Wednesday March 31, 2010
MALAYSIA’S gross national income (GNP) is about US$7,600 annually or RM2,200 a month and currently, almost 4% of all Malaysians and over 7% of rural Malaysians live below the poverty line.
The NEM report said that half a century after independence, these figures provided a sobering reminder of how far Malaysia still had to go before it could become an advanced, high income economy.
From independence in 1957 until the Asian financial crisis, Malaysia’s economic development was impressive by any measure. In the mid-1990s, in the run-up to the 1997 Asian financial crisis, Malaysia’s gross domestic product (GDP) grew at an average rate greater than 9% annually.
Since 1997, however, the GDP growth rate had been practically halved (not even taking into account the 2008 global financial crisis).
It said the Asian financial crisis was a watershed in Malaysia’s growth. Since the crisis, the country’s position as an economic leader in the region had steadily eroded.
The crisis also caused significant outflow of foreign portfolio investment and foreign direct investment as well as a fall in overall investment, which had not recovered.
Since the Asian financial crisis, Malaysia had seen a major change in aggregate investment trends. While countries such as Indonesia had seen notable recovery in investment levels since the crisis, Malaysia had seen no recovery, with aggregate investments levels as a percentage of GDP continuing to decline.
Although Malaysia ranked 23rd out of 183 countries overall, doing business in Malaysia was more difficult than in competing countries, especially in aspects related to entry and exit of firms.
Malaysia’s place on the Global Competitiveness Index had dropped to 24th in 2010 from 21st previously, indicating that the country was becoming less attractive as an investment destination. Institutional structures, processes and policies also contributed to the difficulty of doing business in Malaysia.
Export is, and had been for some time, a key focus of Malaysia. Exports had focused mainly on electrical and electronics (E&E) products which accounted for more than 40% of the country’s total exports.
GDP growth in Malaysia was sensitive to the fortunes of the E&E sector, where recent decline in global growth was quickly reflected in a fall in such exports, exposing the country to volatility in global markets.
Skilled jobs were most often synonymous with higher wages and in Malaysia, not enough high-wage jobs had been created.
This reflected the dominance in Malaysia of low value-added good which required low-skilled labour. As a result, only 25% of Malaysia’s labour force comprised highly skilled workers, compared with significantly higher proportions in Singapore, Taiwan and South Korea.
The human capital situation in Malaysia was not improving. Instead, the country was losing the skilled talent needed to drive future growth.
The exodus of talented Malaysians was further compounded by the fact that the education system, despite high fiscal outlays through several reform efforts, was not effectively delivering the skills needed.
Against the backdrop of strong economic growth and the New Economic Policy, Malaysia had made impressive headway with regard to overall poverty reduction.
Inequality, however, remained a real challenge for Malaysia. Although absolute poverty had been reduced, 40% of households continued to have very low income levels, particularly those in rural areas.
Starting as a low-income country in 1957, Malaysia briskly climbed the ladder to attain upper middle-income status by 1992.
But since becoming an upper middle-income country, Malaysia had largely stayed where it was. Although its income trajectory continued to exhibit a gradual uptrend, the country remained far below the “high income” boundary.
As global investors were increasingly turning to large-scale markets to lower costs, small economies like Malaysia must remove all costly barriers to give investors compelling reasons to put their money and create high wage jobs here.
Malaysia must act now before its position deteriorated any further.
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Rabu, 31 Mac 2010
thestar: NEM calls for clusters of SMEs
Wednesday March 31, 2010
THE New Economic Model (NEM) calls for the formation of clusters of small and medium enterprises (SMEs) within the same location and the transformation of the Malaysian Industrial Development Authority (Mida) into an effective one-stop agency.
“Firms in such clusters are less prone to move to new locations abroad. Those SMEs involved in innovation and technologically advanced production, creating spill-over effects, will receive support from the Government.
“Such new start-ups will need help with specific problems, especially distortions and restrictions in the licensing and regulatory environment.
“To ease such problems, Mida should be empowered to take decisions and coordinate among the many government departments to facilitate start-ups and licensing.
“It must become a real and effective one-stop agency, not only one in name and aspiration,” according to the NEM report.
The report added that providing good infrastructure was not good enough to encourage such firms to move up the value chain.
