NEM WILL NEED TO ADDRESS CONCERNS OF FALLING INVESTMENTS, SAYS CPPS

PETALING JAYA (Malaysia), Aug 2 (Bernama) -- The New Economic Model (NEM)
will need specific measures to address concerns of falling foreign direct
investment (FDI) and local private investment, according to the Centre for
Public Policy Studies (CPPS).

Its chairman Ramon Navaratnam said to achieve the six per cent growth in
gross domestic product (GDP) as targeted under the 10th Malaysia Plan, there was
a need to boost the faltering level of private investments.

"However, the policy and environment do not make it feasible to achieve the
target," he said during the National Symposium on the 10th Malaysia Plan here
Monday.

Professor Edmund Terence Gomez from University Malaya's Faculty of Economics
and Administration, said there was lack of political will to face the challenges
that Malaysia was facing currently.

"Investors are not responding to what the government says," he said during
the symposium.

Gomez said to attract FDI, there was a need to address the human capital and
education system of the country to prevent people from leaving the country to
look for long-term rewards and careers.

"Another issue is that while the government talks about 1Malaysia, which
has inspired many Malaysians, the kind of discourse from political parties are
more race-based," he said.

According to Gomez, there must also be clear evidence that institutions
acting on corruption is independent and have capacity to act freely as this will
promote investor confidence.

"There is criticism that if there is any action is taken against corrupt
individuals, what we see is only selective prosecution," he said,

American Malaysian Chamber of Commerce president Nicholas S. Zefferys
said the government had made significant steps in terms of the competition law
to create a level playing field.

"However, there is a need to look at labour laws. There are reports that
Malaysia is the worst in the world in terms of hiring and firing practitioners,"
he said.
-- BERNAMA