THE
Introduction and Policy Recommendations
To learn more about MIEPA, click here
Several foreign born students living in California have completed a study of their home country governments' economic policies as compared to the MIEPA list of policies as outlined above. The study on Malaysia is shown below. The ratings herein are based on the following rating scale:
RATING SCALE
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2003. Used herein with permission]
To read a disclaimer about the analysis in this file, scroll to the bottom of the file.
MALAYSIA:
Comparison of Malaysia's economic policies to MIEPA criteria as prepared by native student of Malaysia, Sims, studying in San Francisco in Fall, 2003.
RATING SUMMARY
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 4.7 14.1 15.0 94%
2 5.0 15.0 15.0 100
3 3.5 10.5 15.0 70
4 4.3 12.9 15.0 86
5 5.0 15.0 15.0 100
6 5.0 15.0 15.0 100
7 5.0 15.0 15.0 100
8 3.7 11.1 15.0 74
9 3.5 10.5 15.0 70
10 4.7 14.1 15.0 94
11 4.0 12.0 15.0 80
12 3.7 7.4 10.0 74
13 5.0 10.0 10.0 100
14 3.7 7.4 10.0 74
15 3.7 7.4 10.0 74
16 3.7 7.4 10.0 74
17 3.0 6.0 10.0 60
18 4.7 9.4 10.0 94
19 4.0 8.0 10.0 80
20 4.3 8.6 10.0 86
21 4.0 8.0 10.0 80
22 4.7 9.4 10.0 94
23 4.1 8.2 10.0 82
24 3.7 7.4 10.0 74
25 4.7 9.4 10.0 94
26 3.5 7.0 10.0 70
27 3.6 7.2 10.0 72
28 4.5 9.0 10.0 90
29 3.5 3.5 5.0 70
30 4.5 4.5 5.0 90
31 4.5 4.5 5.0 90
32 2.0 2.0 5.0 40
33 3.5 3.5 5.0 70
34 4.5 4.5 5.0 90
TOTAL 139.5 304.9 375.0 81.3%
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1. Freedom from internal control: 4.7
Citizens of Malaysia are free from positive or pro-active control by government agencies. They are always free to move about and engage in any activity that is not prohibited by the government for good reason. Citizens of Malaysian often feel strongly about the government's movements and decisions. As said they are free to accuse, compliment and express the way they think the government is operating. Newspapers commonly publish editorials, and letters from the public on current issues. There is no punishment for this, and no fear of consequences seeing as how there usually are none. The Australian government encourages freedom and supports many activities that its citizens take part in. Business entrepreneurship and foreign investment is also highly encouraged and isn't bound by any well know laws, just the private ones that it agrees to. I.e. rent payments, fair wages, etc. This freedom provides the maximum opportunity to Malaysian to do many things such as, create more small, medium industry or business and many more.
Source: Personal
2. Freedom of speech: 5.0
Citizens can say anything they want by speaking to anyone about anything they want. Citizens of Malaysia are all able to express themselves freely without censorship or restriction. The whole country shares it's opinions openly, on places which are becoming more nice etc, and if the government’s doing good or not, views and opinion on new regulation and many more. So the national debates, forums, speeches, protests, etc can all be discussed and shared in plain view, without fear of annihilation, murder, banishment, etc. But somehow, a few of most media are shared with the government and this situation to some broad extent barred the social advance. So therefore, some media agencies will say and tell good things about the government and not criticizing the government. But still overall, the citizens have the freedom of speech to say weather they agree or not and give their views. They could communicate in what ever way they like.
Source: Personal
3. Effective, Fair Police Force: 3.5
In Malaysia, the national armed forces are strong and sufficient enough to protect the country. Malaysia there’re many military branches which are created such as The Malaysian Army, Royal Malaysian Navy, Royal Malaysian Air Force, Royal Malaysian Police Field Force, Marine Police, Sarawak Border Scouts and many more. The Military expenditures at dollar figure is at $1.69 billion (FY00 est.) Military expenditures - percent of GDP: 2.03% (FY00) The Malaysia police force are overall good. But some how, the malaysia police are always corrupted. But still that doesn’t change the sense of responsibility police have for the society’s future. However, they are still efficient and fair at other times.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com 12/10/03
4. Private property: 4.5
Malaysia has an effective legal system and adequate legislation to protect private property. Foreigners are permitted to purchase and secure mortgages from financial institutions for property, chattel and real estate in Malaysia with the exception of agricultural land and residential properties valued less than RM250,000 (US$65,800). Individual foreigners are also barred from owning more than 20 percent of the commercial properties in any single development project, though their aggregate commercial holdings are not restricted. Intellectual Property Rights (IPR) are covered by the Trade Description Act of 1972, the Patent Act of 1983, the Copyright Act of 1987 and the Industrial Designs Act of 1996. Malaysia is a member of the World Intellectual Property Organization (WIPO), the Berne Convention for the Protection of Literary and Artistic Works, and the Paris Convention. Malaysia provides protection to all works (inter alia video tapes, audio material, and computer software) published in Berne Convention countries regardless of when the works were first published in Malaysia.
Source: http ://www.1000countries.com/malaysia.. 12/09/03
5. Commercial banks 5.0
The Malaysia banking system is a highly centralized managed system. They are operating under a same set of regulation. under the instruction and inspection of the central bank. Individuals do not have credit line and have no credit in the bank, but the mortgage loan is available. Now as many state-owned enterprises are encountering the recession, the slackened debts have made many financial institutes sink into difficulty, their effect on the contribution to the growth of economy therefore lessened.
Source: http: //www. Countrywatch.com 12/10/03
6. Communication Systems: 5.0
In Malaysia, there’s an extensive network of communication facilities such as the telephone, tv, radio, fax, newspapers, magazines, computer networks and many more. Malaysia’s communication systems are considered very good.
In Malaysia, there’re more than 4.6 million (2000) telephones, main lines in use. There’re about 5 million (2000) mobile cellular phones in use.
The telephone systems are, the general assessment are in modern system and the international service are excellent. As for the domestic telephone system, there’s good intercity service provided on Peninsular Malaysia mainly by the microwave radio relay, adequate intercity microwave radio relay network between Sabah and Sarawak via Brunei. It have it’s own domestic satellite system with 2 earth stations. As for the international telephone system, Malaysia have submarine cables to India, Hong Kong, and Singapore. And with satellite earth stations, 2 Intelsat one in the Indiana Ocean and one in the Pacific Ocean.