“At the same time, many firms, especially those engaged in assembly operations, are gradually moving offshore to cheaper regional competitors, as distortions and barriers in Malaysia drive up costs.
“Malaysian industry is otherwise at risk of becoming hollowed out,” the report added.
Government policies will correct the excessive use of foreign labour, which is undermining the country’s goal to achieve a high-income status.
“Up to the late 1990s, inflows of foreign workers served the country well in moving from low to middle income status.
“Since then, Malaysia’s policies on foreign workers have become incoherent and run counter to the national objective of achieving high income status.
“Firms’ obsession with the pursuit of short-term profits makes them focus solely on keeping costs down. This obsession makes them prefer to tap into the large pool of unskilled workers available in neighbouring countries, leading to excessive use of foreign labour in Malaysia,” the report said.
To develop a quality workforce and reducing dependency on foreign labour, NEM proposes to increase local talent over time, re-skill the existing labour force, retain and access global talent, remove labour market distortions that constrain wage growth, and reduce reliance on foreign labour.
This would involve implementing measures that include revamping the education system, upgrading skills of the bottom segment of the Malaysian labour force through continuing education and training, reviewing existing programmes to attract highly-skilled Malaysians overseas to return home, and offering permanent residence for ex-Malaysians and their families, and enforcing equal labour standards for local and foreign labour.
“The last measure would also address international concerns about Malaysia’s poor treatment of foreign workers.
“A more rational system of levies and the utilisation of the proceeds to fund social services for migrant workers would address equity concerns,” the report said.
The NEM also called for the steady removal of subsidies and price controls, accompanied by a rationalisation of tax incentives.
“Removing subsidies and price controls can reduce operating expenditures over time and restore a better balance to fiscal deficits.
“The savings from the removal of subsidies van then fund a social safety net scheme, targeted at beneficiaries from poor households and vulnerable groups.
“This savings can also be applied to a Transformation Fund to help firms displaced by the reforms to adjust to the new market environment.
“Price distortions will be removed as a result, allowing for the restoration of market signals to regularise the demand and supply of products previously controlled,” the NEM report said. Label: Malaysiaku 0 ulasan
THE New Economic Model (NEM) calls for the formation of clusters of small and medium enterprises (SMEs) within the same location and the transformation of the Malaysian Industrial Development Authority (Mida) into an effective one-stop agency.
“Firms in such clusters are less prone to move to new locations abroad. Those SMEs involved in innovation and technologically advanced production, creating spill-over effects, will receive support from the Government.
“Such new start-ups will need help with specific problems, especially distortions and restrictions in the licensing and regulatory environment.
“To ease such problems, Mida should be empowered to take decisions and coordinate among the many government departments to facilitate start-ups and licensing.
“It must become a real and effective one-stop agency, not only one in name and aspiration,” according to the NEM report.
The report added that providing good infrastructure was not good enough to encourage such firms to move up the value chain.
“At the same time, many firms, especially those engaged in assembly operations, are gradually moving offshore to cheaper regional competitors, as distortions and barriers in Malaysia drive up costs.
“Malaysian industry is otherwise at risk of becoming hollowed out,” the report added.
Government policies will correct the excessive use of foreign labour, which is undermining the country’s goal to achieve a high-income status.
“Up to the late 1990s, inflows of foreign workers served the country well in moving from low to middle income status.
“Since then, Malaysia’s policies on foreign workers have become incoherent and run counter to the national objective of achieving high income status.
“Firms’ obsession with the pursuit of short-term profits makes them focus solely on keeping costs down. This obsession makes them prefer to tap into the large pool of unskilled workers available in neighbouring countries, leading to excessive use of foreign labour in Malaysia,” the report said.
To develop a quality workforce and reducing dependency on foreign labour, NEM proposes to increase local talent over time, re-skill the existing labour force, retain and access global talent, remove labour market distortions that constrain wage growth, and reduce reliance on foreign labour.
This would involve implementing measures that include revamping the education system, upgrading skills of the bottom segment of the Malaysian labour force through continuing education and training, reviewing existing programmes to attract highly-skilled Malaysians overseas to return home, and offering permanent residence for ex-Malaysians and their families, and enforcing equal labour standards for local and foreign labour.
