HONG KONG: Malaysia is awarding new banking licenses and privatizing government firms under its new economic plan to boost the economy, its second finance minister said.
In an interview to Reuters on Thursday, Husni Ahmad Hanadzlah said it has already received “dozens of applications” for its second commercial banking license which it was evaluating.
It awarded its first license to China’s Industrial and Commercial Bank of China, the country’s biggest bank in November.
The world’s second-biggest palm oil producer is also awarding some Islamic banking licenses, he said.
Husni also said the government was privatizing 15 to 17 companies and was liberalizing some sectors to boost foreign investment. He declined to divulge more details of these plans.
Last year Prime Minister Najib Razak liberalized 27 service sub-sectors, opening them up to foreigners, and said a fresh set of sectors to be liberalized would follow soon.
The government has said it would announce next month a new economic model to boost the economy and Husni said he plans to attract more foreign direct investment from new sources such as China, West Asia and the Middle East.
“Our aim is to transform the economy into a high-income one from a middle-income one” Husni said at the conclusion of a three-day visit to Hong Kong.
“We have laid out the foundation so far for the new economic plan and we will unveil the details in February,” he said.
He expects growth to rebound into positive territory in the last quarter of 2009 and expects full-year growth in 2010 at 5 percent.
Growth declined by 1.2 percent in the third quarter of 2009.
Malaysia has been felt the ripple-effect of the global financial crisis with exports declining by 20 percent on an average between April to October and has only started to recover gradually, but demand conditions still remain very weak.
It is expected to be among the last Asian countries to hike interest rates later this year though Husni played down any expectation of when it may do so by saying this was the central bank’s prerogative.
Husni also said though Malaysia has signed an agreement with China for trading in the yuan, it will not force its companies to do so.
In December 2008, China said the yuan could be used for the settlement of trade between the industrial areas of the Pearl River Delta and Yangtze River Delta and the Chinese territories of Hong Kong and Macau.
Members of the Association of Southeast Asian Nations (ASEAN) would be permitted to use yuan in their trade with China’s southeast provinces of Guangxi and Yunnan.
“This gives us a window for alternatives to the dollar but the choice of doing so rests on the companies,” Husni said.
He said 85 percent of the country’s trade was denominated in US dollars.