Malaysia budget targets growth, foreign investment
Malaysia’s government has delivered a budget aimed at growth and increasing foreign investment, probably its last before facing the polls in a national election next year. It plans to spend RM 212 billion (US$69 billion) including some showcase projects designed to wow the outside world (and its potential investors), including a new 100+ floor tower for Kuala Lumpur, a mass transit system, a gas-fired power plant and six new highways around the capital.
The government is hoping that private investors will jump in to fund most of the projects, after Malaysia’s somewhat dramatic drop in private investment over the past decade (down from 25% of GDP in the mid-1990s to 10% today). It has already identified $444 billion worth of potential major private sector-led projects and wants to triple gross national income from RM 600 million ($195 million) today to RM 1.7 billion in 2020, creating 3.3 million new jobs and propelling Malaysia into fully developed nation status.
The government’s plans to diversify its revenue sources away from petroleum (which currently makes up 40%), though it has postponed introduction of a new Goods & Services Tax to an indefinite future date, while raising the current service tax from 5% to 6% and broadening its range. Despite the budget’s otherwise foreign investment-boosting theme, Malaysia will introduce a minimum wage and increase its levy on foreign workers.
source & article: Bloomberg BusinessWeek
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