Highlights of PM's speech at Invest Malaysia 2010 on Tuesday, March 30



The backbone of Malaysia's long-term policy agenda will be a new economic model - which will be integrated into the 10th Malaysia Plan and with a longer-term vision that will be delivered through the 11th Malaysia Plan. These can transform the Malaysian economy to become one with high incomes and quality growth over the next decade.  


Three principles from the NEAC report - firstly, high income, secondly, sustainability and thirdly, inclusiveness.

These  three principles will drive Malaysia's economic progress to become a fully developed nation; a competitive economy strategically positioned in the regional and global economic landscape, environmentally sustainable and a quality of life that is all inclusive and encompassing.


There will be a renewed affirmative action policy in the New Economic Model, with a focus on raising income levels of all disadvantaged groups. It will focus on the needs of all our people - those living in the long houses in Sabah and Sarawak and poor rural households in Semenanjung Malaysia (Peninsular Malaysia), who often feel disconnected from the mainstream economic activity.  Fishermen. petty traders.and small farmers also fall under this category .

Malaysia's renewed affirmative action policy will be built on four principles -- must be market friendly, it must be merit based, it must be transparent and
it must be needs based.

The eight Strategic Reform Initiatives will focus on:-

1)    Re-energising the private sector to lead growth;

2)    Developing a quality workforce and reducing dependency on foreign labour;

3)    Creating a competitive domestic economy;

4)    Strengthening the public sector;

5)    Putting in place transparent and market friendly affirmative action;
6)    Building knowledge base infrastructure;

7)    Enhancing the sources of growth; and

8)    Ensuring sustainability of growth.


EPF's investments


The Employees Provident Fund presently dominates local equity and bond markets with up to 50 percent of daily Bursa volume represented by EPF related trades, a situation that is not healthy for the market or for the EPF.  

EPF will be allowed to invest more assets overseas, both diversifying its portfolio and creating more room domestically for new participants.  EPF presently has about 6 percent of assets invested offshore and this will increase significantly.

EPF will also increase its direct investments in the real economy of Malaysia, as an alternative to market investments - taking positions in healthcare, commodities, property and other long-term investments that match EPF's requirements to protect the real rate of return on its assets.


GLCS, Government holding agencies

GLCs and Government holding agencies pursuing strategic collaborations with private sources of capital in Malaysia in order to provide prospective investors with exposure to the government order book and build national competencies.


Divestment of non-core assets

Progress in the area of divesting non-core assets has seen Khazanah alone has over the course of the last nine months divested significant stakes in Tenaga Nasional, Malaysia Airports and PLUS for the purpose of increasing the liquidity of these counters.   But more such progress in this area must be made.

Govt to pursue further such divestments of non-core and non competitive assets that operate in areas where new strategic shareholders have the potential to enhance the creation of value, as compared to them being left within the government stable.  

Khazanah has resolved to divest its controlling 32 percent stake in POS Malaysia through a two-stage strategic divestment process. Khazanah will draw up a bidding and evaluation process to select a new and entreprenuerial shareholder to further modernize POS Malaysia.

Petronas has already identified two sizable subsidiaries with good track records to be listed this year. These initiatives have the goal to reduce the Government's presence directly or indirectly in business activities that are best carried out by the private sector and are a clear signal of our commitment to promoting competition in the economy, risk taking and long-term economic growth that benefits all Malaysians.



Privatisations

Govt considering privatization measures related to, Percetakan Nasional Malaysia Berhad, CTRM Aero Composites Sdn Bhd, Nine Bio Sdn Bhd and Innobio Sdn Bhd with more under consideration.

Land

To promote higher levels of economic investment, expansion and growth, several parcels of land in Jalan Stonor, Jalan Ampang, Jalan Lidcol, Kuala Lumpur have been identified to be tendered out and developed by the private sector.  This initiative will be a good kick-off for more outright sale and joint ventures between the public and private sectors in land development.

Government of Malaysia and the EPF will form a joint-venture to promote the development of 3,000 acres of land in Sungei Buloh into a new hub for the Klang Valley.  This will lead to over RM5 billion of new investments being made that will have an immediate effect on domestic growth, with an enormous potential for the private sector to participate in prominently.