COMPETITIVENESS INFOLINE

I N F O L I N E : TUESDAY, APRIL 8, 2016 0 1 / 2 0 1 6 STRIVE TO REALISE HIGH - INCOME NATION GOAL

STABILITY: Economic achievement and wellbeing of rakyat are key, says king

Yang di-Pertuan Agong Tuanku Abdul Halim Mu'adzam Shah wants the government to continue the goal of becoming a high-income economy that also ensures the wellbeing of the people.

"We hope this administration will continue to realise the country's objective of becoming a high- income, advanced nation that is not premised solely on economic achievement, but also on the well­being of the people," the king said.

Speaking at the opening of the fourth session of the by 2020. 13th Parliament sitting here yesterday, Tuanku Abdul Halim said the government was concerned about the rakyat, especially the bottom 40 per cent "The government will continue to provide and the middle 40 per cent income groups. allowance to the disabled, assistance to poor

children, temporary shelter to those in need, as well as medical assistance to retirees and civilians." He He added that the groups' well­being would be welcomed the setting up of the Special Committee improved through the increase in minimum wage, to address the increase in cost of living and the expanding the social security network providing addition of zero-rated goods. micro-finance facilities, upgrading of skills, and the expansion of the e-Rezeki and e-Usahawan programmes under the 11th Malaysia Plan, which The programme to build afford­ able homes and will kick off this year. The government will also access to quality healthcare would be intensified, he provide high-speed broadband, with at least 95 per said. cent of the population having access to the Internet

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"So far, 50 per cent of the one million homes plunge the nation into chaos. targeted to be constructed between 2013 and 2018 "As such, we support proactive measures through have been completed." legislation and the upgrading of military assets to

stop extremism and the spread of militant Other initiatives such as interest free loans for ideologies." Orang Asli, as well as the 1Malaysia Civil Servants

Housing scheme and 1Malaysia People's Housing Programme, would continue, he added. He said the government was committed to upgrading security infrastructure at the borders and

empowering the control of security agencies The government is also committed to continue through the Border Security Agency. improving the quality of life of Orang Asli and

Bumiputeras in Sabah and Sarawak. Malaysia's participation in the Regional Digital

Counter-messaging Communication Centre to The king said the attempts of some parties to combat terrorism and human trafficking had play up racial sentiments and abuse social media to gained international recognition and helped to incite, slander and spread extremist contents must improve the country's ranking in the United States be stopped and ad­ dressed immediately. State Department's annual re­ port on human

trafficking, he added.

"Religious issues have to be referred to religious authority and it is group to make their own Tuanku Abdul Halim thanked the civil service and interpretation as this can create confusion, tension the sacrifices of the armed forces, police, civil and conflict in society." defence and enforcement agencies to pre serve

the nation's sovereignty and security. Tuanku Abdul Halim hoped the measures to strengthen religious institutions and enhance the efficiency of Islamic administration laws through He welcomed efforts to transform Parliament. the empowerment of the Syariah Court could be sped up. "We hope that the members of parliament (MPs)

will accept the amendments to make the He said efforts to discredit the nation in the eyes of institution stronger and more effective as a branch the international community should be avoided. of national administration.

Tuanku Abdul Halim hoped civil servants would "I also hope all MPs will stop politicking for narrow protect the confidentiality of government interests as this has gone on for too long, and has documents and adhere to the laws and rules to exhausted the people and government. safeguard national stability. He earlier said security and terror elements which threatened the nation "In a constitutional democracy, we can have were real. differences of opinion but refrain from fostering enmity and slander that can lead to the­ downfall of "The development of militant threats and terror the nation." elements, which have started to spread in the country, has to be given serious attention as it can

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I N F O L I N E : WEDNESDAY, APRIL 20, 2016 0 1 / 2 0 1 6 TPP BOOST FOR SMES

UALA LUMPUR: SMALL and medium enterprises (SMEs) of the 12- member K grouping of the Trans Pacific Partnership can look to the support of all the governments to break entry into global value chains.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said an SME committee, represented by the government and private sector, will be set up when the TPP agreement takes effect.

