“A similar announcement earlier had included conditions attached to the purchase,” Second Finance Minister Tan Sri Nor Mohd Yakcop told a media briefing yesterday. “These measures should be read as a signal that we are moving away from bureaucracy. However, there will be protection for locals as there will still be bumiputra allocations and discounts.”
“Anybody who wants to live in Malaysia can buy these properties which we expect to be in the RM700,000 to RM900,000 range. Foreigners can bring in their own funds,” he added.
Overall, he said, the Government’s ambition was to provide a business-friendly environment with speedier approvals.
Reviewing the current year, Nor Mohd said the next 12 to 18 months should see many projects coming onstream. “The momentum and spillover should be good for 2007 and beyond.”
Strong commodity prices; about 500,000 people employed in the plantations now enjoy higher income, on average, from RM2,500 to RM3,800 per family.
In the area of financial management, Malaysia has adopted a pragmatic approach, with the current emphasis on gradual liberalisation with protection of strategic national interests.
“During the Asian financial crisis, we tackled the uncertainties by fixing the exchange rate and moving it back to floating when the need was not there,” Nor Mohd said.
On the debate over deficit financing, he explained that it was a practical issue and a useful tool in times of confidence building and recession. Growth was always an important aspect in Malaysia’s budget plans as the Government wanted to provide opportunities to all in an expanding pie, he said.
The country, he said, had been disciplined and had not resorted to borrowing to finance operating expenditure. “Revenue must cover operating expenditure,” he said. “We only borrow for development expenditure which has socio-economic benefits. These borrowings are mostly from local sources and, most of the time, we prepay,” he added.
Nor Mohd said Malaysia was becoming more and more liberal. “Foreign direct investors can borrow locally. We want their technology while, at the same time, they are good paymasters.”
Procurement, another major issue, was becoming more efficient, he said, and the savings would be channelled into other areas. “One area we are looking at is an increase in salary for civil servants.”
On the National Automotive Policy and revamp of Perusahaan Otomobil Nasional Bhd (Proton), he said discussions were ongoing with foreign parties while the role of local companies would be looked into.
“We are open to new methods,” he said. “Proton needs fresh thinking. We will see whether with this foreign partnership, there will be a role for local parties. If there is, we will see how best to structure it.
“All parties have their own proposals but, for Proton, it is a national issue involving shareholders. However, the Government will consult the Proton management.”
In response to queries on petrol prices, Nor Mohd said: “Subsidies have reached RM16bil. There is so much demand (for funds) from other areas. When we raised petrol prices, the price of crude oil was at US$58 per barrel, which subsequently shot to US$74. It has come down to US$63, which is still high.”
On overseas listings, he said the authorities were trying to make the stock market more attractive with more friendly and flexible rules. No doubt it has to compete with other bourses but the authorities have to ensure there is value on Bursa Malaysia and that companies with good quality are listed.
Nor Mohd pointed out there were also cases of companies failing on bourses that were very open. “It is a major challenge to us and an area to work hard on,” he added.
On the Thai Government’s earlier decision on capital controls, he confirmed that Malaysia was not making similar moves, on the contrary, it was liberalising progressively.
An industry source said there were less drastic ways of dealing with an appreciating baht.
“People betting on the currency going stronger will sell US dollars. The central bank can buy these up and neutralise operations in the money market.
“Other measures that are interest rate-related can be used,” the source said, adding that the highly geared hedge funds that had caused the 1997 financial crisis had moved on.
Source : The Star 21/12/2006
