Global Transformation Forum 2015

Prime Minister Dato Seri Najib Tun Razak

There is a need to reignite the engines of growth said Prime Minister Datuk Seri Najib Tun Razak in his opening remarks at the Global Transformation Forum (GTF 2015).

He said there were tough decisions to be made, policies up for review and a clearer socio-economic roadmap to be developed if Malaysia wanted to break away from the middle income trap fast and become a high income nation by the year 2020.

Our good years of growth are reaching a plateau. Investments are thinning, there is increased competition for global investors and our economy is in danger of getting caught in the middle income trap.

The global economy is currently facing fierce headwinds, with the decline in oil and commodity prices, the rise in United States’ interest rates and devaluation of the Chinese Yuan.

This situation could last a few years, so the government must rethink its objectives and ambitions to maintain its long-term vision for the country. We are doing so and I will outline some of the measures we intend to take in our annual Budget this Friday, he said.

We should not lose sight of what we have achieved in our transformation over the last six years. It has been nothing short of phenomenal. Malaysia has seen sustainable economic growth and more than double the investments compared to four years ago.

The fiscal deficit fell to 3.4% last year from 6.7% in 2009 when the Government first began its national transformation agenda. With this number reducing each year since 2010, as per our targets, we are confident of reaching a balanced budget - or as close to that as possible - by 2020.

On the 1Malaysia Development Bhd the PM promised to take the strictest action against anyone found to be involved should there be any evidence of wrongdoing.

1MDB is in the midst of implementing a rationalization plan, which would allow the company to pay off its outstanding debt and resolve its current cash flow issues.

On claims of wrongdoing, there are a number of independent investigations, some of which I myself ordered. Rather than conduct a trial by media, we must wait for the outcome of these investigations, he said.

Datuk Seri Abdul Wahid Omar

Minister in the Prime Minister’s Department and head of the Government’s Economic Planning Unit Datuk Seri Abdul Wahid said the bottom 40 (B40) group earnings had increased by 12.7% from 2009 to last year under the leadership of Prime Minister Datuk Seri Najib Tun Razak.

The income level of the B40 group has moved up at a faster rate compared with that of the top 20% wealthiest group over the past five years.

Between 2009 and last year, we saw tremendous growth of income of the bottom 40% household increasing quicker than the top 20%,” he said during the ‘Designing the Future’ session.

Tan Sri Nor Mohamed Yakcop

Tan Sri Nor Mohamed Yakcop, who served as Finance Minister II from 2004 to 2009, said Malaysia was the only country in the world to have a dual banking system comprising conventional and Islamic banking.

In terms of our optimal combination of public and private sector, what has worked is that we’ve built world class infrastructure. We’ve done that very well he stressed in a session titled

‘Transforming State-Owned Enterprises’.

The current state investment fund Khazanah Nasional Berhad deputy chairman went on to say that Malaysia has created world class infrastructure and a strong financial system with the government and private sectors working well together.

We’ve created a very developed, very robust financial system, both in conventional banking as well as Islamic banking. The areas that need further improvement are skills training, which he noted has not been able to fulfill industry demands, as well as better coordination between government agencies.

He warned that if we do not have a stronger performance, we risk becoming like Nokia. We need better risk management, or we risk a major accident like BP, or poor governance like Volkswagen.

Tan Sri Tony Fernandes

AirAsia Group chief executive Tan Sri Tony Fernandes called for more transparency in taxation when he said governments need to be more open on their tax collecting procedures, adding that corporations show greater accountability than governments in their spending.

He said the current taxation system was very complicated, with many different demographics and special needs being taken into account that left the system open to abuse.

In a session titled ‘Transformational Entrepreneurship’ Fernandes said companies were better than governments in being more accountable on tax revenues, spending, ensuring a better P&L, detailing how much money was spent and whether there was a good ROI.

The implementation of GST has sparked complaints of the broad-based consumption tax system being too complex due to a long list of exemptions and zero-rated goods.

He also said that branding was not merely about external branding but internal branding as well, adding that “If you’re going to sell a brand; if your own people don’t believe in the brand, it’s kind of tough. Many great companies miss out on their greatest asset — which is the people in their own organization”.

“I think governments also miss out their biggest asset — the people. The strongest asset in Malaysia is our amazing diversity and the very talented people in this country. Given the chance, we can do so much,” he said.