13 August, 2010

Chinese Economic Congress


1. I am deeply honoured and would like to thank MCA for the opportunity to deliver the Keynote Address at this very important Congress which I am told the last Congress was some 10 years ago. This Congress is based on the theme “The Role of the Chinese Community in Achieving the New Economic Model and the Tenth Malaysia Plan Targets”.

2. The theme of this Congress is indeed apt and welcomed. That underscores the point the Chinese community should want to help achieve the government’s targets and plans is a highly commendable and responsible notion. The model, plan and targets have all been devised to benefit them, as it has for all Malaysians. It is good therefore that the Chinese community is taking personal ownership of these efforts. Like what Datuk Seri Chua Soi Lek said after all it is not Najib’s plan but it is our national plan.

3. The Chinese community contributes directly to our economic progress, as it has for generations. When we became an independent nation, Malaysians of all backgrounds shared one core belief – that we should work together to strengthen our nation and our collective future.

4. It is for this reason that the Government initiated three national policies designed to steer us back to the path of prosperity. As you know, these are the New Economic Model, the Tenth Malaysia Plan and the Government Transformation Program. I am grateful for Datuk Seri Chua’s confidence, support and commitment to these plans. And I am equally grateful for his astute observations of areas to improve.

5. Malaysia would not be what it is today without the industry, expertise and dedication of the Malaysian Chinese community. Likewise, there will be a bleak future for Malaysia without the Chinese community’s support for our policies. We would clearly fall short of reaching the goals of Vision 2020 – to become the developed nation that our fathers and grandfathers strove so hard to achieve – without this vital support.

6. Indeed, there are structural issues in our economy that must be addressed. Some of these have become entrenched for so long that our ability to compete internationally is now at risk. There are also some shortcomings in our internal delivery systems. Much needed assistance is not reaching lower-income groups and the marginalised in our society who need help. At the same time, the constant complaint about the people not interpreting government’s policies and decisions in the right way is often heard.

7. These and other issues have created great political and social divisions. We now face one of the greatest challenges in our history. Our success as a nation – our relevance as a global economic and political player – requires a new momentum, a new vision, and renewal of the spirit that united our predecessors in their dreams for Malaysia. We can only achieve this if we are truly together.

8. Therefore, we need to rejuvenate Malaysia’s spirit and identity. I believe 1Malaysia is more than a concept and certainly more than a slogan. It reflects not only a return to the values of our great leaders: Tunku Abdul Rahman, Tun Tan Cheng Lock, Tun V.T. Sambanthan, and others but goes beyond that as it emphasizes the people, performance and it is very strategic in its conception. The courage of our forefathers and their commitment to unity remain as shining examples to us today. But this revitalization of our national identity cannot succeed without the support of all communities in the country – both here and abroad.

9. Underpinning this notion of national unity and identity is the proverbial economic ‘pie’ which needs to continue growing but it must be shared in a way that is fair and just. While there must be a sense of equity or more accurately, fairness in how Malaysia divides its wealth, this must not be done in a way that inhibits the success of others or benefits one community over another. Whatever we do, we must not be trapped in this notion of a zero sum game i.e. helping one community must not be seen at the expense of the other community. It requires a major mindset change in many of us both in the public and in the private sector.

10. The NEM and the 10th Malaysia Plan are blueprints by the Government for the people. The Government is elected to serve. This is a government of the people and by the people. The Government certainly cannot achieve the NEM or the Plan without the involvement of all stakeholders. The Chinese business community, which is known to be practical, thrifty, self-starters, risk-taking and definitely hard working, is a key catalyst for getting these blueprints off the ground.

Ladies and Gentlemen,

11. If there is a consistent theme to my views, it is that we cannot continue to grow and thrive as a nation unless all of us – Bumiputera, Chinese, Indian and other ethnic groups – are willing to come together and see past and beyond our differences to build up our country together.

12. All processes of transformation create uncertainty, even fear. The Government Transformation Program, New Economic Model and the Tenth Malaysia Plan provide for a level of economic liberalisation previously unknown in our society. The relaxation of the 30 per cent Bumiputera equity requirement in Initial Public Offers, and liberalisation of 27 service-industry sub-sectors, reflect just the first step in the reform process. The ultimate goal of the transformation process is to create a high-income economy for all Malaysians. These advancements are critical to the nation’s competitiveness and future prosperity.

13. Even as some resist new ways of thinking and fear the unknown, it’s not transformation that we must be worried about, but it is stagnation. As Confucius said, what we must truly fear is “being unable to change what is not good.” It takes courage to grapple with systematic transformation because it forces us to recognise that our previous practices have fallen short. I also make this call to you today with the awareness of what recent events have taught us. Our analysis of by-election results in Hulu Selangor and Sibu clearly identify concerns in the Chinese community.

Ladies and Gentlemen,

14. Before we can advocate greater liberalisation and measures to improve access, we must achieve goals set forth in our policies for transformation. Put another way: we cannot expect our trees to bear fruit if we have neglected to first fertilise and water the soil. It is the soil that we must attend to now. These transformations must take effect at the very core of our economy and society. Let me now turn to the solutions we have put in place and ways the government is working to promote them.

