KUALA LUMPUR (BLOOMBERG) - Malaysia's Prime Minister Najib Razak said the country faces an "uphill battle" over the next five years in its plan to become a developed nation.
Datuk Seri Najib introduced a programme in 2010 to lure private investment, improve education and add high-quality jobs to propel the economy into high-income nation status by 2020, fulfilling a goal laid out by former prime minister Mahathir Mohamad.
He said on Tuesday (April 26) that despite challenges, he remains confident of achieving that target. "The race for the best investments and an insatiable appetite for growth exists in most if not all countries," the Premier said in releasing an annual report on the programme. "The next five years will be an uphill battle, but a battle I'm convinced can be won."
Mr Najib is looking to economic growth to bolster his standing with voters - particularly ethnic Malays, the bulwark of his ruling coalition - as he faces his biggest political crisis since coming to power in 2009.
Tun Mahathir is leading a public campaign to get Mr Najib out amid a series of offshore probes of troubled state fund 1Malaysia Development Berhad (1MDB). Mr Najib has also faced questions over millions of dollars that showed up in his bank accounts before the last election in 2013. Both Mr Najib and 1MDB have denied any wrongdoing.
"It has been my stand since day one I took over as prime minister, that the government must move forward to continue building a resilient, sustainable and inclusive economy for the people," Mr Najib said separately in a speech. "Give the current government a chance and time to improve our future, to follow through on the plan that we have already put in place."
The reputation of the government took another hit on Tuesday when 1MDB defaulted on a US$1.75 billion bond amid a dispute with Abu Dhabi's International Petroleum Investment Co., the co- guarantor of the bonds.
The default helped push the ringgit down 0.4 per cent against the greenback, while Malaysia's benchmark stock index fell 1.3 percent.
Mr Najib has removed subsidies on fuel and sugar in recent years, and implemented a goods and services tax to help narrow a budget deficit that the country has been running since 1998.
The government is on track to balance its budget by 2020 after cutting the shortfall to 3.2 per cent of gross domestic product last year, from 6.4 per cent in 2009, according to the report. The deficit may be about 3.1 per cent of gross domestic product this year, he said.
"When a country like Malaysia has good fiscal discipline, our borrowing costs will be low," Mr Najib said. "More importantly, market confidence will continue to be at a high level, and as well as Malaysia's credit rating."
Gross national income per capita dropped to an estimated US$10,110 last year, from US$10,760 in 2014, after the ringgit depreciated against the US dollar, the government said.
A nation would be considered high income if gross national income per capita meets or exceeds US$12,736 in 2016, according to the World Bank.