Malaysia's new economic model: Making choices

Malaysia's new economic model: Making choices
By Professor Dr Danny Quah Published: 2010/04/14

In June 2009, Malaysia's Prime Minister Datuk Seri Najib Razak asked if I would serve on his council of economic advisers, the National Economic Advisory Council (NEAC). This council was to come up with a New Economic Model for the country.


It would not be a group that got together every month to fine-tune the economy. This council was not to sift through the entrails of inventory reports, and propose economic policies to lean against the wind.

No, the task assigned by the NEAC was to put Malaysia back on a high-growth path, reinstating Vision 2020 that Malaysia would within these next 10 years achieve the status of a developed nation.

The council was to do this against a post-1997 background of annual economic growth having nearly halved; investment as a fraction of GDP having plummeted to 50 per cent of what it used to be (private investment, to one third); with the economy relying on a workforce of which four-fifths were educated only up to high-school level while over one quarter of the local public university graduates remained unemployed six months after graduation, and with the human capital brain-drain becoming freshly re-energised (350,000 Malaysians in 2008 lived and worked abroad, half of them with university education).

By 2007, Malaysia seemed as far from the World Bank's notion of a high-income economy as a decade earlier, in contrast to economies such as Slovakia, the Czech Republic, and Poland, all of whom had by 2008 broken through that high-income boundary but had earlier been roughly at level with Malaysia.

Yet, Malaysia had been previously identified by the Spence Commission on Growth and Development as one of only 13 countries in the world that had for more than 25 years grown at rates exceeding 7 per cent annually.

At different times since the 1960s, despite having a population not even one-third of the UK's, Malaysia had been the world's largest producer of tin, rubber, and palm oil.

Today, 40 per cent of Malaysia's households earn less than US$15 a day (RM1500 a month), two thirds the World Bank's low-income threshold.

With Malaysia's domestic income distribution what it is, only one million people pay income tax at the highest rate of 26 per cent; there is no goods and services tax.

Oil and gas revenues have, on occasion, provided up to nearly half the government's total revenues; although by 2014 Malaysia is expected to become a net importer of oil. As much as 20 per cent of the nation's public expenditures routinely get spent on subsidies that keep prices of basic goods low but distort reality for Malaysia's citizens.

Certain policy questions - for instance, monetary control and inflation; financial markets oversight, regulation, and development - are outside the NEAC's remit, and rightly so.

In Malaysia, all those issues were taken care of by others, and already attain world-class standards of performance.

The large facts I have just described seemed to me (and many other observers) precisely the ones raising the critical, first-order challenges for economic policy in Malaysia. The problem was how to organise them coherently and understand their resolution.

But there is, further, the other critical, first-order challenge unmentioned so far: namely, Malaysia's 40-year-old programme of affirmative action.

I say unmentioned but of course that is not how the outside world viewed this. The international press emphasised most of all this dimension to Malaysia's policy framework; I will bring this out further in the discussion that follows.

For now, however, I just note that some foreign financial houses I spoke to about NEAC work downplayed the significance of all the other problems I have mentioned. They said to me, "Malaysia needs to fix its affirmative-action programme; everything else follows."

That proposition, by itself, is almost surely demonstrably false. On the other hand, the perception is obviously one that colours the views of many market participants who actually shift significant financial resources.

Article 153 of Malaysia's Constitution, ratified in 1957, requires that the king protect the special position in Malaysia of the Bumiputeras (ethnic Malays and a small number of other indigenous groups). The Article allows the federal government to protect Bumiputera interests by establishing quotas for public scholarships, public education, and the civil service.

In 1971, following racial riots, declaration of a state of national emergency, and suspension of the parliament, the then-Prime Minister Tun Abdul Razak - father of the current Prime Minister - introduced the New Economic Policy (NEP). This policy sought to eradicate poverty regardless of race and to eliminate the identification of ethnicity with economic function.

The enabler for both these goals would be rapid economic growth, the speedy expansion of the economic pie to divide across all Malaysians, so that no subgroup would feel absolutely disadvantaged.

A key feature of the NEP was its effort to raise Bumiputera equity ownership from 2.4 per cent in 1971 up to 30 per cent within two decades.

What has the NEP's progress been? At a fixed absolute income threshold (its exact value holding no significance as long as it's fixed and applies across the board), poverty rates for Bumiputeras declined from 65 per cent in 1970 to 5 per cent in 2007, while that for Malaysians overall, from 49 per cent to 4 per cent; Chinese, 26 per cent to 1 per cent; Indians, 39 per cent to 2 per cent.

