Prices of sugar, petrol, LPG, diesel to go up Friday

Subsidy removed for RON 97 petrol

KUALA LUMPUR: From Friday, the subsidies for sugar, petrol, liquefied petroleum gas and diesel will be cut as part of the gradual subsidy rationalisation programme, according to a statement from the Prime Minister’s office on Thursday.

The price of sugar will go up 25sen to RM1.75 per kg; LPG will go up 10sen to RM1.85 per kg; petrol RON95 will be up 5sen to RM1.85 per litre and diesel will be up 5sen to RM1.75 per litre.

RON 97 will no longer be subsidised. It will be subjected to a managed float, where the price will be determined by the automatic pricing mechanism, the statement said.

The details of these changes are now available on the PMO and PEMANDU websites, at: www.pmo.gov.my and www.pemandu.gov.my.

On May 27, Minister in the Prime Minister’s Department Datuk Seri Idris Jala had said that Malaysia would be bankrupt by 2019 if it did not cut subsidies and rein in borrowings.

He had said that Malaysia's debt would rise to 100% of GDP by 2019 from the current 54% if it did not cut subsidies.

Meanwhile, In ALOR SETAR, Prime Minister Datuk Seri Najib Tun Razak said that when implementing the subsidy rationalisation plan, the Government would seek not to burden the people.

He said the rationalisation move was necessary to reduce Government expenditure and strengthen the financial position of the country.

“It will help reduce the fiscal deficit so that world and local markets will have more confidence in the national economy,” he told newsmen after opening the Kuala Kedah Umno division meeting here on Thursday.

He added that the Government was reviewing all types of subsidies.

The full press statement from the Prime Minister’s office is below:

1. To help Malaysia maintain the strong growth it has achieved, the Government has implemented difficult but long-needed economic reforms that will help Malaysia become a developed and high-income nation. In this regard, the Government has begun a planned and fair reform of a subsidy regime that for too long has been ineffective in helping those who need it most and, over time, has become a barrier to Malaysia’s progress.

2. The Government has made bold economic decisions over the past two years. Two stimulus packages were introduced, promoting growth, even as the global financial crisis spread. Important sectors of our economy further liberalised were opened to new investment.

The Government cut spending by RM24 billion, by reducing waste and inefficiency. As a result, the country’s economy has been reinvigorated, with 10.1% growth in the first quarter of 2010, Malaysia’s best performance in a decade. Although there is still instability in the global economy, Malaysia is well positioned for the future – not by chance, but by the choices we have made together.

3. As set out by the Prime Minister when he announced the 10th Malaysia Plan, Malaysia’s national goals cannot be achieved by simply managing through a crisis. Malaysia’s ambition is to be a high-income nation, with opportunity for all.

4. In the New Economic Model, the Prime Minister set out plans for further investment in key strategic sectors, upgrading our infrastructure, creating additional private sector investment opportunities and realizing higher levels of GDP growth.

However, growth alone will not allow us to meet our goals. As the Government has consistently said over recent months, we must also implement subsidy reforms that will remove distortions in the marketplace and enable us to better target our resources on those most in need, and on investments that will provide lasting benefits for Malaysians.

5. With these priorities in mind, the Cabinet has decided that, effective 16 July 2010, subsidies for fuel, specifically petrol, diesel and liquefied petroleum gas (LPG), as well as sugar, will be reduced as the first step of a gradual subsidy rationalisation programme.

Subsidies for RON 95 and diesel will be reduced by 5 sen per liter. LPG will be reduced by 10 sen per kilogram. RON 97 will no longer be subsidised. It will be subjected to a managed float, where the price will be determined by the automatic pricing mechanism. For sugar, the upward price adjustment will be 25 sen per kilogram. The details of these changes are now available on the PMO and PEMANDU websites, at: www.pmo.gov.my and www.pemandu.gov.my

6. These minimal changes will help Malaysia achieve a position of fiscal responsibility and put us on a path toward reducing our deficit. To meet these objectives, we have chosen to make adjustments to our subsidies. Even after these changes, the Government will still spend an estimated RM 7.82 billion on fuel and sugar subsidies in 2010. The prices of fuel and sugar in Malaysia will still be among the lowest in the region.

