|New Economic Model Released Next Week , March 24th 2010|
| IN THIS UPDATE: || |
The US-ASEAN Business Council is in the process of redoing its Malaysia mailing list. If you have colleagues that did not receive this email or if these emails should be directed to someone else in your company, please contact Mike Orgill at email@example.com.
The Council will be hosting a business dialogue and dinner in honor of Prime Minister Najib on April 14. For more information, please contact Marc Mealy at firstname.lastname@example.org.
Deputy Prime Minister Muhyiddin Yassin will be visiting Chicago on May 5. For more information, please contact Marc Mealy at email@example.com.
New Economic Model
NEM to rejuvenate education, says Najib, Malaysian Insider, March 18
Datuk Seri Najib Razak (picture) wants the New Economic Model (NEM) to focus on revitalising the country’s education, a sector educationists say is plagued by plunging quality. Under the NEM, the Najib administration will come up with more merit-based programmes, a move his predecessors have long called for but faced resistance from within his ruling Umno as it will dismantle some, if not all race-based programmes, in line with his all encompassing 1 Malaysia concept.
New Economic Model to end subsidy regime, Malaysian Insider, March 18
The government is considering proposals to end its subsidy regime and phase in a new goods and services tax as it begins dismantling a four-decade race-based economic system that has deterred foreign investment. The economic regime adopted after race riots in 1969 has given a wide array of economic benefits to the 55 per cent Malay population, but investors complain it has led to a patronage-ridden economy that has resulted in foreign investment increasingly moving to Indonesia and Thailand.
PM To Announce Administrative Reforms To Support New Economic Model, Bernama, March 24
Prime Minister Datuk Seri Najib Tun Razak will announce administrative reforms when he introduces the New Economic Model (NEM), next week, to ensure its success and effectiveness on the Malaysian economy and the people. "The emphasis will be on the execution of the NEM in order to achieve the government's objective of transforming Malaysia into a high-income economy and to spur deveopment," he told Malaysian reporters. Najibsaid: "Although the new economic model is good but if the implementation is not planned well, with the right people in place, then we will not be able to achieve the desired target." When asked if the administrative reforms would involve both the International Trade and Industry and Finance ministeries, he said: "Let's wait and see next week".
Malaysia to roll back affirmative action: Najib, Business Times, March 23
Malaysian Prime Minister Najib Razak said he’ll keep rolling back policies that give preferential treatment to ethnic Malays as he seeks to lure investment and boost stock-market liquidity. “Whether we will do away completely with affirmative action is something we have to consider very carefully,” Najib said in an interview in Hong Kong today. “Affirmative action will be more market friendly, more transparent and will be more merit-based.”
Najib sees higher FDI after coming admin reform, Reuters, March 23
Malaysia should see increased foreign direct investment (FDI) this year after the government implements administrative reforms, the country's Prime Minister Najib Razak said. The country's new economic model, to be announced later this month, would include unspecified administrative reforms that should result in a "marked improvement" in FDI, Razak told an investment forum in Hong Kong on Tuesday, March 23.
Defense & Security
U.N. Creates Center for Asian Disaster Relief, New York Times, March 21
The response to disaster-stricken communities in Asia will soon be bolstered by a new regional supply hub to be set up in Malaysia by the U.N. World Food Program. The hub, which will become the agency’s first humanitarian response depot in Asia, will stock emergency supplies like first aid kits, generators, water purification units, tents, satellite phones and high-energy biscuits. It is designed to deliver relief supplies within 48 hours of a crisis.
Malaysia to launch long-delayed biofuel mandate in 2011, Reuters, March 24
Malaysia has asked petroleum companies to bear the extra cost of selling diesel blended with palm oil from June next year to kickstart sales of the green fuel after a four-year delay. The world's No.2 palm oil producer has struggled to implement a mandate to push the blended fuel and support the palm industry first introduced in 2007 as the government was reluctant to subsidise biofuel blends to match diesel prices at the pump.
Information & Communications Technology
RM1b in laptops for poor students, Malaysian Insider, March 24
RM1 billion will be taken from the Malaysian Communication and Multimedia Commission (MCMC) Universal Service Provision fund, to buy notebook computers for disadvantaged students as part of the National Broadband Initiative (NBI). The allocation was announced by Prime Minister Datuk Seri Najib Razak at the launching of the NBI this evening.
TM launches high speed broadband, The Star, March 24
Telekom Malaysia Berhad (TM) launched its “UniFi” next-generation High Speed Broadband (HSBB) service at Dataran Merdeka here on Wednesday, but did not release pricing details for the new packages.UniFi promises a world of faster, richer and more reliable online experience, the company said in a statement, adding that pricing details would be disclosed on Thursday.
Broadband - The New Buzzword After NBI Roll-out, Bernama, March 23
"Broadband" will be the new buzzword for every Malaysian when the National Broadband Initiative (NBI) goes into full gear. With the tagline "Broadband For All", the Malaysian Communications and Multimedia Commission (MCMC), which is spearheading the bold initiative, will ensure that all Malaysians, either in the suburbs, rural or remote areas, have access to broadband services.
