04/07/2025

FRIDAY | JULY 4, 2025

14

BIZ & FINANCE

Pact to spur cross-border manufacturing

o UOB signs MoU with Malaysian and Singaporean federations to jointly tap opportunities and facilitate investments

From left: Soh, Ng, UOB deputy chairman and CEO Wee Ee Cheong, Singapore Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong and Liew at the Asean Conference in Singapore.

PETALING JAYA: In a move to bolster regional economic integration and facilitate foreign direct investment (FDI) flows, United Overseas Bank (UOB) signed a tripartite memo randum of understanding (MoU) with the Federation of Malaysian Manufacturing (FMM) and the Singapore Manufacturing Federation (SMF) at the Asean Conference held in Singapore yesterday. The partnership aims to strengthen the Malaysia-Singapore manufacturing corridor by leveraging UOB’s regional network and sectoral expertise to help businesses, especially SMEs, scale across borders, access new markets, and grow sustainably. The collaboration supports the 2025 Asean Summit’s theme of inclusivity, ensuring that businesses of all sizes can participate in and benefit from regional growth. It also builds on the momentum of the Johor-Singapore Special Economic Zone (JS-SEZ) agreement between both governments. Deputy Investment, Trade and Industry Minister Liew Chin Tong

said, “One of the key visions laid out for the JS-SEZ is to establish a better integrated and resilient supply chain ecosystem across the Malaysia Singapore border. Both Johor and Singapore can leverage on our com plementary capacities, join hands to drive innovation and enhance productivity. This MoU between FMM, SMF and UOB is therefore timely and propitious to align the strengths of Malaysia and Singapore for greater regional economic growth in the current global trade climate.” UOB Malaysia CEO Ng Wei Wei said, “UOB is proud to have been an early supporter of the JS-SEZ, launching initiatives such as the Green Lane with Invest Johor and setting up dedicated SEZ Desks and introduced a fast-lane account opening services. Since 2024, UOB has committed RM11.5 billion in financing to support businesses in Johor and is actively facilitating RM10 billion of FDI flows into the zone. Through this MoU, we look forward to working with FMM and SMF to help their members seize cross

opportunities, foster innovation, and become integral players in Asean’s evolving industrial landscape.” SMF president Lennon Tan said, “Asean’s competitiveness rests on how quickly our manufacturers can inno vate, scale and connect. Through this partnership with UOB and our Malaysian counterpart FMM centred on the Johor-Singapore Special Economic Zone, SMF will help businesses to seize cross-border opportunities, accelerate innovation, and strengthen supply chain resilience. Together we will open clearer paths to capital, talent and technology, enabling sustainable growth and keeping the Malaysia-Singapore manufacturing corridor competitive and future-ready.”

tailored market entry and in-market guidance, to FMM and SMF members. These services will help businesses navigate the financial and operational aspects of establishing a presence in Singapore, Malaysia and across Southeast Asia. FMM president Tan Sri Soh Thian Lai said, “This collaboration sets the stage for more cross-border success stories under the JS-SEZ. FMM is committed to supporting our mem bers in leveraging this important bilateral initiative to build stronger regional connections. With the sup port of UOB and SMF, our manu facturers, especially SMEs, will be better equipped to pursue growth

border opportunities and contribute to Asean’s industrial growth.” Reflecting the bank’s long-term commitment to Asean’s sustainable economic growth, the MoU outlines two key objectives. The first is to promote opportunities by facilitating and exploring business opportunities and cross-border projects in the region, particularly between Singapore and Malaysia, for stakeholders and ecosystem partners. The second is to deepen collaboration by driving joint business, trade and investment initia tives focused on strengthening the cross-border manufacturing ecosystem. To support these efforts, UOB will provide advisory services, including

Inclusion must be at heart of subsidy reform: Expert

Selangor policy to speed up business

low-cost economic model – anchored by broad subsidies and price controls – is increasingly showing signs of strain. He said while this approach historically enabled competitiveness and affordability, especially for lower-income groups, the system may now be holding the country back. “We’ve built our economy on being cost competitive – producing and selling goods at low prices both domestically and inter nationally. But that model is fraying,” Fraziali said at the forum. He said subsidies have played a central role in sustaining Malaysia’s affordability model, particularly in essential sectors such as fuel, utilities, and food. However, the policy’s effectiveness is diminishing. “Subsidies are not inherently bad. However, we have over-extended them to their limits. We have maxed out the role of price controls and subsidies to the point where, instead of helping, they are starting to hinder further progress.” Fraziali said massive subsidies – estimated at RM60 billion with RM50 billion alone on fuel – have increasingly become regressive, benefitting the wealthier population more than the poor. And with the current fiscal situation, continuing this trajectory is neither sus tainable nor equitable. “We must shift away from blanket subsidies that distort prices and adopt better-targeted, inclusive policies. If we want to reform subsidies, we need to do it gradually, with floating prices and mechanisms to protect the vulnerable,” Fraziali said. Beyond subsidies, he said Malaysia is grappling with a broader cost-of-living crisis, a challenge that is both structural and global. While the official inflation rate is relatively low, reported at just 1.2%, many households continue to struggle. “Affordability shouldn’t come at the expense of progress,” Fraziali said.