7. This subsidy rationalisation will, according to estimates, allow Malaysia to reduce Government expenditure by more than RM 750 million in 2010.

8. The decision to reduce subsidies for fuel and sugar is based on the fact that reducing fuel subsidies will have the greatest impact on government spending and reducing sugar subsidies will allow us to promote healthier lifestyles. The decision is also grounded on three main concerns:

a. First, these subsidies also benefit foreigners and wealthier Malaysians, who can well afford to pay unsubsidised prices. Our focus should be on helping the family sharing a motorcycle or Kancil to get to work and school, but instead our spending on subsidies has provided the same benefits to those driving imported luxury cars.

The sugar subsidy disproportionately benefits industries, not families. Businesses have been using almost twice as much subsidised sugar as Malaysian households.

b. Second, highly subsidised prices often lead to illegal smuggling of these goods. Because subsidies make these products the cheapest in the region, in 2009 alone smugglers were caught heading out of Malaysia with more than 200 metric tonnes of sugar to be sold across borders.

Also, subsidised diesel continues to go to the black market or across our borders, instead of to those we meant to assist. Law enforcement have been doing their best to prevent smuggling, with 109 sugar related arrests last year. This is the tip of the iceberg. As long as there are big price differences, smuggling will continue. And:

c. Third, unless we reduce our consumption of fuel and sugar, we face potentially serious consequences as a nation. We are quickly depleting our domestic fuel resources. It is vital that we rationalise our fuel use – as well as develop new energy technologies - as a matter of economic, energy and national security.

In this regard, we have implemented a number of policies to protect the environment. We must also reduce our sugar consumption. 40 percent of Malaysians are now either overweight or obese.

Incidents of diabetes are rising quickly. Statistics show that the percentage of Malaysians with diabetes now exceeds that in the United States. We must, as a matter of urgency, take every step available to tackle what is clearly a public health issue for our nation. Reducing sugar consumption, among our children in particular, is a step in the right direction.

9. These are among the reasons why the Government has chosen to focus on sugar and fuel subsidies. Subsidies for education and health care will continue. These are areas of importance for our economy and our society where the Government should be investing.

These include, providing support to develop skills, training the knowledge based workforce of the future and improving the well-being of the nation.

10. The Government arrived at this decision following robust consultations with the people. Thousands of Malaysians participated in the policy labs, Open Day and an unprecedented public feedback process.

As with subsidy reform, the budget, the Government Transformation Program and now the National Key Economic Areas, the Government has made a determined effort to engage the public, listen and learn, and then act in the best interest of the nation.

11. These measures are designed to have a minimal impact on individual families, but long-term benefits for the nation. The reduction in expenditure from these reforms will allow us to better use resources for families, communities and business growth.

Measures such as the 1Malaysia clinics, the 1Malaysia mobile clinics, as well as the scholarships for all 9A+ and deserving students, specifically those who have done well, but come from lower income families, are made possible by such reforms.

Similarly, by reducing expenditure on subsidies we will be able to continue strengthening such initiatives as the price standardisation project, which seeks to harmonise prices of essential goods between urban and rural areas in Sabah and Sarawak.

12. The Government has made a difficult, but bold decision. By choosing to implement these modest subsidy reforms, we have taken a crucial step in the right direction towards meeting our commitment to reduce the fiscal deficit, without overburdening the Malaysian people.

These measures are a demonstration of our fiscal responsibility. They will enhance Malaysia’s financial stability, while also protecting the Rakyat.

Prime Minister’s Office
Putrajaya
15 July 2010

Ringgit, government bond yields up on rates hike

KUALA LUMPUR: The hike in interest rates, which the market now expects to be the last for the year, drove the ringgit up and saw a rise in yields of short-term government bonds.

The ringgit appreciated against the dollar yesterday following the 25-basis-point rise in Bank Negara’s overnight policy rate (OPR) to 2.75%, with traders now expecting the local currency to continue to strengthen in the short term.

CIMB Investment Bank regional rates and foreign exchange strategist Suresh Kumar Ramanathan said the ringgit, which rose to 3.19 against the dollar yesterday, was pointing towards further strengthening.

He said the hike in interest rates made the ringgit an interesting carry-trade proposition for traders.

“Interest rates are pretty high to attract more capital flows into the market,’’ he said.

