9MP: Reactions


  • Business
  • Saturday, 01 Apr 2006

Reactions to the Ninth Malaysia Plan (9MP) from various sectors 

Datuk Dr Salleh Mohd Nor 

Chairman 

Malaysian BioIndustry Organisation 

 

WE need more programmes to increase research linkages between local institutions and overseas universities, which to my mind, are not adequate at the moment. 

We need to provide adequate funding for more fundamental research, so the scientists will have a career path. If we are going to build a society based on science and technology by 2020, the budget should at least be double the RM2bil allocated. 

Proper implementation of incentives and funding should be given to research agencies like MARDI, RRIM and MPOB. 

Emeri Johari  

Chief Executive Officer 

Malaysian Bio-Diagnostics Research Sdn Bhd 

 

THE allocation for biotechnology sector, which increased about 250% from the previous plan, showed the Government’s commitment to promoting the industry.  

I believe this is a step in the right direction. The RM2bil allocation is sufficient for the time being although it is a relatively small amount.  

The RM50mil allocation for entrepreneurship development will encourage the setting up of more biotechnology companies.  

DAVID HO 

Managing Director  

Carotech Bhd 

 

THE government is putting a lot of new ideas such as the BioNexus concept and the focus on agriculture, healthcare and biofuel. The allocation is a good start and good for the industry, but when spread around, the funds appear to be thin.  

We do not need too much physical infrastructure as there are many existing facilities.  

We want to see the allocation go into developing software, motivating people to do research and start up projects. 

 

Dr Rajen M 

Managing Director 

Tropical Botanics Sdn Bhd 

 

THE policies are good. The challenge is to make it happen, which is to create value from the RM2bil allocated for the industry. 

It is easy to spend money but, more importantly, ensure that it goes to the right channels. 

Implementation and execution of the policies are extremely important, especially when the whole world is competing, for instance, India, China, Australia and Thailand. 

 

Dr Abdul Reezal Abd Latif 

Chief Executive Officer  

KLBiotech Sdn Bhd 

 

THE amount came as a pleasant surprise as it is significant increase from the 8MP. The allocation can be used to encourage commercialisation of products and hopefully with research and commercialisation, the industry can move to the next level. 

Malaysia is ready to compete globally and we have the focus and commitment on sectors such as agriculture and healthcare. 

 

Iskandar Mizal Mahmood 

Chief Executive Officer  

Malaysian Biotech Corp 

 

THE BioNexus concept is an important element in allowing a network of the industry to be formed, consisting of local and foreign, entrepreneurs, financiers, and researchers.  

This will allow exchange of expertise, technology, and information and promote collaboration. The other funds set up will help take the products to market, which is the next step for the industry. Malaysia, with its strengths, can collaborate with other players as biotechnology is an industry where co-operation is needed, in terms of expertise and resources. 

 

Datuk Dr Salleh Mohd Nor 

Chairman 

Malaysian BioIndustry Organisation 

 

WE need more programmes to increase research linkages between local institutions and overseas universities, which to my mind, are not adequate at the moment. 

We need to provide adequate funding for more fundamental research, so the scientists will have a career path. If we are going to build a society based on science and technology by 2020, the budget should at least be double the RM2bil allocated. 

Proper implementation of incentives and funding should be given to research agencies like MARDI, RRIM and MPOB. 

 

Freddy Yap  

Group Accountant 

QL Resources Bhd 

 

MAKING Malaysia a regional hub for halal food offers interesting opportunities for fishery and processed seafood products. The focus on biotechnology will help upgrade our fisheries industry to be more competitive internationally. In our marine product and livestock farming sector, I don't think the problem is the availability of scientists or researchers. There is a need generally to reduce red tape in the agricultural sector.  

Datuk Francis Lau 

Executive Director, Leong Hup Holdings Bhd  

President, Federation of Livestock Farmers' Association 

 

WE welcome the allocation of RM500mil for the livestock sub-sector, although we do not have any breakdown of how the money will be distributed. 

As for Leong Hup, we look forward to further food processing products in line with the Government's call to promote Malaysia as a halal hub. 

 

 

ALVIN TAI  

Research Analyst  

OSK Securities 

 

BASICALLY, we do not see much impact on listed companies. We expect smallholders to benefit from the major replanting scheme for planting palm oil and rubber. Rubber glove manufacturers are expected to benefit from the replanting scheme as the increased output will lower rubber prices. However, the impact will not be seen immediately; only in six years. 

