Apr 7, 2010

PM Najib defends country's New Economic Model

SINGAPORE: Malaysian Prime Minister Najib Razak has defended the country's New Economic Model which he revealed last week.

The plan, aimed at steering Malaysia to a high-income based economy, has received criticisms among some sectors for eroding its decades-old affirmative action policy.

Mr Najib was addressing more than 100 journalists at a dialogue session after his speech at a gala dinner organised by the Foreign Correspondents Association in Singapore on Tuesday.

The Malaysian PM arrived in Singapore just three days after marking his first year in office.

Fresh from announcing the country's new growth strategies, he explained the thinking behind some of the reforms.

Questions flowed fast on whether the New Economic Model will get a backlash from Malaysia's bumiputras and even within the ruling Barisan Nasional party.

Mr Najib said Malaysia's affirmative action policy, which gives Malays special privileges, have not hampered Malaysia's growth.

He said that even at the height of the New Economic Policy, Malaysia was growing at 8 to 9 per cent and some of the richest people in Malaysia are non-Malays.

Mr Najib said: "So it will be a more transparent and fairer way in which we implement affirmative action, and at the end of the day, I hope it will lead to a more cohesive and socially harmonious society."

He said the new approach to Malaysia's affirmative action is for it to be more "market-friendly, transparent, merit-based, and needs-based".

The reforms come after the Barisan Nasional took a knocking at the last general elections in 2008.

The results prompted the new prime minister to think about getting back to basics.

Mr Najib said: "What the public wanted and the rakyat or the people wanted was a change. But they did not want an incremental change or incremental changes, they wanted a massive transformation both economically and politically, and the time was right for us to embark on this."

He also revealed that Malaysia will identify new growth engines to propel the economy.

He did not give details, but said it will move beyond traditional sectors like oil and gas, rubber, and palm oil.

Mr Najib also said Malaysia will most probably issue Islamic bonds denominated in US dollars.

He did not reveal when this will take place or the size, which he said will be announced later. He said Malaysia does not actually need the money, but a bond issue would be a benchmark on how the markets viewed the country's creditworthiness.

He was asked about the possibility of a re-merger with Singapore.

Mr Najib said: "Both countries have taken different paths. It would be too traumatic to try to have a political reunification, but I would like to see deeper economic relations between Malaysia and Singapore, I would like to see good relations between both countries. I would like to see us work together in many fronts."

One is a joint project with Raffles Education to develop a university in Iskandar Malaysia, Johor's economic corridor.

The university will be implemented in three phases, with an initial enrolment of about 5,000 students within its first five years. Mr Najib said an application has already been made to Malaysia's Ministry of Higher Education to establish the university.

There is also a plan to build a Wellness Centre on a 500-acre plot of land in the area.

Mr Najib noted: "But we have not concluded it yet. So, that is a subject of intense discussion with Singapore."

Mr Najib and Singapore's Prime Minister Lee Hsien Loong are expected to meet for a retreat in Singapore next month to discuss how to further strengthen bilateral relations.

Now that the foundation has been set, all eyes will be on the implementation of the policies announced.

Mr Najib has indicated that details on the New Economic Model will be revealed over the next few months. - CNA/ms



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