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Malaysia News Update - October 2002
Malaysia seen as an Asia growth leader in 2003	Malaysia, along with China and Korea, is among the Asian economies, which could see relatively better economic growth next year, based on consumer-led domestic recovery, ING Barings' Hong Kong-based chief economist Tim Condon said.
Exciting prospects for Asia	The United States is expected to see slow growth in the next few years as it undergoes an adjustment process to correct excesses and weaknesses in the economy, but the prospects for Asia are becoming more exciting, said Gerard Lyons, Standard Chartered's chief economist and group head of global research.
Malaysia seen to overtake US in corporate governance standards	Malaysia has stolen a lead over the US in its drive for higher standards of corporate governance. According to Ian Rickword, Chairman (Asia Region), PricewaterhouseCoopers, many countries in Asia, notably Malaysia, have taken great strides in improving the levels of corporate governance since the Asian financial crisis. "In some respects, Malaysia has overtaken (the US) and may be leading the way," he said.
Pegged currencies in Asia will not come under pressure	Pegged currencies in Asia, and the Malaysian Ringgit in particular, will not come under pressure during the next 12 months, according to Dr. Andrew F Freris, chief economist, BNP Paribas, Asia Pacific Fixed Income and Treasury. He further added that Malaysia should continue with the ringgit's peg against the US dollar as it worked extremely well in providing foreign exchange stability.
Malaysia set to attract foreign funds	State Street Global Advisors, one of the world's largest fund managers, says Malaysia and Thailand will start attracting large amounts of foreign portfolio funds as they benefit from a stronger domestic economy and trade linkages to the Asean region.
Calpers to rethink its pullout from Malaysia next year	Calpers, the biggest US public pension fund, said yesterday it would review its list of emerging markets, including Malaysia, in the first quarter of next year after pulling out from several countries in the region.
Balance of payments down to RM3.3b	Malaysia's overall balance of payments declined to RM3.3bil in the second quarter of the year from RM7.2bil in the first quarter, the Department of Statistics said.
August trade surplus widens to RM4.6b	Malaysia's trade surplus rose to RM4.6bil in August from RM4.05bil in July with major increases seen in exports of oil and gas products.
Manufacturing sales up 4.6% in August	Sales in the manufacturing sector grew 4.6% or RM1.2bil to RM27.1bil in August from RM25.9bil in the same month last year, according to the Statistics Department.
Bank lending up 9% in September	Bank lending activities strengthened further in September, with loan disbursements up more than nine per cent or RM3.1 billion to RM36.2 billion from RM33.1 billion in August according to Bank Negara. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz urged banks to look at more vibrant loans growth as it can help to further stimulate economic growth.
8% growth seen for retail industry in 2003	The local retail industry can record up to 8% growth next year, compared with this year's estimated growth of 5%, said Tan Tai Hsin, managing director of Retail Group Malaysia which tracks the industry's performance.
Plastic sector to maintain previous turnover	The Malaysian plastics industry does not see growth this year but is targeting to at least maintain last year's industry turnover of RM8.5bil, according to the Malaysian Plastics Manufacturers Association
MAA and analysts remain bullish on motor industry growth for 2002	The Malaysian Automotive Association (MAA) remains confident that the motor vehicle industry will achieve the forecast sales growth of 8.5 per cent to 430,000 units for 2002 despite the anticipated sluggish growth in the remaining months of the year
Mahathir says domestic investment still secure	Datuk Seri Dr Mahathir Mohamad said that he believes that the domestic investments are secure and will continue to be so despite the recent bomb blast in the resort island of Bali, which came as a shock to the region. "We are not getting much foreign direct investment in any case, but in terms of domestic investment, people here are quite secure and I think they will continue to invest," he said. Nevertheless, Dr Mahathir said the investment climate would somehow be affected because of the issue of security.
