Early in the year in my blog posting, I have said that it is very likely that Malaysia will enter into a technical economic recession even with the stimulus package. There is a time lap before the impact of the stimulus package can be felt. Hence, we are talking about a time frame of 6 months to one year before most of the projects come on stream. I then said that the contraction of one percent was too optimistic. Now, we have read in the papers that in the 1st quarter, there was a contraction of 6.2 percent of the economy. This is a significant contraction and if there is any consolation, Singapore, Hong Kong and Japan have fare worst than us.
In the 2nd quarter and 3rd quarter, Malaysia is unlikely to register any positive growth. We will be lucky if there is a slowing down of contraction, what we call bottoming. The most optimistic economist think that if we are looking for growth, it will be in the final quarters. Malaysia is very dependant on trade and export of manufacturing goods and commodities. If our major markets like America, China, Japan and EU which together accounts for about nearly 60% of our world GDP are in recession, it is unlikely that we see a significant increase in trade, in the export of manufacturing goods, the flow of FDI, and an increase in the prices of commodities. Of late, we see oil prices, oil palm and rubber prices going up which we hope is not due to speculation. Until these advance economy, which are our major market, registers significant growth, it is unlikely that we can have a rapid economic recovery. Our economic growth is still greatly determined by external demand.
In the long term, the biggest challenge to us is how to make Malaysia economy more competitive. We are still very dependent on oil revenue, export of commodities, and manufactured goods. We are still dependent on foreign workers. We are unable to move up the value chain. What we manufactured have very little value-added component. We do not have surplus labour, abundance of land and a low cost as the selling point.
Najib has set up the Economic Advisory Council. Let’s hope that the Council can come out with a sustainable economic model that will transform Malaysia and bring us to a higher level of economic growth. We need to develop our service sector since the manufacturing sector has its limitation. When Najib announced the liberalization of the financial and 27 sub-sectors of the service sector, it was seen as a timely move to spur the growth in the service sector. However, more initiatives need to be undertaken to liberalize further subsectors in the service industry. There is a need for total review of the FIC. The FIC have probably outlived its usefulness. This is one piece of legislation, which is regarded as the impediment to FDI and even domestic investment. One area, which is of great potential, is the creative industry in this country. When I talk about the creative industry, I am talking about telecommunication, arts, culture, IT industry, cinematography, handicraft industry etc. This is one area which is still under-developed that has great potential.
Malaysia cannot be low-cost sub-contracting manufacturing country if we want to leap frog into the next stage of our economic transformation to be a developed nation by year 2020. We need an annual economic growth of 6-7 percent in order to achieve 2020. Under the 9th Malaysia plan, we can never achieve the 6-7 percent economic growth a year. Hence, the next 10 years, which is the 10th and 11th Malaysia plan will be very crucial in order to achieve vision 2020. The old economic module that transformed Malaysia from an agriculture-based economy to a manufacturing and a trading nation served us well in the 80s and 90s. Today, we cannot hope to use the same module to substain economic growth in the next 10 years. The world has become more competitive and we have to climb up the value chain in all sectors of the economy if we are to achieve significant economic growth.
Cutting cost in doing business will definitely make our economy more competitive. When you talk about cost in doing business, the holding cost is an important consideration. Hence, an efficient private and public delivery system is important. A visit to any banking institution in this country will tell you how inefficient our banking institution is. Our banks enjoy one of the best margin of profit since their cost of funding (from deposit by customers) and the cost of borrowing (paid by us as customers) is still high. 3-4 percent and even higher for credit card charges. It takes a long time to open up a banking account in Malaysia. In the same way, it takes a long time to cash out a cheque. So we find inefficiency not only in the government public delivery system but also in private sector.
We need to create a people’s friendly business environment. Hence, to register a company and to start a new business, to buy a property and have it registered, to start a banking account and apply for a banking loan and even a simple S&P agreement should all be hassled-free. However, we know that it is often a time consuming undertakings even to start a bank account. To have your own property registered so that it can be charged to the bank can be a frustrating exercise. Malaysia’s front liners in all service sectors should realize that they are there to serve and not to frustrate their clients. All of us dealing with government agencies and also the private establishment have many stories to share about the slow delivery system. There seems to be no urgency to work according to schedule.