In Malaysia, there’s also the radio broadcast stations, from AM 35, FM 391, shortwave 15 and others. There’re about 10.9 millions radios. And as for the television broadcast stations, there’s one ( plus 15 high-power repeaters) there’s more than about 10.8 millions televisions.
The Malaysia internet country code is, my. There’s about 7 internet services providers (ISPs) (2000). There’s currently about 4.1 million internet users (2001)
source: http ://www.terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList countrywatch.com/… 12/03/03
7. Transportation: 5.0
Malaysia's transportation system is very good and of a high standard after years and years of development.
There’s good transportation facilities the movement of merchandise and people, which thereby improving the commercial activity of the country. In Malaysia there’s all kinds of transport from rails, roads, ship, and air.
There’s about a total of 1801 km of railways. And the narrow gauge of railways also 1801 km which 1000 m gauge ( 148 km electrified ) (2001). As for the roads in Malaysia there’s about a total of 64672 km of highways built. Paved highways about 48707 km (including 1,192 km of expressways). In addition to these national and main regional roads, Malaysia has thousands of kilometers of local roads that are maintained by local jurisdictions (1999). As for the unpaved roads there’s about 15,965 km.
As for the waterways in Malaysia there’s about a total of 7,296 km waterways. Peninsular Malaysia is at about 3,209 km, Sabah 1,569 km, and Sarawak 2,518 km. There’s many ports and harbors for the ship transportation in Malaysia, such as in Bintulu, Kota Kinabalu, Kuantan, Kuching, Kudat, Labuan, Lahad Datu, Lumut, Miri, Pasir Gudang, Penang, Port Dickson, Port Kelang, Sandakan, Sibu, Tanjung Berhala, Tanjung Kidurong, Tawau and many others more. As for the merchant marine, there’s about a total of 363 ships (1,000 GRT or over) totaling 4,952,119 GRT/7,229,299 DWT which includes some foreign-owned ships registered here as a flag of convenience: Australia 1, China 1, Germany 2, Hong Kong 15, Indonesia 3, Japan 4, Monaco 1, Philippines 2, Singapore 78, South Korea 2, Vietnam 1 (2002 est.
There’s also the merchant marine ships by different types. Such as type: bulk 57, cargo 114, chemical tanker 35, container 62, liquefied gas 20, livestock carrier 1, passenger 2, petroleum tanker 60, roll on/roll off 5, specialized tanker 1, vehicle carrier 6 and many others.
As for the air transportation in Malaysia, there’s currently now about 116 airport in Malaysia (2001). There’s also many different types of airport with paved runways such as a total of 34 over 3,047 m: 5 , 2,438 to 3,047 m: 5 , 914 to 1,523 m: 6, under 914 m: 7 (2001), 1,524 to 2,437 m: 11 and a lot more. As for the airport wit unpaved runways there’s about a total of 82 1,524 to 2,437 m: 1, 914 to 1,523 m: 8 , and under 914 m: 73 (2001)
source: http ://www.terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList
countrywatch.com/… 12/03/03
8. Education: 3.7
Malaysia’s education is quite high. In Malaysia, their education systems mostly followed the british system.
There’s both government and private Schools in Malaysia. Attendance is compulsory between the ages of 5 through to 15. Education begins when children turn age five and attend kindergarten after a year children attend a primary school (elementary) for 6 years. Upon graduation of primary school, students then attend a high school for a further 6 or 7 years until graduation. Between these times, parents could either choose from normal government schools, chinese standard government schools, hindu schools, or private schools.
After high school and after passing the final secondary major examination, they could either choose to continue in college or stop studying. There are no compulsory requirements after completing high school such as military duty etc, so students are given free reign and are able to take up full time employment, travel, study, relax, etc.
In terms of costs, primary and secondary education is free in government schools in all States and Territories. Tertiary education however is not free. Students often take a government loan to pay for fees, books, etc and pay back the loan on individual terms once employed with the qualifications received from the institution. Private, catholic and other types of schools also often charge expensive fees for educational services. Normally if one study in a government school one will just have to pay a small amount of school fees and as for the books, they could just loan it.
Sources: Personal opinion
9. Social mobility 3.5
In Malaysia, the education system does not provide access by all persons to the tools needed by individuals from deprived backgrounds to join the more elite classes. Generally the rights of individuals are protected and the ability for each person to make a good living is unrestricted. The first point that can be raised on this issues is that statistics on Malaysia's work force show that men are often paid more and often work in higher paying jobs than women. In 1994 it was estimated that men on average earned more than women. The second point being that people are hired for positions primarily for their qualifications and experience within the industry.
Source: Personal opinion.
10. Freedom from Outside Control: 4.7
Malaysian citizens are free from control by any citizen, free from control of any foreign government or outside control. Although Malaysia is part of the British commonwealth this has little or no effects on the citizens, and does not excise any stronghold or forms of control on what the citizens are allowed to say or do.
Source: personal.
11. Foreign currency transactions : 4.0
Despite the imposition of selective capital controls, Malaysia's current account remains fully convertible. Importers and exporters have sufficient access to foreign exchange to meet their needs. The Central Bank has shown flexibility in exercising the capital control measures imposed in 1998. Ringgit earned by foreigners in the form of salaries, interest payments and dividends may be converted into foreign currency for repatriation abroad. All payments to other countries must be made in foreign currency, other than the currency of Israel, Serbia or Montenegro, through authorized foreign exchange dealers. Depending on the size of their monthly receipts, resident exporters and approved operational headquarters are allowed to retain a maximum of US$10 million in export proceeds in foreign currency accounts. Resident and non-resident travelers may carry no more than RM1000 into or out of Malaysia. Residents may not carry out foreign currency more than the equivalent of RM10,000 (US$ 2632). Non-residents may carry out any amount of foreign currency up to the amount they carried in.
An Asian financial crisis in 1997 hit Malaysia's economy hard, ending almost a decade of eight percent annual GDP growth and exposing the country's external vulnerabilities. As the current account deficits of the booming Asian economies like Thailand, Indonesia and Malaysia began to look unsustainable and inconsistent with the 'soft pegs' of local currencies to the U.S. dollar, market confidence in currencies of the Southeast Asian countries evaporated quickly, resulting in large portfolio and bank deposit investment outflows and a decline in equity and property values. In reaction, Malaysian authorities launched policy changes designed to insulate domestic monetary policy from external volatility. Measures adopted included currency and capital controls and an exchange rate pegged to the U.S. dollar at R3.8/US$, a substantial devaluation from the ringgit's value in 1996, about R2.5/US$, before the crisis. This new value for the peg of the ringgit to the U.S. dollar has held to the current time while Malaysia's external accounts have strengthened significantly. With capital controls in place, speculative selling of the ringgit became more difficult and costly and National Bank of Malaysia was subsequently able to lower interest rates as it re-established control over its monetary policy. Also, the government established three institutions to speed recovery of the financial system weakened by the Asian crisis. Danaharta, the asset management company, was established to purchase and manage the many nonperforming loans that were left on the books of Malaysian banks following the devaluation of the ringgit and the abrupt cessation of capital inflows into Malaysia.
