In recent years the prime minister has used his speech at Invest Malaysia (an annual conference organised by the local stock exchange, Bursa Malaysia) as a launch pad for important policy initiatives. Mr Najib littered his speech at this year's conference in mid-April with impending changes, all of which were broadly in line with previous announcements.

A second Capital Market Masterplan (CMP) was announced at the conference. The main aim of the plan, known as CMP2, is make effective use of domestic savings to boost capital formation and economic growth. Based on an official assumption of average real GDP growth of 6.5% a year in 2011-20, Malaysia's capital market is forecast to more than double in size, from M$2trn (US$620bn) in 2010 to M$4.5trn by 2020; with greater internationalisation, declared Mr Najib, this might even rise to M$5.8trn by the latter year. The strongest expansion is planned for the Islamic capital market, which is expected to grow from M$1.1trn in 2010 to M$2.9trn by 2020. The investment-management industry is expected to more than double in size, while the derivatives market will also grow substantially. A shorter-term aim of the Securities Commission is to establish a regulatory framework for private pension funds this year. In the third quarter of 2011 several measures will be introduced, including an easing of fundraising regulation, and equity-market dealers will be licensed to trade in the derivatives market.

In an attempt to increase the pool of skilled labour-a vital element of the plan to raise Malaysia's national income-Mr Najib announced a 15% income tax rate for a period of five years as an incentive for Malaysian expatriates, many of whom have earned degrees at overseas universities, to return home. Income tax for residents currently ranges from zero to 26%. At least 1.5m Malaysians are thought to have emigrated since independence, in part owing to pro-Malay positive-discrimination policies. The government will also introduce a new Residence Pass for highly skilled foreign workers, valid for ten years, and will apply residence rules more flexibly.

The conference also received a progress report on the Economic Transformation Programme (ETP), which aims to turn Malaysia into a high-income nation by 2020. Since the publication of the project's road map last October, 60 projects with a value of M$95.4bn (around US$30bn) have been confirmed, out of a total of 131 projects outlined in the ETP with a combined value of M$794.5bn. The projects that have already received the go-ahead will add an estimated M$137.2bn to gross national income, while the ETP as a whole is expected to add M$1.1trn. The impressive list of projects, together with plans to list the core businesses of a number of government-linked companies, have generated considerable interest among portfolio investors. But worries persist that the ETP may be part of a slick marketing campaign by the government, which is taking credit for investments that would have occurred even in the absence of the programme.