Malaysia sticks to growth projections despite market jitters	Malaysia will stick to its growth projections unveiled in Budget 2003 despite the various market jitters arising from the Bali bomb blast and the possible attack on Iraq by the US said Datuk Mustapa Mohamed, the executive director of the National Economic Action Council. He expressed confidence that Malaysia would be able to achieve a Gross Domestic Product (GDP) growth of 4% projected for 2002 and 6-6.5% in 2003 and dismissed speculation of economic contractions.
Zeti sees economic growth even if war breaks out	Malaysia's economy would still grow strongly even if a war breaks out between the United States and Iraq, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said, but conceded that war would be a drag on the global economy as a whole.
Malaysian economy on track	The Malaysian economy is on track to achieve the 4.5 percent economic growth forecast in the third quarter, National Economic Action Council (NEAC) executive director Datuk Mustapa Mohamed said. He said the indicators included a robust business sector and strong consumption credit.
MIER revises GDP forecast to 4% this year	The Malaysian Institute of Economic Research (Mier) has revised its gross domestic product (GDP) forecast for the current year to 4% from 4.5% due to the slowing down of the US economy, weak financial market and rising risk of war with Iraq.
Consumer spirits still high	The Malaysian Institute of Economic Research (MIER) Consumer Sentiments Index (CSI) for the third quarter 2002 decreased slightly by 0.1 point from the second quarter's 109 points and showed a marked improvement from the 98.7 points recorded last year.
Manufacturers report improved 2Q, upbeat on 3Q prospects	Many Malaysian manufacturing firms have reported an improvement in their overall performance in 2Q of 2002 and continue to be upbeat on the prospects for the third quarter, a business survey showed. The Federation of Malaysian Manufacturers (FMM) in its 18th quarterly CEO survey said the companies reported improvements in production, volume of domestic and export sales, profits, employment levels and investments, while both prices and cost were generally maintained.
Motor vehicle sales down in September	After six months of consecutive growth, motor vehicle sales in September slowed down to register a 4.5% fall year-on-year and an even larger fall of 18% on a month-on-month basis, as consumers held back their purchase in anticipation of lower motor vehicle prices in the Budget 2003 proposal in view of the Asean free trade area (Afta).
More bank mergers in the next few years	Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz expects another "two to three" mergers to take place among domestic banks as the country approaches the liberalisation of its financial sector.
National health insurance scheme in the offing	A national health insurance scheme for all Malaysians which will ease the financial burden on the Government is in the offing.
28 ailing KL firms may be delisted	Some 28 ailing listed Malaysian companies - which have yet to submit financial restructuring plans - could be delisted by next January, Securities Commission chairman Dr Ali Abdul Kadir warned.
Technopreneur activities on track	The Technopreneur Development Flagship (TDF) has made good progress since its inception nine months ago and delivered substantial output, according to Energy, Communications and Multimedia Minister Datuk Amar Leo Moggie.
Number of companies in MBC more than expected	A total of 749 foreign and local companies have set up operations in the Multimedia Super Corridor (MSC), far surpassing the Government's conservative target of 500 companies by next year. Deputy Energy, Communications and Multimedia Minister Datuk Tan Chai Ho said the interest shown by business entities in the information technology (IT) industry reflected their confidence in the project.
Malaysia debt ventures set to lure more foreign firms to MSC	Malaysia Debt Ventures Bhd (MDV), armed with a RM1.6bil information communications technology (ICT) fund, is set to lure more foreign ICT companies to the Multimedia Super Corridor (MSC) and help market made-in-Malaysia software solutions to the world.
BioMalaysia Conference Roundup	Datuk Seri Dr Mahathir Mohamad invited foreign scientists to take part in Malaysia's efforts to fully exploit its potentials and opportunities in biotechnology. The government needs to collaborate with foreign scientists and enterprises to exploit and benefit from the country. Tan Sri Dr Ahmad Zaharudin Idrus, science adviser at the Prime Minister's Department said that the country badly needs more scientists for biotechnology as the country is only able to churn out 3,000 of the required 30,000 scientists in the next five years. Meanwhile, Sweden, Cuba and Canada have expressed interests to help local biotech companies and Malaysia create a "bio-valley" .