In the 2nd quarter and 3rd quarter, Malaysia is unlikely to register any positive growth. We will be lucky if there is a slowing down of contraction, what we call bottoming. The most optimistic economist think that if we are looking for growth, it will be in the final quarters. Malaysia is very dependant on trade and export of manufacturing goods and commodities. If our major markets like America, China, Japan and EU which together accounts for about nearly 60% of our world GDP are in recession, it is unlikely that we see a significant increase in trade, in the export of manufacturing goods, the flow of FDI, and an increase in the prices of commodities. Of late, we see oil prices, oil palm and rubber prices going up which we hope is not due to speculation. Until these advance economy, which are our major market, registers significant growth, it is unlikely that we can have a rapid economic recovery. Our economic growth is still greatly determined by external demand.
In the long term, the biggest challenge to us is how to make Malaysia economy more competitive. We are still very dependent on oil revenue, export of commodities, and manufactured goods. We are still dependent on foreign workers. We are unable to move up the value chain. What we manufactured have very little value-added component. We do not have surplus labour, abundance of land and a low cost as the selling point.
Najib has set up the Economic Advisory Council. Let’s hope that the Council can come out with a sustainable economic model that will transform Malaysia and bring us to a higher level of economic growth. We need to develop our service sector since the manufacturing sector has its limitation. When Najib announced the liberalization of the financial and 27 sub-sectors of the service sector, it was seen as a timely move to spur the growth in the service sector. However, more initiatives need to be undertaken to liberalize further subsectors in the service industry. There is a need for total review of the FIC. The FIC have probably outlived its usefulness. This is one piece of legislation, which is regarded as the impediment to FDI and even domestic investment. One area, which is of great potential, is the creative industry in this country. When I talk about the creative industry, I am talking about telecommunication, arts, culture, IT industry, cinematography, handicraft industry etc. This is one area which is still under-developed that has great potential.
Malaysia cannot be low-cost sub-contracting manufacturing country if we want to leap frog into the next stage of our economic transformation to be a developed nation by year 2020. We need an annual economic growth of 6-7 percent in order to achieve 2020. Under the 9th Malaysia plan, we can never achieve the 6-7 percent economic growth a year. Hence, the next 10 years, which is the 10th and 11th Malaysia plan will be very crucial in order to achieve vision 2020. The old economic module that transformed Malaysia from an agriculture-based economy to a manufacturing and a trading nation served us well in the 80s and 90s. Today, we cannot hope to use the same module to substain economic growth in the next 10 years. The world has become more competitive and we have to climb up the value chain in all sectors of the economy if we are to achieve significant economic growth.
Cutting cost in doing business will definitely make our economy more competitive. When you talk about cost in doing business, the holding cost is an important consideration. Hence, an efficient private and public delivery system is important. A visit to any banking institution in this country will tell you how inefficient our banking institution is. Our banks enjoy one of the best margin of profit since their cost of funding (from deposit by customers) and the cost of borrowing (paid by us as customers) is still high. 3-4 percent and even higher for credit card charges. It takes a long time to open up a banking account in Malaysia. In the same way, it takes a long time to cash out a cheque. So we find inefficiency not only in the government public delivery system but also in private sector.
We need to create a people’s friendly business environment. Hence, to register a company and to start a new business, to buy a property and have it registered, to start a banking account and apply for a banking loan and even a simple S&P agreement should all be hassled-free. However, we know that it is often a time consuming undertakings even to start a bank account. To have your own property registered so that it can be charged to the bank can be a frustrating exercise. Malaysia’s front liners in all service sectors should realize that they are there to serve and not to frustrate their clients. All of us dealing with government agencies and also the private establishment have many stories to share about the slow delivery system. There seems to be no urgency to work according to schedule.
