Malaysia Continues to Improve in Ease of Doing Business

WORLD BANK
October 23, 2012
PRESS RELEASE


Kuala Lumpur, October 23, 2012—A new report from IFC and the World Bank finds that Malaysia remains among the world’s most business-friendly countries.

Released today, Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises  notes that Malaysia made dealing with construction permits faster by improving the one-stop center for new buildings and by reducing the time to connect to telephone services.

“Malaysia is to be commended for its ongoing efforts to reduce the costs of doing business,” said Annette Dixon, World Bank Country Director for Malaysia. “This will help the private sector drive growth, especially if Malaysia can build on its success by continuing to tackle long-term challenges, such as improving the quality of education.”

Malaysia also cut the number of days it takes to register property transfers by introducing a new caseload management system at the land registry. Inspired by effective supply chain management strategies employed by the private sector, the registry reduced registration time from 41 days in 2011 to 7 days in 2012 for non strata properties (those that are not part of a subdivision or common-interest community).

“Malaysia continues to improve the quality of domestic regulations. This has great potential to energize the private sector when combined with stepped-up implementation of strategic reform initiatives, especially the liberalization of services sectors and the enforcement of the new competition law,” said Frederico Gil Sander, World Bank Senior Economist for Malaysia.

The Doing Business 2013 report, which covers the period from June 2011 to June 2012 and which uses data for indicators that measure regulation affecting 10 key areas of the life cycle of local businesses, finds that Singapore tops the global ranking on the ease of doing business for the seventh consecutive year, while Hong Kong SAR, China, holds onto the second spot.

The report finds that 23 economies in East Asia and the Pacific have made their regulatory environment more business-friendly since 2005. During that time, China made the greatest progress in improving business regulations for local entrepreneurs. The report also notes that 11 of 24 economies in East Asia and the Pacific improved business regulations in the past year.

Joining Singapore and Hong Kong SAR, China, on the list of the 10 economies with the most business-friendly regulations are, in this order, New Zealand; the United States; Denmark; Norway; the United Kingdom; the Republic of Korea; Georgia; and Australia.

About the Doing Business report series

Doing Business analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and protecting investors. The aggregate ease of doing business rankings are based on 10 indicators and cover 185 economies. Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure the quality of fiscal management, other aspects of macroeconomic stability, the level of skills in the labor force, or the resilience of financial systems. Its findings have stimulated policy debates worldwide and enabled a growing body of research on how firm-level regulation relates to economic outcomes across economies. This year’s report marks the 10th edition of the global Doing Business report series.


DOWNLOAD THE 140 PAGES FULL REPORT HERE!!

JAPAN WILL SURVIVE! - ARTICLE AND RESEARCH BY NIK ZAFRI


What is happening in Japan is very tragic. Our hearts go out to all those suffering.

It is with heavy heart when I wrote this article as too many questions been e-mailed to me about the post-economic effects of the Tsunami and quakes in Northern Japan.

Definitely oil prices slumped below $98/barrel. This would be worse depending on the situation at the nuclear plant.

Some large nations including China is cutting back nuclear-investment. It means that there is and will be higher demand for oil.

Already global stock markets sharp falls have been observed.

I stand with other global analysts that the immediate dampening effect of the earthquake on Japanese oil demand soon would be reversed. Let not anyone forget about the current crisis the Middle East and North Africa, recovery process in Egypt and the latest "Libya and Gaddafi's Factor" is also affecting the global oil price.

On Japan itself, yes they will be affected somehow - judging by the past experience of Kobe, it has caused > USD100 billion of damages with more than 5000 people are killed.

The death toll now; as I speak; unfortunately; is more than Kobe. Not to mention the grid and network of electrical and communication which may affect macroecomically speaking across the nation.

Furthermore, global ripple effects especially on the United States would be on the auto industry, semiconductors etc.

How would investors in Japan react?

Not good, there are talks about them dumping some of that debt (government bond) in Japan despite assurance there will be budget - spend massive amounts of money rebuilding infrastructure and factories in Northern Japan.

Also there have been rumours about pulling yen out of the abroad market for rehabilitation purposes in the affected places in Japan. But the affect is short term and yen may strengthen but not in the interest of the Feds. With the sharp increase of commodity and oil prices, interest rates might be pushed up.

For the opportunists or 'profitists?' (if there is such word)?

Well as usual - sort term sell-offs = long term gain if you are up to it.