The monetary policy statement on Thursday was dissected by the market and the general consensus is that Bank Negara would most likely stand still now after raising domestic interest rates by 75 basis points this year.

Analysts said the previous statement, which alluded to further normalisation of interest rates, was omitted this time around.

They said this was replaced by a fresh stance whereby the Monetary Policy Committee (MPC) now considered the new level of the OPR to be appropriate and consistent with the current assessment of growth and inflation prospects.

“Taken together, these signals suggest that rate hikes are unlikely to come through in the future,’’ said Barclays Capital in a note yesterday.

“It appears that Bank Negara has created enough monetary policy buffer to respond to any downside risks.”

While the MPC’s assessment is for the global recovery to continue, it noted that there was increased risk that the global growth momentum could moderate.

But it pointed out that for the domestic economy, recent trends in key economic indicators such as industrial production, financing activity, labour market and external trade showed that economic activity had remained robust in the second quarter.

“While external developments may result in some moderation in the pace of growth, the domestic economy is expected to remain strong with continued improvement in private consumption and investment, and augmented by public investment spending,’’ MPC said.

Barclays Capital said the statement noted that recent economic indicators and trends would remain strong despite the recent gains in the ringgit. “This suggests that they are comfortable with the recent normalisation in the currency and would not stand in the way of further appreciation, provided this is fundamentally dictated,’’ it said.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng believes the strong domestic economic indicators might have pipped Bank Negara’s decision to let interest rates go up for the third time.

The market was divided over the prospects for such a hike, given the economic situation globally.

“The central bank is confident that domestic growth momentum can be sustained despite the slowdown in the second half-year in the European Union economies,” Yeah said.

Although the current level was still below the historical average, Yeah called it the “new normal” considering the benign inflationary concerns and the weak economic condition globally.

He felt that the hike was important to nip asset price inflation, especially in the property sector which was driven by super-low interest rates, before it got out of hand.

“The double-digit increase in some property segments is of some concern,’’ he said.

While households have seen a debt build-up in recent years to levels considered high for Malaysia, Yeah said the current level of interest rates was seen as a balance between what households could shoulder and what the business sector found it could live with.

“It’s a fine line. We believe this level will stay for the rest of the year,” he said.

Should interest rates plateau at this level, Maybank Investment Bank head of debt capital markets Michael Oh-Lau said the rally in the bond market, which had seen yields dropping as a result of foreign buying of Malaysian Government Securities, should continue.

The impact on the bond market is expected to be positive but Oh-Lau said one risk that could emerge from interest rates remaining stagnant was a rotation of money out of the Malaysian capital markets to other countries that had not raised their rates. “There might be some risk of the exit of foreign investors if this is the last hike,’’ he said.

With interest rates now projected to remain firm for the rest of the year, analysts said all eyes would now be on the yuan and its movement against major currencies.

“The ringgit is seen as a close proxy to the yuan and further strengthening of the ringgit will come from the pace of strengthening of the yuan,” said Yeah. “This will fit in nicely for Malaysia getting a slower pace of strengthening.’’

OPR up 25 basis points to 2.75pc

KUALA LUMPUR: Bank Negara Malaysia has decided to raise the overnight policy rate (OPR) by 25 basis points to 2.75 per cent.

The floor and ceiling rates of the OPR corridor are correspondingly raised to 2.50 per cent and 3.00 per cent respectively, the central bank said in a statement today.

"The Monetary Policy Committee considers the new level of the OPR to be appropriate and consistent with the current assessment of the growth and inflation prospects," Bank Negara said.

"The stance of monetary policy continues to remain accommodative and supportive of economic growth," it said.

Bank Negara said global recovery had continued in the second quarter, supported by robust and broad-based growth in most emerging economies, in particular Asia, and a moderate recovery in the advanced economies.

"Nevertheless, volatility in the international financial markets has increased following concerns over the ongoing sovereign debt crisis in several advanced economies," it said.

"These developments have raised uncertainties on the potential impact on the international financial system and the global economic activity. Going forward, while the assessment is for the global recovery to continue, there is increased risk that the global growth momentum could moderate."

On the domestic economy, Bank Negara said recent trends in industrial production, financing activity, labour market conditions and external trade indicated that economic activity had remained robust in the second quarter.