“The last measure would also address international concerns about Malaysia’s poor treatment of foreign workers.
“A more rational system of levies and the utilisation of the proceeds to fund social services for migrant workers would address equity concerns,” the report said.
The NEM also called for the steady removal of subsidies and price controls, accompanied by a rationalisation of tax incentives.
“Removing subsidies and price controls can reduce operating expenditures over time and restore a better balance to fiscal deficits.
“The savings from the removal of subsidies van then fund a social safety net scheme, targeted at beneficiaries from poor households and vulnerable groups.
“This savings can also be applied to a Transformation Fund to help firms displaced by the reforms to adjust to the new market environment.
“Price distortions will be removed as a result, allowing for the restoration of market signals to regularise the demand and supply of products previously controlled,” the NEM report said. Label: Malaysiaku 0 ulasan
thestar: No choice but to change, say NEAC members
Wednesday March 31, 2010
MEMBERS of the National Economic Advisory Council (NEAC) say the challenges Malaysia is facing leave the country no choice but to start changing the way things operate or face the prospect of being left behind.
NEAC chairman Tan Sri Amirsham Abdul Aziz said although there were doubts currently about the scope and magnitude of the changes, no huge leap was required, for example, for low-income workers to achieve higher wages.
“To achieve that quick move to higher wages, these workers need to multi-task, to be more productive,” he told reporters during a briefing on the New Economic Model (NEM) on the first day of Invest Malaysia 2010.
Amirsham said the timing and sequence of the changes were important but that workers who were displaced would not be forgotten as a wider social and worker safety net would be set up to support those affected.
He said the NEAC’s recommendations under the NEM were still at the discussion stage and would only be released in its full form in June when the 10th Malaysia Plan is announced.
Datuk Seri Panglima Andrew Sheng said among the changes recommended by the NEAC was growth through productivity instead of capital accumulation.
Professor Danny Quah said the country faced a situation where growth has halved compared with before the Asian financial crisis of 1997/1998, private investment has fallen significantly, the bottom 40% made RM1,500 per month on average and four-fifths of the workforce had only SPM qualification.
“We’re at the crossroads, the way is clear, doing nothing is not an option,” he said.
Quah said although there would be a big push towards the NEM goals, there would be a constant process of review.
On whether there was resistance to change, Datuk Dr Hamzah Kassim said the most challenging part was social transformation. “People must feel that they’re on a burning platform,” he said. Label: Malaysiaku 0 ulasan
MEMBERS of the National Economic Advisory Council (NEAC) say the challenges Malaysia is facing leave the country no choice but to start changing the way things operate or face the prospect of being left behind.
NEAC chairman Tan Sri Amirsham Abdul Aziz said although there were doubts currently about the scope and magnitude of the changes, no huge leap was required, for example, for low-income workers to achieve higher wages.
“To achieve that quick move to higher wages, these workers need to multi-task, to be more productive,” he told reporters during a briefing on the New Economic Model (NEM) on the first day of Invest Malaysia 2010.
Amirsham said the timing and sequence of the changes were important but that workers who were displaced would not be forgotten as a wider social and worker safety net would be set up to support those affected.
He said the NEAC’s recommendations under the NEM were still at the discussion stage and would only be released in its full form in June when the 10th Malaysia Plan is announced.
Datuk Seri Panglima Andrew Sheng said among the changes recommended by the NEAC was growth through productivity instead of capital accumulation.
Professor Danny Quah said the country faced a situation where growth has halved compared with before the Asian financial crisis of 1997/1998, private investment has fallen significantly, the bottom 40% made RM1,500 per month on average and four-fifths of the workforce had only SPM qualification.
“We’re at the crossroads, the way is clear, doing nothing is not an option,” he said.
Quah said although there would be a big push towards the NEM goals, there would be a constant process of review.
On whether there was resistance to change, Datuk Dr Hamzah Kassim said the most challenging part was social transformation. “People must feel that they’re on a burning platform,” he said. Label: Malaysiaku 0 ulasan
thestar: All stakeholders to have say in policy formulation
Wednesday March 31, 2010
COMMENT BY WONG SAI WAN
saiwan@thestar.com.my
PRIME Minister Datuk Seri Najib Tun Razak had already left Shangri-La Hotel in downtown Kuala Lumpur when the 1,800 participants gathered for lunch at the various F&B outlets in the hotel – the main topic of conversation among them was, of course, the New Economic Model (NEM) and the PM’s speech.