1. Auto industry - Japan's sales is more focussed outside and performing splendidly - take Toyota for example - they will go through this as they still have cash - lots of them

2. Nuclear & Uranium - Operators are worried about regulatory and political even monetary policies.

This is a normal case - If you all recall the BP/oil spill case which lead to more offshore drilling - then please do not worry.

I quote this from Motley fool website :

Southern Co. (NYSE: SO) and Exelon (NYSE: EXC) stand out as two intriguing names that have traded off a bit on the market's tumults. Exelon, in particular, has been hit hard and offers big upside. Exelon might be the largest nuclear power producer in the U.S., but about 1/3 of its power generating capacity comes from sources other than nuclear. For that matter, the company operates regulated utilities which offer very consistent cash flow and, frankly, have no real exposure to the drama you're seeing on television. Put it all together with a 5% dividend yield and a valuation that already assumes paltry growth, and you're looking at a bargain.


The Motley Fool are so cool that they also 'agree' to my answer :

Shrinking in uranium demand? No way. China and Russia will continue to create a long term demand growth!!

We have seen how Japan move up after Hiroshima and Nagasaki, after Kobe incident - so what would stop them from going up after this one? Because of there will be heavy spending - in the medium term - they will be UP!

I'm not a Japanese but I do know how the system works over there...so don't create more panic, do not listen to rumours.
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Menjawab soalan dari seorang rakan di luar negara mengenai impak pos-bencana di Jepun ke atas negara-negara ASEAN


Nik Zafri :

Terima kasih saudara kerana soalan berkenaan.

Secara ringkasnya :

KDNK Jepun akan menjadi perlahan tetapi hanyalah bersifat sementara tetapi saya pasti ianya akan 'pick-up' pertengahan 2011 kerana program pembinaan semula.

Walaupun terdapat laporan ketidaktentuan kerana reaktor nuklear, berpandukan pengalaman Hiroshima dan Nagasaki, mereka pasti akan berjaya dalam usaha membangunkan semula negara matahari terbit ini.

Terdapat suara-suara kebimbangan di kalangan negara ASEAN namun impak sebenarnya adalah sangat terhad kecuali sektor pengeluaran automotif dan elektronik.

Potensi KDNK ASEAN sangat tinggi kerana keupayaannya untuk melepasi tahap bahaya selepas krisis global yang bermula dari US (Sab-Prima) dahulu. Jadi saya berpendapat ASEAN akan dapat memproses impak bencana Jepun dengan baik serta merancang satu usaha untuk melepasi tahap ini pula. Kita sebenarnya bertuah kerana mempunyai ramai pemikir-pemikir strategik di negara-negara ASEAN.

Yang paling penting, kita mengawal perasaan supaya kita tidak panik. Kerana, andaikan kita gagal mengawal impak dengan baik, kita akan berhadapan dengan masalah baru iaitu inflasi kerana terdapat tanda-tanda kenaikan dalam kemasukan portfolio modal, kenaikan harga komoditi serta makanan. Negara-negara yang berpendapatan rendah akan pasti merasai kesan ini.

Seperti biasa, tugas mencari jalan bagi merendahkan kadar inflasi sekiranya ia berlaku bergantung kepada negara-negara ASEAN lain untuk merangka satu cara atau polisi yang strategik.Kenaikan komoditi secara berterusan mungkin akan menyebabkan situasi ketidaktentuan di masa hadapan.


Saya mendapat beberapa info dari rakan penganalisa barat yang rata-rata memberitahu saya bahawa ASEAN mempunyai potensi yang tinggi TERUTAMANYA Malaysia dan Singapura disebabkan situasi ketidaktentuan di Timur Tengah, Eropah, Korea dan kini di Jepun.

Oleh sebab kedudukan ini, Malaysia perlu memainkan peranan besar dalam ASEAN termasuk China.

Walaupun China akan menjadi kuasa ekonomi yang besar terutamanya pengekspot dan pengeluar, namun ianya akan bergantung kepada sokongan rakan-rakan ASEANnya. Di sini Malaysia boleh berkongsi pengalaman menerusi proses industrialisasi dan urbanisasi yang selama ini terbukti menjadikan Malaysia negara maju pada tahun 2020.

Lagi pun, Malaysia merupakan satu-satunya negara yang masih aman, maju dan makmur serta tidak mengalami apa-apa bencana alam yang besar seperti negara-negara lain di dunia. Alhamdulillah.

Wassalam - perlu diingatkan ini adalah pendapat peribadi berdasarkan kajian saya dan bukanlah mewakili mana-mana pihak.

The death of the 'decoupling' theory?

