“We must intensify innovation as it is the differentiating factor driving profitability and long-term growth”
PUTRAJAYA: The government needs to be vigilant and continue with efforts at creating layers of buffers, promote long-term economic growth and boost exports, amid a narrowing current account surplus, said Prime Minister Datuk Seri Najib Tun Razak.
Also the Finance Minister, he said the government needs to also be mindful that Malaysia is operating in a competitive global environment, particularly with emerging economies that are rapidly catching up.
“We need to engage in higher value-added activities to retain our comparative advantage and remain ahead of the competition. Due to these strengths, as well as the improving global outlook, our economy is on track to register higher growth of between 4.3 per cent to 4.8 per cent this year.
“Today, our economy is well-diversified in terms of sources of growth and revenue owing to the economic, financial and fiscal reforms the government has undertaken. These have left us well placed to weather both global and domestic economic challenges,” Najib said in his keynote address at the Budget 2018 Consultative Council Meeting, themed, “Negaraku Shaping the Future”, here today.
The Budget 2018 is scheduled to be tabled on Oct 27 in Parliament.
Also present was Second Finance Minister Datuk Seri Johari Abdul Ghani, Treasury Secretary-General Tan Sri Mohd Irwan Serigar Abdullah, Bank Negara Malaysia Governor Datuk Seri Muhammad Ibrahim, Security Commission Chairman Tan Sri Ranjit Ajit Singh and Public Services Department Director General, Datuk Seri Zainal Rahim Seman.
For the first quarter of 2017, the Malaysian economy grew by 5.6 per cent with Foreign Direct Investments (FDIs) rising to RM17 billion during the first quarter of 2017, and mainly in the services, mining and manufacturing sectors.
According to Najib, the competitive global environment can be met by developing a strong entrepreneurial spirit infused with the culture of innovation and creativity, as well as the need to reconfigure to meet the demand of time in which the digital economy plays a vital role.
“In this regard, we must embrace technology and digitalisation in increasing the productivity of our businesses. Digital Malaysia has been given a high priority in the government’s agenda.
We must intensify innovation as it is the differentiating factor driving profitability and long-term growth,” he said.
The Prime Minister regarded advancements in technology, business processes and ideas which come from innovation as being able to enhance Malaysia’s competitiveness, productivity and economic growth, while at the same time, nurture talent to raise productivity.
He said the government also launched the Malaysia Productivity Blueprint, which will enable Malaysia to embrace the Fourth Industrial Revolution, whereby universities and higher learning institutions are challenged to produce human capital with new sets of skills and jobs which are not yet in existence.
“Entrepreneurship is a main driver of economic growth as it creates wealth, enhances innovation and technology, as well as reduce poverty. It is through entrepreneurship that every great business was started and important innovations entered the market, creating new products or production processes, resulting in greater efficiency,” he added.
Najib said SME Corp and Malaysia Digital Economy Corporation (MDEC) will identify 1,500 small and medium enterprises (SMEs) to participate in the world’s first Digital Free Trade Zone (DFTZ) which starts operations this October.
The DFTZ is expected to double the country’s e-Commerce growth from 10.8 per cent to 20.8 per cent by 2020 and create 60,000 jobs by 2025, he added.
Apart from developing and diversifying the economy, Najib said the government is always very attentive to problems faced by the people such as the rising cost of living and mismatches in the property market, while continuing its role in creating an environment that increases affordability as well as accessibility of quality homes for the low and middle income groups.