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ASEAN Community -a Historical Moment!

The ASEAN Community (AC) will come into being on 31st December, 2015 a landmark achievement for the 48-year-old regional association whose member countries have wide diverse social, economic and political backgrounds.

The community will be larger in terms of population than the European Union or North America, and could rival India and China in the years to come. The 10 Asean leaders inked the historic declaration yesterday that entails greater integration of the region of over 600 million people.

The regional community is a monumental effort by every regional member country to bring their nations closer through greater economic integration and social uplift, while ensuring the region remains secure and stable.

Prime Minister Datuk Seri Najib Tun Razak said the idea of a community started in Bali 12 years ago, followed by blueprints and action plans.

“And today, on behalf of Asean member states represented at the 27th Asean Summit here in Kuala Lumpur, it is my solemn duty and privilege as the chair of Asean 2015 to pronounce the establishment of the Asean Community on December 31,” he said at the signing of the Kuala Lumpur Declaration on the Establishment of the Asean Community.

At the event, Malaysia and the leaders of the nine other Asean nations – Brunei, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam – also signed the Kuala Lumpur Declaration on Asean 2025: Forging Ahead Together.

Six of the grouping’s eight dialogue partners – Australia, China, India, Japan, South Korea and Russia – as well as United Nations secretary-general Ban Ki-moon were present.

The AC comprises three core pillars, namely the Asean Political Security Community (APSC), Asean Economic Community (AEC) and Asean Socio-Cultural Community (ASCC).

Najib said Asean would now have to ensure that a truly single market and production base was created with more free movement of goods and services, as this – having common product standards, greater connectivity and removal of trade barriers – would be one that was primed to expand.

“As it is, our combined GDP is expected to reach US$4.7 trillion (RM20 trillion) by 2020. According to one forecast, Asean has the potential to be the fourth largest economy in the world as early as 2030, which is only 15 years from now."

The AC goes beyond economy, said Najib, pointing out that it is also about recognising the special ties that bind the people and “making our citizens feel that Asean courses through their veins.”

“Our Asean Way has guided us and will continue to be our compass as we seek to realise a politically cohesive, economically integrated, socially responsible and a truly people-oriented and rules-based Asean,” he said.

“It is important that we list down some low-hanging fruits that can be delivered every year until we reach 2025, which is at the end of the 10-year blueprint under the Asean Community,” he said.

/theSTAR 23-11-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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Hard times like this: Part 2 ...

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There are always opportunities in a gloomy economic situation for Companies that have established business plan, processes and strong management.

With the Malaysian Ringgit weakened against its trading partners, export oriented Companies will have more demands on their goods. The strong foreign currencies will make Malaysian goods very affordable and competitive for the importing Countries.

Depending on the percentage of the domestic components in the product content of the Malaysian exporter Company, the profit margin will vary.

A Company which have a high local content, which are purchased in the Ringgit, will definitely have a higher profit than those that have lesser when the payment of the goods are paid in the foreign currency particularly the USD!

The USD currency is the global dominant trading currency. Depending on the foreign currency traded Companies will enjoy different percentage/value of forex gain.

Companies may convert the foreign currency immediately upon realisation of payment. Some may "deposit" the receivables in forex account for future payments in foreign currency.

Companies that are highly impacted by the USD may also consider that their future trading transactions should be a mix of foreign currencies rather than on a single currency as each currency have different impact on the Ringgit.

For Companies that are not export driven, but have opportunity to do so, may have to embark to do so, in order to have a healthy revenue stream of domestic and foreign earnings.

With the dynamism and changing world economy and the expected introduction of the TPPA, whether the Country is a signatory to or not, in a short few years, the challenges of the world trading system will see great paradigm shifts and business behaviour.

Thus, this present situation, is a glimpse of what could be expected in the years to come where the geographies of the world are intimately linked and flattened with almost borderless, equitable and fair, may be deemed distorted in some smaller economies, trading environment.

Let all Malaysian Companies be prepared ...

/07-11-2015

Hard times like this: Part 1 ...

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In a difficult and challenging economic situation, whatever the reasons, there is an indeed a moral obligation, for organisations to reach out and help relief the economic burdens of the citizens of the Country to the best of their abilities.

There is uncertainty as to when this economic plight would come to a landing.

