Most journeys begin with a single step, but Malaysia's economic transformation journey is unlike any other. It starts with 12 steps, each representing a key economic area and every stride working towards a unified direction - a high-income, fully developed Malaysia by 2020. The Economic Transformation Programme (ETP) has a two-pronged approach addressing this challenge: to be focused and globally competitive. "Focus is crucial because no one can do everything and be good in each area," says Idris Jala, PEMANDU CEO and minister in the prime minister's department. "Competitiveness follows because, even if you are focused, you cannot achieve full development without being globally competitive." The ETP has identified 12 National Key Economic Areas (NKEAs) that the government believes are Malaysia's strongest and most competitive sectors. These are: Greater Kuala Lumpur/Klang Valley; oil, gas and energy; financial services; wholesale and retail; palm oil and rubber; tourism; electrical and electronics; business services; communications content and infrastructure; education; agriculture; and health care. Under the NKEAs, 131 Entry Point Projects (EPPs) and related business opportunities have also been identified to catalyse investments. These entail active participation from the private sector, which plays a vital role in jumpstarting Malaysia's intensive growth. Investments from the private sector last year increased by 19.4 per cent from 2010, reaching more than 94 billion ringgit (HK$238.8 billion) and exceeding the target of 86 billion ringgit. These contributed a significant portion of the nearly 180 billion ringgit total investments that have been committed in the whole of last year. These investments are projected to fuel Malaysia's steady climb towards its goals - and have the potential to contribute up to 129.5 billion ringgit in gross national income (GNI) and to create more than 313,741 jobs by 2020. "What makes our blueprint stand out among many others is the level of detail we put into every commitment. It is a very rigorous and disciplined approach where progress can be measured," Jala says. "Such detailed promises mean that we do not just say we will enhance liveability in Kuala Lumpur, for example. That commitment includes planting 100,000 trees and rehabilitating the city river to a swimmable class IIB, among other output-based initiatives." Out of 131 EPPs, 110 projects were launched last year, 72 of which have already taken off. The NKEAs in total have contributed more than 589 billion ringgit to the country's GNI, surpassing the full-year target of 494 billion ringgit. This accounted for 70 per cent of Malaysia's national GNI of 830.7 billion ringgit, reinforcing the impact of NKEAs on the country's overall economy. Such results are reflected in the ETP 2011 annual report, verified by independent auditor PricewaterhouseCoopers. The report includes a detailed review of all 12 NKEAs, outlining key performance indicators, targets and achievements for each area. Some of the highlights are as follows: Greater Kuala Lumpur/Klang Valley Summarised as 20-20, the long-term goal for Greater Kuala Lumpur and Klang Valley is to break into the list of the top 20 global ranking in city economic growth and liveability by 2020. Inroads to this goal include new investments from global multinational companies such as Schlumberger, PayPal, IBM and Toshiba. Various programmes have also been successfully launched to repatriate Malaysian professionals, and attract and retain foreign talent in the country. To improve mass transport and reduce traffic congestion, the city commenced the three-line, 150km Klang Valley MyRapid Transit project. The construction of the first line began in July last year and is slated for operation by 2017. Oil, gas and energy Challenges in oil and gas production have not deterred Malaysia from targeting 5 per cent annual growth for the oil, gas and energy sector. The ambitious goal is anchored on four key thrusts: sustaining production, enhancing downstream growth, making Malaysia the No 1 Asian hub for oil field services and building a sustainable energy platform for growth. The approval of the Petroleum Income Tax Act Amendment Bill and the launch of the Global Incentives for Trading Programme last year are expected to bolster this growth. Co-operation between the government and private sectors, inflow of foreign investments, and support for local players will also be strengthened through the newly established Malaysian Petroleum Resources Corporation. Financial services Catering to businesses and consumers in a high-income Malaysia in 2020 is a vision that is hinged on four thrusts. These are identified as strengthening the country's core financial services, serving the needs of the high-income population, developing new growth sectors and adopting an offensive stance. The launch of the Financial Sector Blueprint last year marked the full-speed motion towards realising this vision, charting the direction of the financial system until 2020. Islamic finance is expected to make headway in this sector, with Malaysia's Islamic banking assets growing at the rate of 20 per cent per year. Homegrown financial institutions are also projected to champion the sector's competitiveness, with the likes of CIMB and Maybank expanding into new markets regionally. Wholesale and retail Modernise, globalise and revolutionise - these are the themes that are motivating the wholesale and retail sector to achieve 165 billion ringgit in GNI contribution by 2020. The Small Retailer Transformation programme is helping the sector make big steps towards this goal. Having modernised more than 500 sundry shops across the country last year, it helped retailers earn between 30 and 60 per cent more. The Modernisation of Automotive Workshop programme has also transformed more than 55 workshops, while the 1Malaysia Mall initiative is exploring overseas markets for local skills and products. The sector sees the mainland, Vietnam, India, Indonesia and Sri Lanka as promising destinations. Palm oil and rubber The rising global demand for palm oil has created a natural opportunity for one of Malaysia's key export products. To corner the market, the sector has multiplied its efforts to improve upstream productivity and downstream expansion. This has resulted in a yield growth of 19.69 tonnes per hectare and an oil extraction rate increase to 20.35 per