Long-term view on structural reform agenda vital

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

KUALA LUMPUR: The financial sector should be more active and take a longer-term view instead of looking at shorter-term gains in funding the country’s structural reform agendas, mainly the New Industrial Master Plan 2030 (NIMP 2030) and the recently launched National Semiconductor Strategy.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said.

“While the financial institutions are always looking at shorter-term gains, the whole sector must also take a long-term perspective in funding these structural reform agendas.

“The hallmark of successful reforms and true nation building is a win-win end-game for all stakeholders. Securing Malaysia’s future sustainable growth is also securing future income streams of banks and financial institutions,” he said in his opening remark at the Sasana Symposium 2024 via a recorded video yesterday.

Tengku Zafrul, who was formerly CIMB Group Holdings Bhd group chief executive officer (CEO), highlighted that the NIMP 2030 will require an estimated total investment of RM95bil over the next seven years, of which the government had allocated RM8.2bil.

“While the figures may be daunting, I call upon the banking and financial sector to rise to the challenge, and take this opportunity to create impactful change,” Tengku Zafrul said, adding that these targets could be achieved, especially with the availability of innovative financing that is able to drive new industries.

“This can be done by embedding new dimensions of how banks and the financial sector assess risks, particularly those related to new technologies, climate and environmental, social and governance or ESG-related considerations.

“As a former banker, I am fully convinced that this will be a ‘win-win’ for financial institutions,” he said.

Tengku Zafrul added that unlike past NIMPs, Malaysia’s approach this time is to be “mission-based”.

“This means placing every stakeholder’s focus on four key missions, which are increasing economic complexity; teching up with best-in-class technologies; pushing for net zero and promoting economic security, resilience and inclusivity.

“These transformations must cut across sectors and every industry must contribute to push our economic reforms ahead,” he said.

Meanwhile, Malayan Banking Bhd group president and CEO Datuk Khairussaleh Ramli said the government’s structural reforms should benefit banks and various sectors, but banks need to take into consideration risk criteria and supply chain mechanisms when financing the new sectors.

“The mission under the NIMP 2030, for example, is to be part of the global supply chain. From a banking point of view, how do we support companies in Malaysia to have access to financing or credit, with the view that there is a bigger ecosystem of principals and buyers?” Khairussaleh said virtually during a panel discussion at the symposium.

“There is a lot of reform agendas that have been announced by the government and for us to really digest. I think it is all about us making sure that we are ready,” he added.

Khairussaleh stressed that it is important to co-create between the government and the private sector to ensure that the various objectives can be achieved.

“Take for example the transition towards net zero. We have the nationally determined contribution (NDC) under the Paris agreement. Basically, countries have to make it clear in terms of how they would align this in the economic sector with the corporates.

“The government can clarify this to make it clear in terms of commitments; what sectors and which corporates, and then the private sector will be able to articulate a bit more clearly,” he explained.

He also highlighted the example of online fraud where various key players should be involved in tackling the issue. — By Doreenn Leong

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