Twelfth Malaysia Plan: Key Insights, Goals, and Economic Impact

The Twelfth Malaysia Plan (2021-2025), launched on 27 September 2021 by Prime Minister Dato’ Sri Ismail Sabri Yaacob, aims to build a stronger, fairer, and greener Malaysia. It builds upon past development plans while introducing bold reforms, strategic policies, and economic recovery measures.

This blog will break down the key insights, objectives, and economic impact of the 12MP, explaining how it aims to drive Malaysia towards becoming a high-income nation with sustainable and inclusive growth.

What is the Twelfth Malaysia Plan?

The Twelfth Malaysia Plan (12MP) is a five-year economic development plan designed to shape Malaysia’s future under the framework of Shared Prosperity Vision 2030 (SPV2030). It is structured to:

• Revitalise the economy post-COVID-19
• Ensure social inclusivity for all Malaysians
• Promote sustainable development to combat climate change and environmental degradation

The 6R Approach

To address economic recovery, the twelfth plan Malaysia has the 6R approach:

1. Resolve – Addressing immediate challenges from COVID-19
2. Resilience – Strengthening economic resilience for future crises
3. Restart – Rebooting economic activities strategically
4. Recovery – Implementing short-term recovery policies
5. Revitalise – Strengthening the economy for long-term growth
6. Reform – Making structural reforms for sustained progress

Key Insights from the Twelfth Malaysia Plan

The 12 Malaysia plan summary includes three key themes, four policy enablers, and 14 game changers for Malaysia’s growth:

Themes of the Twelfth Malaysia Plan

• Resetting the Economy: This theme focuses on reviving the economy after the challenges faced in recent years, particularly due to the pandemic. It aims to boost growth across various sectors and create long-term resilience to withstand future economic shocks.
• Strengthening Security, Wellbeing, and Inclusivity: This theme prioritizes improving national security and public safety. It also promotes social protection, ensuring equal opportunities for all groups and creating a more inclusive society.
• Advancing Sustainability: The goal is to prioritize environmental protection and climate action. The plan encourages green growth and promotes responsible and sustainable resource use to ensure long-term ecological balance.

Policy Enablers of the Twelfth Malaysia Plan

• Developing Future Talent: A strong focus is placed on investing in quality education and training to develop the necessary skills. This is aimed at upskilling Malaysians to prepare them for future job opportunities and challenges, making the workforce adaptable and future-ready.
• Accelerating Technology Adoption and Innovation: The plan promotes the use of digital tools and platforms to drive innovation. By embracing new technologies, Malaysia can undergo significant economic transformation, positioning itself as a leader in technological advancements.
• Enhancing Connectivity and Transport Infrastructure: This enabler aims to improve road, rail, and digital infrastructure across the country. The initiative is designed to reduce regional disparities, ensuring better access to services and creating a more connected, efficient system.
• Making the Public Service Stronger: Strengthening governance is a key component of this plan. It emphasizes making public services more efficient, transparent, and responsive, with an increased focus on digitalisation and reforms to improve service delivery.

Game Changers of the Twelfth Malaysia Plan

1. Imperatives for Reform and Transformation – Driving policy and structural reforms for sustainable progress
2. Catalysing Strategic and High-Impact Industries – Boosting economic growth through key sectors
3. Transforming MSMEs as the New Driver of Growth – Strengthening micro, small, and medium enterprises
4. Enhancing National Security and Unity – Promoting stability and unity for nation-building
5. Revitalising the Healthcare System – Ensuring a strong healthcare system for a healthy population
6. Transforming the Approach in Eradicating Hardcore Poverty – Addressing extreme poverty with innovative solutions
7. Multiplying Growth in Less Developed States – Bridging regional disparities, focusing on Sabah and Sarawak
8. Embracing the Circular Economy – Promoting sustainable production and consumption
9. Accelerating Adoption of Integrated Water Resources Management – Strengthening water resource planning and management
10. Improving TVET Ecosystem – Enhancing Technical and Vocational Education and Training (TVET) for future-ready talent
11. Enhancing Digital Connectivity – Ensuring inclusive and widespread digital infrastructure
12. Aligning Research and Development with Commercialisation – Driving innovation for economic and wealth creation
13. Transforming the Logistics Ecosystem – Boosting efficiency and competitiveness in transportation and logistics
14. Transforming the Public Service – Implementing a whole-of-government approach for better governance

Goals and Objectives of the Twelfth Malaysia Plan

With a focus on industrial transformation, digitalisation, and inclusivity, the 12MP aims to position Malaysia as a competitive global player while ensuring equitable development for all. Here are the key goals and objectives:

