform for users to employers. The introduction of the online systems
obtain HR resources in the form of high-quality is also aimed at avoiding the involvement of middle-
men, minimising recruitment costs, shortening the (NER) Study 2017 is underway and is expected
recruitment period and deterring cases of abuse to be completed by March 2018. Starting in 2017,
and trafficking of migrant workers. With effect from the NER will be conducted on a yearly basis to
1 January 2017, employers are held accountable enhance information timeliness that will lead to
towards the management of foreign workers in better understanding of labour-market dynamics,
accordance with Malaysian laws via the signing of including the breakdown of local versus foreign
the Employers Undertaking (Surat Aku Janji Majikan). employees, types of employment, salaries and
gender diversity.
FORMULATING EFFECTIVE ILMIA has also developed a National Wage Index

(NWI) to support policy measures that address
LABOUR POLICIES human resource planning, labour utilisation,

wage fixing, social security and labour costs.
The NWI will be constructed through quarterly
surveys of stratified samples of enterprises that
are representative of the Malaysian economy,
Since its establishment in 2012, the Institute of Labour employees and occupations. To date, five quarterly
Market Information and Analysis, or ILMIA has strived surveys have been conducted since September
to become the focal point for comprehensive labour 2016, the findings of which will be published by
market data to aid the Government in formulating March 2018.
effective labour policies, hence contributing to the
“The
country’s achievement of high-income status. The
Labour Market Information Data Warehouse (LMIDW) National Wage Index (NWI)
was launched on 18 July 2017, with the Data Flow supports policy measures that
Management System (DFMS) developed as a vital part
address human resource planning,
of LMIDW to manage all labour market data-sharing
initiatives and disseminate labour market data. labour utilisation, wage fixing,
Standard Operating Procedures (SOP) to

operationalise the Data Sharing Mechanism
social security and labour costs.
”
were also developed to guide all labour market However, the lack of recognition for ILMIA’s role
data providers. The LMIDW presently involves as the central authority for all data on the labour
participation from 14 agencies and departments market is limiting its effectiveness. This requires
within MOHR and four other Ministries and a greater investment of time and resources in
agencies, namely the Ministry of Education, Ministry nationwide awareness campaigns. ILMIA also
of Higher Education, Ministry of Youth and Sports needs better access to subject matter experts
and Council of Trust for the Bumiputera (Majlis such as labour economists, data scientists and
Amanah Rakyat - MARA). To date, a total of 142 data management personnel. In view of this, ILMIA
labour market indicators can be generated from the will work with MOHR to address its challenges.
43 types of LMIDW data for use by stakeholders
such as policymakers, industry players, academia,
legislators, media houses and jobseekers.
In 2017, ILMIA continued its collaboration with

TalentCorp to produce the Critical Occupations
List (COL), an initiative under the 11th Malaysia Plan,
to address skill mismatches in the labour market.
The updated COL is scheduled for publication in
February 2018 to be used to coordinate policy
interventions related to higher education and TVET,
upskilling, scholarship, and management of highly
skilled foreign workers and Malaysian talent abroad. 1Malaysia Outplacement Centre: one-stop centre for
In addition, the National Employment Returns retrenched Malaysian workers to regain employment.
NURTURING A HIGH-INCOME Nonetheless, MOHR also acknowledged that

there is some difficulty in securing the buy-in and
WORKFORCE involvement of employers to send their employees
for upskilling programmes. Furthermore, there
are overlapping issues on accreditation by the
Malaysian Qualifications Agency (MQA) under
the purview of Ministry of Higher Education, and
This focus area supports the nation’s talent needs JPK under MOHR. Indeed, multiple agencies and
by upgrading the skills and competitiveness of the Ministries are presently involved in upskilling
Malaysian workforce to equip the country with a programmes, creating a possible duplication of
sufficiently skilled workforce to achieve its high- efforts. To address these issues, MOHR is taking the
income goal by 2020. lead in producing the Malaysia TVET Masterplan in
collaboration with six other Ministries, namely the
The Recognition of Prior Experiential Learning Ministry of Education, Ministry of Higher Education,
(RPEL) Programme was launched in 2016 to Ministry of Youth and Sports, Ministry of Rural and
recognise the experience, skills and competencies Regional Development, Ministry of Agriculture, and
of Malaysian workers with the relevant paper Ministry of Works.
qualifications. As of December 2017, 3,182
candidates completed their portfolio development
and received their Diploma in Skills Malaysia Level
4 certification of Malaysian Skills Certification (Sijil
ENABLING FEMALE PARTICIPATION IN
Kemahiran Malaysia, SKM). THE LABOUR MARKET
To further develop the local talent pool,
the Train and Replace programme by HRDF
aims to replace skilled foreign workers and
expatriates with Malaysians. This programme Initiatives to raise female participation in the
was announced by the YAB Prime Minister labour market are based on “3R” principles, which
during the presentation of the Budget 2016 are Retaining female workers in the workforce,
and has seen a total of 899 replacements of Returning them to work after a period of absence,
foreign workers as of December 2017. and Rising them to the top-decision-making level
in the corporate sectors.
On the other hand, the 1Malaysia Skills Training and
Enhancement for the Rakyat (1MASTER) programme Under the Retaining and Returning principles,
by the Department of Skills Development (Jabatan several initiatives led by TalentCorp have been
Pembangunan Kemahiran, JPK) is an initiative implemented to attract and retain the nation’s latent
under the National Blue Ocean Strategy (NBOS) talent pool. The Career Comeback Programme
to upskill workers across different industries, (CCP) is a programme that aims to connect
while the Centres of Excellence in Technology women on career breaks to job opportunities
(CoETs) initiative by HRDF has helped with the and encourages employers to adopt policies that
enhancement of 26 institutions to meet current support gender diversity in the workplace. In 2017,
industry needs and technology changes in the 650 women participated in the CCP of which 195
computerisation of manufacturing. Finally, the OKU women have since returned to work. These women
(Persons with Disabilities) Talent Enhancement are in the financial services, business services and
Programme (OTEP) by HRDF, launched on 1 May education sector, holding administrative, human
2017, has provided competency-based training to resources, accounting and finance and customer
129 disabled persons as of December 2017. service roles.
The abovementioned efforts have thus benefitted Additionally, Career Comeback Grants is another
a total of 4,210 people and contributed towards an initiative to incentivise employers to recruit and
increase of 0.7% in the skilled workforce, resulting retain women who have been on career breaks.
in 28% of skilled workers in Q3 2017 compared to Under this scheme, the Retention Grant offers
27.3% in 2016. employers that successfully retain women returnees
for at least six months a grant that is equivalent to
TalentCorp Career Comeback Programme targeting women who are on career break.
the returnee’s one-month salary (with a limit of up the Resourcing Grant. As of November 2017, more
to RM100,000 per employer). than 60 companies in Malaysia have implemented
FWAs since TalentCorp launched its efforts in
Augmenting the CCP’s efforts, TalentCorp held its promoting FWAs.
4th Career Comeback Networking & Job Fair on 25
August 2017. The event saw a 20% year-on-year Another key enabler to facilitate women’s return to
increase in the number of employers offering a variety work is the provision of quality childcare services
of full-time and flexible job opportunities to more than at the workplace. Previously, childcare centres built
300 women who had left the workforce for various higher than the second floor of high-rise buildings
reasons. These employers included UEM Group, required approvals on a case-by-case basis. Private
Maybank, BASF, Astro and Experian, representing sector players also regularly cited high costs as the
many of the country’s priority key sectors. reason for not building childcare centres on lower
floors, while building such centres on higher levels
involved a cumbersome process to obtain approvals.
“Inin 2017, 650 women participated

the CCP of which 195 women In this respect, PLANMalaysia (Jabatan
”
Perancangan Bandar dan Desa, JPBD) under
have since returned to work. the Ministry of Urban Wellbeing, Housing and
Local Government proposed amendments to
Recognising also that women talents are the guidelines for the establishment of childcare
attracted to companies that offer flexible working centres, including kindergartens and nurseries,
arrangements (FWAs) and family-friendly policies, to allow for childcare centres to be established
TalentCorp offers the Resourcing Grant, which is on Levels 1 to 5 of buildings. These amendments
given to companies that implement or enhance were approved by the Cabinet on 21 June 2017
a programme or campaign to recruit women and subsequently tabled to the National Council
returnees. Under this grant, TalentCorp co-funds for Local Government on 10 July 2017.
75% of the cost incurred to run the programme,
up to a maximum of RM100,000. Moving forward, JPBD will consolidate the new
amended guidelines into a single document and
To date, 72 companies have applied for the present it to local authorities for approval and
Retention Grant and one company has applied for implementation.
Maybank: Championing Women in The

Workplace
Thanks to Malayan Banking Berhad’s (Maybank) development of Maybank’s women talent. The
commitment to its innovative People Transformation Council has paired over 100 women to support
initiative, which it first undertook in 2009, it has their development as effective leaders through its
become recognised nationally and globally as an mentoring programme.
employer that promotes gender diversity, work-life
integration, and a parent-friendly work environment. “The many interventions that have been placed
systematically have provided opportunities
Nora Abdul Manaf, Group Chief Human Capital for our women to accelerate their growth by
Officer at Maybank, has been with Maybank since stretching ambitions, potentials and capacities,
2008. She notes that Maybank’s women employees both professionally and personally. Women form
have registered a favourable engagement score 55% of our workforce, and female representation
of 85% in its recent 2017 engagement survey of in management has grown from 38% in 2009 to
its workforce, compared to 82% in 2014. “These 45% in 2017. Women in top management positions
engagement levels are at global high-performing have also increased from 15.68% in 2009 to 30%
levels, and signify that we have transformed our in 2017,” Nora enthuses.
people practices to truly create an inclusive, fair,
and enabling environment for our diverse talents
to flourish. Women’s empowerment is an ethical,
responsible, critical, and fair business practice.
Sustained change requires consistent and deliberate
actions – we are committed to continue pursuing
this goal,” she adds.
Since 2009, Maybank has taken several initiatives to

improve gender equality in the workplace. Maybank’s
meritocracy-based Diversity and Inclusion Policy,
which governs its employment practices and
activities, explicitly prohibits discrimination or
harassment. In addition, Maybank enacts multiple
communication and engagement platforms, such
as the Conversation Series dialogues, regular town
halls and roadshows featuring top management,
the Ask Senior Management channel, the yearly
International Women’s Day recognition and
celebration, and others.
Senior deserving women are provided further

professional educational courses at institutions
such as Harvard, Cambridge, and INSEAD, to hone
cutting-edge leadership skills and keep abreast
with current developments. In its Transitioning
Leaders to CEO signature leadership programme,
45% of the participants were women. Maybank
also formed the cross-functional Maybank Women Nora Abdul Manaf, Group Chief Human Capital Officer at
Mentor Women Council in 2014 in support of the Maybank.
Maybank celebrates the International Women’s Day annually.
Nora acknowledges that the banking industry

globally is an industry that is still under-represented
by women. “Within Maybank, we work intensively
to create a work climate that is without – or at least
have fewer – barriers, and to more systematically
build the next generation of our women leaders
via many targeted initiatives. This is closely and
constantly watched, monitored at all levels to
address blockages and hurdles responsibly.”
In the long-term, however, she hopes that employers

in the country will take on more initiatives that not
only create an enabling and inclusive workplace
for women to thrive, but also empower their
participation in leadership roles in the workforce.
“This will create a ripple effect that promotes
inclusion and provide women talent the right
opportunity to thrive in their career while being
able to balance work and life.”
Meanwhile, in an effort to increase the number of they are required to provide clarifications and
the qualified childminders, Kursus Asuhan Permata rectification timeline in their Annual Report. Bursa
(KAP) which was designed to provide childcare Malaysia is now taking a step further to reflect the
minders with the relevant knowledge and skills, improvement in the MCCG in its public company
has been extended to the National Service Training listing requirements.
Programme (Program Latihan Khidmat Negara,
PLKN) candidates. In 2017, 201 candidates have been
trained and another 180 candidates have expressed
their interest to undergo the training.
“The percentage of women
directors in all public-listed
As part of the effort to increase the accessibility of
companies stands at 13.3%,
the KAP, the online version of KAP conducted via while the percentage of women
Massive Open Online Course (MOCC) was launched directors in the top 100 public-
on 8 August 2017. This online programme requires
23 weeks of online revision and an additional week
listed companies registered at
of practical coursework at Sultan Idris Education
University (Universiti Pendidikan Sultan Idris, UPSI).
19.2%.
”
To date, the percentage of women directors in
The abovementioned initiatives have resulted in a
all public-listed companies stands at 13.3%, while
commendable 54.6% women labour force participation
the percentage of women directors in the top 100
rate in Q3 2017 compared to 54.3% in 2016.
public-listed companies registered at 19.2%. These
numbers are encouraging, as the percentage of
PLACING MERITED WOMEN IN KEY women directors in all public-listed companies was
a mere 7.5% in 2008, whilst the percentage in the
DECISION-MAKING POSITIONS IN top 100 public-listed companies was 13.2% in 2014.
This achievement was facilitated through the 30%
PRIVATE SECTOR Club, an organisation that promotes awareness
regarding boardroom gender diversity, and the
NAM Institute for the Empowerment of Women
Malaysia (NIEW), which manages training and
provides a registry of potential female board
The YAB Prime Minister had first announced in
candidates under KWKPM.
2011 the country’s aspiration of having at least 30%
Women on Boards to ensure inclusive participation
In 2017, the 30% Club conducted four sessions of
of women across the workforce by 2020. This is
its 30% Club Business Leaders Roundtable as part
the main initiative under the Rising principle. In
of its Board Mentoring Scheme with Chairmen and
2017, he announced the intention to name and
Board Directors of approximately 50% of Bursa
shame public-listed companies with no women on
Top 100 companies, such as Petronas Holdings,
their boards starting in 2018. In the 2018 Budget
Boustead, Top Glove, the Employees Provident
speech, the YAB Prime Minister also announced
Fund, RHB Insurance Bhd, PLUS Bhd and Telekom
that Government-linked companies (GLCs),
Malaysia. As a result, 29 public-listed companies
Government-linked investment companies (GLICs)
have sought assistance from the Club under the
as well as statutory bodies will be required to have
PWC Mentorship programme for their female Board
at least 30% participation of women as board of
candidates.
directors by end 2018.
Under the efforts of NIEW, a total of 1,051 women
In April 2017, the Securities Commission has
director candidates attended the Women Directors
also launched the Malaysian Code of Corporate
Training Programme (WDP) between 2012 and
Governance (MCCG) that includes requirements for
December 2017. As of December 2017, 74 women
public-listed companies with a market capitalisation
from WDP alumni were placed on the board of
of RM2 billion or more to adopt the best practice of
directors of public-listed companies.
having 30% women on their boards. Failing which,
MOving Forward
In pursuing the high-income nation status by 2020, the Human Capital Development (HCD) SRI is one
of the key enablers towards having a 35% skilled workforce to meet the workforce skillset requirements
in all the key economic sectors. The efforts will require full cooperation from public and private sectors.
MOHR will thus continue engaging the relevant stakeholders across the focus areas to realise SRI-HCD
portfolio’s aspiration by 2020.
It is also acknowledged that women participation in the workforce and decision-making positions are
essential towards making up the 35% skilled workforce, mitigating the brain drain issues and enhancing
business practices. Hence, KPWKM will continue to work collaboratively with its stakeholders to enable
more women to be in the workforce with equal access to key decision-making roles.
COMPETITION, STANDARDS AND LIBERALISATION
Raising Malaysia’s
Global Competitiveness
YB DATO’ SERI HAMZAH ZAINUDIN

