Private sector to lead Malaysian economic growth

08:33, June 11, 2010      

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In the 10th Malaysia plan announced by Malaysian Prime Minister Najib Razak here on Thursday, the Malaysian government has targeted a six percent annual gross domestic products (GDP) growth until 2020.

In the coming five years when the plan is implemented, the private sector in the country will be the locomotive of economy, leading Malaysia to become a high-income and developed nation by 2020.

While the Malaysian government is trying to reduce its expenditure and the country's budget deficit to 2.8 percent in 2015 from seven percent in 2009, the private sector now plays a more significant role in driving the nation's economy forward.

According to the plan, the Malaysian government will set up the 20 billion ringgit (6.13 billion U.S. dollars) Facilitation Fund to encourage and boost private investments in nationally strategic areas.

This is also in line with the Malaysia Investment Development Authority's aim to boost domestic investments while continuing to attract foreign funds to be parked in the country.

Private Finance Initiative, the creation of "public-private partnerships" by funding public projects with private capital, will be assuming more important roles than before in the foreseeable future.

The Malaysian government, particularly through the government- linked companies (GLC) and government-linked investment companies, will also establish partnerships with the private sector.

Prior to this, the GLCs has been divesting its non-core businesses to provide rooms and opportunities for the private sector to invest.

Meanwhile, the Malaysian government is also fine-tuning its strategy to boost investment to not only target multinational corporations but also focus on foreign knowledge-based small and medium enterprises (SME).

The foreign SMEs are also encouraged to collaborate with their Malaysian counterparts.

Najib has also placed great emphasis on the National Key Economic Areas which span across 11 sectors and one geographic area.

These sectors, including oil and gas, palm oil and related products, financial services, wholesale and retail, tourism, information and communications technology, education, electrical and electronics, are mainly run by the private sector

The sectors of business services, private healthcare and agriculture will also be given much attention to.

Apparently, the Malaysian government is doing its best to create a conducive business environment for both local and foreign investors, laying a solid foundation for them to prosper as the country's leading growth engine.

Should the initiative be heeded much, the saved development expenditure by the Malaysian government can successfully reduce the Malaysian government's financial burden.

There will also be extra funds to be dedicated to helping the needy, expanding the social safety net to members of the public.

In future, the Malaysian government can then focus more on providing better necessary services to the people such as education and healthcare, with the private sector taking care of other business-related development.



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