MALAYSIA CONFIDENT OF 3.5 PERCENT GDP GROWTH NEXT YEAR

PETALING JAYA, Nov 20 (Bernama) -- Malaysia is confident of achieving a 3.5
percent gross domestic product (GDP) growth next year though the economies of
Asian countries like Japan, Hong Kong and Singapore are facing
recession.

"The situation as we expected is quite dire. The United States appears to
be badly affected with the unemployment rate expected to rise to 8.0 percent
from 6.5 percent," Second Finance Minister Nor Mohamed Yakcop told reporters
after officiating the Young Entrepreneurs Association of Malaysia
Forum here Thursday.

According to him, the country's exports will be slightly affected with the
US and Europe importing less.

Nor Mohamed said Malaysia, however, could depend on trading partners like
China and India as the two countries were still recording positive growth of 7.0
to 9.0 percent.

"This protects us because we are not dependent on the Western countries for
exports," he said.

To achieve the 3.5 percent growth, the minister said the government,
private sector and all other parties needed to work hard together to boost the
economy during the current difficult times.

Related to this, the government has taken action so that the RM7 billion
financial stimulus package announced recently could be implemented as soon as
possible, he said.

"We expect a major portion of the programme to be implemented in the first
quarter of 2009," he added.

According to Nor Mohamed, the current crisis is the "most challenging" ever
faced by the world as it originated from the global financial centre, which is
the United States.

However, he said, Malaysia managed to gain an edge during the current
global financial crisis by promoting Islamic finance as an alternative system
that was fair and impartial, and did not involve high risks.

"The Anglo-Saxon financial system is crumbling because its architecture is
unsuitable, incomplete and unfair. We warned the world about this in the
financial crisis 10 years ago but it was ignored," Nor Mohamed said.

He said the system could not control hedge funds which allowed loans up to
20 times the basic model and the collapse of the financial system had affected
many countries badly.

Nor Mohamed said the G20 leaders' meeting on Nov 15 had agreed to establish
an international financial system which was fairer and more impartial, and in
which hedge funds and rating agencies would be monitored closely to prevent
another financial crisis.

"In difficult times like this we should accept and be aware that we are
facing a very bad patch. We should act to overcome the crisis with the same
confidence that enabled us to be successful in the past," he said.

-- BERNAMA