Minister of Domestic Trade, Co-Operatives and Consumerism
It is the mission of the Ministry of Domestic Trade, Forum’s Global Competitiveness Report 2017-2018,
Co-operatives and Consumerism (MDTCC) to Malaysia is ranked as the 23rd amongst 137 countries
accelerate main domestic sectors that are viable, in terms of global competitiveness. The report also
competitive and sustainable thereby ensuring a stated that Malaysia is the region’s top emerging
developed domestic economy grounded by fair economy, ahead of China which is ranked 27th.
competition and innovation, thus developing a
trade ecosystem based on ethics and protection I am confident that the Malaysia Competition
of consumer interest. Commission (MyCC) will continue to strive to
deliver an effective competition regime to support a
The competition law and policy in this country business-friendly environment to increase Malaysia’s
plays a major role towards this end by ensuring a competitiveness globally. MyCC had changed the
conducive and healthy competition environment business environment by changing the rules of the
in the country. game for the better.
With a healthy competition process, consumers will

be able to enjoy more choices, competitive prices
and better quality goods and services. The country’s
economy as a whole will benefit positively as a result
of increased productivity and more efficient resource
distribution. According to the World Economic
YB DATUK SERI PANGLIMA WILFRED MADIUS TANGAU

Minister of Science, Technology and Innovation
Standards play an important role in assisting be seen as a tool to protect the safety and
businesses of all sizes and sectors to improve health of the rakyat and the environment. Now,
productivity, increase efficiency and access new more standards are being put in place across the
markets. Many businesses question the need for spectrum of products from tyres to building design,
compliance to standards and its associated costs. tinted glass and playground equipment among
The perception by companies is that standards others. High-impact standards such as the Design
compliance is a cost rather than an investment, of Structures for Earthquake Resistance, Anti-
making it a low priority for companies. Companies Bribery Management Systems, good agricultural
should realise that by complying to standards, it practice and specification for trigona honey, and
builds customer confidence that their products DNA detection method for Halal certification have
are safe, reliable and of quality. It also helps to been developed in 2017. As of the end of 2017, 5,331
reduce cost of operation, increase yield and Malaysian Standards have been made available
competitiveness. for businesses and consumers, and 510 of those
standards are being made mandatory by regulators.
Standards has been identified as an important
enabler to ensure the competitiveness of Malaysian We experience unprecedented challenges, including
companies at the global stage. For instance, the rapid urbanisation, modernisation mandates, and
number of certifications for Quality Management economic austerity pressures thus it is the goal of
Systems (QMS) and Environmental Management this Strategic Reform Initiative (SRI) for standards to
Systems (EMS) are being used as indicators for the support the development of the country as outlined
Global Innovation Index (GII). In the GII 2017 report, in the 11th Malaysia Plan. Standards will underlie
Malaysia is ranked 26th out of 127 countries for the entire ecosystem, starting from production,
Quality Management Systems certification and at development, utilisation, market access and even
number 35 for Environmental Management Systems the removal of technical barriers to trade. We aim
certification. Based on this year’s achievement to brand Malaysian standards as a symbol of quality
where the number of certification has increased by for Malaysian products and services.
19%, Malaysia’s GII ranking is expected to further
improve in 2018. This shows that more industries
are adopting and incorporating standards into their
core business practices.
Consumers too need to create an intense demand

for quality products and services which meet
standards in order to alter the attitude of producers
towards standards compliance. Standards must

Minister of International Trade & Industry
Our mission to become a developed nation by the year In our pursuit to become among the most
2020 is supported by several key measures outlined competitive economies in the region, efforts must
under this SRI. This SRI is part of the key policy be strengthened to accelerate the growth of our
measures recommended under the New Economic export in goods and services sectors. Higher
Model (NEM) for Malaysia Part 1: Strategic Policy productivity and value-add for all targeted segments
Direction published by National Economic Advisory of our industry will also have to be intensified and
Council (NEAC). This policy measure stresses on the continued actively. The services sector offers vast
need to continue developing our services sector opportunities with huge growth potential in the
through greater involvement of foreign investment, years to come and our services industry players need
which will spur the competitiveness of our domestic to be able to capture these opportunities presented.
services sector. The excessive protection must be The Government’s commitment in facilitating and
phased out gradually and sectoral liberalisation must attracting more investments is unwavering – we
be continued progressively. will continue to provide conducive business climate
in line with our vision of strengthening Malaysia’s
The Services Sector Blueprint (SSB) was launched position as a premier investment destination.
in 2015 meant to further support the domestic
market and provide valuable policy direction for
the development of Malaysia’s services sector. The
SSB was also designed to support and align with
existing Government programmes, including the 11th
Malaysia Plan. Henceforth, the services sector has
continued to dominate and shall continue to serve
as the biggest contributor to our national income
until and beyond the year 2020.
Against the backdrop of rapidly evolving economic

challenges, we must continue to formulate strategic
moves and policy directions to harness the full
potential of our diverse economy. Complications
such as the shortage of skilled talent as well
as regulatory constraints that still exist in our
governance structure have to be tackled
pragmatically and comprehensively, in line with the
National Transformation Programme (NTP).
Fostering a Culture has dismissed the appeal of MyEG and My E.G.

Commerce Sdn Bhd (MyEG Commerce) against
of Competition the decision of MyCC with a penalty amounting
to RM6,412,200.
MyCC has also extended the block exemption

for liner shipping agreements in respect of
As an enforcement body, the MyCC is serious
Vessel Sharing Agreements (VSA) and Voluntary
in nurturing a strong culture of competition in
Discussion Agreements (VDA) commencing 7 July
Malaysia. Throughout the year, MyCC has achieved
2017 for a period of two years. The block exemption
various milestones through its enforcement,
renewal application was submitted by the Malaysia
advocacy, market review, capacity-building and
Shipowners Association (MASA) and the Shipping
knowledge sharing in ensuring the development of
Association of Malaysia (SAM) on 6 March 2017.
Malaysia into a more globally competitive nation.
Previously, MyCC had granted a three-year block
exemption for liner shipping agreements, which
Actions taken by MyCC include a Proposed
expired on 6 July 2017.
Decision against the General Insurance Association
of Malaysia (PIAM) and its 22 members on 22
In leading competition law in Malaysia, MyCC
February 2017 for infringing Section 4(2)(a) of
continues to spearhead the Special Committee on
the Competition Act 2010 (CA 2010) through
Competition which was formed in 2011, comprising
involvement in an anti-competitive agreement
several sector regulators to discuss mutual issues
to fix trade discounts and labour hourly rate
on competition laws and policy besides to ensure
for PIAM Approved Repairers Scheme (“PARS”)
consistency in the application of the CA 2010 and
workshops. MyCC proposed to impose various
other related laws. The Committee convened in
remedies including financial penalties against the
July and December 2017 to discuss several issues
22 general insurers.
cutting across various sectors. MyCC also continued
to engage with both the public and private sectors
“MyCC continued to engage with

both the public and private
to increase awareness on competition law in the
country through advocacy activities and market
surveys to identify breaches in competition law in
sectors to increase awareness of certain industries. Since its establishment, MyCC
has organised over 200 advocacy programmes for
competition law in the country
both the private and public sectors all over Malaysia.
through advocacy activities
and market surveys to identify In its efforts to raise awareness on competition
breaches in competition law.
” amongst SMEs in Malaysia, MyCC has marked
another notable development during the year with
the launch of the e-Learning System on Competition
On 27 February 2017, the Competition Appeal Compliance Programme for SMEs in March 2017.
Tribunal (CAT) dismissed the appeal of Prompt An introductory course was designed to introduce
Dynamics Sdn Bhd, which had infringed Section CA 2010 to those owning and/or working in SMEs
4(2)(a) of the CA 2010 and was subsequently fined to help them comply with the requirements of the
RM152,042 for engaging in price cartel activities. Act. The main objectives of the e-Learning System
Aside from Prompt Dynamics Sdn Bhd, MyCC also are to serve as a learning tool for SMEs and serve
investigated and penalised four other companies as a one-stop portal to access information on CA
for price cartel activities. All five companies were 2010, especially on competition compliance.
fined a total of RM645,000.
Following the success of the inaugural Moot Court
Following MyCC’s Final Decision against My E.G. Competition on Competition Law in 2016, MyCC
Services Berhad (MyEG) for infringement of organised the 2nd Moot Court Competition on
Section 10 (2)(d)(iii) of the CA 2010 by abusing its Competition Law at the Ahmad Ibrahim Kulliyah
dominant position, MyEG filed an appeal to the CAT of Laws (AIKOL), International Islamic University
on July 2016. On 28 December 2017, the tribunal Malaysia (IIUM), Kuala Lumpur on 28 to 29 October
2 nd Moot Court Competition on Competition Law 2017 held at Ahmad Ibrahim Kulliyyah Of Laws (AIKOL), International
Islamic University Malaysia (IIUM).
2017. The second event attracted seven teams Malaysian construction industry under the CA 2010.
from universities all over Malaysia, and was won The review is done to understand the construction
by the team from the University of Malaya. This industry market and identify any anti-competitive
competition aims to promote CA 2010 among conduct in the production of selected key building
university students, in line with the aim of creating materials, as well as assess the prevailing industry
a pool of future competition experts in Malaysia. practices and regulations that restrict competition
and cause unnecessary regulatory burden. The
The Commission also organised and hosted two Commission is also in the process of finalising new
international conferences, namely the Malaysia guidelines for the use of intellectual property rights
Competition Conference 2017 held on 6 to 7 March under the CA 2010.
2017, serving as a platform for deeper exposure
on competition policies, and the 7 th ASEAN Malaysia continues to face a long road ahead in
Competition Conference on 8 to 9 March 2017, competition-related legislations. Enforcement
focusing on the development of competition policy of competition law remains a complicated issue
and law in ASEAN countries over the past decade, even in the most well-established jurisdictions,
the priorities of younger competition agencies in a due to the complex and technical nature of the
competitive ASEAN, understanding the challenges subject. Detecting and investigating cases require
faced from new technological developments, and considerable economic and legal expertise and
how regional cooperation can be strengthened to these are areas that MyCC will need to invest in.
promote a stronger and more competitive ASEAN. Despite facing multiple challenges, MyCC remains
determined in executing its mandate efficiently
MyCC has completed two market reviews on the and effectively.
pharmaceutical sector and building materials in the
Ensuring World-Class Expansion of standards in the services sectors
Standards of Malaysian Standards Malaysia has worked closely with the

services industry to promote the implementation
Goods and Services of standards in various service sub-sectors. For
instance, it has collaborated with the Malaysia
Association of Cleaning Contractors to promote
the cleaning services standard MS ISO 2550:2014
– Cleaning Performance for Commercial & Public
Producing more quality products Buildings for adoption by the cleaning services
industry. This new standard incorporates best
The Standards initiative under this SRI has practices in management as well as hygiene
contributed to greater cognizance among and cleanliness. Cleaning contractors under the
businesses on certification requirements for their Association such as Industrial & Commercial
products. This is as certification has become a Cleaning Sdn Bhd, Q-Services Sdn Bhd and
pre-requisite for export which facilitates the trade Juwara Trading & Resources Sdn Bhd have
of Malaysian products and allows local players to volunteered to pilot projects using this standard
enjoy better market access. Heightened recognition with Universiti Teknologi MARA Raub and
and implementation of standards has catalysed Universiti Teknologi MARA Shah Alam, Boustead
efficiency in production, especially in the electrical Curve Sdn Bhd and Express Rail Link (ERL) Sdn
and electronics (E&E), food and beverages (F&B), Bhd agreeing to allow their facilities to be used
and agriculture sectors, while significantly increasing in this pilot.
GDP contribution from those sectors (E&E – 0.02%,
F&B – 0.26% and agriculture – 0.06%). Meanwhile, the National Recreational Scuba
Diving Council under the Ministry of Tourism
“Heightened
and Culture (MOTAC) has invited Standards
recognition and Malaysia to provide professional advice from a
implementation of standards conformance perspective to increase awareness
among diving operators and other scuba diving-
has catalysed efficiency in related businesses on the importance of adhering
production.
” to standards. Among the standards set for the
diving industry include the MS ISO 11121:2011 –
Recreational Diving Service which specifies the
The launch of a new certification programme, the minimum requirements for organisations that
Malaysian Sustainable Palm Oil (MSPO) (compliance offer introductory scuba experience training
to MS2530:2013), has also contributed significantly programmes to non-divers in an open-water
to the production of more quality products. To date, environment.
210 oil palm plantations have been awarded the
MSPO certification. The Government, through the Standards Malaysia has also initiated a programme
Ministry of Plantation Industries and Commodities with MOTAC to uplift the service levels of adventure
(MPIC) and the Malaysian Palm Oil Board (MPOB), tourism operators in the Pahang National Park.
will make the MSPO certification mandatory for To this end, Standards Malaysia has signed a
all oil palm plantations by the end of 2019 in the MoU with the Malaysian Tropical Environment
effort towards branding local palm oil as sustainably Adventure & Fellowship Society (MyLEAF) to
produced and safe. In order to uphold the credibility accelerate the development of a certification
of the MSPO certification, the Malaysian Palm Oil scheme for adventure tourism, ensuring that a
Certification Council (MPOCC) in collaboration minimum quality standard is observed by the
with Standards Malaysia has developed an operators. Beyond the safety aspect, this includes
accreditation programme which emphasises on the preservation, conservation and sustainability
three pillars of sustainability: economic viability, of natural habitats.
social acceptability and environmental soundness.
Ensuring quality and security of food expanded to other Tesco product suppliers.
MOH has also worked with the Malaysian Islamic
The Ministry of Health (MOH) has undertaken Development Department (Jabatan Kemajuan Islam
the Makanan Selamat Tanggungjawab Industri Malaysia – JAKIM) to make food safety assurance
(MeSTI), or the “Food Safety is the Responsibility programmes such as the MeSTI certification
of the Industry” certification with the objective mandatory for corporate applicants of the halal
to put in place a system for the maintenance of certification.
food hygiene and process control which includes
food safety assurance and food traceability. It is The MeSTI certification will be expanded to include
targeted for at least 50%, or 3,874, of the 7,749 food other hypermarkets and supermarkets such as
manufacturing premises to be registered with MOH, AEON, Mydin, Giant and 99 Speedmart. MOH is also
and be MeSTI-certified, including MeSTI renewals. currently collaborating with food manufacturers
Since its introduction in 2012, 3,895 premises have such as durian processors, birds’ nest packers,
been certified and by 2021, all food manufacturing honey producers and others to expand and instil
premises shall be required to be certified according the benefits of MeSTI certification.
to MOH’s requirements.
In order to promote MeSTI and create public
The Smart Partnership Programme that saw MOH awareness about the certification, many large-scale
collaborating with Universiti Putra Malaysia (UPM) to promotional activities and campaigns were carried
provide internship students with training on MeSTI out throughout the year through social media as
modules has been expanded to include 127 students well as electronic and print media, besides several
from Universiti Kuala Lumpur Malaysian Institute other local engagement platforms.
of Chemical & Bioengineering Technology (UniKL
MICET) in Malacca, and 94 students from Politeknik Meanwhile, the Malaysian version of the Good
Sultan Haji Ahmad Shah (POLISAS) in Pahang. Agricultural Practice standard, myGAP, has shown a
Lecturers from UPM, UniKL and POLISAS have also CAGR of 37% of certification for fruit and vegetable
received training in relation to the MeSTI certification. farms and 130% for aquaculture farms and 14% for
the number of livestock farms/premises since its
Under the Beyond the Sustainable Supplier inception in 2011. The cumulative number of farms
Development Programme (SSDP), MOH has certified with myGAP increase by 451% from 1,378
collaborated with five major hypermarkets in farms in 2011 to 6,226 farms in 2017. This can be
Malaysia to improve food safety along the supply attributed to increased awareness, market access
chain. Additionally, MOH has partnered with Tesco and funding incentives for farmers to upgrade their
to make it mandatory for Tesco’s fresh produce facilities and fulfil the requirement of the myGAP
suppliers to be MeSTI-certified, and this will be certification.
MesTI certified food manufacturing premise belonging to Serantau Desa Industries, Kuala Lumpur.
However, demand for certified produce remains MOA views increasing the domestic demand for
low in the domestic market, requiring collaboration myGAP as an important component in encouraging
with hypermarkets and grocers to demand farmers to obtain certification. Currently, there is no
certified produce, besides increased enforcement price differentiation for myGAP-certified and non-
from implementing agencies, as well as more certified products. Thus, educating the domestic
understanding among consumers on the need for market to seek certified products where it touches
certification. quality, safety and sustainability will become a high
priority, as well as create another layer of product
Currently, the myGAP certification is voluntary, with offerings. Similar to MOH in its efforts to promote the
the auditing and certification of farms left to the MeSTI certification, MOA will also be collaborating
discretion of farmers. Fruit and vegetable farms with hypermarkets, speciality stores and supermarkets
that are certified by the Department of Agriculture to create a demand for certified produce.
(DOA) comprise small farms which account for
only 2%, or 22,877 hectares, of the total farm land
in Malaysia. Hence, there continues to be a need for
larger farms to apply for the myGAP certification. “The myGAP certification has
started to be recognise by
To further enhance the standards of agricultural
neighbouring countries and has
produce, MOA has also allocated funds to assist been set as a pre-requirement
farmers in upgrading their storage, sewage, for the export of fruits and
collection and other facilities. In addition to funding,
the Departments of Agriculture, Fisheries and
vegetables to Indonesia and
Veterinary Services support MOA’s efforts through
engagement programmes, including capacity-
Brunei Darussalam.
”
building programmes towards myGAP compliance.
Improving environmental standards
The myGAP certification has started to be recognised
The MyHIJAU Programme is an initiative under the
by neighbouring countries and has been set as
Ministry of Energy, Green Technology and Water
a pre-requirement for the export of fruits and
(KeTTHA) which aims to boost the capacity and
vegetables to Indonesia and Brunei Darussalam.
capabilities of the industry in the production of more
Indonesia started implementing this requirement
green products and services that are competitive
in February 2016 while Brunei started in 2017. Full
locally and globally, and at the same time encourage
implementation of this requirement will be rolled
the consumption of goods and services that fulfil
out in Brunei starting January 2018.
myGAP certified farm belonging to Ngee Teck Huat Farming Sdn Bhd in Johor.
environmental standards. The MyHIJAU Programme Work in improving environmental standards in