However, with the sudden reversal in foreign investors' interest in the emerging economies of the Southeast Asian region in 1997, Malaysia could no longer afford the high level of investment and importation of capital goods. Imports fell sharply and the trade surplus widened significantly so that in 1998, the current account had swung to a surplus of US$9.5 billion from a deficit of US$5.9 billion in 1997. Over this period, the value of the ringgit had declined from RM2.5/US$ to RM3.8/US$. With the much weaker ringgit, Malaysia's terms of trade made its exports much more attractive in global markets and they expanded rapidly in 1999 and 2000, before slowing during the global trade recession of 2001.
Source : http : // www. terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList http ://www.1000countries.com/malaysia.. 12/02/03
12. Border Control: 3.7
In Malaysia, the border between Thailand, Singapore, Indonesia and other border are closely watched and checked. But somehow, only a few illegal things that’s aren’t allowed are sometimes corrupted and are brought in Malaysia.
On Aug. 1, 2002, the Malaysian government enforced controversial new amendments to the Immigration Act, under which illegal immigrants in the country could be whipped, and fined up to 10,000 ringgit (US$2,631) or jailed between six months and five years. Before the introduction of the new act, about 380,000 illegal immigrants, 70 percent of them are Indonesians, were sent to countries of their origin under a Malaysian amnesty plan. In deporting the illegal immigrants, Malaysian Minister Syed Hamid said that Malaysia was only exercising its right as a sovereign nation to ensure that the country was free from illegal immigrants who were jobless or choose to get involved in criminal activities.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com , smpke.jpm.my and www.odci.gov/cia/publications/factbook/geos/my.html, personal opinion and others 12/02/03
13. Currency: 5.0
An Asian financial crisis in 1997 hit Malaysia's economy hard, ending almost a decade of eight percent annual GDP growth and exposing the country's external vulnerabilities. As the current account deficits of the booming Asian economies like Thailand, Indonesia and Malaysia began to look unsustainable and inconsistent with the 'soft pegs' of local currencies to the U.S. dollar, market confidence in currencies of the Southeast Asian countries evaporated quickly, resulting in large portfolio and bank deposit investment outflows and a decline in equity and property values. In reaction, Malaysian authorities launched policy changes designed to insulate domestic monetary policy from external volatility. Measures adopted included currency and capital controls and an exchange rate pegged to the U.S. dollar at R3.8/US$, a substantial devaluation from the ringgit's value in 1996, about R2.5/US$, before the crisis. This new value for the peg of the ringgit to the U.S. dollar has held to the current time while Malaysia's external accounts have strengthened significantly. With capital controls in place, speculative selling of the ringgit became more difficult and costly and National Bank of Malaysia was subsequently able to lower interest rates as it re-established control over its monetary policy. Also, the government established three institutions to speed recovery of the financial system weakened by the Asian crisis. Danaharta, the asset management company, was established to purchase and manage the many nonperforming loans that were left on the books of Malaysian banks following the devaluation of the ringgit and the abrupt cessation of capital inflows into Malaysia.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com, personal opinion 12/02/03
14. Cultural, language homogeneity 3.7
Malaysia is a country of Southeast Asia composed of two noncontiguous regions: West Malaysia on the Malay Peninsula and East Malaysia on the north coast of the island of Borneo
Population distribution is uneven, with some 15 million residents concentrated in the lowlands of Peninsular Malaysia. Malaysia's population of approximately 24 million (2003) continues to grow at a rate of 1.9 percent per year. There is great diversity regarding the Malaysian population's ethnicities, linguistic groups, cultures and religions. The population of Malaysia can be divided into four major ethnic groups: the Malays, the Chinese, the Indians and the indigenous people. In addition, there are Europeans, Americans, Australians, Eurasians, Middle Easterners and Thais, as well as people of mixed ancestry.
Ethnic Malays and other indigenous peoples comprise 58 percent of the population. They are the largest, as well as the most homogeneous ethnic group, in the country in terms of culture, language and religion. They share a common culture and speak a common language - Malay - the official language of Malaysia. Almost all Malays are Muslims, and adherence to the religion is seen as an important factor distinguishing a Malay from a non-Malay. Indeed, by constitutional definition, all Malays are Muslim. Malays also enjoy certain privileges under the affirmative action program introduced in 1971, which was aimed at helping Malays who were economically disadvantaged at that time. There are favorable quotas for Malays entering universities and in the arena of employment. These privileges have been sources of conflicts between Malays and other ethnic groups in the country.
The second largest ethnic group in Malaysia is Chinese, consisting of 24 percent of the population. The Chinese are ethnically homogeneous, but less so in terms of language and religion. They speak several different Chinese dialects, and there is no dominating religion among them; some are Buddhist or Taoist as well as a small number of Christians. The Chinese are largely outside of the political process, but they are very active and successful in business. Indeed, the Chinese have historically played an important role in trade and business in Malaysia. Considerable tension exists between the Malays and the Chinese as a result of success of the Chinese in business and their unfavorable political position in the country. The Indians constitute about 8 percent of the population in Malaysia, and most of them speak Tamil. The majority of the people in this ethnic group practice Hinduism; others practice Islam, Buddhism and Christianity.
Non-Malay indigenous groups make up 10 percent of the Malaysian population and they tend to live in Eastern Malaysia. As such, more than half of Sarawak's population and about two-thirds of Sabah's population are composed of non-Malay indigenous groups. They are divided into dozens of ethnic groups, but they share some general patterns of living and culture. Until the 20th century, most practiced traditional beliefs, but since then, many have become Christian or Muslim. The indigenous Malaysians known as the Orang Asli constitute the smallest such ethnic group. The Orang Asli is subdivided into several groups, each speaking a different language from the other groups. Most of them believe in traditional religions, but some have converted to Islam. The "other" category includes Europeans, Americans, Australians, Eurasians, Middle Easterners, Thais, as well as Malaysians of mixed ethnic and national backgrounds.