IMR to set up global hub for traditional medicine	The world's first information hub for integrated medicine will be set up by the Institute of Medical Research (IMR). Deputy Prime Minister Datuk Seri Abdullah Ahmad Badawi said the global hub would act as the foremost source of information on medicine uses, address safety concerns and conduct latest research on traditional and complementary medicine.
Malaysia aims to be international halal food hub	Malaysia is gearing up to become an international halal food hub to cater to the more than two billion Muslims worldwide
Malaysia to become defence procurement hub	Malaysia's quest to become Asia's leading defence procurement hub is expected to be fully realised in two years or at the next Defence Services Asia (DSA) exhibition, Defence Minister Datuk Seri Najib Tun Razak said.
Abdullah to maintain current trade policies	Malaysia has assured business leaders in the Pacific Basin area that there will be no change in its policies after Prime Minister Datuk Seri Dr Mahathir Mohamad steps down next October. "I also told them that we would also continue with the business policies that enable close co-operation between the public and the private sector under the Malaysia Incorporated concept," he said. Business leaders from the region attendedthe Apec CEO's summit which was part of the Apec conference.
US proposes free trade pact with Malaysia	The United States has proposed the establishment of a US-Malaysia Free Trade Agreement (FTA) similar to the ones it had proposed for Singapore, Thailand and the Philippines. US Trade Representative Robert Zoellick also proposed for Asean a Trade and Investment Framework Agreement (Tifa) aimed at increasing US trade and investments in Malaysia. He made the proposals when he met International Trade and Industry Minister Datuk Seri Rafidah Aziz for bilateral talks at the 10th Apec Ministerial Meeting.
Malaysia offers 96.6% of products for tariff under AFTA	Malaysia currently offers 96.6% of its products for tariff concession under the Asean Free Trade Area (AFTA), out of which 60.4% can be imported without paying any import duty. The average Common Effective Preferential Tariff (CEPT) rate for Malaysian products has been reduced significantly from 10.8% in 1993 to 2.6% this year and will be further reduced to 1.9% next year. This means that local manufacturers and their products have been competing with less or without tariff protection from the very first day Afta was launched, said International Trade and Industry Deputy Minister Datuk Seri Kerk Choo Ting
Malaysia's trade with Asean to exceed RM147b	Malaysia's trade with its Asean neighbours totalled RM93 billion from January to July 2002 and is expected to exceed the RM147.6 billion registered in 2001. Deputy Minister of International Trade and Industry Datuk Kerk Choo Ting said on Oct 23, Asean was Malaysia's largest trading partner, recording an average annual growth of 20.7 per cent from RM95.1 billion in 1995 to RM173.7 billion in 2000.
China firms see Malaysia as gateway to Asean	Many Chinese companies regard Malaysia as an important target market as well as a channel southward to other Asean countries, according to China Council for the Promotion of International Trade assistant chairman Yu Ping.
Shift funds from US to Malaysia, Arabs told	Malaysia will open its door to Middle East businessmen who are leaving the United States in view of the tight rules imposed on foreign investments after Sept 11. Deputy Finance Minister Datuk Shafie Salleh said Malaysia was expected to address the matter during the Islamic Development Bank meeting in Africa later this month.
Islamic finance poised for big leap forward	Islamic finance in Malaysia, which prides itself as having a unique dual banking system, is set to take a leap forward with next month's inauguration of the Islamic Financial Services Board (IFSB). Besides being charged with the task of promoting the Islamic financial services industry worldwide, the IFSB is also responsible for supervising and regulating financial institutions offering Islamic products with emphasis on syariah compliance.