Many of the participants had come to the Invest Malaysia conference believing that they would get to witness first-hand the unveiling of the NEM which was to propel the country to a developed nation status and thus, many felt disappointed after Najib’s 90-minute address.
Many had expected Najib to spell out in detail the NEM and all the nitty-gritty. What they did not realise was that the National Economic Advisory Council (NEAC) report that was made public yesterday was the council’s take on what the country had to do to achieve high income status and catch up with countries like South Korea, which once lagged behind Malaysia.
Their disappointment was not unexpected as they were used to hearing the final policy outlines. In this case, the Prime Minister had actually asked for their participation and feedback in the formulation of the NEM itself.
This is in keeping with Najib’s policy of transparency and inclusiveness. The formulation of the policy will include feedback from all stakeholders and, undoubtedly, it will be a more comprehensive and inclusive plan.
The NEAC report is now open for consultation and feedback from every stakeholder. In keeping with all the major policy launches by Najib’s government, the Prime Minister wants to ensure everyone has a say before the plan is implemented.
“It is not written in stone yet and could be modified after the consultation process is completed,” said a senior government official.
Najib stressed that he wanted to be transparent about the policy formation and emphasised on the need for public comments “but this cannot be an old-style political debate”.
“Whether in the Budget or the recent Government Transformation Programme, where thousands of public citizens were involved in the process, I have instructed that this report be published and made available to the general public to gather their input and provide them with an opportunity to be part of the decision-making process over the coming months.
“It is only through consultation with the rakyat and all the other stakeholders that we can achieve a strong, convincing and effective plan to implement our New Economic Model. I have made clear on many previous occasions that the era of ‘Government knows best’ is over.
“The rakyat – and groups such as business leaders and investors – want and deserve input into the policy-making process. We must develop a more consultative approach to engaging our most important stakeholders.”
Many people, including foreign businessmen, are so used to the way things were done previously where orders came from the top without consultation. They were expecting Najib to make pronouncements and were surprised by his invitation to comment instead.
However, the Prime Minister has set out a timeline for the rolling out of the NEM, which will be closely tied to the 10th Malaysia Plan.
The timeline is as follows:
> Between now and June, feedback, comments and suggestions would be collected by the NEAC secretariat and submitted to the Prime Minister’s Office.
> On June 10, Najib is expected to unveil the 10th Malaysia Plan and how the NEM, together with any possible modifications, fits into the overall programme.
> Based on this, the NEAC would then move into the second phase of its work where the council will then draw up the “implementation process” (or sequencing as NEAC chairman Tan Sri Amirsham A. Aziz calls it) and this would be unveiled in mid-August.
> The Budget in October will cover the first year of the 10th Malaysia Plan and continued implementation of NEM.
The Prime Minister is insisting on the people taking ownership in his programme to transform the country into a high income nation and the best way, he feels, is to get them involved in the decision-making process.
“Like investors, this Government accords high marks for transparency,” Najib said in his speech to explain why there will be so much consultation. Label: Malaysiaku 0 ulasan
COMMENT BY WONG SAI WAN
saiwan@thestar.com.my
PRIME Minister Datuk Seri Najib Tun Razak had already left Shangri-La Hotel in downtown Kuala Lumpur when the 1,800 participants gathered for lunch at the various F&B outlets in the hotel – the main topic of conversation among them was, of course, the New Economic Model (NEM) and the PM’s speech.
Many of the participants had come to the Invest Malaysia conference believing that they would get to witness first-hand the unveiling of the NEM which was to propel the country to a developed nation status and thus, many felt disappointed after Najib’s 90-minute address.
Many had expected Najib to spell out in detail the NEM and all the nitty-gritty. What they did not realise was that the National Economic Advisory Council (NEAC) report that was made public yesterday was the council’s take on what the country had to do to achieve high income status and catch up with countries like South Korea, which once lagged behind Malaysia.