The population of Malaysia has a healthy life expectancy at birth of 71.7 years (74.5 for males, and 69.01 for females). The infant mortality rate of Malaysia is 19 deaths per 1,000 live births. In terms of literacy rate in Malaysia, 88.9 percent (85.4 percent for females and 92.4 percent for males), age 15 and over, can read and write. In Malaysia there many different kinds of religion, different kinds of ethnic groups, different culture and many more. The likelihood of problems increases when the cultural differences are severe and when the various cultural groups are nearly equal in size but in Malaysia, people are open and knows the sensitivity of talking about different people’s culture, religion and different ethnic groups. In Malaysia, there’s minority conflicts and remain peaceful though there are many different ethnic groups. But most of all many malaysian know how to work together.
Source: http: //www. Countrywatch.com, and personal opinion. 12/02/2003.
15. Political effectiveness 3.7
Malaysia has experienced little political violence since serious ethnic rioting in 1969. Since 1998, supporters of the reform movement launched by former Deputy Prime Minister Anwar Ibrahim have staged a number of largely peaceful demonstrations. In a few cases, police and demonstrators clashed, but there were no deaths or serious injuries.
As the United States pushed toward a war against Iraq in February 2003, Malaysian Prime Minister Mahathir denounced US policy on the Gulf country, warning that a US-led attack would be seen as a "war against Muslims."
At that time, Malaysia was hosting a summit of developing nations in the 114-member Non-Aligned Movement (NAM), which was set to adopt a declaration condemning war with Iraq.
Mahathir accused the U S of double standards in its contrasting attitudes towards North Korea and Iraq. Ironically, in early April 2003, Malaysia's own government accused its religious schools of teaching hate, not religion, and stopped their state subsidy. More than 125,000 children in Malaysia receive an Islamic education in such institutions.
The commission's long awaited report on the law, which effectively allows for indefinite detention without charge or trial, says it ignores basic rights. Malaysia's security laws date from 1960, a time when the country was locked in a bloody struggle with communist guerrillas. It allows for suspects to be held for up to two years if they are deemed to threaten national security. Police are not required to prove any wrongdoing. Detention orders can be extended indefinitely and are difficult to challenge.
In late April 2003, Malaysia's Official Human Rights Commission - Suhakam - called for the Internal Security Act to be replaced with laws modeled on Western anti-terrorism legislation. It called for any new law to outline specific offenses, for detainees to be charged or released after three months, for detention orders to be subject to judicial review and for the law to require annual renewal. As it was initiated by a government body, this report represented one of the strongest challenges yet to the country's most controversial law.
However, critics say it will be used by the government to lock up political opponents. Meanwhile, supporters of the act believe it is essential to counter terrorism.
More than 70 alleged Islamic militants are currently detained under its provisions. But in early June 2003, the Malaysian government released three opposition activists who were detained for more than two years ago under the controversial Internal Security Act. The detainees were arrested in April 2001 and accused of plotting to overthrow the government, charges they all denied. International rights group Amnesty International had adopted the activists as prisoners of conscience, and lawmakers from several countries including Denmark, Britain and the Netherlands signed a petition asking for their release.
In late May 2003, the Malaysian government outlined a US$1.92 billion stimulus package in an effort to offset the damage of the disease, Sars (Severe Acute Respiratory Syndrome), and revive the country's sluggish economy. The stimulus package, delayed successively since March, is the country's third off-budget spending program since 2001.
Measures included a relief fund and tax breaks for the tourism sector, liberalization of foreign investment rules and new funds to help traders. Two people have died of SARS in Malaysia, which was chosen as the venue of a two-day global forum on the disease held on June 17. (Conclusion) The political problems doesn’t really affect the business climate. But somehow even when governments recognize and try to solve the problems, it’s just isn’t enough. The government have to take more true and effective actions because it has somehow causes some social burden to us and to help improve the country.
Source : http ://www.1000countries.com/malaysia.., http://www.business-in-asia.com/malaysia3_business.html.( business.in.malaysia.net), personal opinion and others 11/24/03
16. Institutional Stability 3.7
In Malaysia the most institution are stable, there’s stable governments which are quite good, courts, schools, stable law enforcement, businesses and many others. The government has created many kinds of institutions most of them are really stable and are still effective. But still there are some that changes quite frequently, only a few. Though there’re many floods and other small crisis that effects Malaysia, but still everything are quickly solved. But somehow there’s also poorly functioning institutions which exist from the village to the national level. In addition, widespread and endemic corruption persists at all levels of the political, administrative, judicial and military systems. Thought there’s corruption going on but it doesn’t effect the country’s institutional stability at all.
Source : Personal opinion.
17. Honest Government 3.0
In my very opinion, Malaysia corruption and bribery are done in almost anywhere especially on small crimes such as to reduce ones speeding ticket, bribe the polis and have them not to give out a ticket or fine you ought to get. Besides this, corruption and bribery are done also in both either a big businesses or a small business. And so therefore, in Malaysia the government leaders does not work hard to limit or eliminate the corruption created.
News reports and anecdotes indicate that corrupt practices exist. Malaysia considers bribery a criminal act and does not permit bribes to be deducted from taxes. The Anti-Corruption Agency (ACA) began operations in 1967. Since June 1997, senior state-level officials have been required to declare their assets to the ACA upon taking office. Foreign businessmen are asked to report any individuals who ask for payment in return for government services. ACA investigations are reported in the newspapers. Transparency International, a nonprofit organization, ranked Malaysia the 32nd least corrupt in its 1999 survey of 99 countries. Malaysia's score of 5.1 on a scale of zero (corrupt) to 10 (clean) placed it in a tie with Costa Rica, ahead of countries such as south Korea, Thailand, China, the Philippines and Indonesia, though behind others such as Singapore, Hong Kong, Taiwan and most of Western Europe. The Malaysian chapter of Transparency International is the Kuala Lumpur society for transparency and integrity.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com and personal opinion 11/25/03
18. Common Laws 4.7
For years now, the Malaysia government have the same set of non-conflicting laws, justice and dispute resolution throughout the population. Also the administration and implementation of the legal system in Malaysia is uniform in all parts. As a conclusion, the Malysia legal system is considered effective and is equally fair. After independence on Aug. 31, 1957, the Federation of Malaysia was formed on July 9, 1963. As a constitutional monarchy, Malaysia's head of state is the "Yang di-Pertuan Agong," (paramount ruler) customarily referred to as the king. Kings are elected for five-year terms from among the nine sultans of the Peninsular Malaysian states. The king has ceremonial duties and is also the leader of the Islamic faith in Malaysia.