Foreigners may be allowed to set up Islamic banks	The government plans to allow foreigners to establish Islamic-based banks in the country to increase the number of such institutions in line with its aspiration to raise the profile of an Islamic-based economy and banking, says Hashim Ismail, the parliamentary secretary to the Finance Ministry
Malaysia urge OIC member countries to use gold dinar	Malaysia hopes that the Organisation of Islamic Conference (OIC) members and others will use Gold Dinar in future trade transactions in order to enhance economic and trade relationships among themselves. This will be among the issues to be raised during the two-day 27th annual meeting of the Islamic Development Bank (IDB) beginning here tomorrow, said Deputy Finance Minister Datuk Dr Shafie Mohd Salleh With that, Malaysia hoped that initially Gold Dinar would be used as a bilateral payment arrangement (BPA), and ultimately the BPA would be expanded as a multi-lateral payment arrangement with other participating Islamic countries as well as other trading partners, he added.
Malaysia may establish secretariat to explain about gold dinar	Malaysia will consider setting up a secretariat to explain the concept of using the gold dinar for settlement of international trade, Datuk Seri Dr Mahathir Mohamad. He said that the secretariat would not only prepare booklets containing information on the gold dinar but also send someone abroad to explain the concept and to examine the laws in other countries as to whether those laws could be made compliant with the usage of gold dinar. Dr Mahathir said that Malaysia and its potential partners would need to amend the laws and convince the international community that gold dinar is a currency and not a gold standard. It was pointed out today at the seminar that there is an existing prohibition by the International Monetary Fund on the use of gold as a medium of payment and therefore the proposed gold dinar is a potential violation of the (IMF) rule
Muslim nations should use oil as a weapon	Datuk Seri Dr Mahathir Mohamad has again urged Muslim nations to consider using oil as a collective weapon to stop the escalating oppression faced by the Islamic world
Handle three issues affecting Muslims with care, says DPM	Malaysia has warned the international community that there would be adverse consequences if they failed to handle carefully the Iraqi issue, the Palestinian-Israeli conflict and terrorism.
Terrorism issue not handled properly	The terrorism problem affecting the world is not being handled properly with the situation now "worse than immediately after Sept 11," Datuk Seri Dr Mahathir Mohamad. "Unless you find out why they are doing these things and eliminate the reasons, we are not going to make any progress."
Removing Saddam no the way	Datuk Seri Dr Mahathir Mohamad said that removing President Saddam Hussein from power and bringing democracy to Iraq would not solve problems affecting that country nor tackle international terrorism effectively. The key to tackling the problem was finding the root causes of terrorism, he said at a one-hour dialogue at his office, here, with 40 international and local media fellows comprising senior journalists who had come for the East Asia Economic Summit organised by the World Economic Forum in Kuala Lumpur.
Malaysia protests to UN on report linking BN to terror network	Malaysia has expressed its outrage over a UN Security Council report implicating Barisan Nasional, PAS, Abim, Islamic Front of Malaysia (IFM), Malaysian Islamic Youth Movement (MIYM) and the Front Malaysian Islamic Council (FMIC) with the al-Qaeda terrorist movement. Describing the report as "totally untruthful and offensive to all peace-loving Malaysians," Deputy Prime Minister Datuk Seri Abdullah Ahmad Badawi said Malaysia had registered its protest through its UN Permanent Representative Tan Sri Hasmy Agam Dr Rohan Gunaratna, the author of the book on which the United Nations Security Council is said to have based its report linking the Barisan Nasional to terrorist organisations, has written a letter to the Deputy Prime Minister to clear the air. Wisma Putra will ask the United Nations to remove Barisan Nasional from a report linking the coalition to the al-Qaeda terrorist network
Global economic repercussions if US attacks Iraq	The world will have to grapple with severe economic repercussions if the United States attacks Iraq, Minister of International Trade and Industry Datuk Seri Rafidah Aziz said. "A war with Iraq can never be contained only in that part of the world," she told newsmen after addressing a seminar on "Business Opportunities in Malaysia". "The US will be the first to feel that impact as prices will go through the ceiling, then you can imagine the impact on international trade. There will be a global impact," she said.