Wealth figures are widely disputed but most sources give Bumiputera equity ownership of 2-4 per cent in 1971; official KL Stock Exchange statistics suggest Bumiputera shares of 29 per cent by 1990 and 37 per cent by 1996.

That was the background when in August 2009 Najib delivered his keynote speech at the NEAC's inaugural meeting, asking the council for ideas and direction to transform Malaysia into a developed nation by 2020.

Malaysia, having successfully drawn foreign investment as a low-cost producer was populated with businesses that, at the margin, had neither incentive nor vision to climb the quality ladder.

Infrastructure and expertise in key areas remained under-developed. For Malaysia as a small open economy, the global trading environment has already shown time and again how it could change suddenly, as it had just done during the 2008 global financial crisis, and further looked set to change even more dramatically but less suddenly from longer-term global carbon considerations.

Reforms started in Malaysia by the Central Bank, the Securities Commission, and others were already liberalising capital markets and taking forward expertise and comparative advantage in Islamic Finance. Government transformation work had already begun to introduce meritocracy and performance measurement in the public sector itself.

What could the council do to help Malaysia relocate its strategic position in the global economy?

The New Economic Model

In the ensuing six months, the council met four times in Kuala Lumpur. At these meetings, council members listened to presentations, mapped strategic visions, and debated subtle differences in emphases. Now and then, we would as a group takes such a big-picture perspective that we would form a collective blind spot over the single largest difficulty in whatever we were discussing, completely missing the key concern.

Now and then, we would micro-drill down and heatedly argue over whether the appropriate punctuation should be a comma or a semi-colon. But all of us remained energetic and enthusiastic and committed, and sometime during the 15 hours of meeting each day, or in seemingly interminable rounds of emails 24/7, we would correct course and converge on the right balance.

We agreed our report had to be in two steps: First, to identify, propose, and persuade on the over-arching framework and strategic vision; Second, to steer from that vision, its delivery to be led by the executive branch and implemented by the civil service.

Without successfully convincing on the first, the second would never be executed. Without successfully executing the second, the first would have been in vain.

The single big-picture vision was that Malaysia had to become an advanced economy by 2020. Sure that included the Malaysian economy generating sufficiently high income. But that vision also included a subtext of inclusiveness - so that the poorest and most vulnerable in society would be taken care of and one of sustainability, so that higher economic growth would continue into the future, not at the expense of degrading the environment for generations to follow.

The council concluded many of Malaysia's malperforming situations were inter-linked. Underperformance in one setting was the rational response to underperformance in the next: Why work hard in school if you're convinced it doesn't benefit you afterwards? Why work hard in your job if your productivity is held back by so many unskilled people around you? In these circumstances, what is needed is a big push to break out of that vicious circle of under-performance.

But disruption would be needed not just in your own circle of school-mates and colleagues, but everywhere in the economy. Hence, we emphasised the big push of economic transformation needed to break the logjam of entrenched, special interests. We sought to build momentum and confidence in the mindset of citizens that more positive changes would continue to emerge but all of us needed to keep pushing.

This economic transformation would come with reform along eight strategic initiatives - slightly more concrete but only slightly:

* Re-energise the private sector so it could lead the process of economic growth;

* Re-energise the private sector so it could lead the process of economic growth;* Develop a high-quality workforce;

* Develop a high-quality workforce;* Create a competitive domestic economy;

* Create a competitive domestic economy;* Streamline and make efficient the public sector as facilitator for private enterprise, when in the past large government-linked corporations (GLCs) had been viewed as competitors instead;

* Streamline and make efficient the public sector as facilitator for private enterprise, when in the past large government-linked corporations (GLCs) had been viewed as competitors instead;* Move to affirmative action that is (a) transparent, (b) market-friendly, (c) merit-based, and (d) conditioned on need ;

* Move to affirmative action that is (a) transparent, (b) market-friendly, (c) merit-based, and (d) conditioned on need ;* Build infrastructure for a knowledge base;

* Build infrastructure for a knowledge base;* Enhance the sources of growth; and

* Enhance the sources of growth; and * Ensure the sustainability of growth.

* Ensure the sustainability of growth. Early on, the council decided it couldn't be swayed by arguments about whether it was doing something truly novel or new or different. The only thing that mattered should be whether a proposal for implementation was likely to succeed and whether it would bring the highest benefits to the greatest number. Good ideas are hard enough to come by generally; why straitjacket oneself to not look at certain of them? This isn't an exam: why not copy good ideas however and wherever you find them?