"Going forward, while external developments may result in some moderation in the pace of growth, the domestic economy is expected to remain strong with continued improvements in private consumption and investment, and augmented by public investment spending," it said.

"Domestic inflation recorded modest increases in April and May, mostly on account of supply factors. Prices are expected to rise at a gradual pace in the coming months, in line with the continued improvement in domestic economic conditions and taking into account possible adjustments in administered prices."

Overall, inflation is, however, expected to remain moderate going into 2011, the central bank said. - Bernama

UPSR and PMR exams may be abolished: Muhyiddin

MUAR: Deputy Prime Minister Tan Sri Muhyiddin Yassin said the Ujian Penilaian Sekolah Rendah (UPSR) and Penilaian Menengah Rendah (PMR) examinations may be abolished.

He said this was part of government efforts to restructure the learning system that as seen as too examination oriented and failed to provide a holistic education.

"We are mulling whether to retain the examinations or abolish them leaving only the Sijil Pelajaran Malaysia (SPM)," he said after opening the Pagoh Umno division delegates meeting here Friday.

Muhyiddin who is also Education Minister said UPSR and PMR might be retained but only as school-based assessments and not as public examinations.

However, the ministry would not act in haste and wanted the public to give feedback to help improve the public examination system.

He felt that only one public examination was needed as only the SPM was needed when seeking employment.

As such, the UPSR and PMR could be used to pick students for residential schools or streaming.

"With only one public examination, the teachers and students can focus on improving creativity, interactive and co-curricular activities and sports." he said. - Bernama

PM tables RM230bil 10th Malaysia Plan

KUALA LUMPUR: The Government has allocated RM230bil for development expenditure under the 10th Malaysia Plan. The allocation will comprise 55% for the economic sector, 30% for the social sector, 10% for security sector and 5% for general administration.

This was revealed by Prime Minister Datuk Seri Najib Tun Razak in his speech, when tabling the 10MP in Parliament on Thursday.

The key points of the 10th Malaysia Plan are:

- The gross national income per capita is targeted to increase to RM38,850, or US$12,140, in 2015. This requires achieving real GDP growth of 65 per annum. Growth will be led by the services.

- The 10MP is based on 10 ideas:

First: Internally driven, externally aware.

Second: Leveraging on our diversity internationally.

Third: Transforming to a high-income nation through specialisation.

Fourth: Unleashing productivity-led growth and innovation.

Fifth: Nurturing, attracting and retaining top talent.

Sixth: Ensuring equality of opportunities and safeguarding the vulnerable.

Seventh: Concentrated growth, inclusive development.

Eighth: Supporting effective and smart partnerships.

Ninth: Valuing our environmental endowments.

10th: The Government as a competitive corporation.

- To achieve the aspirations of the 10MP, five key strategic thrusts have been identified. They are:

First: Designing Government philosophy and approach to transform Malaysia using NKRA methodology.

Second: Creating a conducive environment for unleashing economic growth.

Third: Moving towards inclusive socio-economic development.

Fourth: Developing and retaining a first-world talent base.

Fifth: Building an environment that enhances quality of life.

- The Government will focus on efforts to develop non-physical infrastructure, including human capital development such as skills development and strong innovation capabilities. The 10MP allocation for non-physical infrastructure will be increased to 40%, compared with 21.8% in the 9MP.

Focus will be given to skills development programmes, R&D activities and venture capital funding geared towards promoting a higher level of innovation in the country.

- The main approach in transforming to a high-income economy will be to adopt strategies based on specialisation, given that strong and sustainable competitiveness is difficult to achieve without specialisation.

This Plan will focus on 12 national key economic areas or NKEAs which have potential to generate high income. Apart from 11 sectors, Greater Kuala Lumpur has also been selected as an NKEA as it has the potential to become a world-class city that can be a driver of economic growth. Details of the NKEA will be finalised in the Economic Transformation Programme, which will be announced in October.

The NKEAs are: (i) Oil and gas; (ii) Palm oil and related products; (iii) Financial services; (iv) Wholesale and retail; (v) Tourism; (vi) Information and communications technology (ICT); (vii) Education services; (viii) Electrical and electronic; (ix) Business services; (x) Private healthcare; (xi) Agriculture (xii) Greater Kuala Lumpur

An Economic Transformation Unit will be established to plan and coordinate the implementation and development of the NKEAs.

