Latest news with #SpecialEconomicZone
New Straits Times
an hour ago
- Business
- New Straits Times
No immediate plans for Malaysia-Thailand border economic zones
KUALA LUMPUR: The government currently has no specific plans to establish a Special Economic Zone (SEZ) or Financial Free Zone (FFZ) along the Malaysia-Thailand border. Acting Economy Minister Datuk Seri Amir Hamzah Azizan said in a written parliamentary reply that the ministry is open to considering such a proposal in the future if a need arises and if it brings mutual benefits to both countries. "At present, there are no specific plans to establish a Special Economic Zone or Financial Free Zone along the Malaysia-Thailand border. "However, the government, through the Economy Ministry, is open to considering and further evaluating the proposal to establish a Border Special Economic Zone in the future, should there be a need and if it brings mutual benefits to both countries." He was responding to a question from Rushdan Rusmi (PN-Padang Besar), who had enquired about plans to establish Padang Besar as an SEZ or FFZ to spur cross-border investment and trade. Amir Hamzah said that existing regional cooperation platforms include the Indonesia–Malaysia–Thailand Growth Triangle (IMT-GT) and the Malaysia–Thailand Joint Development Strategy for Development Areas (JDS). He added that in efforts to boost the economy of border areas, the Economy Ministry, through its border development initiative, has identified and developed border economic areas in Kedah, Kelantan, Perlis, and Perak. To date, various initiatives have been implemented, including the Kedah Rubber City (KRC), eight Border Special Economic Zones, and the Northern Corridor Highway.
New Straits Times
4 hours ago
- Business
- New Straits Times
13th Malaysia Plan: Next phase, new path
KUALA LUMPUR: The 13th Malaysia Plan (13MP), covering 2026-2030, is expected to chart an ambitious course to transform the nation into a high-income, innovation-led economy. Key thrusts of the plan include high-tech industrialisation, sustainable development and inclusive growth, amid growing emphasis on fiscal reform. To be tabled during the parliamentary sitting tomorrow (Thursday), the five-year development blueprint will introduce significant policy shifts in response to evolving global and domestic challenges. UiTM's Business Management Faculty senior lecturer Dr Mohamad Idham Md Razak said 13MP may prioritise the acceleration of the digital economy, particularly in artificial intelligence, 6G technology and cybersecurity. At the same time, it will focus on expanding high-value industries including semiconductors, electric vehicles and aerospace, while working towards the national target of generating 40 per cent of energy from renewable sources by 2035. Idham added that the plan will likely place strong emphasis on fiscal reforms, including the rationalisation of subsidies to enhance government revenue. Inclusivity will be a key focus, with initiatives such as development programmes for Sabah and Sarawak, affordable housing and upskilling efforts aimed at narrowing regional and socioeconomic disparities. "13MP may focus on trade diversification to mitigate geopolitical risks, ensuring Malaysia remains competitive amid US-China tensions. "The overarching vision is a resilient, innovation-driven economy that balances growth with sustainability and equity," he added. Idham said 13MP will continue key initiatives from 12MP, particularly in infrastructure development. This includes the completion of the East Coast Rail Link and Johor-Singapore Special Economic Zone as well as digitalisation and energy transition efforts. Unlike earlier plans characterised by broad subsidies, the 13MP is expected to shift towards targeted assistance, fiscal consolidation and structural reform., including potential tax restructuring and stricter management of subsidies. Idham said significant policy shifts are expected, including labor market reforms, tax restructuring and industrial upgrades under the New Industrial Master Plan. "Unlike 12MP's broad subsidies, 13MP may adopt targeted cash aid to improve fiscal efficiency. Geopolitically, Malaysia will likely diversify trade partnerships to reduce reliance on China and the US. "These shifts reflect lessons from 12MP, emphasising structural reforms, fiscal prudence, and high-value growth to overcome past limitations," Idham added. LIMITED FISCAL SPACE However, economist Dr Nungsari Ahmad Radhi cautioned that the government's ambitions may face stark fiscal constraints. He said nearly 60 per cent of government revenue is absorbed by operating expenditure, mainly salaries, pensions and debt servicing, leaving limited room for development spending. "Given the state of where the fiscal situation is, total revenues collected by the government is sufficient to just cover operating expenditures which therefore means that almost every ringgit spent for development expenditures has to be borrowed. "The Fiscal Responsibility Act itself imposes both limits on annual deficits and accumulated debts, so there is only so much that can be borrowed and allocated for development expenditures," he said. CALLS FOR LIBERALISATION AND STRUCTURAL REFORM Economist Dr Geoffrey Williams said the emphasis should be in reducing the role and interference of government through exiting business and commercial areas and leaving them to the private sector. He said the government should focus on areas that are the direct legitimate concern of government including public health, education and social protection. "Regulations should be slashed and focused only on minimum standards of health and safety, anti-corruption, good governance and anti-trust issues," he added. Williams said social issues must focus on creating sustainable living income levels using direct help in the form of a universal basic income and a universal basic pension. These must support policies to raise incomes through meaningful decent work with a fair share of value created going to employees. He proposed the introduction of free higher education through a reform of the existing system, including the replacement of PTPTN loans with a more sustainable financing model. He added that economic mechanisms must include liberalisation of markets, reducing regulatory burdens, limiting government interference and promoting creative, innovative, agile and competitive businesses. "We should be cautious about 'patronage cascades' where policies are specifically designed to pass projects to vested interests. "Broad-based universal programmes available to everyone with open and transparent access routes should be the emphasis," he said. Williams noted that the US tariff issue serves as a reminder that protectionist policies often come with reciprocal costs. As such, removing barriers to market access should be a key priority for the 13MP. He said most of the targets set in previous Malaysia plans have either not been fully achieved or not achieved at all, yet proper independent assessments have rarely, if ever, been conducted. "The main unfulfilled target of every Malaysia plan is to build on a mechanism to end the need for future plans," Williams said.