Nonetheless, having come to the end of putting in place the over-arching vision, we nonetheless could see several ways where our approach differed from earlier ones.

First, we focused on growth through enhancements in productivity, not the sheer brute force of capital accumulation. It's not that we ignored the latter - if we had, we wouldn't have expressed concern about the sharp fall off in Malaysia's investment.

Instead, it is that we figured it would be innovative processes and cutting-edge technologies that would provide the surest platform for Malaysia's producing high value-added goods and services in the future.

Second, we envisioned economic growth being private sector-led and market-driven, no longer dominated by large public investment through GLCs in selected economic sectors.

Third, we described the benefits of the government moving towards local autonomy in decision-making. State and local authorities needed to be empowered to develop and support more of their own growth initiatives - without unnecessarily duplicating function or project. While flat-out competition to produce identical public goods, over and over, would be obviously wasteful, a little competition between local authorities is healthy.

Fourth, we wanted to encourage local geographies to emerge - whether in clusters or corridors - as long as they exploited economies of scale and concentration, and thus raised productivity over the long term.

Fifth, we saw the need for continuing government support of private industry, as long as that support was geared towards innovation, entrepreneurial risk-taking, and high value-added goods and services. It would be those general principles that guided support, not past principles of picking winners.

Sixth, we welcomed talent and skills from everywhere: as long as anyone, local or foreign, is able to contribute to Malaysia's transformation to an innovative, high-value added economy, they would be accepted and welcomed.

Finally, we emphasised how the global economy was changing, and we figured Malaysia's strategic position within it needed to re-orient as well. For the entire 20th century, the world's strongest economic powers have been the US, Western Europe, and Japan.

Malaysia, like many others, tuned production and supply networks to service those markets. While we weren't arguing that policy should be based on the economic centre of the world suddenly shifting tens of thousands of kilometers east, we felt that it was reasonable to acknowledge the change in that global landscape, and to develop further new regional networks centred on the fast-growing, Asia-focused emerging economies.

In a nutshell, that's it. That's the New Economic Model (NEM).

After, for now

For a relatively technocratic problem and solution, the NEM announcement on March 30 by Najib attracted unexpectedly heavy attention from the international press. All the major world press worked in discussion of Malaysia's affirmative action programme, both historical and prospective.

The New York Times (March 30 2010) described the revision of Malaysia's policy to focus on need, not race.

The Wall Street Journal ran articles on two successive days (March 30 and April 1 2010), talking about the recalibration of Malaysia's decades-old affirmative action and asserting how "the New Economic Policy has hindered Malaysia's competitiveness in recent years. The US and European Union have singled out Malaysia's insistence on maintaining preferences for ethnic Malay-owned businesses in government procurement contracts for stalling the development of free-trade pacts".

The Journal's Opinion Asia column (April 1 2010) contextualised Najib's speech by observing how "A few years ago it was inconceivable that a Malaysian premier would express dissatisfaction with the 'rent-seeking and patronage' inherent in the country's four-decade-old affirmative action policies and call for a more 'transparent' system based on merit and need. Former Prime Minister Tun Mahathir Mohamad used to label people with such ideas 'extremists'."

Great cynicism continues to be expressed by some of my friends, Malaysian and otherwise, who say they have seen over the years many politician promises made only to be broken subsequently.

Personally, however, I see great optimism instead. Why? I contrast Najib's March 30 speech with what I imagine someone wanting an easy ride through life might have said, in light of both the general scepticism and fervent fear-mongering in the run-up to the event.

Two days before the NEM announcement, Kevin Brown wrote in the Financial Times (March 28 2010) how there was "widespread doubt" that Najib would take any political risk at all of dismantling Bumiputera special privileges, not least in a new economic model that might greatly dilute that historical affirmative action.

James Hookway's Wall Street Journal article of March 22 2010 gave considerable space to Datuk Ibrahim Ali, a right-wing Malay MP, and to Perkasa, the NGO that he founded devoted to defending Malay rights, reporting how "Ibrahim reckons Najib is misreading the depth of anger many Malays feel towards any change in a policy that has given many a leg up and helped to build a large middle class."

The Economist (March 11 2010) extrapolated from their interview with Najib and with others to sub-lead their article, "Najib wavers over undoing affirmative-action policies".

Not least, of course, there is the now-infamous interview Ibrahim Ali granted Al-Jazeera on March 29 2010, the eve of the launch of the NEM, where he gets bleeped three times speaking, with some vitriol, on the position of other races in Malaysia.

