ERNST & YOUNG ENTREPRENEUR OF THE YEAR AWARD 2011

Tuesday April 12, 2011

ERNST & YOUNG ENTREPRENEUR OF THE YEAR AWARD 2011

YB DATO' MUKHRIZ MAHATHIR DEPUTY MINISTER OF INTERNATIONAL TRADE AND INDUSTRY ERNST & YOUNG ENTREPRENEUR OF THE YEAR AWARD 2011 12TH APRIL 2011 (TUESDAY) KL HILTON HOTEL Assalamualaikum W.B.T and Salam 1 Malaysia. Encik Abdul Rauf Rashid, Country Managing Partner of Ernst & Young; Mr. Philip Rao, Partner and Programme Director of Ernst & Young; Yang Berbahagia Tan Sri Dato’ Seri Dr. Francis Yeoh, Group Managing Director of YTL Corporation Berhad; Members of the Media; Distinguished Guests; Ladies and Gentlemen. 1. First and foremost, I would like to thank Ernst & Young for inviting me to officiate the 10th Ernst & Young Entrepreneur of the Year Malaysia programme. 2. The Ernst & Young Entrepreneur of the Year is a global programme that identifies and recognizes the achievements of outstanding entrepreneurs who have established and built successful companies. It honours local business leaders and creates national role models in support of entrepreneurial excellence. It recognizes the contribution of those who inspire others with their vision, leadership and achievements. 3. In Malaysia, such an award is an important one. The economic progress achieved to date by Malaysia is, in a large part, due to entrepreneurs and their entrepreneurial spirit. Their contributions should be recognized, their example followed by other aspirants. 4. As Malaysia strives towards becoming a high-income nation by 2020, the role of entrepreneurs in this journey grows in significance. As acknowledged in the New Economic Model, entrepreneurs and the private sector have an enormous impact on innovation, progress and the economy of the country. They are the engines of growth, bringing direct benefits to the economy in terms of job and wealth creation and enhancing competitiveness. A better quality of life should ensue for the Rakyat. 5. On the part of the Government, it continues to play its part in helping to create an attractive and conducive environment for people to invest in, work in and live in. Together, the Government and the business community can help the nation achieve its fullest potential. 6. Ever since the Government launched its Government Transformation Programme (GTP) in 2009, we have reshaped the administration to reflect closer the practices of the private sector. Like most of you, MITI has its own set of KPIs to meet and from this year onwards, MITI’s most important KPI is to raise the level of private investment in the country. Based on the EPU’s growth projection, the aim is to secure RM83 billion in private investment this year. This is a very ambitious target but it is also one which the Malaysian Government is determined to achieve for Malaysia to stay on track to become a high-income nation by 2020. However, ours is not a KPI that is predicated on meeting bottom line targets only. Social equitability in society is still a priority whilst Government works towards providing economic growth for the nation. Ladies and Gentlemen, 7. As many of you would know, since 1966, we have had successive Malaysia Plans to chart the country’s economic development plan over five-year planning periods. Each plan is designed to achieve specific goals of the administration. 8. The guiding principles for the 10th Malaysia Plan, which covers the period from January 2011 to December 2015, were laid out in the New Economic Model. By 2020, we aspire to become a developed country with a high-income economy. To get there, the private sector would have to take the lead and become the growth engine of the economy. The 10MP, therefore, outlines the Government’s policy priorities over the next five years in order to achieve these goals. 9. The 10MP forms a major part of the Government’s reform drive to counter the effects of the global financial crisis of 2008/2009. The plan contains various measures to improve the country’s administrative system and infrastructure to restore its competitiveness on a global stage. Unlike previous Plans, a unique component of the 10MP is that it incorporates an element of flexibility and innovation to allow for policies to be adapted to suit a rapidly changing global environment. This seems providential now with the unfolding events in the Middle East and North Africa. We were fortunate to have made a full turnaround last year to achieve 7.2% GDP growth but this growth trend cannot be taken for granted. The implications of the events in the Middle East and North Africa are still being analysed but I believe no country is likely to remain unaffected. 