ACCCIM MEDIA CONFERENCE

Survey Report on Economic Situation of Malaysia

for the 2nd Half of Year 2011

19-3-2011 (Monday), 9.30 am, ACCCIM Conference Room

1. First of all, I would like to express my appreciation to all the media representatives for your presence this morning.

2. The ACCCIM Survey on Economic Situation of Malaysia for the Second Half of 2011 is conducted as a means to gauge the economic situation facing the Malaysian Chinese business community in the Second Half of 2011. The survey also covered some current issues in relation to the Government policies and measures, namely minimum wages, “My First Home” Scheme, One Malaysia Housing Programme, One Malaysia Shop, 2012 Budget announcements, various initiatives for SMEs and the impact of the Competition Act. This survey results would serve as important reference for the business community as well as to facilitate consideration by the Government.

Chairman of the ACCCIM Commerce Committee Dr. Leong Kai Hin will brief on the survey findings in a short while.

3. Announced by Bank Nagara Malaysia on 15th February this year, the Malaysian economy expanded by 5.1% for the whole year of 2011 due to unfavorable external environment. Growth prospects have become increasingly uncertain with the policy uncertainty on the resolution of the ongoing sovereign debt crisis in Europe amid fiscal consolidation in the advanced economies could add further strains to the international financial system, thus affecting the prospects for continued global growth. Going forward, the more challenging external environment could present greater downside risks to Malaysia’s growth prospects and domestic demand is expected to continue to be the key driver of growth.

Ladies and gentlemen,

4. FDI inflows into South East Asian economies is expected to continue as macroeconomic conditions remain on a relatively more stable footing than its western counterparts. Today, Malaysia is facing stiff competition to attract FDI inflow with other ASEAN countries. For instance, Indonesia has become favoured destinations in terms of attracting Foreign Direct Investment in the recent years. In addition to the rich natural resources, population and huge market, Indonesia remains an attractive option for foreign investors due mainly to its advantage of more open and pro-business policies implemented by the government in improving the investment environment and attracting foreign capital into Indonesia.

Nevertheless, the competition in the region has no doubt become increasingly intense. Malaysia’s enterprises, like other ASEAN countries, are now facing many challenges such as market entry barriers, rising labor costs, continued increases in prices of raw materials, instability in the international market, etc. Malaysian businesses continue to look towards the government to implement effective policies that can spur greater economic activities.

5. The Chief Secretary to the Government Tan Sri Mohd Sidek Hassan, Co-Chairman of the Special Task Force to Facilitate Business or Pemudah announced that out of a total of 761 business licenses, 395 unnecessary or outdated licenses were identified to be eliminated or simplified in order to reduce and eliminate licenses, shorten the time for issuing and expand the validity period of the licenses. This whole initiative will result in an estimated reduction of RM729 million in business licenses compliance cost when this exercise is completed in June 2012. The ACCCIM render full support to Pemudah and we believe these continuous efforts will improve the investment climate and contribute significantly to boost the Malaysia’s attractiveness to foreign investors in the coming years.

6. Finally, I commend ACCCIM Commerce Committee and UTAR’s efforts in making this survey a success. I also take this opportunity to thank the media for your support and cooperation in giving continued coverage on this survey exercise.

Thank you.