Najib Continues With Breathtaking Reforms

KUALA LUMPUR, April 27 (Bernama) -- Barely three weeks after taking office as Malaysia's sixth Prime Minister, Datuk Seri Najib Tun Abdul Razak has been able to bring into shape, several major reforms which he has promised Malaysians.
He revised several policies and announced the liberalisation of some sectors of the economy to level the playing field of opportunities.
Since taking office on April 3, Najib has announced a series of major policy changes, including the lifting of some regulations designed to benefit bumiputera but had deterred entrepreneurship and foreign investments.
This included scrapping a 30 per cent Bumiputera ownership requirement for investment in some services sector to help boost the country's flagging economy, with immediate effect.
It will benefit part of the services sector, including computer services and health-care sectors.
As part of his first major policy reforms, Najib also announced that five foreign law firms would be allowed to offer services in Islamic finance.
Economists and analysts have been watching closely, whether the government would gradually liberalise more sectors, particularly the more sensitive sectors such as retail and banking, which also have certain ownership requirements but the government is seen as trying to avoid liberalising these sectors to avoid a political backlash.
However, judging from the speed and determination of the new administration, it seems that they are all out for liberalisation in this sector to turn the nation into a more attractive place for investment.
"In fact, we are very encouraged, quite a number of far-sighted decisions are now being undertaken at a very quick pace since he assumed premiership. This is very encouraging. If it follow through, it will have a positive impact on the sentiments, more importantly the investor confidence," said Chief Economist, RAM Consultancy Service Dr Yeah Kean Leng. "Less than 100 days, there are breathtaking changes. If we can follow through, it can be achieved in less than 100 days," he added.
The New Economic Policy (NEP) was introduced in the 1970s to provide for equitable distribution of the economic wealth, which required businesses to have certain percentage of Bumiputera ownership or quota on the hiring of Bumiputeras.
Foreign investors found this policy to be restrictive, in terms of their businesses.
Political analysts said Najib was smart and bold in continuing this anti- affirmative-action jag, as they said he was aware of its political implications and knew that it was also the only way forward, particularly in the current bad global economic situation.
More importantly, Najib's breathtaking reforms are what the public has been expecting all this while as the way forward for this multi-racial but small country which is still very much dependent on natural resources, plantation and manufacturing as the main sources of income.
"It's a practicality. You have no choice. Either you do something to give it a chance, or you wait till it dies naturally," said James Wong, a former politician and political analyst.
Wong said, since the NEP was announced in 1971, Malaysia's preferential treatment of Bumiputera in education and business was seen as hampering growth.
"If the government can move past these, its economy will benefit most," he added.
Najib took the reform agenda to a new high today when he allowed up to 70 per cent on foreign shareholdings in insurance and investment banking, as part of measures to boost the finance industry under the economic liberalisation package.
His latest move seems to be in tandem with the promises he made during an interview with Financial Times, just before he took over the premiership, that he wanted Malaysia to move away from its dependence on electronics exports and commodities.
Although opposition lawmakers and political parties are expecting wider reforms, DAP member of parliament Tony Pua has described Najib's announcements as a "baby's step forward" to unwind long-standing policies which hindered investments.
In the past, Pua said state agencies and government-linked companies imposed strict guidelines on procurement of goods and services from private firms, requiring them to comply with Bumiputera equity rules and staff quotas.
For instance, he said, some banks engaged only legal firms which have at least 50 per cent Malay equity.
Despite perceptions that the government was unwilling to scrap policies which benefited Bumiputera, for fear of alienating them as they formed the main support of the ruling party, some politicians believe Najib would continue with his reforms even if he faced fiery criticisms from his own party.
As pointed out by UMNO MP for Pulai Datuk Nur Jazlan Mohamed, the people should not worry too much about Najib's reforms and should play their part in a positive way to accept his challenge.
"We should focus on prospering the economy and commit less politicking, if we love the country and love each other. His (Najib) hard work and Barisan Nasional's efforts will be judged by the people, come the next general election.
"So, let's give the Najib Administration time and space to do its job. As for us, let's get on with making us Malaysians strong as one people without letting any policy divide us," Nur Jazlan wrote in a commentary posted on a website.


Liberalisation Will Help Malaysia's Plan As An Islamic Financial Hub

JOHOR BAHARU, April 27 (Bernama) -- The liberalisation of the financial services sector is important not only for the economic development of the country but will also help Malaysia's efforts to become an Islamic financial hub, Deputy Prime Minister Tan Sri Muhyiddin Yassin said.
"We are ready...more so if Malaysia wants to become an Islamic financial hub where the potential value runs into trillions of dollars," he said.
He said Bank Negara had carried out detailed study on the liberalisation move and the government which had been briefed during the National Economic Council meetings did not see any problems arising in the sector.
Muhyiddin said this when asked to comment on the liberal measures announced for the financial services sector by Prime Minister Datuk Seri Najib Tun Razak in Putrajaya on Monday.
He was speaking to reporters after a ground breaking ceremony for a housing project for the people of Kampung Skudai Kiri, in Bandar Uda Utama, 12km from here Monday.
Muhyiddin said without the liberalisation of its financial and services sector, Malaysia may continue to remain behind other Asean member countries. It is currently in the eighth place among 10 Asean members in this area.
The services sector contributes 52 percent to Malaysia's gross domestic product (GDP) while other countries are recording 60-76 percent contribution from their services sector, he said.
He also dismissed fears that the entry of foreign companies with the liberalisation will drown local companies, especially Bumiputera companies.
Local companies and Bumiputera companies are prepared and capable of competing and they should not be underestimated as many of them are more advanced than foreign companies and have made their presence in countries like Dubai, Kuwait, India, China and Pakistan, he said.
"Liberalisation will give the capable local and Bumiputera companies the opportunity to work together with foreign companies," he said.
He also called on the parties still in doubt of the market liberalisation plan to expand their thinking and see from the context of a larger economic pie that could bring greater benefits to the country and entrepreneurs.
Muhyiddin also said the development of housing projects will continue to be in the country's agenda of property development without leaving out any single segment of the society.
Meanwhile, the new housing programme, to be developed by Uda Holdings Bhd, will involve the construction of eight affordable blocks of flats with residential units measuring 78.97 sq metres and another four blocks of flats offering units sized 69.68 sq metres.
Work on the flats is expected to take off mid August with the total of 1,416 units to be ready in 24 months.
Supporting facilities in the area will include recreational centre, football field, surau, shops, as well as a reading hall for the people.
A total of 682 families from Kampung Skudai Kiri and 500 families from Kampung Usaha Jaya are expected to gain from the development of the flats.

tunku : while we support the liberalisation move by the government on certain sectors but let us not forget that NEP is still very much relevant.we hope that people should be thankful to the government for their smart move but should not push them to abolish NEP. NEP is still very much needed. i am sure najib has taken everything into consideration before making the decision on liberalisation.the people should support the move as it will benefits the people and the country.