KUALA LUMPUR, March 13 – Despite a RM60 billion mini Budget heavily bent towards saving jobs, Deputy Prime Minister Datuk Seri Najib Tun Razak is looking to push for a knowledge-based economy that is fair to all.
In a rare interview with the British-based Financial Times published yesterday, Najib said he favoured gradual reform of the National Economic Policy (NEP) that has favoured the majority Bumiputeras in economic restructuring.
The NEP, introduced by his father Tun Abdul Razak Hussein after the May 13 riots, has been criticised for forming an inefficient economy based on ethnic politics and for failing to emphasis poverty alleviation.
“We must accept policies that are attuned to the changing times,” Najib told the Financial Times but added “we cannot have too drastic a move until people are ready for it,” referring to the widespread support for the NEP within Umno.Najib is set to succeed Datuk Seri Abdullah Ahmad Badawi as party president and prime minister after the Umno assembly end of March.
As part of the easing of the NEP, Najib suggested rules on foreign investment in the services sector would be relaxed, which he alluded in the mini Budget proposals. Foreign investors are required at present to have ethnic Malay shareholders in such industries as financial services now.
Najib pointed out that the NEP had successfully raised living standards for the majority population but he acknowledged some mistakes had been made in implementation. He said he favoured a return to his father’s original vision of improving conditions for the poor of all ethnic groups, not only Malays.
On knowledge economy, Najib said his goal was to increase the service sector to 70 per cent of the gross domestic product (GDP), from 54 per cent, in an effort to establish “a knowledge-based economy” that would be less reliant on manufactured exports.
“This is part of the transformation of the Malaysian economy. Services offer tremendous scope for growth,” he said.
One of the 20 top trading nations in the world, Malaysiaâ€™s main export remains manufactured goods at 72.5 per cent of total exports against 14.8 per cent for services.
He identified Islamic financial services as an important area for growth apart from service industries such as healthcare by attracting more foreign patients and to become a regional centre for education and eco-tourism.
He also reiterated Malaysia’s move to focus more on high value- added manufacturing in electronics, biotechnology and green technology. “We can no longer rely on cheap labour as a basis for our manufacturing,” he said.
Malaysia intends to reduce its dependence on its traditional export markets in the west, such as the US, by expanding trade links with south-east Asia, India, the Middle East and China.
Source : Malaysian Insider