Capacity-building in terms of exports, cooperation, information- sharing will be addressed, while a International Trade and Industry Minister Datuk Seri dedicated website will also be set up to help SMEs Mustapa Mohamed addressing SMEs at the TPP sharing adjust to a trading bloc (without borders). session in Kuala Lumpur yesterday.

In Malaysia’s case, he said, SMEs must take “SMEs must keep up with the changes in the advantage of the opportunities to gain market business landscape, lifestyle patterns and the Gen Y access to the United States, Canada, Mexico and purchase habits so as to remain in business,” Peru, countries which Malaysia does not have a free Mustapa said during a TPP sharing session with trade agreement with. SMEs, here, yesterday.

The TPP agreement, which is expected to take The TPP is about scale and increased market access effect two years from when it was inked in February for Malaysia products, which in turn provides 4 this year, has a special chapter on SMEs. spillover and multiplier effects to economic activities to even the “remotest villages”. SMEs form the backbone of the economies of most of the TPP countries, providing more than 50 per Speaking to the media later, Mustapa explained cent of job opportunities. that the government is providing various capacity- building programmes over the next two years to

INFOLINE: 01/2016 NEWS STRAITS TIMES WEDNESDAY, APRIL 20, 2 0 1 6 prepare the players in the textile industry. They include training programmes to improve the Dealing with customized container solution for the standards to enter the global market. oil and gas sector, which include rigs and FPSO, the company has been producing for export markets. Malaysia has been identified as one of the key beneficiaries in the textile sector and 10,000 SMEs It also won the coveted Asean Business Award 2015 stand to benefit. for SME excellence last month.

The entry for products like shirts, which make up 35 Fadzil A Rashid, who is in the lighting industry, per cent of the textile exports to the US, will see a cautioned that it will not be easy to move into the surge since the current 25 per cent duty will be international market as standards have to be eliminated, he added. complied with.

Come 2018, Malaysia will stand to benefit from the “We complement the ‘big boys’ and not compete tariff reduction for products in the electrical and with them,” he added. electronics (E&E) sector, rubber products, palm oil, transparent equipment and wood products.

Canada will eliminate tariffs for Malaysian exports in E&E and palm oil when the TPP agreement comes into effect.

Meanwhile, several SMEs shared their excitement about the changing business landscape in the Pacific Rim.

Builders Biomass Sdn Bhd chairman Ooi Suan Kim described the TPP agreement and Asean Economic Community as two platforms for the company and other Malaysian SMEs to leverage and expand their market reach.

“For us, in the face of challenges, we embrace changes to adapt, carving out our niche. The TPP is a catalyst for us to chart our future.”

Builders Biomass produces biomass waste pellets as a source of green energy and its exports span across Asia and Europe.

VG Offshore Containers International (M) Sdn Bhd managing director Arvin Menon said his company can now venture into unchartered waters, in countries like Mexico, thanks to the TPP.

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I N F O L I N E : WEDNESDAY, APRIL 20, 2016 0 1 / 2 0 1 6 ECONOMISTS SEE 3.2 pc CPI GRO WTH

UALA LUMPUR: The Consumer Price Index INFORGRAPHICS NST may have grown by 3.2 per cent in March CPI forecast for March K compared with the same period a year ago, say economists. (% year-on-year) The Statistics Department will release the data AmInvestment Bank 3.6 today. BIMB Securities 3.4

DBS Bank 3.5 The CPI rose by 3.5 per cent in January and 4.2 per cent in February. Kananga Investment Bank 2.5 Maybank Investment Bank 3.4 Although Bank Negara Malaysia outlook is for a RHB Research 2.6 lower and more stable inflation of 2.5 to 3.5 per cent Standard Chartered Bank 3.2 for 2016, economist expect the first quarter to post higher growth compared with last year. UOB Bank 3.4 Average 3.2 This was due to the adjustment in the administered prices and the weaker ringgit factor.

Outgoing central bank governor Tan Sri Dr. Zeti Akthar Aziz held that the ringgit’s current level would be stronger if it reflected the country’s fundamentals, namely the steady growth, low inflation and an improving fiscal position.