15. The New Economic Model, the Tenth Malaysia Plan and the Government Transformation Plan address these concerns comprehensively and inclusively, and 1Malaysia provides the framework for their realisation. When taken together, they will provide the conditions by which the trees we plant will bear fruit for ourselves and for generations to come. To create this future, we must not neglect the tasks we have set for ourselves today.

16. The liberalisation of the services sector announced early last year signaled my commitment to reform. This was done to create a conducive business environment to attract investments, technologies and higher value employment opportunities. The Government’s removal of the Bumiputera ownership requirement involved dealing with an entrenched policy that had widespread Malay support. Nonetheless, this government lived up to its commitment to do away with the FIC.

17. The government’s commitment to tackle entrenched issues in order to benefit all Malaysians has led to renewed interest in Malaysia from international parties. For the first time, Malaysia has been ranked among the top 10 most competitive countries in the world. And, after a tough year of the global recession, there are signs of renewed investor interest from overseas. The first quarter of this year saw FDI figures close to those for all of 2009.

18. Moving forward, we all have roles to play. We also need the private sector to transform its thinking and reassess its own entrenched beliefs. To achieve our national goals, the public and private sectors must work together and utilise the talents of all our diverse communities. We must encourage genuine partnership between bumiputera and non-bumiputera communities. Through these genuine partnerships, we can attain our goal towards equitable distribution of the nation’s wealth.

Ladies and Gentlemen,

19. It may be fitting that I ask this question: what’s the role of the Prime Minister in all of this? Like my predecessors, I recognise that I am a leader for all Malaysians. Your concerns are my concerns—not the other way around. I have been entrusted with the responsibility to chart the best possible future for all of us. But I can only be successful at this with your active support and participation.

20. My role is to hear your concerns and to act on them whenever it is appropriate decisively. I have begun to do this with the policies initiated in my first year in office, and I will continue to do this with the invaluable encouragement, and with some constructive criticisms, from my own party and friends in the MCA and the other Barisan Nasional component parties. The balancing act is absolutely critical, finding the right balance between all stakeholders in the country is critical in the political and economic management of this country, and the Government is managing and considering the requests of all stakeholders the best we can.

Ladies and gentlemen,

21. It is clear through the Chinese community’s many contributions to nation-building that its loyalty to this country should be clearly appreciated. The community continues to be the backbone of the Malaysian economy through its Small and Medium Enterprises. I am pleased to say SMEs will continue to receive the Government’s wholehearted support through development assistance and greater opportunities. And we will re-examine access to credit and financial facilities so that the growth of the SMEs in this country will not be hindered.

22. Our faith in Malaysia requires a long-term investment in the future. Here, the Malaysian Chinese community must once again take up the reins and take up a more leadership role through economic innovation in genuine partnership with other communities. We must do this within the spirit of 1Malaysia, we should be evident not only in the public sector but also in the private sector. The emergence of companies that reflect the spirit of 1Malaysia, perhaps companies like SP Setia and AirAsia must be applauded as shining examples of the private sector embracing sense of togetherness in reaching out to all. And reaching out to all communities and all customers is a great commercial advantage to be derived from business enterprises being seen as a Malaysian company. I would like to emphasize the true partnership but not the often quoted gibe about being “Ali Baba” like appointing a Bumiputera usually a Tan Sri or a Datuk Seri, former politician or senior civil servant to be the Chairman of your company is not the answer. It is an old way of doing business but it should be replaced by true and genuine partnership between all communities in terms of equity and management.

Ladies and gentlemen,

23. We must do this if we are to achieve our potential and sustain the progress and prosperity we have enjoyed thus far. The government is working to broaden opportunities for all Malaysians. We must do this because we recognize that diversity is the core strength and the source of creativity and innovation needed to grow our economy.

24. This does not mean there won’t be assistance for those in need. Where affirmative action remains, it will focus on areas where systemic inequities persist. This will not be based solely on race. They will target assistance to those most in need. For example, affirmative action will be aimed at: 1) Reducing the urban-rural divide in standards of living; 2) Reducing the education gap among disadvantaged students and offer support to those who show outstanding talent. This is reflected in the rather unique way in which we have decided in the disbursement of JPA Scholarships recently in which we have merit the concept of meritocracy and taking into account the socially disadvantaged. What is very significant is that this could be a good example of how we could approach in other areas as well that for the first time in our history every single Malaysian student who achieved 9A+ receive a JPA scholarship. That to me is a bold and landmark decision we have made, but at the same time for the socially disadvantaged group we have also taken into account of their needs as well.

25. We will continue to support those who are poor and those whose income level are below RM1500 as listed down in the New Economic Model. This is hardly a question of favoritism but is being equitable. The non Chinese role in the economy remains relatively low and in the true spirit of 1Malaysa where all Malaysian will be given fair opportunities, assistance will be provided to the targeted communities until they are ready to be lifted eventually.

