Business

Thursday November 13, 2008

New strategy to weather economic downturn

By FINTAN NG


PUTRAJAYA: The Government-initiated Economic Council is working on a “New Strategy Package” to focus on medium and long-term structural issues affecting the economy.

Minister in the Prime Minister’s Department Tan Sri Amirsham Aziz said the council would identify constraints on the economy and re-look at development strategies.

“These measures include attracting more foreign direct investments from high-surplus countries, stimulating domestic investment, taking advantage of China’s and India’s growth, promotion of tourism and construction activities,” he said yesterday after a briefing for analysts and investors.

Amirsham said the country needed to rely less on low-skilled foreign workers and step up human capital development to move up the value chain.

“We have plans to reduce reliance on low-skilled foreign workers in the construction, manufacturing and services sectors to 300,000 from the current 600,000 over the next two years,” he said.

Economic Planning Unit director-general Tan Sri Dr Sulaiman Mahbob said the reforms being looked at included liberalisation of business and professional services, a high-income policy and flexibility in employment of foreign experts.

He said measures to promote entrepreneurship included reviewing rules and regulations pertaining to the Foreign Investment Committee.

“New sources of growth and income that we’ll promote include Islamic banking and finance, halal hub, tourism and biotechnology, in which financing is already available,” Sulaiman said.

He said for long-term sustainability, there was a need to broaden and raise the efficiency of revenue collection, review subsidies and accelerate the implementation of projects.

“Moving forward, we’ll promote projects with higher domestic content, less leakage and higher returns while looking at the efficiency of expenditure,” Sulaiman said.

On human capital development, he said there would be a review of the wage structure.

“Measures include strengthening skills training and retraining, firming up collaboration between industry and universities as well as raising productivity,” he added.

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