universal approach is more just and effective. In countries like Indonesia, he cited, programmes such as subsidised petrol have inadvertently caused hardship for the poor, forcing them to queue for basic entitlements and suffer the indignity of being publicly marked as “needy”. If subsidy rationalisation is to be implemented, Muhammed said, it should be done gradually, with price floating introduced carefully to avoid shocks to vulnerable groups. “At the heart of reform must be the principle of inclusion – not exclusion.” Muhammed also addressed broader fiscal and governance challenges. He said Malaysia’s taxation system is described as regressive, where individuals are taxed heavily on basic consumption and wages but lightly on dividends and luxury assets. “For instance, buying a cheap car incurs tax, while luxury vehicles often escape it. Salary earners may pay up to 24% in taxes, but dividend income is taxed at only 2%,” Muhammed pointed out. He questioned how tax revenue, parti cularly the recently introduced expanded Sales and Service Tax, is utilised. He said investing in megaprojects such as high-speed rail, which mainly benefit the top 1% to 3% of the population, was criticised as an inefficient use of public funds, especially in the early stages of budget reform. Instead, spending should focus on public goods such as education, healthcare and public transport – services that benefit the majority. “Ultimately, it comes down to governance. Countries with high tax rates, like those in the Nordic region, also have high trust in government and low levels of tax evasion. “Why? Because their citizens see tangible outcomes: clean governance, quality public services, and accountability. When trust exists, people are more willing to contribute to the system,” Muhammed said. Bank Negara Malaysia assistant governor Fraziali Ismail said Malaysia’s long-standing

Ű BY JOHN GILBERT sunbiz@thesundaily.com

approvals out in October CYBERJAYA: Speed Selangor will be launched in October to streamline and accelerate business and investment-related approvals in the state, said Menteri Besar Datuk Seri Amirudin Shari. He said the policy aims to fast track six to seven types of approvals under local authorities (PBT) to ease processes for developers and investors. “We plan to launch it at the Selangor International Business Summit in October. It consolidates various initiatives previously introduced by local councils. “Some PBTs already had their own express green approval systems. Now, we are integrating these into a single, unified framework for broader implementation,” he told a press conference after officiating the Publicity and Public Participation Programme for the Sepang Municipal Council Draft Local Plan 2035 (Replacement) yesterday. Amirudin said officers are undergoing training to ensure the smooth rollout of the policy. “The initial focus is on development and investment approvals. Processes that typically take two months could be shortened to one.” He added that the policy may later be extended to cover public-facing services such as citizen complaints and home renovation applications. “One of the most common issues raised is the approval process for home renovations. This could also benefit from the Speed Selangor approach. Through this initiative, the public will experience direct and meaningful economic impact,” he said. The policy aims to enhance existing procedures to deliver faster, more efficient services to investors, developers, and the public. On another matter, Amirudin said the issue of illegal waste dumping requires coordinated enforcement and legislative reform. “We need stronger legal provisions to allow firm action, including seizures and heavier penalties for landowners and operators involved.” – Bernama

KUALA LUMPUR: Subsidy reform is often considered a necessity, especially as govern ments grapple with fiscal constraints. However, the way subsidies are targeted can have serious implications for the poor. Dr Muhammed Abdul Khalid, research fellow at Institute of Malaysian and International Studies (Ikmas), Universiti Kebangsaan Malaysia said targeted subsidies frequently fail to reach the most vulnerable segments of society. Citing global examples, Muhammed highlighted Brazil’s experience, where targeted median subsidies excluded a signi ficant portion of the bottom 20% to 30% of the population. Similarly, he said, the Philippines cash transfer programme, one of the largest of its kind, also failed to include many in the lowest income bracket. “Even in Malaysia, studies conducted before and during the Covid-19 pandemic found that around 30% of those living in low cost housing did not receive any form of cash aid. “In 2022 alone, 30% of needy residents in Kuala Lumpur were excluded from assistance,” he said at the Intellectual Discourse @ INCEIF titled “The Rising Costs vs Flat Wages – Escaping the Wallet Squeeze” panel discussion yesterday. Muhammed said this consistent pattern of exclusion underscores a key point: targeting the poor is inherently difficult, whereas identifying and excluding the rich is far easier. “Administrative databases more promi nently display the rich due to their smaller numbers. The poor, however, often fall through bureaucratic cracks due to informal employment, inconsistent documentation, or geographic isolation.” Muhammed said rather than stigmatise the poor with means-testing and labelling, a