Domestic reporting too emphasised the emerging political tensions.

Now, contrast what Najib actually said with what all these observers predicted he would say. Think of the political onslaught, the wavering, the self-protection going on around him.

If Najib had wanted an easy way out, he could have taken it and no one would have been surprised. He didn't. He continues along that difficult but worthwhile path.

One final comment. In this international reporting, by far the greatest attention has gone towards Malaysia's New Economic Policy and its possible adjustment. In the council's work, we knew this was important, but so too were all other seven strategic initiatives.

Affirmative action matters. No significant advanced country in the world gets by without affirmative action programmes of some kind - it is in human nature to take care of the weakest and most vulnerable in our society.

So too for the members of council, where that bottom 40 per cent of the Malaysian population is targeted to receive significant help and attention. But fixing all the other problems matters too: it's one big push for all of them.

The council has now finished Step 1. Step 2 starts. Everyone likes to say, Now the hard work begins - as if I've never heard that one before. But I am energised. I continue to do this work (and, for the record, for practically no pay compared to outside options) because I think things actually are looking up in Malaysia.

The writer is an NEAC council member & professor of Economics at Department Of Economics, London School Of Economics & Political Science.


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Biggest obstacle to Najib: The NEM's enemy within

The NEM’s enemy within
Written by Commentary by R B Bhattacharjee
Tuesday, 18 May 2010 00:00


"WHEN the Government Transformation Programme (GTP) hits inevitable challenges and setbacks, we the government and all Malaysians must remind ourselves of what is really at stake here and continue to stay the course."

This line, from the closing of the executive summary of the GTP Roadmap carries a foreboding of the resistance that can be expected when the New Economic Model (NEM) is formally adopted. If things go as planned, the new blueprint will be launched in the latter part of 2010.

The people who would most strenuously object to the new rules of the game are those who have enjoyed a privileged existence, drawing their lifeblood from an opaque administrative system. They are not in the lower rungs of society, the folk who have gained more equitable access to education, scholarships, vocational training, small loans and business licences that were undreamt of just one generation ago.

The interested parties are those who have been controlling the stakes based on know-who rather than merit. As the beneficiaries of the status quo, they can be expected to vote against the GTP, that is working to bring the socio-economic delivery system out of its father-knows-best past into a future where the most deserving will be helped and the fittest will survive.

Of course, it would be expedient for this privileged coterie to agitate the masses against the impending changes in the name of protecting the people’s rights. In the confusion, they hope the rakyat will not see that these vested interests are merely seeking to perpetuate their access to the country’s bountiful assets.

Now, the game is up. Serious cracks in the national edifice have developed because of entrenched abuse of the New Economic Policy (NEP) platform. Perhaps the most glaring symptom of our dysfunctional economic growth is the disparity between the rich and poor, which is the highest in Southeast Asia, according to the UN Human Development Report. The fissures in society have grown so visible that there is no point living in denial any more.

Stunned by the people’s verdict in the 12th general election, the government has been galvanised to respond. The result is the GTP, which identifies six National Key Result Areas (NKRAs), where the need is most pressing to show improvements before Prime Minister Datuk Seri Najib Razak’s administration faces the people in the next general election.

The hidden obstacles facing Najib can be discerned by two aspects of the transition from the NEP and its permutations to the much-heralded NEM. One is the tentative manner in which the new policy direction is being announced, and two is the reactionary noises that are emerging in response to its approaching launch.

When unveiling Part 1 of the NEM in March, Najib outlined three main goals of the policy: turn Malaysia into a high-income economy, ensure all communities benefit from the country’s wealth and strive for sustainable economic growth through efficiency and fiscal discipline. Part 2 of the NEM would follow after public feedback for two months and will be announced at the launching of the 10th Malaysia Plan in June.

As part of the consultation process, a National Key Economic Areas (NKEAs) workshop for some 800 representatives from a cross-section of the economy was held in Kuala Lumpur last week. At this event, Minister in the Prime Minister’s Department Datuk Seri Idris Jala, who is CEO of Pemandu, the unit overseeing the implementation of the administration’s Key Performance Indicators (KPIs), walked the participants through the feedback process, which was aimed at obtaining industry forecasts of expected growth rates for the top 30 contributors to the GDP in the next decade.

Among the questions that followed was one from Centre for Public Policy Studies chairman Tan Sri Ramon Navaratnam, who asked what the basic assumptions were on which to make the forecasts. Growth projections may change significantly depending on changes in policy direction, for example.

