In this fortnightly blog, ICE's Director of Policy Chris Richards looks at developing policy landscape for infrastructure, what decisions mean, and their implications, so that infrastructure professionals can play their part in shaping the discussion.
Malaysian government publishes an updated five-year development plan
The Malaysian prime minister has recently launched the 12th Malaysia Plan, a five-year plan to ensure 'sustainable economic growth and more equal distribution of opportunity'. The initiatives in the Plan will be backed by RM400 billion over the five years, compared to RM260 billion spent in the 11th Malaysia Plan, which ran for five years to 2020.
Infrastructure development features heavily in the plan, as well as a commitment for Malaysia to be a carbon neutral country by 2050. To achieve this, both a carbon price and carbon tax will be introduced.
Other key features in the 12th Malaysia Plan (12MP) include:
- Three themes - resetting the economy; strengthening security, wellbeing and inclusivity; and advancing sustainability.
- Four policy enablers - focus on developing future talent; accelerating technology adoption and innovation; enhancing connectivity and transport infrastructure; and strengthening the public service.
- 14 game changers including - growing less developed states through targeted infrastructure investment.
The Plan also targets GDP growth of between 4.5 to 5.5% each year and labour productivity growth of 3.6% each year. By the end of the five-year period, it is hoped that the activities in 12MP will see average monthly household incomes grow by RM2,905 compared to the outturn at the end of the 11th Plan.
ICE’s view
As we said at the time of Malaysia's pre-Budget report, 12MP is the first five-year plan under Malaysia's Shared Prosperity Vision 2030 (SPV2030). The previous Malaysian national vision, Malaysia 2020, was featured in the Enabling Better Infrastructure programme as a good example of how to establish a national vision that subsequently drives infrastructure investment. 12MP is a good example of how to further drive action by linking national targets, such as on earnings, with a structured framework of investment including in infrastructure.
Ireland updates its National Development Plan outlining a scale up in national investment
The revised National Development Plan (NDP), which updates the previous 2018 capital spending programme, outlines national level investments to address 'Covid-19, Brexit, housing, health, climate action and a population projected to grow by one million people between 2016 and 2040'. Over the decade to 2030, €165bn will be invested, which the Plan outlines is the equivalent of 5% of gross national income, above the EU average of 3%.
The NDP is heavily reliant on infrastructure investment and sets out the benefits in direct-effect terms, noting that approximately 47,000 direct and 33,000 indirect construction jobs will be sustained by the investment on average each year, resulting in increased GDP, employment and wages.
Focus areas include:
- Securing the sustainable growth of more compact urban and rural settlements supported by jobs, housing, community services and amenities;
- Enhancing inter and intra-regional transport connectivity;
- Improving and enhancing sustainable travel options (active travel and public transport);
- Improving international connectivity; and
- Delivering climate action.
The NDP, as with similar investment plans elsewhere, also highlights the need to improve project delivery. Developing the capacity and capability of public sector bodies to ' effectively deliver public investment'. This focus includes how the government plans to support the Irish construction sector in driving innovation and digital adoption.
The UN Sustainable Development Goals (SDGs) are also reinforced in the NDP with a ‘whole-of-government’ approach taken in Ireland, with each minister being given specific responsibility for implementing individual SDG targets related to their ministerial functions.
A forthcoming National Implementation Plan will seek to increase engagement with the SDGs across sectors and society.
ICE’s view
There is a lot of detail in the NDP, reflecting the advance state of some investments. It is also good to see plans to further integrate achieving the SDGs into day-to-day government business and decision making, which would be a good pivot away from the direct-effect construction metrics that feature in the NDP. However, the big question post-publication was whether or not the sizeable investment portfolio can be delivered in the timescales envisaged.
Ireland is not unique in having projects going over time and over budget, and as policymakers increasingly turn to infrastructure development to address historic regional inequalities, recover from Covid-19 and support climate action and resilience, improving certainty in delivery will be critical.
In case you missed it...
- ICE has published an insight paper exploring how subnational leaders in England could help the UK reach net-zero greenhouse gas emissions by 2050 as part of a new programme of engagement.
- Chair of the APPGI, Andrew Jones MP, provides his insight on the future of skills demand and supply in the UK.
Check back in a fortnight for the next edition of the ICE's Infrastructure Policy Watch. You can also sign up to ICE Informs to get a monthly digest of the latest policy activities from ICE, including calls for evidence to support our ongoing advice to policymakers.
