Foreign investors urged to help Malaysia achieve goal

09 June 2010 , By Business Times

THE international business community in Malaysia must help improve the country's competitiveness and raise its productivity and standards of living in order for Malaysia to achieve developed nation status by 2020.

"We want the best Malaysian talent to remain in the country. We want investors to want to come to Malaysia for all the right reasons," International Trade and Industry Minister Datuk Seri Mustapa Mohamed said in Kuala Lumpur yesterday.

"Not simply because we provide low-cost base for operations, but because we have the best infrastructure and environment," he added.

Mustapa was addressing the annual luncheon hosted by the Malaysia International Chamber of Commerce and Industry (MICCI).

He urged companies to offer fair wages so that Malaysians would face "less compulsion to work abroad" or look for alternative employment.

On the issue of the availability of natural gas, Mustapa assured companies of guaranteed sustained supply when the investment decisions are made.

"However, it may not be easy for us to find new allocation before new contracts are drawn up. Companies have to take this as a challenge to increase production efficiency," he said.

The government is undertaking measures to build re-gassification plants, which will ease the situation.

Malaysia's forward contracts expire from 2014 onwards.

On the potential of the services sector as the main engine of growth, he said the International Trade and Industry Ministry (Miti) is in the process of identifying more sectors for liberalisation.

Miti is also working with the Finance Ministry to review the promoted lists and to expand the incentives structure.

"We are also looking at introducing new benefits to incentivise domestic companies to undertake new investments and expand their operations," he said, adding that several proposals are being studied for inclusion into the 2011 Budget.

Malaysia, which made an impressive eight notch jump in this year's IMD World Competitiveness Yearbook to be among the top 10 most competitive nations, now aims for one of the top five positions next year.

Meanwhile MICCI's newly-appointed president Charles Ireland said a radical transformation is needed to address Malaysia which faces the risk of losing its lustre as an attractive investment destination.

The current economic competitiveness model, driven by subsidies and supported partially by foreign labour and low wages are not sustainable in the long term and urgent and radical measures are required.

Some of the measures Malaysia could take include creating a clear business identity, lowering corporate tax band and overhauling taxation to spread the tax base more equitably.