PETALING JAYA: Economists flag income disparity as one of the issues that has to be relooked, ahead of the mid-term review of the 11th Malaysia Plan set to be tabled on Oct 18.
Malaysian Institute of Economic Research (MIER) executive director Prof Dr Zakariah Abdul Rashid said at a media briefing today that the policies related to income disparity between race, state and income group's should be scrutinised and if possible reviewed.
“This is a long-term plan, so it is essential to look at how it can strengthen the economic fundamentals to spur productivity. The allocation of resources is also an issue that has to be relooked given that the income disparity has widened between income groups, race and state,” he explained.
Socio-economic issues such as income disparity and cost of living has to be tackled to ensure that the economy is manageable in the long term.
Concurring with this, Sunway University Business School professor of economics Dr Yeah Kim Leng told SunBiz that unless inequality of income within individual communities is addressed, it will be difficult to bridge the gap on a national level.
However, he said it is timely to shift to needs-based economic policies to reduce disparity, to accelerate and promote an inclusive growth, maximising potential, fully utilise resources and unleash potential of communities.
Meanwhile, the executive director of the Socio-Economic Research Centre (SERC), Lee Heng Guie, said the mid-term review is expected to have programmes to mitigate cost of living burden and uplift the Bottom 40 (B40) group.
Areas such as human capital development, infrastructure and technology are also key in bridging disparity.
Lee opined that bridging income disparity is not only about reducing the number of taxes imposed but also through tangible and intangible initiatives such as education, investment in job creation and increasing income.
On expectations for the mid-term review, both Yeah and Lee noted that the government will come up with plans moving in the direction of the digital economy and the fourth industrial revolution.
Lee said while the policies on the original plan will be maintained while new dimensions will be added to it.
He also said it will be interesting to see if past targets such as reaching a high-income nation status by 2020 and economic growth projections of 5-6% per annum will be reset.
Yeah added that structural transformation to attain fiscal sustainability, reducing impediments to sustainable growth, private sector-led economic growth are areas to look out for in addition to social, environmental aspects and political maturity.
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KUALA LUMPUR: This year’s International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM) 2018, which is to kick off next Wednesday, is expected to generate an estimated RM2.5 billion in business leads.
The first three days of IGEM 2018, Oct 17 to 19, are open to trade visitors. The last day, Oct 20, is open to the general public.
Minister of Energy, Science, Technology, Environment & Climate Change(MESTECC) Yeo Bee Yin in a statement today said, with the global green economy gaining momentum, Malaysia has an opportunity to not just participate but actually lead the green agenda in the region.
“To step up to the green game, we see IGEM playing a pivotal role in bringing together sustainability solutions that are practical, proven and cost-effective,” she said.
With over RM19 billion generated in business leads throughout IGEM’s history, this year it will see 250 exhibitors, and 30,000 visitors from over 30 countries for its ninth edition.
For the first time, IGEM will also be playing host to the World Energy Cities Partnership – Mayors’ Congress, organised by the Kuala Lumpur City Hall which will see four Mayors and delegates from 11 members cities explore opportunities to incorporate environmental technologies to power green cities.
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PETALING JAYA: Institute for Democracy and Economic Affairs (Ideas) chairman Tan Sri Rebecca Fatima Sta Maria said it is crucial for the government to form a body to assess the social impact of any foreign direct investment (FDI) that comes into Malaysia as there is already an existing one to look into the environmental impact.
Rebecca, who was previously secretary general of the Ministry of International Trade and Industry, noted that there has been a reversal in the flow of FDIs between the two countries as Malaysian investments in China used to be six times more than China's investments in Malaysia.
Ideas today unveiled its report on the “Impacts of Investment From China in Malaysia on the Local Economy” which noted that there is a lack of technology and skills transfer from China to Malaysia, as well as the employment of Chinese sub-contractors and labour for construction projects undertaken in Malaysia.
Rebecca, who delivered her opening remarks at the session, noted that the study by Ideas was carried out based on secondary data and there is a need for academics to work together with government bodies such as Malaysian Investment Development Authority and the Statistics Department due to the availability of data on the nature of the investments with these agencies.
“We need to get more vigorous analysis of the nature of the investments in Malaysia so we can than make more concrete solid conclusions. I am hoping that today's discussions will see us getting in that direction,” she said.
Ideas director of research and development Laurence Todd said while presenting the report that skill requirements, differences in working practices, cultural preferences, language barriers, local capacity, access to finance and politically motivated preferences were identified as possible causes for the employment of Chinese sub-contractors and labour force for projects undertaken by Chinese companies in Malaysia.
According to him, evidence from other countries suggests FDI is most beneficial when there is a high level of technology and knowledge transfer but this requires the involvement of human capital.
“There are indications that Chinese firms do not always provide opportunities for such transfers, particularly to local SMEs,” he said while adding that there is a need for skill gap to be bridged.
Meanwhile, Dr Cheong Kee Cheok of University Malaya's Institute of China Studies said in his commentary on the paper that the onus lies with the holding company, which are usually local, on calling for more local participation in the labour force. Foreign companies incorporated here need to have at least 51% local shareholders.
He noted that if skills transfer is what these companies are looking at, they should be included as a clause in contracts.
When it comes to government contracts, he said the government should also bargain to secure reasonable deals.
China's investment is not only limited to construction but is also seen in the services and manufacturing sectors as well as the Malaysian stock and bonds market which gained momentum under the previous administration.
The report flagged the Melaka Gateway project which has come under criticism due to the lack of consideration of impact on local communities and the environment. The project is now being reassessed.