cent last year. Four EPPs have been identified to increase productivity, ensure sustainability and win more market share for the rubber industry. These are expected to raise 28.4 billion ringgit in incremental GNI. The sector has also found allies in the oleo chemicals field, garnering support from key players such as Kuala Lumpur Kepong, Emery Oleochemicals Group, ICM Speciality Chemical and IOI Oleochemical Industries. Tourism While the beauty of Malaysia has always attracted travellers from all over the world, the focus on tourism as an NKEA will further fortify the sector as a major economic driver. Tourism is expected to deliver 66.7 billion ringgit in incremental GNI by 2020. Diverse projects revolve around five themes: affordable luxury; nature adventure; family fun; events, entertainment, spa and sports; and business tourism. These themes are embodied by new and upcoming attractions, ranging from the Johor Premium Outlet to the Malaysia Convention & Exhibition Bureau and four-star and five-star hotels. Electrical and electronics Semiconductors, light-emitting diodes (LED), solar and industrial electronics and home appliances are expected to drive the biggest growth under the electrical and electronics sector. Together with geographical clusters Northern Corridor, Greater Kuala Lumpur/Klang Valley, Johor, and Sabah and Sarawak, these will contribute a projected 90.1 billion ringgit to Malaysia's GNI by 2020. Setting the foundation and favourable conditions for the industries have been the focus last year, including structural reforms to help Malaysian companies level up in the global scene. Intensified efforts to establish capacity-building enablers have paved the way for wafer fabrication equipment refurbishment services in Kulim, LED test and certification services in Bayan Lepas and industrial utilities infrastructure in Samalaju. Business services Aviation maintenance repair and overhaul, outsourcing, data centre hub, green technology and pure play engineering will be the forerunners of Malaysia's business services NKEA. These areas are projected to propel the sector's GNI contribution to 78.7 billion ringgit by 2020 - four times as much as in 2009. Cross-border joint ventures such as that between Malaysia's MAS Aerospace Engineering and India's GMR Hyderabad International Airport Limited will drive activities for the sector. Strengthened relationships with global multinationals are also expected to bring in more business outsourcing and data centre opportunities. Communications content and infrastructure The themes "serving tomorrow, pushing boundaries and enhancing foundation" aptly illustrate Malaysia's vision for the communication content and infrastructure NKEA. The sector achieved an increased broadband household penetration of 65 per cent or a total of 4.5 million households this year, helping more rural communities close the digital divide. Working closely with the private segment, it has also grown the export revenues from the creative industry to 337 million ringgit in the third quarter last year. Among the EPPs under this area, the Track and Trace project stands out as a means to improve trade facilitation. It highlights the use of Radio Frequency Identification technology in monitoring containers to facilitate a more efficient customs clearance process within domestic ports, checkpoints and selected high-volume routes throughout Malaysia. One of the first of its kind in the world, Track and Trace is projected to increase Malaysia's security against terrorism and contrabands while improving container movement efficiency and tracking transparency. Education Education has always been a pillar of Malaysia's growth. This is why EPPs such as Scaling Up of Early Childcare and Education Centres and Improving Early Childcare and Education Training have been included in the national education policy. These will ensure universal preschool enrolment by 2020. Technical education and vocational training programmes also rank as a priority for the sector, especially in anticipation of the increased demand for skilled workforce as Malaysia becomes a high-income nation. As with other NKEAs, the involvement of the private sector is a pivotal factor in pushing education as a competitive edge for Malaysia. This collaboration is particularly imperative as the country positions itself as a regional hub in the global education network. Agriculture In spite of its various modernisation initiatives, Malaysia upholds the role of agriculture as a significant economic area. The key is transforming the agriculture industry to agribusiness through four themes: ensuring food security, tapping premium markets, capitalising on Malaysia's competitive edge and expanding participation in the regional value chain. To reach 28.9 billion ringgit in incremental GNI by 2020, the sector introduced reimbursable incentives to anchor companies to facilitate growth and socio-economic development. This has generated 3.2 billion ringgit in private investments to date, exceeding earlier targets and reducing public investment to 9 per cent from the estimated 34 per cent. Health care Major policy revisions have given rise to new opportunities in Malaysia's health care sector. These include the move to transform Malaysia into a generics export country and the shortening of compulsory services for pharmacists with public hospitals from three years to one. These have also paved the way for the upcoming implementation of the Pharmaceutical Off-Take Agreement-Government Procurement for New Local Manufactured Pharmaceuticals. The agreement will benefit local pharmaceutical companies, which will be able to reduce costs as many globally branded medications go off-patent in the next 10 years. A rapidly growing segment, health care travel is also pegged as a promising driver for the sector. In line with this, the Malaysia Healthcare Travel Council has been corporatised and various motivational initiatives have been put in place for medical professionals and tourists. PEMANDU provides regular reports on the progress of new and ongoing projects in each key economic area. Apart from regularly updating its website, it also uses various multimedia channels to capture ETP activities. "We are encouraged that Malaysia is moving ahead at full speed to reach our goals," Jala says. "If we continue at the pace we are going, I have no doubt that we will get to our destination by 2020."