GET OFF THE CHEAP LABOUR & SUBSIDIES COMFORT ZONE, SAYS MALAYSIAN PM

KUALA LUMPUR, Nov 4 (Bernama) – Cheap labour and subsidies are among the five
comfortable habits that need to be addressed to enable the nation and its
businesses to thrive on the international stage, said Malaysian Prime Minister
Najib Tun Razak.

" As we move from an agriculture base to a more industrialised nation,
unfortunately, we have become addicted to cheap foreign labour in a way that is
no longer sustainable in a truly global market place," he said at a Bankers Club
Luncheon Talk here Wednesday.

Najib said when the country want its businesses, government-linked
companies and traditional businesses to strive on the international stage, it
must move beyond competing for low wage jobs in low value sectors and graduate
to new technologies.
He identified biotechnology, Islamic finance and other high value service
industries as new technology based sectors which can give high value to the
economy.

While advising entreprenuers to invest in new businesses and increase the
level
of productivity, he added," But it is too tempting to rely on cheap labour force
around the region and we are so comfortable with that.

Najib said another area that must be reviewed is huge subsidies.

" All of you here enjoy subsidies, you don’t deserve to enjoy subsidies," he
said in jest drawing laughter from bankers attending the luncheon.

The government, he said spent over RM20 billion (US$5.85 billion) to
maintain price controls over a wide range of products namely fuel, bread and
sugar.

" Subsidies is an illness, once you enjoy it, it is hard to give up," said
Najib, who is also Finance Minister.

He said it was a huge challenge for the government to address but believed
a targeted subsidy approach can save the government a lot of money.

The Prime Minister also said the nation's tax base also needed to be broaden
and that would provide the government a strong revenue base as it moved forward.

A fourth habit to be broken is the disproportionate reliance on oil as a
source of energy and revenue.


" Many countries use the oil revenue but don't use it for productive
investment. Frankly speaking, I do not think we have done well in this regard.

" I feel we have not used the oil revenue that we have accumulated since the
70s to build a strong productive investment," he said.

Finally, Najib said the government system cannot shut off from the realities
of the world, adding that the era of top-down patrician style governance only
served to exclude people.

" This is probably not suitable anymore, it has to open up and be more
inclusive.

" I have my own website, I communicate directly with the people. Some of the
ideas for Budget 2010 came directly from the people via the website," he said.

Najib also said such information was never available before and the
government needs to be open to new ideas, irrespective of where they may have
come from.

" This doesn't mean passively awaiting inspiration from elsewhere, rather
this must be marked by proactive outreach to leaders, the people and
international partners to gather knowledge and form the best policies," he
added.

-- BERNAMA