- The achievement of the 6% per annum growth target for the 10MP period requires a significant leap in investment activities, led by a more dynamic private sector. To achieve this goal, the Malaysian Investment Development Authority (MIDA) has been corporatised and rebranded.

In addition, business regulations which are outdated will be abolished. Towards this end, the Malaysian Productivity Corporation (MPC) will be restructured to spearhead a comprehensive review of business regulations and improve processes and procedures to increase productivity and competitiveness of major economic sectors.

- Healthy competition is needed to make the economy more efficient and dynamic. For this, the Competition Law will be introduced to provide a regulatory framework against market manipulation and cartel practices that may affect market efficiency. A Competition Commission and Appeal Tribunal will be established to ensure more orderly and effective implementation of the law.

- Smart and effective partnerships between the public and private sectors will be established to drive the economic transformation agenda. This new wave of public-private partnership (PPP) will ensure equitable sharing of risks and returns.

To date, 52 high-impact projects have been identified for implementation. These include:

First: Seven highway projects at an estimated cost of RM15bil. Among the projects are the West Coast Expressway, Guthrie-Damansara Expressway, Sungai Juru Expressway and Paroi-Senawang-KLIA Expressway.

Second: Two coal electricity generation plants at an estimated cost of RM10bil.

Third: Development of the Malaysian Rubber Board's land in Sungai Buloh, Selangor, covering an area of 3,300 acres at an estimated cost of RM10bil.

- An important measure in the 10MP is improving the method of financing for public venture capital companies. Currently, government financing for public venture capital companies, such as the Malaysian Technology Development Corporation and Malaysian Venture Capital, is provided through long-term loans. In this Plan, financing will be in the form of equity to match the risk profile of venture capital investment. For this purpose, the Mudharabah Innovation Fund (MIF), with an allocation of RM500mil, will be introduced to provide risk capital to government venture capital companies. To bridge the financing gap between the early stage of commercialisation and venture capital financing for high tech products, the Government will set up a Business Growth Fund with an initial allocation of RM150mil. The aim of this fund is to support these companies until they can generate sufficient commercial value to attract venture capital financing and other forms of financing.

- To ensure that the SMEs have better access to financing facilities, the Government established the Working Capital Guarantee Scheme totalling RM7bil and the Industry Restructuring Loan Guarantee Scheme totalling RM3bil, announced under the Second Economic Stimulus Package. The entire RM7bil under the Working Capital Guarantee Scheme has been approved. In view of the encouraging response to the Working Capital Guarantee Scheme, the Government will provide an additional RM3bil under 10MP, making it a total of RM10bil.

- The bumiputra development agenda will continue to be addressed in line with the concept of growth with distribution. In view of the increasingly challenging global and domestic economic environment, there is a need to transform the agenda to enhance participation among competitive and resilient bumiputra companies. This new approach will be based on four key principles: market-friendly, needs-based, merit-based and transparency.

- Five strategic initiatives to strengthen the bumiputra development agenda have been identified for implementation:

First: Increasing equity ownership through institutionalisation. In this regard, private equity programmes in government-linked investment companies, such as Permodalan Nasional Berhad (PNB), Lembaga Tabung Angkatan Tentera and Tabung Haji will be renewed, strengthened and expanded to consolidate and pool various funds to broaden ownership and control of Bumiputra equity.

Second: Increasing bumiputra property ownership. In this context, Pelaburan Hartanah Berhad will establish a Real Estate Investment Trusts (REITs) to facilitate Bumiputra investment in commercial and industrial properties and benefit from property appreciation. In addition, Kg Baru, Kuala Lumpur, will be redeveloped to enable landowners to realise and unlock the value of their properties without affecting Malay ownership.

Third: Improving skill and entrepreneurial development programmes and funding through various Bumiputra development agencies. An integrated development package will be provided to the Bumiputra Commercial and Industrial Community (BCIC) to strengthen their competitiveness and resilience.

Fourth: Developing professional bumiputra employment in a more holistic manner.

Fifth: Establishing a high-level council to plan, coordinate and monitor the implementation of the bumiputra development agenda. The Prime Minister will lead this Council, made up of relevant cabinet ministers, senior government officials and the private sector. The Economic Planning Unit in the Prime Minister's Department will be the secretariat to the Council. The Project Management Unit in the Finance Ministry will monitor the implementation of programmes to ensure their efficient and effective implementation.