US wants Malaysia to host regional center to counter terrorism	Washington, in apparent recognition of Kuala Lumpur's effort in fighting terrorist activities, has proposed that Malaysia host a Regional Training Centre to Counter Terrorism. Malaysia has subsequently agreed to the proposal.
Malaysia and India set to bolster cooperation in information technology	Malaysia and India are set to enhance cooperation in the information technology (IT) sector following the landmark visit by Datuk Seri Dr Mahathir Mohamad to the Hyderabad Information Technology Engineering Consultancy (Hi-Tec City) one of India's emerging IT hub.
Unity in diversity impresses Irish President	The peaceful co-existence of people of various races and religions in Malaysia has impressed visiting Irish President Mary McAleese who is on a four-day state visit. "...the most compelling aspect of Malaysia, that is its unmistakable diversity...different races, religions and languages are reconciled here. That is truly, truly impressive. That is an important message that I will carry home with me," she said
Dr Mahathir to bridge gap between the west and muslim world	Datuk Seri Dr Mahathir Mohamad said that he is prepared to continue to play a role to create understanding and ease tension between the Muslim world and the West after his retirement in October next year.
US further tightens foreigner entry and exit procedures	The United States has further tightened its entry and exit requirements for foreigners as part of its anti-terror efforts. Foreign Minister Datuk Seri Syed Hamid Albar said the tighter US entry and exit rules was discriminatory and would damage the image of Malaysia. He said it would unjustly create a negative impression of Malaysia among those who were not aware of the country's stand against terrorism and militant activities.
Malaysia disappointed with travel alert to German citizens	TGermany has placed Malaysia on a "highest caution" alert. Its latest advisory to its citizens travelling in the region warned that "highest caution is required" for travel to Malaysia. Malaysia is very disappointed that Germany has put Malaysia on a "highest caution" alert in its latest travel advisory without any evidence. Datuk Seri Dr Mahathir Mohamad said he would like to know from Berlin what evidence it had that caused it to issue the alert.
Malaysia will not impose visa restrictions on visitors, says Dr M	Malaysia will not impose visa restrictions on visitors as such a move will only inconvenience them, Prime Minister Datuk Seri Dr Mahathir Mohamad said. "We are not going to do it as we think it is silly and ineffective," he said when asked whether Malaysia would tighten visa procedures after Saudi Arabia announced it might fingerprint Americans as part of the entry process
Act's purpose clearer with rise in terrorism	The need for the Internal Security Act (ISA), which allows for detention without trial, has become more apparent with the emergence of international terrorist groups, Attorney-General Datuk Seri Panglima Abdul Gani Patail said.
Recycle Law	Recycling of certain solid wastes will be made compulsory under the proposed Solid Waste Management Act currently being drafted, said Housing and Local Government Minister Datuk Seri Ong Ka Ting. He said solid waste experts from the ministry were drafting the Bill, which forms part of the national solid waste management master plan.
Maths and science in English for all national schools from next year	The teaching of Mathematics and Science in English will go ahead as planned for all national schools from next year, Education Minister Tan Sri Musa Mohamad said, ending months of speculation.
Honorary citizenships for skilled foreigners	The Government is considering conferring honorary citizenship to foreigners, especially those with expertise and skills that can hasten the countrys development, Datuk Seri Dr Mahathir Mohamad said
Same-sex guides for tourists in Terengganu	Female tourist guides in Terengganu cannot accompany male tourists and vice-versa under a new policy on tourism announced by the State Government. Muslim visitors to Terengganu should cover their aurat (parts of the body required by Islam to be covered) while non-Muslims have to dress decently. This was among the requirements laid down by the PAS-led State Government in the policy launched by Menteri Besar Datuk Seri Abdul Hadi Awang