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Business Standard
14 hours ago
- Business
- Business Standard
Samsung's PLI journey ends. Will India's production incentive boom hold?
Samsung has officially completed its five-year term under India's Production-Linked Incentive (PLI) scheme, filing a final incentive claim of ₹1,000–1,200 crore for the financial year 2024-25 (FY25), according to a report by The Economic Times. The company reported incremental production of ₹25,000–30,000 crore in its final year, making it the first smartphone maker to wrap up the full PLI cycle. The journey began in FY2021, when Samsung was the only global firm to meet the first-year targets, earning ₹500 crore after government review (against an initial claim of ₹900 crore). It missed the second year but stayed largely on course afterwards. The question now is: What happens after the money stops? Samsung's exit is a test case for the PLI model. With benefits ending, the spotlight shifts to whether companies will maintain capacity and output, or quietly scale down. Industry watchers are already tracking Apple's contract manufacturers and domestic firms such as Dixon, whose PLI terms will phase out in the next 1-2 years. The stakes are high. PLI disbursements for electronics manufacturing and IT hardware are projected to reach ₹9,000 crore in FY26, with overall disbursements increasing to ₹16,000 crore, marking the largest annual outlay thus far. In comparison, in FY25, the government disbursed a total of ₹10,114 crore. PLI firms in the electronics sector received ₹5,732 crore, while the pharmaceutical sector received ₹2,328 crore. Why it matters The PLI scheme is India's most ambitious industrial policy since the Special Economic Zone (SEZ) boom. Launched in 2020, it covers 14 critical sectors, with a total outlay of nearly ₹2 trillion. The idea: reward companies that grow production in India with direct cash incentives tied to incremental output. The early signs have been promising. In mobile phones alone, exports jumped to over ₹1.2 trillion in FY24 from ₹27,000 crore in FY20. The scheme has drawn marquee names including Apple, Samsung, and Foxconn deeper into India's supply chain. But as the incentive window closes for the first wave of applicants, a risk looms. What if firms front-load investment just to qualify for payouts, and reduce output, lay off workers, or even exit once the rewards stop? In 2023, former Reserve Bank of India Governor Raghuram Rajan argued that the PLI scheme for mobile phone manufacturing is not yielding real benefits. He said most components are still imported, so actual value addition in India is low. He questioned whether the subsidies and tax breaks outweigh the economic gains, pointing out that net imports have risen, making India more dependent on foreign parts. Effectively comparing the scheme to a bad loan. Then IT Minister Rajeev Chandrasekhar rebuked criticism, stating that value addition takes time, and early signs—including rising exports, job growth, and investments by major companies—showed the strategy was paying off. Flashback: SEZs, M-SIPS, and other incentive highs that faded India has been here before. M-SIPS (2012–2018) Before PLI, the Modified Special Incentive Package Scheme (M-SIPS) offered capital subsidies of 20–25 per cent to electronics firms setting up manufacturing units. The goal was similar: to make India self-reliant in electronics. By the time it shut in December 2018, the scheme had approved over ₹10,000 crore in incentives. But much of that investment remained on paper. Companies like Havells, Daikin, Orient Cable, Nidec, and Genus Power set up units, especially in Rajasthan, where ₹143 crore was disbursed. The 2000s saw a wave of SEZs, boosted by tax holidays and easy land. But after the Minimum Alternate Tax (MAT) and Goods and Services Tax reforms eroded benefits, interest dried up. Many SEZs today are underutilised, repurposed, or idle. Power subsidies: UMPPs and stranded assets Ultra Mega Power Projects once promised 4,000+ MW each. Many were delayed, overleveraged, or abandoned, leaving banks and states with stranded assets. Textile incentives and industrial parks Multiple states launched textile parks with land, power, and capex subsidies. Many of them failed to attract tenants or ran below capacity, often due to poor logistics or a lack of skilled labour. The recurring theme seems to be one of generous incentives that promote short-term activity but don't often create lasting ecosystems. The fiscal risk: Can the Centre keep footing the bill? PLI disbursals are just beginning to peak. In FY26 alone, government estimates suggest that up to ₹16,000 crore could be paid out, with ₹9,000 crore allocated towards electronics. The fiscal questions raised now: Is India getting value for money? In some sectors, imported components still dominate. In other words, job creation has not met expectations. What's the output-to-subsidy ratio? For every ₹1,000 crore disbursed, how much actual value is added in India? Are clawbacks being enforced? If firms miss targets—as Samsung did in Year 2—do they return incentives? Are penalties applied uniformly? Can India afford to sustain this? With rising welfare outlays, defence spending, and weak private capex, the Centre's fiscal room is shrinking. As more PLI sectors mature, annual payouts will grow, possibly testing the limits of political and fiscal tolerance. The big picture As Samsung's PLI wraps up, India is at a critical juncture on how it wants to proceed with its incentive scheme. The next two years will be crucial. If companies scale up without further payouts, the model works. If they stall, the scheme risks becoming yet another high-cost gamble with low long-term returns.
The Sun
5 days ago
- Business
- The Sun
US tariffs – Short-term shock, long-term opportunities for Asean real estate industry
KUALA LUMPUR: While the US reciprocal tariffs announced on April 2 have unsettled equity markets and export-driven sectors, property leaders believe the disruption could accelerate the adoption of digital technologies, sustainable construction practices and regional trade integration within Asean's real estate landscape. During a panel discussion titled 'Industry Countermeasures: Absorbing the Recent US Tariff Shockwaves' at the Asean Real Estate Conference and the Architecture, Interior Design and Building Exhibition 2025, three prominent figures – Real Estate and Housing Developers' Association (Rehda) president Datuk Ho Han Sang, PropertyGuru Group's head of real estate intelligence Dr Lee Nai Jia and United Overseas Bank senior Asean economist Enrico Tanuwidjaja – said that while the new US tariffs – which are scheduled to go into effect on Aug 1 – bring short-term uncertainty, they also present potential long-term opportunities for the industry. Ho said Malaysian developers are bracing for softer demand in industrial, commercial and high-end residential segments as exporters negotiate who will absorb the higher costs. 'Profit margins will be squeezed as importers and exporters split the burden,' he told the audience. 'With higher prices, purchase volumes will drop and investors will be more cautious. Slower sales mean cash flow problems, and cash flow is reality; without it, there is no oxygen.' Ho noted that while most construction inputs are locally sourced, imported steel, aluminium and glass may see price pressure if the ringgit weakens. The first sectors to feel the pinch, he said, will be export-driven industries scaling back factory expansions, reducing office space needs, and curbing retail growth. Yet he also flagged bright spots. 'Tariffs on Chinese goods could redirect manufacturing to Asean, and a weaker ringgit may attract buyers from Singapore, Hong Kong and Taiwan into projects like Penang Silicon Island or the Johor‑Singapore Special Economic Zone.' Lee observed similar patterns across Asean. Using PropertyGuru's platform data, he described a three‑stage reaction: initial shock, quick normalisation and preference recalibration. 'After the announcement, views on listings in Singapore plunged, while Malaysia and Vietnam saw smaller dips,' he said. 'But people quickly remembered that housing is a long‑term need. What changed is their behaviour where buyers are gravitating towards more affordable, value‑driven homes.' He highlighted Singapore's Linton Woods project, which sold 94% of units despite tariffs, thanks to its proximity to transport and employment hubs. 'Integrated developments are resilient,' Lee said. 'The key is offering value and convenience.' He added that confidence in governance, stemming from Vietnam's policy reforms to Malaysia's interest rate cuts, continues to underpin the region's housing markets. From a macro lens, Tanuwidjaja said the tariffs underline Asean's need to boost internal trade and reduce dependence on external markets. 'Intra‑Asean trade is only 17%, compared to over 40% in the EU,' he said. 'We need to integrate, use local currency settlements, harmonise regulations and build supply chains that loop within the region.' While describing Asean as 'resilient', he warned that volatility will persist throughout the current US administration: 'Businesses must plan for turbulence, not a quick fix. The next midterm election in 2026 is the next real pivot.' He also urged governments and developers to prepare for technological disruption. 'AI will transform customer service, marketing and operations. We must retrain workers for higher‑skill roles like architecture, design thinking, project integration, because low‑skill roles are most at risk.' All three panellists stressed innovation as a pathway through the turbulence. Ho highlighted Integrated Digital Delivery (IDD), a platform that digitally unites 180 industry stakeholders to cut errors and speed approvals, as a game‑changer already deployed in Singapore. 'IDD minimises waste and aligns everyone from engineers to regulators,' he said. 