 

 

THONG PAK LENG 

Research Analyst  

OSK Securities 

THE allocation for livestock under the 9MP represents a 150% increase from the previous plan. It is expected to help smaller poultry companies move to the closed-house system from conventional. We expect QL Resources to gain from the 9MP as it is fully diversified from agro-based to livestock. 

Noor Azwa Mohd Noor 

Head of Research 

Avenue Securities 

 

THE focus on the agriculture sector as the third engine of growth has been well anticipated. 

The private sector, especially government-linked companies, is likely to provide the lead. The focus is to intensify R&D efforts in the palm oil industry to move into more downstream activities such as oleochemical refining. 

The Government has targeted an annual yield of 35 tonnes of fresh fruit bunches per hectare for plantation companies by 2010, which is a feasible long-term target. Some plantation companies such as IOI Corp have already exceeded this figure. 

 

Freddy Yap  

Group Accountant 

QL Resources Bhd 

 

MAKING Malaysia a regional hub for halal food offers interesting opportunities for fishery and processed seafood products. The focus on biotechnology will help upgrade our fisheries industry to be more competitive internationally. 

In our (marine product and livestock farming) sector, I don't think the problem is the availability of scientists or researchers. There is a need generally to reduce red tape in the agricultural sector to make things easier for companies to capitalise on opportunities. 

DATUK SRI SULAIMAN ABDUL RAHMAN TAIB 

Chairman  

Rashid Hussain Bhd and Cahya Mata Sarawak Bhd 

 

Initiatives to help promote a more robust financial services sector, particularly the move to make Malaysia a centre for Islamic banking and finance, will also help prepare domestic financial services providers for the greater challenges that will come with a more liberal financial landscape. It will also be a boost to the growth of the domestic Islamic financial sector.  

NG LIAN LU 

President, Life Insurance Association of Malaysia (Liam) and  

CEO of AmAssurance Bhd 

 

Liam hopes the Government will immediately put in the machinery to set up the private pension plan to cater to the needs of an ageing society. This is to help the working population plan for their financial independence upon retirement. Relying on EPF savings alone is clearly insufficient as retirees would have to ensure their savings last for 20-30 more years. There is also a large group of self-employed workers (about 25% of the working population) who may not have any retirement savings. Hence, there is a need to fill up the retirement income gap and this can be done through a private pension scheme.  

 

 

CHRIS JAMES 

CEO  

Allianz Life Insurance (M) Bhd  

 

Overall, the 9MP is very supportive of the insurance industry. It is clear that the Government’s initiatives are lined up to address the low penetration rate, promote the industry and further increase its professionalism.  

The education of and raising awareness among consumers by the Government is in line with the already extensive efforts of the regulator and the industry.  

The offering of additional takaful and insurance licences and the introduction of liberalisation measures for foreign players will lead to more competition in the industry. Consumers will benefit from such competition in terms of more attractive and diverse products, better advice and service and an increase in distribution through alternative channels. It may also put pressure on smaller insurers and could lead to more consolidation in the market.  

 

 

MD AZMI ABU BAKAR 

CEO  

Syarikat Takaful Malaysia Bhd 

 

We welcome the move to set up a takaful guarantee scheme fund as it will strengthen consumer protection and thus create more confidence among the general public. 

 

 

LIM CHIA FOOK 

Executive director  

General Insurance Association of Malaysia  

 

The planned introduction of a risk-based capital framework for insurers will also be a key element of the master plan to improve and enhance the capability of insurance companies to manage their risks, assets and liabilities to serve the economic needs of the nation.  

The maturing insurance industry has developed increasing financial strength and resilience in terms of its capitalisation and solvency margins under the stewardship of Bank Negara. Consequently, its capacity to provide insurance protection has grown from strength to strength over the years. The industry’s assets grew from RM9.5bil in 1990 to almost RM87bil in 2004.  

 

 

ZARIR J CAMA 

Deputy chairman and CEO  

HSBC Bank Malaysia Bhd  

 

With the financial services sector representing almost 16% of the GDP in 2010, its major role in the development of Malaysia is clear. 

The plan reflects the government’s commitment in the various aspects of the financial services sector, some of which HSBC Malaysia is already focusing on, particularly in talent development, SME business, Islamic banking and takaful. The proposed development of a private pensions industry and of the enhanced role of Labuan are particularly timely.  

 

SHAYNE NELSON 

Managing director and CEO  

Standard Chartered Bank Malaysia Bhd 

 

It is a document that sets us in the right direction with measures that fit well together in support to build a better Malaysia towards Vision 2020. 

