Malaysia's GEAR-uP Programme: RM120 Billion GLIC Push to Transform the Economy
•By Pengkaji Dasar
Artikel ini juga tersedia dalam Bahasa Melayu
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In August 2024, the Ministry of Finance launched a programme with the potential to significantly reshape Malaysia's economic landscape - GEAR-uP, or the Government-Linked Enterprises Activation and Reform Programme. The initiative mobilises six major government-linked investment companies (GLICs) to channel RM120 billion in domestic direct investment (DDI) over five years.
For retail investors on Bursa Malaysia, GEAR-uP is far more than an abstract government policy. It carries direct implications for market capitalisation, institutional fund flows, and the sectors set to receive massive investment injections. This article dissects every aspect of GEAR-uP from an investor's perspective.
GEAR-uP stands for Government-Linked Enterprises Activation and Reform Programme - a programme under the Ministry of Finance (MOF) aimed at activating the strategic role of GLICs and GLCs in driving high-value investment, strengthening Malaysia's economic structure, and improving the people's standard of living.
The programme was launched in August 2024 by Finance Minister II, Dato' Seri Amir Hamzah Azizan, under the Ekonomi MADANI framework outlined by Prime Minister Dato' Seri Anwar Ibrahim.
GEAR-uP operates under two core pillars aligned with the Ekonomi MADANI vision:
The first pillar focuses on raising Malaysia's position in the global economy:
The second pillar targets improvements in quality of life:
GEAR-uP is backed by six major Malaysian GLICs that collectively manage hundreds of billions of ringgit in investment funds:
| GLIC | Primary Role |
|---|---|
| EPF (KWSP) | Private sector retirement fund - Malaysia's largest fund manager |
| PNB | Unit trust fund manager including ASB and ASN |
| KWAP | Civil servant retirement fund |
| Khazanah Nasional | Sovereign wealth fund |
| Lembaga Tabung Haji (LTH) | Hajj savings and investment fund |
| LTAT | Armed forces savings fund |
These six GLICs already hold existing investments worth approximately RM440 billion in public markets, bringing total GLIC investment on Bursa Malaysia to roughly RM540 billion when combined with the new GEAR-uP commitments.
Here are GEAR-uP's key financial targets that investors need to know:
| Metric | Target |
|---|---|
| Total DDI over 5 years | RM120 billion |
| Existing public market investments | RM440 billion |
| Market capitalisation growth target | RM100 billion over 5 years |
| Shareholder return target | 7.5% per annum |
| DDI for 2025 | RM25 billion |
| DDI for 2026 | RM30 billion |
| Already deployed (as of June 2025) | RM11 billion |
The RM120 billion figure is equivalent to roughly 6.5% of Malaysia's GDP - a significant sum, especially as it does not add to the government's fiscal burden since the funds come from GLICs, not the national treasury.
GEAR-uP targets several strategic sectors expected to drive Malaysia's economic growth:
Over RM800 million has been channelled into Malaysia's semiconductor ecosystem in the programme's first year. This sector is critical given the ongoing restructuring of global supply chains amid US-China geopolitical tensions.
Investment in green energy, renewables, and carbon management. KWAP launched a RM1.2 billion Catalyst Fund for co-investment with private fund managers in energy transition, food security, and the digital economy.
High-value manufacturing and economic digitalisation including artificial intelligence, cloud computing, and data centres - sectors currently attracting massive investment into Malaysia.
GEAR-uP supports the full startup lifecycle - from early stage to mid-stage companies and onwards to IPO listing. Khazanah launched a RM250 million Mid-Stage Company Programme to strengthen mid-stage enterprises.
As of June 2025, GEAR-uP has achieved the following:
International rating agency Moody's has given GEAR-uP a positive assessment:
Stock market analysts are generally optimistic. Most research houses set their year-end 2026 FBM KLCI target at at least 1,750 points, with CGS International the most bullish at 1,810 points. GEAR-uP is seen as a key positive catalyst for Bursa Malaysia.
However, GEAR-uP is not without controversy. Several concerns have been raised:
Portfolio concentration risk - Increasing domestic allocation raises geographic concentration risk, particularly for Khazanah's portfolio. All four major GLICs already exceed the 30% overseas portfolio threshold set by the Prime Minister.
Fiduciary duty vs government direction - Critics worry about subordinating fiduciary obligations to diplomatic or political interests. GLICs manage the retirement savings of millions and the nation's strategic reserves.
Foreign capital outflows - Despite GEAR-uP's implementation, foreign capital outflows from Malaysian equities reached RM16.4 billion in the first 9 months of 2025 - four times the RM4.2 billion for all of 2024.
GEAR-uP does not operate in isolation. It is part of a broader policy ecosystem:
| Policy | Relationship |
|---|---|
| Ekonomi MADANI | GEAR-uP is the direct implementation mechanism of the "raise the ceiling / raise the floor" vision |
| 13MP (2026-2030) | GEAR-uP's RM30 billion DDI for 2026 is integrated into 13th Malaysia Plan targets |
| Budget 2026 | GEAR-uP's RM30 billion DDI is part of the total RM470 billion budget |
| PuTERA35 | GEAR-uP is listed as a programme under the Bumiputera Economic Transformation Plan 2035 |
| Progressive Wage Policy | GEAR-uP's RM3,100 living wage commitment complements the government's progressive wage agenda |
GEAR-uP, or the Government-Linked Enterprises Activation and Reform Programme, is a programme under the Ministry of Finance that mobilises six major Malaysian GLICs to channel RM120 billion in domestic direct investment over five years.
The six GLICs are EPF (KWSP), PNB, KWAP, Khazanah Nasional, Lembaga Tabung Haji (LTH), and LTAT.
The total commitment is RM120 billion over five years (2024-2029), with RM25 billion for 2025 and RM30 billion for 2026.
Key sectors include semiconductors, energy transition, advanced manufacturing, digital economy, food security, and venture capital/startups.
No. The RM120 billion comes from GLICs, not the national treasury. Moody's has confirmed the programme does not add to the government's fiscal burden.
GEAR-uP injects significant institutional fund flows into Bursa Malaysia. Analysts target the FBM KLCI at a minimum of 1,750 points by end-2026, partly driven by GEAR-uP's positive impact.
GEAR-uP sets a minimum living wage of RM3,100 per month. So far, 34 GLICs and GLCs have committed to implementing this wage for 153,000 workers.
Ekonomi MADANI is the government's overarching economic vision. GEAR-uP is a specific implementation mechanism under Ekonomi MADANI focused on driving investment through GLICs.
GEAR-uP is one of Malaysia's most significant economic initiatives this decade. With RM120 billion in investment commitments from six major GLICs, the programme has the potential to transform the nation's economic and capital market landscape. For retail investors, understanding where GLIC funds are flowing - semiconductors, green energy, digital economy - can serve as an important guide for investment decisions.
If you want to capitalise on investment opportunities arising from GEAR-uP fund flows into Bursa Malaysia, the first step is to have your own investment account.
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