Expanding on this point to The Edge Financial Daily in a phone interview later, Navaratnam said that since the NEM chiefly involves a major shift in economic strategy, wouldn’t the forecast be very different after the NEM is introduced?

What appears to be a disconnect between economic planning and common sense can be understood when the political dimension is added to the mix. To legitimise the NEM, Najib needs to build a broad consensus for its radically different direction. This is in order to neutralise the ethnocentric right wing that seems to be singleminded in its mission to keep the race-based agenda alive.

Ironically for Najib, the biggest obstacle that could stop him from claiming his place in history as the leader who reinvented Malaysia is the enemy within.

http://www.theedgemalaysia.com/business-news/169190-stocks-to-watch-three-a-lafarge-gentingm-gaming.html

What's new in NEM?

New council for Bumi agenda
By Kamarul Yunus
Published: 2010/06/11

Prime Minister Datuk Seri Najib Razak will lead a high-level council to plan, coordinate and monitor the implementation of a Bumiputera development agenda

A HIGH-LEVEL council will be set up to plan, coordinate and monitor the implementation of a Bumiputera development agenda, which aims to safeguard and uphold the interest of the Bumiputeras under the 10th Malaysia Plan (10MP) (2011-2015).

Prime Minister Datuk Seri Najib Razak will lead the proposed council, to be made up of relevant Cabinet ministers, senior government officials and representatives from the private sector.

"The Economic Planning Unit in the Prime Minister's Department will be the secretariat to the council, while the project management unit in the Finance Ministry will monitor the implementation of programmes to ensure their efficient and effective implementation," he said when tabling the 10th Malaysia Plan in the Parliament in Kuala Lumpur yesterday.

The proposed council is one of five strategic initiatives identified to strengthen the Bumiputera development agenda. Other initia-tives include increasing Bumiputeras' equity and property ownership; improving skill and entrepreneurial development programmes and funding; and developing professional Bumiputera employment in a more holistic manner.

In trying to increase Bumiputera equity ownership through institutionalisation, Najib said private equity programmes in government-linked investment companies such as Permodalan Nasional Bhd (PNB), Lembaga Tabung Angkatan Tentera and Tabung Haji will be renewed, strengthened and expanded to consolidate and pool various funds to broaden ownership and control of Bumiputera equity.

In this context, he said Equity Nasional Bhd (Ekuinas) was established recently as a Bumiputera private equity investment institution.

"Ekuinas has a similar function as PNB, with special emphasis to invest in high-potential medium-sized companies to be supported to become champions and leaders in their respective sectors," he said.

He said Ekuinas will adopt a new approach, which is more market-friendy and merit-based, backed with the government support to take their businesses to a higher level at the domestic, regional and international arena.

On property ownership, Najib said Pelaburan Hartanah Bhd, a group set up to boost Bumiputera holdings of properties will establish a Real Estate Investment Trust to facilitate Bumiputera investment in commercial and industrial properties and benefit from property appreciation.

In addition, he said Kampung Baru, a valuable Bumiputera asset in the heart of Kuala Lumpur, will be redeveloped to enable landowners to realise and unlock the value of their properties without affecting the Malay ownership.

On funding to improve skill and entrepreneurial development programmes among Bumiputeras, Najib said an integrated developement package will be provided to the Bumiputera Commercial and Industrial Community to strengthen their competitiveness and resilience.

"The package will include entrepreneurial training, technical assistance, financing, consulting services, promotion and marketing," he said.

To improve access to financing facilities, Najib said half of the additional RM3 billion allocated under the Working Capital Guarantee Scheme will be allocated to Bumiputera entrepreneurs.

"Entrepreneurial development organisations such as MARA and Perbadanan Usahawan Nasional Bhd will also be strengthened. For this, an allocation of RM3 billion will be provided," he said.

Najib said the government also wants to develop professional Bumiputera employment in a more holistic manner although Bumiputeras currently can be seen participating in all professions and even lead in the fields of engineering, medicine, law, surveying and architecture.

The Malay Businessmen and Industrialist Association of Malaysia (Perdasama) yesterday said the proposed council is a good move, but hoped that the government would take into consideration contribution from non-governmental organisations (NGOs).

"The government has recently strongly emphasised the role of NGOs, but every time they set up a council, the NGOs are not (represented) there," Perdasama president Datuk Moehamad Izzat Emir said.

