MALAYSIA TO RESTORE ECONOMIC GROWTH

PUTRAJAYA, July 24 (Bernama) -- The Malaysian government will strengthen
resilience and undertake measures to restore the economy on track to growth
trajectory, said Second Finance Minister, Ahmad Husni Mohamad Hanadzlah
Thursday.

"While focusing on economic issues, we will ensure that the needs of the
rakyat, especially the vulnerable groups, will continue to be addressed," he
said in his opening address at the launch of Focus Group Meeting for 2010 Budget
here Thursday.

The small and medium enterprises (SMEs) is the first focus group from 18
identified for the meeting.

Ahmad Husni said formulating the 2010 Budget would be a challenge given the
uncertain global environment, stretched resources and rising public
expectations.

"In line with the slower economic growth, coupled with low and volatile
commodity prices, our revenue collection will be similarly affected," he said.

He said, in this regard, the government has instituted measures to improve
efficiency and quality of spending.

Over the longer term, he said, "the government is looking into measures to
broaden the revenue base."

The Malaysia economy is expected to contract between four and five percent
this year.

The International Monetary Fund has projected world economy to contract by
1.4 percent this year and trade is expected to register negative 12.2 percent.

The ministry has received 68 memoranda from various stakeholders, covering a
wide range of issues and recommendations, on 2010 Budget.

The issues include private investment; human capital; niche areas in the
services sector; public transport; construction and housing industry; and, rural
infrastructure development.

The minister said there was a vast scope for SMEs to further enhance their
contributions to the national economy.

"Although SMEs comprise 99.2 percent of total registered business
establishments in the country and contribute 56.4 percent to employment, they
only contribute about 32 percent to gross domestic product (GDP) and 19 percent
to total exports," he said.

In advanced economies, he said, the contributions of SMEs to GDP were much
higher, in Germany it was 49 percent, Japan (55.3 percent) and South Korea (49.4
percent).

"On our part, we have streamlined various government funds for SMEs from 53
to 19, and grants from 26 to 14.

"We have also provided RM8.8 billion (US$1=RM3.5) in loans and grants for
them," he said.

Ahmad Husni said the SME Corp, which acted as a referral centre, would help
SMEs resolve difficulties expeditiously.

-- BERNAMA