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I N F O L I N E : WEDNESDAY, APRIL 20, 2016 0 1 / 2 0 1 6 FUNDAMENTALS STILL S OUND, SAY AGENCIES

IMPRESSED: Fitch, Moody’s and S&P applaud Malaysia’s growth

UALA LUMPUR: GLOBAL rating agencies, Second Finance impressed with the five per cent growth Minister Datuk K Malaysia chalked up last year despite tough Seri Ahmad Husni economic conditions, have acknowledged that the Hanadzlah country's fundamentals remain sound.

Their assessment of Malaysia came out of the meetings last week between Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah and senior representatives of Fitch Ratings, Moody's and Standard & Poor's (S&P), ahead of the International Monetary Fund-World Bank annual spring meetings in Washington. respectively with a “stable” outlook in February due

to government’s commitment to fiscal "Malaysia's prospects are even brighter as the consolidation path, a stable ringgit and reserves government plans and prepares to take the country and stronger economic growth. beyond Vision 2020 that will see Malaysia competing successfully with other high-income S&P late last year maintained Malaysia’s “A-” and countries," said Husni in a statement. “Stable” outlook.

Last month, Moody’s assessed that Malaysia’s long- Husni said Malaysia’s development plans were term economic prospects remained favorable given unaffected by the recent budget recalibration, its structural strengths and diversified economy, adding that the government would always invest in despite the revision of its ‘”A3” rating outlook to the development of the people. “stable” from “positive”.

He said that task ahead for Malaysia and global Fitch affirmed Malaysia’s long-term foreign and leaders would be fraught with many difficult local currency issuer default ratings as “A-” and “A”,

INFOLINE: 01/2016 NEWS STRAITS TIMES WEDNESDAY, APRIL 20, 2 0 1 6 situations, given the context of current uncertain global environment and escalating humanitarian crisis. He urged the World Bank Group to remain focused and take the lead in tackling the challenging global development issues.

Husni said the World Bank Group should proactively explore innovative financing options and other financial support facility to assist member countries during and in the aftermath of a disaster.

“The world needs more sophisticated and innovative solutions, and the World Bank Group needs to collaborate with other multilateral development bank, global agencies and regional groupings to avoid and duplication and wastages. This also includes tapping the private sector, which is the catalyst for development,” he added.

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I N F O L I N E : WEDNESDAY, APRIL 20, 2016 0 1 / 2 0 1 6 CHANGING TACK TO IMP ROVE STEM EDUCATION

STRATEGY: Stakeholders must work together for a coordinated national effort that embraces quality to achieve our goal

CIENCE, Technology, Engineering and Mathematics education, or STEM, has “We need a S recently come under scrutiny not just in system of Malaysia, but also in many countries of the world, implementation including the United States. which allows us to

Policymakers have grown uneasy knowing things DR. AHMAD gauge whether we are not going well with STEM. There is concern over IBRAHIM are on the right the declining interest among students. Even those track or not. We, who have taken up STEM have not quite therefore, need demonstrated the desired outcome. an institutional driver of STEM.” We have, for example, fared poorly in some of the benchmark international competitions in STEM, As usual, the workshops hosted by Mosti talked such as PISA (Programme for International Student about the same grouses that have preoccupied Assessment). In fact, we have even performed previous workshops. Quality of teaching, lack of poorly compared with some of the new entrants proper infrastructure, ineffective pedagogy, rural- from emerging economies. It’s not for want of urban divide in terms of facilities, poor trying. How do we address this? implementation and many more. It was obvious the issues were not new. The Academy of Sciences recently hosted a discourse, which brought together the education, There have been many discloses on STEM. The higher education, and science, technology and academy has made numerous submissions to the innovation ministries, as well as industry government on actions needed to boost STEM representatives from sectors such as oil and gas, education. In fact, the latest blueprint on education plantation and manufacturing to deliberate on what has outlined the approaches needed to address the else we can recommend to the government on concern. Yet, we continue to organize workshop STEM.

