Malaysia To See Single Biggest Transformation Since 1970
KUALA LUMPUR, Dec 1 (Bernama) -- The country's economy is set to see its single biggest transformation since the introduction of the New Economic Policy in 1970, with the introduction of bold changes that will, among others, focus on rebuilding the private sector's investor confidence.
Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah, said the economy has stagnated.
"We have lost our competitive edge to remain as leader of the pack in many sectors of the economy and our private investment has been steadily on the decline," he said at the opening of the National Economic Outlook Conference 2010-2011 here on Tuesday.
He said the private sector investment was half of what it was since the Asian crisis while both the manufacturing and service sectors had become less capital-intensive.
"For the period 2000-2007, investments in manufacturing dropped from 30.6 per cent to 21.7 per cent and the services sector, from 26.8 per cent to 22.1 per cent," he said.
Among peers, China, India, Vietnam, Indonesia, Philippines and Thailand, Malaysia's real economy growth in the last three years was the second lowest at 5.5 percent as the manufacturing sector was not investing up the value chain and the services sector's growth was low and under-developed.
"The transformation is particularly urgent when we take the external environment into account as the global environment is changing," he said.
Ahmad Husni said the heavy responsibility of the transformation was on the New Economic Advisory Council set up by Prime Minister, Datuk Seri Najib Tun Razak.
Among others, he said, the government must also consider the gradual dismantling of the open-ended protection of specific sectors and industries which had led to complacency and artificial levels of supply.
"The long-term success of the nation's economy must take precedence over the short-term interests of a few protected groups.
"There's a need for better competition policies and regulatory environment which can allow market forces to operate in an orderly manner," he said.
He said half of the top thirty companies listed on Bursa Malaysia in terms of market capitalisation were government-linked companies (GLCs).
Hence, he said, there was a widespread perception that due to the substantial role of the GLCs in the market place, the private sector, the true entreprenuer-run private sector, believed "he is crowded out".
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