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New Straits Times
10-05-2025
- Business
- New Straits Times
Look within, say experts and industry groups
KUALA LUMPUR: Policy makers should look internally at ways to facilitate ease of doing business and investing in the country as part of a wider response to the United States' tariffs, says an economist. Centre for Market Education chief executive officer Dr Carmelo Ferlito said while it was encouraging that Malaysia had sent a delegation to Washington to discuss the issue with the US, it was also important for the country to "look within". Ferlito said that this is because while tariffs are negotiated at a government-to-government (G2G) level, business was conducted at a business-to-business (B2B) level. "There is merit for new opportunities where trade diversification and alternatives are concerned," he told the New Straits Times. "But we have to be clear that trading partners cannot be changed overnight because trade happens between businesses, not countries per se." A 10 per cent export loss to the US cannot easily or necessarily be shifted to another market like China or the European Union, he said, as it boils down to agreements between firms in two countries. "Can a US importer find an alternative supplier domestically or from another country at the same or better price after the tariff is imposed? "What are the transaction costs involved in such a search? Can the Malaysian firm find a European customer to replace the American one, in case the American one is lost? How long will it take?" Ferlito said the tariff issue should not be viewed from an aggregate perspective without considering "microfoundations" because in the economy, everything happens at a "microlevel". "The macro level exists only in the statistics books." He said each transaction is the consequence of many other micro transactions, interrelated in a way which cannot be changed overnight or as a consequence of an interstate agreement. Ferlito said there were measures that Malaysia could take beyond tariff discussions and exploring other markets, including non-tariff barriers. "We can take a leaf from Indonesian President Prabowo Subianto, who called for simplifying and streamlining regulations to make to increase competitiveness and attract investments." "Such a measure would help boost investments, not just foreign direct investments (FDI) but also domestic direct investments (DDI)." This, in turn, could help soften the blow from any impact of the tariffs once the 90-day pause on the measure ends, he said. During the special parliamentary session on May 5, Prime Minister Datuk Seri Anwar Ibrahim outlined several measures to address the US tariff situation. These include RM1.5 billion in financial aid for SMEs and the fast-tracking of infrastructure projects to stimulate domestic economic activity. In response, business groups say internal strengthening is just as critical as external support. The Federation of Malaysian Manufacturers (FMM) backed the formation of a National Supply Chain Council to address vulnerabilities across key sectors. "Private sector participation is essential to ensure that the Council's strategies are grounded in operational realities," said FMM president Tan Sri Soh Thian Lai. FMM also urged the swift rollout of the Government Procurement Act, calling it vital to "stimulating domestic demand and enhancing national production capabilities." It added that government-linked companies should be subject to "a clear mandate or strong policy encouragement to increase their procurement from local manufacturers." Small and Medium Enterprises Association (Samenta) noted that non-exporting SMEs make up the bulk of Malaysia's business landscape. "These businesses... will be equally impacted as input costs rise, supply chains tighten, and consumer spending begins to contract," said president Datuk William Ng. He called on the government to "pause all new and planned cost increases on SMEs" and freeze compliance requirements that could push more businesses into distress.
