Kuala Lumpur. Malaysia said on Tuesday private investments in its flagship economic development programme rose at a steady 11 percent in 2014, with the country half way to becoming a high-income nation by 2020.

Investment commitments in the private sector rose to 146.1 billion ringgit ($41.11 billion) from 131.7 billion ringgit a year ago, Prime Minister Najib Razak said on Tuesday as he introduced the annual report of the Economic Transformation Program (ETP).

Total investments in Malaysia grew to 228 billion ringgit last year, the report showed, up from 217 billion ringgit in 2013.

“We are now at the halfway point of Malaysia’s goal of achieving developed nation status by 2020, and I am glad to say that we remain on track,” Najib said in the report.

Public investment in 2014 fell to 81.9 billion ringgit, or 36 percent of total investment, from 40 percent in 2013, an annual report released by the government showed. That is largely in line with the ETP’s objective to reduce government spending and increase the private sector’s role as the main driver of economic growth.

The ambitious program was begun in 2010 to address lackluster private and foreign investment in Malaysia and lift the country to high-income status by 2020. It aims to generate $444 billion in investments and raise annual per-capita income to $15,000.

Gross national income per person in Malaysia climbed to $10,426 in 2014 from $10,106 in 2013, in line with the government’s goal of $15,000 by 2020 or earlier.

Malaysia’s economy grew at its fastest pace in four years, 6.0 percent, in 2014, defying sliding oil and commodities prices with gains in construction and manufacturing.

But analysts say the country, a net energy exporter, may start to feel the effects of weaker global oil prices on its income in the months ahead.

Oil-based revenues dropped to 30 percent of the government’s total revenue in 2014, from 40 percent in 2009, as Malaysia looked to cut its reliance on the commodity.

Out of the 66 billion ringgit of oil revenues, 29 billion came in the form of dividends paid by state-owned oil and gas firm Petronas, the report showed.

“We must continue diversifying our economy while powering on with fiscal reforms,” Najib added.

While Malaysia, the region’s third-largest economy, has curbed its fiscal deficit from a staggering 6.7 percent in 2009 to 3.5 percent in 2014, other problems persist.

The government faces pressures over a heavily indebted investment fund, 1MDB, and the risk that its weak fiscal position could trigger a sovereign downgrade.

Malaysia introduced a consumption tax of 6 percent in April, which is expected rake in 5.6 billion ringgit in 2015.

But 4.9 billion ringgit from the goods and services tax will be channeled to programs such as BR1M, a cash-based initiative for people on lower incomes, leaving only 690 million ringgit of actual revenue.

Reuters

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