Photo - Malaysia Prime Minister - Datuk Seri Najib Tun Razak.
Early ICT industry reactions generally welcome the Budget 2014 proposals tabled by the Malaysia prime minister Datuk Seri Najib Tun Razak on Friday 25 October 2013, which includes measures such as the introduction of a new 6 percent GST to help reduce account surplus as well as to shrink and balance the fiscal deficit by 2020.
Themed 'Strengthening economic resilience, accelerating transformation and fulfilling promises,' Najib, who is also the finance minister, said that the allocation for next year's budget is RM264.2 billion [US$84.03 billion] to implement programmes and projects for the well-being of the rakyat [the people] and national development. Of this amount, RM217.7 billion [US$69.24 billion] is for operating expenditure while RM46.5 billion [US$14.76 billion] for development expenditure.
Reflecting the modest slower global economic growth of 2.9 percent this year, he said. "As a highly open economy, Malaysia is not spared from the modest growth. Nevertheless, the country's strong economic fundamentals and accommodative monetary policy will enable us to grow at a sustainable pace. In fact, the economy grew 4.2 percent in the first half of 2013 [compared with 5.1 percent in the first half of 2012] supported by private investment."
"In addition, private and public consumption are expected to grow 7.4 percent and 7.3 percent, respectively mainly supported by strong domestic economic activity," said Najib.
He added that "foreign direct investment was higher at RM18.2 billion [US$5.79 billion] in the first half of 2013 compared with RM15.9 billion [US$5.06 billion] during the same period in 2012."
ICT industry initiatives include the allocation of RM3.4 billion [US$1.08 billion] towards the second phase of the national high-speed broadband project [HSBB], which has so far been implemented by the state-linked Telekom Malaysia as part of a public-private partnership. The initiative includes increasing internet coverage in rural areas with the building of 1000 telecommunication transmission towers in the next three years as well laying new underwater cables within the same period.
National ICT industry association of Malaysia, PIKOM chairman Woon Tai Hai (pic) said the association "is encouraged by the fiscally responsible Budget for 2014 announced by the Prime Minister cum Finance Minister. It is a comprehensive budget that is cognizant of all the stakeholders in the country. The reduction of the fiscal deficit with the aim to achieve a balance budget by 2020 and ensuring the debt to GDP [gross domestic product] does not exceed 55 percent are steps in the right direction."
"The business community, especially the ICT sector, would view the Budget 2014 positively. This budget addresses the medium and long term needs of the nation," said Woon.
"The Malaysian information and communications technology (ICT) industry has been charting an impressive 10 percent average growth yearly for the last 5 years," he added. "The industry is now worth at RM55 billion [US$17.49 billion] and targeted to hit RM100 billion [US$31.81 billion] by 2017 and a contribution of 20 percent to the country's GDP by the year 2020."
He added that PIKOM's call for a single ICT ministry received a government response. "With [national ICT agency] Multimedia Development Corporation (MDeC) now under the fold of the Ministry of Communications and Multimedia, this will mitigate the risk of overlap of accountability between ministries; and augur well for the industry."
Sign up for CIO Asia eNewsletters.