Govt introduces measures to protect economy, says Najib

The government has introduced measures to boost the economy which includes asking both international and local Malaysian companies to repatriate profits and reinvest in Malaysia and to reactivate ValueCap Sdn Bhd with a RM20 billion injection to boost under-performing shares.

Other steps include restructuring and rescheduling the loans of small and medium enterprises and to beef up the working capital guarantee scheme with an additional RM2 billion to other sectors besides the RM5 billion set aside for the services sector.

In announcing specific and proactive economic measures to deal with the country's current economic development and financial situation here today, Prime Minister Datuk Seri Najib Tun Razak also said import duty exemption would be given to 90 tariff lines covering consumable spare parts and research apparatus used in the manufacturing sector until the global economy recovered.

"This is in addition to the existing 319 tariff lines which have already been given an import duty exemption," he said, adding that about 900 manufacturing companies would benefit in annual cost savings of between RM100,000 and RM500,000.

And, to further stimulate domestic and foreign investments, he said the Domestic Investment Strategic Fund would be continued with an additional allocation of RM1 billion under the 11th Malaysia Plan period.

Additional measures on the capital economy would be announced in the 2016 Budget on Oct 23, he added Najib also said since the country recovered from the 1997/1998 Asian financial crisis, private companies and Government-Linked Investment Companies (GLICs) abroad had expanded and increased their investments, which exceeded the amount of direct investments in the country.

As of June 2015, Malaysia was a net exporter of capital. Investments made by GLIC overseas stood at RM522 billion against foreign direct investment amounting to RM477 billion.

The Prime Minister also said the government was reactivating ValueCap, formed in 2002, as an entity to support underperforming shares and had proven to be effective in stabilising the equity market.

"ValueCap has given handsome returns to shareholders like Permodalan Nasional Bhd, Retirement Fund Incorporated and Khazanah Nasional Bhd," said Najib.

He said SMEs could apply to restructure and reschedule their loans from financial institutions or the Bank Negara Malaysia's credit guarantee scheme if necessary," he added.

On the additional allocation for the Domestic Investment Strategic Fund, he said it was aimed at accelerating local companies transition into high value-added, high-tech, knowledge-intensive and innovation-based industries.

The Prime Minister said among medium-term measures considered included curbing dependence on foreign workers as they contributed to cash outflow of RM28 billion in 2014 and impeded local wage rate growth.

He said the government would also introduce measures to raise the income and welfare of the bottom 40 per cent of the households.

The government will continue to monitor and minimise the impact of global economic uncertainty on the country's economy, he added.

"Even with the implementation of the proactive measures, the government remains committed to implementing fiscal consolidation to lower the fiscal deficit to 3.2 per cent of gross domestic product this year from 3.4 per cent last year," he said.