1. Boosting High-Impact Industries

For long-term economic stability, Malaysia is prioritising industries that generate high revenue and global competitiveness:

• A target of RM120 billion in revenue to make Malaysia’s position stronger as a global leader in the Electrical & Electronics (E&E) Industry
• A contribution of RM31.9 billion mainly for digital content, gaming, and film production
• RM56 billion to reinforce Malaysia’s reputation as a global halal hub

2. Empowering MSMEs for Economic Growth

Micro, small, and medium enterprises (MSMEs) are the backbone of Malaysia’s economy. To increase their impact, the aim is to:

• Transition to digital operations for 90% of MSMEs.
• MSMEs’ contribution to GDP to reach 45% by 2025
• Better access to financing, upskilling, and market expansion

3. Enhancing National Security

To create a stable and secure environment, the aim is:

• To rank in the Top 10 of the Global Peace Index
• Stronger law enforcement and cybercrime prevention
• Better disaster preparedness and crisis management

4. Strengthening Healthcare Services

The COVID-19 pandemic exposed weaknesses in healthcare. The government plans to:

• Provide affordable, high-quality medical services to all citizens
• Increase pandemic preparedness with better medical infrastructure and research
• Expand mental health support and rural healthcare facilities

5. Eradicating Hardcore Poverty

Aiming for zero hardcore poverty by 2025, the plan includes:

• Targeted financial aid and income support programs
• Entrepreneurship training and job creation initiatives
• Better access to education, healthcare, and basic amenities

6. Circular Economy and Waste Management

To promote sustainable growth, the aim is to:

• Increase household waste recycling to 40%
• Cut greenhouse gas (GHG) emissions by 45% by 2030 (compared to 2005 levels)
• Adopt eco-friendly practices in industries and households

7. Water Resource Management

To ensure clean and reliable water access, the aim is to:

• Give 98% of rural areas access to safe drinking water
• Decrease non-revenue water loss (leakage and wastage) to 25%
• Invest in modern water infrastructure to increase efficiency

8. TVET Reform and 4IR Skills Development

To future-proof the workforce, the aim is to:

• Increase TVET enrollment to 55%
• Prioritise Fourth Industrial Revolution (4IR) skills
• Focus on industry-academia collaborations to bridge the skills gap

9. Digital Transformation and Connectivity

To accelerate digital progress, the aim is to:

• Give full 4G coverage across the country
• Improve broadband speeds for better digital experiences
• Allow nationwide 5G adoption to support fintech, smart cities, and AI-driven services

10. Research & Development (R&D) and Innovation

To increase Malaysia’s global competitiveness, the aim is to:

• Allocate 2.5% of GDP to R&D and innovation
• Strive for a Top 20 ranking in the Global Innovation Index
• Encourage University-business research collaborations

11. Fighting Corruption

To improve governance and integrity, the plan aims to:

• To rank Malaysia in the Top 30 of the Corruption Perceptions Index
• Make anti-corruption laws and enforcement stronger, and implement them
• Improve government procurement transparency
• Make whistleblower protections stronger

12. Efficient Bureaucracy and Digital Governance

By 2025, Malaysia aims for:

• 80% of government services to be fully digital (end-to-end)
• Faster public service delivery through automation and AI
• A business-friendly regulatory environment to attract investments

Economic Impact of the Twelfth Malaysia Plan

The 12MP is expected to bring significant economic growth, thanks to its focus on productivity, private sector investment, and international trade.

Role of E-Invoicing in Malaysia’s Economic Transformation

E-invoicing improves business efficiency, tax compliance, and financial transparency. Automating invoicing decreases paperwork and errors and speeds up payment processing. Consequently, MSMEs and large enterprises will benefit. The system supports tax digitisation. So, businesses will comply with regulations while improving revenue collection for the government.

As Malaysia pushes for 90% MSME digital adoption and economic modernisation, e-invoicing pushes smooth transactions, decreases fraud, and improves cross-border trade. This blends with the Twelfth Malaysia Plan’s goal of a digitally advanced, transparent, and high-growth economy by 2025.

Conclusion

The Twelfth Malaysia Plan aims to build a strong, fair, and sustainable nation. It focuses on new technology, better governance, and improved public services. Key industries will get support to grow and compete globally.  

Success depends on teamwork between the government, businesses, and people. With the right efforts, Malaysia can achieve its big goals. The future looks bright, and the 12MP is the guide to shared growth.