Ladies and gentlemen,

26. Let us be candid. The Government alone cannot make all the necessary changes. The private sector plays a vital role in driving the innovation; creativity and investment that are needed to boost Malaysia’s global competitiveness and support our goal to become a high-income nation. I would like to urge this Congress to discuss on how the private sector including the Chinese business community, in fact especially the Chinese business community, can be transformed to be another pillar of the national growth and development.

27. The private sector transformation is urgently needed because the economy cannot expand without their committed and positive participation. Businesses should not only look for short-term profit but must be prepared for a longer haul. For this, the private sector must dare to take risk and invest in new industries, new products and services. R&D expenditure and technology acquisition should be regarded as investment for long-term growth and profits. The private sector should also value human capital by paying the right level of wages and allocate resources to nurture talent.

28. Under the New Economic Model, the private sector is essential to investments and projects that support Vision 2020. The achievement of the 6 per cent per annum growth target highlighted in the 10th Malaysia Plan will require a significant boost in investment, much of which needs to come from a more dynamic private sector. The Plan expects private investment to grow 12.8% per annum or RM115 billion of investment annually. The role of the government will be an enabler to encourage, to enable, to incentivize the private sector to make this kind of investment to the level that I have just mentioned.

29. To make this leap forward, I appeal to all Malaysian Chinese businesses, industries and enterprises to invest as much in their employees to support their growth and career development. There are tough structural issues that business leaders must address too. The current structure of our economy depends too heavily on cheap foreign labour. These are generally lower skilled jobs that produce goods with little value added

30. The Government take note of MCA’s desire for a comprehensive minimum wage policy as a measure to build human capital to the levels necessary in a high-income economy. This is also necessary to reduce our national dependence on foreign labour especially in the construction sector and the services industry. A sectoral minimum wage probably offers the best way to build a skilled and competitive workforce capable of harnessing the potential of all Malaysians.

31. The Government is looking at the best formula to address this issue. While we would like producers and companies to move up the value chain, the government also understands that leaps like that don’t happen overnight, especially for companies in labour-intensive industries. This is why the Human Resource Ministry will be submitting their case to Cabinet soon. To this end, I urge all employers here to seriously consider the minimum wage as a business strategy and an opportunity to revitalize your businesses.

Ladies and gentlemen,

32. Let me also share what the Government will do to support the growth of your businesses and progression to the higher value areas. We are strengthening our education system, so it can produce the highly skilled and educated employees you need. One measure is to improve the competence of graduates by linking their employability to the KPIs for universities and using results to allocate funding to universities. We are also prepared to offer skills training for school dropouts to boost their value in the jobs market. Government spending will also reinvigorate our education system.

33. Outstanding students will have access to scholarships for higher education. As I mentioned, no Malaysian child who is a high achiever should be barred from an opportunity to progress via whatever assistance that can be provided. Talented youth are national assets who provide the foundation for our shared future. I would also continue my engagement with MCA and the other component parties to discuss about how we can constructively help the Chinese schools progress even further in providing more opportunities for all Malaysians.

34. Education alone is not enough. We need talent. I appeal to you to help stop the “brain-drain.” The New Economic Model and the Tenth Malaysia Plan provide many excellent opportunities for talented Malaysians to assume positions of leadership. All that remains is for us to rise to the challenge. I understand that this is a two way process, we cannot just make this call without providing opportunities and more exciting challenges for them. Nonetheless, recently when I was doing the rounds of sessions with the labs, I met a Malaysian Chinese who have returned from abroad after spending 10 years overseas. I asked him:”Why do you return to Malaysia?” He said: “I return to Malaysia because I believe in the government’s policies and I also want my children to have Eastern values.” I hope there will be more Malaysians like this who will be saying the same thing in the near future. I call on all Malaysians working abroad to return and take advantage of these opportunities.

35. A large number of the approximately 700,000 Malaysians working abroad are Malaysian Chinese. Our goal is to make Malaysia an attractive and more exciting place of employment for all, so that overseas Malaysians want to come home or stay home to work. To this end, the Government is due to launch The Talent Corporation in 2011, which will make it easier for Malaysians to return and ensure that Malaysia is an attractive place for employment.

Ladies and Gentlemen,

36. If we are to achieve the goals of Vision 2020, we need to become a united, strong and resourceful nation. We must trust in our own abilities and drive transformation at the core to ensure a better future for ourselves and that of our children. We have provided the means to do this through the Government Transformation Program, New Economic Model and the Tenth Malaysia Plan.

37. It is important that we remain positive and work together to explore new methods and ideas to achieve our development goals – together as a nation, united under 1Malaysia. I deeply appreciate the efforts of MCA to undertake this Chinese Economic Congress in order to promote issues of concerns. I am gratified by the participation and energy of the Malaysian Chinese, whom I see gathered here together in such big number. Let me wish all of you a fruitful discussion and deliberation throughout the conference today.

Thank you.

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