INFOLINE: 01/2016 NEWS STRAITS TIMES WEDNESDAY, APRIL 20, 2 0 1 6 after workshop to deliberate on what to do to should not expect immediate results. We need to invigorate interest in STEM. implement a mechanism that will eventually lead to the desired outcome. Most of all, we need a system Many views were expressed as to why past of implementation which allows us to gauge initiatives in STEM have not succeeded. A few whether we are on the right track or not. We, raised the issue of lack of implementation of the therefore, need an institutional driver of STEM. actions identified. Admittedly, we as a nation are very good as producing plans. Unfortunately, we Implementation cannot be on an ad hoc basis have difficulty acting on the plans. It is not just the because the effective delivery of STEM calls for a plan for STEM. Many pother plans, including coordinated national effort. Stakeholders, including Science, technology and Innovation, Industrial and industry, the public and the government, must Agriculture master plans, suffer a similar fate. together work to make STEM a success.

The desired outcomes have always alluded us. This is where the strategy must embrace th quality Some explain we are addicted to aiming for short- approach. This refers to the plan, do check, action term results rather than go for the long haul. We are (PDCA) strategy. This is being done under the always in a hurry to demand results. Some attribute Outcome Based Education (OBE) approach where the failings to too much interference, which has led the ultimate objective is to implement Continuous to frequent changes in implementation strategies. Quality Improvement (CQI). It is time for change. We can start with STEM. In the accreditation exercise for engineering There is no denying that in the era of innovation programmes at universities, OBE and CQI are and disruptive changes in the technology mandatory. We need to face the fact that all plans landscape, a country’s strength in STEM is a definite have to be dynamic and flexible f they are to have asset. A string command of STEM will put us in any chance of success. They are living documents. good stead when it comes to elevating the nation’s competitiveness. STEM is, therefore, an important Plans needs to be implemented, monitored and investment in nation building. analyzed to continuously improve. We need to adopt the same strategy for STEM. This way, future But, we must recognize the fact that STEM workshops will only discuss ways out of obstacles to education is a journey. A long and arduous one. We deliver progress, and not repeat the grouses.

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I N F O L I N E : WEDNESDAY, APRIL 20, 2016 0 1 / 2 0 1 6 ‘ASEAN CAN WORK TOGE THER FOR PEACE’

COMMON DESTINY: ‘Overemphasis on national interest obstructs integration’

VEREMPHASIS on national interests is one friendships but also push our militaries to do of the challenges to greater security better.” O integration among Asean members. Defence Minister Datuk Seri Hishammuddin “Another exciting prospect is collaboration in Hussein said while no one was suggesting that natural disaster and humanitarian relief.” He also Asean nations should surrender their sovereignty, it proposed that sub-regional groups could be used to was frustrating that rivalries, chauvinism and address security concerns. paranoia stood in the way of closer cooperation between countries. “For instance, great good can be done towards improving the southern Philippines and Sulu Sea “At the end of the day, we have to realize that issue through cooperation between Brunei, the Southeast Asia has a common destiny, and that Philippines, Indonesia and Malaysia.” prosperity as well as peace can only be won if we work together,” he said in his keynote speech titled Hishammuddin’s third proposal was to include all “Building Regional Security Integration in levels of society in Asean to drive regional Southeast Asia” at the Putrajaya Forum 2016 here integration, and that it should not be left to top yesterday. leaders.

The session was moderated by The New Straits “Indeed, peace and cooperation are only Times Press Bhd chairman Tan Sro Mohammed sustainable and lasting if they involve all members Jawhar Hassan. of the various societies. Security cooperation will only take root in Asean with the participant f civil Hishammuddin put forward several proposals to society ad business.” boost security integration in Asean. First, he proposed that confidence-building After his speech, he took questions from the floor, initiatives, such as military cooperation and which was made up of military officers, security exercises between countries in the region should be analysts and officials from around the world. ramped up to forge peace. A military officer from Uganda asked “Joint exercises and exchanges not only forge

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Hishammuddin, what Asean would do if the grouping was forced choose between the China and the United States in the event of war.

He said it was easy to succumb to the temptation of war, but leaders had to resist that.