includes the MyHIJAU Mark and MyHIJAU Directory Malaysia has to take into consideration several issues
initiatives, both of which aim to coordinate and and challenges. Eco-friendly products and goods
monitor all existing green labelling activities, as well are more expensive, as there is a high initial cost in
as enhance promotional and information gathering manufacturing such green products. As a result,
activities related to green labelling which is currently supplier readiness remains a concern, as does the
done by multiple agencies. This coordination serves wide availability of existing non-green/traditional
to provide clarity and avoid confusion to arise from products and services as alternatives to their green
the multitude of uncertified ‘green’ labels. As of counterparts. There is also ignorance with regards
December 2017, 2,319 new local products have been to the existence of green products and services,
certified under MyHIJAU, including air conditioners, which is one of the factors why the market for such
televisions, refrigerators and consumer products goods is less driven by local demand.
such as biodegradable detergents.
To overcome these hindrances, the Government
Another branch under the MyHIJAU Programme needs to set up a strategy to overcome those
is the MyHIJAU SME & Entrepreneur Development challenges. First is to create awareness that the green
Programme, which aims to promote and increase agenda is an investment, besides providing incentives
awareness of the MyHIJAU certification and provide and assistance to the industry to encourage them
consultation to local entrepreneurs to encourage to adopt green standards and technologies. The
them to move towards obtaining the certification. As strategy should also include enhancing the existing
of December 2017, 423 companies have participated green standards, labelling and certification system.
in this entrepreneur development programme. At the same time, the Government needs to focus
on compliance of procurement regulations in the
In 2017, the implementation of the Government public and private sectors.
Green Procurement (GGP) initiative has expanded
to all 25 Ministries and Government agencies. Under
the 11th Malaysia Plan development budget for the
period of 2016-2017, RM4.88 million was allocated “As of December 2017, 2,319
new local products have been
for the implementation of green technology
development and green procurement programmes. certified under MyHIJAU,
This programme involves capacity building among including air conditioners,
procurement officers to enhance their capabilities to televisions, refrigerators and
implement the GGP, besides providing consultation
for SMEs to encourage them to adapt green
consumer products such as
technology and practices in their operations. This
programme promotes and facilitates the registration
biodegradable detergents.
”
of the MyHIJAU Mark for businesses producing
green products and services. The rolling out of the Green Income Tax Allowance
(GITA) and Green Income Tax Exemption (GITE)
To date, the GGP implementation has seen the should continue to encourage greater demand
selection of 20 product groups as preferred green for green products. KeTTHA will be involved in
products with GGP compliance serving as an continual engagement with various identified
evaluation criteria in the Star Rating mechanism agencies that provide Environmental Certification
introduced by the Malaysian Administrative Schemes under the MyHIJAU Programme. Moreover,
Modernisation and Management Planning Unit under the ‘Green SME’ initiative, environmental
(MAMPU) to evaluate and rate the performance of compliance and criteria will be incorporated in
public-sector agencies. GGP guidelines involving all SME development programmes organised by
those 20 product groups have been developed Ministries and Government agencies. Additionally,
based on MOF’s procurement procedures and steering the SMEs’ plans of action towards eco-
relevant national standards and eco-labels. In 2016, friendly approaches will be done by the respective
the GGP value by the 12 selected ministries was Ministries and agencies to reduce greenhouse gas
RM130 million. emissions contributed by the manufacturing and
services sectors.
Liberalisation and Reforms Corporation-SME Partnership Programme, Mid-Tier

Companies Development Programme and GoEx.
Spur Investments These programmes are designed to address specific
needs of export-ready services firms not only through
funding opportunities but other support measures
such as consultation, market research and export
promotion. Programmes such as the Large Corp-SME
Since 2009, Malaysia has undertaken a policy of Partnership Programme also encourage partnerships
progressive liberalisation and business reforms of its between large corporations and SMEs to venture into
services sector to attract greater foreign investment projects abroad.
and improve the competitiveness of the country. The
Government has also undertaken sectoral governance The effectiveness of investment incentives can be
reforms which improve the business climate. The further improved with central coordination and
exercises in liberalisation and reform continued into management of the various incentive schemes, a
the implementation of the NTP. focus on quality, transparency and more robust
evaluation of current and future incentive schemes.
In March 2015, the Government launched the Services Investing in talent is also essential in ensuring the
Sector Blueprint (SSB) to further boost investment success of the services sector.
and activity in the services sector. The blueprint
focuses on priority sectors, the Construction Industry Other than the three strategic shifts, SSB
Transformation Plan (CITP) and the Logistics and recommended the establishment of the Incentive
Trade Facilitation Master Plan, paving the way for a Coordination and Collaboration Office (ICCO), which
change in the composition of the services sector to was set up in MIDA on 15 April 2015. ICCO identifies
enhance and leverage on linkages between sectors the gaps and the enhancement opportunities across
as well as to improve competitiveness and generate all schemes offered and ensures that underserved
high-income jobs. segments are included. MIDA administers all
incentives under the Promotion of Investment
Act, 1986 (PIA) and selected incentives under the
“Incentives such as the Services

Export Fund, Large Corporation-
Income Tax Act, 1967. In alignment with MIDA Act
1965, the organisation is also mandated to be the
centre for collection, reference and dissemination
SME Partnership Programme and of information relating to investments across all
GoEx were introduced to facilitate sectors of the economy.
export growth.
” ICCO fundamentally serves three main groups
of stakeholders which are the foreign and local
SSB also focuses on three strategic shifts which companies who are interested to establish and
include focusing on knowledge-intensive services, currently operating their businesses in Malaysia,
implementing an integrated sectoral governance agencies that manage incentives such as MOSTI,
reform and stepping up internationalisation efforts MIDF, MDEC and MATRADE, as well as incentive
of local service providers. The blueprint has identified monitoring authorities such as MOF and EPU.
challenges facing this sector and proposed four
policy levers namely internationalisation strategy, For the first phase of ICCO’s implementation, MIDA
investment incentives, human capital development has developed an interactive web portal which
and sectoral governance reform to be implemented. currently stores information on 120 incentives by
31 Federal Ministries and agencies. For the second
Strategies and action plans have been formulated phase, ICCO will collaborate with the relevant
for local companies to increase their export and Ministries and agencies to compile a database of
expand their presence into the international companies granted incentives under a centralised
market. A number of incentives were introduced approval database management system to improve
to support and facilitate the development of the central coordination and management of
export such as the Services Export Fund, Large incentive provision.
Climbing up the ranks of Doing Business of enhancing the benefits and effectiveness of the
regulatory reforms to the business community.
The success of these efforts can be measured by
Malaysia’s 24th ranking on the World Bank’s Doing Reducing unnecessary regulatory burdens
Business 2018 report, putting the country fifth in
Asia after Singapore, Republic of Korea, Hong Kong Efforts to ensure conducive environment for
SAR and Taiwan. Among the highlights of positive business are also undertaken by the Malaysia
reforms include the areas of getting credit, cross- Productivity Corporation (MPC), which has
border trade and protection of minority interests. undertaken a series of specific regulatory
The country is also ranked 8th in the world in terms reviews and developed the National Policy on the
of getting electricity due to the shorter number of Development and Implementation of Regulations
days needed to connect to the grid (31 days versus (NPDIR) to establish good practices for the reform
78 days across OECD high-income economies), the processes. Implementation of the NPDIR includes
reliability of supply, transparency of tariffs and the undertaking in-depth public consultations and
affordable cost of connection. regulatory impact assessments to ensure that the
new regulatory changes are sound and effective to
the public and the relevant industries in Malaysia.
“Malaysia is ranked 24 in the

World Bank’s Doing Business
th
Following this, among regulations which have been
”
eased include landing permits for chartered flights.
2018 report. Prior to the exercise, on average it took seven
days for cargo flights and 14 days for passenger
flights to obtain landing permits against the best
Furthermore, in the past 15 years, Malaysia has
practice, of around two to three days. This exercise
implemented 23 governance reforms aimed at
has shortened the issuance of Landing Permits
improving business regulations. According to
of Charter Flights to three days for cargo and
the World Bank, this is much higher than the per
passenger flights and reduced 70% of documents
country average of 15 reforms in the East Asia and
for applications for Domestic Airlines and 30%
Pacific region. Notably, the country was ranked 11th
for Foreign Airlines. This improvement will bring
in the ‘dealing with construction permits’ indicator,
tremendous impact in terms of stimulating trade,
with the average time to obtain a construction
facilitating business efficiency and spurring
permit in Malaysia amounting to 78 days against
economic growth. It has also contributed to the
the global average of 158 days.
larger objective of transforming Malaysia into the
preferred logistics gateway to Asia.
The report additionally highlighted the
Government’s establishment of a one-stop service
Although governance and regulatory reform
centre as well as streamlining of the registration
exercises are carried out consistently, a number of
process through the introduction of e-lodgment to
improvements are required to support the objective
ease new business registrations. This has helped to
of further improving the ease of doing business
halve the time needed to register a new business
in Malaysia. These include the need to enhance
from 37 days 15 years ago to 18 days now, while
knowledge on Good Regulatory Practices (GRP)
the cost has been reduced from 33% of income
among Government agencies to strengthen the
per capita to 5% today.
public consultation mechanism and governance to
ensure that stakeholders are not adversely affected
The Doing Business 2018 report also suggested
when the Government introduces and amends
areas of improvement, including carrying out
policies or regulations. Ministries and agencies are
governance reforms in a more streamlined and
encouraged to undertake the Regulatory Impact
regular manner across all Ministries and agencies.
Analysis (RIA) in order to manage intended and
Despite completing six regulatory reform exercises
unintended consequences that may arise from
in the Starting a Business area in the last 15 years,
regulatory review processes.
further improvements are suggested in the interest
Strengthening Malaysia’s Brand by

Raising the Bar
Building up trust in Malaysia’s products and services is the fact that the MyGAP certification allows GM
pivotal to the nation gaining competitiveness. Therefore, Peladang’s products to more easily gain acceptance
Malaysian products and services need to meet high and entry into hypermarkets, farmer’s markets and
standards, and be seen to be meeting high standards. hotel kitchens.
Standards Malaysia, a Government department in The adoption of Standards Malaysia’s standards

charge of creating standards for the country’s products aided a Kuala Lumpur-based digital security
and services, is one of the key drivers of the CSL SRI. firm, Securemetric Technology Sdn Bhd, double
This SRI aims to develop an efficient and competitive its export revenues to RM4.95 million in 2014 as
business environment and culture via the enhancement compared to RM2.4 million in 2010. Securemetric
and adoption of standards and best practices. adopted two standards: ISO 15408 – Common
Criteria Evaluation Assurance and ISO 9001 –
Datuk Fadilah Baharin, Director General of Quality Management Systems. ISO 15408, which
Standards Malaysia states that upholding Malaysian also helped Securemetric obtain new deals in
products and services to the highest standards is the government and private sector that it had
one of the keys to transforming the nation into a previously been unable to secure.
high-income economy. “Standards are important
as they open doors, help speed market growth The department is also focused on increasing
and increase domestic and international trust in awareness of the importance of standards to the
Malaysian products and services.” future generation. To this end, Standards Malaysia
is working with universities to incorporate
Standards Malaysia has developed over 6,000 standards education into their syllabi. It
standards across 25 sectors, and among those also works with the Ministry of Education to
is the Halal certification which is awarded and disseminate knowledge about standards to
enforced by Jabatan Kemajuan Islam Malaysia primary and secondary school students. This is
(JAKIM). Through aiding various Government done via games and competitions such as The
ministries to enforce certification programmes to National Standards Olympiad; where students
help companies and businesses improve quality and must demonstrate creativity, problem-solving
gain market trust; higher levels of trust, higher sales skills and cooperation through team-based
and better quality for customers are achievable by competitive standardisation activities such as
Malaysian companies. developing prototypes.
For example, following the Winners of The National Standards Olympiad

adoption of MS 1784 Good go on to the represent the country at the
Agriculture Practice Crop International Standards Olympiad. Two Malaysian
Commodities (MyGAP) in schools, Sekolah Menengah Kebangsaan Taman
2004, Terengganu based Mutiara Rini 2, Johor and Sekolah Menengah
company, GM Peladang Sdn Kebangsaan Rantau Petronas, Terengganu won
Bhd which grows melons silver and bronze medals respectively in the
and tomatoes experienced global games held in Yongin, Korea in 2017.
a rise in profit from
RM3,870 in 2005 to Standards Malaysia is now working on
RM124,567. The rise introducing a national quality mark to help
was attributed to enhance Malaysia’s brand globally. “With this
national quality mark, Malaysia will fly high,” said
Fadilah. “There will be higher trust in Malaysia’s
Datuk Fadilah Baharin, products and our products will become the
Director General of preferred brand around the globe.”
Standards Malaysia.
MOving Forward
The Competitions, Standards and Liberalisation SRI has brought many advancements to the nation in the
past seven years including increased awareness of competition law, heightened standards of local products
and services, and the progressive transition of the services sector to become more knowledge-intensive
and innovation led.
To deliver effective competition regime in Malaysia, MyCC will continue its role to implement and enforce the
CA 2010 to ensure a conducive competition culture to make markets work well for consumers, businesses
and the Malaysian economy. MyCC will remain focused on elevating awareness as well as educating
stakeholders and the public on the importance of complying with competition laws. Besides that, MyCC
will continuously build and disseminate expertise in competition law through networking efforts.
Meanwhile, the focus of standards has always been to encourage business entities to obtain certification to
improve their competitiveness, particularly those who wish to penetrate the export market. However, the
drive to obtain certification is still dependent on export market requirements while certified products do
not command a price advantage over non-certified products or produce. Consequently, local businesses
would not see the value of obtaining certification. Moving forward, the Government needs to step up its
efforts to increase the demand of certified products among domestic consumers and enhance the country’s
standards to meet international benchmarks.
In liberalisation of the services sector, the Ministry of International Trade and Industry (MITI) will coordinate
and oversee implementation of the SSB which outlines 29 action plans that transcends across four main
policies: internationalisation of services firms; effective management of investment incentives; enhancing
human capital development; and enhancing sectoral governance integration. In addition, there should
be continuous efforts by MPC to evaluate the Business Environment Framework, especially in Reducing
Unnecessary Regulatory Burdens for the sectors such as the ICT sector, logistics and Distributive Trade
to raise Malaysia’s ease of doing business.
NARROWING DISPARITY
Safeguarding equality
in prosperity
YB DATUK SERI PANGLIMA ABDUL RAHMAN DAHLAN

