V. Proposals regarding Malaysia

Relax foreign exchange restrictions.

1. In order to hedge foreign exchange risks by remitting funds abroad or buying foreign exchange contracts, previous authorization is required from the government. This situation should be improved. Procedures connected with overseas remittance and foreign exchange contracts should also be simplified.
2. Limits on the size of foreign currency deposits (up to US$50,000 if sales exceed 1 million ringgit) should be eliminated.

Relax restrictions on entry of foreign laborers.

Because Malaysia has a serious labor shortage, the government should allow more foreign laborers to enter the country and find employment. (Labor shortages are chronic in the manufacturing sector, which depends heavily on foreign laborers. Since the outbreak of the currency crisis, however, restrictions on the hiring of foreign laborers have become even more stringent. The government has stated that firms engaged in export activities have priority access to foreign laborers, but in reality all applications for authorization to hire foreign laborers are being turned down.)

Bumiputra policies (which accord special privileges to ethnic Malays) should be relaxed or eliminated

1. Requirements that Malays receive first consideration for hiring should be relaxed or applied flexibly.
2. Malay ownership requirements should be relaxed or eliminated. (Last month, the government announced that it would reduce the required percentage of Malay business ownership of 30%, and that the prohibition against investment to Malay-owned businesses by Chinese companies, which was intended to foster the development of Malay capital, would be partially lifted.)