To compete globally, Malaysia has to maximise the economies of scale and deliver low-cost, high quality products to consumers around the world.  

On human capital development, this should be the number one agenda to ensure Malaysia goes beyond the lip service and really builds a knowledge-based economy driven by innovation and ideas. We should focus more on the people, skills, technology and mindset changes that will be required to make Malaysia a world-class knowledge centre.  

 

 

TENG CHEE WAI  

CEO and executive director  

Hwang-DBS Investment Management Bhd 

 

Broadening the use of derivatives in portfolio management will hopefully open another paradigm of growth for the Malaysia fund manager industry as well as benefit investors in general through development of alternative products in Malaysia. 

 

ANDREW WONG 

CEO 

MCA ICT Resource Centre 

 

The Government's effort to intensify competitiveness, productivity and value of established sectors such as the SMEs will create more demand for ICT products. 

It is also heartening to see that the 9MP will encourage technopreneurship. This should spur growth in the number of start-up ICT companies over the next five years. However, the government must help ensure that the necessary support is in place for these businesses to sustain. 

 

KHAIRIL ANUAR AZIZ  

CEO  

MLABS Systems Bhd  

 

Efforts to expand ICT infrastructure and improve broadband connection to 13% by 2010 bodes well for advanced multimedia applications such as video-conferencing, which can be an avenue to encourage greater collaboration amongst ministries and agencies for greater operational efficiency and civil service delivery. 

At the end of the day, it is about execution and bringing our country’s ICT sector on par with or even exceeding that of developed nations. We have to play our part to ensure there is proper governance and transparency to fulfil these initiatives as outlined under the 9MP. 

 

LEONG NYU KUAN 

Chief Operating Officer 

IFCA-MSC Bhd  

The increased emphasis on ICT programmes and projects under the 9MP clearly demonstrates the government’s efforts to “monetise knowledge” and create new economic value that will enhance the country's competitiveness and capabilities. 

Efforts to improve broadband penetration should result in the creation of a culture that produces and conditions knowledge. More Malaysians will be receptive to having a K-economy mindset and this would result in a thirst for knowledge. 

 

CHOY NGEE HOE 

CEO 

Visdynamics Holdings Bhd 

At present, our education system does not encourage entrepreneurship and not much has been done to help young entrepreneurs get off the ground. Entrepreneurship must be cultivated very young and it is good that the 9MP is going to put emphasis on this. 

It is also wise move to encourage innovation in the 9MP but the Government must help ensure it creates an innovation-friendly environment.  

 

Zurina Amnan  

CEO 

Natchip (M) Sdn Bhd 

It is important for Malaysia to be in line with global security and supply chain standards. The 9MP is well positioned to help local industries and government institutions adopt and grow the RFID industry, which will further strengthen Malaysia’s future in one of the fastest areas of technology growth. 

Establishments such as the RFID Centre of Excellence will provide the necessary push required to develop RFID within the country. 

 

Voon Seng Chuan 

MD 

IBM Malaysia 

The focus on human capital is spot-on, giving needed impetus for the infusion of high value skills to the ICT industry. This was why we made the decision to establish six regional shared services centres in Malaysia because the right skills and business conditions exist.  

Talent is the human dimension of innovation. This will be the single greatest driver of Malaysia's competitive advantage and it’s reassuring to know that its at the heart of the 9MP. 

TAN SRI WILLIAM CHENG 

President 

Associated Chinese Chambers of Commerce of Malaysia 

 

The 9MP encourages private investment, public and private partnership. New regional growth centres and growth corridors will be developed.  

It is also stated that the selection of concessionaires for the projects will be made through an open bidding process. We hope entrepreneurs of all races will be encouraged to take part in these projects.  

Moreover, it will be advisable for the GLCs to invite experienced Chinese entrepreneurs to participate in the operations of the GLCs, and this will help lead the GLCs into the international market arena.  

While the allocation for research and development is 97.3% higher at RM3.9bil under the 9MP compared to 8MP, the higher sum might not be sufficient amid the various high-tech programmes to be developed.  

Hence, we suggest that the private sectors be invited to take part in high-tech development, probably subsidised by the Government, say on a one-to-one basis. 

DATUK NAZIR RAZAK  

Group chief executive 

Commerce International Merchant Bankers Bhd  

 

The 9MP places strong emphasis on human capital development, which is a primary ingredient for value creation in a knowledge economy. Increasing the public-private smart partnership and stressing on inculcating a culture of high performance in both sectors show that the Government is clear on the key drivers of value creation. 