Minister in the Prime Minister’s Department,
Economic Planning Unit
In enhancing inclusiveness towards an equitable On 19 April 2017, the YAB Prime Minister launched
society, the Government has continued to focus on the Transformasi Kesejahteraan Bumiputera (TKB)
addressing the needs of identified target groups, as an expansion of BETR 1.0. While BETR 1.0 was
including the Bumiputera. Since the launch of the more focused on wealth creation, the TKB is aimed
New Economic Policy (NEP) in 1971, various initiatives at uplifting the well-being of Bumiputera across all
were implemented in support of the Bumiputera aspects of their lives. The Bumiputera Economic
agenda to uplift living standards and reduce socio- Council (Majlis Ekonomi Bumiputera, MEB) provides
economic imbalances. The incidence of poverty the necessary guidance on policies and initiatives
among Bumiputeras has since declined from 64.8% to implement the TKB. Its initiatives are steered
in 1970 to 0.5% in 2016 and the mean monthly gross towards placing more emphasis on women, youth
household income of Bumiputeras has increased and Bumiputera in Sabah and Sarawak.
from RM172 in 1970 to RM6,267 in 2016.
The Government is also committed towards enabling
Despite this progress, the participation of Bumiputeras Bumiputera companies to penetrate international
in the economy is still low, therefore, continuous markets. In this regard, RM100 million has been
efforts are required to ensure more equitable allocated for TERAJU to implement various export
access for Bumiputeras to economic opportunities. programmes for Bumiputera SMEs. TERAJU
In this regard, the Government through TERAJU International, an arm to facilitate Bumiputera
has mobilised and spearheaded the implementation exporters and connect them to the global arena,
of the Narrowing Disparity SRI, adopting “growth was launched in 2017 and will serve to strengthen the
with equity distribution” as a key principle to ensure competitiveness of Bumiputera companies through
inclusive planning and balanced economic growth. integral capacity-building in the international market.
This SRI has paved the way for the development of the As we move forward, emphasis must be placed
Bumiputera community and the implementation of the on transforming the mindset of the Bumiputera
Bumiputera Economic Transformation Roadmap (BETR) community to reduce their dependency on financial
1.0 in 2011 has been able to address the fundamental assistance and enhance their competitiveness
issues faced by the Bumiputera community in a holistic through capability and capacity-building as well as
manner with the goal of catalysing Bumiputera wealth. innovation. It is only in this way that we will be able to
Thus far the results have been encouraging, enabling achieve sustainable improvements in the well-being
the creation of business, employment and education of Bumiputera.
opportunities for the Bumiputera community. As of
2017, through the initiatives carried out under BETR 1.0,
a total of RM122.2 billion business opportunities have
been created for the Bumiputera.
EMPOWERING HUMAN CAPITAL
Education development and skills improvement

are essential elements to continuously uplift the
Bumiputera community’s share of wealth and
participation in the economy. In this area, Yayasan
Peneraju Pendidikan Bumiputera (Yayasan Peneraju)
is the body mandated to increase the quality,
quantity and relevance of Bumiputera talent. This is in
Entrepreneurship development program conducted by
accordance with the Government’s effort to catalyse INSKEN.
the creation of skilled jobs in line with Malaysia’s
transformation into a high-income nation. RM419
million was allocated, through both Government and Currently, a large number of Bumiputera companies
private funding, for three core programmes under are involved in low-value projects due to their lack of
Yayasan Peneraju, namely Peneraju Skil, Peneraju capacity and capabilities. In an effort to boost the size
Profesional and Peneraju Tunas. After more than five and capabilities of Bumiputera companies, INSKEN,
years in operations, Yayasan Peneraju has enrolled a unit under TERAJU, has played an important role
17,700 scholars via more than 205 intervention in developing the capacity of Bumiputera companies
programmes. From this total, 3,900 scholars were and ensuring that the companies are on par with the
enrolled under Peneraju Tunas, 10,300 scholars under competitors in the market. As of 2017, 325 businesses
Peneraju Skil and another 3,500 scholars enrolled have registered a minimum revenue increase of 10%,
under Peneraju Profesional. exceeding the target of 300 businesses through the
INSKEN500 programme. In total, 28,330 entrepreneurs
have benefitted from 1,109 programmes implemented
“After more than five years in

operations, Yayasan Peneraju
nationwide in collaboration with various federal and
state entities.
has enrolled 17,700 scholars On the corporate front, in 2017, INSKEN collaborated
via more than 150 intervention with Talent Corporation Malaysia Berhad (TalentCorp)
”
and Unit Perancang Ekonomi Negeri Sabah (UPEN
programmes.
Sabah) to conduct the Sabah GLC Talent Development
Programme which aims to develop human capital
among those holding senior management positions
In addition to providing education opportunities for
in Sabah. These individuals are placed within selected
the Bumiputera community, Yayasan Peneraju also
national GLCs where they are trained for six months
focuses on instilling greater discipline, ethics, self
to gain a better understanding of best practices in
and social awareness, besides strengthening work-
GLCs. The programme also enables knowledge and
relevant soft skills and providing on-the-job training
technology transfer among GLCs in organisational
to further prepare their scholars for the working
development and project implementation and delivery.
world. This includes closer engagement with the
industry to ensure graduates are equipped with
As the Secretariat to the GLC Talent Development
relevant skills. In the future, Yayasan Peneraju aims
Programme, TalentCorp is responsible for implementing
to develop and implement programmes for new
and monitoring this programme, including strategising
target areas which require intervention such as the
the best way to develop top talent, setting the selection
religious education stream, workforce for emerging
criteria and matching the candidates with suitable
industries and technologies as well as providing
GLCs through profile assessment. In September 2017,
programmes specifically for selected groups such
two Sabah GLC Talent Development Programme
as the Orang Asli, asnaf (Zakat recipients) and
candidates started their six-month training in two
prison inmates.
GLCs, Khazanah Nasional Berhad and TERAJU.
BOOSTING THE BUMIPUTERA ECONOMY through programmes such as the TeraS Fund, the
Business Expansion Fund, Bumiputera SME Equity
Fund and the Bumiputera Technology Fund. As a
result, from an initial Government funding of RM444
million, Bumiputera companies have received RM1.62
In 2017, RM80.47 billion worth of business billion in financing, equivalent to a financing multiplier
opportunities were created for Bumiputera companies of 3.65 times against a target of three times.
through two feeder programmes – the Facilitation
Fund and the Carve-out & Compete programme. Nonetheless, there has been found to be a low take-
Through the Facilitation Fund, RM14.44 billion in up rate of the funds as there appears to be lack of
private investments have been generated from RM1.7 awareness among companies of the availability of the
billion in financing approvals for 455 companies programmes. In an effort to address this, TERAJU
and 538 projects. Under the Carve-out & Compete regularly engages with its financing partners to
programme, two projects identified in 2017 – the undertake awareness programmes.
LRT3 expansion project and the Pan Borneo Sabah
Highway project – carved out RM7.12 billion and RM3.9 Efforts under BETR 1.0 have also included increasing
billion worth of works, respectively, to be awarded Bumiputera corporate equity through the Skim Jejak
to Bumiputera companies. Since 2012, a total of Jaya Bumiputera (SJJB). In 2017, two Bumiputera
RM66.03 billion in contract value has been carved companies – GFM Services Bhd and Serba Dinamik
out for Bumiputera companies via the Carve-out & Holding Bhd – were listed on Bursa Malaysia in
Compete programme. January and February respectively. Both companies
have seen their market capitalisation increase by more
To increase Bumiputera involvement in mega than 50% since then. Serba Dinamik, which raised
infrastructure projects, RM500 million has been RM2 billion from its initial public offering (IPO), has
made available for local contractors under the seen its market capitalisation grow to RM4.3 billion
“Program Pembiayaan Kontraktor Pan Borneo in 2017, while GFM Services raised RM162.6 million
Highway” (PPKPBH). The funds are made available during IPO and recorded a market capitalisation of
in collaboration with SME Bank, RHB Islamic and RM214.1 million in the same year.
Credit Guarantee Corporation.
Efforts to uplift Bumiputera should be recognised
Meanwhile, to ensure efficient use of Government as a national agenda. In order to expand its reach
funding, TERAJU had introduced the use of nationwide, TERAJU has worked with multiple
Government funding as collateral to be leveraged agencies to disburse the Dana Pembangunan
by financial institutions to provide financing to Usahawan Bumiputera (DPUB). The agencies involved
qualified companies. This financing is provided include the Northern Corridor Investment Authority
(NCIA), East Coast Economic Region Development
Council (ECERDC), Iskandar Regional Development
Authority (IRDA), Sabah Economic Development and
Investment Authority (SEDIA), Ministry of Industrial
and Entrepreneurial Development Sarawak (MIED),
Sedcovest Holdings Sdn Bhd, a State Government
agency in Sabah, and Yayasan Sabah. Funds
amounting RM15 million are allocated to each corridor
for, among others, entrepreneur funding, training and
the establishment of community innovation centres,
infrastructure development and incubation centres. A
total of RM110 million has been disbursed since 2015. To
date, 11,488 entrepreneurs from these various corridors
have benefitted from the various programmes under
DPUB implemented across all corridors.
The Government remains inclusive in its initiatives to

YAB Tan Sri Datuk Seri Panglima Musa Aman looking uplift Bumiputera and has formulated strategies to
at the floor plan of Anjung Usahawan Tanjung Lipat upscale Bumiputera micro-entrepreneurs. As such,
redevelopment project.
various initiatives were developed to aid those in External Trade Development Corporation
this segment, especially micro-entrepreneurs at (MATRADE) to assist export-ready companies and
the corridors with emphasis given to Sabah and other high-potential companies with competitive
Sarawak. One of the initiatives is the redevelopment products to penetrate international markets. The
of the Anjung Usahawan Tanjung Lipat with an programme is targeted to develop five global
allocation of RM13.5 million through a collaboration champions and 10 regional champions from
with Sedcovest. The 51,130 square feet building was different sectors.
rebuilt and given a facelift with the aim to create
a centre for business that is comfortable and well-
organised for Bumiputera entrepreneurs in the food
& beverage, retail and services sectors. It is also
hoped that the development of the surrounding
“TERAJU launched TERAJU
International in 2017 to serve as a
areas and tourism industry in Kota Kinabalu will platform to facilitate Bumiputera
be further supported with the development of this exporters through various
business environment. Construction commenced
in September 2017 and is targeted for completion programmes and connecting
in December 2018. The redevelopment project will
provide business opportunities to 64 entrepreneurs
within the business area and is projected to create
them to the global arena.
”
200 additional jobs for the locals. Meanwhile, BFF is a partnership between TERAJU
and EXIM Bank which provides financing facilities to
Young, innovative and creative Bumiputera exporters for indirect exports, overseas contracts,
entrepreneurs and start-up companies are also projects or investment abroad for working capital
given a chance to realise their ideas through the and capital expenditure. Using the funds as security/
Skim Usahawan Permulaan Bumiputera (SUPERB). collateral, EXIM Bank will provide a financing facility
As at December 2017, 201 winners have been of RM150 million for exporters to enjoy cheaper
identified for grant allocation of RM79.8 million in financing from subsidised financing rates, reduction
collaboration with 10 agencies, namely Malaysia in collateral obligations for financing and access to
Digital Economy Corporation (MDEC), Perbadanan cross-border financing products to capitalise on new
Usahawan Nasional Bhd (PUNB), Technology Park business opportunities.
Malaysia, Malaysia Development Ventures, Malaysia
Venture Capital Management Bhd (MAVCAP), To push forward the Bumiputera agenda, Unit
Malaysian Technology Development Corporation Pemerkasaan Ekonomi Bumiputera (UPEB) has
(MTDC), Cradle Fund, Bioeconomy Corporation, been set up within Ministries to drive and lead the
MyCreative Ventures and Kumpulan Modal Perdana. implement of Bumiputera agenda at the Ministerial
level. These Ministries will need to carry out initiatives
The Government is also committed to enabling that promote the Bumiputera agenda with KPIs
Bumiputera companies to penetrate international reported to MEB on a bi-annual basis to ensure all
markets. In view of this, RM100 million was targets are achieved.
allocated to implement various export programmes
for Bumiputera SMEs. Following this, TERAJU
launched TERAJU International in 2017 to serve
as a platform to facilitate Bumiputera exporters Bumiputera Economic
through various programmes and connecting them
to the global arena with the aim of strengthening
Transformation Roadmap 2.0
their competitiveness in the international market.
The Bumiputera Initiative for Globalisation (BIG)

programme and Bumiputera Frontier Financing In April 2017, the BETR 2.0 Syndication Lab was
(BFF) are the two flagship programmes under held, attended by over 600 representatives from
TERAJU International, for which RM50 million ministries, agencies, entrepreneurs, GLCs, GLICs
has been allocated for each programme. BIG is and NGOs. A total of 46 initiatives were derived
a collaboration between TERAJU and Malaysia from the syndication lab, which paved the way for
the YAB Prime Minister to introduce Transformasi

Kesejahteraan Bumiputera (TKB). TKB aims to
introduce policy principles that will strengthen
the Bumiputera agenda over the next 10 years,
while focusing on programmes and initiatives to
be delivered over the next five years – from 2017
to 2021.
TKB’s programmes and initiatives will be guided

by the following policy principles:
1. Income as the true north – achieve a mean

monthly income of RM5,000 for Bumiputera
over the next five years, encompassing both
wage and non-wage income.
2. Creating success stories into replicable
models – combination of fine-tuning existing The BETR 2.0 syndication lab session held in April 2017.
programmes to make them more replicable,

as well as complementing them with new
initiatives.
3. Combining public and private financial
Adopting the Bumiputera Agenda
resources to deliver greater impact – increase on a National Scale
funding for B40.
4. Rationalisation of the delivery system –
ensure that benefits are distributed amongst
Bumiputera on a needs-based and equitable
manner in terms of socio-economic background Programmes under TERAJU have seen multiple
and gender; Bumiputera companies that are successes and many Bumiputera companies and
in the priority sectors are given adequate individuals have seen an improvement in income
coverage. and quality of life due to the positive outcomes
5. Small firm-friendly policies – TERAJU will work of the programmes. Thus, in the effort to ensure
with key Government organisations and GLCs the sustainability of these improvements, TERAJU
to pilot small-firm friendly policies in specific is continuously encouraging large and successful
procurement and project contexts. Bumiputera companies to adopt policies or
6. Strengthening emphasis on women. programmes such as Carve-out & Compete or
7. Malaysian Youth and the readiness for disruptive develop their own mini Vendor Development
technology – programmes like SUPERB for the Programme.
younger generation need to continue and be
enhanced for the nation to be ready for the Echoing the Government’s directive which came
next ‘game-changing’ innovation. into effect on 1 August 2017 that any company
8. The Bumiputera agenda has to be embedded which receives procurement/contracts from the
in the mainstream activities of Ministries and Government are required to provide training
agencies. for Skim Latihan 1Malaysia (SL1M) trainees by
allocating a budget of 1% of the procurement/
The approach taken by TKB for the Bumiputera contract value for the SL1M programme, many
transformation champions the people with the companies that have received funding from the
aim of elevating the status of Bumiputera. It is Government will play their part in tackling the issue
anchored on five areas: upscaling Bumiputera of unemployment and human capital development
companies, empowering human capital, enhancing by taking in SL1M trainees. This will help address the
the competitiveness of Bumiputera, enabling issue of unemployment and create opportunities
social mobility and ensuring that Bumiputera for skills development among youth.
transformation is comprehensive and holistic.
Paving the Horology Field in Malaysia
Horology, the study and measurement of time