The executive branch of the federal government is headed by the prime minister who is appointed by the king. The cabinet members are appointed by the prime minister from among the parliament members with consent of the king. The federal government has authority over foreign policy, defense, internal security, the administration of justice and citizenship. The current prime minister of Malaysia is Dr. Mahathir bin Mohamad, who has been in the position since 1981. Legislative power in Malaysia is divided between federal and state legislative assemblies. The bicameral parliament consists of the "Dewan Negara" (Senate) and the "Dewan Rakyat" (House of Representatives). Among the 69 members of the Senate who serve a six-year term, 43 are appointed by the king and 26 are elected by the state legislature-two from each state. The 193 members of the House of Representatives are elected from single-member districts by universal adult suffrage to maximum terms of five years. Of these, 145 are from Peninsular Malaysia, 27 are from Sarawak and 21 are from Sabah. Malaysia is divided into 13 states and two federal territories (the capital and an island). Each state has its own written state-level constitution, a legislative assembly, and a government headed by a chief minister. Each state Legislative Assembly can legislate on matters not reserved for the federal parliament.
The Malaysian legal system is based on English common law, judicial review of legislative acts in the Supreme Court at request of supreme head of the federation; has not accepted compulsory ICJ jurisdiction. Under the constitution of Malaysia, the judicial power of the federation is vested in two High Courts, one in Peninsular Malaysia and the other in East Malaysia, and in subordinate courts. There is also a Supreme Court which is above the High Courts. Malaysia has an effective legal system and adequate legislation to protect private property. Foreigners are permitted to purchase and secure mortgages from financial institutions for property, chattel and real estate in Malaysia with the exception of agricultural land and residential properties valued less than RM250,000 (US$65,800). Individual foreigners are also barred from owning more than 20 percent of the commercial properties in any single development project, though their aggregate commercial holdings are not restricted. Intellectual Property Rights (IPR) are covered by the Trade Description Act of 1972, the Patent Act of 1983, the Copyright Act of 1987 and the Industrial Designs Act of 1996. Malaysia is a member of the World Intellectual Property Organization (WIPO), the Berne Convention for the Protection of Literary and Artistic Works, and the Paris Convention. Malaysia provides protection to all works (inter alia video tapes, audio material, and computer software) published in Berne Convention countries regardless of when the works were first published in Malaysia.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com , personal opinion and others 11/25/03
19. Central Bank: 4.0
The central bank in Malaysia is called Bank Negera Malaysia. The duty of the central bank is primarily to formulate and implement monetary policy. The bank's duties also include monitoring the monetary and banking policies of its divisional banks and also many others. The Bank Negara Malaysia also serves as a tool for the central planning agencies and it also held the assets external financial consist of claims on non-residents and, of monetary gold and Special Drawing Rights (SDRs). The Bank Negara is fully owned by the Malaysia Government, to which its profits go to. Therefore the Bank Negara are known to operate under government control and isn't independent of political control. The central Bank somehow is controlled by the government in good condition and is doing the country’s economic good.
For instance, the Malaysian government authorities launched policy changes designed to insulate domestic monetary policy from external volatility. Measures adopted included currency and capital controls and an exchange rate pegged to the U.S. dollar at R3.8/US$, a substantial devaluation from the ringgit's value in 1996, about R2.5/US$, before the crisis. This new value for the peg of the ringgit to the U.S. dollar has held to the current time while Malaysia's external accounts have strengthened significantly. With capital controls in place, speculative selling of the ringgit became more difficult and costly and National Bank of Malaysia was subsequently able to lower interest rates as it re-established control over its monetary policy. Also, the government established three institutions to speed recovery of the financial system weakened by the Asian crisis. Danaharta, the asset management company, was established to purchase and manage the many nonperforming loans that were left on the books of Malaysian banks following the devaluation of the ringgit and the abrupt cessation of capital inflows into Malaysia. A Corporate Department Restructuring Committee was set up to encourage collective debt workouts between debtors and creditors. The government also promoted the consolidation of more than 50 financial institutions through domestic mergers of weak institutions into 10 stronger ones
Source: www.countrywatch, picosearch.com/cgi_bin/ts.pl and personal opinion date accessed 11/20/03
20. Domestic Budget Management: 4.3
The fiscal balance experienced a substantial swing between 2000 and 2001 as the government executed a well-timed expansion of the central government deficit to more than five percent of GDP to cushion the decline in external demand from the slowing world economy. The consolidated fiscal balance in Malaysia (all levels of government and public enterprises) moved from a surplus of 0.7 percent in 2000 to a deficit of 2.1 percent of GDP in 2001, providing a fiscal pulse to the economy of nearly 3 percent of GDP. That policy reaction, plus accommodative moves from the central bank, helped return the economy to positive growth in 2002. Unemployment in Malaysia is low by western, developed country standards: it averaged 3.6 percent during the slow-growth year of 2001 and dipped to 3.5 percent during 2002. By contrast, the rate had been as low as 2.5 percent in the boom years of the middle 1990's.
Malaysia's budget findings are published every year in the newspapers when it is released. The government site exclaims that there will be a budget surplus for the fiscal year of 2003-2004. This surplus is planned to be invested in to the current welfare system, tax reforms, job strengthening and training programs, youth initiatives, etc.
The real gross domestic product increased 4.1 percent in 2002 after having grown just 0.3 percent in 2001 compared to 7.9 percent in 2000 and 6.1 percent in 1999. The inflation rate (based on the GDP deflator) has been a bit volatile in the past three years.
After falling marginally in 1999, the price level rose 5.5 percent in 2000 as higher energy prices and booming export markets had their effect, and then declined by 2.5 percent in 2001 as petroleum prices flattened out and rapidly falling global demand reduced the prices of key products and commodities produced by Malaysia. As commodity prices recovered in 2002, the GDP deflator rose 3.5 percent in that year. Consumer price inflation has been lower and less volatile throughout this period and Malaysia has not generally experienced the deflation that some of its neighbors in Asia are suffering with.
Source: http://www.malaysiagateway, http://www.smpke.jpm.my and picosearch.com/cgi_bin/ts.pl 11/19/03
21. Government Debt: 4.0
Because of the mostly centrally controlled financing system, the Malaysia government can manage its debt well. Malaysia has tightened up considerably on new obligations by the national government and is enforcing restrictions on borrowing by provinces, municipalities and their banking entities. The internal debt to finance budget deficit, is issued every year. It was a good way to reserve the value of in hand currency for most people. There’s also the loans and the domestic debt have contributed very much to the rapid growth of the economy and to the improvement of the life of people, and the Malaysia government are operating it quite good.
