Q: Malaysia has made significant strides in improving its business environment – the World Bank this year ranked it sixth globally in its Doing Business survey. What, then, was the rationale behind creating the Performance Management & Delivery Unit [Pemandu] if the country’s goals are seemingly achieved?
A: The key thing about Pemandu is that it was formally established in 2009, as a unit under the prime minister's department, to oversee the implementation and assess the progress of the Government Transformation Programme and the Economic Transformation Programme [ETP].
An important thing we did was getting the private sector and the government to come together and to ensure that challenges and solutions devised were private sector driven. So with regards to the oil and gas sector, for instance, we did not want the blueprint to be driven by the government. We got people from Petronas, Shell and ExxonMobile, who are the real practitioners, and we put them in a room with representatives of the government. We then asked them to tell us exactly what they wanted us to do to improve the operating environment in their sector. We did the same thing for financial services as we got representatives from the banks and asked for their feedback.
This was an entirely new approach as it put the private sector in the driving seat of our country’s economic transformation. We hold monthly steering committee meetings and there are weekly dashboard meetings as part of our ongoing reviews, and it is notable that [global companies such as] Bloomberg have voted us among the top 20 government agencies in the world.
Q: What are some of the challenges that Pemandu has faced in overcoming these weaknesses that it identified?
A: We have worked to establish a new economic model that will make Malaysia a high-income, inclusive and sustainable society by 2020, and that is a huge goal. Nevertheless we have been very successful in implementing this. When we first started in 2009, our fiscal deficit stood at -6.6% and we have been able to reduce that on an annual basis to -3.9%. As such we have been able to finance our borrowings consistently.
Moreover, a year and a half ago, we found that there was a lot of traffic congestion in Kuala Lumpur’s central business district. Therefore we bought 38 new trains from China, and we successfully constructed the Mass Rapid Transit trains in order to ease traffic and improve our environment. Additionally we have made buses completely free within the central business district, so we have reduced the number of taxis around the city.
All of these solutions were not ideas driven by Pemandu. We facilitated these ideas as we gathered nearly 60 people from the private sector in a room, and we brought in government representatives, and we told them to figure out positive solutions to develop Kuala Lumpur.
Q: Being Malaysia’s capital city, what role has Kuala Lumpur played in boosting the country’s business performance? Additionally how will the Association of South-east Asian Nations Economic Community [AEC] coming into being in 2015 affect Kuala Lumpur’s standing as a regional hub?
A: Kuala Lumpur will benefit significantly from the AEC because there will be a lot more free movement of trade and capital, and all of these goals – which are in line with the [AEC starting in 2015] – are in line with our goals. As such I am confident that Kuala Lumpur will emerge as one of the most competitive and liveable cities in the world, as part of the AEC.