Article Abstract:
The budget that Malaysian Deputy Prime Minister Datuk Seri Anwar Ibrahim released to parliament on Oct 27 came out to a reception as mixed as the messages it sends. Malysia's currency and the main stockmarket index both slipped slightly, and analysts differed on whether the new measures will do enough to curb the country's impressive growth rate. It proposes lower tax rates, higher salaries for govt workers, and measures to favor savings over consumption. A huge current-account deficit remains a major concern.
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Article Abstract:
Malaysia's robust economic growth has the central bank worried about inflation and the ministry of international trade and industry rejecting more international investment applications. The government wants to emphasize greater productivity and added value rather than luring investment with low wages, given more competition on that front. Overall investment and consumption are both growing strongly, heightening inflationary pressures. A hike in interest rates has not yet made them unattractive to foreigners.
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Article Abstract:
Malaysia's phenomenal growth over the past decade is both its greatest strength and a potentially debilitating weakness. The govt points to GDP growth rates of 8.9% and rising, with inflation and unemployment in 1994 at 3.7% and 2.9% respectively. Opponents say those figures mask problems of affordability and environmental degradation. Certainly investment has driven the boom, and sustaining it without further harm to the environment is one crucial task. Greater austerity may follow the Apr 1995 elections.
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