20100421 1251 Malaysian Economic News.

The leading index (LI) declined by 0.5% mom in February (0.6% in Jan). The six-month smoothed growth rate of the LI in February declined to 5.2% from 7.7% in January, suggesting that the economic scenario remains favourable in the near term. (Department of Statistics) Please see our Economic Update for further details.

Deputy Prime Minister Tan Sri Muhyiddin Yassin says there will be a review of subsidies, price controls and other incentives that give way to distortion and affect the competitiveness of local economy. These incentives will be replaced by a better safety net for those who qualify and within the target audience. (Bernama)

Malaysia External Trade Development Corporation (Matrade) has targeted a 20% increase in immediate sales at Malaysia International Halal Showcase (MIHAS) 2010 (vs. RM226.4m in 2009), which will be held in conjunction with Halal Malaysia Week on 23- 27 Jun. Its chief executive officer Datuk Noharuddin Nordin said the corporation was confident of achieving the target due to improved economic conditions as well as an increase in participation from exhibitors. (Bernama)

The Asean Trade Centre, expected to be established by October this year, will further support small and medium enterprises (SMEs) to penetrate the Asean market as well as new markets. The initiative will also help the SMEs to cut down their production costs and help them in buying raw materials in bulk, said Kuala Lumpur Malay Chamber of Commerce Malaysia's president Datuk Syed Amin Al-Jefri. Initial cost of setting up the centre is estimated at RM2m. The proposed trade centre would also provide warehousing and logistics facilities and possibly financing for the SMEs to access new markets. (Bernama)

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said that under the 10th Malaysia Plan (10MP), value management analysis will be undertaken on development programmes and projects costing RM50m and above. For projects costing less than RM50m, meanwhile, the ministries and agencies will also be encouraged to conduct value management analysis, especially for recurring and complex programmes and projects. This value management analysis would save government expenditure by between 20-30% and speed up project completion. The method would also ensure projects under 10MP are completed in time. (Bernama)

Bank Negara Malaysia (BNM) has proposed to restructure the country's motor insurance policy in line with the government's aim of ensuring access for motorists to the mandatory Third-Party Bodily Injury and Death (TPBID) insurance coverage. The establishment of a new company that would provide such claims is costing the general motor industry about RM1bn p.a.

• Its Financial Sector Development Department director Abdul Rasheed Ghafur said the central bank for now has proposed that the overall liability limit could potentially be up to RM2m per life/injured person.
• Two scenarios are currently being considered for the proposed scheme, whereby in Scenario A, payment will be based on a fixed scale provided or in Scenario B, payment will be determined based on injury or death. (Bernama, Financial Daily)

There is no reason why Malaysia cannot move up the competitiveness ranking globally to be among the top 20 countries, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. In the latest global competitiveness report 2009-2010, Malaysia is ranked 24th among 133 countries. Malaysia can be in the top 20s in a couple of years along with productivity enhanced through innovation and creativity.

• Among the regional Asian Productivity Organisation member countries, Malaysia's productivity level was US$12,793, Thailand US$4,596, China US$3,734, Philippines US$3,192, Indonesia US$2,471 and India US$2,051. (Bernama)

Some 36,000 Class F contractors nationwide may have to close shop due to lack of business as government projects have been slow in coming. Perak Malay Contractors Association president Datuk Jamaludin Abdul Rahim said the 2,800 Class F contractors in the state were fully dependent on the government for construction jobs. He urged the government to hasten implementation of Tenth Malaysia Plan (10MP) projects for the sake of some 40,000 bumiputera contractors. (Bernama)

Malaysia is in a strong position to maintain its position among the top three leading shared services centre globally in view of the multiskilled and multi language workforce, said Executive partner, finance and performance management of Southeast Asia for Accenture, Paul Prendergast. "More companies are using a "hub-and-spoke" model to satisfy local needs while leveraging global advantages and Malaysia is a platform for that," Prendergast said. (Bernama)

The Works Ministry’s work-from home programme has help its employees save up to RM500 a month on toll, petrol, maintenance for their cars and food expenses, said Minister Datuk Shaziman Abu Mansor. The programme is found to be a success as it helped to increase productivity rate by up to 88% in some sectors while some have shown a 100% increase The government has allowed for it to be extended for another three months ended on 30 Jun. (The Star, Bernama)