The Star
06-05-2025
- Business
- The Star
Better support needed amid tariffs
PETALING JAYA: Support measures aimed at helping Malaysian exporters navigate US-imposed tariffs must be designed with clarity, accountability, and measurable outcomes, say economists. While recent government initiatives signal the right intentions, Centre for Market Education CEO Dr Carmelo Ferlito said concerns remain over how effectively the support will be implemented and who will ultimately benefit. 'There's a right spirit in the government's initiatives, but we must ask who benefits and how efficiently the money will be spent,' he said. Ferlito was commenting on Prime Minister Datuk Seri Anwar Ibrahim's announcement yesterday on allocating RM50mil for market exploration and additional financial aid for exporters. Instead of upfront cash or loan guarantees, Ferlito advocated for tax-based incentives tied directly to export performance. 'It may be more effective to reduce taxes on profits derived from sales to alternative markets. 'A tax incentive is ex-post – it's given after results are achieved. Incentives not linked to clear key performance indicators risk mismanagement and inefficiency.' He also questioned the suggestion made in the Dewan Rakyat yesterday to delay fuel subsidy rationalisation, arguing that such structural reforms should not be compromised. 'Are we truly in a state of emergency to justify postponing this? 'It sends the wrong signal on policy commitment,' he said. Emeritus Prof Dr Barjoyai Bardai of Universiti Tun Abdul Razak pointed out that efforts to identify new markets will take time to materialise. 'Finding new buyers isn't immediate. Exporters must ensure credibility and secure demand – and most new markets will be in developing countries with lower purchasing power,' he said. Therefore, in the short term maintaining strong trade flows with the United States and China remain critical, he said. 'If we can retain those markets while exploring new ones, that's already a big achievement.' Prof Barjoyai also highlighted the importance of complementing export strategies with broader economic resilience measures, including food security and reducing reliance on imported essentials. 'We import nearly RM90bil in essential goods annually. 'If we can reduce that, we protect ourselves from currency volatility and global shocks,' he said. He also stressed the need to support micro, small and medium enterprises (MSMEs), which collectively employ more than 65% of Malaysia's workforce. 'Helping MSMEs improves job quality and wages, which stabilises the broader economy,' Prof Barjoyai said. Industry groups echoed similar concerns and recommendations. The Federation of Malaysian Manufacturers (FMM) welcomed the government's immediate actions but called for enhanced export-focused initiatives. FMM president Tan Sri Soh Thian Lai said more than half of its members are already pivoting away from traditional markets like the United States. He said that while the RM50mil allocation to Matrade (the Malaysia External Trade Development Corporation) and the resumption of European Union free trade agreement (FTA) talks are timely, Malaysia needs stronger Market Development Grant (MDG) support to help exporters lead missions into emerging markets. Soh stressed the need for enabling associations like FMM to access funding directly and organise targeted export activities to boost reach and competitiveness. 'These measures are crucial to ensure Malaysian manufacturers remain viable globally despite mounting geopolitical pressures.' Meanwhile, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) voiced concerns about unintended consequences of increased tariffs, including potential abuse of trade routes and increased risk of anti-circumvention actions. Its president, Datuk Ng Yih Pyng, warned of 'renegade products' -- goods rebadged or misclassified to evade tariffs – distorting trade flows and exposing Malaysian firms to legal and reputational risks. 'We must enhance Customs enforcement and strengthen compliance on certificates of origin,' he said. Ng also urged the government to accelerate FTA negotiations and expand MDG support to help SMEs explore new markets. He cautioned that with global tariffs rising, Malaysia may face an influx of dumped foreign products that could undermine local industries, especially MSMEs in sectors like furniture, steel, retail and e-commerce. 'Swift, targeted safeguards and international collaboration are needed to protect our domestic economy.' The Small and Medium Enterprises Association (Samenta) said the United States' reciprocal tariffs on Malaysian goods have exposed the fragility of the country's SME export ecosystem. While welcoming the government's targeted support measures, Samenta said many SME exporters were already operating on razor-thin margins and remain vulnerable to global trade shocks. 'The latest tariff shock is a reminder that Malaysia's economic model must be recalibrated around the needs of SMEs, not just large corporations,' the association said in a statement. Samenta added that broader structural imbalances must be addressed to ensure sustainable support for exporters and to build long-term resilience in Malaysia's trade environment.