Malaysian consumers are burdened with price hikes for almost all of their basic needs with the introduction of GST (Good & Services Tax) in April 2015. They are now more careful and selective in their spending. There is an erosion of their purchasing power. Many are now "buying when necessary and in smaller quantity", resorting to more "eating at home" and taking other measures to stretch and conserve their dwindling ringgit.

The business community is also facing difficult moments with revenues affected with the weakening of the Malaysian Ringgit against major trading currencies. Their cash flow is also affected with the introduction of GST (Good & Services Tax) in April 2015.

The Country's economy is no better with low crude oil and commodity prices.

On the whole, everyone is adversely affected.

To be sustainable, importers and domestic businesses, must be able to generate adequate revenue, with decent profit margin, to keep afloat until the worse is over. The following, general and basic action plan, not exhaustive, could be adopted either singly or otherwise, on a temporary basis until a more permanent or better solutions be found:

1) business must absorb some incremental cost and thus accept a lower profit margin. If absolutely necessary, have a minimal price increase as well.
2) negotiate with foreign Suppliers for lower cost of goods to tie over this difficult moment. Or offer more "free goods" or price discounts with purchases.
3) review your other purchases of goods and services for efficient inventory and pricing control eg stationery, logistic deliveries
4) negotiate to share cost with your local trade partners by lowering their profit margin.
5) reduce or discontinue samples, free goods or bonus to your trade partners
6) get professional advice on hedging your purchases. Get close to your Bankers.
7) get additional financial facilities from your Banks if you have to.
8) improve on your account receivables ie reduce credit days. This will improve liquidity and reduce bank borrowings in order to enhance financial performance.

Laying staff should not be in the equation. In fact they are great assets to help you go through this period of uncertainty. Effective leadership is the key to drive business continuity.

/06-11-2015

IHH: Opens RM 400mil Hospital in Johore

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IHH Healthcare Bhd will soon open its RM400mil Gleneagles Medini Hospital in Nusajaya, Johor.

The hospital, located on a 6ha land in Medini Nusajaya, is the 14th hospital in Malaysia by Parkway Pantai after Gleneagles Kota Kinabalu, which was opened in May 2015.

Parkway Pantai is a unit of IHH Healthcare and is one of the region’s largest integrated private healthcare groups with a network of 23 hospitals and more than 5,000 beds throughout Asia including Singapore, Malaysia, Brunei, India, China, Vietnam and the United Arab Emirates.

Gleneagles Malaysia CEO Datuk Amir Abdullah Firdaus said the opening of the new medical facility would put Iskandar Malaysia at the forefront of healthcare in South-East Asia.

“We have the latest medical equipment that can be found nowhere else in Johor except in Gleneagles Medini with 250 staffs including 40 consultants. Besides that, we will also be working closely with other agencies and our counterparts in particular from Singapore to attract foreign visitors to come here,” he said.

With the medical tourism market growing rapidly, Malaysia as a whole stood to gain to meet the demand for better healthcare service. The current weakened ringgit, would be able to attract more foreign visitors to come here for medical healthcare.

“Our Gleneagles Penang has seen high number of foreign patients where 70% of those are Indonesians while Gleneagles Kuala Lumpur have a balance number of nationals as we are strategically located among various embassies and large number of South Korean community living within the area.

“The healthcare services provided by us also include plastic and reconstructive surgeries,” he said.

He added that the hospital would have five centres of excellence, namely cardiology, orthopedics, women and children, oncology and ophthalmology.

The hospital, according to Amir, is equipped and designed to meet Joint Commission International (JCI) and Malaysian Society for Quality in Health (MSQH) accreditation standards.

/theSTAR 30-10-2015

Malaysia as Regional Halal Hub

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Malaysia has called on global pharmaceutical producers to consider the country as the new regional hub to cater for the expanding global halal market.

In making the call, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said local industry players should also keep track of the latest know-how and technologies.

"Local industry players should double their efforts to position Malaysia at the forefront of the global healthcare and pharmaceutical industry," he said when opening the Halal Initiatives in Healthcare Industry Forum here today.

Also present was Halal Industry Development Corporation Chief Executive Officer Datuk Seri Jamil Bidin.

Ahmad Zahid said the global demand for halal pharmaceuticals is estimated to be worth RM 349 bil (USD 82 bil) but the current supply is estimated at only RM 8.5 mil (USD 2 mil).