“A wise man told me when I took office, ‘Your job as defence minister is to avoid war.”

“I feel that China and the US do not want to see this region unstable. The waterways of the Straits of Malacca and the South China Sea are crucial (to them).”

He said the time had not come for Asean to choose between the two powers, as it was not in their interests to see the region unstable.

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I N F O L I N E : TUESDAY, MAY 3, 2016 0 1 / 2 0 1 6 BMCC SEES MLAYSIA - U K INVESTMENTS GROWING TO £8b

British Malaysian Chamber of Commerce chairman Andrew Sill says so far, the top 24 British companies -in Malaysia alone have invested over RM86 billion and created around 70,000 jobs

KUALA LUMPUR: The United Kingdom and Malaysia are set to double trade and grow investments to £8 billion (RM45.76 billion) this year, said British Malaysian Chamber of Commerce (BMCC) chairman An­ drew Sill.

"So far, the top 24 British companies in Malaysia alone have invested over RM86 billion in Malaysia and created around 70,000 jobs," he said in an interview, here.

As the service delivery partner for the UK's small and medium enterprises under the Overseas Business Network Initiative, Sill said BMCC strove BMCC Chairman, Andrew Sill to strengthen relations and rapport between the chamber, UK Trade and Investment, Foreign Singapore.

Commonwealth Office and Malaysian government institutions, local industries and workforce to Among British names that have established thei r foster more bilateral trade. footprint in Malaysia are Aberdeen Asset

Management, Allied Pickford, BAE Systems, He noted that the UK emerged as Malaysia's fourth British - Petroleum, British America n Tobacco, · largest trading partner among - European Union Marks & Spencer, Dyson, Harrods, Marlborough countries in 2013with a total trade of RM13.03 College, Petrofac, Pinewood Studios, Tesco, Weir billion while Malaysia was the UK'.s second largest Group and the University of Nottingham. trading partner in the Asean region after

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To date, Sill, who is also The Royal Bank of Scotland "For the past 30 years, UK businesses have invested country executive of Malaysia, Indonesia and Thai­ more than £20 billion in Malaysia," said Sill. land, noted that BMCC's member­ ship had grown to an all-time high of 280 represented companies Since 1963, BMCC has been a catalyst in providing and a network of over 100,000 employees. businesses on both sides of the continent with net­ working, knowledge exchange, bilateral trading Among its high profile members are Rolls-Royce assistance and support. Malaysia Sdn Bhd, British Airways, Balfour Beatty Rail, Petrofac Malaysia and The Alice Smith Schools Malaysian investors that have put in money into the Association. UK's utility, real estate and hospitality sectors are SP Setia Bhd, Sime Darby Bhd, YTL Corp Bhd, Amcorp Properties, Tanjong plc, Genting and Hong Leong Group.

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I N F O L I N E : TUESDAY, MAY 3, 2016 0 1 / 2 0 1 6 FOUR KEY PILLARS TO S T R O N G GOVERNMENT

IIAM President says “Toxic culture” can undermine good governance...

UALA LUMPUR: For an organization to be successful, it must K have strong governance backed by four key pillars: board of directors, management team, internal auditors and external auditors.

"If the four pillars are not working effectively, we will be seeing more high-profile corporate scandals such as at FIFA, Olympus, Volkswagen and Toshiba, where 'toxic culture' can undermine good governance and ultimately destroy shareholders' value," said Institute of Internal Auditors Malaysia (IIAM) president Datuk Shabaruddin Ibrahim. IIAM President, Datuk Shabaruddin Ibrahim He said a farsighted and effective nomination committee would keep an eye on the need for a needs to be approached with a watchful eye and succession planning in the boardroom. inquiring mind," Shabaruddin said in a statement.

The board, meanwhile, should be strengthened by He said having independent di­ rectors was crucial independent directors who do not have any as interests of management, the company and the connection . with the company and, therefore, shareholders differed. ·On internal audit, have no conflict of interest in the discharging their Shabaruddin said it should operate in an duties. atmosphere that allowed it to function

independently. "Any approval being sought at the board level

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It should have the resources to do its job well and must have separate administrative and functional reporting lines to the chief executive officer and board or audit committee, respectively. He said an internal auditor must assess and make appropriate recommendations for improving the governance, risk management and control processes using a systematic and disciplined approach.

