Malaysian Prime Minister Datuk Seri Najib Razak today unveiled economic reforms that he said would make his country a developed nation by 2020, but provided few clues as to how he would get there. "
I pledge that we will work to develop and implement economic reforms needed for the country to grow further," Najib told an investment conference in the Malaysian capital. Najib said the "New Economic Model" will see more divestments of government holdings in listed companies and the government is still in consultation on the reform of its subsidy policy.
However, there was no timeframe for the new taxes and for cuts in a subsidy regime that sees Malaysians pay one of the lowest prices for petrol in Asia and that cost the country RM24.5 billion in 2009 out of RM160.2 billion in federal government operating spending. Bernama reported that the New Economic Model targets to raise per capita income of Malaysians from US$7,000 to US$15,000 in 10 years time, said Najib. The Government will review affirmative action plan to embrace more competitive economic policies which are market friendly and merit base, said Najib Malaysia will corporatize its industrial development authority and rename it the Malaysia Investment Development Authority to attract capital investment, Najib said. Malaysia will revise its affirmative action policies to focus on the bottom 40 per cent of households by income, Najib said. The new policies will be fair and transparent, he said. - Reuters/Bernama
Keypoints of the Prime Minister's speech Tuesday:
*Petronas has identified two subsidiaries to be listed on Bursa Malaysia
* Government and EPF to jointly develop 3,000 acres of land in Sungai Buloh that will produce activities worth RM5bil
Prime Minister Datuk Seri Najib Tun Razak speaking at the launch of the New Economic Model (NEM) in Kuala Lumpur on Tuesday.
*Pos Malaysia to get new investor; wages to be improved
*Khazanah Holdings to divest its investment in Pos Malaysia after detailed study and review of postal services
*EPF will be allowed to invest more money overseas to get better returns
*Government to allow private sector investment in GLCs through new coalition of public-private sector
*MIDA to be corporatised to make it more flexible, empowered to draw in more investment, including offering instant investment incentives
*Private sector innovation to be supported
*Modernisation of our education to create a world-class workforce is imperative to achieve high income nation status
*Special Economic Reform unit will be set up to ensure the successful implementation of the NEM and the choosing of economic activities that will be declared as National Key Economic Activities or the country's economic champions
*Government has identified 6 National Key Economic Activities to be the engines of growth to generate high growth rates including oil and gas, electronic and electrical, Tourism, Agriculture and Financial Services
*There's a need to change rent-seeking and patronage system that has wracked our old system and the NEM must overcome this
*NEM will focus on inclusiveness where all Malaysians of all races will contribute
*The NEM aims to take Malaysia to a high income country with per capita income of US$15,000, from the current US$7,000, in 10 years
*We will use NEAC report as a roadmap to a new Malaysia but welcome public input to make them part of the decision process
*NEM forms the backbone of reform and is vital in the rebuilding of the Malaysian economy
*Don't be fooled by calls to protect the status quo. Old ways cannot be continued. We have to break-out of middle income trap
*Government relooking at the subsidy system and introduction of GST which are common sense policies that need to be implemented
*Najib pledges to carry out the economic reforms needed for businesses to grow and people to prosper
*The NEM report by NEAC is 160 pages and warns that Malaysia can fall further behind its neighbour