ACCCIM MEDIA CONFERENCE on
Survey Report on Economic Situation of Malaysia for the 2nd Half of Year 2012
28-2-2013 (Thursday), 10.30 am, ACCCIM Conference Room
Speech by Dato’ Lim Kok Cheong,
President of ACCCIM
First of all, I would like to express my appreciation to all the media representatives for your presence this morning.
Bank Negara Malaysia announced that Malaysia achieved sustainable economic growth despite the global economy has yet to fully recover. The country's economy recorded a growth of 5.6 per cent last year.
Nevertheless, not everyone is optimistic about Malaysia’s economy in view of the existing external economic scenario. Facing the challenges from home and abroad, it is expected that 2013 is yet another challenging year for Malaysian enterprises.
The cost of doing business and raw material prices continue to increase. Businesses are facing difficulties to maintain their competitiveness and profit- growth.
The manufacturing sector is currently confronted with a grim situation since the fully implementation of the minimum wage policy, which covers foreign workers as well. Many SMEs are running into difficulties being unable to cope with the sharp rise of labor cost.
ACCCIM has proposed a gradual scheme of implementation according to different regions, different industries and size of the companies. However, it is regrettable that the proposal has not been given consideration by the government, and now disputes between employees and employers are seen in many places where the SMEs are located.
In the meantime, the date of 13th general election is yet to be announced. Given the prevalence of uncertainty, most businesses continue to adopt a wait and see approach, or to defer their investment plans.
Under this circumstances, it is hard to see the real effect of the measures on stimulating private investment and domestic consumption announced in the Budget 2013 as well as the Economic Transformation Programme in driving the economy.
The pro-business policy is an important element to strengthen the economy by both government and the private sector. The government should further simplify the administrative procedures, improve efficiency and quality of service, in order to improve the business environment.
Feedback and proposals from business community should be given serious consideration by the government prior to implementation of any policy in order to avoid subsequent changes and adjustments when the implementation is not smooth.
On the other hand, I wish to once again urge the SMEs to seek ways and means to cope with the unprecedented impact of implementation of minimum wage, as well as to transform and overcome difficulties in the situation.
This survey is conducted as a means to gauge the economic situation of the Malaysian Chinese business community for the Second Half of year 2012. The survey also covered some current issues in relation to the Government policies and measures, namely implementation of minimum wage, impact of external economic factors, views in relation to the current state of the Malaysian economy in relation to the coming General Election, Competition Act, prices of properties in Malaysia, and so on.
Last but not least, I commend ACCCIM Commerce Committee’s efforts, particularly Dr. Leong Kai Hin and Mr. Peck Boon Soon, with UTAR cooperation in making this survey a success.
I also take this opportunity to thank the media for your support and cooperation in giving continued coverage to this survey exercise.
The Associated Chinese Chambers of Commerce and Industry (ACCCIM) held its National Council Meeting today, attended by council members and representatives from all the states included Dato’ Lim Kok Cheong (President), Datuk Ter Leong Yap (Deputy President), Vice Presidents Dato’ Sri Lim Sing, Dato’ William Tan, Dato’ Seri Choot Ewe Seng, Dato’ Wee Kok Tiong, Tan Sri Dato’ Lim Bah, Tan Sri Dato’ Soong Siew Hoong (Executive Adviser), Dato’ Low Kian Chuan (Secretary General), Dato’ Liew Sew Yee (Treasurer) etc.
Various issues and activities on economy and industries were discussed and endorsed in the meeting. Among the topics discussed, the Council expressed particular concern on the disputes and strikes of foreign workers arising from the implementation of National Minimum Wage since 1st January 2013.
Although Cabinet has decided that foreign workers were to pay for their own levy, and the National Wage Consultative Council has issued a Press Statement dated 20th February 2013 saying that employers facing financial constraint can apply to extend the implementation of minimum wage for foreign workers to 2014, these employers need to obtain prior approval from the council and subject to the followings:
- The extension only apply to foreign workers;
- Employers who have already implemented the MW are not allowed to apply for an extension;
- Employers who had implemented the minimum wage policy but who have run into difficulties paying the wages could apply to the Government to be allowed to deduct the costs of levy and accommodation from the workers' pay, except those in plantation sector;
- Employers who apply for an extension of the wage implementation date were prohibited from deducting the levy and accommodation costs from the workers' pay;
ACCCIM opined that the announcement by the council does not resolve the problems faced by the industry but creates more confusion as it does not come out with new guidelines to clarify the details.
ACCCIM urges the Government to look into this issue seriously and solve it as soon as possible before the relationship between employers and employees of SMEs is worsen.
Good morning to friends from media!
Since ACCCIM signed a collaboration agreement with Credit Bureau Malaysia (CBM) in May 2012, both parties have gone through several discussions to finalise the details of cooperation and procedures to facilitate members of ACCCIM Constituent Chambers to obtain services of CBM in the most convenient way.
Ladies and Gentlemen,
There are many people in the business community who are not aware on the role and services of CBM. The Bureau was set up by Credit Guarantee Corporation (CGC) in year 2008 with the objectives to enhance SMEs' access to financing and to create a sound credit culture amongst the business community in the country. The Bureau undertakes this role by generating independent credit ratings on SMEs from credit and corporate business information obtained from credible sources such as Bank Negara Malaysia (BNM) and the Suruhanjaya Syarikat Malaysia (SSM).
Malaysian SMEs have always been facing problems in obtaining financing from commercial banks due to various reasons. ACCCIM has been working closely with the Ministry of Finance, Bank Negara Malaysia and The Association of Banks in Malaysia, seeking to resolve this problem.
Traditionally, one of the key factors in credit evaluation is the historical conduct of payment behavior. SMEs that have no previous banking history would not have the 'reputational collateral' that would otherwise give them easier access to financing.
The Bureau's role is to "bridge" the current perceived information gap and address some of the issues related to inadequate financial track record involving SMEs. By bridging this gap, The Bureau hopes to create an increasing level of trust between SMEs and lenders, while promoting greater transparency and competition between lenders.
Ladies and Gentlemen,
While The Bureau's reports and ratings are primarily used for credit evaluation, they may also be used by the SMEs to undertake a self-check. This is because The Bureau's credit ratings will identify and highlight areas that need improvement and the necessary remedial actions to be taken by SMEs in order to resolve their weaknesses and improve their credit standing. Having identified their weaknesses, SMEs, if they wish, can also seek professional counselling from The Bureau on the remedial actions required. This service is available to SMEs free of charge.
Meanwhile, by getting consent from clients or potential partners, members can also obtain their credit ranking report and determine the risk for cooperation. By having such analysis, members can have better management and reduce the risk for getting bad debt.
The ACCCIM also wish to assist members of Constituent Chambers to build up well managed credit records through this cooperation. In long term, we hope that the commercial banks can fix different interest rate according to their credit ranking, so that those have better ranking can enjoy lower interest rate to reduce their cost of doing business and increase their competitiveness.