Malaysia: Business environment at a glance

Malaysia: Business environment at a glance. Check it out:

(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY VIEW

FROM THE ECONOMIST INTELLIGENCE UNIT

Policy towards private enterprise and competition

2006-07: Regional economic integration limits the government's ability to distort competition by protecting domestic industries.

2008-10: Free-trade agreements and non-discrimination clauses will reduce the privileges of the bumiputera (ethnic Malays and other indigenous peoples).

Policy towards foreign investment

2006-07: Competition with China guides investment incentives; Malaysia emphasises its relative advantages in labour skills, resources and infrastructure.

2008-10: Malaysia will increase incentives in order to establish itself as a regional services centre.

Foreign trade and exchange controls

2006-07: Bank Negara Malaysia (the central bank) maintains the existing exchange-rate system of a managed float against a trade-weighted basket of currencies. The ringgit remains non-convertible on the capital account.

2008-10: Free-trade agreements will lead to the removal of most foreign trade controls.

Taxes

2006-07: Gradual fiscal consolidation continues as subsidies are cut.

2008-10: A new goods and services tax will facilitate reductions in personal and corporate tax rates.

Financing

2006-07: Reform and liberalisation of the financial sector improve access to finance for the corporate sector, and especially for small and medium-sized enterprises.

2008-10: Greater financial market liquidity will further extend corporate access to finance.

The labour market

2006-07: Malaysia continues to attract large numbers of unskilled workers, despite government policy to expel illegal immigrants.

2008-10: A lack of skilled, well-educated labour will impede progress at the upper end of the value chain.

Infrastructure

2006-07: New infrastructure investment is started, helping the ailing construction sector.

2008-10: Thanks to greater private-sector involvement, infrastructure projects will be completed.

Copyright 2006 Economist Intelligence Unit

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September 22, 2006 12:32 AM

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