As a result of the ongoing economic reforms, Malaysia’s government expects the country will become a high-income economy by 2020, strengthening its markets and related exchange traded funds.
The iShares MSCI Malaysia ETF (NYSEArca: EWM) has gained 6.1% over the past three months and is up 0.5% year-to-date.
In the annual report on the so-called Economic Transformation Program, the Malaysian government said the economy expanded to $10,060 Gross National Income per capita in 2013, compared to $9,970 in 2012, reports Manirajan Ramasamy for Bloomberg. The government plans to hit $15,000 by 2020.
According to the World Bank, a country has a high-income designation when GNI per capita meets or exceeds $12,616.
The economic program has helped launch 196 projects under the 12 National Key Economic Areas, and six Strategic Reform Initiatives, which promote small- and mid-sized businesses, New Straits Times reports.
“Malaysia’s economic transformation is evolving to acquire the characteristics of a high-income economy that is service-based, private-consumption driven and being less reliant on oil revenues,” the government said in a statement.
Prime Minister Najib Razak has been cutting down on government subsidies to limit fiscal risks, which have led to a cut in the country’s credit outlook in July by Fitch Ratings. Consumption is now said account for over half of the gross domestic product.
The program will also generate 3.3 million jobs, and over the past three years, the NKEAs have created 1.3 million positions. Looking ahead, the reforms should increase the proportion of middle- to high-income workers.
The country has seen steady economic growth, expanding by 5.6%, 5.1% and 4.7% in 2011, 2012 and 2013, respectively, reports The Star Online.
Malaysia recently attracted international attention after Malaysia Airlines Flight 370 inexplicably disappeared somewhere in the Indian Ocean.
iShares MSCI Malaysia ETF
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