"The NGOs who are also from the business community can sit and contribute. They can play an active role in such a council. The government should nominate one or two (NGOs) so as to be more transparent in what they want to do," he added.

Kuala Lumpur Malay Chamber of Commerce president Datuk Syed Amin Aljeffri said the setting up of the high-level council shows the commitment of the Prime Minister in safeguarding the interest of the Bumiputeras.

"In actual fact, Bumiputera interest is always in his mind. I think that is the reason why he wants to lead (the council). He (Prime Minister) wants to walk the talk," he said.

Read more: New council for Bumi agenda
http://www.btimes.com.my/Current_News/BTIMES/articles/konsel/Article/index_html#ixzz0qUrtcTs3

PM's Hong Kong visit eye-opener for investors

CREDIT Suisse group is forecasting a more bullish outlook for Malaysia with a gross domestic product of 6 per cent this year compared with Bank Negara Malaysia's (BNM) estimate of 5.5 per cent.

It also expects more senior investors to come to Malaysia for in-depth research on local listed companies following Prime Minister Datuk Seri Najib Razak's address at the Asian Investment Conference in Hong Kong last week.

"They now better appreciate that he is a prime minister who means business, but also respects the fact that he faces a herculean task in reforming Malaysia," said Stephen Hagger, country manager & head of equities for Credit Suisse in Malaysia.

He said that a key takeaway was that the prime minister understood what the market wanted, but has to balance that with socio-political considerations and getting elected.

"PM Najib's visit to Hong Kong served as a timely reminder to many investors not to forget about Malaysia," he said in response to questions sent via e-mail.

Credit Suisse is the number one institutional investor research company globally.

In Hong Kong, Hagger said he met several senior investors keen to come to Malaysia to "kick the tyres" or go the extra mile in doing company research after hearing the prime minister and realising that Malaysia was becoming "under-researched".

Najib last week met top-notch fund managers besides delivering a keynote address on Malaysia's attributes as an investment destination for equity and capital market investments and its ground-breaking economic reforms.

He also met Credit Suisse special adviser, Sir John Major, who moderated the luncheon address where Najib discussed Malaysia's economic transformation efforts to emerge as a high-income economy by 2020 and the soon-to-be unveiled new economic model.

Hagger said those who met the prime minister were surprised on the upside, particularly with regard to his openness and frank answers to questions.

Asked about concerns about investing in Malaysia, he said there were only a few well-capitalised stocks on Bursa Malaysia, while fund managers needed large and liquid stocks, so that they could buy or sell a position in one day.

"Malaysia has few such stocks and is competing for capital and 'air time' with the larger more liquid North Asian markets," he said.

Fund managers are also looking for well-managed companies, he said. 

However, he said the government has achieved considerable success with the government-linked companies' reform programme in scaling down equity in listed entities, particularly at Khazanah Nasional Bhd, the government's investment arm.

This has been followed up by the beginnings of a "selldown" by Khazanah, which should improve the liquidity of those stocks.

He cited how there was clearly a potential conflict of interest in the government owning controlling stakes in both Malaysia Airlines and Malaysia Airports Holdings, when there was no regulator to ensure "fair play" with other airline operators.

Hagger said Malaysia was struggling to stay relevant as an investment destination for global fund managers primarily due to size and liquidity, but also of course, valuation.

"We notice that the foreign ownership of the Malaysian market has fallen significantly and the number of visits by foreign fund managers has dwindled."

He said the annual Credit Suisse Asian Investment Conference was a great forum for companies, governments and investors to meet, whereby there were about 270 companies from around Asia, including 16 companies from Malaysia, meeting some 2,000 fund managers from around the world, including several from Malaysia.

In addition, working with CIMB, "we are proud to have "showcased" the prime minister and several Malaysian companies in New York last year."

"We have also assisted the three regulators - Securities Commission, Bursa Malaysia and BNM - to meet fund managers overseas.

"Unfortunately, some company chief executive officers take investor relations more seriously than others," said Hagger.

Hagger said Malaysia's problems looked very easy to fix "when you are sitting behind a desk in Boston".

The reform of the "30 per cent Bumi listing rule" would have been perceived as a "no brainer" by many foreign fund managers, who probably failed to appreciate that it was an incredibly brave step by the prime minister, he said.

"I believe that is why Prime Minister Najib took such pains to explain that ... he understands what the market wants, but he has to balance that with getting his party re-elected," he said. - Bernama


http://www.btimes.com.my/Current_News/BTIMES/articles/cres28/Article/