The Malaysia’s overall balance in the second quarter of 2002 saw a decline in the overall balance to +RM3.3 billion (+RM7.2 billion was registered in the previous quarter), attributable to a decrease in the current account surplus of RM5.9 billion (+RM6.9 billion previously), a net outflow amounted to RM6.2 billion in the financial account (a net inflow of RM3.3 billion in the preceding quarter) and errors & omissions of +RM3.6 billion (of which RM5.2 billion was due to revaluation gains). The overall balance, which accounted for +RM10.5 billion in the first half of 2002, pronounced a turnaround from that of -RM14.7 billion a year ago.
In the current quarter, the increase of the net international reserves held by Bank Negara Malaysia stood at RM3.3 billion, lower than the increase of RM7.2 billion recorded in the earlier quarter.
And in the Malaysia’s financial account, during the second quarter of 2002, financial account saw a turnaround of -RM6.2 billion from an inflow of RM3.3 billion recorded in the first quarter 2002. The reversal was reflected by a net outflow in the portfolio investment of RM5.0 billion mainly due to a redemption of debt securities, which resulted in a reduction in the private sector's external debt, from an inflow of RM2.9 billion in the preceding quarter, coupled with the decreased net inflow of RM0.2 billion in the direct investment from a bigger inflow of RM2.3 billion registered in the earlier period. In the meantime, the official sector's contribution in the other investment was -RM1.1 billion, a turnaround from RM2.9 billion reported in the previous quarter, while the net outflow recorded in the private sector had dropped to RM0.3 billion (from -RM4.8 billion in the first quarter 2002).
The small net outflow of RM3.0 billion of the financial account in the first half of 2002 had indicated a significant drop from an outflow of RM22.2 billion recorded in the correspondence period last year. The substantial shortfall was due to the other investment that accounted for a net outflow of RM3.3 billion from -RM21.0 billion reported in the same period of 2001.
Source: http://www.malaysiagateway, www.countrywatch, www.statistics.gov.my/ and picosearch.com/cgi_bin/ts.pl, 11/20/03
22. Economic Statistics: 4.7
In Malaysia, plentiful statistics are produce to increase awareness of business opportunities and especially to let many business investors know what’s happening and going on in a businesses and in the country itself. There’re many different kinds of statistics published for example, in the foreign investment statistics shows that the U.S. has consistently been a leading investor in Malaysia. According to the Malaysian Industrial Development Authority. The U.S. was the largest foreign investor in the manufacturing sector with approved projects valued at US$1,641 million in 1998. Japan was second with U.S.$484 million, followed by Taiwan, with US$255 million. The three made up more than 70 percent of total foreign manufacturing investments in Malaysia in 1998. (note: manufacturing investment only; upstream oil and gas investments not included.)
There’s also the Malaysia economic performance statistics, which provide quite accurate statistics. It shows that the real gross domestic product increased 4.1 percent in 2002 after having grown just 0.3 percent in 2001 compared to 7.9 percent in 2000 and 6.1 percent in 1999. The inflation rate (based on the GDP deflator) has been a bit volatile in the past three years. After falling marginally in 1999, the price level rose 5.5 percent in 2000 as higher energy prices and booming export markets had their effect, and then declined by 2.5 percent in 2001 as petroleum prices flattened out and rapidly falling global demand reduced the prices of key products and commodities produced by Malaysia. As commodity prices recovered in 2002, the GDP deflator rose 3.5 percent in that year. Consumer price inflation has been lower and less volatile throughout this period and Malaysia has not generally experienced the deflation that some of its neighbors in Asia are suffering with. The fiscal balance experienced a substantial swing between 2000 and 2001 as the government executed a well-timed expansion of the central government deficit to more than five percent of GDP to cushion the decline in external demand from the slowing world economy. The consolidated fiscal balance in Malaysia (all levels of government and public enterprises) moved from a surplus of 0.7 percent in 2000 to a deficit of 2.1 percent of GDP in 2001, providing a fiscal pulse to the economy of nearly 3 percent of GDP. That policy reaction, plus accommodative moves from the central bank, helped return the economy to positive growth in 2002. Unemployment in Malaysia is low by western, developed country standards: it averaged 3.6 percent during the slow-growth year of 2001 and dipped to 3.5 percent during 2002. By contrast, the rate had been as low as 2.5 percent in the boom years of the middle 1990's.
Besides that, in Malaysia there’s also a Department of Statistics currently produces a wide range of economic and social statistics to help the economic growth and many more. Decisions on statistics to be compiled are based on priorities and current needs of the Government. Currently they cover the following main areas: National Accounts; Balance of Payments; External Trade; Manufacturing; Construction; Mining; Services; Prices; Demography; and, Socio-economic.
The main channel of data dissemination by the Department is through publications. While some publications for specific fields are produced on an annual basis, yet others are produced on a monthly, quarterly and half-yearly basis. Furthermore, special publications are produced on an ad hoc basis. These publications can be purchased at the headquarters as well as at the state branches of the Department. The Department also entertains user requests for data in the form of diskettes and magnetic tapes. Unpublished statistics are also made available to users on request.
There’s also Consultancy services in the field of sampling are also provided by the Department to government agencies who require them. ..
There’s also monthly Statistical Bulletin which are meant to provide up-to-date information for a cross-section of subject-areas and sectors of the economy of Malaysia.
Source: http://www.malaysiagateway, www.countrywatch, www.statistics.gov.my/ , picosearch.com/cgi_bin/ts.pl and personal opinion 11/25/03
23. Protection of Public Health and Safety: 4.1
In Malaysia, the public’s health issues is quite satisfactory though in a certain year there was an infectious disease called J.E. infection which are from mosquetoes spread to pig then to human who eats the meat. But this infectious disease are quickly taken action upon. In Malaysia, all food which are sold out into the market must be inspected properly it is because in Malaysia a muslim country and also many other more religion, restaurant and all food product must all shown clearly that if the food contains pork, beef and other more ingredient. Products or ingredient contains "halal" which means does not contain pork can be eaten by muslim.
