ACCCIM survey news (1) September 5, 2007Posted by elizabethwong in Current Affairs, Democracy, Economy, Malaysia, Note2Self, Politics, Race Relations.
(ACCCIM SURVEY REPORT ON ECONOMIC SITUATION OF MALAYSIA, H1 2007)
By PAULINE NG IN KUALA LUMPUR
Published September 4, 2007, Business Times Singapore
MALAYSIA’S Chinese community had a rough ride in the first half of
the year and is not sanguine about second-half prospects either, a
recent survey shows.
Domestic competition, rising raw material prices and operating costs,
as well as opaque government policies were the three factors which
most adversely affected the business performance of the Chinese
Despite the slew of ongoing government initiatives to ensure the
sustainability of the local economy, the community appears less
optimistic about economic prospects in H2.
A volatile bourse and stronger local currency are some of the reasons
for the pessimism, the Associated Chinese Chambers of Commerce &
Industry of Malaysia (ACCCIM) told a press conference yesterday to
announce its survey findings.
A more robust ringgit had affected nearly a third of its 28,000
members who are export-oriented, ACCCIM president William Cheng said,
urging the government to curb the ringgit’s rise to an annual 3 per
cent at most.
Although the ringgit has weakened by more than 4 per cent since
hitting sub-3.40 to the US dollar in May, exporters contend that even
at the 3.50-mark, the ringgit’s relative strength has affected their
competitiveness. Only close to a fifth of ACCCIM members who
participated in the survey anticipate a rise in export sales,
compared with 37 per cent last year.
But the pessimism also extends to local sales. Only 17 per cent
believe domestic sales will increase in H2, compared with nearly a
third in 2006.
Inflationary pressures are expected to continue to have an impact on
sales, with 64 per cent believing rising inflation will affect
consumer sentiment and sales. But this is an improvement over the
same period last year when 81 per cent of respondents said they
anticipated higher prices to affect their sales performance.
Malaysia’s small and medium-sized industries (SMIs) contribute some
one-third of its GDP of RM340 billion (S$150 billion). An estimated
90 per cent of SMIs are Chinese-owned.
Interestingly, the Chinese business community does not expect to
benefit from additional government spending on a number of massive
development initiatives to ensure the sustainability of the local
economy in the years ahead. This is in part because they do not
believe they would be on the receiving end of these projects, but
bureaucratic red tape also continues to have a stranglehold – some
improvements aside – with the time lag between announcement of an
initiative and the actual implementation generally taking over a year
Besides improving the delivery system, government policies need to be
more transparent and liberal, the association said. It specifically
mentioned the policy guidelines on distributive trade which the
Domestic Trade & Consumer Affairs Ministry has tried to introduce to
the ire of many. These guidelines stipulate businesses which are
owned 15 per cent and above by foreigners should be restructured in a
way which allows bumiputras or Malays to hold at least 30 per cent
equity. The paid-up capital of the businesses also has to be raised
to a minimum of RM1 million and the composition of the directors and
employees must reflect the racial composition of the country.
Asked if affirmative action policies were a concern especially in an
increasingly globalised and challenging environment, Mr Cheng
replied: ‘Of course, we are concerned. We need to help the poor but
we must also allow other businesses and races the opportunity to
perform, to compete freely.’