'Speedier approvals, like Penang's recent 36‑day affordable housing clearance, reduce costs and help projects move despite headwinds.' Green technology also surfaced as a competitive advantage. Lee pointed to Vietnam's success in renewable energy during the first trade war. 'This is our chance to lead with climate‑sensitive design and ESG frameworks tailored to Southeast Asia's climate,' he said. Looking beyond domestic markets, Ho urged Malaysian developers to revive their overseas promotion campaigns, targeting buyers from Hong Kong, China, and Singapore. 'Our products are internationally recognised and competitively priced by Asean standards,' he said. 'With stable governance and award‑winning townships, Malaysia can stand out.' Tanuwidjaja echoed the sentiment: 'The higher tide will lift all boats but only if Asean rows together.' While uncertainties remain, the panel's tone shifted from caution to resolve. The tariffs, they argued, could catalyse Asean's next phase of growth by forcing integration, accelerating digital tools and prioritising sustainability. 'If you don't change, you'll be changed,' Ho said. 'This is the moment for our industry to reinvent and emerge stronger.'
RNZ News
5 days ago
- Business
- RNZ News
Solomon Islands PM's former chief of staff returns to represent firm that led to his firing
Solomon Islands Minister Jamie Vokia and (former) Chief of Staff Mack Faddean Aoraunisaka, right, pictured with SI Group Chairman Phan Nhat Minh and CEO Le Thi Huy Binh. Photo: Hand-out A senior Solomon Islands government staffer who was sacked by Prime Minister Jeremiah Manele earlier this month is back - this time representing the very company whose dealings got him fired in the first place. On 3 July, RNZ Pacific reported that Manele dismissed his chief of staff, Mack Faddean Aoraunisaka, after he had arranged a deal between Vietnamese firms concerning a shrimp farming project. The deal between the consulting firms SI Group and Growmax, and Commerce Minister Jaimie Vokia, was signed without Manele's knowledge. It would allow the establishment of a Special Economic Zone (SEZ), which would give SI Group and its client Growmax (a fisheries company), special commercial privileges. The three parties signed the controversial memorandum of understanding, granting the two firms tax exemptions and various other privileges within the Solomon Islands. When Manele found out, he moved Vokia to a new ministerial portfolio and fired Aoraunisaka, while the Foreign Investment Division (FID) barred SI Group from the country. The FID said that "[SI Group's] presence in the Solomon Islands carrying out commercial activity without foreign investment approval or company incorporation violates the laws of this country." However, Solomon Business Magazine reported that SI Group and Growmax met with Fisheries Minister Bradley Tovosia on 15 July. The meeting was reportedly followed by consultations with officials from the Ministry's Aquaculture Division. In a statement, Aoraunisaka, as the "local authorised representative for SI Group JSC", decried negative attention toward his new employers. "It is unfortunate the manner in which SI has been treated," he said. "People must realise that such treatment not only damages the business reputation of a credible international company but also undermines Solomon Islands' status as a welcoming and business-friendly destination for foreign investment. "Local representatives of SI [Group] are currently working closely with the Foreign Investment Division to rectify the situation and ensure that the process is resolved amicably and efficiently." The statement included a quote from Tovosia in support of the two firms, but the Prime Minister's office could not confirm its veracity. SI Group was the sponsor of a concert on 12 July starring dancehall reggae artist Busy Signal, which Aoraunisaka called a "success". The show was set up to raise funds for the Kadere Party, of which Minister Vokia is the leader. Immediately afterward, in a news conference with a SI Group senior director by his side, party executive member Martin Housanau defended SI Group's presence in the country "The event that is happening now is a non-commissioned activity, and under the laws it doesn't benefit [the SI Group] in any convening [the event]." Aoraunisaka told Solomons Business Magazine that the over 50,000 people came to the concert, showing that SI Group has popular support. "Unfortunately, there remains a loud but tiny group of individuals-mostly hiding behind fake profiles and bitter narratives on social media-who continue to spew negativity against anything and everything good." "We need positive vibration to move forward. Bad vibe is bad. Good vibe is what the soul, the land, and the nation wants. This is a positive vibration construct. And SI Group JSC is a vessel of that positivity." RNZ Pacific has contacted the Ministry of Fisheries for comment.