Source : personal opinion
24. High Wage Policies: 3.7
In Malaysia, the Labor market conditions had improved in 1999. At the end of 1999, the Malaysian unemployment rate declined to three percent from 3.2 percent at the end off 1998. As the domestic economic activities began to pick up, the number of job vacancies has exceeded the number of retrenched workers. The regional economic downturn in 1997-1998 has led to retrenchments, which affected mostly Malaysia's substantial foreign workforce. In February 2000, the government lifted the freeze on foreign workers except for some specific jobs. The government imposes a monthly per capita levy on employers of foreign workers: RM125 (US$33) on foreign construction and manufacturing workers and RM30 (US$8) on domestic and agricultural workers. In recent years wage rates have climbed faster than productivity rates, prompting concerns about Malaysia's future competitiveness. However, the rate of wage increases has slowed to 2.7 percent in 1998 from 10.2 percent in 1997. In 1999, the private sector wage rate rose 5.5 percent. Productivity in Malaysia, while contracting 1.5 percent in 1998, rebounded to 4.4 percent growth in 1999. The National Labor Advisory Council, a tripartite forum, has introduced a set of guidelines for a productivity-linked wage system to facilitate collective negotiations of wage agreements. Malaysia no longer seeks labor-intensive industries and reserves its fiscal incentives for high value-added projects. Malaysia is a member of the International Labor Organization (ILO). Labor relations in Malaysia are generally non-confrontational. A system of government controls strongly discourages strikes. Some labor disputes are settled through negotiation or arbitration by an industrial court. Once a case is referred to the industrial court, the union and management are barred from further industrial action. While national unions are proscribed, there are a number of national confederations of unions. Employers and employees share the costs of the Social Security Organization (SOSCO), which covers eight million workers as of December 1999. No welfare programs or government unemployment benefits exist; however, the Employee Provident Fund (EPF) provides retirement benefits for private workers, while civil servants receive pensions.
There is no legal minimum wage. But there’s high wages and a proper income for people who’s working in the medical section such as doctors, surgeon, nurses, phamercy and many more others. Therefore most of the working people can afford to buy consumer goods beyond basic living necessities such as likes having more than one car, spend it on expensive things and many more which helps the country’s economy.
Source : personal opinion.
http: //www. Countrywatch.com
www.odci.gov/cia/publications/factbook/geos/my.html 10/15/03
25. Environmental Protection: 4.7
In Malaysia, the environment isn’t that good but the government is trying to improve and built more awareness onto people. There’re many pass and current issues that happened on the environment such as air pollution from industrial and vehicular emissions; water pollution from raw sewage; deforestation; smoke/haze from Indonesian forest fires and many more. In this regard, Malaysia is now actively developing policies and programs to build public awareness on environmental issues, preservation of the natural resources and ecology, as well as land conservation. Many environment organizations are set up such as major non-governmental environmental organizations and entities include Asian Wetland Bureau (AWB), International Center for Conservation Biology (ICCB), TRAFFIC Southeast Asia and many more. Besides this Malaysia also have set up international agreements to help on the environment issues such as party on: Biodiversity, Climate Change, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Life Conservation, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands signed, but not ratified: Climate Change-Kyoto Protocol
source: http ://www. 1000counties.com/malaysia.thm/
terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList
countrywatch.com/… 10/15/03
26. Strong Army: 3.5
In Malaysia, the national armed forces are strong and sufficient enough to protect the country. Malaysia there’re many military branches which are created such as The Malaysian Army, Royal Malaysian Navy, Royal Malaysian Air Force, Royal Malaysian Police Field Force, Marine Police, Sarawak Border Scouts and many more. The military manpower at military age of 21 years of age (2002 est.) and the availability of it is only males at the age of 15-49 and the total is 5,933,296 (2002 est.) and fit for military service is at the total of 3,592,997 (2002 est.). The Military expenditures at dollar figure is at $1.69 billion (FY00 est.)
Military expenditures - percent of GDP: 2.03% (FY00)
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com 11/5/03
27. Foreign Trade Impact: 3.6
Malaysia’s current account import in 2000 was $82.6 billion and total exports was $ 97.9 billion. The GDP real growth rate in the year 2000 was 8.6% (2001 est.) Per Capital GDP based on purchasing power parity is $223.7 billion (2000 est) and the GDP purchasing power parity per capital was only $10,300 (est 2000 est.) From here we can see that the total exports plus imports is $180.5 billion.
Source : http://www.business-in-asia.com/malaysia3_business.html.( business.in.malaysia.net) 10/15/03, http : // www. terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList http ://www.1000countries.com/malaysia.. 10/29/03
28. Protection of Foreign Currency Earning Enterprises: 4.5
Malaysia offers a number of fiscal incentives to foreign manufacturing investors. Historically these incentives have been linked to performance criteria such as export-percentage requirements, as specified in individual manufacturing licenses. As mentioned above, however, export requirements have recently been relaxed, which will not affect the benefits and incentives that firms receive. Project approval depends on many factors. MIDA may consider the size of an investment, the export-orientation of production, the percentage of local equity participation, the type of financing (both local and offshore) required, capital/labor ratio, the potential for technological diffusion into the local economy, the ability of existing and planned infrastructure to support the effort, and the existence of a local or foreign market for the output. The criteria are applied in a non-discriminatory manner, except in instances where both a local and foreign firm propose identical projects. All requests are handled on a case-by-case basis.
Foreign participation in commercial banking remains restricted, with foreign equity limited to an aggregate 30 percent in any single institution. For virtually all publicly listed companies, only a minority portion of stock is available for trading; the majority is often held by the principal shareholders. Malaysia has maintained a robust privatization program that slowed as a result of the recent economic downturn. Foreign participation is generally welcome at all stages of the program. Foreign firms are able to participate in government-financed research and development programs. So basically Malaysia have high protection onto the exporting industries.
Source : http://www.smpke.jpm.my and www.odci.gov/cia/publications/factbook/geos/my.html 9/25/03
29. Management of Foreign Currency Budget: 3.5
Since 1998, Malaysia has maintained substantial current account surpluses, a sharp reversal of the trend prior to the Asian crisis of 1997. From the mid-1990s to 1997, Malaysia's current account had been in deficit as its small trade surplus, driven by oil and gas and manufactured exports, but also burgeoning investments of capital goods, was not sufficient to outweigh the country's deficits in international services, net factor income and net transfers. However, with the sudden reversal in foreign investors' interest in the emerging economies of the Southeast Asian region in 1997, Malaysia could no longer afford the high level of investment and importation of capital goods. Imports fell sharply and the trade surplus widened significantly so that in 1998, the current account had swung to a surplus of US$9.5 billion from a deficit of US$5.9 billion in 1997. Over this period, the value of the ringgit had declined from RM2.5/US$ to RM3.8/US$. With the much weaker ringgit, Malaysia's terms of trade made its exports much more attractive in global markets and they expanded rapidly in 1999 and 2000, before slowing during the global trade recession of 2001.