and the art of making time-keeping instruments,
is synonymous with Swiss passion and specialty.
Although Malaysia has never been known to lead
this department, one man and his team are planning
to change that.
“MASA Horlogerie is a Malaysia-born fine

watchmaking company,” says Dr. Ahmad Syahid
Mohd. Fadzil. “Established on 31 August 2015,
we are the first and only Malaysian Bumiputera
watchmaking company that is involved in the
business of high quality, ultra-exclusive Swiss-made
luxury timepiece. MASA Horlogerie is inspired by
the highly acclaimed Swiss watchmaking heritage
and artistry, and the aesthetically rich cultural
heritage of Malaysia.”
The medical doctor by profession and self-

confessed ‘horologer, designer, watchmaker and
entrepreneur by passion’ is one of the winners of
the prestigious Bumiputera Entrepreneurs Startup
Scheme (Skim Permulaan Usahawan Bumiputera,
SUPERB) programme, held under the patronship
of TERAJU and the Prime Minister’s Office. The
programme provides grants and funds to support
Bumiputera-led startup companies with innovative
and creative business ideas. Dr. Ahmad Syahid Mohd. Fadzil, founder of MASA
Horlogerie.
Accelerated through SUPERB

or ‘Horologi Warisan™’ receive domestic and
“To be honest I joined the (SUPERB) programme for
international demand.
the opportunity to gain professional entrepreneurial
knowledge, not to win,” says Dr. Ahmad Syahid,
The company is currently in the midst of creating
a University Malaya graduate. “The experience I
historic-themed pieces such as the Kerabat I series
gained from the programme was truly priceless!
with the world’s first “Keris Lok 9” watch hand and
I had the opportunity to learn about the start-
“Songket Bunga Pecah 8” dial. It has also successfully
up ecosystem in Malaysia, meet captains of the
established an exclusive sartorial/fashion label, the
industry and gain knowledge and guidance from
MONT/OPHIR™️ which features the classical name
vastly experienced coaches, mentors and fellow
of Gunung Ledang and its legendary gold story.
participants.”
“SUPERB has provided not only a significant financial
Local culture, International products
contribution, but more importantly the platform for
MASA Horlogerie to be established, (plus) social
Dr. Ahmad Syahid is passionate in bridging the
networking, entrepreneurial empowering sessions,
business and knowledge gap between Malaysia and
and personalised and focused mentoring. It gave
Switzerland in the horology field while highlighting
us the opportunity to give back to the society, pay
Malaysia’s unique heritage. MASA Horlogerie’s fine
our best tribute towards the country, our culture
watches, which incorporates ‘Heritage Horology™’
and patriotic spirit through horology,” the founder
says. “The SUPERB programme had opened the

path for me to explore my entrepreneurial acumen
and self-potential.”
Plans for the future
Dr. Ahmad Syahid is a keen believer in giving back to

society. His team is now developing a syllabus and
learning materials to encourage Malaysians to be a
part of the local horology movement. The company
is training staff members and interns on international
business administration, the business of horology as
well as basic technical aspects of Swiss watchmaking.
In addition, the company also plans to establish a
national horological institute and a horology-tourism-
based “mini Switzerland” in Malaysia, the first in Asia. The watch designing process with a Swiss expert.
The institute will feature a watchmaking school, a
resource lab and a training centre.
To aspiring entrepreneurs, Dr. Ahmad Syahid shared
Exemplifying his entrepreneurial spirit, Dr. Ahmad the following advice: “Knowledge, perseverance and
Syahid has big plans for MASA Horlogerie. “We undying passion are the rules to become successful
hope to have our own certified watchmaking facility in any field or career, as these values are the most
in Malaysia before 2020, so we can educate and significant motivation. When you are passionate
train our own talents in this field. In 2018, we will about something that you whole-heartedly believe,
expand our customer experience and support with you will find a solution for every problem you might
a bigger gallery, an adjacent watchmaking facility encounter. Your knowledge must be apt and you
under the name “Montres MASA.” should never, ever stop learning.”
Watches produced by MASA Horlogerie.

DPUB Eases the Way Forward for

Bumiputera Entrepreneurs in the ECER
Designed to address the limited access to funding As of December 2017, DPUB had benefited 1,630
and lack of capital that many Bumiputera face, the ECER entrepreneurs, 95% of which have annual
Bumiputera Entrepreneur Development Fund (Dana turnovers below RM300,000, with 70 percent of the
Pembangunan Usahawan Bumiputera, DPUB) has entrepreneurs involved in the food and beverages
been overwhelmingly well-received; being the most (F&B) industry. “On average, entrepreneurs that
highly sought-after programme by Bumiputera received DPUB assistance increased their sales by
entrepreneurs in the East Coast Economic Region 30% after only six months; some of them, especially
(ECER). in the F&B line, increased sales by more than 50%,”
Suhaimi enthuses.
Mohd Suhaimi Ab Aziz, Project Manager of the
entrepreneurship development programme in the He also notes that the business transformation
East Coast Economic Region Development Council did not only improve their quality of life, but was
(ECERDC), has been involved with the DPUB also able to create a spill over effect in creating
from the start. “I was involved in policy planning more jobs to the local community. “Our survey
and drafting, activity selection, budget planning, data shows that on average, each entrepreneur has
SOP development, promotion and awareness. I created three new job opportunities, all of which
now manage the overall implementation of the are filled by locals.”
programme,” he explains.
Suhaimi believes that DPUB, along with all the other
As part of a strategic collaboration with Unit human capital development and entrepreneurship
Peneraju Agenda Bumiputera (TERAJU) since programmes implemented since 2009, has
August 2015, DPUB aimed to assist Bumiputera successfully narrowed the economic disparity in
SMEs in the ECER to grow their business through the country, especially in the ECER. “The initiatives
four initiatives; soft loans for micro-enterprises, carried out by the Government have benefited
business equipment aid, reimbursement grants about 11% of total households in the ECER, which
for Bumiputera investors in industrial parks and is significant given that 97% of them are in the B40
development fund for contract farmers. group, and more than 85% are Bumiputera.”
However, he also thinks that the Government needs
“On average, entrepreneurs

that received DPUB assistance
to encourage technology uptake by Bumiputera
entrepreneurs. “The Fourth Industrial Revolution is
not merely a concept; it is going to drive industry
increased their sales by 30% after growth. We need to change entrepreneurs’ mindsets
only six months.
” and perceptions, so that they see that technology
and automation actually reduces costs through
digitisation of business operations and improved
“Our strategy has been to identify Bumiputera efficiency. Thus, the Government should impose
entrepreneurs with potential to nurture their specific criteria regarding the use of industrial
organic growth and increase their competitiveness. automation or ICT for Bumiputera entrepreneurs
We also cover less-recognised industries, such to be eligible for all assistance programmes.”
as post-natal care services and home dealers of
agriculture produce, which otherwise might not be
considered for loans through commercial financial
institutions,” Suhaimi points out.
MOving Forward
In the future, TERAJU aspires to be the Centre of Excellence for Bumiputera entrepreneurs – serving to
incubate, pilot and deploy replicable programmes across both the public and private sectors to further
scale-up Bumiputera entrepreneurs. Programmes under TERAJU will also be geared to be more holistic and
inclusive, parallel to the TKB to develop the well-being of the Bumiputera community. Emphasis will also be
placed on the development of women and youth.
As the programmes for Bumiputera expand, there will be a need to streamline and transform programmes
at the Ministry level where best practices and programmes from TERAJU can be adopted and Ministry
programmes can be streamlined to reduce redundancy and improve efficiency in the use of resources.
TERAJU targets to launch the TKB index (Bumiputera Well-Being Index) in May 2018 which will be used to
measure the achievement and effectiveness of Bumiputera policy implementation. This is crucial in ensuring
the quality of the programmes carried out and identifying areas for improvement in order to continuously
generate positive outcomes.
PUBLic Finance reform
strengthening the
nation’s fiscal position
YB DATUK SERI JOHARI ABDUL GHANI

Minister of Finance II
The Public Finance Reform SRI is focused on has supported the adherence to our self-imposed
exercising prudence in Government spending while debt ceiling of 55% of GDP, while we also continue
increasing revenue to ensure a sustainable fiscal to implement Outcome Based Budgeting (OBB)
position. At times, this has required the introduction which replaces the Modified Budgeting System to
of difficult but necessary measures as we seek to achieve efficient and effective management of public
institutionalise structural reform of the Government’s sector programmes.
finances in a disciplined manner.
With all these measures in place, we remain confident
Two major outcomes of this approach have been of achieving our target of a near-balanced budget in
the gradual removal of subsidies to optimise public 2020, ensuring the sustainability of public finances
spending and the introduction of the Goods and and resilience of Malaysia’s economy for generations
Services Tax (GST) to enhance the efficiency and to come.
transparency of tax system. Although the rakyat
were sceptical on these activities at first, these
initiatives have enabled the Government to redirect
allocations of non-targeted blanket subsidies
towards direct targeted financial aid. This has allowed
the Government to be more effective in assisting
the rakyat in managing living costs, especially the
bottom 40% of Malaysia’s household income earners
(B40) who need this support the most.
Furthermore, the GST has diversified the

Government’s sources of income from its previous
reliance on oil and gas revenue, strengthening our
resilience against external shocks. This ensures that
the Government revenue and the Malaysian economy
are shielded from commodity price volatility, as we
have seen in recent years. In 2017, the Government’s
oil-related revenue, as a percentage of total revenue,
declined to 15.1% from 41.3% in 2009.
As a result of these reform initiatives, Malaysia’s

fiscal deficit has continued to narrow from 6.7% in
2009 to 3% in 2017. Our improved fiscal position
TARGETING A NEAR-BALANCED Exercising expenditure optimisation
FISCAL POSITION FOR A Since 2010, the Government has gradually

rationalised subsidies to shift away from blanket
SUSTAINABLE FUTURE subsidies towards providing targeted assistance.
This has allowed the Government to channel aid
to those most in need through activities such as
Bantuan Rakyat 1Malaysia (BR1M). As at the end of
2017, more than RM26 billion in direct cash assistance
The Malaysian Government has come a long under BR1M has been provided to over seven million
way in reforming its fiscal policy since 2009. individuals and families in the B40 bracket. These
The implementation of the NTP introduced a efforts are also focused on increasing inclusiveness
two-pronged approach to public finance reform: within the Malaysian economy.
enhancing Government revenue and exercising
expenditure optimisation to achieve a near- To further instil discipline in managing its
balanced budget in 2020. finances, the Government has also put in place an
administrative fiscal rule of financing operating
Enhancing Government revenue expenditure through its revenue while borrowing
is strictly to finance development expenditure. As
Measures to enhance Government revenue have a result, the ratio of Government debt to GDP in
focused on improving tax administration and 2017 has improved to 50.8% from 52.7% in 2016.
compliance of direct and indirect taxes, as well as
implementing the GST to allow for broader tax-based The Government has continued the implementation
collection. These are implemented by the Ministry of OBB which is in line with the Government’s
of Finance’s (MoF) tax agencies, namely the Inland efforts to rationalise fiscal policy initiatives through
Revenue Board of Malaysia (IRBM) which collects better expenditure management and enhanced
direct taxes and the Royal Malaysian Customs accountability to managers at all levels. The OBB
Department (RMCD) which collects indirect taxes. provides Ministries an integrated performance
framework designed to focus on outcomes and
The challenge for these initiatives remains non- established the necessary vertical alignments of
compliance to tax laws, including tax evasion and Ministries’ programmes to national planning and
tax avoidance. Additionally, more enforcement is horizontal linkages of ministries’ programmes to
required to enable taxation of those involved in ensure more efficient and effective management
informal sectors, especially e-commerce, to reduce of public sector programmes. The Ministry’s results
tax leakages. Furthermore, there remain companies framework based on the OBB Program-Activity
which have not registered for GST, hindering optimal structure was made public through the Budget
tax collection. As at the end of December 2017, a 2018 announced on 27 October 2017.
total of 462,784 business entities have registered
under the GST.
In view of this, the Government has established the

Collection Intelligence Arrangement (CIA) as part of
continuous efforts to reduce tax evasion, avoidance
and leakage. Members of CIA are the IRBM, RMCD
and the Companies Commission of Malaysia. CIA
provides an integrated information-sharing platform
between agencies in enhancing enforcement and
increasing compliance as well as addressing informal
sectors of the economy.
The Government is also reviewing tax incentives to

ensure the tax breaks provided achieve its intended
outcome of facilitating private investment to channel
money back into the economy.
MOving Forward
The continued narrowing of the fiscal deficit since 2009 bears testimony to the success of the Government’s
fiscal reforms. As the Government maintains its discipline and prudence in managing its finances towards
achieving its targeted near-balanced budget in 2020, it will continue to prioritise rakyat-centric and high-
impact programmes and projects.
This will focus on maximising outcomes, reducing leakages and enhancing value-for-money expenditure, with
emphasis placed on the provision of essential services to the rakyat, particularly in the areas of healthcare,
education and targeted assistance. The Government will also increasingly focus on the future generation,
enhancing the rakyat’s well-being and ensuring inclusiveness.
Collectively, these will further strengthen the country’s economic fundamentals and resilience in line with its
transformation into a high-income nation and towards the goals of Transformasi Nasional 2050 (TN50) for
Malaysia to become a top-20 country in terms of economic development, social advancement and innovation.
expenditure 2017
In the interests of transparency and accountability, the following is the summary of expenditure for NKRA
and SRI. Meanwhile, the expenditure is not reported for the Economic Transformation Programme (ETP)
as the ETP is private sector driven and contains market sensitive data.
NKRA AND SRI 2017 OPERATIONAL EXPENDITURE (OE) SPENDING

NATIONAL TRANSFORMATION PROGRAMME (NTP)
Achievement Total 2017 OE Allocation Total Spent %
NKRA % Spent
(RM) (RM)
Reducing Crime 161 34,000,000 33,168,000 98
Raising Living Standards of Low-Income Households 112 21,000,000 21,000,000 100
Total 55,000,000 54,168,000

SRI % Spent
(RM) (RM)
Competition, Standards and Liberalisation 113 896,266 438,280 49
Public Service Delivery Transformation 114 250,000 207,500 83
Total 1,146,266 645,780
Note: N
o 2017 OE allocaton for NKRA Addressing the NKRA Cost of Living, NKRA Fighting Corruption, NKRA Improving Rural Development, NKRA Assuring Quality Edu-
cation and NKRA Improving Urban Public Transportation.
NKRA AND SRI 2017 dEVELOPMENTAL EXPENDITURE (DE) SPENDING

NATIONAL TRANSFORMATION PROGRAMME (NTP)
NKRA % Spent
(RM) (RM)
Improving Rural Development 100 2,393,701,678 2,201,228,820 92
Reducing Crime 161 25,000,000 21,907,036 88
Raising Living Standards of Low-Income Households 112 10,000,000 10,000,000 100
Improving Urban Public Transport 100 35,591,134 35,036,314 98
Total 2,464,292,812 2,268,172,169