Their disappointment was not unexpected as they were used to hearing the final policy outlines. In this case, the Prime Minister had actually asked for their participation and feedback in the formulation of the NEM itself.
This is in keeping with Najib’s policy of transparency and inclusiveness. The formulation of the policy will include feedback from all stakeholders and, undoubtedly, it will be a more comprehensive and inclusive plan.
The NEAC report is now open for consultation and feedback from every stakeholder. In keeping with all the major policy launches by Najib’s government, the Prime Minister wants to ensure everyone has a say before the plan is implemented.
“It is not written in stone yet and could be modified after the consultation process is completed,” said a senior government official.
Najib stressed that he wanted to be transparent about the policy formation and emphasised on the need for public comments “but this cannot be an old-style political debate”.
“Whether in the Budget or the recent Government Transformation Programme, where thousands of public citizens were involved in the process, I have instructed that this report be published and made available to the general public to gather their input and provide them with an opportunity to be part of the decision-making process over the coming months.
“It is only through consultation with the rakyat and all the other stakeholders that we can achieve a strong, convincing and effective plan to implement our New Economic Model. I have made clear on many previous occasions that the era of ‘Government knows best’ is over.
“The rakyat – and groups such as business leaders and investors – want and deserve input into the policy-making process. We must develop a more consultative approach to engaging our most important stakeholders.”
Many people, including foreign businessmen, are so used to the way things were done previously where orders came from the top without consultation. They were expecting Najib to make pronouncements and were surprised by his invitation to comment instead.
However, the Prime Minister has set out a timeline for the rolling out of the NEM, which will be closely tied to the 10th Malaysia Plan.
The timeline is as follows:
> Between now and June, feedback, comments and suggestions would be collected by the NEAC secretariat and submitted to the Prime Minister’s Office.
> On June 10, Najib is expected to unveil the 10th Malaysia Plan and how the NEM, together with any possible modifications, fits into the overall programme.
> Based on this, the NEAC would then move into the second phase of its work where the council will then draw up the “implementation process” (or sequencing as NEAC chairman Tan Sri Amirsham A. Aziz calls it) and this would be unveiled in mid-August.
> The Budget in October will cover the first year of the 10th Malaysia Plan and continued implementation of NEM.
The Prime Minister is insisting on the people taking ownership in his programme to transform the country into a high income nation and the best way, he feels, is to get them involved in the decision-making process.
“Like investors, this Government accords high marks for transparency,” Najib said in his speech to explain why there will be so much consultation. Label: Malaysiaku 0 ulasan
thestar: PM: Affirmative action a vital component in new economic reality
Wednesday March 31, 2010
Reports by WONG SAI WAN, ZUHRIN AZAM AHMAD, IZATUN SHARI, SIRA HABIBU, MAZWIN NIK ANIS, LESTER KONG, YENG AI CHUN, NG SI HOOI, RACHAEL KAM, ZALINAH NOORDIN, KAREN CHAPMAN, PRIYA KULASAGARAN, JOSHUA FOONG, SHAUN HO and SEREAN LAU
AFFIRMATIVE action will be a key feature in the New Economic Model and will be market-friendly, merit-based, transparent and needs-based.
Datuk Seri Najib Tun Razak said this was a “common-sense enhancement” of policies for a new economic reality where inclusiveness was a key component.
Najib said the Government was now dealing with 21st century problems that required fresh 21st century approaches.
“We will chase the same goals, but transform the way we do things. Our first priority must be to eradicate poverty, irrespective of race,” he said in his keynote address at Invest Malaysia 2010 yesterday.
New beginning: Najib arriving to deliver his keynote address at Invest Malaysia 2010 conference at Shangrila hotel in Kuala Lumpur yesterday.
Najib said the original objectives of the New Economic Policy (NEP) launched about 40 years ago with its affirmative action policies were still relevant. However, it was time to review its implementation.
The NEP, he said, had served the nation well by balancing the economic growth strategies of the country with the need to address structural inequalities and promote social harmony.
Najib said when affirmative action was implemented in a transparent, fair and empowering way, it would yield better results.
“For too long, the implementation of our affirmative action policies has not reached those who needed them the most.
“We can no longer tolerate practices that support the behaviour of rent-seeking and patronage, which have long tarnished the altruistic aims of the NEP,” he said.