DATUK ABDUL WAHID OMAR 

CEO 

Telekom Malaysia Bhd 

 

The five thrusts of the 9MP certainly provide the road map for a balanced growth across all segments of Malaysian society, businesses and the rakyat. 

In our aspiration to establish ourselves as a leading regional and global entity, the interest and concerns of the rakyat are also high on the priority list as demonstrated by the Government’s commitment towards addressing socio-economic inequalities through development programmes and its drive to improve the quality of life. 

TM is committed to playing a major role in the country’s ICT development, specifically in the areas of infrastructure expansion in terms of broadband connection, development of local content, greater e-commerce adoption and improved information security. 

From a positive jump-off point today – of a fully diversified national and international network, 550,000 broadband subscribers, 80 mobile content providers, established e-commerce and e-payment platform, Internet security services and applications – we certainly look forward to supporting Malaysia's ICT aspirations.  

LEE HENG GUIE 

Head of Economics 

CIMB Securities 

 

THE Government has set a higher development expenditure ceiling of RM200bil for the 9MP, which is 17.6% more than the RM170bil allocated under the 8MP. 

Although this amount is significant, its share to GDP is however, lower at 7% compared with the 8.4% allocated in 8MP. That said, the prudent management of public finances remains, with the fiscal deficit expected to improve to 3.4% of GDP in 9MP, from 3.8% in 8MP.  

The RM200bil is expected to provide a boost to the economy, with real GDP growth expected to gain traction at 6.0% per annum in 9MP (4.5% in 8MP).  

Barring unforeseen circumstances, especially from external shocks, it is a realistic set of macro targets and is in line with the country’s estimated potential output of 6%.  

The key issue lies in our capacity to further enhance the country’s potential output. Since 2001, there has been a steady recovery in the potential output, augmented by a rise in productivity of labour and capital arising from technological and economic efficiency.  

This suggests that Malaysia is gradually shifting towards a productivity-driven economy.  

To further enhance this transformation, the key thrust of the 9MP is human capital development, technology advancement, intensifying R&D and increasing the utilisation of ICT in all sectors of the economy.  

On this note, investment in human capital, that is education and training, will be getting the lion's share of 22.6% of RM45.1bil of total 9MP allocation.  

Malaysia needs to find a win-win economic structure and development path that capitalises on its strengths and natural resources, while re-orienting and broadening its approach to regional co-operation.  

There are still structural weaknesses and market rigidities that have somewhat impeded growth of the country’s overall competitiveness and productivity.  

The Prime Minister recognises these inherent weaknesses and has thus made a firm commitment to rectify them.  

These include corruption and corporate governance; cumbersome rules and regulations as well as work procedures at the public sector level; weaknesses in implementing agencies, state enterprises and the government-linked companies; and unevenness in industrial development between states, and the resource-based and non-resource-based industries.  

Addressing these challenges decisively is the key element of 9MP. We recognise that there are no easy and quick answers to the many issues that confront us; we must act fast to undertake radical and forward looking policy changes to enhance the economy’s value chain.  

Much has been achieved in terms of “brick and mortar” development and the Government recognises that tackling the “soft” side of development is critical. 

To begin with, the Plan has set the stage for the private sector to move forward and take charge. The Government will provide a conducive environment and the needed incentives and infrastructure. The rest will depend on private enterprise spending and entrepreneurial initiatives.  

In line with the emphasis on strengthening the economy's resilience and competitiveness as well as capacity building, the economic sector will be given the largest allocation, amounting to RM89.9bil, or 44.9% of total.  

This allocation will focus on agriculture development (RM11.4bil), commerce and industry (RM19.9bil), transport (RM31.9bil) and energy and public utilities (RM21.8bil).  

The small and medium-scale enterprises (SMEs) will get a boost of RM2.2bil in allocation, a jump of 38.3% from RM1.6bil in 8MP. This allocation will focus on creating innovation-driven SMEs, involving the building of technical and innovation capacity. 

Over the medium-term, what is really significant is the Government’s resolve to gradually consolidate its fiscal position, raise productivity and inject much needed discipline in its spending.  

We caution on the need for greater fiscal discipline in spending so as not to exceed the ceiling of RM200bil. Looking at past allocations and expenditure, there appears to be a tendency to revise upwards the development allocation. This could eventually put a strain on fiscal finance.  

We think that the Government should still work towards fiscal consolidation, as this would provide greater fiscal flexibility in the event of any economic downturn.  

Implementation is crucial. If implemented without any leakages and wastage, the Plan will provide a boost to domestic growth.  