- Specific focus will be given to disadvantaged groups, especially those living in the interior, in long houses in Sabah and Sarawak, as well as the orang asli and estate workers in Peninsular Malaysia.

- The Government is also considering granting land titles to the orang asli and bumiputras of Sabah and Sarawak.

- Focus will also be given to improving the quality of life of workers in estates and displaced estate workers. Water supply will be provided to 182 estates, up to 1,000 acres in size and located less than 5km from the water mains, costing RM109mil.

- Skills training will be provided, especially to school dropouts from various ethnic groups, to enhance their employability.

- Residents in Chinese new villages will also be given assistance. They will be provided soft loans to assist them pay their land premiums and renewals of leasehold. The loan will be channelled through Bank Simpanan Nasional and an initial fund of RM100mil will be provided.

- In addition, the Cabinet Committees for Indians as well as Sabah and Sarawak Bumiputra affairs will continue to address the issues of the respective communities.

- To improve the quality of students, the proportion of graduate teachers in primary schools will be increased from 28 to 60%.

- The performance of students in critical subjects, particularly the National Language, English, Science and Mathematics, will also be improved by increasing the number of quality teachers.

- In order to meet the demand for quality Mandarin language teachers in Chinese National Schools and National Schools, those with Unified Examination Certification and Sijil Pelajaran Malaysia or SPM will be considered for enrolment into the Chinese Language Programme in Institutes of Teacher Education.

- For purposes of renovating and upgrading government-aided schools, a sum of RM280mil will be allocated for 2011 and 2012. Each category of government-aided school, namely Chinese schools, Tamil schools, religious schools and mission schools will receive an allocation of RM70mil for the first two years of the Plan. In addition, assistance will be provided to pay electricity and water bills, up to RM2,000 ringgit per month per government-aided school, benefiting about 1,900 government-aided schools.

- To improve the competence of graduates, their employability will be one of the KPIs of universities. Financial allocation to universities will depend on the achievement of their KPI targets. In addition, the Government will grant gradual autonomy to the universities to improve their performance.

- In order to promote and encourage R&D activities among the higher education institutions, the Government has declared UM, UKM, UPM and USM as research universities. To further enhance R&D activities and programmes under the 10MP, Universiti Teknologi Malaysia (UTM) to be elevated to the status of a research university.

- Currently, the country has approximately 1.9 million foreign workers. However, the continued reliance on unskilled foreign workers will hinder country's aspiration to shift to higher value-added economic activities. Therefore, the foreign worker employment policy will be streamlined by introducing different levy rates according to the ratio of foreign workers to total workers in the company, and vary according to the skill level of the foreign workers. Higher rates will apply for lower-skilled workers. The rates will be increased yearly.

- To attract more skilled workers into the country, the Government will establish a Talent Corporation, which will identify skill shortages in key sectors, and attract and retain necessary skilled human capital.

- The Government aims to provide an attractive and comfortable living environment for city dwellers to live, work and play. Open spaces and green areas will be created and improved. Among the initiatives to be implemented are the transformation of the Lake Gardens in Kuala Lumpur into a botanical garden and the setting up of a Malaysia Truly Asia Tourism Centre in Kuala Lumpur.

- Waterfront areas of cities will be beautified and turned into attractive spaces, similar to the restoration of the Malacca River waterfront.

- Focus will be given to increasing the coverage of basic infrastructure such as roads, electricity and water supply, and communication networks to rural areas. The government will build 6,300km of paved roads in Peninsular Malaysia, 2,500km in Sabah and 2,800km in Sarawak, which is expected to benefit 3.3 million people.

- The Government will also improve rural water supply with a target of 99% in Peninsular Malaysia, 98% in Sabah and 95% in Sarawak. This will involve the extension of water supply to 117,000 homes in Peninsular Malaysia, 112,700 in Sabah and 87,400 in Sarawak.

- In line with the "Greater Kuala Lumpur" NKEA, the Government will further enhance the public transportation network in Kuala Lumpur with the implementation of the high-capacity Mass Rapid Transit system. This is an iconic project in our capital city that will be highly beneficial to commuters and have large spillovers to the economy.

