18
business
Malaysia to forge
new economic model
by Karen Arukesamy
newsdesk@thesundaily.com
PETALING JAYA: Malaysia will use the
current downturn to forge a new economic
model that prioritises knowledge and
invest in education and technology, said
Deputy Prime Minister Datuk Seri Najib
Abdul Razak.
“In Malaysia, we learned fundamental
lessons from the 1997 financial crisis. Our
financial sector and corporations realigned
as a result,” he said in a piece authored in
Wall Street Journal yesterday.
“We are fortunate today to have good
national infrastructure, technical know-
how, a diversified economy and a quality
workforce. Overall, post-1997 we are far
better placed to weather this new storm,”
Najib wrote, however stressing that further
transformation is vital in the long run.
He said stimulus packages should not
be about resorting to popular policies or
handing out cash and target one group or
area, but benefit the whole country.
He said the government was focused
on boosting investments and credit flows
while providing government guarantees
and infrastructure expansion.
With foreign investment expected to
fall by 50% to RM26 billion this year, Najib
stressed, Malaysia must either respond do-
mestically or waste precious years where
it should be building a better society.
He said that was why the government
announced the two stimulus packages
- RM7 billion in November and RM60 bil-
lion last week.
“Accounting for 9% of Malaysia’s gross
domestic product, the RM60 billion alone
is the biggest stimulus package in our his-
tory,” Najib said.
“Some may say this is too much. But
with our low foreign debt, large interna-
tional reserves and ample banking sector
liquidity, we have the capacity to fund it,”
he said, adding that the risk is not that
we do too much, but that we do not do
enough.
He said when the world eventually
recovers from the crisis, the government
wants Malaysia to be best positioned to
take advantage of that recovery.
“That is why we have decided to balance
short-term requirements with building for
the future. The mini-budget is designed to
provide a quarter of the stimulus funds as
a boost to meet people’s immediate needs,
with the remaining 75% for medium- and
long-term development goals.”
He said Malaysia’s corporate tax of 25%
was comparable with other countries,
however, considering the many incentives
offered to investors, the country’s effective
tax rate was between 3% and 7%.
The technical committee set up to
monitor the implementation will meet
regularly and report to a steering commit-
Visa
unveils
global ad
campaign
pg 20
We are fortunate today
to have good national
infrastructure, technical know-
how, a diversified economy and a
quality workforce. Overall, post-
1997 we are far better placed to
weather this new storm.”
– Najib
tee which Najib chairs.
“I will then report to the ultimate
beneficiaries of the effort, the Malaysian
people. They are the appropriate judges of
the mini-budget’s success,” he said.
He said the government would cham-
pion inclusiveness not just because it was
a foundation for political stability and
economic growth, but because it was right
and hoped that the Group of 20 leaders
would take similar steps when they meet
in April.
theSun | THURSDAY MARCH 19 2009
Oil price drop
will not badly
affect M’sia’s
earnings
KUALA LUMPUR: Petronas recorded a
revenue of RM223.1 billion and a pre-tax
profit of RM95.5 billion for the financial
year ended March 31, 2008 during which
the average world oil price was US$82
(RM303.40) a barrel, Deputy Prime Minister
and Finance Minister Datuk Seri Najib Abdul
Razak said today.
However, taking into the view that
Petronas’ current financial year will end
only on March 31, 2009, the real effects
of the drop in world oil price on Petronas’
earnings cannot be ascertained as yet, he
said.
Najib said this in his written reply to
Teresa Kok (DAP-Seputeh) who wanted to
know the estimated reduction in Petronas
earnings following the oil price drop in 2007
and 2008 and the consequent amount of
drop in the government’s earnings follow-
ing the world oil price drop.
The world oil price experienced a steep
rise and a significant drop both during the
same financial year period which will end
only this March 31, 2009, he said.
On the country’s earnings this year, the
deputy premier said it would not be badly
affected due to the drop in petroleum price
as the income tax from petroleum is based
on the year before.
“The average price of oil up till Decem-
ber last year was US$104 (RM394.80) a bar-
rel compared with the originally estimated
price of US$125 (RM462.50) a barrel for the
year (2008),” he said. – Bernama