ZETI: A MORE PROMINENT ROLE FOR ASIA POST-CRISIS Several trends will gain more significance in the aftermath of the global economic and financial crisis. These include a more prominent role for Asia in the global economy, extensive international regulatory reforms and the growth as well as integration of Islamic finance into the international financial system. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said in a lecture at the inaugural Official Monetary and Financial Institutions Forum in Frankfurt, Germany, on Monday that these trends would gain more influence in the global economy and the international financial system in the post-crisis era. She said policy flexibility in implementing monetary and fiscal stimulus; a sound financial system, households and corporate sectors that were not over-leveraged and increased intra-regional trade had supported the recovery in Asia. “Trade among the emerging economies has already increased with this trend being most evident among emerging economies in Asia,” Zeti said, adding that intra-regional trade accounted for 50% of exports in 2008 versus 32% in 1995. She said supported by stronger economic fundamentals, emerging economies were expected to grow at higher rates over the next five years compared with the period prior to the crisis from 2000 till 2008. Zeti said there was agreement that the regulatory framework needed to be more responsive to risk. She added that while there was agreement on the need to materially improve risk management in financial institutions, there had also been substantial debate in other areas such as the degree to which regulation should play a role in the system. Zeti said Islamic finance “is well positioned to be a vehicle on the new Silk Road as the enabling supporting infrastructure is already in place.” She said the increasing internationalisation of Islamic finance was accompanied by new emerging global patterns of financial and economic interlinkages. - The Star

TIERED FUEL PLAN OFFICIALLY SCRAPPED, NO INCREASE FOR NOW The Government has officially scrapped its plan to introduce the two-tiered fuel subsidy scheme, following negative feedback and response from the public over the proposed restructuring. Domestic Trade, Co-operative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said the decision to “abandon” the plan was because the Government did not want to implement an important policy that did not get the support from or was not accepted by the people. “Prime Minister Datuk Seri Najib Tun Razak has said that this is the people’s government and it is open to views. Today, the Government has proven that it this is not mere rhetoric and that it is true to its word. “We have heard the people’s voices and now we have proven that we are willing to scrap the plan because the rakyat does not want it to be done,” he told a press conference Thursday. Ismail Sabri said the price of fuel remained the same for now as “there is no directive to announce a petrol price hike. I don’t know when that will happen, but the public must remember that fuel price fluctuates.” He added that while the Government’s commitment was to subsidise 30sen per litre for RON95, it was not subsidising nine sen more as the price of the commodity had increased. The Government is subsidising 16.5sen for every litre of RON97 and 32sen per litre for diesel. In 2009, the Government forked out RM3.4bil to subsidise petrol and another RM1.9bil to subsidise diesel. The Government had wanted to introduce a new management system for the fuel subsidy this year as it felt that the subsidy did not fully benefit the target group and that even owners of foreign-registered vehicles were enjoying the benefit. The plan, originally set to be implemented on May 1, was to introduce a tiered pricing system for petrol, depending on engine capacity, while foreigners would have to pay the market price. It called for the mandatory use of MyKad to differentiate Malaysians from foreigners, requiring the need for MyKad readers at petrol stations. Subsidised petrol would have been capped at a certain amount of litres a month per user for owners of vehicles with engine capacities of below a certain threshold. The reported upper limit eligibility for the petrol subsidy is 2,000cc. Owners of cars with bigger engine capacities would have been exempted from the subsidy. Ismail Sabri also announced that a subsidy rationalisation laboratory headed by Minister in the Prime Minister’s Department Datuk Seri Idris Jala was in place to study the implementation of all subsidies, adding that apart from the fuel subsidy, the laboratory was also tasked to review other areas which the Government subsidises. “In the meantime, foreigners can still purchase petrol according to the pump price but the policy governing foreigners when purchasing petrol at the border areas remains. “My ministry will propose to the Cabinet a certain policy to control the purchase of subsidised fuel among foreigners because we need to ensure that the subsidy goes to the targetted group,” he said. Last December, the Government announced that foreign-registered vehicles would only be allowed to pump a maximum of 20 litres of fuel at petrol stations within a 50km radius from the border. He also dismissed talks that the restructuring plan was not viable as it was difficult to implement, claiming that a study conducted showed that it could be done without much hassle and inconvenience, or cause consumers to wait long while their MyKad was scanned. - The Star

GOVERNMENT MACHINERY URGED TO REDOUBLE EFFORTS TO ACHIEVE 6 PER CENT GROWTH Prime Minister Datuk Seri Najib Razak wants the government administrative machinery to redouble efforts to achieve the national economic growth target of six per cent this year. At the same time, he urged the administrative machinery to implement a particular project or programme in a cost-effective manner stressing on 'value for money' without affecting its objective. "I hope we will do our best and mobilise our machinery fully so that we can achieve the six per cent (national economic growth) this year. "I don't think this is beyond our capability. I'm convinced that if we work with determination from the start...(with) strategic planning, we can come out with concrete ideas and do proper and effective planning. "...carry out monitoring that can detect our strength and weaknesses, I believe we can achieve something that is beyond expectation," he said at the monthly assembly of the Prime Minister's Department at the Dataran Perdana, here Monday. Also present were Deputy Prime Minister Tan Sri Muhyiddin Yassin and ministers in the Prime Minister's Department. Najib said although Malaysia had achieved a good economic growth which was beyond expectation especially in the fourth quarter of 2009 at 4.5 per cent, the global environment had not recovered fully. In fact, he said, the private sector had also not been able to play its optimum role in helping to achieve the country's economic recovery. "So, the role of the public sector is still important...there is still a need to emphasise the importance of our role as a major catalyst for a full recovery. "I hope in the year 2010, we can achieve a better economic growth than what we had projected. "I hope civil servants can respond positively to these efforts," he said. In implementing projects that yielded the best returns, Najib cited two examples where due diligence had been adopted which had innovative elements as well as creativity. He said that in the past, it was never imagined that the government could set up 50 1Malaysia clinics throughout the country involving an expenditure of only RM10 million. In fact, he said, the national-level Maulidur Rasul (Prophet Muhammad's birthday) celebration at the Main Prayer Hall, Masjid Putra last Friday could still be held although the allocation had been reduced from RM2.2 million to RM500,000. The Prime Minister said although the allocation for the celebration had been reduced, the relevent departments did not complain and had in fact carried out the programme well. "In terms of significance, I feel the function was the same and the RM2.2 million expenditure (originally) was in fact excessive, because we were in a mosque where we could feel its sanctity. "Although these examples are minor, it means that we do not complain. Many departments complain...grumble, whenever there is a cut in expenditure. "So, if we have a positive attitude, we can actually find ways of achieving a particular objective even with a minimal expenditure because this can help in the country's economic recovery process. "When we can reduce the government's fiscal deficit from 7.4 per cent to seven per cent, this year 5.6 per cent and so on, we will put in place stronger fundamentals for the national economy," he said. At the same time, Najib praised the civil servants who attended the assembly punctually to listen to his message. "I consider this assembly to be better. No one is out of breath for climbing the hill (due to late arrival) because we adhere to the time stipulated. I believe all of you can do it," he added. -- BERNAMA