PM'S ECONOMIC REFORMS TO CREATE NEW SOURCES OF COMPETITIVENESS

KUALA LUMPUR, July 11 (Bernama) -- Najib Tun Razak's first 100 days as Prime
Minister is unprecedented for introducing bold economic reforms that will
create new sources of competitiveness for Malaysia such as in financial services
while strengthening the economy against the downturn.

Najib, who was sworn in on April 3 this year as Malaysia's sixth Prime
Minister, has moved quickly to liberalise 27 services sub-sectors and raise the
nation's competitiveness for which he has received widespread applause from
local businesses and the foreign investing community.

With the economy set to contract by between -4.0 percent and -5.0 percent
this year, Najib, who is also Finance Minister, unveiled a slew of economic and
financial measures and two stimulus packages worth RM67 billion.

They also lauded his foresight in balancing the need to counter the economic
crisis and introducing measures within a short time to beef up the economy so
that it competes in what is surely a fiercely competitive global marketplace.

Renowned regional economist Manu Bhaskaran said the crisis makes reforms
even more important by demonstrating the risks of strong exposure to a few
niches such as electronics exports to the big economies.

"The crisis has showed the vital necessity for Malaysia to diversify and
strengthen its competitiveness, none of which is possible without such reforms,"
he said.

Malaysia's target is for the services sector to contribute 70 percent to
the nation's gross domestic product from 54 percent currently.

"Prime Minister Najib has made an impressive start and all of us outside
Malaysia who wish the country well look forward to the momentum of reforms being
maintained," Bhaskaran told Bernama when asked to comment on Najib's performance
in his first 100 days as premier.

His move to liberalise computer and related services, health and social,
tourism, transport, sport and recreational and business services in efforts to
lure more investments, professionals and technology also won praises from
business circles.

Other reforms included easing listing and fund raising rules, relaxation in
acquisition of properties, a website where the public can monitor the
implementation of projects under the stimulus packages, disbursement of licenses
by local authorities to small and medium scale enterprises, setting up the
National Economic Council to formulate a new economic model, launching Felda
Global Ventures Holdings to turn the entity into a multinational and urging
banks to facilitate lending to stimulate business activity during the downturn.

To Najib's announcement last week relaxing listing guidelines and doing away
with the 30 percent Bumiputera equity ruling and raising foreign shareholding
in stockbroking to 70 percent from 49 percent before, Bhaskaran who is an
adjunct research fellow at Singapore's Institute of Policy Studies, said:

"It sends the right signals about the government's willingness and ability
to push through reforms and it is positive in that sense."

However, "portfolio investors (in stocks and bonds) are interested in
returns that commensurate with the risks they face (and) so, Malaysia has to
deliver returns that are attractive when compared to the risks adjusted returns
available elsewhere," he said.

Deloitte Malaysia managing partner Tan Theng Hooi was pleased with what
Najib has done so far as some of it were in his wish list including the
dismantling of the Foreign Investment Committee (FIC), a move which "opens up
many transactions for foreign investors."

As for the 30 percent Bumiputera equity ruling, he said it was a challenge
for local companies when the market was down as very few people come forward to
take the Bumi shares for which the firms have to do it in advance.

He said the government could still maintain the Bumi corporate equity and
equitable distribution of wealth through other means like what Permodalan
Nasional Bhd was doing with unit trusts. "Not many countries do that but we have
done very well with that."

"The ultimate is to have a free enterprise system (but) are we ready for
it... maybe not to the full extent," said Tan, expressing the hope that more
industries would be liberalised eventually.

However, to compete with Hong Kong and Singapore, the region's financial
services centres, he said Malaysia must liberalise the financial services and
related sectors and in the process "attract the best talents."

KPMG Malaysia's Corporate Finance executive director Emily Choo said
Malaysia has taken a very big step to be competitive by relaxing listing
guidelines to be on par with other equity markets in the region.

From the government's point of view, they have already provided a good
platform and it is now up to the practioners to list good companies and attract
more investors, she said.

"Everyone has to play their role as potential firms will be looking at
markets which generate the most money for them," she said.

Malkit Singh, Bank Islam chief financial officer, said that liberalisation
was already spelt out in the Financial Sector Masterplan "but Najib accelerated
it (and) foreign investors were surprised as they expected it to happen a lot
later."

"He seems to be a man with a good foresight of things and although there
were deadlines set for things to happen down the road, he did not wait for
them," he said.

However, he said that Najib was not impatient but rather pragmatic in doing
what really needs to be done. "Rather than sitting and waiting, he has got a
plan."

There is a lot of liberalisation to support Islamic finance and banking in
Malaysia and regionally and "allowing us certain tax breaks in products such as
Ijarah (leasing) will help us further," he said.

Abdul Halim Harun, UMW Holdings Bhd chief executive officer, expressed
gratitude to Najib as the stimulus packages have impacted the company's motor
and equipment businesses positively.

"The motor sector is picking up. We are very happy and we see some
improvement in the equipment business as well," he said.

Halal Development Corporation chief executive officer Datuk Seri Jamil
Bidin said the reforms were focused on creating value as "investors are very
selective as to where they want to invest given the current slowdown."

He also said the key performance indicators from the top to the bottom would
give focus to the government's adminstrative machinery in that "everybody will
be very clear what they are supposed to do and deliver."

Perbadanan Usahawan Nasional (PUNB) Bhd chief executive officer Datuk Mohd
Nasir Ahmad, while commending the substantive economic liberalisation measures
initiated by Najib, however said some of the reforms needed to be explained in
more detail to the people.

There was some apprehension as some of the announcements such as the
abolition of the FIC and the setting up of the Equiti Nasional Bhd with a
capital of RM500 million to invest in high growth stocks did not provide
explanatory details.

Detailed and more widespread explanations to the people could allay some of
their concerns, he said.

"Nevertheless, we must give credit for Najib's efforts to advance the
country's economy as it will take time to know its full impact but until then we
must be fair in our judgement," he said.

The Nippon Foundation chairman Yohei Sasakawa who was here recently, said
Najib's leadership would not only benefit Malaysia but also other countries in
Asia, including Japan.

"Prime Minister Najib has a lot of friends in Japan. We would like to
see his leadership continue as Malaysia is among the top countries in Southeast
Asia," he said.

Besides the economic development in Malaysia, he said the safety and well
guarded environment in the country has created interest among Japanese,
especially retired people, to spend their retirement in Malaysia.

Senegal Ambassador to Malaysia Abdel Kader Pierre Fall said Najib has shown
genuine honesty to achieving the 1Malaysia concept by showing respect for
everybody and concern for all communities in Malaysia.

"I do admire his approach with the liberalisation measures which was a bold
move. When bold decisions needed to be taken, he has shown he can step in and
take them," the envoy said.

He said most Africans have showed warm response to the way Najib has been
conducting business in the first 100 days as Prime Minister.

Being Prime Minister is not an easy job, but from what he has done so far
and under the current difficult economic conditions, Najib has proven he is the
right man for the job.
-- BERNAMA