By Conrad de Aenlle Published: January 25, 2008

Traders work on the floor of the New York Stock Exchange in New York, U.S., on Tuesday, Jan. 22, 2008. U.S. stocks pared their biggest decline since 2002 after the Federal Reserve's emergency rate cut helped mitigate concern the economy is slipping into recession. (Jin Lee/Bloomberg News)

No one can say how much has been lost by investors basing decisions on unproven strategies that work in theory, but the amount has grown significantly. As trillions of dollars were wiped off the value of global stocks this week, "decoupling" became the latest big idea to shrink dramatically when tested in the real world.

Decoupling holds that European and Asian economies, especially emerging ones, have broadened and deepened to the point that they no longer depend on the United States for growth, leaving them insulated from a severe slowdown there, even a fully fledged recession. Faith in the concept has generated strong outperformance for stocks outside the United States - until now.

As opinion began to solidify after the start of the year that a recession, or something close to it, was likely in the United States, stock prices accelerated their declines, with the selling intensifying early this week. Contrary to what the decouplers would have expected, the losses were greater outside the United States, with the worst experienced in emerging markets and such developed economies as Germany and Japan.

Exports make up especially large portions of economic activity in those places, but that was not supposed to matter anymore in a decoupled world because domestic activity was thought to be so robust.

Decoupling was all the rage early last year when international financial markets all but ignored the increasing turmoil in the U.S. economy and stock market. Investment advisers point out, however, that the segments of the U.S. economy that were showing wear and tear then were those to which the rest of the world would never be heavily exposed. That is no longer true, they say, and markets are responding accordingly.

"Decoupling is yesterday's story," Stuart Schweitzer, a global strategist at J.P. Morgan Private Bank, declared. "Last year, when the U.S. slowdown was driven almost entirely by housing, it made sense that the rest of the world kept right on going. Housing is a domestic story, plain and simple.

"The nature of the slowdown has changed in two key respects. The credit crunch that began in midsummer is not just a U.S. phenomenon; the rise in risk aversion is global and will have an impact on credit terms and availability everywhere. And we're finally seeing evidence that the U.S. job market is losing steam and consumer spending is slowing."

True believers in decoupling have ignored another theory that appears to be logically inconsistent with it, has been popular for far longer and, most important, has been shown to work in real life. Remember globalization?

"If anything, global interdependence of economies is rising, not falling," said Jeff Applegate, chief investment officer of Citi Global Wealth Management.

"The notion that the U.S. can go into recession with no negative knock-on effect in the rest of the world doesn't hold up."

Andrew Foster, head of equity research for Matthews International Capital, a specialist in Asian markets, contends that it is possible for globalization and decoupling to coexist. In fact, one gave rise to the other, he said. It was only through economic liberalization that the juggernaut economies of Asia were able to grow as fast as they have, allowing for the development of conspicuously consuming middle classes.

"The irony is that these economies are more coupled with the rest of the world than they ever were in the past," he said. "That's why they're so strong, and that has allowed them to become more independent."

The new Asian consumers may not be able to compensate for all of the exports that would be lost during an American recession, Foster said, but some of the companies that serve their needs might still do all right for themselves. The true decoupling may be not so much between the United States and the rest of the world as between segments of the global economy that cater to the burgeoning nouveau riche in emerging economies on one hand and most other commercial sectors on the other.

With the United States apparently tipping over into recession, Foster is looking to fill his Asia portfolios with the first type of businesses, as long as they have not been bid up to unreasonable levels already. A couple of pockets of opportunity that he finds are Chinese insurance companies and Indian health care providers.

"I like companies that don't derive their fortunes from products, services and especially commodities dominated by the global business cycle," he said, although he declined to furnish examples.

Valuation is also critical for Michael Avery, chief investment officer of Waddell & Reed and a professed believer in decoupling - up to a point. He noted that the concept began to pop into the heads of professional investors, including his, during the last U.S. recession, in 2001-2002, although it had not yet achieved buzzword status.

"A lot of people in our business were thinking about where the world was going to head in a post-9/11 environment," Avery recalled. "The U.S. economy had slowed dramatically in 2001, and you had places in the world like China and India that continued to grow at mid- to high single digits. That set in motion the thinking that the U.S. might not be the leading economic force going forward."

But while he accepts the basic idea of economic decoupling, he is not fanatical about it as an investment theme, at least not now. The emerging world will grow faster than the United States, in his view, but Avery doubts that sufficient growth can be achieved to justify the valuations being put on companies in those markets by the new wave of decoupling adherents.