SRI % Spent
(RM) (RM)
Competition, Standards and Liberalisation 113 5,000,000 4,983,618 100
Public Service Delivery Transformation 114 200,000 200,000 100
Total 5,200,000 5,183,618
Note: No 2017 DE allocation for NKRA Addressing the Cost of Living, NKRA Fighting Corruption and NKRA Assuring Quality Education.
agreed upon
procedures By PWC
A core tenet of the National Transformation Programme (NTP) has been transparency and accountability.
In this Annual Report, the 2017 key performance indicators for each National Key Result Area (NKRA),
National Key Economic Area (NKEA) and Strategic Reform Initiative (SRI) are published in full, with
achievements versus targets listed*. CSDU endeavored to ensure the scoring system is transparent and
stringent. Extensive rigour has been put into confirming the collection of data, tabulations of statistics,
and results are accurate. External validation is also key to effectively evaluate the efficacy of the NTP. To
this end, CSDU engaged PricewaterhouseCoopers Malaysia (PwC), an independent professional services
firm, to conduct a series of Agreed-Upon-Procedures (AUP) – specific tests and procedures to review
reported results for the KPIs and projects announced. The AUP is applied to a sample taken from each KPI.
It is then checked against guidelines and formulae developed in the initial lab sessions, and prescribed by
CSDU. Over the course of this exercise, PwC’s findings highlighted a number of exceptions on the samples
selected, which were subsequently addressed and reflected in this Annual Report. PwC confirmed that
the results reported for the selected samples in the Annual Report have been validated according to
the AUP. PwC also identified opportunities to improve processes and the quality of information. CSDU,
together with the relevant Ministries and private sector stakeholders will be taking positive prescriptive
actions to effect these improvements over the next 12 months.
*Exceptions were made where targets featured market-sensitive data. In such instances, this information was kept confidential at the request of involved parties.
NTP
PERFORMANCE 2017
All three methods have been formulated to provide
a pragmatic representation of the actual KPI
numbers in percentages. The overall NKRA/NKEA/
SRI composite scoring is the average of all scores.
METHOD 1 & METHOD 2 METHOD 3
ACHIEVEMENT TRAFFIC LIGHT ACHIEVEMENT SCORING TRAFFIC LIGHT
90 % and above 10 % and above 1
51 %- 89 % 51 %- 99 % 0.5
50 % and less 50 % and less 0
SCORING METHOD DESCRIPTION
Method 1
Scoring is calculate by simple comparison againts set 2017 targets.
Scoring is calculate by dividing actual result againts set 2017 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 calculate by dividing actual results againts set 2017 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
NKRA - FIGHTING CORRUPTION KPI (Quantitative)
Target Actual
# KPI Method 1 Method 2 Method 3
(FY) (YTD)
Transparency International (TI) Corruption Perception

1 55 62 89% 89% 0.5
Index (CPI) score
Percentage of disposal of corruption cases within 1 year

2 85% 43.1% 51% 51% 0.5
upon registration
3 Special Corruption Courts Judges seminar conducted 1 1 100% 100% 1
4 Percentage of conviction rate for corruption cases 85% 80.7% 95% 95% 0.5
5 Tabling of AuG report in every Parliament session 2 2 100% 100% 1
Percentage of resolution of cases highlighted in AuG

6 report Series 1-2 2015 successfully dealt with within 1 year 90% 76.5% 85% 85% 0.5
after being tabled in Parliament
7 Corporate Liability Provision bill tabled in Parliament 100% 60% 60% 60% 0.5
Training to Public Listed Companies (PLCs) and

8 30% 66% 220% 100% 1
Government Link Companies (GLCs) CIP signatories
Political Financing Act:

i. Cabinet approved formation of the Special Committee
for drafting the Political Financing bill – 33%
9 100% 100% 100% 100% 1
ii. Formation of the Special Committee
for the drafting – 50%
iii. First draft completed – 100%
Establish Malaysian standard in accordance with ISO

10 100% 100% 100% 100% 1
37001
100% 88% 0.5

NKRA - REDUCING CRIME KPI (Quantitative)
Target Actual
(FY) (YTD)
1 Index crime per 100,000 residents (114,042 cases) 352.07 306.15 100% 100% 1
Percentage improvement of Perception Crime

2 10% 39.8% 398% 100% 1
Indicator
Modern Policing – to pilot Phase 2 of Modern

3 Policing project to the entire IPK Kuala Lumpur – 24 120% 120% 100% 100% 1
stations
Implementation of Community Engagement

4 Index (CEI) nationwide by 31 December 2017 (788 100% 214% 214% 100% 1
activities)
Implementation of the Community Empowerment

5 Programme to 50 out of the 178 high risk areas (as at 50 64 128% 100% 1
1 January 2017) nationwide by 31 December 2017
AADK to fully take over the enforcement role under

Section 3(1) Drug Dependants Act (Treatment
6 80 105 131% 100% 1
& Rehabilitation) 1983 [Act 283] in 80 districts
nationwide by 31 December 2017
Upskilling of inmates - inmates to undergo certified

7 1,500 2,854 190% 100% 1
skills training
Percentage collection of summonses issued by

8 40% 41.4% 104% 100% 1
PDRM in 2017 under category Pol 257
9 To pilot the border security lab initiatives – AKSEM 6 8.748 146% 100% 1
To roll out e-Reporting (by 31 December 2017) in

10 100% 100% 100% 100% 1
Kuala Lumpur covering non-crime incidents only
161% 100% 1
NKRA - ASSURING QUALITY EDUCATION KPI (Quantitative)
Target Actual
(FY) (YTD)
Percentage of pre-school enrolment nationwide:

1 i. Percentage of 4+ years pre-school enrollment (80%) 100% 97% 97% 97% 0.5
ii. Percentage of 5+ years pre-school enrollment (98%)
2 English literacy rate among Year 3 students 100% 95.7% 96% 96% 0.5
Percentage of teachers improved to at least

3 minimum competency level after undergoing 88% 81% 92% 92% 0.5
PSYNNOVA i-BMT
Percentage of school leaders improved to at least

4 minimum competency level after undergoing 95% 100% 105% 100% 1
PSYNNOVA i-BMT
Percentage of HIP schools achieved English

5 50% 58% 116% 100% 1
immersion of level 3 and above
Percentage of DLP students increased in

6 30% 50.7% 169% 100% 1
proficiency of English language skills
National childcare enrolment rate for children born

7 8% 6.92% 87% 87% 0.5
2013-2017 (National Children Data Center system)
8 Numeracy rate for Year 3 100% 98.8% 99% 99% 0.5
9 Bahasa Melayu literacy rate for Year 3 100% 98.3% 98% 98% 0.5
Percentage of teachers with minimum proficiency of

10 53% 34% 64% 64% 0.5
C1 based on CEFR
Percentage of new English teachers from IPG

11 achieved equivalent of C1 based on CEFR before 90% 60% 67% 67% 0.5
posting
Percentage completion of initiatives implementation

12 28% 28.3% 101% 100% 1
under IPG Transformation Roadmap (2016-2025)
Number of students utilising VLE at least in 1 lesson

13 660,000 865,738 131% 100% 1
session per week
Number of new model of public-private partnership

14 1 1 100% 100% 1
launched with list of schools identified
102% 93% 0.5

NKRA - R
AISING LIVING STANDARDS OF
KPI (Quantitative)
LOW-INCOME HOUSEHOLDS
Target Actual
(FY) (YTD)
Number of new participants under 1AZAM who participated

1 in Financial Literacy and Debt Management Programme, and 3,975 5,340 134% 100% 1
monitored for a minimum of 6 months after implementation
Number of new and existing 1AZAM participants who

2 5,150 5,708 111% 100% 1
increased their income by RM300 in any 3 months
Number of 1AZAM NGO, corporate sector, and community /

3 12 8 67% 67% 0.5
group-based projects
Number of Beyond 1AZAM participants who obtained a

4 minimum 20% increase in income from existing AZAM project 1,930 1,982 103% 100% 1
(any 1 time)
Number of projects to develop B40 entrepreneurs from

5 2 2 100% 100% 1
micro segment to small enterprise (SME category)
Adoption of Information and Communications Technology

6 5,000 5,898 118% 100% 1
via registration among B40 participants via e-Rezeki platform
Number of participants who have generated income through

7 500 500 100% 100% 1
e-Rezeki portal
Number of B40 entrepreneurs registered and trained on

8 8,110 12,300 152% 100% 1
e-Usahawan platform
112% 96% 0.5

NKRA - I MPROVING URBAN

KPI (Quantitative)
PUBLIC TRANSPORT
Target Actual
(FY) (YTD)
1 Number of new KL taxis on the road 4,000 4,987 125% 100% 1
ompletion of Integrated Cashless Payment System

C
(ICPS) 100% completion of deliverables for year 2017:
i. One common card for MRT and Prasarana
2 (including Rapid Bus and MRT Feeder Bus) by July 61% 61% 100% 100% 1
2017
ii.Additional 99 Touch ‘n Go gates opened to the
public for 14 major KTMB stations by Aug 2017
3 Number of bus info panel installed in GKL/KV 3,000 3,257 109% 100% 1
KTM Komuter on-time performance during AM peak

4 95% 94.9% 100% 100% 1
(within 10 minutes)
Urban public transport customer satisfaction level

5 85% 90% 106% 100% 1
(GKL/KV)
6 Daily urban public transport ridership (GKL/KV) 1,300,000 1,206,111 93% 93% 0.5
Percentage of construction progress of parkway

drop zone:
7 100% 98.4% 98% 98% 0.5
i. Serdang : 80% (baseline = 45%)
ii. Batu Tiga : 20% (baseline = 0%)
ITT Gombak Project - percentage achievement of

8 100% 87.9% 88% 88% 0.5
2017 milestones
Percentage of construction progress of Park N’ Ride

9 72% 57% 79% 79% 0.5
Klang
100% 95% 0.5

NKRA - IMPROVING RURAL DEVELOPMENT KPI (Quantitative)
Target Actual
# Project KPI Method 1 Method 2 Method 3
(FY) (YTD)
Roads delivery (km) 786.25 828.27 105% 100% 1
Water delivery (number of

3,000 4,306 144% 100% 1
households)
Rural Development:
1 Rural Basic Electricity delivery (number of
Infrastructure 8,271 8,110 98% 98% 0.5
households)
Housing for poor households -

PPRT / PBR 12,524 8,429 67% 67% 0.5
(number of houses)
Desa Lestari Programme

- number of villages that
successfully initiate business
20 15 75% 75% 0.5
at least one of the approved
economic projects that has
Rural Development: been completed
2
21st Century Village
Rural Business Challenge
- percentage of 2015 RBC
80% 87% 109% 100% 1
winners with more than 30%
increase in income
100% 90% 0.5
NKRA - A
DDRESSING THE RISING COST
KPI (Quantitative)
OF LIVING
Target Actual
(FY) (YTD)
1 Direct handout to the Rakyat through BR1M 100% 100% 100% 100% 1
100% 100% 1
NKEA - AGRICULTURE KPI (Quantitative)
Target Actual
EPP # EPP KPI Method 1 Method 2 Method 3
(FY) (YTD)
Total number of herbal products

4 4 100% 100% 1
completed clinical trial
Unlocking value from
1 Malaysia’s biodiversity
through herbal products
Total sales of herbal product (RM
4.5 5.25 117% 100% 1
million)
Expanding the production of Total export of edible bird nest

2 270 385.44 143% 100% 1
swiftlet nests product (tonnes)
Commercial Seaweed Mini Total production

3 2,500 1,855.54 74% 74% 0.5
Estate and Cluster Project dried seaweed (tonnes)
Farming through Integrated Total production of farmed fish by

4 9,000 8,265.34 92% 92% 0.5
Cage Aquaculture Systems anchor companies (tonnes)
5 Cattle in oil palm estates Total cattle in population 54,800 41,822 76% 76% 0.5
Replicating Integrated Total production by anchor

6 27,000 25,399.36 94% 94% 0.5
Aquaculture Model (iZAQs) companies (tonnes)
Upgrading capabilities to Total production from Taman Kekal

7 produce premium fruits and Pengeluaran Makanan (TKPM) and 72,000 65,353 91% 91% 0.5
vegetables anchor companies (tonnes)
Total sales of Anchor Companies

(AC) and Small and Medium
320 511.21 160% 100% 1
Strengthening the export Enterprise (SME)
8 capability of the processed (RM million)
food industry
Number of new SME 40 154 385% 100% 1
Total production from

352,082 361,537 103% 100% 1
amalgamated land (tonnes)
Scaling up and strengthening

10 Total land area amalgamated (ha) 3,500 4,145 118% 100% 1
paddy farming in Muda area
Total submitted for land acquisition

8,050 8,182 102% 100% 1
(number of lots)
Scaling up and strengthening

Total production from
11 of paddy farming in other 200,000 204,157.1 102% 100% 1
amalgamated land (tonnes)
irrigated areas
Establishing dairy clusters in Total fresh milk produced (million

13 14.23 13.92 98% 98% 0.5
Malaysia litres)
14 Seed industry development Total seeds produced (tonnes) 105 28.36 27% 27% 0
Total revenue generated from

17 Pasar Komuniti (PAKAR) 83 103 124% 100% 1
PAKAR (RM million)
118% 91% 0.5

NKEA - BUSINESS SERVICES KPI (Quantitative)
Target Actual
(FY) (YTD)
Growing aviation
Revenue from MRO services 6,230
1 maintenance, repair 6,100 102% 100% 1
(RM million) (estimated)
and overhaul services
Overseas sales revenue 3,000

3,600 83% 83% 0.5
(RM million) (projected)
Building globally-
2
competitive outsourcers
Projected investment value 731
760 96% 96% 0.5
Total DC services revenue 1,004

1,100 91% 91% 0.5
Making Malaysia a global

3
data centre hub
Percentage completion of site
readiness for implementation of 100% 96.7% 97% 97% 0.5
Sedenak Iskandar Data Hub (SIDH)
Revenue generated from

green technology in subsectors
energy, manufacturing, 6,000 6,090 102% 100% 1
Jump-starting a transportation, building, waste,
4 vibrant green water and services (RM million)
technology industry
New investment in green technology

5,000 2,855 57% 57% 0.5
realised (RM million)
Growing large pure-play Revenue from pure-play engineering 125

5 120 104% 100% 1
engineering services services companies (RM million) (estimated)
Making Malaysia the

hub for aerospace Committed investments from OEM,
7 OEMs in South East Tier 1 and Tier 2 companies (RM 500 600 120% 100% 1
Asia leveraging on million)
‘Asia Aerospace City’
Developing SMEs in Revenue from aerospace

8 the global aerospace manufacturing activities 24.6 17.2 70% 70% 0.5
manufacturing industry (RM million)
92% 89% 0.5

NKEA - C
OMMUNICATIONS CONTENT AND
KPI (Quantitative)
INFRASTRUCTURE
Target Actual
(FY) (YTD)
Revenue of export from creative content 737.84

670 110% 100% 1
My Creative
1
Content
Total estimated production spending under
100 141.8 142% 100% 1
the “Film in Malaysia Incentive" (RM million)
The implementation of DDMS 2.0

30 32 107% 100% 1
(number of new agencies)
6 e-Government
Percentage increase from 2016 in number of
10% 9.9% 99% 99% 0.5
online transactions at ministries
Number of ports providing high speed

broadband with the speed up to 100Mbps in 390,000 480,084 183% 100% 1
capital cities and major towns
Broadband
7 Number of ports providing high speed
for all 317,000 366,294 150% 100% 1
broadband in sub-urban areas (SUBB)
Percentage of access (coverage) to LTE

wireless broadband (% of connected 77% 77.2% 102% 100% 1
population on LTE)
Number of sites with new towers and 3G

base stations for expanded mobile 300 302 101% 100% 1
broadband coverage
8 Extend reach Number of existing base stations to be

500 510 102% 100% 1
upgraded to 3G base stations
Number of sites to be deployed with Pusat

50 52 104% 100% 1
Internet 1Malaysia
Percentage of implementation of submarine

Regional
10 cables (linking Sabah, Sarawak, and 100% 100% 100% 100% 1
network
Peninsular Malaysia) rollout
118% 100% 1
NKEA - ELECTRICAL AND ELECTRONICS KPI (Quantitative)
Target Actual
(FY) (YTD)
Number of services provided to industry

800 850 106% 100% 1
using MIMOS shared facilities for E&E
Executing a Smart Follower
strategy for mature
1
technology semiconductor
fabrication plants Number of engineers and students
trained in E&E using MIMOS advanced 300 430 143% 100% 1
competency framework
Developing assembly
Number of advance packaging companies
2 and test using advanced 1 1 100% 100% 1
in operation
packaging technology
Number of talents for industrial upskilling

