REPORT: Budget 2010 To Lay Foundation For New Economic Model

KUALA LUMPUR, Oct 23
(Bernama) — The 2010 Budget will see Malaysia setting the stage to
take advantage of opportunities arising from the stabilising global
economy while laying the foundation for the new economic model and
formulation of the Tenth Malaysia Plan.

The 2010 Budget, themed “1Malaysia: Together We Prosper,”, is
supported by three strategies namely, propelling the nation towards a
high-income economy, ensuring holistic and sustainable development as
well as focusing on the welfare of the people.

“It also focuses on moving the nation to a high-income economy by
strengthening the private sector as an engine of growth, creating a
skilful and talented workforce, intensifying research and development
(R&D) activities as well as promoting innovative and creativity,”
said the Ministry of Finance in its 2009/2010 Economic report released
Friday.

It said towards this end, the emphasis would be on creating a
conducive environment for businesses and entrepreneurship to thrive in
a more liberalised environment supported by market driven policies.

“On the domestic front, the challenge is to revitalise
investments, safeguard the welfare of the people as well as manage
rising expenditure in the context of declining revenue, without
compromising government efficiency and delivery of services,” said the
MOF.

It also highlighted the fact that the government is committed to
consolidating its financial position to create fiscal flexibility.

According to the ministry, the country would also leverage on
Asia’s growth prospects as over time, consumption is expected to shift
to this part of the world.

“While the United States and Europe will remain the main source of
consumption demand, Asean, China, India and the Middle East would gain
prominence. This is given their prospects for rapid Gross Domestic
Product growth,” it explained.

The Treasury said that Malaysia, which was well positioned to
bridge trade flows between the east and west, needed to develop a
unique value proposition to attract foreign direct investment.

“Trade engagement will be more focused to the Asian region and companies encouraged to expand market and product mix.

“Malaysia is also committed to progressively liberalise several
sectors in the economy in line with the Asean Economic Community
Blueprint, for freer flow of goods, services and capital by 2015.

“In order to facilitate the move into high-income economy, the
government has identified areas that the country has a competitive
advantage, namely Islamic Finance, the Halal industry, resource-based
industries and tourism,” the ministry added.

The report said as access to knowledge and information is very
important in moving forward, a total of RM2.4 billion would be spent to
improve telecommunication infrastructure in rural areas.

“Meanwhile, RM400 million has been allocated to further expedite
the High Speed Broadband project under the stimulus packages,” it said.

It also said that in order to ensure continued development of the
domestic automotive sector, a RM200 million Automotive Development Fund
has also been allocated.

“Malaysian companies have an edge in oil and gas, plantation and
construction activity, which can be further strengthened and promoted
for global expansion.

“The government also recognises several issues including human
capital, fiscal management, liberalisation and private investment that
must be addressed to expedite the recovery process and set the stage
for the transition into a high-income economy,” the report disclosed.

As for external factors, the Treasury said Malaysia would
continuously engage the international community through multilateral
and regional forums while reiterating the need to have a more stable
and resilient international financial system.

“This is to enable it to withstand future systematic shocks and ensure macroeconomic stability,” it added.

— BERNAMA