"There is certainly a huge opportunity here with a very promising future and this is where Malaysia holds some of the keys. As at August this year, there were already 110 Halal-certified pharmaceutical manufacturers in Malaysia including 24 export-ready manufacturers."

"There are also opportunities to capitalise on Malaysia's diverse natural flora and fauna to develop resource-based bio-generic drugs. Malaysia is one of the world's 12 most bio-diverse countries and offers high potential for sourcing active compounds for healing and wellness products," he said.

On Halal tourism, Ahmad Zahid said Malaysia is the top destination and as a leader, the nation could certainly complement the wider medical tourism sector especially for Muslims worldwide.

Malaysia expects to see overall arrivals of more than 930,000 medical tourists with estimated revenue reaching RM1 billion annually, he said.

/Bernama 28-10-2015

Ease of Doing Business 2016 Report: Malaysia ranks 18th in the World.

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Released recently in late October 2015, the "Doing Business 2016: Measuring Quality and Efficiency" Report finds that East Asia and the Pacific is the second most represented region, after Europe, in the world's top 20 economies.

For the 10th consecutive year, Singapore ranks number one in the world on the World Bank Group's annual ease of doing business measurement. Thailand ranked third place among ASEAN countries on the ease of doing business after Singapore and Malaysia.

Other economies in the Asia Pacific region among the top 20 economies are New Zealand (at No. 2), South Korea (4), Hong Kong (5), Taiwan (11), Australia (13) and Malaysia (18). Malaysia improved from the 20th spot in 2014.

The report recognised Malaysia with the most business-friendly regulations, and acknowledged the country’s significant improvements in regulatory processes.

Among the 189 global economies, Malaysia is ahead of Switzerland (26th), France (27th), Netherlands (28th), Japan (34th), United Arab Emirates (31st), Thailand (49th), China (84th) and India (130th).

/Bernama 28-10-2015

Malaysia: Budget 2016 - Health Sector

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Budget 2016 was announced by the Finance Minister on 23rd October 2015.

RM23.03bil has been allocated for healthcare representing 8.6% of the overall sum.

Other countries whose percentages are similar to ours include the United Arab Emirates (8.7%) and South Africa (9.1%).

On the higher end of the scale, countries like Sweden allocate 13.8% of its budget on healthcare, while Norway and Canada spend 17.9%.

Contrast this with countries such as Pakistan, with 1.3% of its annual expenditure on healthcare, Morocco (4.8%), India (3.4%) and Indonesia (6.2%).

After receiving feedback from various segments of society including NGOs, effective from 1 January 2016, the Government had agreed to forego the GST revenue on several basic necessities .

One of which is the "Zero-rating" of all types of controlled medicines under the Poisons List Group A, B, C and D as well as an addition of 95 brands of over-the-counter medicines.

With this latest development there is a double increase from 4,215 to 8,630 brands of medicines.

The medical fraternity and patients hailed these additions. However they were disappointed that the tax was not removed for all healthcare services.

Malaysian Medical Association (MMA) president Dr Ashok Zachariah Philip said cancer patients using newer drugs, for instance, could save RM400 to RM600 from zero-rated drugs because it could cost thousands a month.

He said GST imposition should be totally removed from all healthcare services because when imposed, doctors with taxable turnover of more than RM500,000 would add the cost to the overall cost and pass it on to patients.

He also welcomed more hospitals and clinics being built as the growth had been slow the last few years but did not agree to the building of 1Malaysia clinics as the capacity of services was limited.

Five new hospitals to be built in Pasir Gudang, Kemaman, Pendang, Maran and Cyberjaya.

Kajang Hospital to be rebuilt and upgrading of rural and urban health clinics. The RM 848mil Kuala Lumpur Women and Children’s Hospital will commence operations next October.

RM 72mil in medicine assistance, including haemodialysis, for 10,000 patients.

RM 4.6bil for medicines, consumables, vaccines and reagents to all government hospitals and clinics.

RM 52mil to open new 1 Malaysia clinics and to continue 328 others. Ministry statistics have shown that the number of people seeking the services of 1Malaysia clinics increased from 1.32 million in 2010 to 4.42 million in 2013.

RM 260mil for building and enhancing community, health and dental clinics nationwide.

/theSTAR 24-10-2015