/ advanced upskilling program in IC 15 100 667% 100% 1
design
Developing integrated
3
circuit design firms
Creating business oppurtunities using
GMC product and its technologies for 2 2 100% 100% 1
Malaysia based companies
Increasing the number of Number of new silicon producer

5 1 0 0% 0% 0
silicon producers to start commercial production
Developing LED Number of quality projects in operation

8 1 1 100% 100% 1
front-end operations for epitaxy manufacturer
Total annual sales of local LED

Creating local Solid State
10 companies under SMECorp capacity 120 137.6 115% 100% 1
Lighting (SSL) champions
building program (RM million)
Number of new products to enhance test

4 4 100% 100% 1
and measurement local ecosystem
Number of products tested utilising QAV

52 52 100% 100% 1
test centre (both Penang and Selangor)
Building a test and

11
measurement hub
Number of projects undertaken by local
companies, agencies and institutes in
test and measurement, system design,
prototyping, proof-of-concept and 30 10 33% 33% 0
system customisation at National
Instruments Academy and Innovation
Nucleus (NI-AIN)
Number of new quality projects adopting

1 1 100% 100% 1
smart manufacturing

/ advanced upskilling program in 15 19 127% 100% 1
Growing automation Advanced Manufacturing
13
equipment manufacturing
Number of local talent certified via

National Instruments Academy &
Innovation Nucleus (NI-AIN)'s program 60 130 217% 100% 1
that lead to develop automation and
manufacturing industries
NKEA - ELECTRICAL AND ELECTRONICS (continued) KPI (Quantitative)
Target Actual
(FY) (YTD)
Development of balance of Number of balance of systems for solar

16 1 0 0% 0% 0
systems for photovoltaic PV companies in operation
Number of new embedded systems / IoT

1 1 100% 100% 1
projects

Growing embedded / advanced upskilling program in 70 79 113% 100% 1
17
systems industry Advanced Electronics Systems
Number of embedded systems funded

2 2 100% 100% 1
projects completed in 2017
Implementation of production of battery

material on pilot scale to support limited 100% 100% 100% 100% 1
production of 18650-type Li-ion batteries
Enabling electric vehicle

18
component manufacturing
Deliver a prototype of integrated of
EV Bus and Battery System as further
100% 100% 100% 100% 1
development platform to a commercial
bus producer
Number of products commercialised

Enabling nanotechnology
or companies adopting commercial
20 for Electrical & Electronics 2 2 100% 100% 1
graphene and nanotechnology products
(E&E) Industry
for E&E application
Total number of new quality NKEA E&E

8 8 100% 100% 1
projects by MIDA
Percentage realised investment of E&E

sector projects since 2011 till 2014 (RM 80% 78% 98% 98% 0.5
billion)
Total approved investment for E&E

8 8.9 111% 100% 1
sector (RM billion)
Number of eco design applications

undertaken by companies/ organisations
22 23 105% 100% 1
utilising Eco Industrial Design Centre
(EIDC) shared facilities
1-20 Cross-cutting enablers
Develop National E&E Framework for the

advancement of E&E industries 100% 0% 0% 0% 0
(Completion of E&E national blueprint)
RM million of R&D projects awarded by

6 8 133% 100% 1
CREST
Number of projects completed 6 11 183% 100% 1
Number of R&D projects commercialised

1 1 100% 100% 1
or implemented
119% 87% 0.5

NKEA - EDUCATION KPI (Quantitative)
Target Actual
(FY) (YTD)
Scaling up early child Private pre-school enrollment:

1 care and education i. 4+ years only (59% - 251,406) 100% 93% 93% 93% 0.5
centers ii. 5+ years only (49% - 248,949)
Number of high quality TVET instructor's

15,000 15,471 103% 100% 1
e-profiling
Scaling up private Number of students trained in industry-

5 8,000 8,380 105% 100% 1
skills training provision based approach
Skill development fund

40% 42 105% 100% 1
repayment rate
Number of students enrolled at HLIs in the

17,500 18,384 105% 100% 1
Islamic finance and business programme
Building an Islamic
finance and business
7
education discipline
cluster Number of new international academics
registered with the Islamic Financial 30 61 203% 100% 1
Educators Council (ICIFE)
Number of students enrolled in hospitality

and tourism programmes at private HLIs 6,000 8,409 140% 100% 1
who are members of MyCenTHE+3
Building a hospitality
10 and tourism discipline
cluster
Number of student enrolled in hospitality
and tourism programmes 26,000 24,280 93% 93% 0.5
at Private HLIs
Launching EduCity@ Number of students enrolled in EduCity

11 5,000 4,368 87% 87% 0.5
Iskandar @ Iskandar
Number of international students enrolled

170,000 170,068 100% 100% 1
Championing (136,000 from MoHE and 34,000 from MoE)
Malaysia's
12
international
education brand Number of post graduate international
37,000 32,285 87% 87% 0.5
students enrolled in HLIs
Building a games Number of students enrolled in private

14 500 765 153% 100% 1
development cluster HEIs with games cluster contact
Number of students enrolled in Sunway-

Building an
17 TES through the public-private partnership 1,020 1,079 106% 100% 1
accounting cluster
and Bumiputera initiative
114% 97% 0.5

NKEA - FINANCIAL SERVICES KPI (Quantitative)
Target Actual
(FY) (YTD)
Set-up of Capital Market

100% 100% 100% 100% 1
Research Institute
Increase velocity in the market

2.1 2.3 110% 100% 1
Average Daily Value (ADV) (RM Billion)
Revitalising
1 Malaysia's equity
markets Increase in new issuance from both IPO and
also secondary market (new issue of shares
11 36 327% 100% 1
from rights issue, special issue etc.)
(RM billion)
Increase in number of products

5 8 160% 100% 1
and offerings
Deepening and
Launch of framework for digital investment
2 broadening bond 100% 100% 100% 100% 1
management services
markets
Mandatory offering of basic pure protection

term insurance products via walk-in and/
100% 90% 90% 90% 0.5
or online distribution channels by all life
insurers and family takaful operators
Insuring most, if not
5
all, of our population
Introduction of national life insurance
and family takaful ‘starter pack’ to offer
100% 100% 100% 100% 1
affordable protection and to enhance
insurance / takaful awareness
Becoming the
indisputable global Launch of Islamic Fund and Wealth
10 80% 80% 100% 100% 1
hub for Islamic Management Blueprint
finance
136% 99% 0.5

NKEA - G
REATER KUALA LUMPUR /
KPI (Quantitative)
KLANG VALLEY
Target Actual
(FY) (YTD)
Number of Letter of Intent or equivalent

Incentive Offer concluded for MNCs to set up
10 12 120% 100% 1
regional headquarters/regional hub activity in
GKL
Attracting 100 of
Number of new regional jobs committed 600 1,685 281% 100% 1
the world's most
1 dynamic firms
within priority
sectors
Amount spent by MNCs in 2017 (RM million) 600 1,049 175% 100% 1
Regional jobs created in 2017 617 324 53% 53% 0.5
Number of approved application under

400 405 101% 100% 1
Returning Expert Programme
New JPA scholars under STAR Programme 1,200 1,206 101% 100% 1
Attracting the
right mix of
2
internal and
Percentage of issuance of employment pass
external talent 80% 97% 121% 100% 1
process within 5 working days
Number of approved applications under

900 1,049 117% 100% 1
Residence Pass Talent Programme
Establishment of Bilateral Committee - reviewed

100% 100 100% 100% 1
and finalised by SPAD
Connecting KL
to Singapore via Appointment of the Joint Development Partner
3 100% 100 100% 100% 1
a High Speed (in Q1 2017)
Rail system
Initiation of the AssetsCo tender (roll-out of

100% 100% 100% 100% 1
AssetsCo tender in Q4 2017)
Line 1: Station Completion - To complete all

remaining 12 number of elevated and 7 number 100% 100% 100% 100% 1
of underground stations (total of 19 stations)
Accident frequency rate ratio (less than or equal

1 1 100% 100% 1
to 1)
Line 2: Temporary underground works

commenced at all station sites by end of
Mass Rapid 2017 i.e. 10 stations - Sentul West, Titiwangsa,
4 100% 100% 100% 100% 1
Transit Hospital KL, Kg Baru, Ampang Park, KLCC East,
Conlay, Chan Sow Lin, Bandar Malaysia North
and Bandar Malaysia South
Line 2: 9 Elevated station packages to be

awarded as per planned by Q4 2017, as per
below;
i. S201 – S203 @ northern alignment (total 11 100% 100% 100% 100% 1
stations)
ii. S204 – S210 @ southern alignment (total 14
stations)
NKEA - G
KPI (Quantitative)
KLANG VALLEY (continued)
Target Actual
(FY) (YTD)
Percentage of construction progress River

Beautification and interceptor drainage system
100% 100% 100% 100% 1
works for Package Precinct 7 (P7) - Heritage
Quarter by June 2017
Percentage construction progress for River

20% 24.5% 125% 100% 1
work for Package 3A and 3B (3A 3B) - Northern
River Front by December 2017
Percentage of construction progress for River

18% 12.6% 70% 70% 0.5
works for Package 4A and 4B (4A 4B) -
Southern Riverfront & Brickfields by Dec 2017

18% 10% 56% 56% 0.5
works for Package 1C and 1D (1C 1D) - City
Center by December 2017

Beautification works for Package 2 (Package 2) 43.5% 0% 0% 0% 0
- Titiwangsa Park
ercentage completion of Sewerage Treatment

P
Revitalising the Plant (STP) in Bunus
Klang River into
a heritage and (Baseline: 60%) 100% 99% 98% 98% 0.5
5 Q1 - 71%
commercial
centre for Q2 - 82%
Greater KL/KV Q3 - 100%
Percentage completion of Sewerage Treatment

Plant (STP) in Jinjang Kepong
(Baseline: 11%)
40% 37.3% 91% 91% 0.5
Q1 - 17%
Q2 - 23%
Q3 - 30%
Q4 - 38%
Percentage completion of D44 Bunus Network

pipeline project
(Baseline: 37%)
98% 64% 44% 44% 0
Q1 - 48%
Q2 - 68%
Q3 - 85%
Q4 - 98%
ercentage completion of D43 Jinjang Kepong

P
Network pipeline project
(Baseline: 69%)
86% 84.5% 91% 91% 0.5
Q1 - 74%
Q2 - 79%
Q3 - 83%
Q4 - 86%
NKEA - G
KPI (Quantitative)
Target Actual
(FY) (YTD)
Percentage compliance to effluent standard

A at Bukit Antarabangsa Sewerage Treatment 100% 100% 100% 100% 1
Plant (STP)
Percentage compliance: Water quality of Klang

River at station IK25 - Abdullah Hukum to meet 100% 58% 58% 58% 0.5
WQI target ≥ 61 (Class III)
Percentage compliance: Water quality of River

Gombak at station IK17to achieve WQI target ≥ 100% 101% 101% 100% 1
61 (Class III)
ercentage submission of the River Of Life

P
Public Outreach Programme (RoL POP) Interim
Reports for:
1. Phase 3A – KL East
100% 100% 100% 100% 1
2. Phase 3B – Ampang Jaya Municipal Council
(MPAJ)
3. Phase 4 – Selayang Municipal Council (MPS)
4. Phase 5 – KL West
Revitalising the Performance for 4 nos Sullage Water Treatment

Klang River into Plant (SWTP) in P7 to achieve Water Quality 100% 100% 100% 100% 1
a heritage and Index (WQI) target ≥ 76.5 (Class IIB)
5
commercial
centre for
Greater KL/KV Discharge from Waste Water Treatment Plants
(WWTP) to meet the Water Quality Index (WQI)
target ≥ 76.5 (Class IIB)
1. Pasar Jalan Kelang Lama 100% 99% 99% 99% 0.5
2. Pasar Air Panas
3. Pasar Sentul Pasar
4. Pasar Borong Kuala Lumpur
Percentage of effluent from 134 Communal

Grease Traps (CGT) installed that complies with
100% 100% 100% 100% 1
Malaysian Sewerage Industry Guideline (FOG ≤
50 mg/l)

Grease Traps (CGT) installed in MPAJ that
100% 100% 100% 100% 1
complies with Malaysian Sewerage Industry
Guideline (FOG ≤ 50 mg/l)

Grease Traps (CGT) installed in MPS that
100% 100% 100% 100% 1
complies with comply with Malaysian Sewerage
Industry Guideline (FOG ≤ 50 mg/l)
Greening Greater GPS Tagging of trees 20,000 37,251 186% 100% 1

KL to ensure
6 residents enjoy
sufficient green
space Number of parks adopted/sponsored 4 4 100% 100% 1
NKEA - G
KPI (Quantitative)
Target Actual
(FY) (YTD)
Heritage Trail 5 Phase 1 - Percentage of

50% 50% 100% 100% 1
construction progress
Heritage Trail 5 Phase 2 - Progress of project

milestones:
i. Pre-tender (20%) 100% 100% 100% 100% 1
ii. Procurement (70%)
iii. Site possession (10%)
Creating iconic
7 places and
attractions Heritage Trail 6 (Jejak Rimba Bandar) -
Percentage of project milestone:
i. Design (35%) 100% 100% 100% 100% 1
ii. Procurement (55%)
iii. Site possession and Preliminary works (10%)
Heritage Trail 7 & 8 (Jejak Pekan Dagangan Bijih

100% 100% 100% 100% 1
Timah) progress of project milestones
Creating a
Pedestrian Network & Cycle Lanes Masterplan
comprehensive
8 Completion (until 2018) progress of project 100% 100% 100% 100% 1
pedestrian
milestones
network
To increase waste diversion rate by 2% from

19.5% 21.1% 180% 100% 1
2016 achievement of 17.5% (Baseline: 17.5%)
To increase recycling rate by 2% from 2016

achievement of 17.5% 19.5% 20.9% 170% 100% 1
(Baseline: 17.5%)
Preparation of policy concept paper on

producer responsibility in minimising waste 100% 100% 100% 100% 1
generation
Finalise Pay-As-You-Throw (PAYT) model from

100% 90% 90% 90% 0.5
identified options
Food waste management database for Industry,

Commercial and Institution (ICI) (another 20% 80% 80% 100% 100% 1
in 2018)
Solid waste
9 Baseline survey for food waste under Industry,
management 100% 100% 100% 100% 1
Commercial and Institution (ICI)
Sampling survey on willingness to participate

in Extended Producer Responsibility (EPR) for 100% 100% 100% 100% 1
Industry, Commercial and Institution (ICI)
Completion of web-based application system

for effective monitoring and recording of
80% 80% 100% 100% 1
nationwide construction and demolition (C&D)
waste data
Market study on glass recycling in Malaysia 100% 90% 90% 90% 0.5
Completion of waste to energy plant tender in

100% 90% 90% 90% 0.5
Taman Beringin, Kepong, Kuala Lumpur
NKEA - G
KPI (Quantitative)
Target Actual
(FY) (YTD)
Operational and maintenance services for

100% 40% 40% 40% 0
incinerator plant in Pulau Langkawi, Kedah
Establishment of pilot Catchment Area Needs

100% 40% 40% 40% 0
Statement (CANS) database for Putrajaya
Handover of BEP2.0 concept paper for adoption 100% 100% 100% 100% 1
Solid waste
9 Cabinet paper on rationalisation of privatisation
management
cost of solid waste management and public 100% 100% 100% 100% 1
cleansing
Drafting of Solid Waste and Public Cleansing

Management (Licensing) (Imported Solid 100% 100% 100% 100% 1
Waste) Regulation 2018
Survey on effectiveness of services by

concessionaires for solid waste management 100% 30% 30% 30% 0
and public cleansing
Percentage completion of Langat centralised

sewage treatment plant and network
(Baseline: 24%)
42% 61.7% 209% 100% 1
Q1 - 28%
Q2 - 33%
Q3 - 38%
Q4 - 42%
Percentage completion of D49: “Pembinaan

Rangkaian Paip Pembetungan Di Kajang 1 Dan
Kajang 3 (Reka & Bina)”
(Baseline: 44%) 70% 80.9% 142% 100% 1

