Private sector told to increase investment, boost performance

NECESSARY changes will be put in place in the economy to increase private investment and further enhance investor confidence in Malaysia, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah says.

He said the government is not pleased with the performance of the corporate sector which has continued to show a decline since the Asian financial crisis broke out earlier this year.

"We (the government) are most unhappy that the private sector's share in its contribution to Malaysia's gross domestic product (GDP) has steadily declined since the financial crisis," he said.

Ahmad Husni said the government is also alarmed with the decline in the private sector's level of investment, both in the manufacturing and services industries.



"We wish these trends to reverse," he said at the National Award for Management Accounting (Nafma) in Kuala Lumpur last night.

Ahmad Husni said the situation may become worse as Malaysia is facing the threat of being squeezed from all sides.

"On our right is India, China on the left, behind us is Vietnam and in front lies Indonesia," he said, adding that the corporate sector needs to quickly identify how best to penetrate these countries and benefit from it.

One best way is by building up the country's comparative advantages quickly and strongly.

"The solution is staring right in front of our noses, our single biggest comparative advantage is our diverse population," Ahmad Husni said, noting that Malaysians have not fully taken advantage of harnessing the synergy that can come from the racial mix.

He said over the next few years, the government hopes that the country's comparative advantages will be emphasised and the factors that contributed to the decline of confidence lessen in their importance.

"One of our most important and obvious comparative advantages is the diversity of the country's ethnic make-up.

"It is striking that 70 per cent of the Malaysian population is under 25 (years old) that can propel the future growth of the country," he said.

Also present at the event were Malaysia Institute of Accountants chief executive officer Rosli Abdullah, CIMA Malaysia divisional president Chandra Mohan Balasubramaniam and Nafma organising committee chairman Yeo Tek Ling.