When completed, the system is expected to cover a radius of 20km from the city centre with a total length of about 150km, and when fully operational, will serve up to two million passenger trips per day from 480,000 trips on current urban rail systems.

The construction of bus and rail terminals such as the Gombak Integrated Transport Terminal, will ensure that public transport runs smoothly. These measures are expected to increase the public transport modal share in Greater KL from 12% in 2009 to 30% in 2015.

Efforts to enhance the public land transport system will also be expanded to other cities. For this purpose, a Bus Rapid Transit system will be introduced in Iskandar, Johor, while the number of public buses in Pulau Pinang will be increased by 200 buses to enable the expansion of 26 routes with an added capacity of 75,000 passengers per day.

- Healthcare access, coverage and quality will continue to be improved under 10MP. Among the major initiatives are the construction of eight hospitals, including specialist hospitals, 197 clinics and 50 additional 1Malaysia clinics, which are expected to be ready in the first half of the 10MP.

- Seventy-eight thousand affordable houses will be built during the Plan period. Related laws will also be tightened and enforcement enhanced to ensure the quality of affordable houses built.

A fund of RM500mil will be established for the repair and maintenance works of public and private low-cost housing. This fund will be allocated on a matching grant basis, where half of the contribution will be borne by the Government and the other half by the management committee or residents' association.

- Steps will be will be taken to increase the participation of women at all levels in both the public and private sectors, including entrepreneurial ventures. Existing laws and related regulations will be reviewed to create a more conducive environment that encourages greater female participation in the workforce. Private sector is urged to increase the participation of women, especially in senior positions, such as chief executive officers and members of Board of Directors.

- By 2020, it is estimated that there will be 3.4 million senior citizens. The Government realises that harnessing this pool of resource is valuable and this group should be given the opportunity to remain healthy, active and productive in their golden years. In line with this, programmes will focus on enhancing elderly-friendly infrastructure, improving access to affordable healthcare, ensuring adequate provision of homes and improving financial security as well as employment opportunities.

- The Government will also promote environmentally-friendly housing by introducing guidelines and a green rating system. Putrajaya and Cyberjaya will serve as flagship green townships. The Government will take the lead in adopting green building standards.

New Government buildings will be designed to meet green standards. Energy efficiency of existing buildings will be enhanced and as a showcase example, the Prime Minister's Office complex will be upgraded to meet the Gold Standard Green rating.

- Beginning with the 10th Plan, the implementation of programmes and projects on a rolling plan basis will be introduced. With this approach, allocation for programmes and projects will be provided on a two-year basis beginning 2011-2012.

This allows commitment to be made based on the financial position of the Government and provides flexibility to respond to new priorities and changes in the global and domestic economic environment.

The detailed list of the programmes and projects for the first rolling plan will be ready by the end of August 2010.

Ringgit's direction to be set by euro

The euro's movement is largely expected to dictate the direction of the ringgit next week, a dealer said.

In the week just ended, most rivals of the greenback gained, after the euro rebounded on Thursday, despite nervousness in the market pertaining to the eurozone debt woes.

The firmer euro was supported by advances in equity markets and a denial by Chinese authorities that they are reviewing their holdings of the eurozone debt.

It was reported that China is reviewing its eurozone bond holdings because of growing concerns over gaping deficits in countries, including Greece and Portugal.

"There has been a lot of concern in recent weeks. However, the Euro-zone debt woes and rising tensions between North and South Korea, appear to cool down on Thursday," he said, adding that, the scenario spurred hope for economy
recovery.

"However, anything happening in the euro-zone and Korea would continue to set the direction of the forex market," he added.

On Thursday, the ringgit was firmer against the dollar, with investors short-covering higher-yielding currencies, ahead of a long market holiday.

The market was closed on Friday for the Wesak celebrations.

The ringgit on Thursday strengthened to 3.2940/29800 against the dollar from last Friday's 3.3180/3230.

It went up against the Singapore dollar to 2.3417/3470 from 2.3534/3603 and against the Japanese yen to 3.6486/6539 from 3.6858/6918 previously.

The local unit was also stronger against the pound sterling to 4.7687/7762 from 4.7802/7881 last week and the euro at 4.0352/0407 from 4.1488/1561 previously.-- Bernama