M’sia committed to liberalising regional air services

STAR, 8 June 2009

KUALA LUMPUR: Malaysia is committed to the Asean roadmap for liberalisation of air services operated in the region.

Prime Minister Datuk Seri Najib Tun Razak said the Asean roadmap would fully liberalise air services arrangements in the region by 2015.

He said Malaysia was also working closely with other Asean member countries to look into the possibility of a single aviation market along the line of the European Union.

“This will probably be some distance away in the future, but it an exciting possibility nonetheless,” he said in his keynote address at the 65th International Air Transport Association (IATA) Annual General Meeting here Monday.

Najib said Malaysia was also helping airlines to reduce fuel consumption and carbon emissions through revised air traffic control procedures as well as the implementation of Continuous Descent Approach (CDA) for aircraft landing at Kuala Lumpur International Airport.

International Air Transport Association (IATA) Chief Executive Giovanni Bisignani, right, walks with Malaysian Prime Minister Najib Razak at the 65th IATA Annual General Meeting in Kuala Lumpur on Monday. - AP

The trial, he said currently involved Malaysia Airlines, AirAsia and Singapore Airlines and would eventually be expanded to include other carriers.

“We are also proud that KLIA will be the first stop in Asia to exhibit IATA’s Environment Booth which showcases the industry’s efforts in curbing and reducing carbon emissions,” he said adding that these were some major initiatives that Malaysia was undertaking to strengthen the aviation industry in the long term.

He also said Malaysia was committed to working with the industry to reduce air travel costs as well as improving efficiency and facilitation of passenger and freight movements at its airports.

Najib also that the industry itself needed to make the necessary changes to prepare itself for an uncertain future.

In order to survive the fuel price volatility, the global recession and the threat of outbreak of diseases, he said the air transport industry and governments must work hand in hand to find solutions to map the way forward.

“Together we must address ways to facilitate trade and revive economies, manage climate change, prepare for the possibility of a pandemic, secure our borders, and liberalise air services arrangements between countries.

“Together, the industry must continue to provide safe, reliable, secure and economical air services for the benefit of global consumers,” he said.

The Prime Minister said the ultimate aim of the entire industry must be long-term sustainability.

“The challenges we face today will likely resurface time and again in the future. We must find a way to insulate the industry so that future stocks in the system can be well absorbed without too much impact or damage to the players in the aviation game,” he added.

Najib said the Government was fully supportive of aviation as a key sector of business and commerce.

“Recognising the difficulties faced by the airline industry, we are firmly committed to playing our part in ensuring, not just the survival, but the continued strengthening of our aviation industry.”

Govt lifts 30% bumi rule for 27 services sub-sectors

STAR, 22 April 2009

PUTRAJAYA: The government has removed the 30% bumiputra equity condition in 27 services sub-sectors, with immediate effect.

Prime Minister Datuk Seri Najib Tun Razak said the sub-sectors, which involved health and social services, tourism services, transport services, business services and computer and related services, would have no equity conditions imposed.

He said the liberalisation was aimed at creating a conducive business environment to attract more investments, bring in more professionals and technology, encourage competitiveness and create higher value employment opportunities.

“We will be progressively undertaking liberalisation of the other services sub-sectors,” he told a press conference at his office on Wednesday.

Saying that the services sector would become a new growth sector of the economy, Najib said it contributed 55% to the GDP in 2008, and accounted for 57% of total employment in Malaysia.

The Government wanted to tap the sector’s full potential and raise its contribution to 60% of the GDP, he said.

However, he assured that the liberalisation would not adversely affect the domestic services industry, which would continue to be supported.

He said a RM100mil services sector capacity development fund was established under the first economic stimulus package, managed by the Malaysian Industrial Development Authority (Mida) to assist the industry to face the more liberalised services environment.

To facilitate investments into the sector, a National Committee for Approval of Investments in the Services Sector had been established under Mida which would receive and process applications of investment in the services sector, excluding investments in financial services, air travel, utilities, Economic Development Corridors, Multimedia Super Corridor and Bionexus status companies and distributive trade.

In a bid to develop Malaysia as an international Islamic financial hub, the legal profession would be liberalised to allow up to five international law firms with expertise in international Islamic finance to practise in Malaysia, Najib said.

Najib also said the liberalisation was in line with Malaysia’s commitment to Asean.

However, some of the measures were better than those undertaken by other Asean countries, he said, adding that they would also make Malaysia more equipped to compete internationally.

“Consultations were carried out and the decision was made based on the reception and acceptance by the sub-sectors,” he said on the selection of the sub-sectors.

Najib said that in 2008, approved investments in the services sector totalled RM50.1bil, exceeding the target of RM45.8bil per annum under the Third Industrial Master Plan.

The share of foreign investments was 11% of the total investments.

“With the liberalisation of the services sector, we expect greater inflow of investments,” he said.

Najib also said he would announce next week the liberalisation of the financial sector.

He declined to give details.

“I want it to be full of surprises” and “It is good for the market to digest (the announcement for the services sector) first.”