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Survey Report on Economic Situation of Malaysia for the 1st Half of Year 2016

 |  September 15, 2016  | Posted in President Speeches  |  

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1. First of all, on behalf of the ACCCIM, I would like to welcome everyone to the ACCCIM Media Conference on Survey Report on Economic Situation of Malaysia for the 1st Half of Year 2016.
 
2. Bank Negara Malaysia (BNM) had announced that Malaysia’s Gross Domestic Product (GDP) recorded a total year-on-year growth of 4.1% in the first half of 2016 with the growth in the second quarter moderated to 4.0% from 4.2% in the first quarter. Although domestic consumption continued to cushion the nation’s economy against pressure of slowdown, the economy was impacted from decline in global demand and net exports.
 
3. The issue on foreign workers continues to impact Malaysia’s economy. So far, the government has only opened four sectors (manufacturing, construction, plantations and furniture-making industries) for application to employ foreign workers. As a result, most businesses are still facing the predicament of labour shortage or the inability to accept new orders or to operate normally. Once again, the ACCCIM urges the government to lift the freeze on foreign workers for all sectors and fully streamline legalization programme on foreign workers, and to carry out review and measures to formulate the conditions and guidelines on the employment of foreign workers based on the demand and supply of foreign labour in the respective sectors.
 
4. The extension of the anti-profiteering mechanism by the government has caused much concern to the business community. The Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit) (Net Profit Margin) Regulations 2014 do not allow retailers or traders to increase their net profit margin for any goods or services for 18 months from January 2015 to June 2016. This mechanism was initially due to expiry on 30th June 2016, has now been extended to 31st December 2016. During this period, the government is exploring the possibility of indefinitely extending the mechanism. Malaysia is a free market and free enterprise economy, therefore the proposal to disregard the expiry by extending this mechanism in perpetuity is ill-advised.
 
5. The temporary Anti-Profiteering Mechanism was introduced in parallel with the implementation of the Goods and Services Tax (GST) to prevent businesses from using the GST as an excuse to take advantage by unreasonably hiking prices. The GST has been implemented for about one and a half year, and problems encountered have been gradually addressed with joint efforts by the Ministry of Finance, the Royal Malaysian Customs Department and chambers of commerce including the ACCCIM. At this juncture, we call upon the Government not to extend the current Anti-Profiteering Mechanism in whatsoever form.
 
6. The business community is urgently in need of business-friendly policies by the government to enhance their competitive edge and attract more foreign investments, make use of domestic resources, and strengthen our exports. The ACCCIM has been frequently invited to participate in consultative meetings and dialogues held by the government, submit constructive recommendations to convey the stand of the business community, and jointly build a sustainable economy with the government.
 
7. As we engage more and more partners of free trade accords, it is imperative for the business people to actively respond to and take advantage of the various preferential measures provided by the government to introduce more Malaysian brands to the world. Businesses throughout the world are headed towards digitization and innovation. Apart from facing such severe challenges posed by the micro environment, business people must also hasten their pace to create their own competitive edge.
 
8. The survey covered a wide range of topics of concern for the commercial and industrial community including cost of doing business, cost of hiring of foreign workers, minimum wage, anti-profiteering mechanism, international trade, and so on. Dr. Leong Kai Hin, Chairman of ACCCIM Commerce Committee will brief you on the findings of the survey.
 
9. The ACCCIM would like to thank the Economic Survey Unit of the ACCCIM Commerce Committee and the Universiti Tunku Abdul Rahman (UTAR) for their joint efforts in completing this survey.  We also wish to express our gratitude to the media for their wide coverage on the report of the survey. 
 
Thank you.