News & Events

[ 15-11-2012 ]
IMF Chief Confident Malaysia Can Become A High-income Country By 2020
KUALA LUMPUR, Nov 14 (Bernama) -- The Malaysian government's initiative to boost domestic economy, which included the Economic Transformation Programme, will boost productivity and growth and help it become a high-income country by 2020.

International Monetary Fund managing director, Christine Lagarde, said Prime Minister Datuk Seri Najib Tun Razak's vision of expanding the domestic market, garnering more investment and establishing more infrastructure in the identified sectors would turn the vision into a reality.

"With this goal of moving into a high-income country by 2020, given the rate of growth, I bet you will get there," she said in her speech at the Global Public Lecture entitled 'Asia and the Global Economy -- The Promise of Integration' hosted by the Malaysian Economic Association.

Lagarde said to support that transition, it was critical to have a strong financial sector, whereby Bank Negara Malaysia has designed a financial sector blueprint that sought a world-class financial system worthy of a high-income country.

She said going forward, the global growth would pick up again, 3.3 per cent this year and 3.6 per cent next year.

"We believe Asia will retain its position as a growth leader, expanding two percentage points faster than the world average next year.

"But none of these can be taken for granted. It depends on the actions of global policymakers, especially in the US and Europe," she said.

On investment, she said, over 90 per cent of Asean cross-border portfolio investment flows were with advanced economies outside Asia and it needed to invest more on itself.

"Greater regional financial integration could open up a host of new benefits such as boosting domestic demand, partly by making it easier for small businesses in countries like Malaysia to gain access to credit.

"It can also make economies safer, by allowing more insurance against volatility and adverse developments and greater access to financial services by the poor can reduce inequality," she said.

Lagarde said Asian countries must make growth more inclusive by spending more on healthcare, education as well as pension and unemployment insurance schemes, which were at relatively low levels in the region.