Published March 20, 2009

Najib sets new economic model for M'sia

Goal is to harness talent, energy of all Malaysians

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(KUALA LUMPUR) Malaysia will use the current global economic downturn as a springboard to forge a new economic model by using knowledge as its lead, Deputy Prime Minister Najib Razak said on Wednesday.

'We will invest in education and technology, further strengthening the country's capacity to lead in information technologies, renewable energy and emerging sectors of the new economy,' said Mr Najib, who is also the Finance Minister.

The goal, he said, is to harness the talent, energy and drive of all Malaysians. 'We will be aided in our efforts to provide lasting prosperity by working to spread mutual tolerance and respect between genders, cultures, races, religious and nations,' he said.

'We will champion inclusiveness not just because it is a foundation for political stability and economic growth, but because it is right,' he said. Mr Najib said the country is fortunate today to have good national infrastructure, technical know-how, a diversified economy and a quality workforce to cushion the impact of the global financial crisis.

Malaysia, according to him, has learned fundamental lessons from the 1997 financial crisis.

'Overall, post 1997 we are far better placed to weather this new storm. Yet in the long run, further transformation of the Malaysian economy is needed,' he said in the Editorials & Opinion section of the Wall Street Journal on Wednesday.

Mr Najib said the global economic crisis has demonstrated anew that relying on the behaviour of markets alone was insufficient to promote stable, long-term economic development.

'When economic crisis hit, one has a choice. Those steering national economies can either stand aside, or use public capital to take the place of private capital that has gone into hiding, thereby investing in the country's human capital,' he said. 'In the short term, this kind of action provides jobs and opportunity, and in the long run, the foundation for recovery.'

Mr Najib said stimulus packages should not be about resorting to popular policies or handing out cash and should not target one group or area but benefit the whole country. 'It is about achieving maximum impact,' he said.

Mr Najib said Malaysia has focused on boosting investments and credit flows while providing government guarantees and infrastructure expansion.

He said foreign investment in Malaysia is expected to fall by 50 per cent to RM26 billion (S$10.7 billion) this year. 'That means we must either respond domestically, or allow our country to waste precious years during which we should be working to build a better society,' he added.

Answering crtics who said the second stimulus packages was too much, Mr Najib said Malaysia has the capacity to fund it because of low foreign debt, large international reserves and ample banking sector liquidity. 'I am convinced the risk isn't that we do too much, but that we don't do enough,' he said.

Mr Najib said ultimately, the world will recover, and normal trade levels will resume, and when it does, the government wants Malaysia to be best positioned to take advantage of the recovery.

For this reason, he said the government has decided to balance short-term requirements with building for the future.

Mr Najib said the RM60 billion two-year mini budget was designed to provide a quarter of the stimulus funds as a boost to meet people's immediate needs, while the remaining 75 per cent for medium- and long-term development goals. Efficient implementation is vital in the success of any country's stimulus package, he said.

'As a nation in a hurry, with millions dependent on its development and progress, Malaysia is picking itself up and moving on. We are remaking Malaysia once again,' he said. -- Bernama