Q1 - 45 %
Q2 - 52 %
Sewerage Q3 - 60 %
3
non-river Q4 - 65 %

Rangkian Paip Pembetungan Di Kawasan
Petaling Jaya (Utara), Selangor (Reka & Bina)”
100% 99.6% 93% 93% 0.5
(Baseline: 94%)
Q1 - 100%
ercentage completion of D55: “Pembinaan

P
Rangkaian Paip Pembetungan Di Lot 130, Klang
Selangor Darul Ehsan (Reka & Bina)”
100% 100% 100% 100% 1
(Baseline: 99%)
Q1 - 100%
NKEA - G
KPI (Quantitative)
Target Actual
(FY) (YTD)

Rangkaian Paip Pembetungan & Rationalisasi
Loji Rawatan Kumbahan Di Puchong, Selangor
(Reka & Bina)”
Sewerage
3 79% 73.5% 80% 80% 0.5
non-river (Baseline: 51.83%)
Q1 - 80%
Q2 - 85%
Q3 - 95%
Q4 - 100%
Percentage completion of Upper Kerayong

STP: “Pembinaan Loji Rawatan Kumbahan
Sub-Serantau Upper Kerayong Di Zon 1 - Taman
Maluri C Dan Zon 3 - Taman Lembah Maju,
Selangor Darul Ehsan”
95.98% 84.5% 81% 81% 0.5
(Baseline: 34.69%)
Q1 - 70%
Q2 - 80%
Q3 - 90%
Q4 - 100%
102% 91% 0.5
NKEA - OIL, GAS AND ENERGY KPI (Quantitative)
Target Actual
(FY) (YTD)
Total production from marginal field (oil and

gas) (kboe/d)
Production from Marginal Field (oil)

Developing marginal (thousand barrel per day, kbd)
2
field
*Information kept confidential
at the request of involved parties
Production from Marginal Field (gas) -
(million standard cubic feet per day, MMscfd)
Intensifying
3 Numbers of explored well
exploration activities
Implementation of third party access -

100% 75% 75% 75% 0.5
Completion of relevant instruments for 2017
Unlocking premium
5 gas demand in
Peninsular Malaysia
Publication of average monthly gas price, 100% 100% 100% 100% 1
tariff and existing charges in ST's website
NKEA - OIL, GAS AND ENERGY (continued) KPI (Quantitative)
Target Actual
(FY) (YTD)

Consultation session with key stakeholders 1,000 1,297 130% 100% 1
Unlocking premium with regards to TPA (number of participants)
5 gas demand in
Peninsular Malaysia
Gas Pricing & Marketing – RAPID &
Pengerang COGEN Power GSA @ market 100% 95% 95% 95% 0.5
price
Encouraging
investment in oil and Committed investment by oil & gas supplier
6 gas services and and services and equipment companies 650 724.5 111% 100% 1
equipment (OGSE) facilitated by MPRC (RM million)
industry
Taking local oil and

gas services and
Number of bidders for international projects
7 equipment (OGSE) 8 8 100% 100% 1
facilitated by MPRC
companies to the
global stage
Attracting MNCs to Number of MNCs bringing their global

set up operations in operations to Malaysia or mergers/JVs
8 6 6 100% 100% 1
Malaysia and partner between local OGSE companies with global
with local firms MNCs
Estimated electricity saving achieved from

the compliance of Efficient Management of 5% 2.7% 53% 53% 0.5
Electrical Energy Regulations (EMEER) 2008
Improving energy
9
efficiency
Number of buildings audited in government
30 30 100% 100% 1
sector, industrial and commercial sector
Reduction of Special Industrial Tariff (SIT) by

100% 100% 100% 100% 1
2% for 2017
Additional renewable energy capacity (MW) 7,200 7,260.5 101% 100% 1
Building up
Additional amount of renewable energy
10 renewable power 520 528.1 102% 100% 1
capacity (MW) (Feed-in Tariff)
capacity
Net Energy Metering (NEM) capacity/

2,500 6,114.5 245% 100% 1
subscription (kW)
JPDC to secure potential downstream

investors from non-integrated / support 1.0 2.38 238% 100% 1
industries to PIPC via LOIs (RM billion)
Enhancement of PIPC Master Plan (EPMS) 100% 100% 100% 100% 1

Increase in
13 Petrochemical
output Programme construction management in
relations to the key infrastructure projects in
100% 78.1% 78% 78% 0.5
PIPC (site possession and commencement of
physical works at site)
Support development of quality talent 100% 135% 135% 100% 1
112% 92% 0.5

NKEA - HEALTHCARE KPI (Quantitative)
Target Actual
(FY) (YTD)
Number of Industry Sponsored Research

(ISR) approved by Medical Research
170 171 101% 100% 1
Ethic Committee (MREC) MOH and
Institutional Review Board (IRB)
Creating a supportive
2 ecosystem to grow
clinical research
Number of Industry Sponsored
Research (ISR) approved by Medical
110 110 100% 100% 1
Research Ethic Committee (MREC)
conducted at MOH facilities
Percentage of generic pharmaceutical

Pursuing
products (controlled medicines)
3 pharmaceutical 90% 89.6% 100% 100% 1
registered within 210 working days upon
export opportunities
complete submission
Revenue generated from healthcare

Reinvigorating health 1,150 1,200.5 104% 100% 1
travellers (RM million)
travel through better
4 customer experience,
proactive alliances
and niche marketing Revenue generated from healthcare
825 776.1 94% 94% 0.5
tourists (RM million)
Percentage of establishment license

applications processed within 21 days 90% 98.5% 109% 100% 1
upon complete submission
Progress of 2 pre-clinical testing lab

7-14 Medical device
compliance to OECD GLP requirements
100% 65.6% 66% 66% 0.5
for pre-clinical testing
of medical devices.
Number of medical devices registered 80,000 112,588 141% 100% 1
102% 95% 0.5

NKEA - PALM OIL AND RUBBER KPI (Quantitative)
Target Actual
(FY) (YTD)
Planted hectares of oil palm by smallholders

on gazetted Native Customary Rights land in 1,960 1,207 62% 62% 0.5
Sarawak (ha)
Accelerating the
replanting and
new planting Area of replanting and new planting
12,000 12,820 107% 100% 1
1 of oil palm implemented by smallholders (ha)
and increasing
smallholders' Crop integration to be implemented (ha) 660 1,387 210% 100% 1
income
Number of individual projects under livestock

60 90 150% 100% 1
integration scheme (goat and cattle)
Total FFB sold to mills by all cooperatives by

50,000 93,200 186% 100% 1
year end (tonnes)
Number of new cooperatives (KPSM) selling

5 5 100% 100% 1
FFB to mills with minimum 500 tonnes/year
New area of plantations/smallholders

Improving FFB 150,000 296,007 197% 100% 1
2 complying with MSPO (ha)
yield
National average yield (tonnes/ha/yr) 19 17.9 94% 94% 0.5
National FFB production (million tonnes) 103.5 101.7 98% 98% 0.5
Number of samples tested using SureSawit kit

238,000 243,175 102% 100% 1
to assist certification of oil palm nurseries
Number of palm oil mills certified by MSPO 10 30 300% 100% 1

Increasing the Oil
4
Extraction Rate
Oil Extraction Rate (%) 21.50% 19.72% 92% 92% 0.5
Percentage progress of new biogas plant

100% 120% 120% 100% 1
Developing construction for 5 mills
5 biogas facilities at
palm oil mills Percentage progress of 5 new biogas plants
100% 100% 100% 100% 1
connected to grid
Developing Percentage of take up of the RM2.15 million

6 high-value pre-commercialisation and technology 100% 124% 124% 100% 1
oleo-derivatives acquisition funds
Expediting
growth of food
Percentage of take up RM20.5 million funds
8 and health-based 100% 200% 200% 100% 1
for food and health-based products
downstream
segment
Ensuring
sustainability of Area of replanting and new planting by rubber
9 8,557 8,557 100% 100% 1
the upstream smallholders (ha)
rubber industry
Increasing world
Number of standards met by rubber
market export
10 and rubber products using the newly 5 5 100% 100% 1
of rubber and
commissioned equipment
rubber products
136% 97% 0.5

NKEA - TOURISM KPI (Quantitative)
Target Actual
(FY) (YTD)
Percentage of tourist spend on

Positioning Malaysia as a
1 shopping from total tourism 30% 32% 107% 100% 1
vibrant shopping destination
receipt
Designating Kuala Lumpur

Total footfalls at malls at
2 City Centre-Bukit Bintang as a 105 124 118% 100% 1
BBKLCC (million)
vibrant shopping precinct
Establishing Malaysia as
Number of visitors to MMBH
4 a mega biodiversity hub 750,000 906,661 121% 100% 1
sites
(MMBH)
Number of international cruise

405 471 116% 100% 1
calls at Malaysian ports
6 Developing cruise tourism
Number of cruise passengers
577,500 924,885 160% 100% 1
at primary ports
Positioning Malaysia as Number of international

7 a vibrant events and tourists at international events 80,000 59,908 75% 75% 0.5
entertainment destination supported by MyCEB
Establishing Malaysia as a
Number of delegate days for
9 leading business tourism 320,000 381,342 119% 100% 1
events secured / year
destination
Total weekly seats from

Enhance air connectivity to
11 identified priority countries by 125,500 158,682 126% 100% 1
Malaysia from priority markets
all Malaysian carriers
118% 97% 0.5
NKEA - WHOLESALE AND RETAIL KPI (Quantitative)
Target Actual
(FY) (YTD)
Number of new hypermarkets 2 1 50% 50% 0

Increasing number of
1
large format stores
Number of new superstores 2 3 150% 100% 1
Percentage disbursement of RM3 million

100% 123% 123% 100% 1
allocated TUKAR loan
Modernising via
the Small Retailer
2
Transformation
Programme (TUKAR) Increase in revenue of newly transformed
TUKAR stores by 25% for the first 3 100% 0% 0% 0% 0
months post transformation
81% 63% 0.5

SRI - HUMAN CAPITAL DEVELOPMENT KPI (Quantitative)
Target Actual
# EPP KPI Method 1 Method 2 Method 3
(FY) (YTD)
Percentage of women on board in public

14% 13.3% 95% 95% 0.5
listed companies
Human Capital Percentage of women on board in top 100

18% 19.3% 107% 100% 1
1 Development public listed companies
(MoWFCD)
umber of new childcare centres in the

N
workplace
100% 115% 115% 100% 1
i. Public (10)
ii. Private (10)
Number of women placements 100 196 196% 100% 1

Human Capital
3 Development
(EPU) Critical skills list report – expanded for more
100% 100% 100% 100% 1
sectors and skills level
123% 99% 0.5
SRI - COMPETITION, STANDARDS AND

KPI (Quantitative)
LIBERALISATION
Target Actual
(FY) (YTD)
Number of fruit and vegetable farms

750 951 127% 100% 1
certified under MyGAP
Number of aquaculture farms certified

165 162 98% 98% 0.5
under MyGAP
Competition, standards
1 and liberalisation
(MOA)
Number of livestock farms/premises
100 78 78% 78% 0.5
certified under MyGAP
Number of fruit and vegetable farms

40 51 128% 100% 1
certified under myOrganic
Number of new products under
2 and liberalisation 2,000 2,319 116% 100% 1
MyHIJAU Programme
(KeTTHA)
Competition, standards Number of new certifications obtained

3 and liberalisation by companies from Accredited 1,500 1,937 129% 100% 1
(MOSTI) Certification Bodies
Percentage of food manufacturing

premises registered in the FoSIM
4 and liberalisation 50% 50.2% 100% 100% 1
Domestic System obtaining MeSTI
(MOH)
certification
113% 97% 0.5

SRI - PUBLIC SERVICE DELIVERY

KPI (Quantitative)
TRANSFORMATION
Target Actual
(FY) (YTD)
Number of newly implemented Lean Healthcare Projects at MOH

1 35 40 114% 100% 1
hospitals per year
114% 100% 1
SRI - NARROWING DISPARITY KPI (Quantitative)
Target Actual
(FY) (YTD)
Total value of business opportunities created for Bumiputera

10 14.1 141% 100% 1
companies (RM billion)
Achieve financing approval for Bumiputera companies at a

minimum of 3.0 times against respective government funds 3.0 3.7 122% 100% 1
received (times)
4
Increase in value of "Skim Jejak Jaya Bumiputera" (SJJB) PLCs by

1.0 2.1 210% 100% 1
RM 1 billion (billion)
Minimum revenue increase of 10% for INSKEN500 participants

300 325 108% 100% 1
(businesses)
145% 100% 1
SRI - PUBLIC FINANCE REFORM KPI (Quantitative)
Target Actual
(FY) (YTD)
1 Percentage of fiscal deficit to GDP in 2017 3.0% 3.0% 100% 100% 1
100% 100% 1
This page is intentionally left blank
Civil Service Delivery Unit (CSDU)

Prime Minister’s Department
Level 1, East Block

Perdana Putra Building
Federal Government Administrative Centre
62502 Putrajaya
Malaysia
Tel : 03-8872 7249

Fax : 03-8889 4428
Copyright © 2017 First Edition, First Printing 2017 ISSN 2600-8920

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National Transformation Programme Annual Report 2017 3

Transformation Takes Effect 2

Putting Our People First 4

2017 Year in Review 6

Agreed-Upon Procedures by PwC 285

NTP Performance 2017 286

our economic growth twice during the year. Additionally, all

On top of these improvements in public finance policy,

In addition to fiscal reforms, the Government has also

In view of these realities, we have utilised the Bantuan

While BR1M represents a critical measure by the

2017 year in review

YB DATUK SERI PANGLIMA YBHG TAN SRI DR. ALI HAMSA

The National Transformation Programme (NTP) liberalisation, talent management, equal

9th Malaysian Plan 10th Malaysian Plan 11th Malaysian Plan

Malaysia maintaining its target towards fiscal balance

2009 2010 2011 2012 2013 2014 2015 2016 2017

3.5% 3.2% 3.1% 3.0%

Assuring Quality Education Improving Urban Public Transportation (UPT)

Raising Living Standards of Low Income Households

9th Malaysian Plan 10th Malaysian Plan 11th Malaysian Plan

Digital Free Trade Zone (DFTZ)

To date, over 1,500 SMEs are at various stages of onboarding in DFTZ.

Tourism 81.1 The communications content and infrastructure sector

IMPROVING URBAN PUBLIC TRANSPORT

YB DATO’ SRI LIOW TIONG LAI

Good public transport networks support regular problem-solving sessions, managing

The demand for public transport is expected to

Despite setbacks in some of our major projects, we

YB DATO’ SRI NANCY SHUKRI

“The MRT is a greener way to

LRT3, a project under SPAD’s Urban Rail

The commencement of full operations of MRT

for completion in 2019 with KTMB focusing on

The introduction of LRT and MRT feeder bus

“The Bus Network Revamp (BNR)

taxi and e-hailing drivers with a greater focus

In managing the emerging e-hailing market,

Prior to the implementation of e-hailing regulations,

“The proposed Land Public

The initiative, which reached 61% completion in 2017,

Meanwhile, the integration of the Automatic Fare CUSTOMER SATISFACTION INDEX

Testimonial From Public Transport User

Nora binti Ahmad

As a working professional at a banking institution, Nora

While she still needs to drive to the MRT station, the

Planning Urban Public Transport Trips

Nurul and the SPAD team in charge of the

Testimonial From Public Transport User

Nurul Fatiah Abdul Aziz

Compared to carpooling or having her brother drop

Fatiah also finds taking public transportation easier

Public transport modal share

Year 2010 2015 2020 2030

RAISING LIVING STANDARDS OF LOW-INCOME HOUSEHOLDS

YB DATO’ SRI ROHANI ABDUL KARIM

Successful 1AZAM participants are further

Providing Low-Income participants that is designed to expand their

Distribution of 1AZAM programme equipments in Kapit, Sarawak.

Leveraging Technology to Break As such, the e-Rezeki and e-Usahawan