The Guardian
28-02-2025
- The Guardian
High heels and risky selfies: Etna eruptions cause despair among mountain rescuers
A river of fire from the depths of the Earth carves its way through the black rocks of a mountain blanketed white with snow. Above, the setting sun tints the clouds red. Fountains of lava that explode from a crater soar hundreds of metres into the air and Etna's roar echoes across the Sicilian sky. Its recent eruptions were a breathtaking spectacle, drawing thousands of tourists and unwary daytrippers – many there for a selfie. For some, the outcome was catastrophic. Dozens of people, lacking appropriate mountain gear, went missing last week and were recovered late at night suffering from hypothermia. Many sustained various injuries as hundreds of cars, haphazardly parked along the road leading to the lava flows, blocked the streets and prevented rescue services from reaching those in need of assistance. Authorities threatened to report imprudent visitors to the police and introduced restrictions to stay away from the magma. 'They have turned a volcano into a playground,' said Luca Ferlito, commander of the operational unit of Sicily's Guardia Forestale. 'After images of the eruption started circulating on social media, showing people skiing just a few metres from the lava flow moving over the snow, thousands of visitors stormed the mountain. Many of them were completely unequipped.' Ferlito added: 'We saw all sorts of scenes. People approaching the lava flow in high heels and miniskirts, people in shorts, someone started roasting sausages, others were taking shirtless photos near the lava. A couple brought a six-month-old baby; an American man showed up in jeans, a T-shirt, and crutches. We stopped a 70-year-old tourist who was wearing cotton trousers and summer rubber shoes.' The Guardian joined rescue services on Mount Etna who had been brought in to assist residents and curb the flow of tourists and daytrippers from Sicily and beyond, even after mayors of the towns on the volcano's slopes ordered visitors to stay at least 500 metres from the lava. 'The presence of so many people forced us to work non-stop, day and night without rest,' says Paolo Bernardini, commander of the Alpine Rescue Unit of the Guardia di Finanza. 'Since the lava flows started descending to lower altitudes, the number of rescue operations has increased exponentially.' Italy, home to the most Unesco heritage sites in the world, is becoming wearily accustomed to episodes of overtourism. Last month, the mayor of Roccaraso, a popular Italian ski resort, clamped down on daytrippers after the town was overwhelmed by 260 buses carrying more than 10,000 visitors from Naples and the surrounding Campania region, lured by a TikTok star. But Etna, 3,300 metres (10,800ft) above sea level, is not just a ski resort. It is one of the world's most active volcanoes, and has been in explosive form in recent weeks, spewing incandescent magma and a copious shower of ash that has reached as far as the port city of Catania on the island's east coast. And though visually striking, the interaction of lava and snow exposes visitors to serious risks. A BBC team and a number of tourists suffered minor injuries in 2017 when a lava flow ran into snow and produced superheated steam that pelted the group with boiling rocks. The landscapes of its peaks are wild and nearly devoid of life, the temperatures plunge to freezing even in the height of summer and the weather is inconsistent. Bernardini and his unit rescued four young men in the middle of the night on Sunday after they had lost their way. 'We found them after hours of searching in the dark, with fog rolling in,' he says. 'They were wearing sneakers and jeans and were already showing early signs of hypothermia. One of them wasn't even wearing socks.' In just six days since early February, 1m cubic metres of lava have erupted from Mount Etna. The lava flow – which began on 8 February from an eruptive fissure at the southern base of the Bocca Nuova crater – slowly descended to an altitude of 1,900 metres, making it more accessible to visitors. While the magma from this fissure gradually cooled, another fissure at 3,000 metres near the mountain's south-east crater produced fresh lava flows last Monday. Sign up to Headlines Europe A digest of the morning's main headlines from the Europe edition emailed direct to you every week day after newsletter promotion Authorities fear that people may be tempted to take treacherous routes high up the volcano to experience the new flows. Accompanied by rescuers, the Guardian trekked to the lava, across fragile ash terrain blanketed in ice where rocks from an eruption more than a year ago still smoulder and temperatures hover near -5C. Not everyone has welcomed the restrictions. Guides and nearby residents complain that it is unfair that people are not allowed to enjoy the beauty of their own territory, due to the restrictions introduced by the mayors. 'We are used to mountain excursions,' said Danilo Spongano, 45, from Lecce, who was visiting Etna with his family. 'Depriving people like us to enjoy a natural spectacle like this, I really find it a shame.' Gabriella Cannata, a teacher who lives in Catania, has been exploring Etna for years. 'There are reckless individuals who come without proper preparation,' she said, 'but that shouldn't mean penalising those who act responsibly.' Two weeks ago she was able to visit the lava flow, wearing a helmet, headlamps with spare batteries, and hand and foot warmers. 'I witnessed the latest eruption, and before leaving – by then in darkness – I turned for one last look at the lava,' Cannata said. 'The scene before me was magical: the crowd of visitors had grown, each person moving around the flow with a small light on their head. It felt as if we were all part of a pilgrimage to Mother Nature.' 'In that moment,' she said, 'I realised how important it is to continue being moved by the beauty of nature. Etna is a symbol of that beauty, and it deserves to be respected but also experienced.'
