This task is made more challenging by the projected

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: hen its fiscal position substantially. This task is made more challenging by the projected decline in domestic petroleum production over the next decade as historically revenues from this source has been a significant contributor to government revenues. In this context, fundamental changes need to be made to fiscal policy. There is a need to widen the Government’s tax revenue base so that a much greater share comes from broad-based income and consumption taxes (such as a goods and services tax). In addition, expenditure on subsidies will be rationalised significantly to channel these resources to only those in need. Tight fiscal discipline will be imposed across the board. Exhibit 1-6 Economic Transformation Programme 65 A Roadmap For Malaysia Increasing Global Competition for Markets, Capital and Talent The global economy is becoming much more competitive. The emergence of new, highly competitive regional and global companies has eroded the strong position of Malaysian-based companies in the manufacturing and services sectors. Malaysia will need to work much harder to achieve and sustain competitive advantage, namely by investing in infrastructure and human capital and ensuring that the tax and regulatory environment is conducive to growth. In addition, firms, investors and talent, have an increasing number of opportunities and location options. Therefore Malaysia needs to demonstrate a clear value proposition in order to attract and retain them. Many other governments are aggressively positioning themselves to compete for firms, talent and capital. As shown in Exhibit 1-7, the low levels of foreign direct-investment that Malaysia has received over the past decade are one indication of a weakening competitive position. Exhibit 1-7 66 Chapter 1 New Economic Model of Malaysia Given the shortage of high-wage employment opportunities at home, Malaysia is also losing talent through the emigration of Malaysians, many of them with tertiary qualifications. More than 700,000 Malaysians now live and work in other countries. Until Malaysia is able to generate stronger economic growth and to create opportunities for people, it will struggle to attract and retain talent. THE ETP IS PART OF A COMPREHENSIVE GOVERNMENT AGENDA The ETP is the culmination of a substantial body of work to develop the Government’s economic agenda in response to this emerging environment. However it is not intended to dictate sector-specific policies, but rather serve as input, for example into the Financial Sector Masterplan by Bank Negara Malaysia or the Securities Services Masterplan by the Securities Commission. It also serves to complement existing programmes with similar objectives. For example, the GLC Transformation Programme that seeks to build regional and global champions will support the delivery of the ETP. There are several key common foundations for the ETP. 1Malaysia, People First, Performance Now The 1Malaysia concept seeks to reinforce national unity, with respect for the values of the different communities, and is anchored on...
View Full Document

This note was uploaded on 02/24/2014 for the course ACCOUNTING financial taught by Professor Alan during the Spring '14 term at Howard.

Ask a homework question - tutors are online