Moonshot: Malaysian Government launches the New Industrial Master Plan 2030

On 1 September 2023, the Prime Minister of Malaysia, Dato’ Seri Anwar Ibrahim, launched Malaysia’s New Industrial Master Plan 20301 (“NIMP 2030”).
The NIMP 2030 provides national strategic direction to lead the industrial development policies in Malaysia. It is a collaborative effort between the public and private sectors and is the product of extensive industry consultations, including more than 70 focus sessions and engagements with 313 stakeholders including ministries, regulators, agencies, industry associations and industry players.
The NIMP 2030 adopts a whole-of-nation approach and is an overarching policy that takes into consideration the interconnectedness of all industrial-related policies and the various authorities involved.
In formulating the NIMP 2030, the Malaysian Government recognised twelve key challenges faced by the country, including marginal growth in economic complexity2, stagnation of labour productivity, skills mismatch and talent shortage, rising disparity in manufacturing activities between States, loss of foreign direct investment (“FDI”) to neighbouring countries and declining domestic direct investment (“DDI”), insufficient financing for new ventures and the need to improve ease of doing business.3
The Government also noted the three recent key global trends, namely geopolitical movements, digitalisation and increasing environmental, social and governance (“ESG”) compliance requirements, and the opportunities presented by these trends.
Highlights of the NIMP 2030
The NIMP sets six goals, namely: 
  • Increase economic complexity
  • Create high value job opportunities
  • Extend domestic linkages
  • Develop new and existing clusters
  • Improve inclusivity
  • Enhance ESG practices. 
The outcomes of each goal and the criteria by which they are measured are set out in the NIMP 2030. For example, 700,000 new jobs are to be created by 2030 and median wage for manufacturing is to increase by 128% from RM1,976 in 2021 to RM4,510 in 2030. Further, the NIMP 2030 seeks to increase total investments (FDI and DDI) as a share of State GDP from an average of 13% of State GDP in 2021 to 25% in 2030.
The NIMP 2030 adopts a Mission-based approach in industrial policy development setting ambitious goals and bold solutions from “moon-shot thinking”.4
Four Missions have been formulated to meet the Goals and targets of the NIMP 2030, namely: 
  • MISSION 1 - Advance economic complexity
    This is to encourage high-growth industries to innovate and produce more sophisticated products.
  • MISSION 2 - Tech up for a digitally vibrant nation
    By embracing a whole-of-nation digital transformation, Malaysia can drive digital adoption, spur innovation, enhance labour productivity, and unlock opportunities in digital frontier technologies.
  • MISSION 3 - Push for Net Zero
    This emphasises Malaysia’s commitment to addressing climate change by striving for a Net Zero carbon emission target as early as 2050.
  • MISSION 4 - Safeguard economic security and inclusivity
    To build resilience and enhance trade security against global shocks and geopolitical tension, and create an enabling environment that fosters entrepreneurship, supports small and medium enterprises (“SMEs”), and promotes equitable participation in economic activities to narrow all forms of disparities between the States.
The four Missions are interlinked and are to be advanced simultaneously towards achieving the Goals and targets.
Four Enablers are introduced to address multiple systemic and institutional issues faced by Malaysian industries: 
  • ENABLER 1 – Mobilise financing ecosystem
  • ENABLER 2 – Foster talent development and attraction
  • ENABLER 3 – Establish best-in-class investor journey for ease of doing business
  • ENABLER 4 – Introduce whole-of-nation governance framework 
Strategies and Action Plans
Embodied within the Missions and Enablers are 21 Strategies and 62 Action Plans which can be broken down as follows: 
  • MISSION 1: 5 Strategies and 15 Action Plans
  • MISSION 2: 4 Strategies and 8 Action Plans
  • MISSION 3: 4 Strategies and 10 Action Plans
  • MISSION 4: 4 Strategies and 10 Action Plans
  • ENABLERS: 4 Strategies and 19 Action Plans 
Highlighted below are several of the Strategies and Action Plans comprised in the Missions and Enablers:
Strategy Action Plan
Strategy 1.1 – Expand to high value-added activities of the value chain Create global integrated circuit (IC) design champions from Malaysia
Strategy 1.1 – Expand to high value-added activities of the value chain Identify high value-added opportunities in the aerospace, pharmaceutical and medical devices sectors
Strategy 1.2 – Develop entire ecosystem to support the high value-added activities Integrate value chains between machinery and equipment (M&E) and medical devices, semiconductor and electric vehicles (EV), and chemical and pharmaceutical
Strategy 2.1 – Accelerate technology adoption Accelerate digital infrastructure rollout (JENDELA)
Strategy 2.2 – Shift away from low-skilled labour model Introduce automation condition in new manufacturing licence through a phased approach for SMEs and on an immediate basis for multinational corporations (MNCs) and large local companies (LLCs)
Strategy 3.1 – Accelerate transition towards sustainable practices Introduce accounting model to measure and report on carbon emissions as well as a carbon pricing mechanism, i.e. a carbon tax
Strategy 3.3 – Catalyse new green growth areas Grow carbon capture, utilisation and storage (“CCUS”) as a new growth sector and develop circular framework for industry
Strategy 4.1 – Develop resilient supply chain Establish supply chain cooperation and collaboration through G2G and G2B programme