今年初,我曾通过部落格指出,即使政府推出刺激经济配套,马来西亚也很可能进入一个技术性的经济萧条期。刺激经济配套需要一些时间才得以发挥其效应。因此,我们认为需时6个月至1年时间,国内大部分计划才可以陆续展开。我也曾说,1%的经济萎缩估算是过于乐观的看法。现在,我们从报章得知,今年首季经济衰退6%。这显示经济明显萎缩,而唯一让我们安慰的是,新加坡、香港及日本的情况远比我们恶劣。
在第二季及第三季,马来西亚经济也不可能取得任何积极增长。若能萎缩减缓已属幸运,因为经济已经跌至谷底。最乐观的经济学家认为,我国经济可以在第四季取得增长。马来西亚非常依赖贸易及制造品和原产品出口,若那些占我国经济生产总值60%的主要出口市场即美国、中国、日本及欧盟也处于萧条状态,我们的贸易、货品出口额、原产品价格,及外来直接投资,都不可能取得显著增长。最近,我们看到石油价格上涨,油棕及橡胶价也一并上升,我们不希望这是因为投机所致。惟有这些经济火车头的主要市场取得明显增长,否则我国经济不可能会迅速复苏。它长很大程度上是取决于外需。
长远来看,我们最大的挑战是如何令马来西亚经济更具竞争力。我们仍非常依赖石油收入、原产品及制造品出口。我们也很依赖外劳。我们无法提升价值链,制造品增值度不高。我们也没有充足的劳力、富足的土地及地成本等卖点。
纳吉已经成立经济咨询理事会。我们希望它可以拟定一个持续性的经济模式,为马来西亚转型朝高经济目标前进。基于制造领域发展有局限,我们必须发展本身的服务领域。纳吉宣布金融自由化和开放27项次服务业,被视为可以刺激经济增长的及时措施。然而,政府需要更大努力把服务业的附属领域进一步自由化。
政府也有必要全面检视外来投资委员会。目前,它被视为外来直接投资的最大阻碍。此外,国内的创意工业潜能很大。我所指的是包括通讯、艺术、文化、资讯工艺、电影摄影艺术、手工艺术等等。这一块是仍然欠缺大力开发的高潜能工业。如果我们要达到2020先进国目标,马来西亚不能成为一个地成本的制造品生产国。为落实2020宏愿,我们每年必须取得6至7%经济成长,但第九大马计划期间,我们无法取得6至7%经济年度成长。因此,在未来10年,即第十及第十一大马计划将是落实2020宏愿的关键期。旧经济模式在80年代及90年代把马来西亚从农业经济,转型为工业和贸易经济家。今天,我们不能仰赖以同样的经济模式,让国家经济在未来10年取得持续成长。这个世界已经变得更竞争,要让国家经济取得显著增长,我们必须强化所有领域的价值链。
削减商业成本必将使我们的经济更具竞争力。谈到商业成本,持有成本是重要的考量因素。因此,落实一个有效率的私人及公共传递服务非常重要。今天若我们走进国内任何一家银行,就会知道国内的金融机构多么缺乏效率。这里的银行只着重着如何继续收取最佳的利润幅度,因为他们的资金成本(顾客的存款)及借贷成本(顾客所支付)仍然很高,介于3至4%,信用卡收费更高。在马来西亚,要开设一个银行户口非常耗时,处理现金支票也须久等。所以,不只是政府的传递系统没有效率,基本上,国内一般的私人界也一样缺乏效率。
所以,我们需要建立一个亲商的环境。不论是注册一间公司、开始新生意、购买一个产业、登记或开设银行户口、申请银行贷款,甚至是签署一个简单的买卖合约登,都应该简化。马来西亚所有服务业的前线人员必须明白,他们是为顾客服务,不能让顾客失去耐性。其实,不管是和政府部门打交道,或和私人企业交易,我们都有很多经验和故事分享,这一切都是因为传递系统缓慢,缺乏效率所致。他们看来似乎没有按照时间表做事,工作态度也不积极。