PM:New Economic Model to benefit all

Post date: May 12, 2010 11:49:51 AM

Published: Tuesday March 30, 2010 MYT 9:47:00 AM

Updated: Tuesday March 30, 2010 MYT 4:00:26 PM

KUALA LUMPUR: The New Economic Model (NEM) unveiled by Prime Minister Datuk Seri Najib Tun Razak Tuesday will generate benefits for all Malaysians, irrespective of race under its inclusive growth goal and approach.

The pro-poor growth warrants that no groups be marginalised and the essential needs of the people will be satisfied, according to the NEM.

Under the NEM, inclusiveness will enable all communities to contribute to and share in the wealth of the country.

It points out that a key challenge of inclusive growth is the design of effective measures that strike a balance between the special position of the Bumiputera and legitimate interests of different groups.

While saying that ethnically divide societies are more prone to violent conflicts, NEM emphasises that the multi-racial composition of the Malaysian population is still its outstanding feature and this ethnic diversity will always be with us.

As such, the market-friendly affirmative action programmes in line with the principle of inclusiveness will target assistance to the bottom 40 per cent of households, of whom 77.2 per cent are Bumiputra and many are located in Sabah and Sarawak, and ensure equitable and fair opportunities through transparent processes.

It also allows access to resources on the basis of needs and merit to enable improvement in capacity, incomes and well-being, and has sound intellectual frameworks for better monitoring and effective implementation.

"The ETP (Economic Transformation Programme) will provide mechanisms to strengthen the capability of the bottom 40 per cent so that they can take advantage of opportunities to secure better jobs, raise their productivity and grow their income.

"This group will be assisted with programmes to build skills so that they can use their entrepreneurial instincts to start and grow their businesses," it says.

The NEM will also ensure equality be achieved through competition that is complemented with merits and recognition.

"Families will be endowed with the opportunity and capabilities to pursue their aspirations in connected, sophisticated modern cities, townships and villages. They will live, work and study in localities free from the fear of crime, the indignity of discrimination and the anxiety of need," it says.

Below are some of the keypoints in Najib's speech:

*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

*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. It is to be renamed Malaysian Investment Development Authority

*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

KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak announces Tuesday the highly anticipated New Economic Model (NEM) that aims to transform the country into a high-income nation.

The NEM is part of the four key thrusts of Prime Minister Datuk Seri Najib Tun Razak's agenda.

The others are the 1Malaysia, People First, Performance Now concept; the Government Transformation Programme (GTP); and the 10th Malaysia Plan (10MP).

Najib unveiled the NEM's framework at the Bursa Malaysia's Invest Malaysia conference on Tuesday.

It was at the same function last year that Najib announced various liberalisation measures to make Malaysia more business friendly including the doing away with Foreign Investment Committee requirements.

The NEM recommendations were drawn up by the nine-man National Economic Advisory Council, which is headed by former Maybank chief and ex-minister Tan Sri Amirsham A. Aziz. The NEAC was formed on June 1.

The framework to be unveiled today is the first part of the NEM.

The NEAC is expected to submit the second part of its report on how the model should be implemented after studying all the feedback on the framework from various groups.

Najib is expected to elaborate on the targets of the NEM and the pitfalls facing the country if the recommendations are ignored.

Besides Amrisham, the members of the council include London School of Economics head of department Dr Danny Quah, finance expert Dr Yukon Huang and the World Bank's East Asia chief economist Dr Homi J. Kharas. All three are advisers to the World Bank.

Datuk Dr Zainal Aznam Yusof, a distinguished fellow of the Institute for Strategic and International Studies (ISIS) Malaysia, is also on the council.

Joining Zainal from ISIS are current director-general Dr Mahani Zainal Abidin and its former research director Datuk Dr Hamzah Kassim.

The other distinguished members are China Bank Regulatory Commission chief adviser Datuk Andrew Sheng and Universiti Sains Malaysia vice-chancellor Professor Tan Sri Dzulkifli Abdul Razak.

The sole corporate representative is Datuk Nicholas S. Zefferys, the past president of the American-Malaysia Chamber of Commerce.