MALAYSIA NEEDS TO ADDRESS STRUCTURAL ISSUES IN THE ECONOMY

KUALA LUMPUR, Aug 20 (Bernama) -- Malaysia has enough measures to shore up
the economy in the short term but there are still structural issues to be
addressed to ensure its long-term sustainability, a seminar was told Thursday.

Managing director of Malaysian Government's investment holding arm Khazanah
Nasional Bhd, Azman Mokhtar, said the country has not fully recovered from the
1998 financial crisis as not many structural changes had been made.

For instance, he said, the continued 12 years of deficit faced by the
country was not counter-cyclical but more of a structural issue.

Having had a commodity boom for the last five to six years, there should not
be a fiscal deficit, he said.

"Why must there be fiscal deficit when there is a commodity boom? The issues
of inefficiency and corruption must be tackled," he said at the Perdana
Leadership Foundation's Industry Insights Seminar 2009 themed, "From the
Trenches: Insights and Perspectives of Malaysia's Industry Leaders".

Speaking at a plenary session on "Whither Malaysia's Economy? A Bird's-Eye
View of the Malaysian Economy and Where it is Headed", Azman said although
the country's savings rate was high, investments had dropped significantly.

"This is a structural issue. Why are corporations investing less? This is a
question of confidence," he said.

However, Azman was confident that Malaysia would get by in the short term,
backed by the basic factors of governance, productivity and capacity building.

For the government-linked companies, Azman said, for the last five years,
efforts had been made to reduce wastage, weed out corruption and having
to contend with pressures from all sides.

And for Malaysia, he said, being in the right neighbourhood was an advantage
with leading indicators showing a turnaround in Asia in the second quarter.

As manufacturing competitiveness has eroded, he placed importance on some
segments of the services sector such as tourism and leisure.
-- BERNAMA