The Edge
5 August 2024
Towards creating a wave of change to raise the ceiling
Keynote Speech by Yang Berhormat Datuk Seri Amir Hamzah Azizan Minister of finance II (July 22, 2024)
Tan Sri Datuk Tong Kooi Ong, chairman of The Edge Media Group; Datuk Ho Kay Tat, publisher and group CEO of The Edge Media Group; distinguished award winners; members of the media; ladies and gentlemen.
Bismillahirrahmanirahim. Assalamualaikum warrahmatullahi wabarakatuh. Salam sejahtera, salam Malaysia MADANI and good evening.
It is a pleasure to be here tonight. I wish to thank The Edge Media Group for inviting me to the Centurion Club Corporate Awards 2024.
Tonight, we are here to honour Malaysia’s best-performing small- and mid-sized companies listed on Bursa Malaysia. I believe we have Tan Sri Tong to thank for his vision back in 2019, when he launched these awards to recognise companies listed on Bursa Malaysia with market capitalisations of between RM100 million and RM1 billion.
I understand there are 514 Centurion Club members today, with a total market capitalisation of almost RM180 billion, as at end March this year. The increase from 483 members last year with a market capitalisation of just under RM160 billion is a testament to a conducive economic ecosystem which supports growth.
Malaysia’s landscape is marked by the dynamic resilience of its micro, small and medium enterprises (MSMEs), which serve as the backbone of the country’s economy. These diverse entities, spanning various industries, drive economic growth and foster significant employment generation and spur innovation.
A report by the Department of Statistics Malaysia (DoSM) highlighted an impressive 11.6% growth in MSMEs’ GDP in 2022, outpacing the national GDP growth of 8.7%. This robust performance elevated the sector’s contribution to GDP to 38.4%, amounting to RM580.4 billion in value added — a substantial increase from RM520.0 billion in the previous year.
Moreover, MSMEs demonstrated their pivotal role in Malaysia’s export sector, contributing 10.5% to total exports with a notable 16.3% increase from the year before. In terms of employment, MSMEs employed 48.2% of the Malaysian workforce, up from 47.8% in 2021. This translated to a rise of 279,000 jobs, totalling 7.59 million persons employed by MSMEs in 2022.
The resilience of MSMEs was further underscored by their labour productivity, which surged by 7.5% to RM76,433 per person in 2022, surpassing pre-pandemic levels from 2019. This uptick in productivity amid economic challenges highlighted the adaptability and strength of MSMEs in navigating complex economic landscapes.
Overall, the DoSM report painted a compelling narrative of MSMEs not just as economic contributors, but as drivers of social progress, underscoring their role in shaping Malaysia’s economic trajectory in 2022 and beyond.
Ladies and gentlemen, recent economic indicators also show that the country continues to be on a healthy trajectory. On Saturday, DoSM projected the country’s GDP to grow at 5.8% in the second quarter of this year, up from 4.2% in the first quarter. This would be the highest growth since the fourth quarter in 2022. We also saw Bursa Malaysia breach 1,600 points in May this year and holding steady so far. And last week, the ringgit rallied to its highest since January.
In addition to these indicators, we have also seen positive trends in employment numbers, production indices and trade. More recently, we have seen renewed confidence from international credit rating agencies and market analysts such as S&P, Fitch and JP Morgan.
These early successes are a testament to the government’s Ekonomi MADANI framework, which sets in place the strategy to build a better Malaysia for all Malaysians. The framework encompasses three key pillars: Raise the
Ceiling, Raise the Floor and Good Governance. As organisations with levers to contribute to all three pillars, SMEs have an essential role within the all-of-nation approach, to realise the aspirations of the Ekonomi MADANI.
Belanjawan MADANI 2024 continues to support SMEs in line with the goals of the Ekonomi MADANI framework. Our priority is to support the increase of business capacity and competitiveness in raising the income of the people and the country.
Central to this initiative is a substantial allocation of RM44 billion in loans and financing guarantees earmarked specifically for MSMEs in 2024. Under the purview of Bank Negara Malaysia, a significant portion totalling RM8 billion is designated to support SMEs, with RM600 million dedicated to empowering micro-enterprises and low-income entrepreneurs. This funding also targets small contractors and promotes sustainability practices, particularly in sectors crucial to food security.