Najib said the policy would include the development of a competitive and transparent tender process with set and clear rules for the whole bumiputra community made up of both Malay and other indigenous groups.
He said inclusiveness, where all Malaysians contributed and benefited from economic growth, must be a fundamental element of any new economic approach.
He said the renewed affirmative action policy would focus on the needs of all, including those living in the longhouses in Sabah and Sarawak and poor rural households in the peninsula who often felt disconnected from the mainstream economic activity.
“Fishermen, petty traders and small farmers also fall under this category and not forgetting the orang asli and low-income urban dwellers seeking out a livelihood in tough economic circumstances,” he said.
Najib said in assessing the results, fair distribution must encompass the whole spectrum of measuring wealth such as equity ownership, other financial and non-financial assets, and access to wealth-creating opportunities such as long-term concessions and contracts.
He said even when measuring ownership, it should go beyond equity to include other properties, business assets such as retail, landed properties, commercial building, intellectual property and other services as well as managerial positions.
“A valuable example would be the redevelopment of Kampung Baru, a holistic opportunity of wealth creation and value enhancement that goes deeper and well beyond equity ownership,” he said.
Najib said the ultimate goal was for no Malaysian to live in poverty.
“All will get the chance to succeed and share in prosperity. For those who struggle with low incomes and live in harsh conditions, we will always provide special support to help lift them out of the poverty trap,” he said. Label: Malaysiaku 0 ulasan
Reports by WONG SAI WAN, ZUHRIN AZAM AHMAD, IZATUN SHARI, SIRA HABIBU, MAZWIN NIK ANIS, LESTER KONG, YENG AI CHUN, NG SI HOOI, RACHAEL KAM, ZALINAH NOORDIN, KAREN CHAPMAN, PRIYA KULASAGARAN, JOSHUA FOONG, SHAUN HO and SEREAN LAU
AFFIRMATIVE action will be a key feature in the New Economic Model and will be market-friendly, merit-based, transparent and needs-based.
Datuk Seri Najib Tun Razak said this was a “common-sense enhancement” of policies for a new economic reality where inclusiveness was a key component.
Najib said the Government was now dealing with 21st century problems that required fresh 21st century approaches.
“We will chase the same goals, but transform the way we do things. Our first priority must be to eradicate poverty, irrespective of race,” he said in his keynote address at Invest Malaysia 2010 yesterday.
New beginning: Najib arriving to deliver his keynote address at Invest Malaysia 2010 conference at Shangrila hotel in Kuala Lumpur yesterday.
Najib said the original objectives of the New Economic Policy (NEP) launched about 40 years ago with its affirmative action policies were still relevant. However, it was time to review its implementation.
The NEP, he said, had served the nation well by balancing the economic growth strategies of the country with the need to address structural inequalities and promote social harmony.
Najib said when affirmative action was implemented in a transparent, fair and empowering way, it would yield better results.
“For too long, the implementation of our affirmative action policies has not reached those who needed them the most.
“We can no longer tolerate practices that support the behaviour of rent-seeking and patronage, which have long tarnished the altruistic aims of the NEP,” he said.
Najib said the policy would include the development of a competitive and transparent tender process with set and clear rules for the whole bumiputra community made up of both Malay and other indigenous groups.
He said inclusiveness, where all Malaysians contributed and benefited from economic growth, must be a fundamental element of any new economic approach.
He said the renewed affirmative action policy would focus on the needs of all, including those living in the longhouses in Sabah and Sarawak and poor rural households in the peninsula who often felt disconnected from the mainstream economic activity.
“Fishermen, petty traders and small farmers also fall under this category and not forgetting the orang asli and low-income urban dwellers seeking out a livelihood in tough economic circumstances,” he said.
Najib said in assessing the results, fair distribution must encompass the whole spectrum of measuring wealth such as equity ownership, other financial and non-financial assets, and access to wealth-creating opportunities such as long-term concessions and contracts.
He said even when measuring ownership, it should go beyond equity to include other properties, business assets such as retail, landed properties, commercial building, intellectual property and other services as well as managerial positions.
“A valuable example would be the redevelopment of Kampung Baru, a holistic opportunity of wealth creation and value enhancement that goes deeper and well beyond equity ownership,” he said.