Strategy 4.3 – Strengthen industrial clusters for regional development Align industrial development plan between Federal and States to improve industrial distribution for balanced development
Strategy E1 – Mobilise financing ecosystem Introduce two new funds, the NIMP 2030 Industrial Development Fund (NIDF) and the NIMP 2030 Strategic Co-Investment Fund (NIMP 2030 CoSIF)
Strategy E1 – Mobilise financing ecosystem Issue a Sustainable Development Goal (SDG) Bond in the form of a Green, Sustainability or Sustainability-Linked bond or sukuk, and channel the proceeds through banks to SMES to decarbonise their operations
A summary of the Strategies and Action Plans for each Mission and the Enablers is set out in pages 44-45 of the NIMP 2030. The summary also lists out nine Mission-Based Projects (MBP) for Missions 1 to 3. Further discussions of the Missions and the Enablers are set out in Chapters 4 to 8 of the NIMP 2030.
Sectors covered
The NIMP covers 21 sectors, with aerospace, chemical, electrical and electronics (E&E), pharmaceutical and medical devices being recognised as priority sectors. In addition, the NIMP 2030 also identified four new growth areas, namely advanced materials, electric vehicles, renewable energy and CCUS.5
Sectors not covered in the NIMP 2030 include banking and insurance, construction services, utilities, tourism, private healthcare, private education, transport and logistics, food and beverage and other unregulated services.6 Some of these areas are covered by sectoral policies or blueprints.
Enablers 3 and 4 recognise the need for appropriate frameworks to be established to ensure the successful implementation of the NIMP 2030 and the Action Plans.
To this end, Enabler 3 recognises the challenge in Malaysia’s investment promotion landscape, which comprises over 30 Investment Promotion Agencies (“IPAs”), each with its own direction and potential overlapping responsibilities. Amongst others, it is proposed that the roles and responsibilities of all IPAs be streamlined so that the Malaysia Investment Development Authority (“MIDA”) will be mandated as the national body to centralise investment promotion and marketing, whilst the Project Implementation and Facilitation Office (TRACK), a unit under MIDA, will be empowered to accelerate investment implementation. The role of subnational IPAs will be streamlined to support the investment ecosystem.
The Government’s incentives mechanism will also be improved to ensure that the incentives offered remain attractive for investors and the intended outcomes are better aligned with national targets (NIAs). This would include establishing a tiered incentive system that prioritises national resources based on investor contribution to the national agenda. Each tier will have incremental access to more generous benefits e.g. exemptions on import duties and income taxes, talent visa, etc.
A One-Stop Portal (OSP) will be established for a seamless investor experience from the inception of the investment journey to post-investment care.
Enabler 4 will, amongst others, establish the NIMP 2030 Delivery Management Unit (“DMU”) which will drive the implementation of the NIMP 2030 via the five Working Groups. Key responsibilities of DMU include: (a) tracking and monitoring the progress of Mission-based Strategies, Action Plans and Projects in delivering the NIMP 2030 Goals and targets; and (b) managing the NIMP 2030 funding related matters including tracking and reporting on the utilisation of the NIMP 2030 funds; and (c) managing the Working Groups to ensure implementation timeliness.
The Working Groups will be chaired by identified champions and be responsible for implementing the respective Strategies and Action Plans.
The NIMP 2030 will be implemented in two phases - Phase 1 (2023 to 2026) will be to strengthen the collaboration between the public and private sector and set the foundation for the implementation of the NIMP 2030 while Phase 2 (2027 to 2030) will focus on driving implementation at scale to diversify the economic base, create stronger local linkages and strengthen global cooperation for greater economic resilience that enables sustained growth under any economic conditions.
A mid-term review will be carried out by the end of 2026 to review the targets and implementation progress of the NIMP 2030. It will also provide the opportunity to assess any further global trends and recalibrate any gaps to achieve the NIMP 2030 Goals.
The NIMP 2030 is a holistic, multi-faceted and integrated industrial plan, with many Action Plans to be implemented within a relatively short 7 plus years timeframe. As acknowledged by the Minister of International Trade and Industry, Tengku Datuk Seri Zafrul Tengku Abdul Aziz, The NIMP 2030 is an ambitious plan. However we are confident that its targets are achievable ...7 Time will tell whether the Malaysian Government in formulating the NIMP 2030 has gone for the moonshot.
Article by Kok Chee Kheong (Partner) and Tham Zhi Jun (Associate) of the Corporate Practice of Skrine.

1 The NIMP 2030 and a Summary Booklet of the NIMP 2030 can be accessed here and here respectively.
2 The expression “economic complexity” is explained in the following terms, “Higher levels of economic complexity are associated with higher levels of development and growth. Crucially, a country’s structural transformation is determined by its capacity to accumulate the capabilities that are necessary to produce a greater variety and more complex goods (page 21 of the NIMP 2030).
3 Refer to Chapter 2 of NIMP 2030 for detailed discussion.
4 See page 42 of the NIMP 2030.
5 The existing sectors (including the priority sectors) and the new growth areas are listed on page 18 of the NIMP 2030.
6 See page 18 of the NIMP 2030.
7 Manufacturing sector set to get a boost, The Star, 2 September 2023.

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