In a concerted effort to foster growth in key sectors, Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) guarantees up to 80% of loans for SME entrepreneurs. This initiative, supported by a substantial RM20 billion in guarantee funds, aims to boost enterprises in the green economy, technology and halal industries.
The comprehensive support outlined in the Belanjawan MADANI 2024 underscores
Malaysia’s commitment to empowering MSMEs as engines of economic growth. By facilitating access to substantial financial resources and targeted guarantees, the framework seeks to catalyse sustainable development, foster technological advancement, and enhance Malaysia’s global competitiveness. As MSMEs thrive under this supportive environment, they are poised not only to drive economic expansion but also to enrich the livelihoods of Malaysians nationwide.
The government is cognizant of keeping SMEs relevant and competent through automation and digitalisation. Belanjawan MADANI 2024 allocates a RM900 million loan fund under Bank Negara. This fund is specifically aimed at encouraging SMEs to enhance their business productivity through automation and digitisation. By providing accessible financing options, the loan fund seeks to empower SMEs to invest in advanced technologies and innovative solutions that can drive growth and productivity.
These initiatives represent a comprehensive strategy to support SMEs in their journey towards digital transformation. By leveraging automation and digitalisation, SMEs can not only improve their operational efficiency but also position themselves for long-term success in a rapidly evolving business landscape.
Ladies and gentlemen, development financial institutions (DFIs) play a pivotal role in the SMEs’ development agenda. In alignment with their developmental mandate, DFIs may assume higher-risk credits to provide financing to strategic priority sectors. Additionally, DFIs will bolster lending capacity to industries and businesses, particularly SMEs, which face challenges in securing funding from traditional financial institutions.
As part of public institutions reform, Belanjawan MADANI 2024 announced the restructuring of DFIs.
In 2019, the government had mooted that BPMB (Bank Pembangunan Malaysia Bhd), Danajamin Nasional Bhd, Exim Bank and SME Bank be restructured and merged under one entity through a two-phase approach, in a bid to improve the DFI ecosystem. The first phase of the merger was completed in November 2021, involving Bank Pembangunan acquiring all shares of Danajamin. The second phase involves the merger of Exim Bank and SME Bank into the earlier merged entity.
The consolidation exercise will see enlarged DFIs with larger economies of scale and better realignment of strategic mandates, allowing for more efficient allocation of capital and resources to finance priority segments.
In the pipeline is the National Fund-of-Funds (NFoF), an investment initiative worth RM1 billion under the purview of Khazanah Nasional to streamline funds for impact-focused investments in innovative, high-growth SMEs.
The NFoF will provide a sustainable funding source for the local start-up ecosystem by attracting participation and capital contributions from the private sector into the venture capital ecosystem. The NFoF is expected to kickstart by the third quarter of this year.
All the initiatives that I have mentioned earlier aim to boost domestic direct investment (DDI), which will indirectly act as a catalyst to increase foreign direct investment (FDI).
To this end, and within the frame of the current upward trajectory of our economic growth, I urge your companies to invest. Invest to expand, invest for sustainability and invest in technology and innovation. This directly contributes to efforts in raising the ceiling by creating more space for economic participation and moving key industry sectors further up the value chain.
Ladies and gentlemen, the Ekonomi MADANI framework, as I mentioned, requires an all-of-nation effort. While the government works on policy, on national level blueprints, and on ensuring the rakyat continue to be protected in the wake of necessary economic reforms, I call on all of you from this high-potential group to lend your support.
You have the potential to collectively create a wave of change towards more robust social protection. This can be achieved through decisive actions within your own spheres of influence, such as making commitments to better jobs and higher wages; by ensuring equal opportunities through better gender representation at both board and management levels; and through continuous upskilling and training of employees.
Beyond pursuing business growth, I also urge mid-cap companies to actively put yourselves out there and be seen. Through interesting and engaging branding strategies, for example. Build a great work environment where employees become your ambassadors. Champion social causes with pride and passion. I certainly look forward to seeing and hearing more from the Centurion Club members to bring more vibrancy to Corporate Malaysia.
In closing, let me extend my heartiest congratulations to all the winners tonight. Your achievement is a beacon of what can be aspired to, and I hope it inspires you — not only to pursue greater heights of success, but also to mentor and nurture others who are on their own growth journeys.
Thank you once again for having me, and I wish you all a pleasant evening.
(Web Source: https://theedgemalaysia.com/node/721414)