The trade surplus in 2001 amounted to US$18.4 billion, still almost as large as the US$20.8 billion surplus recorded in 2000. The current account surplus in 2001 was US$7.3 billion, down from US$8.4 billion in 2000 and a record US$12.6 billion in 1999. In 2002, exports recovered a bit from their slump of 2001, but did not return to their record levels of 2000. The trade surplus fell in 2002 to just over US$13 billion, but the current account surplus nevertheless remained at nearly its 2001 level: US$7.2 billion in 2002. Malaysia's services and income accounts remain in deficit, but the huge merchandise trade surpluses it can generate appear likely to keep the current account in surplus for the next few years at least.
in the financial account, the enormous inflows of foreign money into Malaysia that characterized the boom years of the mid-1990s have stopped and even reversed. Running a current account surplus, Malaysia is earning more foreign currency balances in its current transactions than it is paying out and as these excess earnings of foreign currency are placed on deposit or otherwise invested abroad, Malaysia's financial account has turned negative. Historically, Malaysia received sizable inflows of foreign direct investment. After the Asian crisis, it still does so, but it has also begun to invest some of its own excess earnings of foreign exchange (from the current account surplus) in FDI abroad. Portfolio investment and bank lending and borrowing activity have resulted in net outflows of funds from Malaysia, again a reflection of the placement of excess holdings of foreign currency in banks and investments abroad as well as the repayment of past external debt. The result of the sharp reversal in the current account balance has been strong growth in Malaysia's gross international reserves. As of year end 2002, the county held reserves of US$34 billion, up from just US$6.4 billion in the dark days of 1998 when reserves had been rapidly dissipated defending the ringgit's higher exchange value against the US dollar.
Source : http://www.smpke.jpm.my and www.odci.gov/cia/publications/factbook/geos/my.html 10/15/03
30. Layers of Collective Action : 4.5
In Malaysia, in practice, most major decisions are made by many key leaders which are appointed by the government and the people. Each layers of action are very clear in almost every part and role they’re appointed into. Each states has it’s own key leaders and taking care of what’s happening and then report them to the highest level. Initially, Malaysia is divided into provinces which are led by governors, and each province has either a city, regency or a big city. They all have the same level of governmental hierarchy. And then within regency, there are also districts with their own different small laws and rules. Furthermore, district is divided into villages, which is the lowest level of governmental organization structure. In addition, within a village there are some voluntary social organizations called Rukun Kampung, they all play a very important part in each and every village. Solving small problems and helping out villages and many more roles. But somehow all these small or lower level organization structure are elected and voted between the people.
However, the head of the education institute and section, the utility department , the medical associate, and all the major department are appointed by the upper level leaders, But some academic associations may have the right to vote for the leader. And the stability of the government of a city is subject to the stability of the upper leader who raised them, as well as their achievement. Some provincial governments, especially those in fast-growing coastal regions, actively adapt local policy variations. Senior political figures generally agree on the need for further economic reforms and the need for political stability.
Source : personal opinion
31. Pro-Business Climate: 4.5
The Malaysia society places a high value on business. One can always hear n see news about businesses and the market news everywhere on the media. Malaysia is a free market society where entrepreneurship is thoroughly encouraged alot. There’s also many business career education provided almost in every Colleges and in other undergraduate schools. Therefore more people will consider enterprise leadership as a career and getting themselves into business major. There will be many schools for students to choose from and more people will be graduating and entering into the business world. Thus, creating more businesses into the country. People there do enjoy the high status and luxuries of becoming a successful businessperson their name will surely be spread around and how he succeed and many more.
Source: Personal opinion.
32. Government Enterprises 2.0
There are many government establishment and mostly all of it is owned by the government. The government owned enterprises such as transport systems, telecommunications companies, and are very actively engaged in agricultural sector. The Government participates in the financial sector through its ownership of many other kinds of bank. Such as the national investment trust, a housing finance insurance company, and many other more companies. The Government and the central bank, Bank Negara, regulate all state-owned financial institutions.
Even with all these, reality, these companies aren't supporting the nation's economy. It is lack of transparency. They drain the public’s money. The government supply and support, gives more advantage to the enterprise they own in many ways such as letting them loan more money and etc.
Source: http://www.malaysia gateway. ( Malaysia Country Gateway ) 9/25/03 - Personal Opinion.
33. International security agreements 3.5
In Malaysia the international security isn’t that good. There are mutual aid treaties and other agreements to help on the international company’s security. But since September 11, Malaysia and the US have cooperated across a wide range of issues including diplomatic, law enforcement, financial, and intelligence matters to capture terrorists, deny them safe-haven, cutoff their access to money, and increase in the international law. For creating a better investment climate, the government provide investment guarantees to foreigners who make investment, which covers compensation in case of nationalization or expropriation, damages or losses caused by incidents of war, revolution or insurrection, and payments for any approved remittance pursuant to the investment in case of non-convertibility of the currency of the host country
Source: http://www.malaysia gateway.( Malaysia Country Gateway) 9/25/03 - personal opinion
34. Protection of Domestic Enterprises from Government Mandated Costs 4.5
Malaysia imposes many costs on it’s domestic enterprises, the Malaysia government had done many things to reduce the burden of the enterprises, there were many privileges for the enterprises even the owing of taxes. the Government has introduced Worker's Social Security program (sokso), both employers and employees should contribute a certain percentage of the employees' salaries for employment accident benefits, death benefits, old age benefits, and health care benefits. Similar coverage is also provided for civil servants and military personnel. Nevertheless, the amount covered is relatively small. Employee contributes to it and are collected by the employer through payroll deductions. In Malaysia, small and medium-sized enterprises (SMEs) are very encourage by the government. SMEs are usually the ones that suffer most as a result of the countless licenses, fees and hidden costs imposed on the business sector. Consequently, the government provide credit to small companies, and instead encourage banks to service the market opportunities that are generated by the SMEs giving them better apportunities in bussiness and many more such as paying lesser in taxes.
Source: http ://www.bank negara, www.bernama.com, business-in-asia.com/malaysia3_business.html. (business.in.malaysia.net ) 9/25/03 - personal opinion.
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