MALAYSIA MUST COMPLY WITH INTERNATIONAL STANDARDS TO PROSPER IN GLOBAL MARKET

KUALA LUMPUR, Dec 4 (Bernama) -- Malaysia must comply with international
standards to prosper in an integrated global market, the National Economic
Advisory Council (NEAC) says.

In the New Economic Model - Concluding Part report launched by Prime
Minister Najib Tun Razak Friday, it said concerns on food safety,
labour rights, best practices in environmental protection and climate change
management will also add to new international protocols that could impose
barriers to Malaysian exports to global markets.

The measures proposed cover two fronts, namely complying with a set of
international standards to facilitate connection to the global supply chain, and
Malaysia as the originator of global standards on products such as halal foods
and sustainable palm oil.

Malaysia should adopt all relevant international standards and, for each
standard, target an improvement in ranking over a specified period to reach the
top 10 places of choice for doing business.

In the finance sector, Malaysia has made a commitment to undertake the
Financial Sector Assessment Programme (FSAP). It is recommended that Malaysia
undertakes assessment of compliance in all the 12 standards under the FSAP.

This covers the range of standards on the fiscal, monetary, corporate
governance, accounting, payment systems, access to credit, creditor rights and
insolvency and capital market standards.

Two particularly important standards are for fiscal transparency and
insolvency creditor rights (ICR).

In addition, Malaysia should also adopt the credit reporting principles
which together with the ICR will provide the basis for the legal and
institutional framework to enable a move away from collateral-based lending
practices.

Malaysia should make it a priority to adopt the Code of Good Practices on
Fiscal Transparency to identify gaps in sound fiscal management and take
corrective actions covering clarity of roles and responsibilities, open budget
process, public availability of information and assurances of integrity.

In addition to this, Malaysia should also adopt the Guidelines on Corporate
Governance of State-Owned Enterprises.

"Whilst there are various dimensions on sustainability, application of
standards affecting the economic, environmental and social dimensions are
crucial to build an economic environment necessary for the country to achieve
sustainable growth," NEAC said.

To sustain growth Malaysia needs to preserve its natural resources and
safeguard the interest of future generations that must be facilitated
by applying appropriate pricing, regulatory and strategic policies to prudently
and efficiently manage non-renewable resources.

Hence Malaysia needs to outline all measures and targets consistent with the
United Nations conventions to protect the environment and address climate change
issues such as emission reductions, incentivising the deployment of low-carbon
energy technologies to reduce carbon emission by 40 per cent and enforce clean
air and water standards.

To equalise labour-related cost of business in Malaysia and other production
centres, and to be able to attract skilled labour from abroad, Malaysia should
adopt international standards on labour legislation and management.

The quality of labour is a function of education and on-the-job skills
development. More rigorous application of the Malaysian Qualification Agency
standards on education facilities and course curriculum in Malaysian learning
institutions is required.

In broadband, Malaysia should be focussing on the basic protocols,
interfaces and interoperatability standards between devices.

"As we increasingly see the convergence of communications, computing and
content in devices, we need standards to enable this," NEAC said.

In the hospitality industry, Malaysia needs to adopt standards which impact
the level of service, particularly in the tourism sector e.g. the Pacific Asia
Travel Association Code for environmentally responsible tourism, environmental
impact assessments, green hotel standards, food and beverage standards, public
restroom standards, or home-stay standards.

In the agro-based food production area, the emergence of food security
concerns as well as environmental standards necessitate that Malaysia adopts
international standards of agro-food production and processing.

The country should partner with the European Union, United States and Japan
to develop mutually acceptable audits of food production facilities and
processes and develop a list of qualified producers, based on internationally
benchmarked standards.

Malaysia could regain its stature in the commodities sector by developing
standards for the production of sustainable palm oil.

The reserves from the palm oil levy could be used for the research towards
this end.

Currently, Malaysia is helping to set a global standard for halal
certification and should leverage these efforts by converting existing Malaysian
standards to be the preferred benchmark for adoption by the global community.

Furthermore, Malaysia leads in the development of standards in the delivery
of Islamic financial products.

Malaysian expertise should become known for speedy, accurate and accountable
documentation for the different Islamic products that meet international
standards of transactional documentation, so that Malaysia could become the
centre for outsourcing of documentation for Islamic financial product
transactions from any territory.

The blueprint to guide Malaysia in implementation of standards and its
compliance was approved by Cabinet in 2004.

The main authority tasked with oversight responsibility is Ministry of
Science, Technology & Innovation.

Given the cross-cutting nature of standards compliance, and the
opportunities for Malaysia to become a standard setter in halal products and
palm oil, a review of the standard setting and monitoring authority is required.

-- BERNAMA