Three men, three messages, one goal — to be top dog in MCA, Malaysian Insider, March 23
The heat is on in the MCA presidential race as the competitors in the three-way battle hit hectic campaign trails today. The messages that the three — incumbent Datuk Seri Ong Tee Keat, Datuk Seri Dr Chua Soi Lek and Tan Sri Ong Ka Ting — send out over the next few days will be crucial in determining their fates and that of the party’s when the March 28 polls arrive.
GST postponement not due to lack of political will, says Husni, Malaysian Insider, March 21
The government decision to postpone tabling of the Goods and Services Tax (GST) Bill for second reading in parliament is not due to lack of political will. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the government’s political will is putting the public first by providing adequate information before GST is implemented to replace the Sale and Service Tax (SST).
More English classes for all schools, says DPM, The Star, March 20
All schools will have increased hours of English lessons per week by 2011. Deputy Prime Minister Tan Sri Muhyiddin Yassin said all Chinese and Tamil schools would have also extra Bahasa Malaysia lessons per week in addition to increased English classes.
Analysts: Consumption Led-growth Vital In Re-engineering Malaysian Economy, Bernama, March 22
Consumption led-growth is vital in re-engineering the Malaysian economy, according to senior economic analysts. Senior Advisor to the Asian Institute of Finance, Professor Datuk Dr Sudin Haron said basically, there are four main components that drive the economy of a particular country - consumption, investment, government spending and net export. "Therefore, if the government wants to expand the economy, it has to introduce a policy that increases consumption and investment, spend more money for developmental projects and produce more products for export purposes," he told Bernama today.
U.S. authorities break huge counterfeit goods ring, AP, March 19
Federal prosecutors in Maryland announced the indictments Friday of nine people on charges of smuggling 120,000 pairs of counterfeit Nike shoes and half a million counterfeit Coach handbags through the Port of Baltimore. According to the 72-count federal indictment, undercover officers from U.S. Immigration and Customs Enforcement infiltrated the massive operation in 2008, delivering a shipment of 10,000 Nike shoes to Brooklyn, N.Y. The arrests came this week. The products were mostly made in Malaysia and China. Three U.S. citizens are charged with smuggling, trafficking counterfeit goods and money laundering. Four Chinese citizens and two Malaysians also are charged.
Morgan Stanley raises ringgit forecast, Business Times, March 19
Morgan Stanley has raised its end-2010 forecast on ringgit to 3.13/USD from 3.20, citing Malaysia’s improving balance of payments and the central bank’s policy tightening. "We also recognise that the ringgit has a potential ’bonus fundamental’, given that it is perceived to benefit the most from a yuan revaluation scenario in Asia ex-Japan,” analysts at the bank say in a note.
Malaysia Needs Fiscal Reforms: Fitch, Bernama, March 23
Malaysia needs to implement structural fiscal reforms like a goods and services tax in order to improve its credit rating, said Fitch Ratings. Its Asia sovereign ratings director, Andrew Colquhoun, said structural reforms to raise government revenue as a percentage of gross domestic product (GDP) in a sustainable way and a broader structural economic reforms to increase the investment rate to give longer term growth prospects were needed. The rating agency last June cut Malaysia's local currency ratings to "A" from "A " due to concerns over the country's growing budget deficit which hit 7.4 per cent of GDP in 2008.
Malaysia mulls sovereign bond issue, New Straits Times, March 23
Malaysia is seriously considering a sovereign bond issue purely to gauge its credit worthiness and to get the right kind of signals from foreign fund managers, Prime Minister Datuk Seri Najib Tun Razak said here Tuesday. He said the reaction from foreign fund managers who he met at the Credit Suisse Asian Investment conference here was that the market would be very receptive to the idea.
Malaysia Lifts GDP Forecast, Plans Supportive Policy, BusinessWeek, March 24
Malaysia’s central bank raised the country’s 2010 economic forecast, pledging that its monetary policy will continue to support growth even as it begins to “normalize” interest rates amid an “uneven” global recovery.
“We do not expect the central bank to raise interest rates at every policy meeting given expectations of an uneven global economic recovery,” said Peck Boon Soon, an economist at RHB Research Institute Sdn. in Kuala Lumpur. “We believe a mild and gradual increase in interest rates from an extremely low level would unlikely affect consumer spending and business activities in a material way.”
Invest abroad, Malaysia firms told, Business Times, March 24
In strengthening Malaysia's economic development via capital flows, local companies should be encouraged to invest abroad to ensure the country's long-term competitiveness, says Bank Negara Malaysia. "Investments abroad by Malaysian companies can be expected to continue to remain sizeable in the future and this development is in response to the changing structure and competition in the region and in the global economy," the central bank said in its Annual Report 2009 released today.
Report Says Migrants in Malaysia Face Abuse, New York Times, March 24
Amnesty International said in a report released on Wednesday that migrant workers faced exploitation and widespread abuse in Malaysia, and accused the government of not doing enough to protect them.Malaysia, a country of 28 million, relies heavily on foreign labor, with an estimated two million foreigners working legally and another million illegal workers from countries like Indonesia, India, Bangladesh, Nepal and Myanmar.