Association of Islamic Banking Institutions Malaysia

Najib's Trade Liberalisation Move Vital Step Towards Modernising Malaysian Economy - Envoy

Thursday, 02 July 2009

KUALA LUMPUR, July 1 (Bernama) -- The approach adopted by Prime Minister Datuk Seri Najib Tun Razak to further liberalise the Malaysian economy is a crucial step towards modernising the country's economy, says Vincent Piket, Ambassador and Head of Delegation of the European Commission to Malaysia.

Hailing the move as progressive , he said it would spur both domestic and foreign investments.

"Companies will have to look into details of the implementation of the measures. The prime minister has sent a strong and clear signal to local and foreign investors.

"Malaysia, like the EU, is going through tough times economically. All of of us need to find effective and quicker ways to boost our economic recovery," he told Bernama Wednesday.

In his speech at the opening of Invest Malaysia 2009 Conference here yesterday, Najib, who is also Finance Minister, announced that ownership in the wholesale segment of the fund management industry would be fully liberalised to allow 100 per cent ownership for qualified and leading fund management companies to establish operations in Malaysia.

For retail segment, the foreign shareholding limits for the unit trust management companies would be raised to 70 per cent from the current 49per cent.

The prime minister also announced a comprehensive deregulation of the investment guidelines administered by the Foreign Investment Committee (FIC).

The scope and functions of the FIC have been substantially rationalised, involving fewer transactions, rules and conditions.

This is in line with the government's focus to establish a more conducive regulatory environment for the private sector to prosper by facilitating robust investments and a more vibrant capital market.

Najib said the comprehensive deregulation of FIC guidelines was drawn up to strengthen Malaysia's attractiveness as a place to do business and invest, for both Malaysians and foreigners.

"A facilitative business and regulatory environment that unleashes the full potential of the private sector is needed, together with a new economic model to transform the nation towards a sustainable higher growth," he said.

Combined with a more effective distributional policy, Najib said the government was convinced the measures announced would benefit all stakeholders.

He said the government was committed to drive the economy to stronger growth that was equitably enjoyed by all Malaysians in line with the spirit and substance of promoting growth with equity.

Piket said the Brussels-based European Union has been for some years the No. 1 foreign investor in Malaysia.

"You can see very clearly the business conditions here. This is something that we want to build on," he said.

In trade terms, the EU was No.3 or No. 4 trading partner of Malaysia.

"The EU is planning to build on that as well depending on the currency exchange rate," he added.

-- BERNAMA