'RM17b may be lost due to ineffective, inefficient regulations'
AN estimated RM17 billion, or about 2.5 per cent of Malaysia's gross domestic product (GDP), would likely have been "lost" in 2009 due to ineffective and inefficient departmental regulations, a senior industry official said.
Instead of being a boon to the development of a competitive business environment, much of the over 1,000 regulations currently in place are creating draining effect on the national economy.
The billion-ringgit losses suffered by the country's economy and business community annually could have been averted if reviews of departmental regulations were carried regularly, Malaysia Productivity Corp (MPC) director-general Mohd Razali Hussain said.
"The 2.5 per cent figure is an assumptive figure. It could be more but that is the figure we assume reflects the annual cost of regulatory burden expressed as a percentage of our GDP.
"As our GDP grows, the annual lost would be higher unless immediate steps are taken to review departmental regulations which are contributing to higher cost of doing business in Malaysia," he told reporters after the opening of a seminar on "Modernising Business Regulation" in Ipoh, Perak, yesterday.
Razali said the government had tasked the MPC, a statutory body under the Ministry of International Trade and Industry, to carry out reviews on all regulations at the ministerial, departmental and local council levels.
It would review and recommend policy or regulatory changes with a view of removing unnecessary rules and compliance costs.
"The expected outcome includes simplified processes and procedures which will facilitate the ease of doing business in Malaysia, therefore ensuring the government's target of achieving high-income economy and developed nation status by 2020".
He said MPC had collaborated with Australia Government Productivity Commission and University Malaya Malaysian Centre of Regulatory Studies for technical expertise, comprehensive scanning, capacity building, regulatory review and benchmarking programmes in pursuit of more cost-effective and efficient regulations.
"Our target is to reduce regulatory burden by 25 per cent this year. Just that much reduction will result in savings of RM4 billion. That is a sum of money that can be used for massive expansion in the business sector," he said.
Razali also said MPC had set up its own Department of Regulatory Review to review existing regulations to meet the objectives of the New Economic Model especially in the 11 key economic areas and the 10th Malaysia Plan.
He said MPC's recommendations to improve regulatory processes would be submitted to the Cabinet on a regular basis.
Instead of being a boon to the development of a competitive business environment, much of the over 1,000 regulations currently in place are creating draining effect on the national economy.
"The 2.5 per cent figure is an assumptive figure. It could be more but that is the figure we assume reflects the annual cost of regulatory burden expressed as a percentage of our GDP.
"As our GDP grows, the annual lost would be higher unless immediate steps are taken to review departmental regulations which are contributing to higher cost of doing business in Malaysia," he told reporters after the opening of a seminar on "Modernising Business Regulation" in Ipoh, Perak, yesterday.
Razali said the government had tasked the MPC, a statutory body under the Ministry of International Trade and Industry, to carry out reviews on all regulations at the ministerial, departmental and local council levels.
It would review and recommend policy or regulatory changes with a view of removing unnecessary rules and compliance costs.
"The expected outcome includes simplified processes and procedures which will facilitate the ease of doing business in Malaysia, therefore ensuring the government's target of achieving high-income economy and developed nation status by 2020".
He said MPC had collaborated with Australia Government Productivity Commission and University Malaya Malaysian Centre of Regulatory Studies for technical expertise, comprehensive scanning, capacity building, regulatory review and benchmarking programmes in pursuit of more cost-effective and efficient regulations.
"Our target is to reduce regulatory burden by 25 per cent this year. Just that much reduction will result in savings of RM4 billion. That is a sum of money that can be used for massive expansion in the business sector," he said.
Razali also said MPC had set up its own Department of Regulatory Review to review existing regulations to meet the objectives of the New Economic Model especially in the 11 key economic areas and the 10th Malaysia Plan.
He said MPC's recommendations to improve regulatory processes would be submitted to the Cabinet on a regular basis.
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