The next hurdle is to ensure the relevant agencies follow through on implementation. Execution risk must be lowered to ensure the maximum impact of Government spending on domestic growth.  

These include the timely disbursement of funds; ensuring the efficiency of expenditure based on the use of cost-benefit analysis and output impact analysis, as well as putting in a robust and credible system of checks and balances in the implementation of projects.  

The move to set up a high-level Implementation Committee chaired by the Prime Minister to oversee this is a positive one. 

PROFESSOR MOHAMED ARIFF 

Executive Director  

Malaysian Institute of Economic Research  

 

THE 9MP would bring with it the usual volume of real estate building such as houses, schools and universities. However, this time, the Government will focus more on the “softer” side of national development, namely human resource development and human capital building. 

While there is no denying that the construction sector will have something to benefit from, we are seeing the development process spreading to all layers of society.  

The Prime Minister has always stressed on the importance of Malaysians having a “first class mentality” to go with the country's progress, so we might well see the Government concentrating on that. 

This time, I believe the Government will also focus more effort on making sure the implementation of the 9MP goes smoothly, which is good because the people need to know how the annual average Plan expenditure of about RM40bil is being utilised.  

 

YEE MEI HUI 

Investment Analyst  

UOB Kay Hian 

 

THE construction sector emerged as one of the biggest winners in the 9MP with the reintroduction of large infrastructure projects after two years of absence.  

The development expenditure budget for the 9MP is RM220bil, a 29.4% increase on the 8MP. This is higher than expected, with RM20bil coming from private finance initiatives and is positive for the construction industry. 

The bulk of the private finance initiatives, RM9.5bil, will be channelled to education and training. 

In terms of absolute increases, the biggest beneficiary is the Federal Territory, with an increase allocation of RM12.5bil, an increase of 60.5%. We should also expect improvements to public transport utilities and education as well as training.  

DATUK LIM SEE TEOK 

Executive Director and Chief Executive Officer 

Salcon Bhd  

 

I AM happy that the allocation for water and sewerage almost doubled compared with that in the 8MP. The higher allocation and the setting up of Suruhanjaya Perkhidmatan Air Negara demonstrates the Government's commitment towards resolving the nation's water and sewerage challenges on a holistic basis.  

Based on our successful record in Malaysia and overseas, we see tremendous opportunities under the 9MP and the key potential areas would be in the development and upgrading of water and sewerage treatment facilities, as well as the reduction in non-revenue water.  

The 9MP would definitely be a catalyst for the water and sewerage sector after a lull of two years and we look forward to seeing Salcon's active participation.  

 

RIDZA ABDOH SALLEH 

Managing Director  

UEM Builders Bhd 

 

OVERALL, it is a balanced allocation. For example, the allocation for transportation and utilities will benefit a wide spectrum of industries ranging from planners, engineers, economists, architects, surveyors, bankers, insurers, environmentalists, product manufacturers, craftsmen, and so on. 

The prospect of the 9MP boosting the construction sector is very positive, in view of the bigger allocation for infrastructure and utilities. This will help revive the construction sector with the utilization of existing resources such as plant and machinery, material and manpower.  

Like other contractors in the country, UEM Builders stands to benefit from the opportunities created by the 9MP. We will be able to capitalise on and add-value through the enhancement of our knowledge, skills, technology, quality and development of new products. 

We shall also undertake to develop local and small vendors, including bumiputras, in line with the Government's aspirations for small and medium-scale enterprises. 

DATUK K.K. LOW 

Managing Director 

Road Builder (M) Holdings Bhd 

 

THE Government has allocated an ideal amount to boost the construction sector, which is a significant increase compared with that in the 8MP. 

We are confident that we are able to bid for a few Government projects to boost earnings, as we are financially strong and have the experience to stand apart from our competitors.  

However, the effects of the 9MP would only be seen from second half of 2006 onwards. 

 

IZA KAMALUDIN 

Analyst  

Rating Agency Malaysia Bhd  

 

THE allocation under 9MP is higher, but the major concern is the timeliness in the implementation of all these projects. 

The competition among construction players would intensify, as there are many projects announced under the 9MP but these have to be divided among many players.  

In addition, the 9MP would most likely benefit small- and medium-sized construction players as the Government is trying to help them.  

Ninth Malaysia Plan Links 

Click here for the full text of the Prime Minister's speech on the Ninth Malaysia Plan to Parliament. 

Click here for the full text of the Ninth Malaysia Plan. 

Read our Special Report on the Ninth Malaysia Plan here.

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