Najib said the ultimate goal was for no Malaysian to live in poverty.
“All will get the chance to succeed and share in prosperity. For those who struggle with low incomes and live in harsh conditions, we will always provide special support to help lift them out of the poverty trap,” he said. Label: Malaysiaku 0 ulasan
thestar: Helping the poor by narrowing socio-economic imbalances
Wednesday March 31, 2010
THE New Economic Model (NEM) will narrow the gap between those in the bottom 40% of the socio-economic scale and others within a reasonable time-frame.
It will put in place mechanisms to strengthen the capability of the 40% of households in rural and urban areas that earn less than RM1,500 a month.
The aim is to help the lowest-income group take advantage of the opportunities to secure better jobs, raise productivity, and dabble in entrepreneurial ventures and other economic activities that will boost their income.
The National Advisory Council (NEAC), while cautioning that all Malaysians would feel the impact of the disruption and dislocation during the NEM transformation process, acknowledged that special mechanisms were needed to assist the low-income group that would be the least prepared to manage the changes.
“The Government must be able to convey the ultimate equity of the benefits over time, urge a commitment to the process and create a vision of the long-term common good.
Stressing that no one would be left behind, the council said a coherent and comprehensive need-based social safety net would support vulnerable groups, particularly those with disabilities.
It also proposed the setting up of an economic transformation fund and implementation of an enhanced safety net to “cushion” the impact on various communities during the transition period.
The benefits of a high-income economy would include higher purchasing power and a better quality of life, encompassing among others, quality healthcare and social support.
The public will also be assured of greater access to resources, jobs, contracts and licences, based on merit and effort. Label: Malaysiaku 0 ulasan
THE New Economic Model (NEM) will narrow the gap between those in the bottom 40% of the socio-economic scale and others within a reasonable time-frame.
It will put in place mechanisms to strengthen the capability of the 40% of households in rural and urban areas that earn less than RM1,500 a month.
The aim is to help the lowest-income group take advantage of the opportunities to secure better jobs, raise productivity, and dabble in entrepreneurial ventures and other economic activities that will boost their income.
The National Advisory Council (NEAC), while cautioning that all Malaysians would feel the impact of the disruption and dislocation during the NEM transformation process, acknowledged that special mechanisms were needed to assist the low-income group that would be the least prepared to manage the changes.
“The Government must be able to convey the ultimate equity of the benefits over time, urge a commitment to the process and create a vision of the long-term common good.
Stressing that no one would be left behind, the council said a coherent and comprehensive need-based social safety net would support vulnerable groups, particularly those with disabilities.
It also proposed the setting up of an economic transformation fund and implementation of an enhanced safety net to “cushion” the impact on various communities during the transition period.
The benefits of a high-income economy would include higher purchasing power and a better quality of life, encompassing among others, quality healthcare and social support.
The public will also be assured of greater access to resources, jobs, contracts and licences, based on merit and effort. Label: Malaysiaku 0 ulasan
thestar: Need for social safety nets
Wednesday March 31, 2010
Reports by JAGDEV SINGH SIDHU, RISEN JAYASEELAN, DAVID TAN, ZUHRIN AZAM AHMAD, IZATUN SHARI, DANNY YAP, THEAN LEE CHENG, FINTAN NG, YVONNE TAN, SHARIDAN M. ALI and EDY SARIF
THE New Economic Model (NEM) needs to have safety nets in place before the proposals for the overhaul of the economy can be put into action.
National Economic Advisory Council chairman Tan Sri Amirsham A. Aziz said those social safety nets were needed as there would be members of the public who might find it difficult to adapt to the changes brought about in implementing the new proposals.
“We need to have a proper system in place to ensure these people are well supported, trained properly and put back into the job market,’’ he told the media at the Invest Malaysia conference yesterday.
“As we try to shift the workforce towards knowledge workers, there are people who might find it difficult to adapt.”
“There are industries too that will probably be dislocated. We are going to give preference to industries that can create high value in the economy,’’ he said.
“So you might find some of the older industries not getting the support they are used to get. They will be struggling for a while and we need to help them transform and move up the value chain.”
