MARKET DEVELOPMENT
Economists Hail Export Council Plan
Economists Hail Export Council Plan
16/12/2014 (New Straits Times) - The government’s plan to set up the National Export Council will help identify and bolster exports to new and emerging markets as well as boost the sale of new value added products overseas.
Economists said the council will also strike up or hasten new free trade agreements (FTAs) in fresh markets such as India, which will boost bilateral as well as regional trade.
“This council will no doubt boost the country’s competitiveness and improve investors confidence,” said independent economist Lee Heng Guie.
He was commenting on Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah’s announcement on Sunday on the council’s establishment to make Malaysia’s exports more competitive amid the depreciating ringgit and weak oil prices.
Lee, who is formerly CIMB Group’s chief economist, said for the council to work, the economic performance of partnering countries must be stable and not too volatile.
“Malaysia also has to look at the foreign input of local manufactures. If it is palm oil, it would be to our benefit as the sector uses little foreign content. But if the manufactures have a lot of foreign content and are purchased in US dollar, it could be higher cost for the manufacturer,” he added.
An economist at a local bank said it will help diversify the traditional export products such as electrical and electronics into other consumer electronic products.
“However, this export council is not something new and has been an ongoing effort by the International Trade and Industry Ministry,” said the economist who declined to be named.
Other economists, however, noted that the success of the council hinges on the economic performance of countries that Malaysia is doing trade with.
“With China, it would be at our disadvantage as its economy is slowing down, Europe is sluggish, Japan is still adjusting while the US is recovering. Boosting trade among Asean nations may also not work as Asean has trade ties with China. That is why the TPP (Trans Pacific Partnership) is good. The council is a good idea but it will take some time to have an effect,” said one.
Economists said the council will also strike up or hasten new free trade agreements (FTAs) in fresh markets such as India, which will boost bilateral as well as regional trade.
“This council will no doubt boost the country’s competitiveness and improve investors confidence,” said independent economist Lee Heng Guie.
He was commenting on Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah’s announcement on Sunday on the council’s establishment to make Malaysia’s exports more competitive amid the depreciating ringgit and weak oil prices.
Lee, who is formerly CIMB Group’s chief economist, said for the council to work, the economic performance of partnering countries must be stable and not too volatile.
“Malaysia also has to look at the foreign input of local manufactures. If it is palm oil, it would be to our benefit as the sector uses little foreign content. But if the manufactures have a lot of foreign content and are purchased in US dollar, it could be higher cost for the manufacturer,” he added.
An economist at a local bank said it will help diversify the traditional export products such as electrical and electronics into other consumer electronic products.
“However, this export council is not something new and has been an ongoing effort by the International Trade and Industry Ministry,” said the economist who declined to be named.
Other economists, however, noted that the success of the council hinges on the economic performance of countries that Malaysia is doing trade with.
“With China, it would be at our disadvantage as its economy is slowing down, Europe is sluggish, Japan is still adjusting while the US is recovering. Boosting trade among Asean nations may also not work as Asean has trade ties with China. That is why the TPP (Trans Pacific Partnership) is good. The council is a good idea but it will take some time to have an effect,” said one.