Malaysia's re-elected Prime Minister Najib Razak announced yesterday that foreign investors and fund managers would be given five-year multiple entry visas, and that overseas corporations trading in oil and related products in the country would be charged a flat tax of just 3 per cent.
These are among a range of new measures intended to attract investment to boost the country's lacklustre economy.
The day last month when his government was re-elected, the Kuala Lumpur stock exchange's composite index made the biggest gain in its history. But this, as Mr Najib himself indicated in his speech at an investment conference in Kuala Lumpur, was chiefly an expression of relief due to uncertainty about the economic policies of challenger Anwar Ibrahim.
The Prime Minister said that over the past five years the top 10 per cent of listed companies had received 82 per cent of the capital raised on the sharemarket.
Thus government-owned firms -- of which the top 20 increased their earnings by 25 per cent last year -- including the vast Employees Provident Fund would now be directed to invest more in mid-sized stocks, via "a specific objective to increase the velocity of shares traded". Mr Najib, who chairs the government's Economic Council that meets every Monday, said he aimed to transform Malaysia into a "high-income nation" by the World Bank's criteria by 2020 -- increasing the size of the economy by 66 per cent.
"We must choose a flexible and open economy, engaging more with our regional partners," he said, including Australia -- with which Malaysia signed a free-trade agreement a year ago -- and "securing inward investment and opening our industries up to greater competition." He vowed to "revise costly and inefficient subsidies, and to reduce the state's role in private enterprise".
Malaysia was developing a virtual platform for trading unlisted securities, known as MyULM, which would connect the capital market to various products, with a strong aim of helping "early-stage ventures at the lower end of the credit spectrum".
The platform would be ready for launch next year, he added.
The government also planned to recruit 1000 new graduates "to meet the needs of the securities and derivatives industry".
The government also wanted to attract greater participation from experienced expatriates both by offering 10-year residency to foreign executives and launching an Expatriate Services Division.