The proposals from the NEAC for the NEM generally call for the income of 40% of the population who earn less than RM1,500 a month to be lifted through various policy changes that aim to transform the structure of the economy.
The ultimate goal is to lift gross domestic product per capita from US$7,000 to US$15,000 within the next 10 years.
Amirsham said the proposal to lift the income of 40% of the population would be achieved through education.
“In rural schools, we should give the best in terms of teachers and facilities. These are the people that really require help and if they are able to get the best education, it will only take one generation to get them out of the low income,’’ he said.
As for immediate help, Amirsham said the proposals were still “work in progress” but he did not want to see Malaysia become a welfare state.
Although the NEM would tweak affirmative action policies, Amirsham said that would continue but would be based on capacity, needs and merit.
“We have clearly stated in our document is that we do not want rent seeking and that’s very clear. We don’t want the patronage system to continue. It’s based on merit,’’ he said.
By the third quarter, NEAC would come out with the specific details on the 8 Strategic Reform initiatives they have proposed to the government.
Amirsham said the new recommendations would come in after the 10th Malaysia Plan in announced but before the tabling of Budget 2011.
“When it involves incentives and allocations, the treasury will have to put that through the Budget 2011,’’ he said.
Amirsham, however, did not think the new policy would worsen the budget deficit.
“We have not done our calculations on that yet but for me I think there are many ways of dealing with that. From our proposal, we do need to correct the price distortion in the country,’’ he said.
“If we are able to take the subsidy and give it to the right target group, I think it will be even positive for the Government.” Label: Malaysiaku 0 ulasan
Reports by JAGDEV SINGH SIDHU, RISEN JAYASEELAN, DAVID TAN, ZUHRIN AZAM AHMAD, IZATUN SHARI, DANNY YAP, THEAN LEE CHENG, FINTAN NG, YVONNE TAN, SHARIDAN M. ALI and EDY SARIF
THE New Economic Model (NEM) needs to have safety nets in place before the proposals for the overhaul of the economy can be put into action.
National Economic Advisory Council chairman Tan Sri Amirsham A. Aziz said those social safety nets were needed as there would be members of the public who might find it difficult to adapt to the changes brought about in implementing the new proposals.
“We need to have a proper system in place to ensure these people are well supported, trained properly and put back into the job market,’’ he told the media at the Invest Malaysia conference yesterday.
“As we try to shift the workforce towards knowledge workers, there are people who might find it difficult to adapt.”
“There are industries too that will probably be dislocated. We are going to give preference to industries that can create high value in the economy,’’ he said.
“So you might find some of the older industries not getting the support they are used to get. They will be struggling for a while and we need to help them transform and move up the value chain.”
The proposals from the NEAC for the NEM generally call for the income of 40% of the population who earn less than RM1,500 a month to be lifted through various policy changes that aim to transform the structure of the economy.
The ultimate goal is to lift gross domestic product per capita from US$7,000 to US$15,000 within the next 10 years.
Amirsham said the proposal to lift the income of 40% of the population would be achieved through education.
“In rural schools, we should give the best in terms of teachers and facilities. These are the people that really require help and if they are able to get the best education, it will only take one generation to get them out of the low income,’’ he said.
As for immediate help, Amirsham said the proposals were still “work in progress” but he did not want to see Malaysia become a welfare state.
Although the NEM would tweak affirmative action policies, Amirsham said that would continue but would be based on capacity, needs and merit.
“We have clearly stated in our document is that we do not want rent seeking and that’s very clear. We don’t want the patronage system to continue. It’s based on merit,’’ he said.
By the third quarter, NEAC would come out with the specific details on the 8 Strategic Reform initiatives they have proposed to the government.
Amirsham said the new recommendations would come in after the 10th Malaysia Plan in announced but before the tabling of Budget 2011.
“When it involves incentives and allocations, the treasury will have to put that through the Budget 2011,’’ he said.
Amirsham, however, did not think the new policy would worsen the budget deficit.
“We have not done our calculations on that yet but for me I think there are many ways of dealing with that. From our proposal, we do need to correct the price distortion in the country,’’ he said.
“If we are able to take the subsidy and give it to the right target group, I think it will be even positive for the Government.” Label: Malaysiaku 0 ulasan
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