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ASLI - SEDAR Roundtable Discussion “Key Socio-Economic Issues Impacting National Economic Resilience & Competitiveness” by Datuk Nicholas S. Zefferys P.J.N. Governor & Past President American Malaysian Chamber of Commerce President & CEO Applied Consulting & Engineering Sdn. Bhd. Director – Southern Bank Berhad 14 January 2006 1 Requires 7% Avg. Annual Growth (some years higher-others lower) 2020 The march towards 9th Malaysia Plan (pending) Comparative Advantage And 2006 Anticipate steady but unspectacular growth (as reflected in Budget 2006) Jobs 2 3rd Qtr 2005 Economic Results • GDP growth @ 5.3% (v. 4.4% 2nd Qtr); led by Svcs. & Mining • Exports up 7.5% (v.28% in ‘04) led by E&E (6.8% growth; 84% of all exports) • Deficit=0.6% of GDP (est. 3.8% for year) • Inflation tending higher: price increases in chicken, petrol, other • Monetary policy tracking with expansion); lending rate increased to curb inflation • Ringgit appreciating slightly; curbs imported inflation Building a solid economic foundation 3 The Malaysian Model Socio-Economic Dualities 55% Muslim 45% NonMuslim State-owned Enterprises/Jobs/ Education Private Enterprises/Jobs/ Education Separate yet integrated economies complimenting each other Two interactive societies living/working side-by-side 4 The Dual Tracks of Malaysia Bumi Track Syriah Law Priority School seats 30% Entitlements Non-bumi track Civil Law Vernacular Schools Global Mobility Social Bumi Track Economic Non-bumi Track NEP/NDP/Affirm. Actn. Party Dominance Gov’t/Bus Alliance Social-contract Economic survival 5 Niche strategies Where the tracks lead? This? or . . . This? Bumi Malaysians Non-Bumi Separate, protected -but lesser development. Joint but balanced, and stronger development 6 SOCIO-ECO SPHERE Above Surface Goals - To Be Regionally Competitive - Drive Mission Critical Development - Grow the Economy - Meet Regulatory & Social Obligations Driving Forces Below The Water Line Both address structural reforms Leadership & Collaboration CEO: PM MOF II Khazanah Nasional PNB EPF LTAT LUTH 7 GLC Transformation Manual 1. Enhance Board 2. 3. 4. 5. Effectiveness Strengthen Directors Capabilities Enhance GLIC Monitoring & Management Improve Regulatory Environment Clarify Social Obligations 6. Review & Revamp Procurement 7. Optimise Capital Management Practices 8. Manage & Develop Leaders & Other Human Capital 9. Intensify Management Practices 10.Enhance Operational 8 Improvement Khazanah Transformation Plan • Phase 1: Launched 29 July 2005 by PM Develop Goals & Initiatives • Phase 2 (Aug. ‘05 - Dec. ‘06): Execution of initiatives • Phase 3 (2-5 years from now): Materialisation of sustained benefits • Phase 4 (5-10 years onwards): GLCs transform into regional champions 9 Moving from . . . To . . . . . . not just in trade, but also investment 10 NEP/NDP AFFIRMATIVE ACTION POLICIES Borne of poverty reduction & wealth redistribution goals As well as preparation for Globalism. Perceptions? Realities? British Legacy: - Downgraded Malays - Intellectual caldron of “isms”): Malaysian Legacy: Strong Government Central Control Government decides market winners & losers? 11 PM Abdullah’s Presidential Speech On The Malay Struggle WE want to become an advanced nation. (The rest of the world) will not formulate policies to help Bumiputras. The global economy does not recognise quotas; it will not allocate special projects for Bumiputras. The global economic lexicon only acknowledges terms such as competition, competitiveness, productivity, innovation, creativity, originality, excellence and efficiency. 12 Paradigm Pliancy (A Model for Change) The ability to stretch the mind and break out of the box! Existing Paradigm Breaking out of the Box Stepping into a New Domain (A) (B) (C) Entitlements & Affirmative Action A+B=C Equal Opportunity & Meritocracy 13 New Course Old Course Changing course or “tacking” yields a short period of turbulence as the sail is reset to a new course and the wind fills the sail propelling it on its new direction. 14 2006 A turning point? Malaysia has a demonstrated pragmatism for doing the right things. 15 Keadilan Supreme Council The Edge: Nurihsan Majid Unanimously approved an economic motion to “replace race based NEP” with a New Economic Agenda Seeking an ideal of universality A racial approach is inadequate to deal with complex socio-economic inequality in Malaysia 16 Keadilan’s New Economic Agenda The Edge: Nurihsan Majid 1. Emphasis on justice for all Malaysians; eradicating poverty regardless of race; 2. Narrowing the gap in rural & urban development; 3. Provide training & education to all Malaysians to face a K-based economy; 4. Promote entrepreneurship for a stronger small & medium sized enterprise backbone of the economy; 17 Keadilan’s New Economic Agenda The Edge: Nurihsan Majid 5. Promote a delivery system which is worker & business friendly, that inculcates accountability & openness for more sustainable development; 6. Ensure government intervention is limited & strategic by forging positive partnership with the private sector that empowers economic actors for a growth-based economy; and 7. Forge a positive economic strategy to compete in a globalised economy. 18 A Paradigm Forward? SOCIAL ECONOMIC Moving From Moving From Entitlements Gov’t. Run Business To To Equal Opportunity Private Enterprise 19 Terima Kasih Xie Xie Nandree Shukriya 20