"The big difference in 2002 is that not many people placed bets on that outcome, so there wasn't much risk," he said.

"Now I can go anywhere, and if I talk about China and India and the emerging middle class, they all nod their heads. It's a huge difference from five years ago."

Avery still finds value in some domestically oriented sectors in Asia, as well as in Middle Eastern markets that continue to benefit from one key export, crude oil. He noted that while exports to the United States of less viscous products may be at risk, the growth of middle-class spending is promoting a healthy expansion of trade within the emerging world.

Avery made a big bet on declining share prices late last year when he sold short derivative contracts tied to benchmark stock indexes. But his Ivy Asset Strategy Fund has substantial holdings in such plays on emerging-market domestic demand as the phone company China Mobile; Veolia Environnement, a French producer of water treatment systems, and Las Vegas Sands, an American hotel and casino operator expanding into Macao.

In addition to selling stock index futures, Avery has about 10 percent of his portfolio each in gold, cash and Treasury bonds as hedges against the uncertainties and jolts that would accompany a U.S. recession.

Tim Guinness, chairman and chief investment officer of Guinness Atkinson Asset Management, is another whose objection to decoupling is more a matter of how it works in practice.

"I'm a moderate decoupling believer," he acknowledged. "I'm in the camp that believes that China is rapidly moving from being dependent on exports to the U.S. to enjoying a virtuous circle of rapidly rising incomes for Chinese consumers and very strong momentum behind internally driven growth."

There is momentum in China's stock market, too, he noted, but in a different direction. Perhaps the biggest beneficiary of decoupling is giving back much of its enormous gains of the last few years as investors break faith with the concept.

"I prefer China, but not today," Guinness said. "The next few months will see a continued retreat in China-related stocks. The correction already has been very pronounced."

He prefers less bubbly stock markets in emerging economies where domestic demand is strong, like South Korea and Thailand. Individual stocks that he favors include PTT in Thailand, Singapore Petroleum and Cemig, a Brazilian hydroelectric company.

Applegate, at Citi, finds stocks better value than bonds. He particularly likes global banks and stocks in Europe and emerging markets generally, although he considers China and Hong Kong fairly pricey.

Bonds and equities have experienced sharply diverging fortunes recently. Many stock markets are more than 20 percent below their 2007 highs, while yields on government bonds have plummeted, sending their prices aloft.

Movements in both markets suggest that investors are factoring a global recession into their thinking, a development that could set the stage for the next rally in stocks and render the decoupling argument moot.

Another theory, with a proven track record, states that stocks should be bought once the economy is recognized to be in recession. By then, share prices account for all or most of the bad news, the authorities have taken steps to correct imbalances and a recovery is often imminent.

"Play the movie forward," Applegate said. "If the economy is going to soften globally, then can you expect more central bank policy response? The answer is a resounding yes."

In such conditions, he said, "you should have more of a preference for equities over bonds."

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Nik Zafri's Comments : I've been saying it!!!

This was what I've said few months back :

Many have forecasted that SEA will be the first to rebound from the current economic crisis by September, 2009.

On the other hand, what saddens me most is that some even forecasted that Asian economy will fall badly in 2009 - such a pathetic statement meant to discourage us.

In the past, we have been known for the reputation of outperforming the US and Europe due to the right planning and eventually become very immune to any credit crunch from the West.

Some countries are not even depending on IMF or World Bank in 1997-1998-remember? Even China has been too much underestimated (not that I disagree but too much 'smart' speculations..come on) by these 'so-called' economic forecasters.

I have always been known as a 'reverse psychological' person. I don't believe in 'too obvious bad news' being reported meant to lure the small investors away but giving great monetary advantages to speculators.

Based on these 'unfounded fears', I feel strongly that the Asian will be one of the key players in the world economy commencing from 2009.

But of course, I have a different theory (especially for Malaysia) - I think it's earlier than that...say April, 2009?

AND

Where would be the ideal starting point? The answer is the first tier - Banking and Financial Institutions. I would like to open this suggestion to Asia (or SEA) as Asia is a very unique continent that has always found a way towards survival. (perhaps some democratization of financial policies should be in place) Most important is TRUST and coordinated efforts one another - as every bankers and financiers have all the knowledge. (Don't wait for someone else to start first) There should be no more too much dependency on certain elite groups or industries that are 'controlling the financial world' and we have seen the impact when these 'big mega industries' started to fall
-------------------------------

Today...I'm so happy to see THIS NEWS :

From The Star 21 February, 2009:

Asean to seek consensus on RM308b common fund

PHUKET: Malaysia, along with other Asean members, will meet tomorrow to seek consensus on a multi-billion dollar Asean+3 Cooperation Fund for economic stimulus packages.

