Sept 13: Text of the speech by Prime Minister and Finance Minister DatukSeri Dr Mahathir Mohamad while introducing the Supply Bill (2004) at theDewan Rakyat yesterday. ..........

Research and development (R&D)

The second national science and technology policy was formulated toachieve R&D expenditure of at least 1.5 per cent of GDP by 2010. Towardsthis end, the Government has provided substantial allocation to developexpertise and expand R&D facilities. To continue with these efforts, a sumof RM183.6 million is allocated for the Intensification of Research inPriority Areas (Irpa) programme, specifically for public researchinstitutions in collaboration with the private sector. In addition, threenew research institutions will be established in BioValley and Cyberjaya,specifically in biotechnology. The Government will encourage largecompanies to relocate to BioValley to undertake contract research as partof efforts to further develop the services industry.

Our R&D efforts have contributed significantly to increases in yield ofcommodities, especially oil palm and rubber. The yield of commodities perhectare has doubled and their maturity period shortened. Apart fromincreasing output, research institutions have also undertaken downstreamresearch, such as biodiesel from oil palm and rubber thermoplastic.

In the light of declining contribution of commodities to the economy, itis timely that R&D institutions refocus their efforts towards greaterdemand and market-driven R&D that emphasise value-added or value creation,with the view of commercialising their research findings.

For example, the global market for health care and life sciences productsand services is expected to reach four trillion euros whilepharmaceuticals 30 billion euros by 2006. In Malaysia, biotechnology isstill an infant industry. Although currently there are about 60biotechnology companies, they are still small and have yet to reachworld-class status.

The Government will restructure Sirim to become the focal point to matchR&D with market demand. Sirim will identify the requirements for newproducts and technology for both the domestic and global markets. It willalso study the whole R&D value chain to create value, including nicheactivities such as logistics, packaging and marketing.

The Government through Sirim will also identify R&D requirements based onmarket demand and match them with R&D capacity in universities andresearch institutions. As this represents a long-term investment indeveloping our local technology to produce high quality Malaysian brands,the Government will provide adequate funds for this purpose. The nationhas the expertise and capacity to undertake R&D to meet market demand. Forexample, we have more than 1,000 doctorates, apart from adequatefacilities and funding for R&D.

To promote the commercialisation of research findings, the Governmentproposes that income received by researchers from such activity be giventax exemption of 50 per cent for five years. At the same time, theGovernment will not impose charges on patents registered by localresearchers.