M'SIA: ECONOMIC LIBERALISATION TO BE CARRIED OUT IN STAGES

KUALA LUMPUR, June 22 (Bernama) -- The market liberalisation process will be
carried out in stages, and not in a drastic or grand manner, to stimulate
Malaysia's economy.

Deputy Minister of International Trade and Industry, Mukhriz Dr
Mahathir, informed the Lower House of Parliament Monday that the phase by phase
liberalisation is intended to position Malaysia as an investment destination for
foreign investors without jeopordising the opportunities for local business
operators including Bumiputera (son of soil) entrepreneurs.

"The non-governmental contribution to Gross Domestic Product (GDP) in 2008
was 47.6 percent while the percentage being aimed for in 2020 is 60.0 percent.
The GDP contribution of the non-government sector in many of the advanced
countries exceed 70 percent," he said.

"The liberalisation of the services sector meanwhile is aimed at bringing in
foreign investments to the sector which accounted for only 11 percent of the
total investments in the sector in 2008.

"It will be ideal to raise this level to 40 percent of total investments,"
Mukhriz said in his reply to a question from Nizar Zakaria, a MP who had
requested that the assurance for the Bumiputera entrepreneur community is not
put in jeopordy.

He explained that foreign direct investments (FDIs) were needed for
transfer of technology, use of expertise not available in the country, provision
of high income jobs and for the establishment of a business environment that is
of international standard and capable of competing.

"This will also expose the local companies to outside market which offers
unlimited potential," he said.

Under the first economic stimulus package, the government had formed the
Services Sector Capacity Development Fund with an initial allocation of RM100
million (US$1=RM3.58) to help the domestic services industry face the impact of
liberalisation.

Mukhriz also pointed out that the liberalisation of the manufacturing
sector had started in July 1998 when the equity conditions and factory licensing
conditions for several specific sectors were removed.

"To further enhance the investment climate in Malaysia, all conditions on
equity in manufacturing projects were taken off on June 17, 2003.

"The Cabinet also agreed on November 14, 2008 to speed up the liberalisation
process for the services sector so that the potential of the sector can be
further unlocked for contribution to economic growth," he said.

-- BERNAMA