10. However, these developments do not change our priorities. In fact, they strengthen our reform imperative to bring about a comprehensive transformation of the economy. We are no longer looking at business as usual. In giving the private sector the lead role, we hope to see innovation become a key driving factor in moving our economy on to a steep growth trajectory. To give you an idea of the scale of our aspiration, let me list some of the macro-economic targets set out in the 10MP. 11. For the five year period until 2015, we aim to raise Gross National Income (GNI) per capita to RM 38,850 per annum from about RM 21,000 currently. This requires a Real GDP growth rate of 6% per annum and a private investment growth rate level of RM115 billion per annum. Private sector investment is crucial to the success of this policy because the Government’s priority is to reduce fiscal deficit from 5.3% of GDP at present to less than 3% by 2015. We recognise that a high income nation cannot be built with a low-skilled workforce. Therefore, we also aim to increase the composition of highly skilled workers in the country from 23% to 37% of the workforce by the end of the 10MP period. 12. To achieve these targets, the 10MP comprises a series of measures organised around five key strategic thrusts, namely: • Stimulating economic growth • Developing a first-world talent base • Ensuring inclusive Social-Economic Development • Building an environment that enhances quality of life, and • Transforming the Government. 13. For the purpose of today’s audience, I will address mainly policy measures designed to achieve the first of the said strategic thrusts. To stimulate growth, a central focus of the 10MP is to scale back Government involvement in the economy so as to open up new opportunities to the private sector and reduce distortions in the economy caused by an extensive subsidies structure. By rationalising subsidies, we aim to strengthen market mechanisms and create incentive for firms to be more efficient and competitive. 14. As public sector involvement is scaled back, efforts are to be redoubled to enhance the role of the private sector as the growth engine of the economy. The initiatives outlined in the 10MP to facilitate investments are aligned to the Economic Transformation Programme which identified 12 National Key Economic Areas, deemed to have the potential to generate high income growth. These include oil, gas and energy, tourism, healthcare and financial services. To achieve maximum impact the soon-to-be corporatized, MIDA, the national investment arm, has been tasked to promote investments in these sectors through a range of incentives and support programmes. 15. In tandem with investment promotion, the 10MP also stipulates the need to improve on the overall business environment in the country. Since 2007, PEMUDAH, the Special Task Force to Facilitate Business, has implemented a wide range of initiatives to cut red tape across the public sector and improve the business environment. To complement these initiatives, the Malaysian Productivity Corporation (MPC) was restructured late last year to spearhead a comprehensive review of business regulations affecting major economic sectors. 16. Another strategy to encourage private investment growth is by accelerating liberalisation of the services sector. This is a significant area of growth as the sector now contributes more than 57% to GDP. Opening up this sector would create opportunities for higher levels of investments, increased skilled job opportunities and transfer of know-how. In 2009, the Government started the ball rolling by lifting foreign equity restrictions on 27 services sub-sectors. Under the 10MP, this programme of liberalisations is to continue specifically through bilateral and regional preferential trade arrangements. 17. The most extensive series of services sector liberalisations are currently undertaken as part of the ASEAN Framework Agreement on Services which aims to liberalise 115 services subsectors by 2015. Last year, Free Trade Agreements were concluded with India and New Zealand opening up new services sectors for cross- investments. This year, services liberalisation will also receive strong attention in our FTA negotiations with the European Union and members of the Trans Pacific Partnership, which includes the United States. More broadly, these FTAs will increase the market reach of our businesses while making Malaysia a more attractive destination for investments. 18. What I have stated so far forms just a small portion of the 10MP. I would encourage you to go over the 10MP in its entirety. Ladies and Gentlemen, 19. Before I take my leave, I would like to wish the soon-to-be-announced country winners of the Ernst & Young Entrepreneur of the Year the very best as they go on to compete with other leading entrepreneurs from around the world at the annual World Entrepreneur of the Year event in Monte Carlo. This world competition provides our Malaysian entrepreneurs the opportunity to network with like-minded individuals and enhance their personal, business and country profiles on a global platform. 20. Ray Kroc who is remembered as the man who made McDonald’s Corporation into what it is today famously said that “The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it”. 21. At this point, I would also like to congratulate Yang Berbahagia Tan Sri Dato’ Dr Francis Yeoh on his appointment as the Chairman of the World Entrepreneur of the Year judging panel this year. 22. Finally, I wish to end by congratulating and applauding Ernst & Young and the Malaysian Entrepreneur of the World alumni for their achievements, and to officially launch the Ernst & Young Entrepreneur of the Year’s 10th year of honouring Malaysia’s best entrepreneurs. Thank you.