Meanwhile, Shabaruddin said IIAM was working towards being endorsed as a professional self- regulatory organisation (SRO).

"IIAM is in the process of building capacity and setting up the infrastructure to ensure that we are ready to take on the role as an SRO. We expect it to take up to five years for the entire process to be completed," he said.

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I N F O L I N E : TUESDAY, MAY 3, 2016 0 1 / 2 0 1 6 MINIMUM WAGE IN ALL FIRMS

ALL WILL BENEFITS FR OM NEW WAGE RATE

minimum wage, but employers and W ith the exception of maids, the small and medium-scale all workers in the private sector will industry association said the move enjoy a higher minimum wage from would add to their cost of business. July 1 onwards All private sector firms regard­ less of their staff size, "Many employers are facing will have to abide by the new ruling, challenges in a weakened economy, according to the Minimum Wage with revenue (for some companies) Order (MWO) 2016, which was reduced by between 30 per cent gazetted on April 29. and 40 per cent compared with previous years , " said Malaysian With the new order, the previous Employers Federation (MEF) MWO 2012 no longer applies. executive director Datuk Shamsuddin Bardan. "The gazetting of MWO 2016 proves the commitment by the "We have asked the government to government to protecting consider postponing the new employees' rights without ignoring minimum wage, but the proposal the rights of employers," Human was not accepted," he said.

Resources Minister Datuk Seri Richard Riot Jaem said yesterday. Consumers Association of Penang president S.M. Mohamed Idris said Economists lauded the the new minimum wage rate would government's move to raise the benefit low-income workers and

“The higher minimum wage that takes effect on July 1 applies to all companies re- gardless of employee numbers. The human resources minister says the new rates prove the government’s commitment to protecting the rights of workers. Economists and consumer associations support the move, but the employers’ federation says it will add to challenges in a weakened economy.“

INFOLINE: 01/2016 NEWS STRAITS TIMES TUESDAY, MAY 3, 2016 help families that were struggling. "The government hopes that the new minimum "It would also be morally wrong for business owners wage rate can boost the income of Malaysians, as and employers, citing higher operational costs, to well as help improve the country's economy in pass on the cost to consumers." The new minimum achieving high-in­ come nation status by 2020." wage will be RMl,000 per month, or RM4.81 per hour for Peninsular Malaysia, and RM920 per Prime Minister Datuk Seri Najib Razak said at a month, or RM4.42 per hour for Sabah, Sarawak and Workers Day rally on Saturday that the higher Labuan. minimum wage rate would take effect as scheduled

on July 1.

As for the daily minimum wage rate, it is subject to a maximum of 48 hours per week. Prior to this, the minimum wage rate was RM900 in Peninsular Malaysia and RM800 in Sabah, Sarawak

and Labuan. In ttie peninsula, for a six-day working week (48 hours), the daily minimum wage rare is RM38.46; Najib said the implementation of the national five days a week at RM46.15, and four days a week minimum wage policy in 2013 had benefited 1.9 at RM57.69. million private sector workers, and was later

extended to the public sector following a pay hike In Sabah, Sarawak and Labuan, for a six-day recently. working week, the daily minimum wage rate is RM35.38, five days a week at RM42.46, and four days a week at RM53.08, the minister said.

Riot said for workers who were paid on a piece-rate, task, tonnage, trip or _ commission basis , the monthly salary should not be less than RM1,000 in Peninsular Malaysia, and RM920 in Sabah, Sarawak and Labuan .

Minimum wage rate Area Monthly Daily Hourly

Number of working days in a

week

Penisular Malaysia RM1,000 6 RM38.46 5 RM46.15 RM4.81 4 RM57.69 Sabah, Sarawak and 6 RM35.38 Federal Territory of RM920 5 RM42.46 RM4.42 Labuan 4 RM53.08

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