The economic engine: Greater KL is a leader in regional and national growth


Generating over 37% of GDP and contributing about RM263bn ($84.8bn) to GNI, the Greater Kuala Lumpur/Klang Valley (GKL/KV) region is the prosperous core and the administrative axis of Malaysia’s economic growth. In 2011, the number of people living in the region – which falls under 10 local authorities – hovered at about 6m, or around 20% of the country’s total. By 2020 the Ministry of Federal Territories and Urban Wellbeing officials expect around 10m people to live in GKL/KV, an increase of 5.6% per year, compared to the current estimate of between 1.9% and 2.9%.

This accelerated growth demonstrates the region’s importance as the nation’s economic engine, and in testimony to this, GKL/KV has also been designated as one of 12 National Key Economic Areas (NKEAs) under the government’s Economic Transformation Programme (ETP). As such, GKL/KV is expected to generate RM193bn ($62.3bn) in incremental GNI by 2020 and create more than 300,000 jobs, according to the Performance Management and Delivery Unit’s estimates. Other NKEA targets include situating GKL/KV among the world’s top 20 most liveable cities by 2020 and placing it in the global top 20 in terms of economic growth.

PROJECTS: To achieve this heightened growth and elevated status, officials estimate the region will need 2.5m additional people by 2020. Of these, 20% are expected to be expatriates and Malaysians returning from overseas, with a major part of the NKEA aimed at bringing these workers back. Indeed, the second of the GKL/KV’s nine entry point projects (EPPs) is “talent attraction”. This EPP is being run by the government agency, TalentCorp, with the creation of 1.7m incremental employment demands in GKL/KV by 2020 its main goal. In 2012 this EPP aims to persuade 1200 expats to return to Malaysia, approve 1100 residence passes, and attract 800 scholars and 100 corporate partners.

Other projects are oriented towards making GKL/KV a prime location for companies and professionals; enhancing the liveability of GKL/KV; cleaning up urban waterways and other urban beautification projects; improving pedestrian walkways; creating iconic places in the city; and upgrading heritage trail routes.

INFRASTRUCTURE: In terms of infrastructure development, the NKEA aims to create better external and internal transport connections, specifically by building a high-speed rail (HSR) line to run between KL and Singapore, alongside a rapid transit project for GKL/KV.

Completion of a feasibility study for the HSR line is scheduled by the end of 2012. When this goes forward, the line could have substantial economic effects for both GKL/KV and Singapore, with GKL/KV’s comparatively low-cost labour suddenly within a two-hour commute from the Lion City. An HSR could also stimulate leisure travel from Singapore to Malaysia, which officials estimate could bring in RM2bn-5bn ($645. 2m-1.6bn) annually. In addition, the HSR line would likely release pent-up demand for property in GKL/KV, which is generally about five times cheaper than Singapore’s.

In addition, local transport is set to be extended via the Klang Valley MYR apid Transit project, which has reducing congestion as its remit. MRT Corporation, the project developer and asset owner, expects the first line to be fully operational by 2017.

REAL RESULTS: According to the ETP 2011 Annual Report, many if not all of the region’s key performance indicators – measurable targets set for the NKEAs to achieve – were met or exceeded in 2011. A prime example is InvestKL – a special agency set up to attract investment from multinational corporations (MNCs) – whose officials in 2011 signed letters of intent with six MNCs, including Toshiba and IBM, to locate their main or regional headquarters in GKL/KV.

InvestKL’s target for 2012 is to sign 10 more such letters of intent, creating 600 employment opportunities in the region. By 2020 the agency is expected to have attracted 100 MNCs to GKL/KV, with a total contribution of RM40bn ($12.9bn) to the nation’s annual GNI. With such numbers, this development area should spearhead regional and national growth, as Malaysia heads for its much-coveted high-income-nation title.


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The Report: Malaysia 2012

Regions chapter from The Report: Malaysia 2012

The Report

This article is from the Regions chapter of The Report: Malaysia 2012. Explore other chapters from this report.

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