KUALA LUMPUR, 10 Feb 2009: International Trade and Industry Minister Tan Sri Muhyiddin Yassin said the New Economic Policy (NEP) “is perfect and good” in its original form.
“In the process of implementation, there could be some weaknesses,” he said at the Malaysian Industrial Development Authority (MIDA) annual media conference on the performance of the manufacturing and services in 2008 here today.
He was asked to respond to a suggestion by CIMB Group chief executive Datuk Seri Nazir Razak to improve certain areas in the New Economic Policy (NEP) to woo investments.
Nazir had said the NEP should be reviewed with regard to how it retards national unity, investments and economic efficiency and develop a new and more relevant framework for economic policy-making.
Muhyiddin said: “If we talk about the industrial sector, there have been policies over the years requiring foreign investors to comply with (bumiputera participation, for example.”
“There is a FIC (Foreign Investment Committee) requirement that they (foreign investors) need to fulfil, among others, to give a bit of leverage for bumiputera interests,” he said.
Some sectors such as the services sector have not been too open because “we thought that this sector is a bit more Malaysian in nature and we want to encourage Malaysian bumiputera to participate.”
Muhyiddin concurred with Deputy Prime Minister Datuk Seri Najib Razak’s assurance that the government would gradually liberalise the NEP, “where it is possible and when we are ready.”
“This will provide new avenues for foreign and local investors to come.
“So when you say there is a need for a review of NEP, first you should understand what NEP is all about. Maybe a review on how you implement the NEP could be a correct interpretation.”
“I am not too sure whether Nazir means a total removal. I am not too sure which specific areas of NEP he has suggested for a review…whether he mentioned about business sectors, banking or services.”
“But he said sooner than later, some of the service sectors would be opened up but “it doesn’t mean that this is a banning of what has been the mainstay of Malaysia’s policy of NEP.”
“So, where some adjustments are needed… we will do that accordingly,” he said.
Najib, who is also Finance Minister, had said recently the NEP elements would not be abolished at this time but liberalisation would be undertaken in stages.
He had said although the NEP had been replaced with the National Development Policy and now the National Mission, there were provisions in the two policies, which still mirrored the NEP spirit, such as the quota allocations and certain considerations, which were still practised to achieve a fair wealth distribution.
“When the Malays and bumiputera have attained success and the confidence to compete at the domestic and global levels, then they would no longer need quotas or special considerations,” Najib added. — Bernama