Deputy Prime Minister Datuk Seri Najib Tun Razak will lead the Malaysian delegation at the special meeting among Asean finance ministers, together with their counterparts from China, Japan and South Korea.

The meeting is to formalise a common fund aimed at bolstering foreign exchange reserves to cope with the global economic crisis.

Under the Chiang Mai Initiative Multilateralisation Scheme, Asean members, Japan, China and South Korea have agreed to create a pool of US$84bil (RM308bil). The fund, which was agreed to in May last year, is to help boost forex reserves among member countries.

China, Japan and South Korea will contribute 80% of the fund while the remaining 10 Asean countries will come up with the rest.

A Malaysian Finance Ministry official said Asean finance ministers would also discuss methods to protect the region’s economy and other joint initiatives to overcome the current economic slum.

“Asean finance ministers are also expected to discuss and raise the fund to US$120bil (RM441bil) to help revive the region’s economy.

“The meeting will also seek views on ways to tackle the current economic issues as well as enhancing the regional trade and financial markets corporation.”
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Nik's comments :

The RIGHT MOVE!! GO FOR IT!!

Personal Note : I sure hope President Obama sees this.

NIK ZAFRI'S (HUMBLE) ASIA/SEA ECONOMICAL FORECAST 2009

Many have forecasted that SEA will be the first to rebound from the current economic crisis by September, 2009.

On the other hand, what saddens me most is that some even forecasted that Asian economy will fall badly in 2009 - such a pathetic statement meant to discourage us.
In the past, we have been known for the reputation of outperforming the US and Europe due to the right planning and eventually become very immune to any credit crunch from the West.

Some countries are not even depending on IMF or World Bank in 1997-1998-remember? Even China has been too much underestimated (not that I disagree but too much 'smart' speculations..come on) by these 'so-called' economic forecasters.

I have always been known as a 'reverse psychological' person. I don't believe in 'too obvious bad news' being reported meant to lure the small investors away but giving great monetary advantages to speculators.

Based on these 'unfounded fears', I feel strongly that the Asian will be one of the key players in the world economy commencing from 2009.

But of course, I have a different theory (especially for Malaysia) - I think it's earlier than that...say April, 2009?

But, I share the agreement that it is likely going to be Singapore then probably followed by Malaysia. There have been a trend of banking and financial institutions in these two neighbouring countries offering new packages to GLCs and MNCs. These efforts would probably contribute to economy recovery in 2009. There has also been a higher demand for exports from Malaysia and Singapore based on the increased spending in the Euro and US.

The banking sectors in Japan are planning to buy securities, stocks and bonds (corporate) etc - and if these plan works, it will help stabilise their financial market. The Government has announce Japan's biggest ever annual budget Y12,000bn.

China however would still have to be put under alert - to grow or not to grow. Since China are trading with other SEA countries, their ability to export surplus stocks financed on credit should be monitored. New policies to boost consumption need to be drawn up to counter this possibility. I do know that China works very-very hard lately not to be bound to 'intelligent economic comments' e.g. decoupling - and I have every confident that they will succeed.

In Indonesia, the President announce the budget of USD200 billion ++ and a 6.2% growth is expected. However, they are not too sure about the outcome of issuance of Government bonds and probably there will be a budget deficit of nearly 2% GDP. Mainly taxes will play a role for the main revenue followed by non-tax sectors. There will also be about 102 trillion rupiah for fuel subsidy.

The only biggest dillema in Indonesia is corruption - if this is not being minimized, I do not think that they can reach the target that they are hoping for. While for the good part that Indonesia has done right is their achievement of regaining self-sufficiency in rice where the production has surpassed the country's rice consumption. This has made them better in terms of food situation and probably would take them out of the current global food crisis.

For Korea, they are not too ambitious; which I find a good thing to do - be cautious. While everyone is hoping and praying for a 2009 turnaround, Korea predicted a 3% growth and the focus is mainly creating new job opportunity. They have also cut taxes here and there.

Korean consumer price is estimated to stabilize to less than 4% and there may also be decreasing service deficitit and rising goods surplus - thus making 2009 account surplus to exceed USD10 billion. I personally think that Korea should now put an effort to minimize their dependency on IMF as what they have done before in 1997.

I will keep you all updated.